Form of Membership Interest Purchase Agreement

EX-10.1 2 ea161858ex10-1_ecoark.htm FORM OF MEMBERSHIP INTEREST PURCHASE AGREEMENT

EXHIBIT 10.1

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”) is made as of June 16, 2022 by and between Trend Ventures, LP a limited partnership organized under the laws of Delaware (the “Purchaser”), and Agora Digital Holdings, Inc., a Nevada corporation (the “Seller”).

 

The Seller is the beneficial owner of all of the outstanding membership interests (the “Interests”) of Trend Discovery Holdings, LLC, a Delaware limited liability company, (the “Company”). This Agreement contemplates the sale by the Seller to the Purchaser of the Interests.

 

In consideration of the foregoing and the mutual provisions set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE 1

THE TRANSACTION

 

1.1 Sale and Purchase of Interests. Upon the terms and conditions set forth in this Agreement, at the Closing (as defined below), the Seller will sell and transfer to the Purchaser, and the Purchaser will purchase and acquire from the Seller, all of the Interests, free and clear of any Encumbrances. Before the Closing, the Company shall (1) sell, convey and transfer to the Seller its ownership of Bitstream Mining, LLC, a Texas limited liability company, and OTZI LLC, a Texas limited liability company and (2) assign the 80% working interest in fourteen oil and gas wells. The sale of the Interests and the transactions contemplated by this Section 1.1 (1) and (2) are (the “Contemplated Transactions”).

 

1.2 Purchase Price. The aggregate purchase price for the Interests (the “Purchase Price”) is a US$4.25 million promissory note, in the form of Exhibit A (the “Note”), which shall mature on June 15, 2025 and bear interest at 5%.

 

1.3 Guarantees. The Seller’s obligation to proceed with the Contemplated Transactions is subject to each of the entities listed on Exhibit B guaranteeing the Note in the form annexed as Exhibit A.

 

1.4 Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement will take place at the principal executive offices of the Seller on or before June 30, 2022 (such date, the “Closing Date”).

 

1.5 Transfer of Beneficial Ownership.

 

(a) The Interests will be sold, conveyed, transferred and delivered, pursuant to instruments in such form as may be necessary or appropriate to effect a conveyance of the Interests under applicable Law. Such transfer instruments will be in form and substance reasonably acceptable to the parties (the “Transfer Documents”).

 

 

(b) The transfer of the Interests will be effective as of the Closing Date, from and after which date the Purchaser will be the beneficial owner of the Interests for all purposes

 

(c) Without limiting the parties’ respective rights and obligations under this Section 1.4, the parties agree to cooperate in good faith and take any such actions as may be reasonably necessary to cause the Contemplated Transactions to be consummated under applicable Law as soon as commercially practicable following the Closing.

 

1.6 Closing Deliveries.

 

(a) As soon as commercially practicable after the Closing, the Seller will deliver or cause to be delivered to the Purchaser:

 

(i) the duly executed Transfer Documents;

 

(ii) certificates representing the Interests; and

 

(iii) resignations effective as of the Closing Date of the manager of the Company and any other persons as the Purchaser may have requested in writing.

 

(b) At the Closing, the Purchaser will deliver or cause to be delivered the Note and the guarantees to the Seller.

 

(c) In connection with the Closing, the parties, as applicable, will cause the Company to undertake the following as soon as reasonably practicable thereafter:

 

(i) (A) amend the Operating Agreement or Limited Liability Company Agreement, as applicable to reflect completion of the Contemplated Transactions as the Purchaser may reasonably designate; (B) approval of the transfer of Interests from the Seller to the Purchaser or its nominees as set forth in the Transfer Documents; and (C) the appointment of anew manager nominated by the Purchaser;; and

 

(ii) instruct the Company’s bank to change the authorized signatories for the Company’s bank account(s) to the persons designated by the Purchaser.

 

1.7 Taxes. Any and all applicable sales, use, transfer, stamp, stock transfer, value-added or other similar Taxes that are, or become due and payable as a result of the Contemplated Transactions, whether such Taxes are imposed by Law on the Seller, the Purchaser or the Company (such Taxes, the “Transfer Taxes”) will be borne solely by the Seller.

 

 

ARTICLE 2

DEFINITIONS

 

For the purposes of this Agreement:

 

“Affiliate” means, with respect to a specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the specified Person. In addition to the foregoing, if the specified Person is an individual, the term “Affiliate” also includes (a) the individual’s spouse, (b) the members of the immediate family (including parents, siblings and children) of the individual or of the individual’s spouse and (c) any corporation, limited liability company, general or limited partnership, trust, association or other business or investment entity that directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with any of the foregoing individuals. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Authorized Agents” shall have the meaning ascribed to such term in Section 7.1(b).

