SECURITIES PURCHASE AGREEMENT
dated as of August 23, 2021
among
CFN ENTERPRISES INC.
AND
THE OTHER PARTIES SET FORTH IN EXHIBIT A HERETO
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS1
1.1Recitals/Certain Definitions1
ARTICLE II PURCHASE AND SALE OF THE SECURITIES4
2.1Purchase and Sale of the Securities4
2.2Closing4
2.3Transactions to be Effected at the Closing4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS5
3.1Authority and Enforceability5
3.2Noncontravention5
3.3The Securities6
3.4Brokers’ Fees6
3.5Understandings or Arrangements.6
3.6Seller Status.6
3.7Experience of Each Seller.7
3.8Access to Information.7
3.9Legend.7
ARTICLE IV INTENTIONALLY OMITTED7
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER7
5.1Organization7
5.2Authorization8
5.3Noncontravention8
5.4Capitalization9
5.5Brokers’ Fees9
5.6Independent Investigation10
ARTICLE VI COVENANTS12
6.1Notice of Developments12
6.2No Solicitation12
6.3Covenant not to Compete12
6.4Taking of Necessary Action; Further Action13
6.5Confidentiality13
ARTICLE VII CONDITIONS TO OBLIGATIONS TO CLOSE14
7.1Conditions to Obligation of the Buyer14
7.2Conditions to Obligation of Sellers14
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER16
8.1Termination of Agreement16
8.2Effect of Termination16
8.3Amendments17
8.4Waiver17
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TABLE OF CONTENTS
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ARTICLE IX INDEMNIFICATION17
9.1Survival17
9.2Indemnification by Sellers17
9.3Indemnification by Buyer18
9.4Third Party Indemnification Procedures18
9.5Direct Claim Procedures20
9.6Limitation on Indemnification Obligation20
9.7Payments21
9.8Tax Refunds, Insurance Proceeds and Other Payments21
9.9Mitigation22
ARTICLE X MISCELLANEOUS22
10.1Press Releases and Public Announcement22
10.2No Third-Party Beneficiaries22
10.3Entire Agreement22
10.4Succession and Assignment22
10.5Construction22
10.6Notices22
10.7Governing Law23
10.8Consent to Jurisdiction and Service of Process23
10.9Headings23
10.10Severability23
10.11Expenses24
10.12Incorporation of Exhibits and Schedules24
10.13Limited Recourse24
10.14Specific Performance24
10.15Counterparts24
EXHIBIT A – List of Sellers
EXHIBIT B - Buyer’s Certificate of Incorporation
EXHIBIT C - Buyer’s Bylaws
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated as of August 23, 2021 (the “Agreement”), among CFN ENTERPRISES INC., a Delaware corporation (the “Buyer”), and the other party or parties set forth in Exhibit A hereto (each a “Seller” and, if more than one, the “Sellers”).
BACKGROUND
Each Seller is the record and beneficial owner of the equity interests (“Securities”) in CNP Operating, LLC, a Colorado limited liability company (“Company”), set forth opposite such Seller’s name on Exhibit A. The Sellers collectively own 45.9% of the issued and outstanding Securities in the Company. The Sellers desire to sell, transfer and convey all of their respective Securities to the Buyer, and the Buyer desires to purchase and accept all such Securities from Sellers, upon the terms and subject to the conditions set forth in this Agreement (the sale and purchase of such Securities, the “Acquisition”).
Buyer understands that Sellers are not managers or managing members of the Company, have no substantive knowledge of the operations thereof and are not making any representations, warranties, covenants or undertakings in respect thereof. With respect to all such matters, Buyer is entering into a separate securities purchase agreement on the date hereof with the Company and the managers / managing members of the Company (the “Managers / Managing Members”).
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the respective representations and warranties, covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1Recitals/Certain Definitions.
(a)The recitals set forth above are incorporated by reference as if fully set forth herein. When used in this Agreement, the following terms will have the meanings assigned to them in this Section 1.1(a) and other defined terms will have the meanings given to them elsewhere in this Agreement:
“Action” means any claim, action, suit, inquiry, hearing, proceeding or other investigation.
“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such Person. For purposes of this definition, “control” (including the terms “controlled by” and “under common control with”) means possession of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of
stock, membership interests or other equity interests, as trustee or executor, by Contract or otherwise.
“Business Day” means a day other than a Saturday, Sunday or other day on which banks located in New York, New York are authorized or required by Law to close.
“Code” means the Internal Revenue Code of 1986, as amended.
“Contract” means any written agreement, contract, commitment, arrangement or understanding.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Governmental Entity” means any entity or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to United States federal, state or local government or foreign, international, multinational or other government, including any department, commission, board, agency, bureau, official or other regulatory, administrative or judicial authority thereof.
