Document:

ex10_2.htm

Exhibit 10.2

 

LIMITED GUARANTEE

 

LIMITED GUARANTEE, dated as of October 11, 2011 (this “Limited Guarantee”), by the Canada Pension Plan Investment Board (the “Guarantor”) in favor of 99 Cents Only Stores, a California corporation, (the “Guaranteed Party”).

 

1.             GUARANTEE. To induce the Guaranteed Party to enter into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), among Number Holdings, Inc., a Delaware corporation (“Parent”), Number Merger Sub, Inc., a California corporation (“Merger Sub”) and the Guaranteed Party, pursuant to which Merger Sub, or its permitted
assignees, will be merged with and into the Guaranteed Party (the “Merger”), Guarantor, intending to be legally bound, hereby absolutely, irrevocably and unconditionally, guarantees to the Guaranteed Party, but only up to the Cap (as defined below), the due and punctual observance, performance and discharge of payment when due of 41.67% (its “Pro Rata Portion”) of (i) the Parent Termination Fee pursuant to Section 8.03(b) of the Merger Agreement and (ii) any amounts that become payable (the “Payable Expenses”) by Parent or Merger Sub pursuant to Section 8.03(d) of the Merger Agreement (collectively, after giving effect to the Guarantor’s Pro Rata Portion of any reduction in the
amounts payable under clauses (i) or (ii) above or replacement fee agreed to in writing by Parent and the Company or imposed by a court of competent jurisdiction (other than in connection with a bankruptcy, reorganization or similar proceeding), the “Obligation”); provided that in no event shall the Guarantor’s aggregate liability under this Limited Guarantee exceed in the aggregate (i) $39,378,150, in the case of the Parent Termination Fee and (ii) $4,167,000 in the case of Payable Expenses (collectively, the “Cap”), it being understood that this Limited Guarantee may not be enforced without giving effect to the Cap. All payments hereunder shall be made in lawful money of the United
States, in immediately available funds. Subject to the Cap, the Guarantor promises and undertakes to make all payments hereunder free and clear of any deduction, offset, defense, claim or counterclaim of any kind (other than defenses to the payment of the Obligation that are available to Parent or Merger Sub under the Merger Agreement). Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Merger Agreement.

 

If Parent or Merger Sub fails to discharge any of the Obligation, then the Obligation shall, at the Guaranteed Party’s option, become immediately due and payable by Guarantor and the Guaranteed Party may at any time and from time to time, at the Guaranteed Party’s option, and so long as Parent or Merger Sub fails to discharge any of the Obligation, take any and all actions available hereunder or under applicable law to collect on the Guarantor’s liabilities hereunder in respect of such Obligation subject to the Cap; provided, that the Guaranteed Party acknowledges that the Guarantor’s liability hereunder is subject to the
Cap.

 

Subject to and in furtherance of the foregoing, the Guarantor acknowledges that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against the Guarantor for the full amount of the Obligation (subject to the Cap), regardless of whether any action is brought against Parent or Merger Sub or whether Parent or Merger Sub is joined in any such action or actions.

 

2.             NATURE OF GUARANTEE.  Subject to the Cap, the Guarantor’s liability hereunder is absolute, unconditional, irrevocable and continuing irrespective, without limitation, of (a) any modification, amendment or waiver of, or any consent to departure from, the Merger Agreement that may be agreed to by Parent or Merger Sub in accordance with the terms of the Merger Agreement or (b) any other circumstance that might otherwise constitute a defense available to, or a discharge of, Guarantor hereunder (other than payment and performance in full or
termination of this Limited Guarantee in accordance with its terms). Without limiting the foregoing, the Guaranteed Party shall not be obligated to file any claim relating to the Obligation in the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantor’s Obligation hereunder. In the event that any payment to the Guaranteed Party in respect of the Obligation is rescinded or must otherwise be returned to Guarantor for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to such Obligation as if such payment had not been made. Subject to the Cap, this Limited Guarantee is an unconditional, irrevocable and continuing guarantee of payment of the Obligation and not of collection of the Obligation. If the Guaranteed Party is prevented
under applicable law or otherwise from demanding or accelerating payment of any of the Obligation from Parent or Merger Sub by reason of any automatic stay or otherwise, the Guaranteed Party shall be entitled to receive from the Guarantor, upon demand therefor, the sums that otherwise would have been due had such demand or acceleration occurred.

 

  

  

  

 

3.             CHANGES IN OBLIGATION, CERTAIN WAIVERS.

 

(a)           The Guarantor agrees that the Guaranteed Party may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of the Obligation (provided that any amendment to the Merger Agreement shall be subject to the consent of Parent and Merger Sub as provided in Section 8.04 thereof), and may also make any agreement with Parent or Merger Sub for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, without in any way impairing or affecting such Guarantor’s Obligation under this Limited Guarantee. The Guarantor agrees that the Obligation of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (i) the failure or delay on the part of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against Parent or Merger Sub; (ii) any change in the time, place or manner of payment of the Obligation or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement made in accordance with the terms thereof or any agreement evidencing, securing or otherwise executed in connection with the Obligation; (iii) the addition, substitution or release of any entity or other person interested in the transactions contemplated by the Merger Agreement; (iv) any change in the corporate existence, structure or ownership of Parent or Merger Sub; (v) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting Parent, Merger Sub or any other person interested in the transactions contemplated by the Merger Agreement; (vi) the existence of any claim, set-off or other right which the Guarantor may have at any time against Parent, Merger Sub or the Guaranteed Party, whether in connection with the Obligation or otherwise (other than defenses to the payment of the Obligation that are available to Parent or Merger Sub under the Merger Agreement); or (vii) the adequacy of any means the Guaranteed Party may have of obtaining payment related to the Obligation. Subject to the Cap, to the fullest extent permitted by law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Guaranteed Party. The Guarantor waives promptness, diligence, notice of the acceptance of this
Limited Guarantee and of the Obligation, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Obligation incurred and all other notices of any kind (other than notices expressly required to be provided to Parent or Merger Sub pursuant to the Merger Agreement), all defenses that may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of Parent or Merger Sub or any other person interested in the transactions contemplated by the Merger Agreement, and all suretyship defenses generally (other than defenses to the payment of the Obligation that are available to Parent or Merger Sub under the Merger Agreement). The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by
the Merger Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits.

 

  

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(b)           The Guaranteed Party hereby covenants and agrees that it shall not institute, and shall cause its respective controlled affiliates not to institute any formal proceeding or bring any other formal claim, in any litigation or other formal proceeding, arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby (including under the equity commitment letter dated as of the date hereof from the Guarantor to Parent (the “Equity Commitment Letter”)), against the Guarantor, Parent, Merger Sub, or any of their affiliates or any of their respective
former, current or future equity holders, controlling persons, directors, officers, employees, agents, affiliates, members, managers, general or limited partners, or assignees (each of the foregoing, including the Guarantor, Parent and Merger Sub, a “Non-Recourse Party”), other than (A) claims against Parent and/or Merger Sub or any of their successors or assigns under the Merger Agreement, (B) claims by the Guaranteed Party against ACOF Operating Manager III, LLC or the Guarantor, or any of their successors and assigns, under the Confidentiality Agreement, (C) claims against the Guarantor or any of its successors or assigns under this Limited Guarantee, or (D) claims against the Ares Corporate Opportunities Fund III, L.P. (the “Other Guarantor”) or any
of its successors or assigns under the limited guarantee, dated as of the date hereof, by the Other Guarantor in favor of the Guaranteed Party (the “Other Limited Guarantee”) (the claims referred to in clauses (A), (B), (C) and (D) hereof being referred to herein as the “Permitted Claims”). The Guarantor hereby covenants and agrees that it shall not institute, and shall cause its affiliates not to institute, directly or indirectly, any proceeding asserting that this Limited Guarantee or any portion thereof is illegal, invalid or unenforceable in accordance with its terms.

 

(c)           The Guarantor shall not exercise any rights that it may now have or hereafter acquire against Parent or Merger Sub that arise from the existence, payment, performance, or enforcement of the Guarantor’s Obligation under or in respect of this Limited Guarantee, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against Parent or Merger Sub or such other person, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to
take or receive from Parent or Merger Sub or such other person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until the Obligation under this Limited Guarantee shall have been indefeasibly paid in full in immediately available funds. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the indefeasible payment in full in immediately available funds of the Obligation and all other amounts payable under this Limited Guarantee, such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or
assignment) to be credited and applied to the Obligation and all other amounts payable under this Limited Guarantee, in accordance with the terms of the Merger Agreement, whether matured or unmatured, or to be held as collateral for any Obligation or other amounts payable under this Limited Guarantee thereafter arising.