 

“Business Day” means any day other than Saturday, Sunday or any day on which banking institutions in New York or Nevada are closed either under applicable Law or action of any Governmental Authority.

 

“Claim Notice” shall have the meaning ascribed to such term in Section 6.4.

 

“Closing Date” shall have the meaning ascribed to such term in Section 1.4.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Contemplated Transactions” shall have the meaning ascribed to such term in Section 1.1.

 

“Contract” means any written contract, agreement, lease, license, commitment, understanding, franchise, warranty, guaranty, mortgage, note, bond or other instrument or consensual obligation that is legally binding.

 

“Encumbrance” means any charges, mortgages, pledges, security interests, escrows, options, rights of first refusal, indentures, security agreements or other encumbrances, claims, agreements, arrangements or commitments of any kind or character and whether or not relating in any way to credit or the borrowing of money.

 

“Governmental Authority” means any (a) federal, state, local, municipal, foreign or other government, (b) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, instrumentality or other entity and any court or other tribunal), (c) multinational organization exercising judicial, legislative or regulatory power or (d) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature of any federal, state, local, municipal, foreign or other government.

 

“Governmental Authorization” means any approval, consent, ratification, waiver, license, permit, registration or other authorization issued or granted by any Governmental Authority.

 

 

“Indemnified” Party” shall have the meaning ascribed to such term in Section 6.4.

 

“Indemnifying Party” shall have the meaning ascribed to such term in Section 6.4.

 

“Interests” means 100% of the issued and outstanding membership interests of the Company.

 

“Judgment” means any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority or arbitrator.

 

“Knowledge” means with the actual knowledge, without any obligation of independent investigation.

 

“Law” means any federal, state, local, municipal, foreign, international, multinational, or other constitution, Law, statute, treaty, rule, regulation, ordinance or code.

 

“Liability” means any liability or obligation, whether known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due.

 

“Losses” mean all damages, awards, Judgments, assessments, fines, penalties, charges, costs, expenses and other payments however suffered or characterized, all interest thereon, all reasonable costs and expenses of investigating any claim, lawsuit or arbitration and any appeal therefrom, all reasonable attorneys’, accountants’, investment bankers’, and expert witness’ fees incurred in connection therewith, whether or not such claim, lawsuit or arbitration is ultimately defeated and, subject to Article 6, all amounts paid incident to any compromise or settlement of any such claim, lawsuit or arbitration.

 

A violation, circumstance, change, effect or other matter is deemed to have a “Material Adverse Effect” on the Purchaser, the Seller, or the Company as applicable, if such violation, circumstance, change, effect or other matter would have a material adverse effect on the ability of such party to perform its obligations under this Agreement or on the ability of such party to consummate the transactions contemplated by this Agreement.

 

“Non-transferred Assets” shall have the meaning ascribed to such term in Section 5.1(b).

 

“Person” means an individual or an entity, including a corporation, limited liability company, general or limited partnership, trust, association or other business or investment entity, or any Governmental Authority.

 

“Proceeding” means any action, arbitration, audit, examination, investigation, hearing, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, and whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.

 

“Purchase Price” shall have the meaning ascribed to such term in Section 1.2.

 

 

“Purchaser Indemnified Parties” shall have the meaning ascribed to such term in Section 6.2.

 

“Sellers Indemnified Parties” shall have the meaning ascribed to such term in Section 6.1.

 

“Taxes” means (a) any federal, state, local, foreign or other tax, charge, fee, duty (including customs duty), levy or assessment, including any income, gross receipts, net proceeds, alternative or add-on minimum, corporation, ad valorem, turnover, real property, personal property (tangible or intangible), sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, profits, occupational, premium, interest equalization, windfall profits, severance, license, registration, payroll, environmental (including taxes under Section 59A of the Code), capital stock, capital duty, disability, estimated, gains, wealth, welfare, employee’s income withholding, other withholding, unemployment or social security or other tax of whatever kind (including any fee, assessment or other charges in the nature of or in lieu of any tax) that is imposed by any Governmental Authority, (b) any interest, fines, penalties or additions resulting from, attributable to, or incurred in connection with any items described in this paragraph or any related contest or dispute and (c) any Liability for the Taxes of another Person.

 

“Third Party Claim” shall have the meaning ascribed to such term in Section 6.5(a).

 

“Transfer Documents” shall have the meaning ascribed to such term in Section 1.5(a).

 

“Transfer Taxes” shall have the meaning ascribed to such term in Section 1.7.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

The Seller represents and warrants to the Purchaser that the statements set forth in this Article 3 are true and correct as of the Closing:

 

3.1 Organization and Good Standing.

 

(a) The Seller is a corporation duly organized, validly existing and in good standing under the Laws of the State of Nevada, and has all requisite corporate power and authority to conduct its business as presently conducted.

