Document:

Exhibit 10.2

 

 

 

COMMON
STOCK PURCHASE AGREEMENT

 

 

 

 

by
and between

 

 

 

THE CHILL
GROUP, INC.
AND THE SELLERS
IN EXHIBIT 1 HERETO

 

and

 

LIFE
ON EARTH, INC.

(the
“Buyer”) dated
as of August _2,
2018

This Common
Stock Interest
Purchase
Agreement
(this “Agreement”)
is dated as of
August _,

2018, by
and among
The Chill Group,
Inc.
(“JCG”),
a California
corporation,
the Sellers
reflected in Exhibit
1 (collectively,
the “Sellers”)
and Life
on Earth, Inc.,
a Delaware
corporation
(the “Buyer”).
Capitalized
terms not otherwise
defined
herein shall have
the meanings set forth
in Appendix 1 hereto.

 

Recitals

 

		•	WHEREAS,
the Sellers
wish to sell 100% of the Common Stock
Interests
in JCG to the Buyer,
subject to the terms
and conditions
set forth
below;

 

		•	WHEREAS,
Buyer
wishes to purchase
from Sellers,
the Common Stock Interests
(defined below),
subject to the terms
and conditions set
forth herein;

 

		•	NOW,
THEREFORE, in consideration
of the mutual covenants
and agreements
hereinafter
set forth and
for other good and
valuable consideration,
the receipt and
sufficiency
of which are hereby
acknowledged,
the parties hereto
agree as
follows:

    	 

    	 

    

 

 

 

 

 

 

ARTICLE
I Purchase
and Sale

1.01
Purchase
and Sale.
Subject to the terms
and conditions
set forth herein,
at the Closing,
the Sellers
shall sell to Buyer,
and Buyer
shall purchase
from Sellers,
all of each Seller’s
right, title
and interest
in Common Stock Interests
representing
100% of the outstanding
Common Stock Interests
of JCG, free
and clear
of all Encumbrances
(the “Common
Stock Interests”),
for the consideration
specified
in Section
1.02 (the “Transaction”).

 

1.02
Purchase
Price/Holding
Period.
In consideration
for the Common Stock Interests,
the Buyer
shall collectively
pay the Sellers
the consideration
noted below; individual Sellers
of JCG shall receive
the consideration
on a pro rata basis,
according
to their respective
percentage
ownership interests
of JCG reflected
in Exhibit 1:

 

(a)
At the Closing, the Buyer
shall issue to the Sellers
on a pro-rata basis
according to their respective
ownership in JCG,
One Thousand Six Hundred
Thirty Six Thousand
and Three
Hundred Sixty
Three (1,636,363)
restricted Common
Stock Shares
(the “1,636,363 Shares”)
of the Buyer
as priced
by the Buyer
at $0.55 per share
(“Share
Price”).
The 1,636,363 Shares
as issued
on a pro-rata basis
to the JCG shareholders,
shall be subject to a Lock-Up
agreement
subjecting
the holders to a 1 year
lock up period after
the issuance
of the 1,636,363 Shares
and leak out provisions contained
in the Lock-Up
Agreement
attached
hereto as
Exhibit 2 and
otherwise pursuant
to Rule 144 of the Securities
Act of 1933, as
amended.

 

(b)
Buyer
shall pay
an additional
aggregate
of 1,090,909 Restricted
Common Stock Shares
of the Buyer
to the Sellers
if and when
the Just Chill
Brand
generates
$900,000 in gross revenues,
in a twelve month period;
the issuance
of these shares
shall be issued
at a 20% discount to market
on the Closing Date with
a floor price of $0.55
per share;

 

(c)
Buyer
shall pay an
additional
aggregate
of $500,000 in Restricted
Common Stock Shares
of the Buyer
to the Sellers
if and when the Just
Chill Brand
generates
$3,000,000 in gross revenues,
in a twelve month
period; the issuance
of these shares
shall be issued
at a 20% discount to market
on the Closing Date
with a floor price
of $0.65 per
share;

 

(d)
Buyer
shall pay an
additional $500,000 in
restricted Common
Stock Shares
of the Buyer
if and when the Just
Chill Brand
generates
$5,000,000 in gross revenues,
in a twelve month period;
the issuance
of these shares
shall be issued
at a 20% discount to market
on the Closing Date with
a floor price of
$0.75 per share;

 

(e)
Buyer
shall assume
a maximum of $65,000 of JCG’s
current debt/liabilities
as of and immediately
following the closing
of the Transaction.
As such, if JCG’s
debt on JCG’s
balance sheet
as of the Closing
Date is less
than $65,000, the Buyer
shall assume
such lesser amount;
if such debt is more
than $65,000,
Buyer
shall assume
no more than $65,000 of JCG’s
debt. The Buyer
shall have a period
of 12 months following the Closing
Date to pay off JCG’s
current debt
with an initial down payment
of $3,000. The Seller
will have
the right
to convert
any balance
due

    	 

    	 

    

 

 

 

 

 

after
six months into equity
of the Buyer
at the price set
for the transaction
of $0.55 per common
share. A schedule
of debt shall
be provided by Seller
to Buyer
prior to closing;

 

(f)
with respect
to the shares
reflected in (a),
the 1,636,363 Shares
, shall begin
upon the

Closing
Date at which
time the Shares
will be issued and
for 12 months thereafter.

 

(g)
If after 12 months after
holding the respective
shares reflected
in 1.02(a) 1,636,363

Shares)
and if the price of the Shares
is trading below
$0.30, the Buyer
will issue the Seller
additional shares
equal
to the purchase
price with a floor price
of $0.20.

 

 

 

1.03 Additional
Terms.
This Agreement
is subject to
the following additional
terms:

 

(a)
Sellers,
via the participation
of Max Baumann,
will work
with Buyer
for a period of one year
to enable a smooth
transition in ownership
and a continuation
of the current
business without interruptions.

 

(b)
Buyer
and Max Baumann
will enter into an
Advisory Agreement
providing that he will introduce
strategic
partners in investments,
marketing,
and other strategic
alliances
to the Company; the Advisory Agreement
shall be negotiated
and finalized
to reflect arm’s
length transactions.

 

(c)
Buyer
will issue in writing
to the JCG’s Stockholders
on a pro-rata basis
according
to their respective
ownership,
$850,000 of Two Year
Warrants
priced at $0.85.

 

(d)
Buyer
grants
to the Seller,
participation rights
to invest in the next
and any
subsequent offering
conducted
by the Buyer
after this
Offering.

 

(e)  Upon
Closing, Fernando
“Oswaldo” Leonzo,
or a designated
representative
of the

Buyer,
will be appointed
President of JCG.

 

(f).
Thirty percent
(30%) of the Shares
will be held back by
Buyer
for a period of months to cover
any additional
debts or other obligations
of Buyer,
post-closing,
or for any
breaches
of any representations
or warranties
by JCG or the JCG
Stockholders.

 

(f)
If there is any
additional debt
or liabilities
exceeding
the $65,000 paid by the
Buyer
within the year
after
closing, such
debt shall be reduced
from the held back
shares based
on the Share Price
specified
in 1.02(a), $0.55 per
share.

 

(g)
JCG and the JCG
Stockholders
guarantee
that prior to the Closing Date
there are no arrangements,
understanding, agreements
to cancel
or change
the terms of any
material
manufacturing agreements,
distributor agreements
and other agreements
of JCG.

 

(h)       JCG
shall cancel
all Preferred
Shares
held by JCG
shareholders.

    	 

    	 

    

 

 

 

 

 

(i)
Buyer
will engage
Max Baumann’s
Basemakers,
a marketing
and merchandising
service company
owned by
Max Baumann,
to represent
all Buyer
Portfolio
Brands for
a two year
discount(discount
TBD).

 

(j)
Max Baumann
has been authorized
to act as the representative
of the Sellers
and to sign this
Agreement
on their behalf

 

 

2.01 Transactions
to be Effected
at the Closing.

 

(a)
At the Closing, Buyer
shall deliver
to the Sellers:

 

		(i)	Stock
certificates
of Buyer
evidencing
the Shares,
fully paid
and nonassessable,
duly issued
in the name
of each Seller;
and

 

(iii)
the Transaction
Documents
and all other agreements,
documents, instruments
or certificates
required to be delivered
by Buyer at
or prior to the Closing pursuant to
Section
7.03 of this Agreement.

 

(b)
At the Closing, the Sellers
shall deliver
to Buyer
the Common Stock Interests
and Transaction
Documents and all
other agreements,
documents, instruments
or certificates
required to be delivered
by the Sellers
at or prior to the Closing pursuant
to Section
7.02 of this Agreement.

 

2.02
Closing Conditions.
The closing of the Transaction
will occur on July
1, 2018, or a later date
mutually
agreed
by the parties
(the “Closing
Date”), and
will be subject to customary
closing conditions,
including without limitation:

 

(a)
Approval of the transactions
by the Boards
of Directors
of LFER and JCG;

 

(b)
Satisfactory
approval
by Buyer
of all salaried
employees,
management, working
capital,
and budget of JCG
post transaction
on or before
August , 2018;

 

(c)
Receipt of any
required,
material third
party consents
or approvals;

(d) Receipt
of all requisite
stockholder approval,
if required, on or before
August , 2018; (e) No material
adverse
change
in the business
or financial
statements of either
LFER or JCG

prior to the
closing of
the Transaction;
and

 

(f)
All representations
and warranties
of the Parties
in the definitive agreement
shall be true and correct
and all Parties
shall have fulfilled
all required
covenants
set forth in the definitive
agreement.

 

(g) Completion
and delivery
by the Sellers of
the Schedules
attached
hereto
as Exhibit 2.

 

(h) Delivery of
officer’s certificates
in customary
form from each
of Buyer
to the Sellers and
from JCG to Buyer, certifying
true and accurate copies
of the Buyer and JCG’s
respective Organizational
Documents of the Closing,
and certifying
that no changes
to the same have
occurred.

    	 

    	 

    

 

 

 

 

 

 

 

ARTICLE
III

 

Representations
and Warranties
of the JCG and Sellers

 

3.0.
On and
as of the
date
of this
Agreement
and the
Closing
Date,
the representations
and warranties
of the JCG and
the Sellers
are subject
to, and
qualified
by, every
material
fact disclosed
in the certificates,
exhibits,
schedules,
and Disclosure
Schedules
to this
Agreement
or any other
document
or instrument
that is
delivered
to Buyer
on or before
the date
of this
Agreement
or the
Closing
Date or pursuant
to this
Agreement.
Disclosures
made
in the certificates,
exhibits,
schedules,
or Disclosure
Schedules
to this
Agreement,
or in the
other closing
documents
and Transaction
Documents
to be prepared
by Buyer’s
Counsel,
JCG’s counsel
and the
Sellers’
counsel,
will
constitute
disclosures
by Seller
with
respect
to all
representations
and warranties
of JCG and
Sellers
in this
Agreement.
The inclusion
by JCG and the
Sellers
in any particular
exhibit
of any fact
or information
that is
not needed
or required
to be disclosed
to make
a representation
or warranty
true,
correct
or not misleading
in any material
respect
will
not be construed
by Buyer
as an indication
that all
items
of similar
scope
and degree
are required
or have
been included
in every
other exhibit
or schedule.
Accordingly,
a representation
or warranty
of JCG and
the Sellers
under this
Agreement
or in a certificate
or instrument
delivered
pursuant
it will
be considered
to have
been breached
or will
be considered
to be inaccurate
only if
Buyer
has no
actual
knowledge
on or before
the Closing
Date of
facts that
rendered
the representations
or warranty
untrue.
To the extent
that any
agent,
employee,
or representative
of Buyer
has actual
knowledge
of a fact
that is
not disclosed
by JCG and
the Sellers
and that
should
be disclosed
so as to
make
a representation
or warranty
otherwise
affected
by the omission
true
and correct
or not
misleading
in any material
respect.
Furthermore,
the specific
representations
and warranties
contained
in Exhibit
3 are made
“to JCG’s
knowledge”
or "to
Sellers’
knowledge".

 

 

3.01
Organization and
Authority of the Sellers.
The Sellers
have full power
and authority
to enter into this
Agreement
and the other Transaction
Documents to which the Sellers
are a party, to carry
out their obligations
hereunder
and thereunder
and to consummate the transactions
contemplated hereby
and thereby.
The execution
and delivery
by the Sellers
of this Agreement and
the other Transaction
Documents to which
the Sellers
are parties,
the performance
by the Sellers
of their obligations
hereunder
and thereunder
and the consummation by the Sellers
of the transactions
contemplated
hereby and
thereby have
been duly
authorized by all
requisite action
on the part of the Sellers.
When this
Agreement
is duly executed
by the Sellers
and delivered
to Buyer, this
Agreement
shall constitute
a legal, valid
and binding obligation
of the Sellers
enforceable
against
it in accordance
with its terms. When
each other Transaction
Document to which the Sellers
are or will be parties has
been duly
executed and
delivered
by Seller,
such Transaction
Document will constitute
a legal and
binding obligation
of Seller
enforceable
against it in accordance
with its terms. The Sellers
represent
and warrant
to Buyer
that the statements contained
in this Article III are
true and correct.

    	 

    	 

    

 

 

 

 

 

 

3.02
Organization, Authority
and Qualification
of JCG. JCG is a company
duly organized,
validly
existing
and in good standing
under the Laws
of the state of California
and has
full power and authority
to own, operate
or lease the properties
and assets now
owned, operated
or leased by
it and to carry
on its business as
it has been and
is currently
conducted.

 

3.03 Capitalization.

 

(a)
The Sellers
are the record
owners of and has
good and valid
title to the Common
Stock Interests,
free and
clear of all
Encumbrances.
The Common Stock Interests
as defined
in 1.01 constitute 100% of the total
issued and
outstanding Common
Stock Interests
in JCG. The Common
Stock Interests
have been
duly authorized
and are
validly issued,
fully-paid and
non-assessable.
Upon consummation of the transactions
contemplated by this
Agreement,
Buyer
shall own all
of the Common Stock Interests
of JCG, free and
clear
of all Encumbrances.

 

(b)
The Common Stock Interests
were issued
in compliance
with applicable
Laws. The Common
Stock Interests
were not issued
in violation
of the bylaws
or articles of incorporation
of the Sellers
or any other agreement,
arrangement
or commitment
to which the Sellers
or JCG is a party
and are not subject
to or in violation of any
preemptive
or similar
rights
of any Person.

 

(c)
There are
no outstanding or authorized
options, warrants,
convertible
securities or other rights,
agreements,
arrangements
or commitments
of any character
relating to the Common Stock
Interests or obligating
the Sellers
to sell any
of its Common Stock
Interests in JCG.
Other than the Organizational
Documents, there are
no voting trusts, proxies or other agreements
or understandings
in effect
with respect
to the voting or transfer
of any of
the Common Stock Interests.

 

3.04 No Subsidiaries.
JCG does not own or have
any interest
in any shares
or Common

Stock
Interests
or have an
ownership interest
in any
other Person.