 

  

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4.             NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder. Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised
by the Guaranteed Party at any time or from time to time. Subject to the Cap and except with respect to its obligations to proceed against Guarantor as provided in Section 1, the Guaranteed Party shall not have any obligation to proceed at any time or in any manner against, or exhaust any or all of the Guaranteed Party’s rights against, Parent, Merger Sub or any other person liable for the Obligation prior to proceeding against the Guarantor hereunder.

 

5.             REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants, with respect to itself, to the Guaranteed Party that (a) it is duly organized and validly existing under the laws of the jurisdiction of its formation; (b) it has all limited partnership or corporate, as applicable, power and authority to execute, deliver and perform this Limited Guarantee; (c) the execution, delivery and performance of this Limited Guarantee by such party has been duly and validly authorized and approved by all necessary limited partnership or corporate, as
applicable, action, and no other proceedings or actions on the part of such party are necessary therefore; (d) this Limited Guarantee has been duly and validly executed and delivered by it and constitutes a valid and legally binding obligation of it, enforceable against it in accordance with its terms, except that such enforceability may be (i) limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws of general application relating to or affecting creditors’ rights generally and (ii) subject to general equitable principles (whether considered in a proceeding in equity or at law); (e) the execution, delivery and performance by it of this Limited Guarantee do not and will not (i) violate its organizational and governing documents, (ii) violate any law or judgment or (iii) result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under, any contract to which it is a party, other than such items that, individually or in the aggregate, would not reasonably be expected to prevent or delay it from performing the Obligation under this Limited Guarantee; and (f) it has the financial capacity to pay and perform the Obligation under this Limited Guarantee, and all funds necessary for it to fulfill the Obligation hereunder shall be available to it for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof.

 

  

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6.             NO ASSIGNMENT. The Limited Guarantee may not be assigned, in whole or in part, by the Guaranteed Party.  The Guarantor’s obligation to fund all or any portion of the Obligation set forth herein may be assigned by the Guarantor to one or more affiliates of the Guarantor and affiliated funds, provided, however, that any such assignment shall not relieve the Guarantor of the Obligation under this Limited Guarantee.  Any purported assignment in contravention of this Section 6 shall be void.

 

7.             NOTICES. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given (i) upon personal delivery, (ii) one (1) Business Day after being sent via a nationally recognized overnight courier service, (iii) three (3) Business Days after being sent, postage prepaid, by registered, certified or express mail or (iv) upon receipt of electronic or other confirmation of transmission if sent via facsimile, in each case, at the addresses or facsimile numbers (or at such other address or facsimile number
for a party as shall be specified by like notice) set forth below:

 

if to the Guarantor:

 

Canada Pension Plan Investment Board

One Queen Street East, Suite 2600

P.O. Box 101

Toronto, Ontario M5C 2W5

Attention: Shane Feeney

Facsimile: 416-868-8684

 

with a copy to:

 

Torys LLP

1114 Avenue of the Americas

23rd Floor

New York, NY 10036-7703

Attention: Stefan P. Stauder

Facsimile: 212-682-0200

 

If to the Guaranteed Party, as provided in the Merger Agreement.

 

8.             CONTINUING GUARANTEE. This Limited Guarantee may not be revoked or terminated and shall remain in full force and effect and shall be binding on the Guarantor and its successors and assigns until the Obligation has been indefeasibly satisfied in full. Notwithstanding the foregoing, this Limited Guarantee shall automatically and immediately terminate, the Guarantor shall have no further obligations under this Limited Guarantee and, solely in the case of clause (e) below, if the Guarantor has previously made any payments under this Limited Guarantee, the
Guarantor shall be entitled to recover such payments from the Guaranteed Party upon the earliest to occur of (a) the valid termination of the Merger Agreement pursuant to the terms thereof (other than a valid termination of the Merger Agreement that results in the Parent Termination Fee becoming payable pursuant to Section 8.03(b) of the Merger Agreement), (b) the Effective Time; provided the Guarantor shall, prior to such termination, have fully funded and paid to Parent its Commitment as defined under the Equity Commitment Letter, (c) the Guaranteed Party or any of its designees accepting the Parent Termination Fee pursuant to the Merger Agreement and the payment by Parent or its designees of all amounts payable under Section 8.03(d) of the Merger Agreement, (d) the nine month anniversary of the date of a valid
termination of the Merger Agreement pursuant to the terms thereof, unless prior to such nine month anniversary, the Guaranteed Party shall have provided notice to the Guarantor claiming amounts payable by the Guarantor to the Guaranteed Party under this Limited Guarantee or notice to Parent or Merger Sub claiming amounts payable by Parent or Merger Sub under the Merger Agreement, in which case this Limited Guarantee shall terminate upon (i) indefeasible payment in full of the Obligation (subject to the Cap), (ii) the final, non-appealable resolution of all legal proceedings commenced by the Guaranteed Party alleging amounts payable by the Guarantor under this Limited Guarantee and indefeasible payment in full of the Obligation (subject to the Cap), if applicable or (iii) a written agreement signed by each of the parties hereto terminating this Limited Guarantee or (e) the Guaranteed
Party or any of its controlled affiliates, instituting any formal proceeding or bringing any other formal claim, in any litigation or other formal proceeding, against the Guarantor, Parent or Merger Sub or any other Non-Recourse Party in connection with the Merger Agreement or any of the transactions contemplated thereby (including under  the Equity Commitment Letter), other than any Permitted Claim.

 

  

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9.             NO RECOURSE. Notwithstanding anything that may be expressed or implied in this Limited Guarantee or any document or instrument delivered in connection herewith, and notwithstanding the fact that the Guarantor may be a partnership, by its acceptance of the benefits of this Limited Guarantee, the Guaranteed Party acknowledges and agrees that no person other than the Guarantor has any obligations hereunder and no recourse shall be had hereunder or under any document or instrument delivered in connection herewith, or for any claim based on, in respect of, or by
reason of, such obligations or their creation, against, and no personal liability therefor shall attach to, the Guarantor, or any Non-Recourse Party through the Guarantor, Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of the Guaranteed Party against the Guarantor or against any Non-Recourse Party (including any claim to enforce the Equity Commitment Letter), by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise, except for the Guaranteed Party’s rights (i) against the Guarantor and its successors or assigns under this Limited Guarantee, (ii) against Parent and Merger Sub and their successors or assigns pursuant to the Merger Agreement, (iii) against
ACOF Operating Manager III, LLC or the Guarantor, or any of their successors and assigns, under the Confidentiality Agreement, and (iv)  against the Other Guarantor and its successors or assigns under the Other Limited Guarantee, pursuant to a Permitted Claim (such rights, the “Permitted Rights”).  Other than the Permitted Rights and, in the case of affiliates, any rights against Parent or Merger Sub pursuant to (x) the Other Transaction Agreements and any other agreement contemplated thereby, (y) the letter agreement, dated as of the date hereof, among Parent, Merger Sub, and certain Company affiliates relating to certain leases and (z) any agreement entered into pursuant to the consummation of the Merger, recourse against the Guarantor pursuant to and expressly subject to the terms and conditions
of this Limited Guarantee shall be the sole and exclusive remedy of the Guaranteed Party and all of its affiliates against the Guarantor, Parent, Merger Sub and the Non-Recourse Parties in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement, the Equity Commitment Letter or the transactions contemplated thereby.  Nothing set forth in this Limited Guarantee shall confer or give or shall be construed to confer or give to any person (including any person acting in a representative capacity) any rights or remedies against any person other than the Guarantor as expressly set forth herein.  Notwithstanding anything to the contrary in this Limited Guarantee or any document or instrument delivered in connection herewith, the Guaranteed Party shall not pursue any remedies directly against the Guarantor pursuant to this Limited
Guarantee, unless it is seeking (or has sought) to pursue similar relief against the Other Guarantor pursuant to its limited guarantee in favor of the Guaranteed Party dated as of the date hereof, in accordance with the terms thereof.

 

  

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10.           GOVERNING LAW; JURISDICTION; VENUE; WAIVER OF JURY TRIAL. This Limited Guarantee shall be governed by, and construed in accordance with, the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

 

Each of the parties hereto (i) irrevocably submits itself to the personal jurisdiction of any court of proper subject matter jurisdiction in the State of California in the event any dispute arises out of this Limited Guarantee, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action relating to this Limited Guarantee in any court other than a court in the State of California, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court, and (iv) waives any right to trial by jury with respect to any suit, action or
proceeding directly or indirectly related to or arising out of this Limited Guarantee.  Each of the parties hereto further agrees that notice as provided herein shall constitute sufficient service of process and waives any argument that such service is insufficient.  Each of the parties hereto hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action related to or arising out of this Limited Guarantee, that (i) the action in any such court is brought in an inconvenient forum, (ii) the venue of such action is improper or (iii) this Limited Guarantee or the subject matter hereof may not be enforced in or by such courts.

