UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 20, 2016
PARALLAX HEALTH SCIENCES, INC.
(Exact name of Company as specified in its charter)
Nevada |
000-52534 |
46-4733512 |
(State or other jurisdiction |
(Commission File Number) |
(IRS Employer |
of Incorporation) |
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Identification Number) |
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1327 Ocean Avenue, Suite M Santa Monica, CA 90401 (Address of principal executive offices)
310-899-4442 (Registrants Telephone Number) |
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Copy of all Communications to : Lawrence I. Washor Washor & Associates 21800 Oxnard Street, Suite 790 Woodland Hills, CA 91367 (310) 479-2660 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions: |
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
As used in this current report and unless otherwise indicated, the terms "we", "us", "our", “ Company ” , and “ Parallax mean Parallax Health Sciences, Inc., a Nevada corporation, and its subsidiaries, unless otherwise indicated.
FORWARD LOOKING STATEMENTS
This current report contains forward-looking statements as that term is defined in section 27A of the United States Securities Act of 1933, as amended, and section 21E of the United States Securities Exchange Act of 1934, as amended. These statements relate to future events or future financial performance. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, which may cause actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity or performance. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
Unless otherwise specified, all dollar amounts are expressed in United States dollars.
ITEM 1.01
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
The information required by this Item 1.01 is set forth in Item 2.01 below, which is incorporated herein by reference.
ITEM 2.01
COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to a consent resolution of the board of directors, the Company executed an Agreement to Purchase One Hundred Percent of the Issued and Outstanding Shares of QOLPOM, Inc. an Arizona Corporation (the QOLPOM) in the remote healthcare monitoring and compliance and its Assets, Inventory and Intellectual Property (the Purchase Agreement) between the Company, QOLPOM and its shareholders (the Seller). The Purchase Agreement was fully executed and the transaction was completed with a Closing Date of September 20, 2016.
Pursuant to the Purchase Agreement, in exchange for 100% of the QOLPOM stock and 100% of QOLPOMs Assets, Inventory and Intellectual Property, among other things, the Company delivered to the Seller on the Closing Date of September 20, 2016:
1.
A grant provided to QOLPOMs Shareholders that provides for them to enter into a Stock Purchase Agreement with the Company to purchase five million (5,000,000) shares of the Companys common stock at par value $.001 or approximately three hundred thousand ($300,000) dollars in value based on a six cents ($.06) share price on the Companys listed common stock;
2.
A Cash earn-out in the amount of two million ($2,000,000) dollars that is to be derived from revenue generated from the QOLPOM business operations will be paid to QULPOM shareholders.
3.
A Royalty Agreement that will distribute three (3%) percent of the revenue generated by QOLPOM from its technology, will be paid to a third party non-profit organization located in Arizona.
4.
A Grant of two million five hundred thousand (2,500,000) common stock options of the Company to QOLPOM shareholders that vest quarterly over one (1) year and are priced at the following terms:
a.
500,000 common stock options priced at ten ($.10) cents;
b.
1,000,000 common stock options priced at fifteen ($.15) cents; and
c.
1,000,000 common stock options priced at twenty-five ($.25) cents.
The Closing was subject to the Company receiving certain documents standard with a transaction such as the one undertaken by the Company and QOLPOM and included, but was not limited to, the issuance of the five million (5,000,000) shares of common stock and the execution of a stock purchase agreement.
About QOLPOM
QOLPOM is an acronym that stands for Quality of Life Peace of Mind . Our primary goal at QOLPOM is to deliver a service that will allow clients who operate medically related residential based services to reduce costs, increase revenues and provide a better client experience through the adoption of innovative new technologies of the Internet of Things (IoT) and particularly the numerous possible combinations of products represented by the QOLPOM Hub , a medication dispensing, medication compliance/adherence, management and remote monitoring system developed by various health care technology companies in the last few years .
ITEM 3.02
UNREGISTERED SALES OF EQUITY SECURITIES
In connection with the Acquisition, and pursuant to the terms and conditions of the Purchase Agreement, the Company issued 5,000,000 shares of its restricted common stock to the Seller at $0.001 per share.
The Shares are being issued in reliance upon an exemption from registration afforded by Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering.
ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS
(a) |
Financial Statements of Business Acquired. |
Financial statements of QOLPOM, Inc. are not included in this Current Report on Form 8-K. Such financial statements will be filed within 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.
(b) |
Pro Forma Financial Information. |
Pro forma financial information relative to the Acquisition of QOLPOM, Inc. is not included in this Current Report on Form 8-K. Such pro forma financial information will be filed within 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.
Exhibit Number |
Description |
Filing Reference |
(2) |
Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession |
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Filed herewith |
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(10) |
Material Contracts |
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Filed herewith |
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Filed herewith |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PARALLAX HEALTH SCIENCES, INC. |
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Date: September 23, 2016 |
/s/ J. Michael Redmond |
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By: J. Michael Redmond |
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Its: President and Chief Executive Officer |
1
AGREEMENT
TO PURCHASE AND SELL ONE HUNDRED PERCENT (100%)
OF THE ISSUED AND OUTSTANDING SHARES OF
QOLPOM, INC.