 

3.05
No Conflicts;
Consents. The execution,
delivery
and performance
by the Sellers
of this Agreement and
the other Transaction
Documents
to which it is a party,
and the consummation of the transactions
contemplated
hereby and
thereby, do not and
will not: (a) conflict
with or result in a violation
or breach of, or default
under, any
provision
of the Organizational
Documents of the Sellers;
(b) conflict with or result in a violation
or breach
of any provision
of any law
or Governmental
Order
applicable
to the Sellers;
(c) require the consent,
notice or other action
by any
Person, under conflict
with, result in a violation
or breach of, constitute
a default or an event
that, with or without notice
or lapse of time or both,
would constitute a default
under, result in the
acceleration
of or create
in any party
the right to accelerate,
terminate, modify
or cancel
any Material
Contract to which
the Sellers
are a party
or by which the Sellers
are bound or to which any
of their respective
properties and
assets are
subject or any
Permit affecting
the properties,
assets or business of the Sellers;
or (d) result in the creation
or imposition of any
Encumbrance
on any properties
or assets of the Sellers.
No consent,
approval, Permit,
Governmental Order,
declaration
or filing with, or notice
to, any Governmental
Authority is required
by or with
respect to the Sellers
in connection
with the execution
and delivery
of this Agreement
and the other Transaction
Documents and
the consummation of the transactions
contemplated
hereby
and

    	 

    	 

    

 

 

 

 

 

thereby,
except
for customary
filings which
may be made at
or after the Closing,
which would not prevent
the Closing.

 

3.06
Financial
Statements.
Complete copies
of JCG’s unaudited
financial statements
consisting of the balance
sheet as of the Date
of Closing and the related
statements of income for the year
then ended December
31, 2017 (the “Unaudited Financial
Statements”),
and unaudited
financial statements
consisting
of the balance
sheet as of December
31, 2017 and the related
statements of income (the “Financial
Statements”)
are included
in the Disclosure Schedules/have
been delivered
to Buyer.
Except as disclosed
in the Financial
Statement, the
Financial
Statements have
been prepared
to the best of the Sellers’
ability
in accordance
with GAAP applied
on a consistent basis throughout
the period involved,
subject, in the case of the Interim
Financial
Statements, to normal
and recurring
year-end
adjustments (the effect
of which will not be materially
adverse).
The Financial Statements
are based
on the books and records
of the JCG, and fairly
present
in all material
respects
the financial
condition of the JCG
as of the respective
dates they
were prepared
and the results
of the operations
of JCG for the periods indicated.
The balance
sheet of the JCG as
of May 31, 2018 is referred
to herein
as the “Balance
Sheet” and
the date thereof
as the “Balance
Sheet Date”
and the balance
sheet of the JCG
as of May 31, 2018 is referred
to herein
as the “Interim
Balance Sheet”
and the date
thereof as
the “Interim
Balance Sheet
Date”. JCG
shall also
provide updated financial
statements through July
15, 2018, which shall
fairly present
in all material
respects
the financial condition
of the JCG as of the
respective
dates they were
prepared
and the results
of the operations
of JCG for the periods indicated..
The JCG maintains a standard
system of
accounting
established
and administered
in accordance
with GAAP to the best
of its ability.

 

3.07 Undisclosed
Liabilities/Material
Variations in Assets
.. To the Sellers’
knowledge, JCG
has no material
liabilities,
obligations
or commitments
of any nature
whatsoever,
absolute or contingent,
accrued
or unaccrued,
matured or unmatured
or otherwise (“Liabilities”)
(“material”
for purposes
of 3.07 is defined
as any
10% decrease
in balance
sheet items
as of July
15, 2018, except
(a) those which are
adequately
reflected
or reserved
against
in the Interim Balance
Sheet as
of the Interim Balance
Sheet Date,
and (b) those which have
been incurred
in the ordinary course
of business consistent with past
practice
since the Interim
Balance
Sheet
Date and
which are not, individually
or in the aggregate,
material in amount.
Additionally,
to the Sellers’
knowledge,
the Assets reflected
on the Balance
sheet are
not materially
less according
to the above definition
of “material”
then reflected
on the July 15, 2018 Balance
Sheet
and for 1 year
following the Closing.
Should either
the Assets or Liabilities
reflect
a material change
in the July 15, 2018 Balance
Sheet, the Buyer
will hold back 30% of the 2,727,272 Shares
for a period of up to 1 year
based on the Share
Price.

 

3.08
Absence of Certain Changes,
Events and
Conditions. Since
the Interim Balance
Sheet Date,
and other than in the ordinary
course of business
consistent with past
practice,
to the Sellers’
knowledge,
there has not been,
with respect
to JCG, any:

 

(a)
event,
occurrence
or development
that has had,
or could reasonably
be expected
to have, individually
or in the aggregate,
a Material
Adverse Effect;

 

(b) amendment
of the Organizational
Documents of JCG;

    	 

    	 

    

 

 

 

 

 

 

(c)
split, combination or reclassification
of any Common
Stock Interests
of JCG;

 

(d)
issuance,
sale or other
disposition of, or creation
of any Encumbrance
on, any Common
Stock Interests
of JCG, or grant
of any options,
warrants or other
rights to purchase
or obtain (including upon conversion,
exchange
or exercise)
any Common
Stock Interests
of JCG, except
pursuant to this
Agreement;

 

(e)
declaration
or payment
of any distributions
on or in respect
of any Common
Stock Interests
of JCG or redemption,
purchase or acquisition
of any of the Sellers’
outstanding Common
Stock Interests;

 

(f)
material
change
in any method
of accounting
or accounting
practice
of JCG, except
as required
by GAAP or as
disclosed in the notes to the Financial
Statements;

 

(g) material
change
in JCG cash management
practices
and its policies,
practices
and procedures
with respect
to collection
of accounts receivable,
establishment of reserves
for uncollectible
accounts, accrual
of accounts receivable,
inventory control, prepayment
of expenses,
payment of trade
accounts
payable, accrual
of other expenses,
deferral
of revenue and
acceptance
of customer
deposits;

 

(h) entry
into any
Contract that
would constitute a Material
Contract;

 

(i)
incurrence,
assumption
or guarantee
of any indebtedness
for borrowed
money except
unsecured current
obligations
and Liabilities
incurred
in the ordinary course
of business consistent with past practice.

 

(j)       transfer,
assignment,
sale or other disposition
of any of the
assets shown on the

Financial
Statements or Interim
Balance
Sheet;

 

(k)
transfer,
assignment
or grant of any
license
or sublicense of any
material
rights under or with
respect to
any Seller
Intellectual Property
or Seller
IP Agreements;

 

(l)
material
damage,
destruction
or loss (whether
or not covered
by insurance)
to its property;

 

(m) any
capital
investment
in, or any
loan to, any other Person;

 

(n) acceleration,
termination,
material modification
to or cancellation
of any material
Contract (including,
but not limited to, any
Material
Contract) to which JCG
is a party or by which
it is bound;

 

(o) any
material capital
expenditures;

 

(p)
imposition of any
Encumbrance
upon any of
JCG’s properties
or assets,
tangible or
intangible,
except
ordinary and
customary
liens of manufacturers,
vendors, or the like;

    	 

    	 

    

 

 

 

 

 

 

(q)
any loan to (or forgiveness
of any loan to), or entry
into any
other transaction
with, any of
its members
or current
or former
managers,
officers and
employees;

 

(r)
entry into
a new line of business
or abandonment
or discontinuance
of existing
lines of business;

 

(s)
adoption of any
plan of merger,
consolidation, reorganization,
liquidation or dissolution
or filing of a petition
in bankruptcy under
any provisions of federal
or state bankruptcy
Law or consent
to the filing
of any bankruptcy
petition
against it under any
similar
Law;

 

(t)
acquisition
by merger
or consolidation with, or by
purchase
of a substantial
portion of the assets, stock or other equity
of, or by any
other manner, any
business or any
Person or any
division thereof;

 

(u)
action
by JCG to make,
change
or rescind
any Tax
election,
amend
any Tax
Return or take any
position on any
Tax Return, take any
action,
omit to take any
action
or enter into any
other transaction
that would have the
effect
of increasing
the Tax liability
or reducing
any Tax
asset of Buyer
in respect
of any Post-Closing
Tax Period;
or

 

(v)
any Contract
to do any of the
foregoing,
or any
action
or omission that would result
in any of the foregoing.

 

3.09 Material
Contracts.

 

(a)
Section
3.09(a) of
the Disclosure Schedules
lists all material
Contracts of JCG
(together
with all Contracts concerning
the occupancy,
management
or operation
of any Real
Property,
including but without limitation,
brokerage
contracts,
listed or otherwise disclosed in Section
3.10(b) of the Disclosure Schedules,
being “Material
Contracts”).

 

(b)
Each Material
Contract is valid
and binding on JCG
in accordance
with its terms and
is in full force and
effect.
None of JCG or, to Seller’s
Knowledge,
any other
party thereto
is in breach of
or default
under (or is alleged
to be in breach of or
default
under) in any
material respect
or has provided or received
any notice
of any intention
to terminate,
any Material
Contract. No event
or circumstance
has occurred
that, with notice or
lapse of time or both,
would constitute an
event of default
under any
Material
Contract or result in a termination
thereof or would cause or permit
the acceleration
or other changes
of any right or obligation
or the loss of any benefit
thereunder. Complete
and correct
copies of each
Material Contract
(including all
modifications,
amendments and
supplements thereto and
waivers
thereunder) have
been made available
to Buyer.

 

3.10 Title to Assets;
Real Property.

 

(a)
To the Sellers’
knowledge, JCG
has good and
valid (and,
in the case of owned Real
Property,
good and marketable
fee simple) title
to, or a valid leasehold
interest
in, all Real Property
and personal
property and
other assets reflected
in the Financial Statements
or acquired after
the Interim Balance
Sheet
Date, other than properties
and assets sold or otherwise
disposed of in the

    	 

    	 

    

 

 

 

 

 

ordinary
course of business consistent
with past practice
since the Interim Balance
Sheet Date.
All such properties
and assets (including
leasehold interests)
are free
and clear
of Encumbrances,
except ordinary
and customary
liens of manufacturers,
vendors, or the like and
pursuant to the Seller
Debt.

 

(b)
Section
3.10(b) of the Disclosure
Schedules
lists (i) the street
address of each
parcel
of Real Property;
(ii) if such property
is leased or subleased
by JCG, the landlord
under the lease,
the rental amount currently
being paid,
and the expiration
of the term of such lease
or sublease for each
leased
or subleased
property;
and (iii) the current
use of such property.
With respect
to owned Real Property,
the Sellers
have delivered
or made available
to Buyer
true, complete
and correct
copies of the deeds and
other instruments
(as recorded)
by which JCG
acquired such
Real Property,
and copies of all
title insurance
policies, opinions,
abstracts and
surveys in the possession of JCG
or the Sellers
and relating
to the Real Property.
With respect
to leased Real
Property,
the Sellers
have delivered
or made available
to Buyer
true, complete
and correct
copies of any
leases
affecting
the Real Property.
JCG is not a sublessor or grantor
under any
sublease or other
instrument granting
to any other Person
any right
to the possession,
lease,
occupancy
or enjoyment
of any leased
Real Property.
The use and operation
of the Real Property
in the conduct of JCG’s
business do not violate
in any material
respect any
Law, covenant,
condition, restriction,
easement,
license,
permit or agreement.
To the best of Sellers’
knowledge,
no material improvements
constituting
a part of the Real Property
encroach
on real property
owned or leased
by a Person
other than JCG. To the Sellers’
knowledge,
there are
no Actions pending
nor threatened
against or affecting
the Real Property
or any
portion thereof or interest
therein in the nature
or in lieu of condemnation
or eminent
domain proceedings.

 

3.11
Condition and Sufficiency
of Assets. The buildings,
plants, structures,
furniture, fixtures,
machinery,
equipment, vehicles
and other items
of tangible
personal
property of JCG
are structurally
sound, are in good
operating
condition and
repair (normal
wear and
use excepted),
and are adequate
for the uses to which
they are being
put, and none of such
buildings,
plants, structures,
furniture,
fixtures, machinery,
equipment,
vehicles and
other items
of tangible personal
property is, to the best
of the Sellers’
knowledge,
in need of maintenance
or repairs
except
for ordinary,
routine maintenance and
repairs that are
not material in nature
or cost. The buildings,
plants, structures, furniture,
fixtures, machinery,
equipment, vehicles
and other items
of tangible personal
property currently
owned or leased
by JCG, together
with all other properties
and assets
of JCG, are sufficient
for the continued
conduct of JCG’s
business after
the Closing in substantially
the same manner as
conducted
prior to the Closing and constitute
all of the rights,
property and assets
necessary to conduct
the business of JCG
as currently
conducted.

 

3.12
Inventory.
All inventory of JCG, whether
or not reflected
in the Interim Balance
Sheet, consists
of a quality
and quantity
usable and salable
in the ordinary
course of
business consistent with past
practice.
All such inventory
is owned by JCG
free and clear
of all Encumbrances,
except
ordinary and
customary
liens of manufacturers,
vendors, or the like and
pursuant to the Seller
Debt,
and no inventory is held
on a consignment
basis.
The quantities
of each item
of inventory (whether
raw materials,
work-in-process
or finished goods) are
not excessive
but are reasonable
in the present circumstances
of JCG.

    	 

    	 

    

 

 

 

 

 

3.13
Accounts Receivable.
The accounts receivable
reflected
on the Interim Balance
Sheet and
the accounts
receivable
arising after
the date thereof
(a) have
arisen from
bona fide transactions
entered into
by JCG involving
the sale of goods
or the rendering
of services
in the ordinary course
of business consistent with
past practice;
and (b) constitute
only valid,
undisputed
claims of JCG not subject
to claims of set-off
or other defenses
or counterclaims other than normal
cash discounts accrued
in the ordinary course
of business consistent
with past practice.

 

3.14
Insurance.
Section
3.14 of the Disclosure Schedules
sets forth a true and
complete
list of all current
policies or binders
of fire, liability,
product liability,
umbrella
liability,
real and
personal property,
workers’ compensation,
vehicular,
directors’ and
officers’
liability,
fiduciary
liability
and other casualty
and property
insurance
maintained by JCG
and relating to the assets,
business, operations,
employees,
officers
and managers
of JCG (collectively,
the “Insurance
Policies”)
and true and
complete
copies of such Insurance
Policies
have been
made available
to Buyer.
Such Insurance
Policies
are in full force
and effect.
JCG has not received
any written
notice of cancellation
of, premium increase
with respect
to, or alteration
of coverage
under, any of such
Insurance
Policies.
All premiums due on such
Insurance
Policies
have either
been paid
or, if due and payable
prior to Closing, will be paid
prior to Closing in accordance
with the payment
terms of each
Insurance
Policy.
The Insurance
Policies
do not provide for any retrospective
premium
adjustment or other experience-based
liability
on the part of JCG. All such
Insurance
Policies
(a) are valid
and binding in
accordance
with their terms; (b) are provided
by carriers
who are financially
solvent; and (c)
have not been subject
to any lapse in coverage.
There are
no claims related
to the business of JCG pending
under any such
Insurance
Policies
as to which coverage
has been questioned,
denied or disputed or in respect
of which there is an
outstanding reservation
of rights. JCG is
not in default under,
or otherwise failed
to comply with, in any
material
respect,
any provision contained
in any such
Insurance
Policy.
The Insurance
Policies
are of the type
and in the amounts
customarily
carried
by Persons conducting
a business similar
to JCG and are
sufficient for compliance
with all applicable
Laws and
contracts
to which JCG
is a party or by which
it is bound.

 

3.16 Legal
Proceedings;
Governmental
Orders.

 

(a)
Except as
set forth on
Schedule
3.16, to the Sellers’
knowledge,
there are
no Actions
pending or threatened
(a) against
or by JCG affecting
any of its
properties
or assets (or by or against
the Sellers
thereof relating
to JCG); or (b) against
or by the Sellers
or JCG that
challenges
or seeks to prevent,
enjoin or otherwise
delay the transactions
contemplated by
this Agreement. To Seller’s
knowledge, no event
has occurred
or circumstances
exist
that may give rise to, or serve
as a basis for,
any such
Action.