 

(b) The Company is duly organized, validly existing and in good standing under the Laws of Nevada and has all requisite corporate power and authority to conduct its business as presently conducted.

 

3.2 Authority and Enforceability. The Seller has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. The execution, delivery and performance of this Agreement and the consummation of the Contemplated Transactions by the Seller have been duly authorized by all necessary action on the part of the Seller. The Seller has duly and validly executed and delivered this Agreement. Assuming the due authorization, execution and delivery of this Agreement by the Purchaser, this Agreement constitutes the valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms, subject to (a) Laws of general application relating to bankruptcy, insolvency and the relief of debtors and (b) Laws governing specific performance, injunctive relief and other equitable remedies.

 

 

3.3 No Conflict. Neither the execution, delivery and performance of this Agreement by the Seller, nor the consummation by the Seller of the Contemplated Transactions, will (a) conflict with or violate (i) the Seller’s certificate of incorporation or bylaws, or (ii) the Company’s, articles of association, Limited Liability Company agreement or similar constituent document, each as amended to date, (b) result in a breach or default under, or create in any Person the right to terminate, cancel, accelerate or modify, or require any notice, consent or waiver under, any Contract of the Seller or the Company, (c) to the best of Seller’s Knowledge, violate any Law or Judgment applicable to the Seller or the Company or (d) require the Seller or the Company to obtain any Governmental Authorization or make any filing with any Governmental Authority except as may be required by the Securities and Exchange Commission.

 

3.4 Capitalization and Ownership.

 

(a) The Seller is the holder of 100% of the Interests. The Seller is the sole beneficial owner of all of the Interests, free and clear of all Encumbrances. Upon payment in full of the Purchase Price, good and valid title to the Interests will pass to the Purchaser, free and clear of any Encumbrances, and with no restrictions on the voting rights or other incidents of record and beneficial ownership of such Interests, except to the extent contemplated by this Agreement. There are no contracts to which either the Seller or any other Person is a party or bound with respect to the voting (including voting trusts or proxies) of the Interests. Other than the Interests, there are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Company is a party or which are binding upon the Company providing for the issuance or redemption of any of the Company’s membership interests.

 

(b) The Company does not directly or indirectly own any capital stock of, or other equity interests in, any corporation, limited liability company, partnership or any other entity, except as reflected on Exhibit B.

 

3.5 Certain Payments.

 

(a) To the Knowledge of the Seller, neither the Seller, nor any member, officer, agent, employee, Affiliate or other Person associated with or acting on behalf of the Seller has provided, or arranged for the provision of, any unlawful contribution, gift, entertainment or other unlawful expense relating to any political party or official thereof or any candidate for public office.

 

(b) None of the assets and properties of the Company (i) has been acquired by the Company pursuant to a transaction that has involved directly or indirectly an illegal payment to a representative or employee of any Governmental Authority or (ii) represents the proceeds of any illegal activity.

 

 

3.6 Brokers’ Fees. The Seller has no Liability to pay any fees or commissions to any broker, finder or agent with respect to the Contemplated Transactions.

 

3.7 Disclosure of all Material Liabilities. During the course of negotiation of this Agreement and prior to the date hereof, Seller has made available to Purchaser any and all information and materials requested by Purchaser and/or Purchaser’s accountants, advisors, attorneys or other representatives in connection with the Purchaser’s evaluation of the Company and the Contemplated Transactions. To the Seller’s Knowledge (after reasonable inquiry and investigation), there are no Liabilities of the Company other than those disclosed to the Purchaser in connection herewith, whether reflected on the books of account of the Company or otherwise (including, for such purpose but without limitation, the March Cash Balance).

 

3.8 Disclaimer of Other Representations and Warranties. The representations and warranties set forth in this Article 3 are the only representations and warranties made by the Seller with respect to the Interests, the Seller, the Company or any other matter relating to the Contemplated Transactions.

 

3.9 Non-Reliance. The Seller acknowledges that the representations and warranties of the Purchaser constitute the sole and exclusive representations and warranties of the Purchaser in connection with the transactions contemplated hereby, and the Seller further acknowledges and agrees that neither the Purchaser, nor any of its respective representatives, are making any representation or warranty whatsoever, express or implied, beyond those expressly given in this Agreement. Notwithstanding anything to the contrary in this Agreement, nothing herein is intended to or shall limit or otherwise restrict any claim by or right of the Purchaser with respect to or arising from any intentional misrepresentation or reckless or intentional fraud.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser represents and warrants to the Seller that the statements set forth in this Article 4 are true and correct as of the Closing:

 

4.1 Organization and Good Standing. The Purchaser is a corporation duly organized, validly existing and in good standing under the Law of Delaware, and has all requisite corporate power and authority to conduct its business as it is presently conducted.