“Knowledge of Seller(s)” means the actual knowledge of the applicable Seller to which such knowledge qualification pertains.
“Law” means any statute, law, ordinance, rule or regulation of any Governmental Entity.
“Liability” means all indebtedness, obligations and other liabilities and contingencies of a Person, whether absolute, accrued, contingent, fixed or otherwise, or whether due or to become due.
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, hypothecation or other encumbrance in respect of such property or asset.
“Order” means any award, injunction, judgment, decree, order, ruling, subpoena or verdict or other decision issued, promulgated or entered by or with any Governmental Entity of competent jurisdiction.
“Permit” means any authorization, approval, consent, certificate, license, clearance, permit or franchise of or from any Governmental Entity of competent jurisdiction or pursuant to any Law.
“Permitted Liens” means (i) Liens for current Taxes that are not yet due and payable or that may hereafter be paid without material penalty or that are being contested in good faith, (ii) statutory Liens of landlords and workers,’ carriers’ and mechanics’ or other like Liens incurred in the ordinary course of business not yet overdue or that are being contested in good faith, (iii) Liens that will be released prior to or as of the Closing, (iv) Liens arising under this Agreement, (v) Liens created by or through the Buyer, or (vi) Liens that, individually or in the aggregate, do not materially interfere with the ability of Sellers to perform their obligations under this Agreement.
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“Person” means an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated association, a Governmental Entity or any agency, instrumentality or political subdivision of a Governmental Entity, or any other entity or body.
“Pro Rata Portion” means, with respect to any Seller, the quotient, expressed as a percentage, obtained by dividing: (a) the Securities held by such Seller, by (b) the aggregate Securities held by all Sellers, as set forth in Exhibit A hereto.
“Purchase Price Per Unit” means quotient obtained by dividing: (a) the Purchase Price Shares by (b) the aggregate number of Securities held by the Sellers.
“Representatives” means, with respect to any Person, the respective directors, officers, employees, counsel, accountants and other representatives of such Person.
“Securities Act” means the Securities Act of 1933, as amended.
“Transaction Proposal” means any written bona fide proposal made by a third party relating to (i) any direct or indirect acquisition or purchase of all or substantially all of the assets of the Company or any of its Subsidiaries, (ii) any direct or indirect acquisition or purchase of a majority of the combined voting power of the Securities or any equity securities of any of their Subsidiaries, or (iii) any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company in which the other party thereto or its stockholders will own 51% or more of the combined voting power of the parent entity resulting from any such transaction.
“$” means United States dollars.
(b)For purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires: (i) the meaning assigned to each term defined herein will be equally applicable to both the singular and the plural forms of such term and vice versa, and words denoting any gender will include all genders as the context requires; (ii) where a word or phrase is defined herein, each of its other grammatical forms will have a corresponding meaning; (iii) the terms “hereof”, “herein”, “hereunder”, “hereby” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement; (iv) when a reference is made in this Agreement to an Article, Section, paragraph, Exhibit or Schedule without reference to a document, such reference is to an Article, Section, paragraph, Exhibit or Schedule to this Agreement; (v) a reference to a subsection without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule will also apply to paragraphs and other subdivisions; (vi) the word “include”, “includes” or “including” when used in this Agreement will be deemed to include the words “without limitation”, unless otherwise specified; (vii) a reference to any party to this Agreement or any other agreement or document will include such party’s predecessors, successors and permitted assigns; (viii) a reference to any Law means such Law as amended, modified, codified, replaced or reenacted as of the date hereof, and all rules and regulations promulgated thereunder as of the date hereof; and (ix) the term “as of the Closing” or “as of the Closing Date” when used to calculate financial amounts in this Agreement will be as of 11:59 p.m. local time on the Closing Date.
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ARTICLE II
PURCHASE AND SALE OF THE SECURITIES
2.1Purchase and Sale of the Securities.
(a)Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, each Seller will sell, transfer, assign, convey and deliver to the Buyer, and the Buyer will purchase, accept and receive from each such Seller all right, title and interest in and to the Securities set forth opposite such Seller’s name on Exhibit A for an aggregate purchase price consisting of 162,486,000 shares of common stock (the “Purchase Price Shares”) of CFN Enterprises Inc., which as of the Closing shall account for approximately 34.2% of the issued and outstanding capital stock of CFN Enterprises, Inc. (collectively, the “Purchase Price”). The Purchase Price Shares shall be payable as described below and allocated among Sellers as set forth on Exhibit A.
(b)At the Closing, the Buyer will deliver each Seller, such Seller’s Pro Rata Portion of the Purchase Price Shares, in those amounts set forth on Exhibit A.