 

(b)
There are
no outstanding Governmental
Orders and
no unsatisfied
judgments, penalties
or awards
against
or affecting
JCG or any
of its properties
or assets. To the Sellers’
knowledge, no event
has occurred
or circumstances
exist that may
constitute or result
in (with or
without notice or lapse
of time) a violation
of any such Governmental
Order.

    	 

    	 

    

 

 

 

 

 

3.17 Compliance
With Laws; Permits.

 

(a)
To the Sellers’
knowledge,
JCG is not in violation
of any Laws
applicable
to it or its business, properties
or assets that has had
or could reasonably
be expected
to result in a Material
Adverse Effect.

 

(b)
To the Sellers’
knowledge,
all Permits required
for JCG to conduct
its business have
been obtained by
it and are valid
and in full force and
effect,
except
where the failure
to possess such permits could
not reasonably
be expected
to result in a Material
Adverse Effect.
All fees and
charges
with respect
to such Permits
as of the date hereof
have been
paid in full. Section
3.17(b) of the Disclosure
Schedules
lists all current
Permits
issued to the Sellers,
including
the names of the Permits
and their respective
dates of issuance
and expiration.
To the Sellers’
knowledge,
no event has
occurred
that, with or without notice
or lapse of time or both, would reasonably
be expected
to result in the revocation,
suspension, lapse or limitation of any
Permit set
forth in Section
3.17(b) of the Disclosure Schedules.

 

3.18 Environmental
Matters.

 

(a)
To the Sellers’
knowledge, JCG
is currently
and has been
following all Environmental Laws
and has not, and
the Seller
has not, received
from any Person
any: (i) Environmental
Notice or Environmental Claim; or (ii)
written request
for information pursuant
to Environmental Law,
which, in each case,
either
remains pending or
unresolved, or is the
source of ongoing
obligations
or requirements
as of the Closing Date.

 

(b)
JCG has obtained
and is in material
compliance
with all Environmental Permits
(each of which
is disclosed in Section
3.18(b) of the Disclosure Schedules)
necessary
for the ownership, lease,
operation
or use of the business or assets
of JCG and all
such Environmental
Permits are
in full force and effect
and shall be maintained
in full force and
effect
through the Closing
Date in accordance
with Environmental Law,
except
to the extent that the failure
to maintain such Permits,
individually or in the aggregate,
would not cause a Material
Adverse Effect,
and to Seller’s
knowledge, neither
JCG nor the Sellers
are aware
of any condition,
event
or circumstance
that might prevent
or impede,
after the Closing
Date, the ownership,
lease,
operation
or use of the business or assets
of JCG as currently
carried
out. With respect
to any such
Environmental Permits,
JCG has undertaken,
or will undertake prior to the Closing
Date, all measures
necessary
to facilitate
transferability
of the same,
and to the Sellers’
knowledge,
neither
JCG nor the Sellers
are aware
of any condition,
event or circumstance
that might prevent
or impede the transferability
of the same, nor have
they received any
Environmental Notice or written
communication
regarding
any material
adverse
change
in the status or terms
and conditions
of the same.

 

3.19
Employment
Matters.
Section
3.19 of the Disclosure Schedules
contains a list
of all persons who are
employees,
independent
contractors
or consultants of JCG
as of the date
hereof,
including any employee
who is on a leave of absence
of any nature,
paid or unpaid, authorized
or unauthorized,
and sets forth
for each such individual
the following: (i) name; (ii) title
or position (including
whether full or part
time); (iii) hire date;
(iv) current
annual base
compensation
rate; (v) commission,
bonus or other incentive-based
compensation;
and (vi) a description
of the fringe benefits
provided to each such
individual as of the date
hereof. To the Sellers’
knowledge,
JCG is

    	 

    	 

    

 

 

 

 

 

not a party
to or bound by any
collective
bargaining
or any other
type
of labor or union agreement
which covers
any employees.
To the Sellers’
knowledge,
no strike, labor suit or proceeding
or labor administrative
proceeding
is pending or to the Sellers’
knowledge,
threatened
respecting
the Employees,
and to the Sellers’
knowledge,
no such matter has
been threatened
since .

 

3.20 Taxes.

 

(a)
All Tax Returns required
to be filed on or before
the Closing Date by
JCG have been,
or will be, timely
filed. Such
Tax Returns are,
or will be,
true, complete
and correct
in all material
respects. All material
Taxes
due and owing by JCG
(whether or not shown on any
Tax Return), as
of the Closing Date, have
been, or will be, timely
paid.

 

(b)
JCG has withheld and
paid each
Tax required
to have been
withheld and paid
in connection
with amounts paid
or owing to any employee,
independent contractor,
creditor,
customer,
member or other party, and
complied with all
information reporting
and backup
withholding provisions of applicable
Law, except
to the extent that JCG’s
failure to do the same
would not have a Material
Adverse Effect.

 

(c)
No written claim
has been made
by any
taxing
authority in any
jurisdiction
where JCG

does
not file Tax Returns that it is, or may
be, subject
to Tax by
that jurisdiction.

 

(d)
No extensions or waivers
of statutes of limitations
have been
given
or requested with respect
to any
Taxes
of JCG.

 

(e)
The amount of JCG’s
Liability
for unpaid Taxes
for all periods ending
on or before the Interim
Balance Sheet
Date does not, in the aggregate,
materially
exceed
the amount of accruals
for Taxes
(excluding
reserves
for deferred
Taxes)
reflected on the
Financial
Statements. The amount
of the JCG’s Liability
for unpaid Taxes
for all periods following
the Interim Balance
Sheet Date
shall not, in the aggregate,
exceed
the amount of accruals
for Taxes
(excluding
reserves
for deferred
Taxes)
as adjusted
for the passage
of time through the Closing
Date in accordance
with the past custom and
practice
of JCG (and which
accruals
shall not exceed
comparable amounts
incurred in similar
periods in prior years).

 

(f)
JCG is not a party
to any Action
by any
taxing authority.
There is no pending or to

Seller’s
knowledge,
threatened
Actions by
any taxing
authority.

 

(g)
The Sellers
will deliver
to Buyer,
by the Closing Date,
copies of all federal,
state, local
and foreign
income, franchise
and similar
Tax Returns, examination
reports, and
statements of deficiencies
assessed against,
or agreed
to by, JCG
for Tax periods ending
on or after December

31, 2014.

 

(h)
The Sellers
agree
to pay any
and all Taxes
of Seller
due in connection
with the resale
of the Shares.

 

3.21
Books and
Records.
The minute books of JCG have
been made available
to Buyer
and to the extent
records were
created,
are correct
and have been
maintained in accordance
with

    	 

    	 

    

 

 

 

 

 

sound business
practices.
At the Closing, all
of those books and records
will be in the possession of the Sellers.

 

3.22
Brokers.
No broker, finder or investment
banker
is entitled
to any brokerage,
finder’s or other fee
or commission
in connection
with the transactions
contemplated by
this Agreement
or any other
Transaction
Document based
upon arrangements
made by or on behalf
of the Sellers,
except
those that the Sellers
will satisfy
within thirty
(30) days of Closing.

 

3.23
Full Disclosure.
To the Sellers’
knowledge no
representation
or warranty
by the Sellers
in this Agreement
and to the Sellers’
knowledge, no statement
contained in the
Disclosure Schedules
to this Agreement
or any certificate
or other document furnished
or to be furnished to Buyer
pursuant to this Agreement
contains any
untrue statement of a material
fact or omits
to state a material fact
that has had
or could reasonably
be expected
to result in a Material
Adverse Effect
on Buyer.

 

ARTICLE
IV Representations
and Warranties
of Buyer

Except
as set forth
in the correspondingly
numbered
Section
of the Disclosure Schedules,
Buyer
represents
and warrants
to JCG and the Sellers
that the statements contained
in this Article
IV are
true and correct
as of the date hereof.

 

4.01
Organization and
Authority of Buyer.
Buyer
is a corporation
duly organized,
validly
existing
and in good
standing under the Laws
of the state of Delaware.
The Organizational
Documents of Buyer
provided to Seller
are the effective
Organizational
Documents of Buyer,
and no amendments
or changes
thereto will have
been
made prior to the Closing. Buyer
has full corporate
power and authority
to enter into
this Agreement
and the other Transaction
Documents to which Buyer
is a party,
to carry
out its obligations
hereunder
and thereunder
and to consummate the transactions
contemplated
hereby
and thereby.
The execution
and delivery
by Buyer
of this Agreement
and any
other Transaction
Document
to which Buyer
is a party, the performance
by Buyer
of its obligations
hereunder
and thereunder
and the consummation by
Buyer
of the transactions
contemplated
hereby
and thereby
have been
duly authorized
by all requisite
corporate
action on the part
of Buyer.
This Agreement
has been
duly executed
and delivered
by Buyer,
and this Agreement
constitutes
a legal, valid
and binding obligation
of Buyer
enforceable
against Buyer
in accordance
with its terms.
When each
other Transaction
Document
to which Buyer
is or will be a party has
been duly
executed
and delivered
by Buyer,
such Transaction
Document will constitute
a legal and binding
obligation
of Buyer
enforceable
against
it in accordance
with its terms.

 

4.02
No Conflicts;
Consents. The execution,
delivery
and performance
by Buyer
of this Agreement
and the other Transaction
Documents to which it is a party,
and the consummation of the transactions
contemplated
hereby
and thereby,
do not and will not: (a) conflict
with or result
in a violation
or breach of, or default
under, any
provision of the Organizational
Documents of Buyer;
(b) conflict
with or result in a violation
or breach of any
provision of any
Law or
Governmental Order
applicable
to Buyer;
or (c) require the
consent, notice
or other action
by any

    	 

    	 

    

 

 

 

 

 

Person
under, conflict
with, result in a violation or breach
of, constitute a default
or an event
that, with or without notice
or lapse of time
or both, would constitute a default
under, result
in the acceleration
of or create
in any party
the right to accelerate,
terminate, modify
or cancel
any Contract
to which Buyer
is a party or is bound or to which
any of its
properties or assets
are subject
(including any
Material
Contracts) or any
Permit affecting
the properties,
assets or business of Buyer.
No consent, approval,
Permit, Governmental
Order, declaration
or filing with, or notice to, any
Governmental
Authority is required
by or with respect
to Buyer
in connection
with the execution
and delivery
of this Agreement
and the other
Transaction
Documents and the consummation
of the transactions
contemplated hereby
and thereby.

 

4.03
Brokers.
No broker, finder or investment
banker
is entitled
to any brokerage,
finder’s or other fee
or commission
in connection
with the transactions
contemplated by
this Agreement
or any other
Transaction
Document based
upon arrangements
made by
or on behalf
of Buyer.

 

4.04
Sufficiency
of Funds. Buyer
has sufficient
cash on hand or other
sources of immediately
available
funds to enable
it to make payment
of the Purchase
Price and
consummate the transactions
contemplated
by this Agreement.

 

4.05 Capitalization.

 

(a)
The capitalization
of the Buyer
as of the date
of the Agreement
is as described
on Schedule
4.05 and
will remain as of the Closing
Date. The Buyer
has not issued
any capital
stock since such date. No shares
of the Buyer’s
capital
stock are held
in the Buyer’s
treasury. Other
than preferred
shares,
Buyer
has not authorized
and does not have
outstanding any
other class of debt
or equity securities.
Except as
set forth on Schedule
4.05, there are no authorized
or outstanding
options, warrants,
script, rights to subscribe to, or
debt or other
securities exercisable
for or convertible
into, calls
or commitments
of any character
whatsoever relating
to, or securities, rights
or obligations
convertible
into or exchangeable
for, or giving
any Person
any right to subscribe
for or acquire,
any shares
of capital
stock, or contracts,
commitments,
understandings
or arrangements
by which the Buyer
is or may become bound
to issue additional
shares of common
stock, or securities or rights
convertible
or exchangeable
into shares
of common stock, and
none will be authorized,
issued, or granted
from the date of
this Agreement until
Closing. All preemptive
or participation rights
in the capital
stock of Buyer
are set
forth in Schedule
4.05.

 

(b)
The Shares
will be free and
clear
of all liens
and Encumbrances
at the Closing and
will be fully paid and
non-assessable
subject to the limitations
in the Lock-Up
Agreement (Exhibit
2).

 

4.06
Financial
Statements.
Complete copies
of Buyer’s
audited
financial
statements consisting
of the balance
sheet as of May
31, 2017 and
the related statements
of income for the year then
ended May
31, 2017, and unaudited
financial
statements consisting
of the balance
sheet as
of February
28, 2018 and the related
statements of income (the “Buyer’s
Financial
Statements”),
as well as
the same with respect
to any Subsidiaries
of Buyer,
are included
in the Disclosure Schedules/have
been delivered
to the Sellers’
Representative.
Except as
disclosed in the Financial Statement,
the Financial Statements
have been
prepared
to the best of Buyer’s
ability

    	 

    	 

    

 

 

 

 

 

in accordance
with GAAP applied
on a consistent basis
throughout the period involved,
subject, in the case
of the Interim
Financial Statements,
to normal and recurring
year-end
adjustments (the effect
of which will not be materially
adverse).
The Financial
Statements are
based
on the books and records
of the Buyer
and its Subsidiaries,
and fairly
present
in all material
respects
the financial
condition of the Buyer
and its Subsidiaries
as of the respective
dates they were prepared
and the results
of the operations
of Buyer
and its Subsidiaries
for the periods indicated.
The balance
sheet of Buyer
as of May 31, 2017 is referred
to herein
as the “Buyer
Balance Sheet”
and the date
thereof as the “Balance
Sheet Date”
and the balance
sheet of
Buyer
as of February
28, 2018 is referred
to herein
as the “Interim
Buyer Balance
Sheet” and
the date thereof as
the “Interim
Buyer Balance
Sheet Date”.
Buyer
maintains a standard system
of accounting
established
and administered
in accordance
with GAAP to the best
of its ability.

 

4.07
Undisclosed Liabilities.
To Buyer’s
knowledge,
Buyer
and its Subsidiaries
have no material
liabilities,
obligations
or commitments
of any
nature whatsoever,
absolute or contingent,
accrued
or unaccrued,
matured
or unmatured or otherwise
(“Liabilities”),
except
(a) those which
are adequately
reflected or reserved
against
in the Interim Buyer
Balance Sheet
as of the Interim
Buyer
Balance Sheet
Date, and
(b) those which have
been incurred
in the ordinary
course of business
consistent with past practice
since the Interim Balance
Sheet Date
and which are
not, individually or
in the aggregate,
material
in amount.