AND ITS ASSETS, INTELLECTUAL PROPERTY AND INVENTORY
THIS AGREEMENT TO PURCHASE AND SELL ONE HUNDRED PERCENT (100%) OF THE
ISSUED AND OUTSTANDING SHARES OF QOLPOM, INC. AND ITS ASSETS AND
INVENTORY ( “ AGREEMENT ” ) IS MADE AS OF AUGUST 31, 2016 (the “ EFFECTIVE
DATE ” ) BY AND BETWEEN:
Parallax Health Sciences, Inc., a Nevada corporation, with its principal
address at 1327 Ocean Avenue Suite M Santa Monica, CA 90401
( “ PARALLAX ” );
AND
QOLPOM, Inc., an Arizona corporation, with its principal address at 504 W.
29th St, Tucson, AZ 85713 ( “ QOLPOM ” or “ Selling Entity ” );
AND
David Bradley , Michael Prudence, Daniel J. Ranieri and the Intellectual
Property Network, Inc. a Delaware corporation represent one hundred
(100%) percent of the shareholders of QOLPOM, with an address at 504 W.
29th St, Tucson, AZ 85713 ( “ Selling Shareholders ” )
WHEREAS , Selling Shareholders are the registered and beneficial owners of one hundred and
fifty (150) shares of Common stock representing one hundred (100%) percent of the issued and
outstanding common shares of the capital stock of QOLPOM (the “ QOLPOM Shares ” ) ; and
WHEREAS , PARALLAX desires to buy and Selling Shareholders desires to sell the QOLPOM
Shares; and
WHEREAS , PARALLAX desires to buy and Selling Shareholders and QOLPOM desire to sell
all of the assets used in connection with the business (the “ Assets ” ) and the inventory at the date of
Closing ( “ Inventory ” ).
NOW THEREFORE , in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties and covenants herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows.
Parllax Health Sciences, Inc QOLPOM, Inc. Purchase and Sale Agreement
Confidential
August 31, 2016
1.
DEFINITIONS
1.1
Definitions. In addition to definitions provided herein, the following terms have the
meanings set forth below, unless the context indicates otherwise.
(a)
“ 1933 Act ” means the Securities Act of 1933, as amended.
(b)
“ Agreement ” means this Agreement, and all the exhibits, Schedules and other
documents attached to or referred to in this Agreement, and all amendments and
supplements, if any, to this Agreement.
(c)
“ Assets ” means all of the assets used in connection with the business of QOLPOM,
whether owned by Selling Shareholders or QOLPOM. Specifically included in the term
Assets shall be each and every license or authority of any sort (a) used by the Sellers or
any employee or associate of the Sellers or (b) necessary for the conduct of the business
of the Sellers.
(d)
“ Cash Earn-out ” means the cash which is to be received based on terms and conditions
of the Earn-out provision in Section 2.7 paragraph B.
(e)
“ Closing ” means the event at which the Selling Shareholders shall deliver to
PARALLAX the QOLPOM Shares and QOLPOM shall deliver to PARALLAX title to
the Assets and the Inventory.
(f)
“ Closing Date ” means a date mutually agreed upon by the Parties hereto in writing
following the satisfaction or waiver by PARALLAX and Selling Shareholders of the
conditions precedent specified herein, such date to be no later than September 30, 2016.
(g)
“ Closing Documents ” means the papers, instruments and documents required to be
executed and delivered on or before the Closing Date pursuant to this Agreement.
Detailed in Section 7 of this Agreement.
(h)
“ Contract ” means each material contract, agreement, license, permit, arrangement,
commitment, instrument or contract to which PARALLAX, QOLPOM or Selling
Shareholders is a party.
(i)
“ Copyrights ” means all copyrights in both published works and unpublished works.
(j)
“ COGS ” Cost of Goods Sold, are the direct costs attributable to the production
of the products sold/leased by QOLPOM. This amount includes the cost of the
materials used in creating the products, cost of the lease from the vendor (Phillips)
and any direct labor costs used to produce the products. It excludes indirect
expenses such as distribution costs and sales force costs. COGS will be deducted
from QOLPOM ’ s gross revenue to calculate the “ Adjusted Gross Revenue. ”
(k)
“ Common Stock Purchase Agreement ” , means the legal Agreement issued by
PARALLAX to the Selling Shareholders as part of the Equity Consideration that
memorializes the purchase of Common Stock by the Selling Shareholders herein
as Schedule “ Q ” .
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(l)
“ Disclose, ” “ Disclosed ” and “ Disclosure ” means any information and/or
documentation requested by a Party from another Party.
(m)
“ Employment Agreement ” means the executive employment agreement between
QOLPOM and Nathaniel T. Bradley.
(n)
“ Employee Stock Option Plan of PARALLAX ” means the Parallax Health Sciences,
Inc ( “ PARALLAX ” ) 2016 Stock Option Plan is intended to encourage ownership of
Shares of PARALLAX by certain employees of the Company or of its Parents or
Subsidiaries and certain other Persons, to provide additional incentive for them to remain
in the employ of the Company or its Parents or Subsidiaries, and to promote the growth
and success of the Company and such Parents and Subsidiaries. It is intended that the
Options issued pursuant to the Plan shall constitute either incentive stock options within
the meaning of Section 422 of the Code and the regulations thereunder or non-incentive
stock options.