 

11.           COUNTERPARTS. This Limited Guarantee 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 Limited Guarantee 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 Limited Guarantee.

 

12.           CONFIDENTIALITY. This Limited Guarantee shall be treated as confidential and is being provided to the Guaranteed Party solely in connection with the Merger. This Limited Guarantee may not be used, circulated, quoted or otherwise referred to in any document, except with the written consent of the Guarantor. The foregoing notwithstanding, the Guaranteed Party and the Guarantor may disclose the existence of this Limited Guarantee to (a) their affiliates and representatives and (b) to the extent required by law, the
applicable rules of any national securities exchange or in connection with any securities regulatory agency filings relating to the Merger.

 

13.           NO MODIFICATION; ENTIRE AGREEMENT. This Limited Guarantee may not be amended, modified or supplemented except by an agreement in writing signed by the Guarantor and the Guaranteed Party.  This Limited Guarantee constitutes the sole and entire agreement of the Guarantor or any of its affiliates, on the one hand and the Guaranteed Party or any of its affiliates, on the other hand, with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with
respect to such subject matter.

 

  

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14.           PARTIES IN INTEREST.  This Limited Guarantee (a) is for the sole benefit of the Guaranteed Party, (b) shall be binding upon the Guarantor, and (c) may be enforced solely by the Guarantor and the Guaranteed Party.  Nothing in this Limited Guarantee, express or implied, is intended to or shall confer upon any person (other than the Guarantor and the  Guaranteed Party) any legal or equitable right, benefit or remedy of any nature whatsoever

 

15.           MISCELLANEOUS.

 

a.      The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Limited Guarantee.

 

b.      All parties acknowledge that each party and its counsel have reviewed this Limited Guarantee and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Limited Guarantee.

 

(signature pages follow)

 

  

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IN WITNESS WHEREOF, the Guarantor has caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

 

	 	
CANADA PENSION PLAN 

INVESTMENT BOARD

	 
	 	 	 	 
	
 

	
By 

	/s/ André Bourbonnais	 
	 	Name: André Bourbonnais	 
	 	Title: Senior Vice President, Head of Private Investments	 
	 	 	 
	 	 	 
	 	
CANADA PENSION PLAN

INVESTMENT BOARD

	 
	 	 	 
	 	By	/s/ Jim Fasano	 
	 	Name:  Jim Fasano	 
	 	Title: Vice President, Principal	 

 

[Signature Page to Limited Guarantee]

 

  

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IN WITNESS WHEREOF, the Guaranteed Party has caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

 

	 	
99 CENTS ONLY STORES

	 
	 	 	 	 
	
 

	
By

	/s/  Eric Shiffer	 
	 	Name: Eric Shiffer	 
	 	Title: Chief Executive Officer	 

 

[Signature Page to Limited Guarantee]

 

 

10Unassociated Document

Exhibit 10.1

ACQUISITION AGREEMENT

AMONG

CONSORTEUM HOLDINGS, INC.,

TARSIN, INC.,

AND

TARSIN LTD

 

 

 

 

 

 

  

  

  

 

TABLE OF CONTENTS

ARTICLE 1

SALE AND PURCHASE OF THE SHARES

 

	 	1.1	 	
Issuance of the Shares.

	 	 	1	 
	 	1.2	 	
Consideration

	 	 	1	 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

 

	 	2.1	 	
Representations and Warranties of the Parties

	 	 	2	 
	 	 	 	
2.1.1    Organization, Standing, Power

	 	 	2	 
	 	 	 	
2.1.2    Authority

	 	 	3	 
	 	 	 	
2.1.3    Capitalization of the Parties

	 	 	4	 
	 	 	 	
2.1.4    Subsidiaries

	 	 	4	 
	 	 	 	
2.1.5    No Defaults

	 	 	4	 
	 	 	 	
2.1.6    Governmental Consents

	 	 	5	 
	 	 	 	
2.1.7    Financial Statements

	 	 	5	 
	 	 	 	
2.1.8    Absence of Undisclosed Liabilities

	 	 	5	 
	 	 	 	
2.1.9    Absence of Changes

	 	 	5	 
	 	 	 	
2.1.10  Patents and Trademarks

	 	 	6	 
	 	 	 	
2.1.11  Certain Agreements

	 	 	6	 
	 	 	 	
2.1.12  Compliance with Other Instruments

	 	 	6	 
	 	 	 	
2.1.13  Employee Benefit Plans

	 	 	7	 
	 	 	 	
2.1.14  Other Personal Property

	 	 	7	 
	 	 	 	
2.1.15  Properties and Liens

	 	 	7	 
	 	 	 	
2.1.16  Inventory

	 	 	7	 
	 	 	 	
2.1.17  Major Contracts

	 	 	7	 
	 	 	 	
2.1.18  Questionable Payments

	 	 	8	 
	 	 	 	
2.1.19  Recent Transactions

	 	 	8	 
	 	 	 	
2.1.20  Leases in Effect

	 	 	9	 
	 	 	 	
2.1.21  Taxes

	 	 	9	 
	 	 	 	
2.1.22  Disputes and Litigation

	 	 	10	 
	 	 	 	
2.1.23  Compliance with Laws

	 	 	10	 
	 	 	 	
2.1.24  Related Party Transactions

	 	 	10	 
	 	 	 	
2.1.25  Minute Books

	 	 	10	 
	 	 	 	
2.1.26  Disclosure

	 	 	10	 
	 	 	 	
2.1.27  Reliance

	 	 	11	 
	 	2.2	 	
Representations of Seller

	 	 	11	 
	 	2.3	 	
Representations of Buyer

	 	 	11	 

ARTICLE 3

CONDITIONS PRECEDENT

	 	3.1	 	
Conditions to Each Party’s Obligations

	 	 	12	 
	 	3.2	 	
Conditions to Seller’s Obligations

	 	 	12	 
	 	3.3	 	
Conditions to Buyer’s Obligations

	 	 	13	 

ARTICLE 4

CLOSING AND DELIVERY OF DOCUMENTS

	 	4.1	 	
Time and Place

	 	 	14	 
	 	4.2	 	
Deliveries by Seller

	 	 	14	 
	 	4.3	 	
Deliveries by Company

	 	 	14	 
	 	4.4	 	
Deliveries by Buyer

	 	 	15	 

 

  

  

  

 

ARTICLE 5

INDEMNIFICATION

	 	5.1	 	
Seller and Company’s Indemnity Obligations

	 	 	15	 
	 	5.2	 	
Buyer’s Indemnity Obligations

	 	 	15	 

ARTICLE 6

DEFAULT, AMENDMENT AND WAIVER

	 	6.1	 	
Default.

	 	 	16	 
	 	6.2	 	
Waiver and Amendment.

	 	 	16	 

ARTICLE 7

MISCELLANEOUS

	 	7.1	 	
Expenses.

	 	 	16	 
	 	7.2	 	
Notices.

	 	 	17	 
	 	7.3	 	
Entire Agreement

	 	 	17	 
	 	7.4	 	
Survival of Representations

	 	 	18	 
	 	7.5	 	
Incorporated by Reference

	 	 	18	 
	 	7.6	 	
Remedies Cumulative

	 	 	18	 
	 	7.7	 	
Execution of Additional Documents.

	 	 	18	 
	 	7.8	 	
Costs and Fees.

	 	 	18	 
	 	7.9	 	
Choice of Law.

	 	 	18	 
	 	7.10	 	
Exclusive Jurisdiction and Venue.

	 	 	18	 
	 	7.11	 	
Attorneys’ Fees

	 	 	18	 
	 	7.12	 	
Binding Effect and Assignment

	 	 	18	 
	 	7.13	 	
Counterparts; Facsimile Signatures

	 	 	19	 
	 	7.14	 	
Conflict Waiver

	 	 	19	 

  

  

  

 

Table of Contents

Table of Schedules and Exhibits

 

	
Exhibit A

	  	
Consorteum Holdings, Inc. Disclosure Schedule

	  
	  	  	  	  
	
Exhibit B

	  	
Tarsin, Inc. Disclosure Schedule

	  
	  	  	  	  
	
Exhibit C

	  	
Tarsin LTD Disclosure Schedule

	  

 

  

  

  

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (the “Agreement”), dated October 4, 2011, is by and among CONSORTEUM HOLDINGS, INC., a Nevada corporation (the “Buyer”), TARSIN, INC., a Nevada corporation (the “Company”), and TARSIN LTD, a company organized under the laws of the United Kingdom (the “Seller”) (individually, a “Party”; collectively, the “Parties”).