 

4.08
Absence of Certain Changes,
Events and
Conditions. Since
the Interim Buyer
Balance
Sheet
Date, and other than in the ordinary
course of business
consistent with past
practice,
to Buyer’s
knowledge,
there has not been,
with respect
to Buyer
or its Subsidiaries,
any:

 

(a)
event,
occurrence
or development
that has had,
or could reasonably
be expected
to have, individually
or in the aggregate,
a Material
Adverse Effect;

 

(b) amendment
of the Organizational
Documents;

 

(c)
split, combination or reclassification
of any shares
of stock;

 

(d)
issuance,
sale or other disposition
of, or creation
of any Encumbrance
on, any shares
of Buyer’s
capital
stock held by Buyer
or its Affiliates,
or grant of any
options, warrants
or other rights to purchase
or obtain (including
upon conversion,
exchange
or exercise)
any such
shares,
except
pursuant to this
Agreement;

 

(e)
declaration
or payment
of any distributions
on or in respect of any
shares of Buyer’s
or its Subsidiaries’
capital stock, or redemption,
purchase or acquisition
of any outstanding
capital
stock;

 

(f)
material
change
in any method of
accounting
or accounting
practice
of Buyer
or its

Subsidiaries,
except
as required
by GAAP or as
disclosed in the notes to the Financial
Statements;

 

(g)
material change
in Buyer’s
or its Subsidiaries’
cash management
practices
and its policies,
practices
and procedures
with respect to
collection
of accounts
receivable,
establishment
of reserves
for uncollectible
accounts,
accrual
of accounts receivable,
inventory control, 

prepayment
of expenses,
payment
of trade accounts
payable,
accrual
of other expenses,
deferral
of revenue and
acceptance
of customer
deposits;

    	 

    	 

    

 

 

 

 

 

 

(h)
incurrence,
assumption
or guarantee
of any indebtedness
for borrowed
money except
unsecured current
obligations
and Liabilities
incurred
in the ordinary course
of business consistent with past practice.

 

(i)
transfer, assignment,
sale or other disposition of any
of the assets shown
on the Buyer

Financial
Statements or Interim
Buyer
Balance Sheet;

 

(j)
transfer,
assignment
or grant of any
license or sublicense
of any material
rights under
or with respect
to any
Buyer
Intellectual
Property
or Buyer
IP Agreements;

 

(k)
material damage,
destruction
or loss (whether or not covered
by insurance)
to its property;

 

(l)
any capital
investment
in, or any
loan to, any other Person;

 

(m)
acceleration,
termination,
material modification
to or cancellation
of any material
Contract (including,
but not limited to, any
Material
Contract) to which Buyer
or any
of its Subsidiaries
are a party
or by which
it or they are
bound;

 

(n)
imposition of any
Encumbrance
upon any material
portion of its property
or assets, tangible
or intangible;

 

(o)
any loan to (or forgiveness
of any loan to), or entry
into any
other transaction
with, any of
its shareholders
or current or former
directors, officers
and employees;

 

(p)
entry into
a new line of business
or abandonment
or discontinuance
of existing
lines of business;

 

(q)
adoption of any
plan of merger,
consolidation,
reorganization,
liquidation or dissolution
or filing of a petition
in bankruptcy
under any
provisions of federal
or state bankruptcy
Law or consent
to the filing
of any bankruptcy
petition
against it under any
similar
Law;

 

(r)
acquisition
by merger
or consolidation with, or by purchase
of a substantial
portion of the assets, stock or other equity
of, or by any
other manner, any
business or any
Person or any
division thereof;

 

(s)
action by
Buyer
or any of its
Subsidiaries to make,
change
or rescind
any Tax
election,
amend any
Tax Return
or take any
position on any Tax
Return, take any
action,
omit to take any
action or enter
into any
other transaction
that would have the effect
of increasing
the Tax
liability
or reducing any
Tax asset
of Seller
in respect
of any Post-Closing
Tax Period;
or

 

(t)
any Contract
to do any of the
foregoing,
or any action
or omission that would result
in any of
the foregoing.

    	 

    	 

    

 

 

 

 

 

 

4.09 Title to Assets;
Real Property.

 

(a)
To Buyer’s
knowledge,
Buyer
has good and
valid (and,
in the case of owned Real
Property,
good and marketable
fee simple) title
to, or a valid leasehold
interest
in, all Real Property
and personal
property and
other assets reflected
in the Financial Statements
or acquired after
the Interim Balance
Sheet
Date, other than properties
and assets sold or otherwise
disposed of in the ordinary
course of business consistent
with past practice
since the Interim Balance
Sheet Date.
All such properties
and assets
(including leasehold
interests)
are free
and clear
of Encumbrances.

 

(b)
Section
4.10(b) of the Disclosure
Schedules
lists (i) the street
address of each
parcel
of Real Property;
(ii) if such property
is leased
or subleased by
Buyer,
the landlord under the lease,
the rental amount currently
being paid,
and the expiration
of the term of such lease
or sublease for each
leased
or subleased
property;
and (iii) the current
use of such property.
With respect
to owned Real Property,
Buyer
has delivered
or made available
to the Sellers
true, complete
and correct
copies of the deeds and
other instruments (as
recorded)
by which Buyer
acquired
such Real Property,
and copies of all
title insurance
policies, opinions,
abstracts and
surveys in the possession of Buyer
and relating
to the Real Property.
With respect
to leased
Real Property,
Buyer
has delivered
or made available
to the Sellers
true, complete
and correct
copies of any
leases
affecting
the Real Property.
Buyer
is not a sublessor or grantor
under any
sublease or other instrument
granting
to any other Person
any right
to the possession,
lease, occupancy
or enjoyment
of any leased
Real Property.
The use and operation
of the Real Property
in the conduct
of Buyer’s
business do not violate
in any material
respect
any Law,
covenant,
condition, restriction,
easement,
license,
permit or agreement.
To the best of Buyer’s
knowledge,
no material improvements
constituting
a part of the Real
Property
encroach
on real property
owned or leased
by a Person
other than Buyer.
There are no Actions
pending nor, to the Buyer’s
Knowledge,
threatened
against
or affecting
the Real Property
or any portion thereof
or interest
therein in the nature
or in lieu of
condemnation or eminent
domain proceedings.

 

4.10
Condition and Sufficiency
of Assets. The buildings,
plants, structures,
furniture, fixtures,
machinery,
equipment, vehicles
and other items
of tangible personal
property of Buyer
are structurally
sound, are in good operating
condition and
repair (normal
wear and
use excepted),
and are adequate
for the uses to which they
are being put, and
none of such buildings,
plants, structures, furniture,
fixtures, machinery,
equipment, vehicles
and other items
of tangible personal
property is, to the best
of Buyer’s
knowledge,
in need of maintenance
or repairs except
for ordinary,
routine maintenance
and repairs
that are not material
in nature or cost.
The buildings,
plants, structures, furniture,
fixtures, machinery,
equipment,
vehicles and
other items
of tangible
personal property
currently
owned or leased
by Buyer,
together with all other properties
and assets of Buyer,
are sufficient
for the continued
conduct
of Buyer’s
business after
the Closing in substantially
the same manner as
conducted
prior to the Closing and constitute
all of the rights, property
and assets necessary
to conduct the business
of Buyer
as currently
conducted.

 

4.11
Accounts Receivable. The accounts receivable
reflected
on the Interim Balance Sheet and
the accounts
receivable arising after
the date thereof
(a) have arisen from
bona fide transactions entered
into by Buyer
involving the sale of goods or
the rendering
of services
in the ordinary course
of business consistent with past
practice; and
(b) constitute
only valid,
undisputed claims of Buyer
not subject to claims of set-off
or other defenses
or counterclaims other than
normal cash discounts accrued
in the ordinary course
of business consistent
with past practice.

    	 

    	 

    

 

 

 

 

  

4.12
Insurance.
Section
4.13 of the Disclosure Schedules
sets forth a true and
complete
list of all current
policies or binders
of fire, liability,
product liability,
umbrella
liability,
real and
personal property,
workers’ compensation,
vehicular,
directors’ and
officers’
liability,
fiduciary
liability
and other casualty
and property
insurance
maintained by Buyer
and relating to the
assets,
business, operations,
employees,
officers
and directors
of Buyer
(collectively,
the “Insurance
Policies”)
and true and
complete
copies of such Insurance
Policies
have been
made available
to Seller.
Such Insurance
Policies
are in full force
and effect.
Buyer
has not received
any written
notice of cancellation
of, premium
increase with respect
to, or alteration
of coverage
under, any
of such Insurance
Policies.
All premiums
due on such Insurance
Policies
have either
been paid
or, if due and payable
prior to Closing,
will be paid prior
to Closing in accordance
with the payment
terms of each Insurance
Policy. The
Insurance
Policies
do not provide for any retrospective
premium adjustment
or other experience-based
liability
on the part of Buyer.
All such Insurance
Policies
(a) are valid
and binding in accordance
with their terms;
(b) are provided by
carriers
who are financially
solvent; and (c) have
not been subject
to any lapse in coverage.
There are
no claims related
to the business of Buyer
pending
under any
such Insurance
Policies
as to which coverage
has been questioned,
denied
or disputed or in respect of which
there is an outstanding
reservation
of rights,
which could have
a Material
Adverse Effect.
Buyer
is not in default under,
or otherwise
failed
to comply with, in any
material respect,
any provision contained
in any such
Insurance
Policy.
The Insurance
Policies
are of the type
and in the amounts
customarily
carried
by Persons conducting
a business similar
to Buyer
and are sufficient
for compliance
with all
applicable
Laws and
Contracts to which
Buyer
is a party or
by which it is bound.

 

4.13 Legal
Proceedings;
Governmental
Orders.

 

(a)
To Buyer’s
knowledge,
there are
no Actions pending
or threatened
against
or by Buyer
or any Affiliate
of Buyer
affecting
any of its
properties
or assets; or (b) against
or by Buyer
or any Affiliate
of Buyer
that challenges
or seeks to prevent,
enjoin or otherwise
delay the transactions
contemplated by
this Agreement.
No event
has occurred
or circumstances
exist that may
give rise to, or serve
as a basis for,
any such
Action.

 

(b)
There are
no outstanding Governmental
Orders and
no unsatisfied
judgments, penalties
or awards
against
or affecting
Buyer
or any
of its properties
or assets. No event
has occurred
or circumstances
exist that may
constitute or result
in (with or without
notice or lapse
of time) a violation
of any such
Governmental
Order.

 

4.14 Compliance
with Laws;
Permits.

 

(a)
To Buyer’s
knowledge,
neither
Buyer
nor its Affiliates are
in violation
of any Laws
applicable
to it or its business,
properties or assets
that has
had or could reasonably
be expected
to result in a Material
Adverse Effect.

 

(b)
To Buyer’s
knowledge,
all Permits
required for Buyer
to conduct its
business have been
obtained by it and
are valid
and in full force and
effect,
except
where the failure
to possess

    	 

    	 

    

 

 

 

 

 

such
permits could not reasonably
be expected
to result in a Material
Adverse Effect.
All fees and
charges
with respect
to such Permits
as of the date hereof
have been
paid in full. Section
4.14(b) of the Disclosure Schedules
lists all current
Permits issued
to the Buyer,
including
the names of the Permits
and their respective
dates of
issuance
and expiration.
To Buyer’s
knowledge,
no event has
occurred
that, with or without notice or lapse
of time or both, would reasonably
be expected
to result in the revocation,
suspension, lapse or limitation
of any Permit set
forth in Section
4.14(b) of the Disclosure Schedules.

 

4.15 Environmental
Matters.

 

(a)
To Buyer’s
knowledge,
Buyer
is currently
and has been
in compliance
with all Environmental Laws
and has
not, and the Buyer
has not, received
from any
Person any:
(i) Environmental Notice or Environmental
Claim;
or (ii) written
request
for information pursuant
to Environmental Law,
which, in each
case,
either
remains pending or unresolved,
or is the source of ongoing
obligations
or requirements
as of the Closing Date.

 

(b)
Buyer
has obtained
and is in material
compliance
with all Environmental
Permits (each
of which is disclosed in Section
4.15(b) of the Disclosure
Schedules)
necessary
for the ownership, lease,
operation
or use of the business or assets of Buyer
and all such
Environmental Permits
are in full force
and effect
and shall be maintained
in full force and
effect
through the Closing
Date in accordance
with Environmental Law,
except
to the extent
that the failure to maintain such
Permits,
individually
or in the aggregate,
would not cause a Material
Adverse Effect,
and to Buyer’s
knowledge,
Buyer
is not aware of
any condition,
event or circumstance
that might prevent
or impede,
after the Closing
Date, the ownership,
lease,
operation
or use of the business
or assets of Buyer
as currently
carried
out.

 

4.16
Taxes. To the best
of Buyer’s
knowledge,
neither
Buyer
nor its Subsidiaries
have outstanding
any material
unpaid liability
for taxes or similar
charges
other than
as reflected
in the Buyer
Financial
Statements.

 

4.17
Books and Records.
The minute books of Buyer
have been
made available
to Seller
and to the extent
records were
created,
are correct
and have been
maintained in accordance
with sound business practices.
At the Closing, all
of those books and records
will be in the possession of the Buyer.

 

4.18
Full Disclosure.
To Buyer’s
knowledge
no representation
or warranty
by Buyer
in this Agreement
and to Buyer’s
knowledge,
no statement contained
in the Disclosure Schedules
to this Agreement
or any
certificate
or other document
furnished or to be furnished
to Seller
pursuant to this
Agreement
contains any
untrue statement of
a material fact
or omits to state
a material fact
that has had or could
reasonably
be expected
to result in a Material
Adverse Effect
on Buyer.

 

4.19
Shares.  The Shares
are duly authorized
and upon delivery
to the Sellers,
will be validly
issued, fully
paid and
nonassessable,
free and
clear
of all liens
and Encumbrances
other than restrictions on transfer
provided for in this
Agreement.
The issuance
of the Shares
will not violate any
shareholder’s
agreement,
preemptive
rights, and
will be issued in
compliance
with the registration
provisions of state
and federal
securities
laws.

    	 

    	 

    

 

 

 

 

 

 

 

 

ARTICLE
V Covenants

5.01
Conduct of
Business
Prior
to the Closing. From the date
hereof
until the Closing,
except
as otherwise provided
in this Agreement
or consented
to in writing by
Buyer
(which consent
shall not be unreasonably
withheld or delayed),
the Sellers
shall cause JCG
to, (a) conduct
the business of JCG
in the ordinary course
of business consistent
with past practice;
and (b) use
reasonable
best efforts
to maintain and preserve
intact the current
organization,
business and franchise
of JCG and
to preserve
the rights, franchises,
goodwill and relationships
of its employees,
customers,
lenders, suppliers,
regulators
and others
having business
relationships with JCG.
Without limiting
the foregoing,
from the date hereof
until the Closing Date,
Seller
shall cause JCG:

 

(a)       to
preserve
and maintain all
of its Permits;

 

(b)       to
pay its debts,
Taxes and
other obligations
when due;

 

(c)
to maintain the properties
and assets owned,
operated or used
by it in the same
condition as
they were
on the date
of this Agreement,
subject to
reasonable
wear and
tear;

 

(d)
to continue in full force
and effect
without modification
all Insurance
Policies,
except
as required
by applicable
Law;

 

(e)       to
defend and
protect
its properties
and assets
from infringement
or usurpation;

 

(f)
to perform all
of its obligations
under all Contracts
relating to or affecting
its properties,
assets
or business;

 

(g)to maintain
its books and records
in accordance
with past practice;
(h)to comply in all material
respects
with all applicable
Laws; and

(i)
not to take or permit any
action that would cause
any of the changes,
events
or conditions described
in Section
3.08 to occur.

 

5.02
Access
to Information.
From the date
hereof
until the Closing,
the Seller
shall, and
shall cause JCG
to, (a) afford
Buyer
and its Representatives
full and free
access to and
the right to inspect
all of the Real Property,
properties, assets,
premises,
books and records,
Contracts and other documents
and data
related to JCG;
(b) furnish Buyer
and its Representatives
with such financial,
operating
and other data
and information
related to JCG
as Buyer
or any of its
Representatives
may reasonably
request;
and (c) instruct
the Representatives
of JCG and JCG
to cooperate
with Buyer
in its investigation
of JCG. Buyer
shall provide Seller
with reasonable
and customary
financial
and operation
information.