 

4.2 Authority and Enforceability. The Purchaser has all requisite power and authority to execute and deliver this Agreement. The execution, delivery and performance of this Agreement by the Purchaser and the consummation of the Contemplated Transactions by the Purchaser have been duly authorized by all necessary action on the part of the Purchaser. The Purchaser has duly and validly executed and delivered this Agreement. Assuming the due authorization, execution and delivery of this Agreement by the Seller, this Agreement constitutes the valid and binding obligation of the Purchaser, is enforceable against the Purchaser in accordance with its terms, subject to (a) Laws of general application relating to bankruptcy, insolvency and the relief of debtors and (b) Laws governing specific performance, injunctive relief and other equitable remedies.

 

 

4.3 No Conflict. Neither the execution, delivery and performance of this Agreement by the Purchaser, nor the consummation by the Purchaser of the Contemplated Transactions, will (a) conflict with or violate the Purchaser’s articles of association, Limited Partnership Agreement or other constituent documents, each as amended to date, (b) result in a breach or default under, or create in any Person the right to terminate, cancel, accelerate or modify, or require any notice, consent or waiver under, any contract, (c) violate any Laws or Judgment applicable to the Purchaser or (d) require the Purchaser to obtain any Governmental Authorization or make any filing with any Governmental Authority, except in any case that would not reasonably be expected to have a Material Adverse Effect on the Purchaser.

 

4.4 Investment Intent. The Purchaser is acquiring the Interests for the Purchaser’s own account and investment purposes and is not acquiring the Interests with a view to, or for sale in connection with, any distribution thereof within the meaning of any federal or state securities Law. The Purchaser is an “accredited investor” within the meaning of Rule 501(a) of Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, and has sufficient business and financial knowledge and experience to protect its own interests and to evaluate the merits and risks in connection with the purchase of the Interests.

 

4.5 Legal Proceedings. There is no Proceeding pending or, to the Purchaser’s Knowledge, threatened against the Purchaser that questions or challenges the validity of this Agreement or that may prevent, delay, make illegal or otherwise interfere with the ability of the Purchaser to consummate any of the transactions contemplated by this Agreement.

 

4.6 Brokers’ Fees. The Purchaser has no Liability to pay any fees or commissions to any broker, finder or agent with respect to the Contemplated Transactions.

 

4.7 Independent Investigation. The Purchaser has conducted its own independent investigation, review and analysis of the business, operations, assets, liabilities, results of operations, financial condition and prospects of the business of the Company as it has deemed appropriate, which investigation, review and analysis was done by the Purchaser and its Affiliates and representatives. The Purchaser acknowledges that it and its Affiliates and representatives have been provided adequate access to the personnel, properties, premises and records of the Seller and the Company for such purpose. In entering into this Agreement, the Purchaser acknowledges that it has relied solely upon the aforementioned investigation, review and analysis and not on any factual representations or opinions of the Seller, the Company or their representatives (except the representations and warranties set forth in Article 3). The Purchaser hereby acknowledges and agrees that other than the representations and warranties set forth in Article 3, none of the Seller, the Company, any of their Affiliates, or any of their respective officers, directors, employees, agents, representatives or stockholders, makes or has made any representation or warranty, express or implied, at Law or in equity, as to any matter whatsoever relating to the Interests, the Seller, the Company, or any other matter relating to the Contemplated Transactions including as to (i) merchantability or fitness for any particular use or purpose, (ii) the operation of the business of the Company after the Closing in any manner or (iii) the probable success or profitability of the business of the Company after the Closing.

 

 

4.8 No Liabilities. The Purchaser was recently organized and has no liabilities except legal fees in connection with this Agreement.

 

4.9 Disclaimer of Other Representations and Warranties. The representations and warranties set forth in this Article 3 are the only representations and warranties made by the Purchaser with respect to the Interests, the Seller or any other matter relating to the Contemplated Transactions.

 

4.10 Non-Reliance. The Purchaser acknowledges that the representations and warranties of the Seller constitute the sole and exclusive representations and warranties of the Seller in connection with the transactions contemplated hereby, and the Purchaser further acknowledges and agrees that neither the Seller, nor any of its respective representatives, are making any representation or warranty whatsoever, express or implied, beyond those expressly given in this Agreement. Notwithstanding anything to the contrary in this Agreement, nothing herein is intended to or shall limit or otherwise restrict any claim by or right of the Seller with respect to or arising from any intentional misrepresentation or reckless or intentional fraud.