RECITALS

A.           The capital stock of the Company consists of 25,000,000 authorized shares of Common Stock, $0.001 par value, of which 100% are currently issued and outstanding and held by Seller (the “Shares”) such that the Company is a wholly owned subsidiary of Seller.

B.           Upon the terms and conditions set forth below, Seller desires to sell all of the Shares to Buyer, such that, following such transaction, the Company will be a 100% owned subsidiary of Buyer.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the Parties hereto agree as follows:

ARTICLE 1

SALE AND PURCHASE OF THE SHARES

1.1           Issuance of the Shares.  Subject to the terms and conditions herein set forth, and on the basis of the representations, warranties and agreements herein contained, Seller shall sell and transfer to Buyer the Shares which constitute 100% of the issued and outstanding common stock of the Company.

1.2           Consideration.  In consideration for this Agreement, the Parties shall provide the following:

1.2.1           Purchase Price.  The purchase price for the Shares shall be 100 million shares of common stock of Buyer, currently equal to 20% of the Buyer’s outstanding common stock, on a fully-diluted basis (the “Purchase Shares”);

1.2.2           Buyer Assumption of Liabilities.  Any indebtedness of the Company incurred through the Closing (as defined in Article 4 of this Agreement) shall be the responsibility of Seller.  Any indebtedness of the Company incurred after the Closing shall be the responsibility of Buyer;

1.2.3           Seller License Agreement to Buyer.  Seller is the sole owner of the Capsa Mobile Platform technology (“Capsa”).  On or before December 30, 2011, Seller agrees to enter into a licensing agreement with Company, whereby Seller shall grant to Company an exclusive, royalty-free, worldwide perpetual license to use, distribute, and sell Capsa in consideration of $500,000 received from Buyer (the “License Agreement”).  Seller acknowledges that the License Agreement is a material term of this Agreement of which the Buyer is placing reliance upon and, without which, the Buyer would not have otherwise been induced to enter into the Agreement;

1.2.4           Company’s Board of Directors.  The Company shall, at the next meeting of Company shareholders and in accordance with the Company’s bylaws, nominate John Osborne and Steve Jones to the Company’s Board of Directors for election by the Company shareholders;

1.2.5           Buyer’s Board of Directors.  Buyer shall, at the next meeting of Buyer shareholders and in accordance with Buyer’s bylaws, nominate John Osborne to the Buyer’s Board of Directors for election by the Buyer’s shareholders;

1.2.6           Buyer’s Working Capital Obligation.  Buyer shall provide or procure the provision of working capital to Company as follows: (1) $750,000 no later than January 1, 2012, and (2) an additional $500,000 no later than June 1, 2012.  Failure to provide or procure the working capital as described herein shall constitute a material breach; and

1.2.7           Anti-Dilution Protection.  Until such time as the Buyer has a market capitalization equal to or greater than $100,000,000 on any business day, if the Buyer issues additional shares of its common stock which cause the Seller’s Purchase Shares’ percentage ownership of the Buyer to decrease, the Buyer shall issue to Seller that certain number of additional shares of common stock in order to restore Seller’s percentage ownership interest in the Buyer (“Anti-Dilution Protection”), except, however, that without triggering Anti-Dilution Protection adjustments, shares of common stock and/or options therefore may be sold or reserved for issuance by the Buyer to (i) employees, officers, directors, consultants, contractors or advisors of the Buyer pursuant to stock purchase or stock option plans or arrangements or other incentive arrangements approved by the Buyer’s Board of Directors, (ii) to lender, equipment lessors, or other parties providing goods or services to the Buyer, (iii) the issuance of securities pursuant to stock splits, stock dividends, or similar transactions, (iv) the issuance of securities in connection with acquisition or strategic partnership transactions, and (v) the issuance of common stock in any other transaction in which exemption from the Anti-Dilution Protection is approved by the Seller.

 

  

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ARTICLE 2

REPRESENTATIONS AND WARRANTIES

2.1           Representations and Warranties of the Parties.  Except as disclosed in a document referring specifically to the representations and warranties in this Agreement that identifies by section number the section and subsection to which such disclosure relates and is delivered by each Party to the others prior to the execution of this Agreement (the “Disclosure Schedules”), the Parties represent and warrant each to the other, as of the date hereof and as of the Closing, as follows:

2.1.1           Organization, Standing, Power.

(a)           Buyer.  Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the state of Nevada.  It has all requisite corporate power, franchises, licenses, permits, and authority to own its properties and assets and to carry on its business as it has been and is being conducted.  Buyer is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a Material Adverse Effect (as defined below) on Buyer.  For purposes of this Agreement, the term “Material Adverse Effect” means any change or effect that, individually or when taken together with all other such changes or effects which have occurred prior to the date of determination of the occurrence of the Material Adverse Effect, is or is reasonably likely to be materially adverse to the business, assets (including intangible assets), financial condition, or results of operations of the entity.

(b)           The Company.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of the state of Nevada.  It has all requisite corporate power, franchises, licenses, permits, and authority to own its properties and assets and to carry on its business as it has been and is being conducted. The Company is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a Material Adverse Effect on the Company.

(c)           Seller.  Seller is a corporation duly organized, validly existing, and in good standing under the laws of the United Kingdom.  It has all requisite corporate power, franchises, licenses, permits, and authority to own its properties and assets and to carry on its business as it has been and is being conducted.  Seller is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a Material Adverse Effect on Seller.

2.1.2           Authority.  The Parties have all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery by the Parties of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the parts of the Parties, including the approval of the Board of Directors of each Party.  This Agreement has been duly executed and delivered by the Parties to each other and constitutes a valid and binding obligation of each Party enforceable in accordance with its terms, except that such enforceability may be subject to: (a) bankruptcy, insolvency, reorganization, or other similar laws relating to enforcement of creditors’ rights generally; and (b) general equitable principles.  Subject to the satisfaction of the conditions set forth in Article 3 below, the execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation, or acceleration of any obligation, or to loss of a material benefit under, or the creation of a lien, pledge, security interest, charge, or other encumbrance on any assets of any of the Parties (any such conflict, violation, default, right, loss, or creation being referred to herein as a “Violation”) pursuant to: (i) any provision of the organization documents of the Parties; or  (ii) any loan or credit agreement, note, bond, mortgage, indenture, contract, lease, or other agreement, or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule, or regulation applicable to each of the Parties’ respective properties or assets, other than in the case of  any such Violation which individually or in the aggregate would not have a Material Adverse Effect on any of the Parties.

 

  

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2.1.3           Capitalization of the Company.

(a)           The Company.  The capital stock of the Company consists of 25,000,000 authorized shares of common stock, of which 100% shares are currently issued and outstanding and held by Seller.

(b)           Upon issuance pursuant to the terms of this Agreement, the Shares will be duly and validly issued, fully paid and nonassessable, and issued in accordance with an exemption from the registration provisions of the Securities Act of 1933, as amended (the “Act”), and any relevant state securities laws or pursuant to valid exemptions therefrom.  The Shares are free of restrictions on transfer other than restrictions on transfer as set forth in the Disclosure Schedules and under applicable state and federal securities laws.  The Shares shall be issued in a private transaction and consequently will be deemed to be “Restricted Securities” as set forth in Rule 144 promulgated under the Act.

(c)           Except as set forth on the Disclosure Schedules, there are no options, warrants, rights, calls, commitments, plans, contracts, or other agreements of any character granted or issued by any of the Parties which provide for the purchase, issuance, or transfer of any additional shares of the capital stock of the Parties nor are there any outstanding securities granted or issued by any of the Parties that are convertible into any shares of the equity securities of the Parties, and none is authorized. None of the Parties have outstanding any bonds, debentures, notes, or other indebtedness the holders of which have the right to vote (or convertible or exercisable into securities having the right to vote) with holders of the Parties’ capital stock on any matter.

(d)           Except as set forth on the Disclosure Schedules, none of the Parties are a party or subject to any agreement or understanding, and, to the best of the Parties’ knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a shareholder or director of any of the Parties.

(e)           Except as set forth on the Disclosure Schedules, none of the Parties have granted or agreed to grant any registration rights, including piggyback rights, to any person or entity.

2.1.4           Subsidiaries.  “Subsidiary” or “Subsidiaries” means all corporations, trusts, partnerships, associations, joint ventures, or other Persons, as defined below, of which any of the Parties or any Subsidiary of any of the Parties owns not less than 20% of the voting securities or other equity or of which any of the Parties or any Subsidiary of any of the Parties possesses, directly or indirectly, the power to direct or cause the direction of the management and policies, whether through ownership of voting shares, management contracts, or otherwise.  “Person” means any individual, corporation, trust, association, partnership, proprietorship, joint venture, or other entity.  Prior to the Closing of this Agreement, there are no Subsidiaries of any of the Parties other than as disclosed herein or disclosed on the Disclosure Schedules.