    	 

    	 

    

 

 

 

 

 

5.03 Notice
of Certain Events.

 

(a)
From the date hereof
until the Closing,
each party
shall promptly
notify the other in writing
of:

 

(i) any
fact, circumstance,
event or action
the existence,
occurrence
or taking of which (A)
to its knowledge,
has had, or could
reasonably
be expected
to have, individually
or in the aggregate,
a Material
Adverse Effect,
(B) has
resulted
in, or could reasonably
be expected
to result in, any
representation
or warranty
made by it hereunder
not being true and correct
or (C) has resulted
in, or could reasonably
be expected
to result in, the failure
of any of the conditions
set forth
in Section
7.02 to be satisfied;

 

(ii) any
notice or other communication
from any
Person alleging
that the consent of such
Person is or may
be required in connection
with the transactions
contemplated
by this Agreement;

 

(iii) any
notice or other
communication
from any
Governmental Authority
in connection
with the transactions
contemplated by
this Agreement;
and

 

(iv) any
Actions commenced
or, to the disclosing party’s
Knowledge,
threatened
against,
relating to or involving or otherwise
affecting
Seller
or the Seller
that, if pending on the date
of this Agreement,
would have been
required to have
been disclosed pursuant
to Section 3.17 or that
relates to the consummation
of the transactions
contemplated by
this Agreement.

 

5.04
Confidentiality.
At all times through
and after
the Closing, each
party
shall, and
shall cause its
Affiliates to, hold, and shall
use its reasonable
best efforts
to cause its
or their respective
Representatives
to hold, in confidence
any and all
information, whether written
or oral, concerning
the other, except
to the extent that it can
show that such information (a)
is generally
available
to and known by the public through
no fault of the disclosing
party,
any of its Affiliates
or their respective
Representatives;
(b) is lawfully acquired
by the disclosing party,
any of its
Affiliates or their respective
Representatives
from and after
the Closing from sources
which are not prohibited
from disclosing such
information
by a legal,
contractual
or fiduciary obligation;
or (c) is required
by law or regulatory
order or the disclosure of such
information is necessary
to establish
a lawful claim or defense.
If a party
or any of its Affiliates
or their respective
Representatives
are compelled to disclose
any information by
judicial or
administrative
process or by
other requirements
of Law
or to establish a claim
or defense,
it shall promptly notify
the other in writing and shall
disclose only that portion of such information
which it is advised
by its counsel
in writing is legally
required
to be disclosed, provided that it shall
use reasonable
best efforts
to obtain an appropriate
protective
order or other reasonable
assurance
that confidential
treatment
will be accorded
such information,
and shall cooperate
with the party whose information
is to be disclosed in such a manner
as may be reasonably
requested
to limit disclosure or dissemination.
Buyer agrees
that, unless legally
required, it shall
not publicize or publicly
disclose the Purchase Price
or consideration
given Seller
hereunder
and shall take
all reasonable
steps to assure that such
information
is treated as confidential
in Securities
and Exchange
Commission filings
and disclosures and
other governmental
filings and is not included in press
releases
or the like.

    	 

    	 

    

 

 

 

 

 

 

5.05 Governmental
Approvals
and Consents.

 

(a)
Each party
hereto
shall, as
promptly as possible,
(i) make, or cause
to be made, all filings
and submissions required
under any
Law applicable
to such party
or any
of its Affiliates;
and (ii) use reasonable
best efforts
to obtain, or cause to be obtained,
all consents,
authorizations,
orders and approvals
from all
Governmental Authorities
that may be or become
necessary
for its execution
and delivery
of this Agreement
and the performance
of its obligations
pursuant to this Agreement
and the other Transaction
Documents. Each party
shall cooperate
fully with the other party
and its Affiliates
in promptly seeking
to obtain all such consents,
authorizations,
orders and approvals.
The parties hereto
shall not willfully
take any
action that will have
the effect
of delaying,
impairing or impeding
the receipt
of any required
consents, authorizations,
orders and approvals.

 

(b)
Seller
and Buyer
shall use reasonable
best efforts
to give all notices
to, and obtain all
consents from,
all third parties
that are described
in Section
3.05 and Section
4.02 of the Disclosure Schedules.

 

5.06
Closing Conditions.
From the date
hereof until
the Closing, each
party
hereto
shall, and
Seller
shall cause
JCG to, use reasonable
best efforts
to take such actions
as are necessary
to expeditiously
satisfy
the closing conditions
set forth
in Article
VII hereof.

 

5.07
Resale of Shares.
For a period of twelve
(12) months
upon the receipt
of the Shares
(the “Lock-Up
Period”),
the Seller
shall not offer,
pledge,
sell,
contract to sell,
grant, lend or
otherwise transfer
or dispose of, directly
or indirectly,
any Shares.
Upon the expiration
of the Lock- Up Period,
the Seller
may sell the Shares
only in accordance
with 1.02 of this Agreement.
The Sellers
are prohibited
from transferring
the shares at
any time
to a third party
unless written consent
is obtained from
the Buyer.

 

The Sellers
hereby
agree
with the Buyer
as follows:

 

(a)
The certificates
evidencing
the Shares
issued to the Sellers,
and each certificate
issued in transfer
thereof, will bear
the following or similar
legend:

 

THE
SECURITIES
REPRESENTED BY THIS
CERTIFICATE
HAVE NOT BEEN
REGISTERED
UNDER
THE SECURITIES
ACT OF 1933, AS AMENDED
(THE “SECURITIES
ACT”), OR ANY
STATE SECURITIES
LAWS AND
NEITHER
SUCH SECURITIES
NOR ANY INTEREST
THEREIN MAY BE
OFFERED, SOLD,
PLEDGED,
ASSIGNED
OR OTHERWISE
TRANSFERRED EXCEPT
(1) PURSUANT
TO AN EFFECTIVE
REGISTRATION
STATEMENT
UNDER THE
SECURITIES
ACT AND APPLICABLE
STATE SECURITIES
LAWS OR (2) PURSUANT
TO AN AVAILABLE
EXEMPTION
FROM THE REGISTRATION
REQUIREMENTS
OF THE SECURITIES
ACT AND APPLICABLE
STATE
SECURITIES
LAWS,
IN WHICH
CASE THE HOLDER
MUST, PRIOR
TO SUCH TRANSFER,
FURNISH
TO THE SELLER
AN OPINION
OF COUNSEL,
WHICH
COUNSEL AND
OPINION
ARE REASONABLY
SATISFACTORY
TO THE SELLER,
THAT SUCH SECURITIES
MAY BE OFFERED, SOLD,
PLEDGED,
ASSIGNED
OR OTHERWISE
TRANSFERRED
IN THE MANNER
CONTEMPLATED
PURSUANT
TO

    	 

    	 

    

 

 

 

 

 

AN AVAILABLE
EXEMPTION
FROM THE REGISTRATION
REQUIREMENTS
OF THE SECURITIES
ACT AND APPLICABLE
STATE SECURITIES
LAWS.

 

(b)
Subject to the provisions of the Lock-Up
Agreement, on the first
anniversary
of the Closing, Buyer
shall cause
Seller
to be issued substitute
stock certificates removing
such restrictive legends.

 

ARTICLES
VI Tax Matters

6.01 Tax Covenants.

 

(a)
Without the prior written
consent of Buyer,
the Sellers
(and, prior to the Closing,
JCG, its Affiliates
and their respective
Representatives)
shall not, to the extent
it may affect,
or relate to, the Seller,
make, change
or rescind
any Tax
election,
amend any Tax
Return or take any position
on any Tax
Return, take any
action, omit
to take any action
or enter into any
other transaction
that would have the effect
of increasing
the Tax liability
or reducing
any Tax asset
of Buyer
other than in the ordinary course
of business consistent with past
practice
in respect of
any Post-Closing
Tax Period.
Seller
agrees
that Buyer
is to have no liability
for any Tax
resulting from
any such
action
prior to Closing of the Sellers,
JCG, its Affiliates
or any of their respective
Representatives,
and agrees
to indemnify
and hold harmless
Buyer
against
any such Tax
or reduction
of any Tax asset.

 

(b)
All transfer,
documentary,
sales, use, stamp, registration,
value added
and other such fees
(including any
penalties
and interest)
incurred in connection
with this Agreement
and the Assignment and
the other Transaction
Documents (including
any real
property
transfer
Tax and
any other similar
Tax)
shall be borne and
paid 50%
by the Sellers
and 50% by
Buyer.
The Sellers
shall, at
their own expense,
timely file any
Tax Return
or other document
with respect to the foregoing
taxes or fees
(and Buyer
shall cooperate
with respect thereto
as necessary).

 

(c)
Buyer
shall prepare,
or cause to be prepared,
all Tax Returns
required to be filed
by the Sellers
after the Closing
Date with respect
to a Pre-Closing
Tax Period.
Any such Tax
Return shall be prepared
in a manner consistent
with past practice
(unless otherwise
required
by Law)
and without a change
of any election
or any accounting
method. Buyer
shall permit the Sellers
to review and
comment
on each
such Tax Return
prior to filing and
shall make
such revisions
as reasonably
requested
by the Sellers.

 

(d)
JCG may establish
and/or maintain a reserve
for payment
of taxes and
other charges
identified in Clauses (a) and
(b) above,
incurred
in the current
tax year
of JCG and that are
currently
due and owing, which
shall be reflected
in the Financial Statements.
JCG may continue
to set aside funds in reserve
to pay such
taxes and
similar charges
for the period between
the execution
of this Agreement
and the Closing.
Buyer
shall cause
JCG to use any such
funds held in reserve
for payment of such
taxes and
other similar charges
as required
following the Closing.

 

    	 

    	 

    

 

 

 

 

 

6.02
Tax Indemnification. For
a term beginning on the Closing Date and ending on the second anniversary of the Closing Date, the Sellers
shall indemnify JCG, Buyer, and each Buyer
Indemnitee and
hold them harmless
from and against
(a) any Loss
attributable to any
breach of or
inaccuracy
in any representation
or warranty
made in Section
3.20; (b) any Loss attributable
to any breach or
violation
of, or failure
to fully perform, any covenant, agreement,
undertaking or obligation
in Article VI; (c) all
Taxes
of JCG or relating to the business
of JCG for all Pre-Closing
Tax Periods
to the extent
in excess of the amounts
reserved
for on the Interim Balance Sheet;
and (d) any and all
Taxes
of any person
imposed on JCG arising
under the principles
of transferee
or successor liability
or by contract,
relating
to an event
or transaction
occurring before
the Closing Date. In each
of the above cases,
together
with any out-of-pocket fees and expenses
(including attorneys’ and accountants’
fees) incurred
in connection
therewith. For
a term beginning on the Closing Date and ending on the second anniversary
of the Closing Date, Seller
shall reimburse Buyer
for any Taxes
of JCG that are
the responsibility
of the Sellers
pursuant to this Section
6.02 within ten Business Days after payment
of such Taxes by Buyer, except
that Buyer
shall have the right
to timely appeal any
such imposition of tax with
the proper taxing authority and payment by
the Sellers
to Buyer
would be due only upon the resolution
of the appeal.

 

6.03
Straddle
Period. In
the case of Taxes
that are payable
with respect
to a taxable period
that begins before
and ends after
the Closing Date (each
such period, a “Straddle
Period”),
the portion of any such
Taxes
that are treated as
Pre-Closing
Taxes
for purposes of this
Agreement
shall be:

 

(a)
in the case of Taxes
(i) based upon, or related
to, income, receipts,
profits, wages,
capital
or net worth, (ii) imposed
in connection
with the sale, transfer
or assignment
of property,
or (iii) required to be withheld, deemed
equal
to the amount which
would be payable
if the taxable year
ended
with the Closing Date;
and

 

(b)
in the case of other Taxes,
deemed to be the amount of such
Taxes for the entire
period multiplied
by a fraction
the numerator of which is the number
of days in the period
ending on the Closing Date
and the denominator
of which is the number of days
in the entire period.

 

 

 

ARTICLE
VII Conditions to Closing

7.01
Conditions to Obligations
of All Parties.
The obligations
of each party
to consummate the transactions
contemplated by
this Agreement
shall be subject
to the fulfillment,
at or prior to the
Closing, of each
of the following conditions:

 

(a)
No Action shall
have been
commenced
against
Buyer,
the Sellers
or JCG, which
would prevent the Closing.
No injunction
or restraining order
shall have been
issued by
any Governmental
Authority,
and be in effect,
which restrains
or prohibits
any transaction
contemplated hereby.

 

(b)
No Governmental Authority
shall have
enacted,
issued, promulgated,
enforced
or entered any
Governmental
Order which
is in effect
and has the effect
of making the transactions
contemplated by
this Agreement
illegal,
otherwise
restraining
or prohibiting consummation
of

    	 

    	 

    

 

 

 

 

 

such
transactions
or causing any
of the transactions
contemplated hereunder
to be rescinded
following completion
thereof.

 

7.02
Conditions to Obligations
of Buyer. The obligations
of Buyer
to consummate the transactions
contemplated
by this Agreement
shall be subject
to the fulfillment
or Buyer’s
waiver,
at or prior to the
Closing, of each
of the following conditions:

 

(a)
The representations
and warranties
of the Sellers
contained in this
Agreement, the other Transaction
Documents and
any certificate
or other writing
delivered
pursuant hereto
shall be true
and correct
in all respects
(in the case of any
representation
or warranty
qualified by
materiality
or Material
Adverse Effect)
or in all material
respects (in the case
of any representation
or warranty
not qualified
by materiality
or Material
Adverse Effect)
on and as of the date
hereof and
on and as of the Closing
Date with the same effect
as though made at
and as of such
date (except
those representations
and warranties
that address matters
only as of a specified
date, the accuracy
of which shall
be determined
as of that specified
date in all respects).

 

(b)
The Sellers
shall have duly
performed
and complied
in all material
respects
with all agreements,
covenants
and conditions
required
by this Agreement
and each
of the other Transaction
Documents to be performed
or complied with by
it prior to or on the Closing Date; provided,
that, with respect
to agreements,
covenants
and conditions
that are qualified
by materiality,
the Sellers
shall have performed
such agreements,
covenants
and conditions,
as so qualified,
in all respects.

 

(c)
All approvals, consents
and waivers
that are listed in Section
3.05 or on Section
3.05 of the Disclosure
Schedules
shall have been
received
and executed
counterparts
thereof shall
have been
delivered
to Buyer
at or prior to the
Closing.

 

(d)
From the date of this
Agreement,
there shall not have
occurred
any Material
Adverse Effect,
nor shall any
event or events
have occurred
that, individually or
in the aggregate,
with or without the lapse of time,
could reasonably
be expected
to result in a Material
Adverse Effect.

 

(e)
The Sellers
shall have
duly executed
and delivered
the Assignment
to Buyer.

 

(f)
Buyer
shall have
received
a certificate,
dated the Closing
Date and
signed by a duly authorized
officer of the Sellers,
that each
of the conditions set
forth in Section
7.02(a) and Section

7.02(b)
have been
satisfied.

 

(g)
The Sellers
shall have delivered
to Buyer
a good standing certificate
(or its equivalent)
for the Sellers
from the secretary
of state or similar
Governmental
Authority of the jurisdiction under
the Laws in which the Seller
is organized.