 

ARTICLE 5

POST-CLOSING COVENANTS

 

5.1 Further Assurances; Cooperation.

 

(a) From and after the Closing, the Seller and the Purchaser each will use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to make effective as promptly as practicable the Contemplated Transactions and to cooperate with each other in connection with the foregoing, including to: (i) obtain all necessary waivers, consents and approvals from other parties; (ii) obtain all Governmental Authorizations that are required to be obtained under any Law and (iii) effect all necessary registrations and filings including filings and submissions of information requested or required by any Governmental Authority. In connection therewith, the Seller will cause the Nominee to take such actions as are necessary, proper or advisable to facilitate the Contemplated Transactions. In no event, however, will the Seller be obligated to pay any money to any Person or to offer or grant other financial or other accommodations to any Person in connection with its obligations under this Section 5.1.

 

(b) Notwithstanding and without limiting Section 5.2 hereof, the parties further acknowledge that, in connection with certain intercompany transfers and transactions that may be undertaken by Seller and its Affiliates prior to the Closing Date, certain assets and related rights may continue to be held in the name of the Company as of the Closing Date (such assets and rights the “Non-transferred Assets”). From time to time after the Closing Date, to the extent that the Purchaser discovers the existence of a Non-Transferred Asset, the parties will cooperate in good faith to effect the transfer of such Non-transferred Asset from the Company to an entity designated by the Seller, provided that this would not alter the original intent of the parties as evidenced by this Agreement with respect to the Interests to be sold and transferred to the Purchaser.

 

 

5.2 Public Announcements. Following the Closing, each party agrees not to issue any press release or make any other public announcement relating to this Agreement without the prior written approval of the other party, except that the Seller reserves the right, without the other party’s prior consent, to make any public disclosure it believes in good faith is required by applicable securities Laws or securities listing standards (in which case the disclosing party agrees to use commercially reasonable efforts to advise the other party prior to making the disclosure). The Seller’s principal stockholder, Ecoark Holdings, Inc., may make any disclosures it deems appropriate and is not bound by this Section 5.2.

 

ARTICLE 6

INDEMNIFICATION

 

6.1 Indemnification of the Seller. The Purchaser will, from and after the Closing, defend and promptly indemnify and hold harmless the Seller, and its officers, directors, stockholders, Affiliates, agents and representatives (collectively the “Sellers Indemnified Parties”), from, against, for, and in respect of and pay any and all Losses suffered, sustained, incurred or required to be paid by any such party arising out of or resulting from:

 

(a) any breach of any representation, warranty, covenant or agreement of the Purchaser contained in this Agreement or any Transfer Documents;

 

(b) the enforcement by any Sellers Indemnified Party of any of its rights under this Section 6.1 or any other covenant contained in this Agreement or any Transfer Documents;

 

(c) any Other Taxes or any Liability for Taxes provided for in Section 6.3(b); or

 

(d) the operations of the Company following the Closing.

 

6.2 Indemnification of the Purchaser. The Seller will defend, indemnify, and hold harmless the Purchaser and its respective officers, directors, stockholders, Affiliates, agents and representatives (collectively the “Purchaser Indemnified Parties”) from, against, for and in respect of and pay any and all Losses suffered, sustained, incurred or required to be paid by any such party arising out of or resulting from:

 

(a) any breach of any representation, warranty, covenant or agreement of the Seller contained in this Agreement or any Transfer Documents;

 

(b) the enforcement by any Purchaser Indemnified Party of any of its rights under this Section 6.2 or any other indemnification covenant contained in this Agreement or the Transfer Documents; or

 

(c) Any Transfer Taxes or Liability for Taxes as provided for in Section 6.3(a).

 

 

6.3 Tax Matters.

 

(a) Seller’s Liability for Taxes. Except to the extent such items have been paid prior to Closing, the Seller will be liable for and will indemnify the Purchaser for all Taxes imposed on the Company or for which the Company may otherwise be liable (i) for any taxable year or period that ends on or before the Closing Date, and (ii) the portion of such taxable year or period ending on or including the Closing Date (but only to the extent such Taxes arise from actions taken by the Company prior to the Closing that result in Liability for Taxes after the Closing Date). The Seller will be entitled to any refund of Taxes the Company receives for any such periods ending on or prior to the Closing Date.

 

(b) Purchaser Liability for Taxes. The Purchaser will be liable for and will indemnify the Seller for the Taxes of the Company and its subsidiaries post-Closing (i) for any taxable year or period that begins after the Closing Date, and (ii) with respect to any taxable year or period beginning before and ending after the Closing Date, except to the extent of Taxes payable by the Seller in accordance with Section 6.3(a).