2.1.5           No Defaults.  None of the Parties has received notice that they would be, with the passage of time, in default or violation of any term, condition, or provision of: (i) their Articles of Incorporation or Bylaws; (ii) any judgment, decree, or order applicable to any of the Parties; or (iii) any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license, or other instrument to which any of the Parties is now a party or by which they or any of their properties or assets may be bound, except for defaults and violations which, individually or in the aggregate, would not have a Material Adverse Effect on any of the Parties.

 

  

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2.1.6           Governmental Consents.  Any consents, approvals, orders, or authorizations of or registrations, qualifications, designations, declarations, or filings with or exemptions by (collectively “Consents”), any court, administrative agency, or commission, or other federal, state, or local governmental authority or instrumentality, whether domestic or foreign (each a “Governmental Entity”), which may be required by or with respect to any of the Parties in connection with the execution and delivery of this Agreement or the consummation by the Parties of the transactions contemplated hereby, except for such Consents which if not obtained or made would not have a Material Adverse Effect on any of the Parties for the transactions contemplated by this Agreement, are the responsibility of the respective Party.  Each of the Parties hereby represents and warrants that such Consents have been obtained by them, if necessary.

2.1.7           Financial Statements.  The Company has furnished Buyer with a true and complete copy of its financial statements for the period ending S, 2011 (the “Financial Statements”), which comply as to form in all material respects with all applicable accounting requirements with respect thereto and have been prepared internally and fairly present the financial positions of the Company as at the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal, recurring audit adjustments not material in scope or amount).  To the best of the Company’s directors’ knowledge and belief, there has been no change in the Company’s accounting policies or the methods of making accounting estimates or changes in estimates that are material to the Financial Statements, except as described in the notes thereto.

2.1.8           Absence of Undisclosed Liabilities.  To the best of their knowledge and belief, none of the Parties have any liabilities or obligations (whether absolute, accrued, or contingent) except: (i) liabilities that are accrued or reserved against in their respective balance sheets; or (ii) additional liabilities reserved against since September 30, 2011 that (x) have arisen in the ordinary course of business; (y) are accrued or reserved against on their books and records; and (z) amount in the aggregate to less than $10,000.

2.1.9           Absence of Changes.  To the best of their knowledge and belief, since September 30, 2011, the Parties have conducted their businesses in the ordinary course and there has not been: (i) any Material Adverse Effect on the business, financial condition, liabilities, or assets of the Parties or any development or combination of developments of which management of the Parties has knowledge which is reasonably likely to result in such an effect; (ii) any damage, destruction, or loss, whether or not covered by insurance, having a Material Adverse Effect on the Parties; (iii) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock, or property) with respect to the capital stock of the Parties; (iv) any increase or change in the compensation or benefits payable or to become payable by the Parties to any of their employees, except in the ordinary course of business consistent with past practice; (v) any sale, lease, assignment, disposition, or abandonment of a material amount of property of the Parties, except in the ordinary course of business; (vi) any increase or modification in any bonus, pension, insurance, or other employee benefit plan, payment, or arrangement made to, for, or with any of their employees; (vii) the granting of stock options, restricted stock awards, stock bonuses, stock appreciation rights, and similar equity based awards; (viii) any resignation or termination of employment of any office of the Parties; and the Parties, to the best of their knowledge, do not know of the impending resignation or termination of employment of any such office; (ix) any merger or consolidation with another entity, or acquisition of assets from another entity except in the ordinary course of business; (x) any loan or advance by the Parties to any person or entity, or guaranty by the Parties of any loan or advance; (xi) any amendment or termination of any contract, agreement, or license to which any of the Parties is a party, except in the ordinary course of business; (xii) any mortgage, pledge, or other encumbrance of any asset of any of the Parties; (xiii) any waiver or release of any right or claim of the Parties, except in the ordinary course of business; (xiv) any write off as uncollectible any note or account receivable or portion thereof; or (xv) any agreement by any of the Parties to do any of the things described in this Section 2.1.9.

 

  

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2.1.10           Patents and Trademarks.  The Parties each have sufficient title and ownership of all patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights, and processes (collectively, “Intellectual Property”) necessary for their businesses as now conducted without any conflict with or infringement of the rights of others.  There are no outstanding options, licenses, or agreements of any kind relating to the Intellectual Property, nor are any of the Parties bound by or a party to any options, licenses, or agreements of any kind with respect to the Intellectual Property of any other person or entity.  None of the Parties has received any communications alleging that they have violated or, by conducting their businesses as proposed, would violate any of the Intellectual Property of any other person or entity.  None of the Parties are aware that any of their employees is obligated under any contract (including licenses, covenants, or commitments of any nature) or other agreement, or subject to any judgment, decree, or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Parties or that would conflict with each of the Parties’ respective business as proposed to be conducted.  Neither the execution or delivery of this Agreement, nor the carrying on of each of the Parties’ respective business by their respective employees, nor the conduct of each of the Parties’ respective business as proposed, will, to the best of the Parties’ knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant, or instrument under which any of such employees is now obligated.  None of the Parties believe that it is or will be necessary to utilize any inventions of any of its employees (or people it currently intends to hire) made prior to their employment by any of the Parties.

2.1.11           Certain Agreements.  To the best of the Parties’ knowledge and belief, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will: (i) result in any payment (including, without limitation, severance, unemployment compensation, parachute payment, bonus, or otherwise), becoming due to any director, employee, or independent contractor of any of the Parties, from any other Party under any agreement or otherwise; (ii) materially increase any benefits otherwise payable under any agreement; or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

2.1.12           Compliance with Other Instruments.  To the best of the Parties’ knowledge and belief, none of the Parties are in violation or default of any provision of their respective articles of incorporation or bylaws, or of any instrument, judgment, order, writ, decree, or contract to which they are a party or by which they are bound, or, to the best of their knowledge, of any provision of any federal or state statute, rule, or regulation which may be applicable to them. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, order, writ, decree, or contract, or an event that results in the creation of any lien, charge, or encumbrance upon any assets of any Party or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to any Party, its businesses, or operations, or any of its assets or properties.

2.1.13           Employee Benefit Plans.  The Parties have no employee benefit plans (including without limitation all plans which authorize the granting of stock options, restricted stock, stock bonuses, or other equity based awards) covering active, former, or returned employees, other than as listed in the Disclosure Schedules.

2.1.14           Other Personal Property.  The books and records of each of the Parties contain a complete and accurate description, and specify the location, of all trucks, automobiles, machinery, equipment, furniture, supplies, and other tangible personal property owned by, in the possession of, or used by the Parties in connection with their businesses. Except as set forth in the Disclosure Schedules, no personal property used by the Parties in connection with their businesses is held under any lease, security agreement, conditional sales contract, or other title retention or security arrangement.

2.1.15           Properties and Liens.  Except as reflected in the Financial Statements or as set forth in the Disclosure Schedules, and except for statutory mechanics’ and material men’s liens, liens for current taxes not yet delinquent, the Parties own, free and clear of any liens, claims, charges, options, or other encumbrances, all of their tangible and intangible property, real and personal, whether or not reflected in the Financial Statements (except that sold or disposed of in the ordinary course of business since the date of such statements) and all such property acquired since the date of such statements.  All real property and tangible personal property of the Parties is in good operating condition and repair, ordinary wear and tear excepted.

2.1.16           Inventory.  In reliance upon their respective auditing firms, the inventories of the Parties shown on the Financial Statements and inventories acquired by them subsequent to the date of the Financial Statements consist solely of items of a quality and quantity usable and salable in the normal course of business, with the exception of obsolete materials and materials below standard quality, all of which have been written down in the books of the Parties to net realizable market value or have been provided for by adequate reserves.  Except for sales made in the ordinary course of business, all inventory is the property of the Parties.  No items are subject to security interests, except as set forth in the Disclosure Schedules.  The value of the inventories has been determined on a first-in, first-out basis consistent with prior years.

 

  

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2.1.17           Major Contracts.  Except as otherwise disclosed in the Disclosure Schedules, none of the Parties is a party or subject to:

(a)           Any union contract, or any employment contract or arrangement providing for future compensation, written or oral, with any officer, consultant, director, or employee which is not terminable by the Party on 30 calendar days’ notice or less without penalty or obligations to make payments related to such termination;

(b)           Any joint venture contract, partnership agreement or arrangement or any other agreement which has involved or is expected to involve a sharing of revenues with other persons or a joint development of products with other persons;

(c)           Any manufacture, production, distribution, sales, franchise, marketing, or license agreement, or arrangement by which products or services of the Party are developed, sold, or distributed;

(d)           Any material agreement, license, franchise, permit, indenture, or authorization which has not been terminated or performed in its entirety and not renewed which may be, by its terms, accelerated, terminated, impaired, or adversely affected by reason of the execution of this Agreement, or the consummation of the transactions contemplated hereby or thereby;

(e)           Any material agreement, contract, or commitment that requires the consent of another person for the Party to enter into or consummate the transactions contemplated by this Agreement;

(f)           Except for object code license agreements for any of the Party’s executed in the ordinary course of business, any indemnification by the Party with respect to infringements of proprietary rights; or

(g)           Any contract containing covenants purporting to materially limit the Party’s freedom to compete in any line of business in any geographic area.