 

(h)
The Sellers
shall have delivered
to Buyer
such other documents
or instruments as
Buyer
reasonably
requests
and are reasonably
necessary
to consummate the transactions
contemplated by
this Agreement provided
such request
does not enlarge
or extend
any existing liability
or obligation
of the
Sellers or
impose
on the Sellers
any new or additional
liability
or obliga-
tion.

    	 

    	 

    

 

 

 

 

 

 

7.03
Conditions to Obligations
of the Sellers.
The obligations
of the Sellers
to consummate the transactions
contemplated by
this Agreement shall
be subject
to the fulfillment
or the Sellers’
waiver, at
or prior to the Closing,
of each of the following conditions:

 

(a)
The representations
and warranties
of Buyer
contained in this
Agreement, the other Transaction
Documents and
any certificate
or other writing
delivered
pursuant hereto
shall be true
and correct
in all respects
(in the case of any
representation
or warranty
qualified by
materiality
or Material Adverse
Effect)
or in all material
respects (in the case
of any representation
or warranty
not qualified
by materiality
or Material
Adverse Effect)
on and as of the date
hereof and
on and as of the Closing
Date with the same effect
as though made at
and as of such
date (except
those representations
and warranties
that address matters
only as of a specified
date, the accuracy
of which shall
be determined
as of that specified
date in all respects).

 

(b)
Buyer
shall have duly
performed
and complied
in all material
respects with all
agreements,
covenants
and conditions
required
by this Agreement
and each
of the other Transaction
Documents to be performed
or complied with by
it prior to or on the Closing Date;
provided, that, with respect
to agreements,
covenants
and conditions
that are qualified
by materiality,
Buyer
shall have
performed
such agreements,
covenants
and conditions,
as so qualified,
in all respects.

 

(c)
The Sellers
shall have
received a certificate,
dated the Closing Date
and signed
by a duly authorized
officer of Buyer,
that each of the conditions
set forth in Section
7.03(a) and Section

7.03(b)
have been
satisfied.

 

(d)
The Sellers
shall have
received a resolution
adopted by
the board of directors
of Buyer
authorizing the execution,
delivery
and performance
of this Agreement
and the other Transaction
Documents and the consummation
of the transactions
contemplated hereby
and thereby,
including,
but not limited to, the issuance
of the Shares.

 

(e)
Buyer
shall have delivered
to the Sellers
a stock certificate
of Buyer evidencing
the

Shares,
fully paid
and nonassessable,
duly issued
in the name
of the
Sellers.

 

(f)
Buyer
shall have
delivered
to the Sellers
a good standing certificate
(or its equivalent)
for Buyer
from the secretary
of state or similar
Governmental
Authority of the jurisdiction
under the Laws
in which the Buyer
is organized.

 

(g)
Buyer
shall have delivered
to the Sellers
such other documents or instruments
as the Sellers
reasonably
request
and are
reasonably
necessary
to consummate the transactions
contemplated by
this Agreement provided
such request
does not enlarge
or extend
any existing
liability
or obligation
of Buyer or
impose
on Buyer any
new or
additional
liability
or obligation.

    	 

    	 

    

 

 

 

 

 

ARTICLE
VIII Indemnification

8.01
Survival.
Subject to
the limitations and
other provisions of this
Agreement,
the representations
and warranties
contained
herein (other
than any representations
or warranties
contained in Articles
III and IV
 which are
subject to Article
VI) shall
survive the Closing and
shall remain in full force
and effect
until the date that is one and
one-half
years from the Closing
Date; provided, that
the representations
and warranties
in (i) Section
3.01, Section
3.03, Section

3.23, Section
4.01, Section
4.07, Section
4.08,  and Section
4.17 shall survive indefinitely,
and (ii) Section
3.19 shall survive for a period
of three years
after the Closing.
All covenants
and agreements
of the parties contained
herein (other
than any covenants
or agreements
contained in Article
VI which are
subject to Article
VI) shall
survive the Closing indefinitely
or for the period explicitly
specified
therein.
Notwithstanding the foregoing,
any claims
asserted in good
faith with reasonable
specificity
(to the extent known at
such time)
and in writing
by notice from
the non- breaching
party to the breaching
party prior
to the expiration
date of the applicable
survival period shall
not thereafter
be barred
by the expiration
of the relevant
representation
or warranty
and such claims
shall survive until
finally resolved.
Representations
and warranties
that speak as of a particular
date, including without limitation,
the date of execution
or the Closing, shall
speak only as
of that date, notwithstanding
any survival
period provided
herein.

 

8.02
Indemnification
by Seller.
Subject to the other
terms and conditions
of this Article
VIII,
for a term
beginning
on the Closing
Date and
ending on
the second
anniversary
of the Closing
Date,
Seller
shall indemnify
and defend
each
of Buyer
and its Affiliates
(including
JCG) and their
respective
Representatives
(collectively,
the “Buyer Indemnitees”)
against,
and shall hold
each of them harmless
from and against,
and shall pay
and reimburse
each
of them for, any
and all Losses
(except
as provided
in this Section
8.02) incurred or
sustained by,
or imposed upon, the Buyer
Indemnitees
based
upon, arising out of, with respect
to or by reason
of:

 

(a)
any inaccuracy
in or breach of
any of the representations
or warranties
of the Sellers
contained in this
Agreement
or in any certificate
or instrument delivered
by or on behalf
of the Sellers
pursuant to this Agreement
(other than in respect
of Section
3.20, it being understood
that the sole remedy for any
such inaccuracy
in or breach
thereof shall
be pursuant to Article
VI), as
of the date such representation
or warranty
was made or as
if such representation
or warranty
was made on and as
of the Closing Date (except
for representations
and warranties
that expressly
relate to a specified
date, the inaccuracy
in or breach of which
will be determined
with reference
to such specified
date);
or

 

(b)
any breach
or non-fulfillment
of any covenant,
agreement
or obligation
to be performed
by the Sellers
pursuant to this Agreement
(other than any
breach or violation
of, or failure
to fully perform,
any covenant,
agreement,
undertaking
or obligation
in Article
VI, it being
understood that the sole remedy
for any such
breach,
violation
or failure shall
be pursuant to Article
VI).

 

(c)
Buyer
shall
not satisfy
any Loss
by asserting
a setoff,
defense,
or counterclaim
against
any obligation
or indebtedness
owed by Buyer
to the
Sellers,
and Buyer
waives
all rights
it otherwise

    	 

    	 

    

 

 

 

 

 

might
have
to do so.
Notwithstanding
a contrary
provision
in this
Agreement,
the Sellers
shall
not be
liable
to Buyer,
or have
any obligation
to indemnify
Buyer, for
any Loss arising
out of (i) the actions or omissions of or its agents,
employees,
officers, directors,
or representatives
or a breach by of any
representation
or warranty made
by it or its agents, employees,
officers, directors,
or representatives;
or (ii) any motor vehicle related
claim to which the Sellers
have no knowledge. Notwithstanding anything
to the contrary herein,
the Sellers’ total
maximum liability to Buyer,
whether in the nature of indemnity or
otherwise, including, without limitation,
under Article
VI, arising from
or relating to this Agreement,
shall not exceed
the amount of consideration
paid by Buyer
to the Sellers pursuant to 1.02.

 

8.03
Indemnification
by Buyer.
Subject to the
other terms
and conditions
of this Article
VIII,
for a term
beginning
on the
Closing
Date
and ending
on the second
anniversary
of the Closing
Date,
Buyer
shall indemnify
and defend
each
of the Sellers
and their Affiliates
and their respective
Representatives
(collectively,
the “Sellers
Indemnitees”)
against,
and shall hold each
of them harmless from
and against,
and shall pay
and reimburse
each
of them for, any
and all Losses
incurred or
sustained by,
or imposed upon, the Sellers
Indemnitees
based upon,
arising out of, with respect
to or by reason
of:

 

(a)
any inaccuracy
in or breach of any
of the representations
or warranties
of Buyer
contained in this
Agreement
or in any certificate
or instrument delivered by
or on behalf of Buyer
pursuant to this Agreement,
as of the date such
representation
or warranty
was made or as if such
representation
or warranty was
made on and as of the Closing
Date (except
for representations
and warranties
that expressly
relate to a specified
date, the inaccuracy
in or breach
of which will be determined
with reference
to such specified
date);

 

(b)
any breach
or non-fulfillment
of any covenant,
agreement
or obligation
to be performed
by Buyer
pursuant to this
Agreement
(other than Article
VI, it being
understood that the sole remedy
for any
such breach
thereof shall
be pursuant to Article
VI); or

 

 

 

ARTICLE
IX Miscellaneous

9.01
Expenses.
Except as
otherwise expressly
provided herein,
all costs and
expenses,
including, without limitation,
fees and
disbursements of counsel,
financial
advisors and accountants,
incurred in connection
with this Agreement
and the transactions
contemplated hereby
shall be paid by
the party incurring
such costs and
expenses,
whether or not the Closing
shall have occurred.

 

9.02
Notices. All notices,
requests,
consents, claims,
demands, waivers
and other communications
hereunder
shall be in writing
and shall be deemed
to have been given
(a) when
delivered
by hand
(with written
confirmation of receipt);
(b) when received
by the addressee
if sent by a nationally
recognized
overnight courier
(receipt
requested);
(c) on the
date sent
by facsimile
or e-mail of a PDF document
(with confirmation
of transmission)
if sent during normal business
hours of the recipient,
and on the next
Business Day if sent
after
normal business hours

    	 

    	 

    

 

 

 

 

 

of the recipient
or (d) on the third day after
the date mailed, by
certified
or registered
mail, return receipt
requested,
postage prepaid.
Such communications
must be sent to the respective
parties at
the following addresses
(or at such other
address for
a party as
shall be specified
in a notice given in accordance
with this Section
9.02):

 

	If to the Sellers:	
        Max
        Baumann, Sellers
        Representative

         

        (contact
        info)

	with a copy to:	 
	If to Buyer:	
        Fernando
        Oswaldo Alonzo,
        Chief Executive

        Officer

        575 Lexington
        Ave 4th Floor

        New
        York, NY 10022

	with a copy to:	
        Frederick
        M. Lehrer,
        P. A.

        Via Email:
        flehrer@securitiesattorney1.com

 

9.03
Interpretation.
For purposes
of this Agreement,
(a) the words “include,”
“includes” and
“including” shall be deemed
to be followed by the words
“without limitation”;
(b) the word “or” is not
exclusive;
and (c) the words
“herein,”
“hereof,”
“hereby,”
“hereto”
and “hereunder”
refer to this
Agreement
as a whole. Unless
the context otherwise
requires, references
herein: (x)
to Articles,
Sections,
Disclosure Schedules
and Exhibits
mean the Articles
and Sections
of, and Disclosure Schedules
and Exhibits
attached
to, this Agreement;
(y) to an
agreement,
instrument or other document
means such
agreement,
instrument or other document
as amended,
supplemented and
modified from
time to time
to the extent permitted
by the provisions thereof
and (z) to a statute means
such statute as amended
from time to time
and includes any
successor
legislation
thereto and any
regulations promulgated
thereunder.
This Agreement shall
be construed
without regard
to any presumption
or rule requiring construction
or interpretation
against
the party drafting
an instrument
or causing any
instrument to be drafted.
The Disclosure Schedules
and Exhibits
referred
to herein shall
be construed
with, and as an
integral
part of, this Agreement
to the same extent
as if they were
set forth verbatim
herein.

 

9.04
Headings. The headings
in this Agreement
are for reference
only and shall
not affect
the interpretation of this
Agreement.

 

9.05
Severability.
If any
term or provision of this Agreement
is invalid,
illegal
or unenforceable
in any jurisdiction,
such invalidity,
illegality
or unenforceability
shall not affect
any other term
or provision of this Agreement
or invalidate
or render unenforceable
such term or provision in any
other jurisdiction.
Upon a determination
that any term
or other provision is invalid, illegal
or unenforceable,
the parties
hereto
shall negotiate
in good faith
to modify this Agreement
so as to effect
the original intent
of the parties as
closely as
possible in a mutually
acceptable
manner in order
that the transactions
contemplated hereby
be consummated as
originally contemplated
to the greatest
extent possible.
If the parties
are unable
to so agree,
any court
or tribunal finding a provision invalid or unenforceable
shall be authorized
to reform the same,
solely in the circumstances
in which it is invalid or unenforceable,
to the minimum extent
necessary
to render
it valid and enforceable.

    	 

    	 

    

 

 

 

 

 

 

9.06
Entire Agreement.
This Agreement,
the Assignment and the other
Transaction
Documents constitute
the sole and entire
agreement
of the parties to this
Agreement
with respect
to the subject matter contained
herein
and therein,
and supersede
all prior and contemporaneous
understandings
and agreements,
both written and
oral, with respect
to such subject matter.
In the event
of any inconsistency
between
the statements in the body
of this Agreement
and those in the Assignment
and the other Transaction
Documents, the Exhibits
and Disclosure Schedules
(other than an exception
expressly
set forth
as such in the
Disclosure Schedules),
the statements in the body of this Agreement
will control.

 

9.07
Legal Representation.
Each party
to this Agreement
has read
and fully
understands
the terms and provisions hereof,
has reviewed
this Agreement with its
legal counsel
and/or advisor, has
executed
this Agreement
based upon such
party’s
own judgment and
advice of counsel,
and knowingly, voluntarily,
and without duress, agrees
to all of the terms set
forth in this Agreement.
The parties have
participated
jointly in the negotiation
and drafting of
this Agreement.
If an ambiguity
or question
of intent or interpretation
arises, this
Agreement
will be construed as
if drafted jointly
by the parties
and no presumption
or burden of proof will arise
favoring
or disfavoring
any party
because of
authorship of any
provision of this Agreement. Except
as expressly
set forth in this
Agreement,
neither
the parties nor their
affiliates,
advisors and/or their attorneys
have made any
representation
or warranty,
express
or implied,
at law or in equity
with respect of the subject
matter contained herein.
Without limiting
the generality
of the previous sentence,
the Buyer, its
affiliates,
advisors and/or attorneys
have made no representation
or warranty
to Seller
concerning
the state or federal
tax consequences
to Seller
regarding
the transactions
contemplated by
this Agreement.

 

9.08
Successors and
Assigns. This Agreement
shall be binding upon and
shall inure to the benefit
of the parties hereto
and their respective
successors and
permitted
assigns. Neither
party may
assign its
rights or obligations
hereunder
without the prior written consent
of the other party,
which consent
shall not be unreasonably
withheld or delayed;
provided, however,
Buyer
may, without the prior written
consent of the Sellers,
assign all
or any portion of its
rights under this
Agreement (except
with respect
to its obligations
as to the Shares
in Sections
2.02(c) and 5.13 and
the representations and
warranties
in Article
IV), to one or more of its direct
or indirect wholly-
owned subsidiaries.
No assignment shall
relieve
the assigning party
of any of its
obligations
hereunder.

 

9.09
No Third-party
Beneficiaries.
Except as
provided in Section
6.02 and Article
VIII,
this Agreement
is for the sole benefit
of the parties
hereto and
their respective
successors and
permitted
assigns
and nothing herein,
express
or implied,
is intended
to or shall confer
upon any other Person
or entity
any legal
or equitable
right, benefit
or remedy
of any
nature whatsoever
under or by reason
of this Agreement.