2.3Transactions to be Effected at the Closing.
(a)At the Closing, the Buyer will: (i) issue to each Seller its Pro Rata Portion of the Purchase Price Shares in the applicable amounts reflected on Exhibit A and record such issuance in Buyer’s books and records; (ii) deliver original stock certificates evidencing the Purchase Price Shares (to the extent that the Purchase Price Shares are so certificated), or book entry records from the Buyer’s transfer agent, free and clear of all Liens, duly endorsed in blank, and any other transfer instruments required to validly transfer title in and to the Purchase Price Shares to each Seller (or to such Seller’s designee or designees, if so elected by such Seller); (iii) deliver to Sellers all those documents, instruments or certificates required to be delivered by the Buyer at or prior to the Closing pursuant to Section 7.2 of this Agreement; and (iv) deliver all other instruments and documents reasonably requested by Sellers.
(b)At the Closing, each Seller will: (i) deliver to the Buyer a certificate or certificates representing the Securities, if certificated, duly endorsed or accompanied by stock powers, duly endorsed in blank, and any other transfer instruments required to validly transfer title in and to the Securities to Buyer (or to Buyer’s designee or designees, if so elected by Buyer); (ii) deliver to the Buyer all those documents, instruments or certificates required to be delivered by Sellers at or prior to the Closing pursuant to Section 7.1 of this Agreement; and (iii) deliver all other instruments and documents reasonably requested by Buyer.
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(c)At the Closing, Sellers shall deliver to the Buyer a final Schedule of Sellers in the form attached hereto as Exhibit A, which shall amend and restate in its entirety Exhibit A attached hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of Seller, severally, but not jointly, represents and warrants to the Buyer as to itself (and not to as to any other Seller) that each statement contained in this Article III is true and correct as of the date hereof.
(a)Neither the execution and the delivery of this Agreement, nor the consummation of the Acquisition or the other transactions contemplated by this Agreement, will, with or without the giving of notice or the lapse of time or both, to the Knowledge of such Seller, (i) violate any Law applicable to such Seller or (ii) violate any Contract related to the Company to which such Seller is a party, except in the case of clauses (i) and (ii) to the extent that any such violation would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on such Seller’s ability to consummate the Acquisition or perform its other obligations hereunder.
(b)The execution and delivery of this Agreement by such Seller does not, and the performance of this Agreement by such Seller will not, require any consent, approval, authorization or Permit of, or filing with or notification to, any Governmental Entity, except where the failure to take such action would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on such Seller’s ability to consummate the Acquisition or perform its other obligations hereunder.
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(a)Such Seller holds of record and owns beneficially the issued and outstanding Securities of the Company set forth opposite such Seller’s name on Exhibit A, free and clear of all Liens (except for Permitted Liens and any restriction on transfer arising under applicable securities Laws). The Securities set forth opposite such Seller’s name on Exhibit A correctly sets forth all Securities owned of record or beneficially by such Seller in the Company.
(b)Seller is not a party to any Contract obligating such Seller to vote or dispose of any Securities, or other equity securities or voting interests in, the Company.
(c)Such Seller has the full right to sell, convey, transfer, assign and deliver the Securities, without the need to obtain the consent or approval of any third party other than as prescribed in the organizational documents of the Company and, to the Knowledge of such Seller, the Buyer will have, as of the Closing, good and valid record and title to the Securities, free and clear of all Liens (except in each case for any restriction on transfer arising under applicable securities Laws).
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND ARE “RESTRICTED SECURITIES” AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE DISTRIBUTED OR TRANSFERRED EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE ACT.
ARTICLE IV
[INTENTIONALLY OMITTED]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to Sellers that each statement contained in this Article V is true and correct as of the date hereof.
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conducted. Buyer is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the assets, properties, condition (financial or otherwise), operations of the Buyer or any of its subsidiaries, or Buyer’s ability to consummate the Acquisition or perform its other obligations hereunder.
(a)Neither the execution and the delivery of this Agreement, nor the consummation of the Acquisition and the other transactions contemplated by this Agreement, will, with or without the giving of notice or the lapse of time or both, (i) violate any provision of the Certificate of Incorporation or Bylaws of the Buyer, (ii) violate any Law applicable to the Buyer on the date hereof, or (iii) violate any Contract to which the Buyer is a party, except in the case (ii) and (iii) to the extent that any such violation would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the assets, properties, condition (financial or otherwise), or operations of the Buyer or any of its subsidiaries, or prevent or materially delay the consummation of the Acquisition or Buyer’s ability to perform its other obligations hereunder.