 

6.4 Procedure. Any party seeking indemnification pursuant to this Agreement (the “Indemnified Party”) will promptly give the party from whom such indemnification is sought (the “Indemnifying Party”) written notice (a “Claim Notice”) of the matter with respect to which indemnification is being sought, which notice will specify in reasonable detail, if known, the amount or an estimate of the amount of the Liability arising therefrom and the basis of the claim or indemnification obligation. Such Claim Notice will be a condition precedent to any Liability of the Indemnifying Party for indemnification hereunder, but the failure of the Indemnified Party to promptly notify the Indemnifying Party will not adversely affect the Indemnified Party’s right to indemnification hereunder except, and only to the extent that, in the case of a claim made by a third Person, the defense of that claim is materially prejudiced by such failure.

 

6.5 Third Party Claims.

 

(a) In connection with any indemnification claim arising out of a claim or legal Proceeding (a “Third Party Claim”) by any third Person, the Indemnifying Party will be entitled to control the defense of any such claim with counsel reasonably acceptable to the Indemnified Party at the Indemnifying Party’s own cost and expense, including the cost and expense of reasonable attorneys’ fees and disbursements in connection with such defense, by providing written notice to the Indemnified Party no later than five Business Days following its receipt of the Claim Notice; provided, however, that the Indemnifying Party may not assume control of the defense of a suit or Proceeding (a) involving criminal liability, or (b) to the extent such suit or Proceeding seeks an injunction or equitable relief against the Indemnified Party. In the event that the Indemnifying Party assumes control of the defense, the Indemnified Party may participate at its own expense. The party controlling such defense will keep the other party reasonably advised of the status of such suit or Proceeding and the defense thereof, and will consider in good faith recommendations made by the non-controlling party with respect thereto. The parties will otherwise cooperate in good faith in connection with such defense.

 

 

(b) The Indemnifying Party will be entitled to agree to a settlement of, or the stipulation of any Judgment arising from, any such Third Party Claim, with the consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided, however, that no such consent will be required from the Indemnified Party if (A) the Indemnifying Party pays or causes to be paid all Losses arising out of such settlement or Judgment concurrently with the effectiveness thereof (as well as all other Losses theretofore incurred by the Indemnified Party which then remain unpaid or unreimbursed), (B) in the case of a settlement, the settlement is conditioned upon a complete release by the claimant of the Indemnified Party, and (C) such settlement or Judgment does not impose an injunction or other equitable relief upon the Indemnified Party, require the Encumbrance of any asset of the Indemnified Party or impose any restriction upon its conduct of business or otherwise materially adversely affect its business.

 

6.6 Limitations.

 

(a) In no event will the Seller’s Liability under this Agreement exceed the Purchase Price actually paid hereunder.

 

(b) Nothing in this Agreement will limit the Liability of any Person to any other party for intentional fraud or willful misconduct.

 

(c) The Indemnified Party will take, and will cause its Affiliates to take, all commercially reasonable steps to mitigate any Losses upon and after becoming aware of any facts, matters, failures or circumstances that would reasonably be expected to result in any Losses that are indemnifiable hereunder. In the event the Indemnified Party will fail to take such commercially reasonable steps, then notwithstanding anything in this Agreement to the contrary, the Indemnifying Party will not be required to indemnify the Indemnified Party for that portion of Losses that would reasonably have been expected to have been avoided if the Indemnified Party had taken such steps.

 

6.7 Survival of Representations and Warranties. The representations, warranties, covenants and agreements contained in this Agreement will survive the Closing and any investigation made by or on behalf of any of the Parties hereto at any time with respect thereto, and expire as follows:

 

(a) the representations and warranties set forth in this Agreement or in any certificate or writing delivered pursuant hereto or in connection herewith will expire on the first anniversary of the Closing Date;

 

(b) the obligations of the parties set forth in Section 6.3 will remain in effect for the period of the relevant statute of limitations applicable to the Taxes at issue; and

 

(c) the covenants and agreements of the parties set forth in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith will survive the Closing until the expiration of the applicable statute of limitations (including any extension or tolling thereof) or for the shorter period explicitly specified therein, except that for such covenants and agreements that survive for such shorter period, breaches thereof will survive indefinitely until the expiration of the applicable statute of limitations (including any extension or tolling thereof).

 

 

6.8 Exclusive Remedy. The sole and exclusive remedy of any Indemnified Party with respect to any and all Losses arising in connection with the representations, warranties, covenants and agreements set forth in this Agreement will be pursuant to the indemnification obligations set forth in this Article 6 hereof and subject to the limitations set forth herein.

 

6.9 Exercise of Remedies by Persons Other than the Parties. No Indemnified Party (other than the Parties or any respective successor or assignee of such Party) is entitled to assert any indemnification claim or exercise any other remedy under this Agreement unless (a) in the case of the Seller Indemnified Party, the Seller (or any successor or assignee of the Seller) consents to the assertion of the indemnification claim, or (b) in the case of the Purchaser Indemnified Party, the Purchaser (or any successor or assignee of the Purchaser) consents to the assertion of the indemnification claim.