 

9.10
Amendment
and Modification;
Waiver. This Agreement
may only
be amended,
modified or supplemented
by an agreement
in writing
signed
by each
party hereto.
No waiver by
any party
of any of the provisions
hereof shall
be effective
unless explicitly
set forth in writing
and

    	 

    	 

    

 

 

 

 

 

signed
by the party
so waiving.
No waiver
by any
party shall
operate
or be construed
as a waiver
in respect of any
failure,
breach or default
not expressly
identified by such written
waiver, whether
of a similar
or different character,
and whether
occurring
before or after
that waiver.
No failure
to exercise,
or delay in exercising,
any right,
remedy,
power or privilege
arising from
this Agreement
shall operate
or be construed
as a waiver
thereof; nor shall
any single
or partial exercise
of any right,
remedy,
power or privilege
hereunder
preclude
any other or further
exercise
thereof
or the exercise
of any other
right,
remedy, power
or privilege.

 

9.11 Governing
Law; Submission
to Jurisdiction;
Waiver of Jury
Trial.

 

(a)
The Transaction
Documents, including the Agreement, shall
be governed
by New York
state law and be subject
to the jurisdiction
of the New York Courts governing
the transactions
and the New York
courts shall
be the sole forum for any
dispute, without giving
effect
to any choice
or conflict
of law provision or rule (whether
of the State of Delaware
or any other
jurisdiction).

 

(b)
ANY LEGAL
SUIT,
ACTION OR PROCEEDING
ARISING
OUT OF OR BASED UPON THIS
AGREEMENT,
THE ASSIGNMENT,
OR THE OTHER
TRANSACTION
DOCUMENTS OR THE
TRANSACTIONS
CONTEMPLATED
HEREBY OR THEREBY
MAY BE INSTITUTED
IN THE FEDERAL
COURTS OF THE UNITED
STATES OF AMERICA
OR THE COURTS
OF THE STATE
OF NEW YORK, AND
EACH PARTY IRREVOCABLY
SUBMITS
TO THE EXCLUSIVE
JURISDICTION
OF SUCH COURTS IN
ANY SUCH SUIT,
ACTION
OR PROCEEDING.
THE PARTIES
IRREVOCABLY AND UNCONDITIONALLY
WAIVE
ANY OBJECTION
TO THE LAYING
OF VENUE OF
ANY SUIT,
ACTION
OR ANY PROCEEDING
IN SUCH COURTS
AND IRREVOCABLY
WAIVE
AND AGREE NOT
TO PLEAD
OR CLAIM
IN ANY SUCH
COURT THAT ANY
SUCH SUIT,
ACTION OR PROCEEDING
BROUGHT IN
ANY SUCH COURT
HAS BEEN BROUGHT
IN AN INCONVENIENT
FORUM.

 

(c)
EACH PARTY ACKNOWLEDGES
AND AGREES THAT
ANY CONTROVERSY
WHICH
MAY ARISE
UNDER THIS
AGREEMENT,
OR THE OTHER
TRANSACTION DOCUMENTS
IS LIKELY
TO INVOLVE
COMPLICATED
AND DIFFICULT
ISSUES
AND, THEREFORE,
EACH SUCH PARTY
IRREVOCABLY
AND UNCONDITIONALLY
WAIVES
ANY RIGHT
IT MAY HAVE
TO A TRIAL
BY JURY IN
RESPECT OF ANY LEGAL
ACTION
ARISING
OUT OF OR RELATING
TO THIS AGREEMENT,
THE ASSIGNMENT,
OR THE OTHER
TRANSACTION
DOCUMENTS OR THE
TRANSACTIONS
CONTEMPLATED
HEREBY OR THEREBY.
EACH PARTY TO THIS
AGREEMENT CERTIFIES
AND ACKNOWLEDGES
THAT (A) NO
REPRESENTATIVE
OF ANY OTHER
PARTY HAS REPRESENTED,
EXPRESSLY
OR OTHERWISE,
THAT SUCH OTHER
PARTY WOULD
NOT SEEK TO ENFORCE
THE FOREGOING
WAIVER
IN THE EVENT
OF A LEGAL
ACTION,
(B) SUCH
PARTY HAS
CONSIDERED
THE IMPLICATIONS
OF THIS WAIVER,
(C) SUCH PARTY MAKES
THIS WAIVER
VOLUNTARILY,
AND (D) SUCH
PARTY HAS BEEN
INDUCED
TO ENTER INTO
THIS
AGREEMENT.

 

9.12
Specific
Performance.
The parties
agree that
irreparable
damage
would occur if any
provision of this Agreement
were not
performed
in accordance
with the terms hereof
and that the

    	 

    	 

    

 

 

 

 

 

parties
shall be entitled
to specific performance
of the terms hereof,
in addition to any
other remedy
to which they are entitled
at law
or in equity.

 

9.13
Attorneys’
Fees. In
the event that
either
Party
brings an action
to enforce
or effect
its rights under
this Agreement,
each
Party
shall be responsible
for their own legal
fees, costs
and expenses,
including the costs of mediation,
arbitration,
litigation,
court fees,
and reasonable
attorneys’
fees incurred
in connection
with such an action.

 

9.14
Counterparts.
This Agreement
may be executed
in counterparts,
each
of which shall
be deemed an original,
but all of which together
shall be deemed
to be one and the same
agreement.
A signed copy
of this Agreement delivered
by facsimile,
e-mail or other
means of electronic
transmission
shall be deemed to have
the same legal
effect
as delivery
of an original signed
copy of this Agreement.

 

[Signature
Page Follows]

 

IN
WITNESS
WHEREOF,
the parties
hereto have
caused this
Agreement
to be executed
as of the date first
written above
by their respective
officers
thereunto duly authorized.

 

 

 

 

JCG:

 

THE JUST CHILL GROUP,
INC.

 

 

 

 

 

By
/s/ Max Baumann

Name: Max Baumann

Title:
Chief Executive
Officer

 

 

 

 

 

 

 

SELLERS

 

 

/s/ Max
Baumann

 

By:
Max Baumann
on behalf
of the Sellers

 

 

 

BUYER:

LIFE
ON EARTH, INC.

    	 

    	 

    

 

 

 

 

 

 

 

Fernando O. Leonzo

 

 

Chairman & CEO

 

By /s/
Fernando Oswaldo Alonzo

Name:
Fernando Oswaldo Alonzo

Title:
Chief Executive
Officer

 

 

 

 

 

 

APPENDIX
OF DEFINED
TERMS

 

Appendix
1

 

The following capitalized
terms set
forth in the Purchase
Agreement
to which this Exhibit
is attached shall
have the following meanings:

 

“Actions”
means lawsuits,
arbitrations,
administrative
grievances,
or other legal
proceedings
by or against
a Person.

 

“Affiliates”
means any
(i) Parents or Subsidiaries
of a Person, or (ii) Persons
controlled by
or under
common control
with a Person
by virtue of voting
rights, Contract,
or management
control.

 

The “Assignment”
means
an instrument
evidencing
an assignment
of all Common Stock

Interests
in JCG from Seller
to Buyer.

 

“Buyer
Intellectual
Property”
[Need definition]
“Buyer
IP Agreements”
[Need definition]

“Contracts”
means binding agreements
whether oral
or written.

 

“Encumbrance”
and “Encumbrances”
refer to any
liens, mortgages,
pledges,

attachments,
levies, charges,
or security
interests.

 

“Environmental
Claim”
means (a) a legal
claim made
by any
Governmental
Authority having
jurisdiction
alleging
breach of
or non-compliance
with applicable Environmental
Laws or Environmental
Permits,
or (b) an Action
brought
by any
other Person
alleging
a breach
or non- compliance
with applicable Environmental
Laws or Environmental
Permits.

 

“Environmental
Laws” means laws,
rules, regulations,
codes, and
ordinances,
relating
to (i) the environment, (ii)
preservation
or reclamation
of natural resources,
or (iii) the

    	 

    	 

    

 

 

 

 

 

generation,
use, handling,
transportation,
storage,
treatment,
disposal, release,
or threatened
release
of hazardous
materials.

 

“Environmental
Notice”
means a notice issued
by a Governmental
Authority alleging
an

actual
or potential violation
of Environmental Laws.

 

“Environmental
Permits”
means any
Permit issued
under an Environmental
Law.

 

A “Governmental
Authority”
means the government
of the United
States of America,
any other
nation, or any
political
subdivision thereof,
whether
state or local,
or any agency,
authority,
instrumentality,
regulatory
body, or other
entity
exercising
executive,
legislative,
judicial,
taxing,
regulatory
or administrative
powers or functions
of or pertaining
to government,
having jurisdiction
over Buyer,
Seller, or JCG, as
the case may be.

 

“Governmental
Orders”
means judgments,
orders, writs, injunctions,
decrees,
stipulations, consent
agreements,
determinations
or awards,
entered
or issued by a Governmental
Authority and
binding on a Person.

 

“Liability”
means an obligation,
liability,
or debt of a Person.

 

“Losses”
means losses, liability,
damages,
obligations,
and expenses
(including costs
and

reasonable
attorney’s
fees).

 

“Law”
means any
law, statute,
rule, regulation,
or ordinance of
a Governmental

Authority
materially
applicable
to a Person.

 

A “Material
Adverse Effect”
means, with respect
to a Person or its Affiliates,
any fact,
change,
circumstance,
event,
or occurrence,
which (i) has or reasonably
would be expected
to have a material
adverse effect
on it business,
property,
operations,
or financial
conditions, or (ii)
would prevent or materially
impair its
ability
to carry out
the transactions
contemplated in the
Agreement.

 

“Organizational
Documents”
means (a)
with respect
to a corporation,
its Articles
of Incorporation,
Certificate of Incorporation,
or the like, its bylaws,
and any
shareholders
or stockholders agreement(s)
to which it is a party,
and (b) with respect
to a limited
liability company,
its Articles
of Organization,
Certificate of Organization,
or the like, and its Operating
Agreement, in each
case, as
amended from
time to time,
and current
as of the Closing.

 

“Parents”
means any
Persons or group of Persons
(a) owning
or control more than fifty
percent
(50%) of the outstanding
equity securities
of a legal
entity (on an economic
or voting basis,
or both), (b) has
more than 50% of the voting
power of such
entity,
or (c) has
the authority to appoint or elect
more than
one-half
(1/2) of the directors or members
of the governing
body of such entity.

    	 

    	 

    

 

 

 

 

 

A “Person”
means an
individual,
firm, company,
corporation,
limited liability
company,

partnership,
joint venture,
unincorporated
association,
or other legal
entity.

 

A “Permit”
means any
permit, approval,
or license
required
to be maintained,
and issued

by
a Governmental
Authority having
jurisdiction,
to Buyer,
Seller, or JCG,
as the case
may be.

“Real
Property”
means land, improvements
thereon,
and estates
in land, excluding
leasehold or similar
interests.

 

“Representatives” means
the agents, employees, attorneys, accountants,
or other Persons acting or authorized
to act for or on behalf
of a Person.

 

“Seller
Intellectual
Property” [Need definition] “Seller IP
Agreements” [Need
definition]

 

“Subsidiaries”
means with respect
to a Person,
any legal
entity in which that
Person or a group
of Persons of which
such Person
is a member, (a)
owns or controls more
than fifty percent
(50%) of the outstanding
equity securities
of such legal
entity (on an economic
or voting basis,

or both),
(b) has more
than 50% of the voting power
of such entity,
or (c) has
the authority to appoint
or elect more
than one-half
(1/2) of the directors
or members of the governing
body of such entity.

 

“Transaction
Documents”
means the Purchase
Agreement by and
among Buyer
and Seller
to which this Exhibit
is attached, the exhibits
and schedules thereto,
the Assignment,
and the certificates
required
to be delivered
thereunder.

    	 

    	 

    

 

 

 

 

 

(EXHIBIT
1)

 

 

	TOTAL AUTHORIZED	NUMBER AND TYPE	RECORD AND	NUMBER	TYPE	PERCENTAGE OF	CONTRIBUTION
	CAPITAL	ISSUED OUTSTANDING	BENEFICIAL OWNER	 	OWNERSHIP INTEREST
	 	 	 	 	 	 	 
	10,000,000 CS	754,004	Max Baumann	255,402	CS	3.07%	W, L & S
	 	 	Russell Fager	170,818	CS	2.06%	W, L & S
	 	 	Jeff King	10,000	CS	0.12%	W, L & S
	 	 	LA Libations	314,799	CS	3.79%	W, L & S
	 	 	Caleb Davidge	217,991	CS	2.62%	W, L & S
	 	 	Mitchell Raisch	113,817	CS	1.37%	W, L & S
	 	 	Gervais (Warrant)	32,000	CS	0.39%	W, L & S
	 	 	Ann DeVooght	6,648	CS	0.08%	W, L & S
	 	 	Levi Filkins	3,672	CS	0.04%	W, L & S
	 	 	Jennifer Kruger	66,318	CS	0.80%	W, L & S
	 	 	Dash	13,809	CS	0.17%	 
	 	 	 	1,205,274	Common Stock	14.51%	 
	 	 	 	 	 	 	 
	7,000,000 PS	2,196,707	Birdview Investments, LLC	1,618,488	Series A - convert to CS 3:1	19.48%	$1,800,000
	 	 	The Maximillian Baumann Trust	660,000	Series A - convert to CS 3:1	7.94%	$800,000
	 	 	HRC Trust	450,000	Series A - convert to CS 3:1	5.42%	$600,000
	 	 	Peter Baumann and Alison Baumann	2,260,752	Series A - convert to CS 3:1	27.21%	$2,660,000
	 	 	Corbin J. Robertson Descendants Trust	777,201	Series A- convert to CS 3:1	9.35%	$1,000,000
	 	 	Lillie T. Robertson	621,762	Series A- convert to CS 3:1	7.48%	$800,000
	 	 	Bald Cypress LTD	194,301	Series A- convert to CS 3:1	2.34%	$250,000
	 	 	HRC Estate Trust f/b/o Carroll R. Ray	155,442	Series A- convert to CS 3:1	1.87%	$200,000
	 	 	U-Article 5 UWWRS-ARB Trust	365,853	Series A- convert to CS 3:1	4.40%	$ 500,000
	 	 	 	7,103,799	Series A	85.49%	$8,500,000
	 	 	 	 	 	 	 
	 	 	TOTAL SHARES	8,309,073	 	100.00%	 

 

 

DISCLOSURE
SCHEDULES

 

In
connection
with that certain
Common Stock Purchase
Agreement
(as amended,
amended
and restated,
supplemented or
otherwise modified
from time
to time,
the “Purchase
Agreement”),
dated as of 2018, by
and between
the Sellers reflected
in Exhibit A (the “Seller”)
and Life on Earth,
Inc., a Delaware
corporation
(the “Buyer”),
the Sellers
hereby
delivers
these disclosure schedules
(the “Disclosure
Schedules”)
to the Buyer.
Capitalized
terms used in the
Disclosure Schedules
but not otherwise defined
herein shall have
the meanings
ascribed
to such terms in
the Purchase
Agreement.

 

Inclusion
of any item
in the Disclosure Schedules
shall not constitute,
or be deemed to be,
an admission
to any third party,
except
the Buyer,
concerning
such item
by the Sellers
or any of
their Affiliates, and to Seller,
concerning
such item by
Buyer
and any
of its Affiliates.

 

The Disclosure
Schedules
set forth exceptions,
qualifications
and limitations
to certain of the representations,
warranties
and other provisions (or documents
or other items required
to be disclosed in reference
thereto) set
forth in the Purchase
Agreement.
The Disclosure Schedules
are qualified
in their entirety
by reference
to specific
provisions of the Purchase
Agreement
and are not intended
to constitute, and
shall not be construed
as constituting,
representations,
warranties
and covenants
of the Seller
or any of
their Affiliates,
or the Buyer,
or any of
its Affiliates, except
as and to the extent
expressly
provided in the Purchase
Agreement.