(b)The execution and delivery of this Agreement by the Buyer does not, and the performance of this Agreement by the Buyer will not, require any consent, approval, authorization or Permit of, or filing with or notification to, any Governmental Entity or any other third party, except for (i) post-closing securities filings or notifications required to be made under federal securities Laws, or (ii) where the failure to take such action would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the assets, properties, condition (financial or otherwise), operations of the Buyer or any of its subsidiaries, or Buyer’s ability to consummate the Acquisition or perform its other obligations hereunder.
5.4Capitalization.
(a)The authorized capital of the Buyer consists, immediately prior to the Closing of:
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(i)500,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”), 121,192,209 shares of which are issued and outstanding immediately prior to the Closing. All of the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities Laws. The Buyer holds no Common Stock in its treasury.
(ii)2,000,000 shares of preferred stock, of which 500 shares have been designated as Series A preferred stock and 3,000 shares have been designated as Series B preferred stock (the “Preferred Stock”), all of which designated shares are issued and outstanding immediately prior to the Closing. All of the outstanding shares of Preferred Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities Laws. The Buyer holds no Preferred Stock in its treasury.]
(iii)The rights privileges and preferences of the Buyer’s capital stock are as stated in Buyer’s Certificate of Incorporation, a copy of which is attached hereto as Exhibit B (the “Certificate of Incorporation”), Buyer’s Bylaws, a copy of which is attached hereto as Exhibit C (the “Bylaws”), and as otherwise provided by the Delaware General Corporation Law.
(b)Buyer has reserved 3,160,000 shares of Common Stock for issuance to officers, directors, employees and consultants of Buyer pursuant to its 2006 stock option Plan, duly adopted by Buyer’s Board of Directors (the “Stock Plan”). Of such reserved shares of Common Stock, options to purchase 3,160,000 shares have been granted and are currently outstanding, and no shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to the Stock Plan. Buyer has furnished to Sellers complete and accurate copies of the Stock Plan and forms of agreements used thereunder.
(c)None of Buyer’s stock purchase agreements or stock option documents contains a provision for acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions or other terms of such agreement or understanding upon the occurrence of any event or combination of events, including, without limitation, in the case where Buyer’s Stock Plan is not assumed in an acquisition. Buyer has never adjusted or amended the exercise price of any stock options previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means. Except as set forth in the Certificate of Incorporation, Buyer has no obligation (contingent or otherwise) to purchase or redeem any of its capital stock.
(d)Buyer has obtained valid waivers of any rights by other parties to purchase any of the Purchase Price Shares covered by this Agreement.
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with respect to this Agreement, the Acquisition or the transactions contemplated by this Agreement that could result in any Liability being imposed on Sellers or the Company.
5.6Independent Investigation. Buyer has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Sellers and the Company for such purpose. Buyer acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own investigations and the limited representations of the Sellers set forth in Article III of this Agreement; and (b) none of the Sellers have made any representation or warranty as to Sellers, the Company, the Securities or this Agreement, except as expressly set forth in Article III of this Agreement. Specifically with respect to all matters relating to the Company (including any disclosure schedules), Buyer is relying solely upon a separate securities purchase agreement executed among Buyer, Company and the Manager/Managing Members thereof, for which Sellers have absolutely no Liability therefor. Buyer acknowledges and agrees that except for the representations and warranties of the Sellers expressly set forth in Article III of this Agreement, (i) Sellers hereby expressly disclaim all representations and warranties of any kind or nature whatsoever (including warranties for particular purposes), whether expressed or implied, including representations and warranties with respect to the Company and the Securities or otherwise, and/or statements, documents or other information (including as to the accuracy or completeness thereof) heretofore or hereafter delivered to or made available to the Buyer or any Person (whether written or oral), and that Buyer will not assert a claim against any Seller or any Seller Indemnified Party, or hold Sellers liable with respect thereto; (ii) Sellers hereby expressly disclaim any and all representations and warranties with respect to the Company, its business, the Securities or otherwise and Sellers make no warranty or representation whatsoever, either oral or written, express or implied, at law or in equity, with respect to the Company, the Securities or otherwise; and (iii) Buyer is not relying upon any representation of any kind or nature made by Sellers (or any Party purporting to act on behalf of Sellers) and that, in fact, no such representations have been made except as expressly set forth in Article III of this Agreement.
5.7Acquisition Entirely for Own Account. This Agreement is made with Buyer in reliance upon Buyer’s representation to the Sellers, which by the Buyer’s execution of this Agreement, Buyer hereby confirms, that the Securities to be acquired by the Buyer will be acquired for investment for Buyer’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that Buyer has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, Buyer further represents that Buyer does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Securities. Buyer understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any other applicable state securities laws.