 

ARTICLE 7

GENERAL PROVISIONS

 

7.1 Governing Law; Disputes.

 

(a) The internal Law of the State of Nevada (without giving effect to any choice or conflict of Law provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause the application of Laws of any other jurisdiction) govern all matters arising out of or relating to this Agreement and the Contemplated Transactions, including its validity, interpretation, construction, performance and enforcement and any disputes or controversies arising therefrom or related thereto. EACH OF THE PARTIES KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY PARTY TO THIS AGREEMENT IN NEGOTIATION, EXECUTION AND DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT.

 

(b) Any action or proceeding arising out of or relating to this Agreement or the Contemplated Transactions must only be brought in the state or federal courts of the State of Nevada located in Clark County. Each of the parties knowingly, voluntarily and irrevocably submits to the exclusive jurisdiction of each such court in any such action or Proceeding and waives any objection it may now, or hereafter, have to venue or to convenience of forum. Each of the parties expressly consents to the jurisdiction of such courts in any such action or Proceeding, and waives any other requirements of or objections to personal jurisdiction with respect thereto. If necessary, the Purchaser will appoint an entity as its authorized agent (“Authorized Agents”) upon whom process may be served in any such action or Proceeding arising out of or based on this Agreement or the transactions contemplated hereby. The Purchaser represents and warrants that such Authorized Agents will have agreed to act as such agents for service of process and agree to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agents and written notice of such service to the Purchaser will be deemed, in every respect, effective service of process upon the Purchaser. Nothing in this Section 7.1, however, affects the right of any party to serve legal process in any other manner permitted by Law.

 

 

(c) The parties acknowledge and agree that in the event of a breach by either party or any of their respective Affiliates of any of the provisions of this Agreement, monetary damages will not constitute a sufficient remedy. Consequently, in the event of any such breach, either party or their respective successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of law or equity of competent jurisdiction for specific performance or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof, in each case without the requirement of posting a bond or proving actual damages.

 

(d) The rights and remedies of the parties hereto will be cumulative (and not alternative) and the exercise by a party of one remedy will not preclude the exercise of any other remedy. Any enumeration of the party’s rights and remedies in this Agreement is not intended to be exclusive, and a party’s rights and remedies are intended to be cumulative to the extent permitted by Law and include any rights and remedies authorized in Law or in equity.

 

7.2 Limitation on Liability. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, IN NO EVENT (A) WILL ANY PARTY OR ANY OF ITS AFFILIATES BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS, LOSS OF REVENUE OR LOST SALES) IN CONNECTION WITH ANY CLAIMS, LOSSES, DAMAGES OR INJURIES ARISING OUT OF THE CONDUCT OF SUCH PARTY PURSUANT TO THIS AGREEMENT REGARDLESS OF WHETHER THE NONPERFORMING PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR NOT, AND (B) WILL THE AGGREGATE LIABILITY OF THE SELLER FOR ANY CLAIMS, LOSSES, DAMAGES OR INJURIES ARISING IN CONNECTION WITH THIS AGREEMENT EXCEED THE PURCHASE PRICE.

 

7.3 Notices. All notices and other communications under this Agreement must be in writing and are deemed duly delivered when (a) delivered personally or by an internationally recognized overnight courier service (costs prepaid), or (b) received or rejected by the addressee, if sent by certified or registered mail, return receipt requested or (c) by email; in each case to the following addresses or emails and marked to the attention of the individual (by name or title) designated below (or to such other address, facsimile number or individual as a party may designate by notice to the other parties):

 

If to the Seller:	Agora Digital Holdings, Inc.
	145 King Street, Suite 410
	Charleston, South Carolina 29401
	Attention: Brad Hoagland (___________)
With a copy to:	Nason Yeager Gerson Harris & Fumero, P.A.
	3001 PGA Boulevard, Suite 305
	Palm Beach Gardens, FL 33401
	Attention: Michael D. Harris, Esq. (____________)
If to the Purchaser:	Trend Ventures, L.P.
	At the address on the signature pages to this Agreement

 

 

7.4 Counterparts. The parties may execute this Agreement in multiple counterparts, each of which constitutes an original as against the party that signed it, and all of which together constitute one agreement. This Agreement is effective upon delivery of one executed counterpart from each party to the other parties. The signatures of all parties need not appear on the same counterpart. The delivery of signed counterparts by email transmission that includes a copy of the sending party’s signature(s) is as effective as signing and delivering the counterpart in person.

 

7.5 Amendment. This Agreement may not be amended, supplemented or otherwise modified except in a written document signed by each party to be bound by the amendment and that identifies itself as an amendment to this Agreement.