All contracts, plans, arrangements, agreements, licenses, franchises, permits, indentures, authorizations, instruments, and other commitments of the Parties are valid and in full force and effect and to the best of their knowledge, neither the Parties themselves nor any other party thereto, breached any material provisions of, or is in default in any material respect under the terms thereof.

2.1.18           Questionable Payments.  None of the Parties, nor to their knowledge any director, officer, employee, or agent of any of the Parties, has: (i) made any payment or provided services or other favors in the United States or any foreign country in order to obtain preferential treatment or consideration by any Governmental Entity with respect to any aspect of the business of the Parties; or (ii) made any political contributions that would not be lawful under the laws of the United States, any foreign country or any jurisdiction within the United States or any foreign country.  None of the Parties, nor to their knowledge any director, officer, employee, or agent of any of the Parties, has been or is the subject of any investigation by any Governmental Entity in connection with any such payment, provision of services, or contribution.

2.1.19           Recent Transactions.  None of the Parties, nor to their knowledge any director, officer, employee, or agent of any of the Parties, is participating in any discussions and do not intend to engage in any discussion: (i) with any representative of any corporation or corporations regarding the consolidation or merger of any of the Parties with or into any such corporation or corporations; (ii) with any corporation, partnership, association, or other business entity or any individual regarding the sale, conveyance, or disposition of all or substantially all of the assets of the Parties or a transaction or series of related transactions in which more than 50% of the voting power of any of the Parties is disposed of; or (iii) regarding any other form of acquisition, liquidation, dissolution, or winding up of the Parties.

2.1.20           Leases in Effect.  All real property leases and subleases to which any of the Parties is a party and any amendments or modifications thereof (each a “Lease” and, collectively, the “Leases”) are valid, in full force and effect and enforceable, and there are no existing defaults on the part of any Party and no Party has received nor given notice of default or claimed default with respect to any Lease, nor is there any event that with notice or lapse of time, or both, would constitute a default thereunder.  Except as set forth on the Disclosure Schedules, no consent is required from any Party under any Lease in connection with the completion of the transactions contemplated by this Agreement, and none of the Parties have received notice that any party to any Lease intends to cancel, terminate, or refuse to renew the same or to exercise any option or other right thereunder, except where the failure to receive such consent, or where such cancellation, termination, or refusal would not have a Material Adverse Effect on the Parties.

 

  

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2.1.21           Taxes.  Except as set forth elsewhere in this Agreement or in the Disclosure Schedules:

(a)           All taxes, assessments, fees, penalties, interest, and other governmental charges with respect to the Parties which have become due and payable by August 31, 2011 have been paid in full or adequately reserved against by the Parties, and all taxes, assessments, fees, penalties, interest, and other governmental charges which have become due and payable subsequent to August 31, 2011 have been paid in full or adequately reserved against on their books of account and such books are sufficient for the payment of all unpaid federal, state, local, foreign, and other taxes, fees, and assessments (including without limitation, income, property, sales, use, franchise, capital stock, excise, added value, employees’ income withholding, social security, and unemployment taxes), and all interest and penalties thereon with respect to the periods then ended and for all periods prior thereto;

(b)           There are no agreements, waivers, or other arrangements providing for an extension of time with respect to the assessment of any tax or deficiency against the Parties, nor are there any actions, suits, proceedings, investigations, or claims now pending against the Parties in respect of any tax or assessment, or any matters under discussion with any federal, state, local, or foreign authority relating to any taxes or assessments, or any claims for additional taxes or assessments asserted by any such authority; and

(c)           There are no liens for taxes upon the assets of the Parties except for taxes that are not yet payable.  The Parties have withheld all taxes required to be withheld in respect of wages, salaries, and other payments to all employees, officers, and directors and timely paid all such amounts withheld to the proper taxing authority.

2.1.22           Disputes and Litigation  Except as disclosed in the Disclosure Schedules, there is no suit, claim, action, litigation, or proceeding pending or, to the knowledge of the Parties, threatened against or affecting any of the Parties, respectively, or any of their properties, assets, or business or to which any of the Parties is a party, in any court or before any arbitrator of any kind or before or by any Governmental Entity, which would, if adversely determined, individually or in the aggregate, have a Material Adverse Effect on the Parties, nor is there any judgment, decree, injunction, rule, or order of any Governmental Entity or arbitrator outstanding against any of the Parties, respectively, and having, or which, insofar as reasonably can be foreseen, in the future could have, any such effect.  To the knowledge of the Parties, there is no investigation pending or threatened against any of the respective Parties before any foreign, federal, state, municipal, or other governmental department, commission, board, bureau, agency, instrumentality, or other Governmental Entity.

2.1.23           Compliance with Laws.  Except as set forth in the Disclosure Schedules, to the best of their knowledge and belief, none of the Parties’ businesses is being conducted in violation of, or in a manner which could cause liability under any applicable law, rule, or regulation, judgment, decree, or order of any Governmental Entity, except for any violations or practices, which, individually or in the aggregate, have not had and will not have a Material Adverse Effect on the Parties.  The Parties each have all franchises, permits, licenses, and any similar authority necessary for the conduct of their business as now being conducted by them, the lack of which could materially and adversely affect the business, properties, prospects, or financial condition of the Parties and believes they can obtain, without undue burden or expense, any similar authority for the conduct of their business as it is planned to be conducted.  To the best of their respective knowledge and belief, none of the Parties are in default in any material respect under any of such franchises, permits, licenses, or other similar authority.

2.1.24           Related Party Transactions.  To the best of each of the Parties’ knowledge and belief, no employee, officer, or director of any Party nor member of his or her immediate family is indebted to that Party or any other Party, nor is any Party indebted (or committed to make loans or extend or guarantee credit) to any of them.  To the best of each of the Parties’ knowledge, none of such persons has any direct or indirect ownership interest in any firm or corporation with which any of the Parties is affiliated or with which any of the Parties has a business relationship, or any firm or corporation that competes with the Parties, except that employees, officers, or directors of the Parties and members of their immediate families may own stock in publicly traded companies that may compete with the Parties.  To the best knowledge of each of the Parties, respectively, no member of the immediate family of any officer or director of any of the Parties is directly or indirectly interested in any material contract with any of the Parties.

2.1.25           Minute Books.  The minute books of the Company provided to Buyer contain a complete summary of all meetings of directors and shareholders since the time of incorporation and reflect all transactions referred to in such minutes accurately in all material respects.

 

  

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2.1.26           Disclosure.  No representation or warranty made by any of the Parties in this Agreement, nor any document, written information, statement, financial statement, certificate, or exhibit prepared and furnished or to be prepared and furnished by the Parties or their representatives pursuant hereto or in connection with the transactions contemplated hereby, when taken together, contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading in light of the circumstances under which they were furnished, to the best of each of the Parties’ knowledge and belief.

2.1.27           Reliance.  The foregoing representations and warranties are made by each Party with the knowledge and expectation that the other Parties are placing reliance thereon.

2.2           Representations of Seller.  Seller represents and warrants to Buyer as follows:

(a)           Seller has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the common stock offered by Buyer of the size contemplated.  Seller represents that it is able to bear the economic risk of the investment and at the present time can afford a complete loss of such investment.  Seller has had a full opportunity to inspect the books and records of the Buyer and to make any and all inquiries of Buyer officers and directors regarding the Buyer and its business as Seller has deemed appropriate.

(b)           Seller is an “Accredited Investor” as defined in Regulation D of the Act or Seller, either alone or with Seller’s professional advisers who are unaffiliated with, have no equity interest in and are not compensated by Buyer or any affiliate or selling agent of Buyer, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Seller is capable of evaluating the merits and risks of an investment in the common stock offered by Buyer and of making an informed investment decision with respect thereto and has the capacity to protect Seller’s own interests in connection with Seller’s proposed investment in the Buyer’s common stock.

(c)           Seller is acquiring the Buyer’s common stock solely for Seller’s own account as principal, for investment purposes only and not with a view to the resale or dis­tribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Buyer’s common stock.