5.8Securities Filings. Except as disclosed in the SEC Reports, buyer has timely filed all forms, reports, statements, certifications and other documents required to be filed by it with the U.S. Securities and Exchange Commission under the Securities Act, Exchange Act and other
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applicable federal securities laws. None of Buyer’s SEC Reports contains any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference or necessary in order to make the statements that are made in the SEC Reports, in light of the circumstances in which they were made, not misleading.
5.9Valid Issuance of Shares. The Purchase Price Shares, when issued and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free and clear of any and all Liens and restrictions on transfer other than restrictions on transfer arising applicable federal and state securities Laws and Liens created by or imposed by Sellers. Assuming the accuracy of the representations of each Seller set forth in Article III of this Agreement, and subject to the filings described in Section 5.3(b) of this Agreement, the Purchase Price Shares will be issued in compliance with all applicable federal and state securities laws. As of the Closing each Seller shall good and valid record and title to the Purchase Price Shares, free and clear of all Liens (except in each case for any restriction on transfer arising under applicable securities Laws).
5.10Compliance with Other Instruments. The Buyer is not in violation or default: (i) of any provision of its Certificate of Incorporation or Bylaws; (ii) any instrument, judgment, Order, write or decree, (iii) under any note, indenture or mortgage, (iv) under any lease agreement contract or purchase order to which it is a party or by which it is bound, or (v) of any provision of federal or state statute, rule, regulation or Law applicable to the Buyer, the violation of which would have a material adverse effect on the assets, properties, condition (financial or otherwise), operations of the Buyer or any of its subsidiaries, or the Buyer’s ability to consummate the Acquisition or perform any of its other obligations hereunder. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in such violation or be in conflict with or constitute, with or without the passage of time and giving notice, either: (i) a default under any such provision, instrument, judgment, Order, writ, decree, contract or agreement, or (ii) an event which results in the creation of any Lien, charge or encumbrance on any assets of the Buyer or the suspension, revocation, forfeiture or nonrenewal of any material Permit or license applicable to the Buyer.
5.11Permits. The Buyer has all franchises, Permits, licenses and similar authority necessary for the conduct of its business, the lack of which could reasonably be expected to have a material adverse effect on the assets, properties, condition (financial or otherwise), operations of the Buyer or any of its subsidiaries, or Buyer’s ability to consummate the Acquisition or perform its other obligations hereunder. Buyer is not in default in any material respects under any such franchises, Permits, licenses or other similar authority.
5.12Corporate Documents. The Certificate of Incorporation and Bylaws of Buyer as of the date of this Agreement are in the form attached hereto and have not been amended or modified subsequent to Buyer’s provision of the same to Sellers.
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ARTICLE VI
COVENANTS
(a)The Sellers shall immediately cease any existing discussions regarding a Transaction Proposal.
(b)During the period commencing on the date hereof and ending at the earlier of the Closing and the termination of this Agreement in accordance with Article VIII, without the prior consent of the Buyer, no Seller will, nor will any Seller authorize or permit any of its respective Representatives to, directly or indirectly through another Person, (i) solicit, initiate or encourage (including by way of furnishing information), or take any other action designed to facilitate any inquiries, proposals or offers from any Person that constitute, or would reasonably be expected to constitute, a Transaction Proposal, (ii) participate in any discussions or negotiations (including by way of furnishing information) regarding any Transaction Proposal or (iii) otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any other Person to do or seek any of the foregoing. The Sellers shall immediately communicate to the Buyer the terms of any Transaction Proposal received by any of the Sellers, or any of their Representatives.
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preceding twelve (12) months, an employee or officer of the Buyer or an Affiliate of the Buyer as of the Closing Date, provided, however, that each Seller may undertake such actions directed to the general public (including, without limitation, mass mailing based on commercially acquired mailing lists, newspaper, radio and television advertisements) which shall not constitute solicitation under this Section 6.3.
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ARTICLE VII
CONDITIONS TO OBLIGATIONS TO CLOSE
(a)The representations and warranties of Sellers set forth in this Agreement will be true and correct in all respects as of the date of this Agreement and as of the Closing Date (except to the extent such representations and warranties speak as of another date, in which case such representations and warranties will be true and correct as of such other date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” set forth therein) does not have, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Sellers’ ability to consummate the Acquisition or perform its other obligations hereunder. Furthermore, for purposes hereof, a representation or warranty of any Seller shall not be deemed to have been breached if the representation or warranty is not true and correct in all material respects as of the Closing Date by reason of changed facts or circumstances arising after the Effective Date, the occurrence of which did not arise by reason of a breach of a covenant made by such Seller making such representation or warranty under this Agreement.
(b)Each Seller shall have performed all covenants required to be performed by it under this Agreement at or prior to the Closing, except where the failure to perform does not have, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect or materially adversely affect the ability of such Seller to consummate the Acquisition or perform its other obligations hereunder.