 

7.6 Waiver and Remedies. The parties may (a) extend the time for performance of any of the obligations or other acts of any other party to this Agreement, (b) waive any inaccuracies in the representations and warranties of any other party to this Agreement contained in this Agreement or (c) waive compliance with any of the covenants or conditions for the benefit of such party contained in this Agreement. Any such extension or waiver by any party to this Agreement will be valid only if set forth in a written document signed on behalf of the party or parties against whom the extension or waiver is to be effective. No extension or waiver will apply to any time for performance, inaccuracy in any representation or warranty, or noncompliance with any covenant or condition, as the case may be, other than that which is specified in the written extension or waiver. No failure or delay by any party in exercising any right or remedy under this Agreement or any of the documents delivered pursuant to this Agreement, and no course of dealing between the parties, operates as a waiver of such right or remedy, and no single or partial exercise of any such right or remedy precludes any other or further exercise of such right or remedy or the exercise of any other right or remedy. Any enumeration of a party’s rights and remedies in this Agreement is not intended to be exclusive, and a party’s rights and remedies are intended to be cumulative to the extent permitted by Law and include any rights and remedies authorized in Law or in equity.

 

7.7 Assignment, Successors and No Third-Party Rights. This Agreement binds and benefits the parties and their respective successors and assigns, except that Purchaser may not assign any rights under this Agreement without the prior written consent of the Seller. No party may delegate any performance of its obligations under this Agreement, except delegations of the performance of its obligations to any Affiliate of such party so long as such party remains fully responsible for the performance of the delegated obligation. Nothing expressed or referred to in this Agreement will be construed to give any Person, other than the parties to this Agreement, any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement except such rights as may inure to a successor or permitted assignee under this Section 7.7.

 

 

7.8 Severability. If any provision of this Agreement is held invalid, illegal or unenforceable, the remaining provisions of this Agreement will remain in full force and effect, if the essential terms and conditions of this Agreement for each party remain valid, binding and enforceable.

 

7.9 Expenses. Each party will pay its own direct and indirect expenses incurred by it in connection with the preparation and negotiation of this Agreement and the consummation of the Contemplated Transactions, including all fees and expenses of its advisors and representatives.

 

7.10 No Joint Venture. Nothing in this Agreement creates a joint venture or partnership between the parties. This Agreement does not authorize any party (a) to bind or commit, or to act as an agent, employee or legal representative of, another party, except as may be specifically set forth in other provisions of this Agreement, or (b) to have the power to control the activities and operations of another party. The parties are independent contractors with respect to each other under this Agreement. Each party agrees not to hold itself out as having any authority or relationship contrary to this Section 7.10.

 

7.11 Interpretation. In the negotiation of this Agreement, each party has received advice from its own attorney. The language used in this Agreement is the language chosen by the parties to express their mutual intent, and no provision of this Agreement will be interpreted for or against any party because that party or its attorney drafted the provision.

 

7.12 Construction; Exhibits and Schedules. The Exhibits and Schedules to this Agreement are incorporated herein by reference and made a part of this Agreement. Any reference in this Agreement to an “Article,” “Section,” “Exhibit” or “Schedule” refers to the corresponding Article, Section, Exhibit or Schedule of or to this Agreement, unless the context indicates otherwise. The headings of Articles and Sections are provided for convenience only and are not intended to affect the construction or interpretation of this Agreement. All words used in this Agreement are to be construed to be of such gender or number as the circumstances require. The words “including,” “includes,” or “include” are to be read as listing non-exclusive examples of the matters referred to, whether or not words such as “without limitation” or “but not limited to” are used in each instance. Where this Agreement states that a party “will”, “will” or “must” perform in some manner or otherwise act or omit to act, it means that the party is legally obligated to do so in accordance with this Agreement. Any reference to a statute is deemed also to refer to any amendments or successor legislation as in effect at the relevant time. Any reference to a contract or other document as of a given date means the contract or other document as amended, supplemented and modified from time to time through such date.

 

7.13 Entire Agreement. This Agreement constitutes the entire agreement among the parties and supersedes any prior and contemporaneous understandings, agreements or representations by or among the parties, written or oral, with respect to the subject matter of this Agreement.

 

7.14. Excluded Companies. For avoidance of doubt, Agora shall not own any equity interest in the entities listed on Exhibit C.

 

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The parties have executed and delivered this Agreement as of the date indicated in the first sentence of this Agreement.

 

SELLER			PURCHASER
Agora Digital Holdings, Inc.			Trend Ventures, LP
By:			By:
Name:	Randy May		Name:
Title:	Executive Chairman		Title:

 

	Address:
	Email:

 

Signature Page to Membership Interest Purchase Agreement

 

 

EXHIBIT A

Form of Note

 

 

 

EXHIBIT B

 

 

 

EXHIBIT C

Excluded Companies

 

 

 

Exhibit C