(d)           Seller will not sell or otherwise transfer the Buyer’s common stock without registration under the Act or an exemption therefrom and fully understands and agrees that Seller must bear the economic risk of Seller’s purchase for an indefinite period of time because, among other reasons, the Buyer’s common stock have not been registered under the Act or under the securi­ties laws of any state and, therefore, cannot be resold, pledged, assigned or other­wise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

2.3           Representations of Buyer.  Buyer represents and warrants to Seller as follows:

(a)           Buyer has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the common stock offered by Seller of the size contemplated.  Buyer represents that it is able to bear the economic risk of the investment and at the present time can afford a complete loss of such investment.  Buyer has had a full opportunity to inspect the books and records of the Seller and to make any and all inquiries of Seller officers and directors regarding the Seller and its business as Buyer has deemed appropriate.

 

  

8

  

 

(b)           Buyer is an “Accredited Investor” as defined in Regulation D of the Act or Buyer, either alone or with Buyer’s professional advisers who are unaffiliated with, have no equity interest in and are not compensated by Seller or any affiliate or selling agent of Seller, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Buyer is capable of evaluating the merits and risks of an investment in the common stock offered by Seller and of making an informed investment decision with respect thereto and has the capacity to protect Buyer’s own interests in connection with Buyer’s proposed investment in the Seller’s common stock.

(c)           Buyer is acquiring the Seller’s common stock solely for Buyer’s own account as principal, for investment purposes only and not with a view to the resale or dis­tribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Seller’s common stock.

(d)           Buyer will not sell or otherwise transfer the Seller’s common stock without registration under the Act or an exemption therefrom and fully understands and agrees that Buyer must bear the economic risk of Buyer’s purchase for an indefinite period of time because, among other reasons, the Seller’s common stock have not been registered under the Act or under the securi­ties laws of any state and, therefore, cannot be resold, pledged, assigned or other­wise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

ARTICLE 3

CONDITIONS PRECEDENT

3.1           Conditions to Each Party’s Obligations.  The respective obligations of each Party hereunder shall be subject to the satisfaction prior to or at the Closing of the following conditions:

(a)           No Restraints.  No statute, rule, regulation, order, decree, or injunction shall have been enacted, entered, promulgated, or enforced by any court or Governmental Entity of competent jurisdiction which enjoins or prohibits the consummation of this Agreement and shall be in effect.

(b)           Legal Action.  There shall not be pending or threatened in writing any action, proceeding, or other application before any court or Governmental Entity challenging or seeking to restrain or prohibit the consummation of the transactions contemplated by this Agreement, or seeking to obtain any material damages.

3.2           Conditions to Seller’s Obligations.  The obligations of Seller shall be subject to the satisfaction prior to or at the Closing of the following conditions unless waived by Seller:

(a)           Representations and Warranties of Buyer.  The representations and warranties of Buyer set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing, except: (i) as otherwise contemplated by this Agreement; or (ii) in respects that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.  Seller shall have received a certificate signed on behalf of Buyer by the President or Chief Executive Officer of Buyer to such effect on the Closing.

(b)           Performance of Obligations of Buyer.  Buyer shall have performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.  Seller shall have received a certificate signed on behalf of Buyer by the President or Chief Executive Officer of Buyer to such effect on the Closing.

3.3           Conditions to Buyer’s Obligations.  The obligations of Buyer shall be subject to the satisfaction prior to or at the Closing of the following conditions unless waived by Buyer:

(a)           Company Valuation.  Prior to Closing, Buyer shall be satisfied that the Company has a valuation of at least $12,000,000.

(b)           Assumption of Line of Credit with NAT West. Prior to closing Buyer shall provide a loan repayment guarantee acceptable to NAT West to guarantee repayment of the outstanding balance owed on the line of credit established by Tarsin LTD and NAT West.

 

  

9

  

 

(c)           Representations and Warranties of Seller and the Company.  The representations and warranties of Seller and the Company set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing, except: (i) as otherwise contemplated by this Agreement; or (ii) in respects that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.  Buyer shall have received certificates signed on behalf of Seller and the Company by the President or Chief Executive Officer of each Seller and the Company to such effect on the Closing.

(d)           Performance of Obligations of Seller and the Company.  Seller and the Company shall have performed all agreements and covenants required to be performed by them under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.  Buyer shall have received certificates signed on behalf of Seller and the Company by the President or Chief Executive Officer of each Seller and the Company to such effect on the Closing.

(e)           Governmental Approvals.  All Consents of Governmental Entities legally required by Seller and the Company for the transactions contemplated by this Agreement shall have been filed, occurred, or been obtained, other than such Consents, the failure of which to obtain would not have a Material Adverse Effect on the consummation of the transactions contemplated by this Agreement.

(f)           Consents of Other Third Parties.  Seller and the Company shall have received and delivered to Buyer all requisite consents and approvals of all lenders, lessors, and other third parties whose consent or approval is required in order for Seller and the Company to consummate the transactions contemplated by this Agreement, or in order to permit the continuation after the Closing of the business activities of the Company in the manner such business is presently carried on by it.  Buyer shall have received copies of any necessary written consent(s) to this Agreement and the transactions contemplated herein.

(g)           Material Adverse Change.  Since the date hereof and through Closing, there shall not have occurred any change, occurrence, or circumstance in Seller or the Company having or reasonably likely to have, individually or in the aggregate, in the reasonable judgment of Buyer, a Material Adverse Effect on the Parties or on the transactions contemplated by this Agreement.

ARTICLE 4

CLOSING AND DELIVERY OF DOCUMENTS

4.1           Time and Place.  The closing of the transactions contemplated by this Agreement shall take place at the offices of Buyer, located at 101 Church Street, Suite 14, Los Gatos, California 95030, immediately upon the full execution of this Agreement, the satisfaction of all conditions, and the delivery of all required documents, or at such other time and place as the Parties mutually agree upon (which time and place are hereinafter referred to as the “Closing”).

4.2           Deliveries by Seller.  At Closing, Seller shall make the following deliveries to Buyer:

(a)           A cancelled stock certificate representing the Shares previously owned by Seller as set forth in Section 1.1 above;

(b)           A certificate executed by Seller certifying that: (i)  all Seller’s representations and warranties under this Agreement are true as of the Closing, as though each of those representations and warranties had been made on that date; and (ii) Seller has performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement; and

(c)           Certified resolutions of the Board of Directors of Seller, in form satisfactory to counsel for Buyer, authorizing the execution and performance of this Agreement.

 

  

10

  

 

4.3           Deliveries by the Company.  At Closing, the Company shall make the following deliveries to Buyer:

(a)           A certificate representing the Shares that Buyer is acquiring as set forth in Section 1.1 above;

(b)           A certificate executed by the Company certifying that: (i)  all the Company’s representations and warranties under this Agreement are true as of the Closing, as though each of those representations and warranties had been made on that date; and (ii) the Company has performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement;

(c)           Certified resolutions of the Board of Directors of the Company, in form satisfactory to counsel for Buyer, authorizing the execution and performance of this Agreement;

(d)           The minute book and corporate records of the Company; and

(e)           The financial statements of the Company as required in Section 2.1.7.

4.4           Deliveries by Buyer. At Closing, Buyer shall make the following deliveries to Seller:

(a)           A certificate executed by Buyer certifying that: (i)  Buyer’s representations and warranties under this Agreement are true as of the Closing, as though each of those representations and warranties had been made on that date; and (ii) Buyer has performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement; and

(c)           Certified resolutions of the Board of Directors of Buyer in form satisfactory to counsel for Seller, authorizing the execution and performance of this Agreement.

ARTICLE 5

INDEMNIFICATION

5.1           Seller and the Company’s Indemnity Obligations.

(a)           Upon receipt of notice thereof, Seller and the Company shall, jointly and severally, indemnify, defend, and hold harmless Buyer from any and all claims, demands, liabilities, damages, deficiencies, losses, obligations, costs and expenses, including attorney fees and any costs of investigation that Buyer shall incur or suffer, that arise, result from or relate to: (i) any breach of, or failure by Seller or the Company to perform, any of their representations, warranties, covenants, or agreements in this Agreement or in any schedule, certificate, exhibit, or other instrument furnished or to be furnished by Seller and/or the Company under this Agreement; and (ii) the employment of any of the Company’s employees which is in violation of any law, regulation, or ordinance of any Governmental Entity.

(b)           Buyer shall notify promptly Seller and the Company of the existence of any claim, demand, or other matter to which Seller and the Company’s indemnification obligations would apply, and shall give them a reasonable opportunity to defend the same at their own expense and with counsel of their own selection, provided that Seller shall at all times also have the right to fully participate in the defense. If Seller and the Company, within a reasonable time after this notice, fails to defend, Buyer shall have the right, but not the obligation, to undertake the defense of, and, with the written consent of Seller and the Company, to compromise or settle the claim or other matter on behalf, for the account, and at the risk, of Seller and the Company.