(c)The parties hereto shall have received all other authorizations, consents and approvals of all Governmental Entities in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby.
(d)No temporary, preliminary or permanent restraining Order preventing the consummation of the Acquisition will be in effect.
(e)Each Seller will have delivered, or caused to be delivered, to Buyer: (i) an affirmation, if such Seller is an individual, or (ii) a certificate executed by an officer, if such Seller is an entity, dated as of the Closing Date, certifying that each of the conditions set forth in Section 7.1(a) and Section 7.1(b) have been satisfied in all respects.
(f)The Sellers will have delivered, or caused to be delivered, to Buyer a final Schedule of Sellers in the form attached hereto as Exhibit A.
(g)The Sellers shall have delivered to Buyer such other documents or instruments as Buyer may reasonably request and are reasonably necessary to consummate the Acquisition and the other transactions contemplated by this Agreement.
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(a)The representations and warranties of the Buyer set forth in this Agreement will be true and correct in all respects as of the date of this Agreement and as of the Closing Date (except to the extent such representations and warranties speak as of another date, in which case such representations and warranties will be true and correct as of such other date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” set forth therein) does not have, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Buyer’s ability to consummate the Acquisition or perform its other obligations hereunder. Furthermore, for purposes hereof, a representation or warranty of the Buyer shall not be deemed to have been breached if the representation or warranty is not true and correct in all material respects as of the Closing Date by reason of changed facts or circumstances arising after the Effective Date, the occurrence of which did not arise by reason of a breach of a covenant made by the Buyer making such representation or warranty under this Agreement.
(b)The Buyer shall have performed all covenants required to be performed by it under this Agreement at or prior to the Closing, except where the failure to perform does not have, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect or materially adversely affect the ability of the Buyer to consummate the Acquisition or perform its other obligations hereunder.
(c)The parties hereto shall have received all other authorizations, consents and approvals of all Governmental Entities in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby.
(d)No temporary, preliminary or permanent restraining Order preventing the consummation of the Acquisition will be in effect.
(e)The Buyer shall have obtained any consents, Permits, licenses, approvals or notifications of any Governmental Entities, lenders, lessors, suppliers, customers or other third parties required to consummate the Acquisition.
(f)The Buyer shall have delivered to Sellers the Share Purchase Price.
(g)The Buyer shall have delivered, or caused to be delivered, to Sellers original stock certificates evidencing the Purchase Price Shares (to the extent that the Purchase Price Shares are so certificated), or book entry records from the Buyer’s transfer agent, free and clear of all Liens, duly endorsed in blank, and any other transfer instruments required to validly transfer title in and to the Purchase Price Shares to each Seller in accordance with Exhibit A.
(h)The Buyer shall simultaneously close on the balance of the issued and outstanding Securities in the Company from its Managers/Managing Members at a pro-rata price not to exceed the Purchase Price Per Unit paid to the Sellers hereto.
(i)The Buyer shall have delivered, or caused to be delivered, to Sellers a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer, certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement and the consummation of the Acquisition and all other transactions contemplated hereby, and that all such
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resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby.
(j)The Buyer shall have delivered, or caused to be delivered, to Sellers a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer, certifying the names and signatures of the officers of Buyer authorized to execute this Agreement and the other documents to be delivered hereunder.
(k)The Buyer shall have delivered to Sellers a certificate of the Buyer, executed by an officer of the Buyer, dated as of the Closing Date, certifying on behalf of the Buyer that each of the conditions set forth in Section 7.2(a) and Section 7.2(b) have been satisfied in all respects.]
(l)The Buyer shall have delivered to Sellers such other documents or instruments as Sellers may reasonably request and are reasonably necessary to consummate the Acquisition and the other transactions contemplated by this Agreement.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
8.1Termination of Agreement. This Agreement may be terminated as follows:
(a)by mutual written consent of the Buyer and Sellers at any time prior to the Closing;
(b)by either the Buyer or Sellers if any Governmental Entity will have issued an Order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement;
(c)by either the Buyer or Sellers if the Closing does not occur on or before the ninetieth (90th) day following the date of this Agreement; provided that the right to terminate this Agreement under this Section 8.1(c) will not be available to any party whose breach of any provision of this Agreement results in the failure of the Closing to occur by such time;
(d)by the Buyer if any Seller has breached its respective representations and warranties or any covenant or other agreement to be performed by it in a manner such that the Closing conditions set forth in Section 7.1(a) or 7.1(b) would not be satisfied; or
(e)by Sellers if the Buyer has breached its representations and warranties or any covenant or other agreement to be performed by it in a manner such that the Closing conditions set forth in Section 7.2(a) or 7.2(b) would not be satisfied
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ARTICLE IX
INDEMNIFICATION
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directors, employees, agents and Representatives (each, a “Buyer Indemnified Party” and collectively, the “Buyer Indemnified Parties”) harmless from and against any and all direct and actual Liabilities, deficiencies, demands, claims, Actions, assessments, losses, costs, expenses, interest, fines, penalties and damages (including reasonable fees and expenses of attorneys and accountants but excluding any special, incidental, indirect, exemplary, punitive or consequential damages (including lost profits, loss of revenue or lost sales, or amounts calculated as a multiple of earnings, profits, revenue, sales or other measure)) (individually and collectively, the “Losses”) suffered, sustained or incurred by any Buyer Indemnified Party arising out of or otherwise by virtue of: (a) any breach of any of the representations or warranties of such Seller contained in Article III or (b) the failure of such Seller to perform any of its covenants or obligations contained in this Agreement.