    	 

    	 

    

 

 

 

 

 

The Section
headings
and subheadings
in these Disclosure
Schedules
are for convenience
of reference
and for informational
purposes only and
shall not be deemed to amend,
alter
or affect
the express
description of the Sections
as set forth in the
Purchase
Agreement.

 

Schedule
2.02

 

Qualification
of the Sellers

 

List
of Jurisdictions in and/or
certain of its Affiliates
(as applicable)
Operate

 

Schedule
2.04

 

Interests,
Subsidiaries
or Affiliates

 

Schedule
2.06

 

Financial
Statements

 

See
attached.

 

Schedule
2.08

 

Absence of Certain
Changes, Events
and Conditions

 

Schedule
2.09

 

Material
Contracts

 

	Company	Coverage	Provider	Services
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

Schedule
2.10

 

Title to Assets;
Real Property

    	 

    	 

    

 

 

 

 

 

	Jurisdiction	Address	
        Monthly

        Rent
	Expiration	Owner	
        Current

        Use

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

 

Schedule
2.14

 

Insurance

 

	Insured	
        Insurance

        Carrier
	Description	
        Policy

        Expiration

	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

Schedule
2.15

    	 

    	 

    

 

 

 

 

 

Legal
Proceedings;
Governmental
Orders

 

Schedule
2.16

 

Compliance
with Laws;
Permits

 

1.

 

	Permit Name	Permit Issuer	Date of Issuance	
        Expiration

        Date

	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

Schedule
2.17

 

Employment
Matters

 

STATEDEPARTMENTPOSITIONNAME

MONTHLY

ADMISSION DATE

CONTRACT

 

SALARY

TYPE

    	 

    	 

    

 

 

 

 

 

STATEDEPARTMENTPOSITIONNAME

MONTHLY

ADMISSION DATE

CONTRACT

 

SALARY

 

 

TYPE

 

 

 

 

 

 

 

 

 

Schedule
2.18

 

Taxes

 

Schedule
2.21

 

Labor
Relations

    	 

    	 

    

 

 

 

 

 

EXHIBIT
2

 

 

LOCK-UP
AND RESALE
RESTRICTION
AGREEMENT

 

 

THIS
LOCK-UP
AGREEMENT
AND RESALE
RESTRICTION
(this “Agreement”)
is made and
entered
into this
2 day
of August
2018 “(Effective
Date”), by and
between
Life on Earth,
Inc., a Delaware
corporation
(the “Company”)
and the Sellers
reflected
in Exhibit
A hereto
(the “Sellers”)
..

 

Recitals

 

WHEREAS,
the Company
and the Sellers
in Exhibit
A, each in
their
individual
capacity,
have
executed
a Purchase
Agreement,
whereby,
among other
terms,
the Company
is obligated
to pay the
Sellers,
collectively
1,636,363 common stock
shares (the
“Shares”)
as part
of the purchase
price shares
of the Company’s
common stock.

 

WHEREAS,
the Company
and the Sellers
believe
it is in
its best
interests
to lockup
the Shares
for a period
of 12 months following
the execution
of this Agreement
and thereafter
subject
the Sellers,
each in their
individual
capacity,
to a leak
out as provided
for herein.

 

WHEREAS, the
Sellers have authorized Max Baumann to act as their representative in the
Purchase Agreement and in this
Lock-Up and
Resale
Restriction Agreement.

 

NOW
THEREFORE,
the Company
and the Sellers
(through
their
representative,
Max Baumann),
each in their
individual
capacity,
agrees
as follows:

 

1.The
Sellers,
each in their
individual
capacity,
agrees
that
as of the
date hereof
and for a period
of 1 year following
the execution
of this
Agreement,
that each
will
not transfer,
sell,
contract
to sell,
devise,
gift, assign,
pledge,
hypothecate,
distribute
or grant
any option
to purchase
or otherwise
dispose
of, directly
or indirectly
the Shares
for a period
of 12 months
(the “Lock-Up
Period”).

 

 

2. The
Sellers,
each in
their
individual
capacity,
agree
that after
the Lock-Up
Period the
maximum
allowable
shares
that
each may
sell during
any given
one-day
period, shall
be 5% of each
of their
total
holdings
or no more than
20% of the
average
trading
volume of the
preceding
30 days,
whichever
is less.

 

 

3. The
Sellers, each in their individual capacity, shall disclose to the Company the registered securities
broker-dealer where the
Shares are
deposited, the
lock-up
and dribble
out and provide
a copy of this Agreement executed
by the Parties to such registered broker-dealer. The Company will reserve the right to request and receive from the
Sellers
account statements and other records evidencing trades in the
Shares from their
broker-dealer where the shares are deposited and
held during the leak
out period and for
12 months after the restrictions are lifted from each certificate.

 

4. Two
years
from the Effective
Date,
the Sellers,
each
in their
individual
capacity,
may sell
up to 20% of their
shares each
on a monthly
basis.

 

5. Any
attempted
sale,
transfer
or other
disposition
in violation
of this
letter
agreement
shall
be null and
void.

 

6. The
Sellers,
each in
their
individual
capacity,
further agrees
that if
either
attempts
to sell,
transfer,
or

    	 

    	 

    

 

 

 

 

 

otherwise
dispose
of its shares
in violation
of this
Agreement,
the Company
(i) may
instruct
its transfer
agent
not to transfer
such
securities
(ii)
may provide
a copy of this
letter
agreement
to the Company's
transfer
agent for the
purpose
of instructing
the Company's
transfer
agent
to place
a legend
on the certificate(s)
evidencing
the securities
subject
hereto
and disclosing
that any
transfer,
sale,
contract
for sale,
devise, gift,
assignment,
pledge or hypothecation
of such securities
is subject
to the
terms
of this
letter
agreement
and (iii)
may issue
stop-transfer
instructions
to its
transfer
agent for
the period
contemplated
by this
letter
agreement
for such
securities.

 

7. This
Agreement
shall
be binding
upon the holder,
its agents,
heirs,
successors,
assigns
and beneficiaries.

 

8. Any
waiver
by the Company
of any of the
terms and
conditions
of this
letter
agreement
in any instance
must be in
writing
and must
be duly executed
by the Company
and the Sellers,
in their
individual
capacity
and shall
not be deemed
or construed
to be a waiver
of such
term
or condition
for the future,
or of any subsequent
breach thereof.

 

9. The
Sellers,
each in their
individual
capacity,
agrees
that any
breach
of this
letter
agreement
will cause
the Company
and the third-party
beneficiaries
irreparable
damage
for which
there
is no adequate
remedy
at law.
If there
is a breach
or threatened
breach
of this letter
agreement
by the Holder,
the Sellers
hereby agree
that
the Company
and the third-party
beneficiaries
shall
be entitled
to the
issuance
of an immediate
injunction
without
notice
to restrain
the breach
or threatened
breach.
The Sellers,
each in their
individual
capacity,
also agrees
that the
Company
and all
third-party
beneficiaries
shall
be entitled
to pursue
any other remedies
for such
a breach
or threatened
breach,
including
a claim
for money
damages.

 

10. The Sellers,
each in their
individual
capacity,
agrees
that as
of the
date hereof
and during
the pendency
of this Agreement,
that each
has not
entered
into
any agreements
with other
Sellers,
each in
their
individual
capacity,
nor will the
Sellers
enter into
any agreement
with any
other Sellers,
each in their
individual
capacity,
to sell
the Company
shares as
a group.

 

11. The
Sellers,
each in
their
individual
capacity,
acknowledges
and warrants
that
each
has not entered
into any agreements
or understanding
with other
shareholders
or any unaffiliated
third
parties,
nor will each
enter
into any
agreement
with
any other
shareholders
or third
party to
sell
the Company
shares as a group.

 

12. Should
any individual
Seller
wish to
present
a restricted
stock
certificate
with
a valid legal
opinion to
the Company’s
transfer
agent, the
individual
Seller
shall
be individually
required
to complete
a form to
the Company indicating
the instructions
to be provided
to the
Company’s
transfer
agent
at which
time
the Seller
will be
provided
with a copy
of this
Agreement
and shall
be required
to execute
a written
acknowledgment
of receiving
and reviewing
the Agreement.

 

13. Max
Baumann,
hereby
certifies
that he has
given
a copy of this
Agreement
to each
of the Sellers
listed
in Exhibit
A.

 

IN
WITNESS
WHEREOF,
the undersigned
has duly
executed
and delivered
this
Agreement
as of the day
and year first
above written.

 

SELLERS

 

/s/ Max Baumann

 

By:
  Max Baumann,
Sellers’
Representative

    	 

    	 

    

 

 

 

 

 

 

 

 

LIFE
ON EARTH,
INC.

 

/s/ Fernando
O. Leonzo

 

 

Fernando
O. Leonzo,
Chief
Executive
OfficerExhibit 10.2

EXHIBIT
2

 

 

LOCK-UP
AND RESALE
RESTRICTION
AGREEMENT

 

 

THIS
LOCK-UP
AGREEMENT
AND RESALE
RESTRICTION
(this “Agreement”)
is made and
entered
into this
2 day
of August
2018 “(Effective
Date”), by and
between
Life on Earth,
Inc., a Delaware
corporation
(the “Company”)
and the Sellers
reflected
in Exhibit
A hereto
(the “Sellers”)
..

 

Recitals

 

WHEREAS,
the Company
and the Sellers
in Exhibit
A, each in
their
individual
capacity,
have
executed
a Purchase
Agreement,
whereby,
among other
terms,
the Company
is obligated
to pay the
Sellers,
collectively
1,636,363 common stock
shares (the
“Shares”)
as part
of the purchase
price shares
of the Company’s
common stock.

 

WHEREAS,
the Company
and the Sellers
believe
it is in
its best
interests
to lockup
the Shares
for a period
of 12 months following
the execution
of this Agreement
and thereafter
subject
the Sellers,
each in their
individual
capacity,
to a leak
out as provided
for herein.

 

WHEREAS,
the Sellers
have
authorized
Max Baumann
to act
as their
representative
in the
Purchase

Agreement
and in this
Lock-Up
and Resale
Restriction
Agreement.

 

NOW
THEREFORE,
the Company
and the Sellers
(through
their
representative,
Max Baumann),
each in their
individual
capacity,
agrees
as follows:

 

1.The
Sellers,
each in their
individual
capacity,
agrees
that
as of the
date hereof
and for a period
of 1 year following
the execution
of this
Agreement,
that each
will
not transfer,
sell,
contract
to sell,
devise,
gift, assign,
pledge,
hypothecate,
distribute
or grant
any option
to purchase
or otherwise
dispose
of, directly
or indirectly
the Shares
for a period
of 12 months
(the “Lock-Up
Period”).

 

 

2. The
Sellers,
each in
their
individual
capacity,
agree
that after
the Lock-Up
Period the
maximum
allowable
shares
that
each may
sell during
any given
one-day
period, shall
be 5% of each
of their
total
holdings
or no more than
20% of the
average
trading
volume of the
preceding
30 days,
whichever
is less.

 

 

3. The
Sellers,
each in
their
individual
capacity,
shall
disclose
to the Company
the registered
securities
broker-dealer
where
the Shares
are deposited,
the lock-up
and dribble
out and provide
a copy of this Agreement
executed
by the Parties
to such
registered
broker-dealer.
The Company
will reserve
the right
to request
and receive
from the Sellers
account statements
and other
records
evidencing
trades
in the

Shares
from their
broker-dealer
where
the shares
are deposited
and held
during
the leak out period
and for

12 months
after
the restrictions
are lifted
from each
certificate.

 

4. Two
years
from the Effective
Date,
the Sellers,
each
in their
individual
capacity,
may sell
up to 20% of their
shares each
on a monthly
basis.

 

5. Any
attempted
sale,
transfer
or other
disposition
in violation
of this
letter
agreement
shall
be null and
void.

 

    	 

    	 

    

6. The
Sellers, each in their individual capacity, further
agrees that if
either
attempts to sell, transfer,
or otherwise
dispose
of its shares in violation of this Agreement, the Company (i) may instruct its transfer agent
not to transfer such securities (ii) may
provide
a copy of this letter
agreement to the Company's transfer
agent for the
purpose
of instructing the
Company's transfer agent to
place a legend
on the certificate(s) evidencing the securities subject hereto and
disclosing that any transfer, sale, contract for sale,
devise, gift, assignment,
pledge or hypothecation
of such securities is subject to the terms
of this letter
agreement
and (iii) may issue stop-transfer instructions to its transfer
agent for the
period contemplated
by this letter agreement for such securities.

 

7. This
Agreement
shall
be binding
upon the holder,
its agents,
heirs,
successors,
assigns
and beneficiaries.

 

8. Any
waiver
by the Company
of any of the
terms and
conditions
of this
letter
agreement
in any instance
must be in
writing
and must
be duly executed
by the Company
and the Sellers,
in their
individual
capacity
and shall
not be deemed
or construed
to be a waiver
of such
term
or condition
for the future,
or of any subsequent
breach thereof.

 

9. The
Sellers,
each in their
individual
capacity,
agrees
that any
breach
of this
letter
agreement
will cause
the Company
and the third-party
beneficiaries
irreparable
damage
for which
there
is no adequate
remedy
at law.
If there
is a breach
or threatened
breach
of this letter
agreement
by the Holder,
the Sellers
hereby agree
that
the Company
and the third-party
beneficiaries
shall
be entitled
to the
issuance
of an immediate
injunction
without
notice
to restrain
the breach
or threatened
breach.
The Sellers,
each in their
individual
capacity,
also agrees
that the
Company
and all
third-party
beneficiaries
shall
be entitled
to pursue
any other remedies
for such
a breach
or threatened
breach,
including
a claim
for money
damages.

 

10. The Sellers,
each in their
individual
capacity,
agrees
that as
of the
date hereof
and during
the pendency
of this Agreement,
that each
has not
entered
into
any agreements
with other
Sellers,
each in
their
individual
capacity,
nor will the
Sellers
enter into
any agreement
with any
other Sellers,
each in their
individual
capacity,
to sell
the Company
shares as
a group.

 

11. The
Sellers,
each in
their
individual
capacity,
acknowledges
and warrants
that
each
has not entered
into any agreements
or understanding
with other
shareholders
or any unaffiliated
third
parties,
nor will each
enter
into any
agreement
with
any other
shareholders
or third
party to
sell
the Company
shares as a group.

 

12. Should
any individual
Seller
wish to
present
a restricted
stock
certificate
with
a valid legal
opinion to
the Company’s
transfer
agent, the
individual
Seller
shall
be individually
required
to complete
a form to
the Company indicating
the instructions
to be provided
to the
Company’s
transfer
agent
at which
time
the Seller
will be
provided
with a copy
of this
Agreement
and shall
be required
to execute
a written
acknowledgment
of receiving
and reviewing
the Agreement.

 

13. Max
Baumann,
hereby
certifies
that he has
given
a copy of this
Agreement
to each
of the Sellers
listed
in Exhibit
A.

 

IN
WITNESS
WHEREOF,
the undersigned
has duly
executed
and delivered
this
Agreement
as of the day
and year first
above written.

 

 

SELLERS

 

/s/ Max
Baumann

 

 

By:
 Max Baumann,
Sellers’
Representative

    	 

    	 

    

 

 

LIFE
ON EARTH,
INC.

 

 

/s/ Fernando
O. Leonzo

 

Fernando
O. Leonzo,
Chief
Executive
Officer

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