5.2           Buyer’s Indemnity Obligations.

(a)           Upon receipt of notice thereof, Buyer shall indemnify, defend, and hold harmless Seller and/or the Company from any and all claims, demands, liabilities, damages, deficiencies, losses, obligations, costs, and expenses, including attorney fees and any costs of investigation that Seller and/or the Company shall incur or suffer, that arise, result from or relate to any breach of, or failure by Buyer to perform any of its representations, warranties, covenants, or agreements in this Agreement or in any schedule, certificate, exhibit, or other instrument furnished or to be furnished by Buyer under this Agreement.

(b)           Seller and/or the Company shall notify promptly Buyer of the existence of any claim, demand or other matter to which Buyer’s indemnification obligations would apply, and shall give it a reasonable opportunity to defend the same at its own expense and with counsel of its own selection, provided that Seller and the Company shall at all times also have the right to fully participate in the defense. If Buyer, within a reasonable time after this notice, fails to defend, Seller and the Company shall have the right, but not the obligation, to undertake the defense of, and, with the written consent of Buyer, to compromise or settle the claim or other matter on behalf, for the account, and at the risk, of Buyer.

 

  

11

  

 

ARTICLE 6

DEFAULT, AMENDMENT AND WAIVER

6.1           Default.  Upon a breach or default under this Agreement by any of the Parties (following the cure period provided herein), the non-defaulting party shall have all rights and remedies given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.  Notwithstanding the foregoing, in the event of a breach or default by any Party hereto in the observance or in the timely performance of any of its obligations hereunder which is not waived by the non-defaulting Party, such defaulting Party shall have the right to cure such default within 15 calendar days after receipt of notice in writing of such breach or default.

6.2           Waiver and Amendment.  Any term, provision, covenant, representation, warranty, or condition of this Agreement may be waived, but only by a written instrument signed by the party entitled to the benefits thereof.  The failure or delay of any party at any time or times to require performance of any provision hereof or to exercise its rights with respect to any provision hereof shall in no manner operate as a waiver of or affect such party’s right at a later time to enforce the same.  No waiver by any party of any condition, or of the breach of any term, provision, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or waiver of any other condition or of the breach of any other term, provision, covenant, representation, or warranty.  No modification or amendment of this Agreement shall be valid and binding unless it be in writing and signed by all Parties hereto.

ARTICLE 7

MISCELLANEOUS

7.1           Expenses.  Whether or not the transactions contemplated hereby are consummated, each of the Parties hereto shall bear all taxes of any nature (including, without limitation, income, franchise, transfer, and sales taxes) and all fees and expenses relating to or arising from its compliance with the various provisions of this Agreement and such party’s covenants to be performed hereunder, and except as otherwise specifically provided for herein, each of the Parties hereto agrees to pay all of its own expenses (including, without limitation, attorneys and accountants’ fees, and printing expenses) incurred in connection with this Agreement, the transactions contemplated hereby, the negotiations leading to the same and the preparations made for carrying the same into effect, and all such taxes, fees, and expenses of the Parties hereto shall be paid prior to Closing.

7.2           Notices.  Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by facsimile transmission to the addresses of the Parties as follows:

 

	
  

	
To Buyer:

	
Consorteum Holdings, Inc.

Attn: Joseph R. Cellura, Chief Executive Officer

101 Church Street, Suite 14

Los Gatos, California 95030

 

	
  

	
To Company:

	
Tarsin, Inc.

	
Attn:

	 	
     

	 	 	
     

	
 

	 	
     

 

	
  

	
 
To Seller:

	
Tarsin, Inc.

	
Attn:

	 	
     

	 	 	
     

	
 

	 	
     

 

  

12

  

The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid.  If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient.  If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by facsimile transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

7.3           Entire Agreement.  This Agreement, together with the Schedule and Exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof.  No understanding, promise, inducement, statement of intention, representation, warranty, covenant, or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any party hereto which is not embodied in this Agreement, or in the schedules or exhibits hereto or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant, or condition not so set forth.

7.4           Survival of Representations.  All statements of fact (including financial statements) contained in the Schedules, the exhibits, the certificates, or any other instrument delivered by or on behalf of the Parties hereto, or in connection with the transactions contemplated hereby, shall be deemed representations and warranties by the respective party hereunder.  All representations, warranties, agreements, and covenants hereunder shall survive the Closing and remain effective regardless of any investigation or audit at any time made by or on behalf of the Parties or of any information a party may have in respect hereto.  Consummation of the transactions contemplated hereby shall not be deemed or construed to be a waiver of any right or remedy possessed by any party hereto, notwithstanding that such party knew or should have known at the time of Closing that such right or remedy existed.

7.5           Incorporated by Reference.  The schedules, exhibits, and all documents (including, without limitation, all financial statements) delivered as part hereof or incident hereto are incorporated as a part of this Agreement by reference.

7.6           Remedies Cumulative.  No remedy herein conferred upon the Parties is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.

7.7           Execution of Additional Documents.  Each Party hereto shall make, execute, acknowledge, and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.

7.8           Costs and Fees.  Each of the Parties hereto is responsible for their own costs and fees incurred with respect to this Agreement or to any of the transactions contemplated hereby.

7.9           Choice of Law.  This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

7.10           Exclusive Jurisdiction and Venue.  The Parties agree that the Courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

 

  

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7.11           Attorneys’ Fees.  In the event any Party hereto shall commence legal proceedings against the other to enforce the terms hereof, or to declare rights hereunder, as the result of a breach of any covenant or condition of this Agreement, the prevailing party in any such proceeding shall be entitled to recover from the losing party its costs of suit, including reasonable attorneys’ fees, as may be fixed by the court.

7.12           Binding Effect and Assignment.  This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, legal representatives, and assigns.

7.13           Counterparts; Facsimile Signatures.  This Agreement may be executed simul­taneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  The Parties agree that facsimile signatures of this Agreement shall be deemed a valid and binding execution of this Agreement.

7.14           Conflict Waiver.  Seller hereby acknowledges that Oswald & Yap LLP (“the Firm”) represents the Buyer with various legal matters and does not represent the Seller in connection with this Agreement or the contemplated transaction nor in any other respect. Seller further acknowledges that the Firm has drafted this Agreement. Seller has been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.  Seller hereby waives any action it may have against the Firm regarding such conflict of interest.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of the date first written hereinabove.

 

	BUYER:       	 	 	THE COMPANY:	 
	 	 	 	 	 
	CONSORTEUM HOLDINGS, INC.,           	 	 	TARSIN, INC.,	 
	a Nevada corporation  	 	 	a Nevada corporation	 
	 	 	 	 	 
	 	 	 	 	 
	
/s/ Joseph R. Cellura    

	 	 	
/s/ John Osborne 

	 
	
By: Joseph R. Cellura   

	 	 	
By: John Osborne 

	 
	
Its:  Chief Executive Officer   

	 	 	
Its:  Chief Executive Officer          

	 

 

	

SELLER:

	 	 	 	 
	 	 	 	 	 
	

TARSIN LTD,

	 	 	 	 
	

a United Kingdom company

	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	

/s/ John Osborne 

	 	 	 	 
	

By: John Osborne 

	 	 	 	 
	
Its:  Chief Executive Officer   

	 	 	 	 

                                                               

  

14

  

 

          EXHIBIT A

CONSORTEUM HOLDINGS, INC. DISCLOSURE SCHEDULE

The items set forth below are exceptions to the representations and warranties of Consorteum Holdings, Inc. (the “Buyer”) set forth in Section 2 of the Agreement.  Any matter set forth herein as an exception to a section of the Agreement shall be deemed to constitute an exception to all other applicable sections of the Agreement.  Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.

 

	
Section

	  	
Exception

	  	  	  
	
None

	  	  

  

 

  

 

EXHIBIT B

TARSIN, INC. DISCLOSURE SCHEDULE

The items set forth below are exceptions to the representations and warranties of Tarsin, Inc. (“Company”) set forth in Section 2 of the Agreement.  Any matter set forth herein as an exception to a section of the Agreement shall be deemed to constitute an exception to all other applicable sections of the Agreement.  Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.

 

	
Section

	  	
Exception

	  	  	  
	
None

	  	  

  

 

  

 

EXHIBIT C

TARSIN LTD DISCLOSURE SCHEDULE

The items set forth below are exceptions to the representations and warranties of Tarsin LTD (the “Seller”) set forth in Section 2 of the Agreement. Any matter set forth herein as an exception to a section of the Agreement shall be deemed to constitute an exception to all other applicable sections of the Agreement. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.

 

	
Section

	  	
Exception

	  	  	  
	
None

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