9.4Third Party Indemnification Procedures.
(a)If a Buyer Indemnified Party or a Seller Indemnified Party seeks indemnification under this Article IX, such party (the “Indemnified Party”) shall promptly give written notice to the other party (the “Indemnifying Party”) of the assertion of any claim or the commencement of any suit, action or proceeding by any third party (a “Third Party Claim”) in respect of which indemnity may be sought under this Article IX. Such notice shall contain details reasonably sufficient to disclose to the Indemnifying Party the nature and scope of the claim including an estimate of the amount of claimed Losses (if known and quantifiable) and copies of all relevant pleadings, documents and information. Any failure in the delivery of such notice shall not affect the obligations of the Indemnifying Party, except to the extent (and only to the extent) that the rights and remedies of the Indemnifying Party are prejudiced as a result of the failure to give, or delay in giving, such notice.
(b)The Indemnifying Party shall be entitled to participate in the defense of any Third Party Claim and, subject to the limitations set forth in this Section 9.4(b), shall be entitled to control and appoint lead counsel for such defense, in each case at its own expense; provided, that (i) the Indemnifying Party provides written notice to the Indemnified Party that the Indemnifying Party intends to undertake such defense and (ii) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently; provided, further, that the Indemnifying Party shall not have the right to defend against such Third Party Claim (unless otherwise agreed to in writing by the Indemnified Party) if (A) the claim for indemnification relates to or arises in connection with any criminal or quasi-criminal proceeding, action, indictment, allegation or investigation, (B) the claim seeks an injunction or other equitable relief against any Indemnified Party or any of its Affiliates, or (C) the Indemnified Party shall in good faith determine after consultation with outside counsel that the Indemnified Party may have available to it one or
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more defenses or counterclaims that are inconsistent with one or more of the defenses or counterclaims that may be available to the Indemnifying Party in respect of a Third Party Claim that would make it inappropriate for the same counsel to represent both the Indemnifying Party and the Indemnified Party.
(c)The Indemnifying Party shall notify the Indemnified Party within fifteen (15) days after having received any claim notice with respect to whether or not it is exercising its right to defend the Indemnified Party against the Third Party Claim. If the Indemnifying Party has the right to and elects to assume the control of the defense of any Third Party Claim in accordance with the provisions of this Section 9.4, (i) the Indemnifying Party shall have the right to defend such Third Party Claim with counsel selected by the Indemnifying Party (which counsel shall be subject to the approval of the Indemnified Party, such approval not to be unreasonably withheld, conditioned or delayed), (ii) the Indemnifying Party shall not enter into any settlement agreement with respect to such Third Party Claim without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, delayed or conditioned) and (iii) the Indemnified Party shall be entitled to participate in the defense of any Third Party Claim and to employ at its expense separate counsel of its choice for such purpose (in which case the counsel of the Indemnifying Party shall reasonably cooperate with such separate counsel to facilitate such participation, including (x) promptly providing to such separate counsel copies of all written materials received in respect of the Third Party Claim, (y) providing such separate counsel a reasonable opportunity to review and comment on materials being drafted and furnished in respect of such Third Party Claim (which such comments shall be considered in good faith) and (z) providing the opportunity to participate in all meetings (whether in person, by teleconference or otherwise) relating to such Third Party Claim).
(d)If the Indemnifying Party does not notify the Indemnified Party that the Indemnifying Party elects to defend the Indemnified Party pursuant to Section 9.4(c) within fifteen (15) days after receipt of notice of a Third Party Claim, or the Indemnifying Party is otherwise not entitled to defend the Indemnified Party pursuant to Section 9.4(b), then the Indemnified Party may defend, and be reimbursed by the Indemnifying Party for its reasonable costs and expenses in regard to, the Third Party Claim with counsel selected by the Indemnified Party in all appropriate proceedings. In such circumstances, the Indemnified Party may defend any such Third Party Claim and have full control of such defense and proceedings including the settlement, compromise or discharge thereof; provided, however, that no such Third Party Claim shall be settled, compromised or discharged by the Indemnified Party without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, delayed or conditioned). The Indemnifying Party shall be entitled to participate in the defense of any Third Party Claim described in this Section 9.4(d) and to employ one separate counsel of its choice for such purpose (in which case the counsel of the Indemnified Party shall reasonably cooperate with such separate counsel to facilitate such participation, including (x) promptly providing to such separate counsel copies of all written materials received in respect of the Third Party Claim, (y) providing such separate counsel a reasonable opportunity to review and comment on materials being drafted and furnished in respect of such Third Party Claim (which such comments shall be considered in good faith) and (z) providing the opportunity to participate in all meetings (whether in person, by teleconference or otherwise) relating to such Third Party Claim). The fees and expenses of such separate counsel shall be paid by the Indemnifying Party.
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(e)Each party shall cooperate, and cause its respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith; provided that no Indemnified Party, upon reasonable advice of counsel, shall have any obligation to disclose any information the disclosure of which would reasonably be expected to result in a violation of applicable Law or is subject to attorney-client or any other privilege, and if requested by an Indemnified Party, the Indemnifying Party will enter into an appropriate joint defense agreement (or other privilege-preserving agreement) in connection with obtaining access to such information.
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(a)The Sellers shall not, individually, be liable to the Buyer Indemnified Parties for Losses arising under Section 9.2 (other than with respect to Fundamental Representations or for actual fraud in the making of representations or warranties of Sellers in this Agreement (“Fraud”)) in excess of each such Seller’s Pro Rata Portion of the aggregate sum of $2,000,000 (the “Cap”). Each Seller’s aggregate liability for Fraud or for the breach its Fundamental Representations shall be limited to the value of such Seller’s Pro Rata Portion of the Purchase Price Shares as of the date such Losses arose (the “Upper Cap”).
(b)The Sellers shall not be liable to the Buyer Indemnified Parties for Losses arising under Section 9.2(a) (other than with respect to Fundamental Representations) until and unless the aggregate amounts indemnifiable for such breaches exceeds $200,000 (the “Basket”). In the event the Buyer Indemnified Parties’ entitlement to indemnification for Losses, in the aggregate, exceed the Basket, the Buyer Indemnified Parties shall be entitled to all Losses in excess of the Basket, subject to the Cap and Upper Cap, as applicable.
(c)The Sellers shall not be liable to the Buyer Indemnified Parties for Losses arising under Section 9.2 unless the claim therefor is asserted in writing on or prior to the expiration of the applicable representation and/or warranty.
(d)All indemnification payments pursuant to this Article IX shall be deemed to be adjustments to the Purchase Price.
(e)For the avoidance of doubt, subject to the limitations contained in this Article IX, each of such Seller’s liability under this Article IX is limited to the amount of cash actually received by such Seller pursuant to this Agreement and allocated among Sellers in accordance with each Seller’s Pro Rata Portion and in no event shall one Seller be liable for a breach (including Fraud) of another Seller. Each of the parties hereto acknowledges and agrees that following the Closing, the indemnification provisions of this Article IX shall be the sole and exclusive remedies of the Buyer Indemnified Parties for any matter arising out of this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, a party hereto may bring an Action to enforce this Article IX.
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receives any insurance proceeds, indemnification payments, contribution payments or reimbursements relating to the circumstances giving rise to such Losses, the Indemnified Party will promptly remit to the Indemnifying Party such proceeds, payments or reimbursements in an amount not to exceed the amount of the corresponding indemnification payment made by the Indemnifying Party. The Buyer will use (and will cause its Affiliates to use) commercially reasonable efforts to collect the proceeds of any available insurance which would have the effect of reducing any Losses (in which case the net proceeds thereof will reduce the Losses).
ARTICLE X
MISCELLANEOUS
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If to the Buyer:c/o CFN Enterprises Inc.
600 East 8th Street
Whitefish, MT 59937
Attn: Chief Executive Officer
Email: brian@accelerize.com
with a copy to:Dentons US LLP
1221 Avenue of the Americas
New York, New York 10020
Attn: Rob Condon, Esq.
Email: rob.condon@dentons.com
If to Sellers:To the addresses specified on Exhibit A hereto
with a copy to:Seyfarth Shaw LLP
620 Eighth Avenue
New York, New York 10018
Attn: Marc J. Gurell, Esq.
Any party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties notice in the manner set forth herein.
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this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, (d) with respect to Sellers’ obligations in Section 6.3 of this Agreement, the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision and (e) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms of such illegal, invalid or unenforceable provision as may be possible.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
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