(o)
“ Environmental Laws ” means any applicable federal, state, municipal or local laws,
regulations, orders, governmental decrees or ordinances concerning environmental,
health or safety matters.
(p)
“ Evaluation Date ” means the period prior to Aug 31, 2016.
(q)
“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.
(r)
“ Exhibits ” means any supplemental documentation attached hereto and titled “ Exhibit. ”
(s)
“ Equity Consideration ” means a grant from PARALLAX to the Selling Shareholders to
purchase five million (5,000,000) Shares of PARALLAX Common Stock.
(t)
“ Equity Consideration Purchase Price ” means the number of Shares of Common stock
that comprise the Equity Consideration multiplied by the par value of $.001 per share as
well as the Options at the agreed upon strike price below in Section 2.6.
(u)
“ FINRA ” means Financial Industry Regulatory Authority.
(v)
“ GAAP ” means generally accepted United States accounting principles applied in a
manner consistent with prior periods.
(w)
“ Hazardous Substance ” means any pollutant, contaminant, waste, special or hazardous
waste, toxic or hazardous substance which, when released into the natural environment is
likely to cause harm or risk to the natural environment or to human or animal health,
including without limitation, any substance considered hazardous under Environmental
Laws.
(x)
“ Intellectual Property Assets ” means interest in all intellectual property assets
necessary for the operation of PARALLAX or Selling Entity as currently conducted.
(y)
“ Inventory ” means all of the medical and office equipment, durable medical equipment,
dispensing equipment, and any associated products used by QOLPOM or targeted for
eventual delivery by sale or lease to customers/patients or already in a customer
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environment, owned by and/or in the possession of QOLPOM, whether owned by Selling
Shareholders or QOLPOM.
(z)
“ IRS ” means Internal Revenue Service.
(aa)
“ Landlords ” means Worthe Real Estate Group, LLC for PARALLAX and La Frontera
for QOLPOM.
(bb)
“ La Frontera Community Solutions, Inc. ” is a non-profit Arizona corporation at 504
W 29 th Street, Tucson, AZ 85713 that provides outpatient and residential mental health
and substance abuse. QOLPOM has partnered with La Frontera so that QOLPOM can
utilize La Frontera ’ s unique call center services, which use clinical professional to
interact with the clients on the phone.
(cc)
“ Leases ” means each of the leases, subleases, claims or other real property interests to
which Selling Entity is a party or is bound, and which are legal, valid, binding,
enforceable and in full force and effect in all Material respects.
(dd)
“ Liability ” or “ Liabilities ” means any direct or indirect indebtedness, guaranty,
endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility,
fixed or unfixed, known or unknown, asserted choate or inchoate, liquidated or
unliquidated, secured or unsecured.
(ee)
“ Loss ” or “ Losses ” mean any and all demands, claims, actions or causes of action,
assessments, losses, damages, Liabilities, costs, and expenses, including without
limitation, interest, penalties, fines and reasonable attorneys, accountants and other
professional fees and expenses, but excluding any indirect, consequential or punitive
damages, lost profits or lost business opportunities suffered by PARALLAX or
QOLPOM.
(ff)
“ Marks ” means all functional business names, trading names, registered and
unregistered trademarks, and service marks.
(gg)
“ Material ” or “ Materially ” means a matter that is so substantial or important as to
reasonably influence the Party to whom it is made and without which a decision would or
could not be made.
(hh)
“ Material Adverse Effect ” means any undisclosed action, suit, judgment, claim,
demand or proceeding outstanding or pending, or threatened against or affecting a Party
or which involves any of the business, or the properties or assets of a Party that, if
adversely resolved or determined, would have a Material adverse effect on the business,
operations, assets, properties, prospects, or conditions of a Party taken as a whole.
(ii)
“ OTCQB ” means the quotation medium used for over-the-counter equity securities that
are not listed on a national stock exchange.
(jj)
PARALLAX ” means Parallax Health Sciences, Inc., a corporation organized under the
laws of the State of Nevada, with its principal address as provided on the first page of this
Agreement, including any subsidiaries.
(kk)
“ PARALLAX Accounting Date ” means June 30, 2016.
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(ll)
“ PARALLAX Common Stock ” means as of August 30, 2016 the authorized capital
stock and other equity securities of PARALLAX consisting of Two Hundred and Fifty
Million (250,000,000) shares of Common stock authorized and One Hundred Million
Five Hundred and Sixty-Six Thousand and Seven Hundred and Seventy-Four
(100,566,774) shares of Common stock issued and outstanding with a par value of
$0.001.
(mm) “ PARALLAX Documents ” means all of PARALLAX ’ s documents contemplated by
this Agreement.
(nn)
“ PARALLAX Financial Statements ” means true, correct, and complete copies of the
audited balance sheets of PARALLAX and related statements of operations, balance
sheet, cash flows, and changes in shareholder ’ s equity and footnotes for the fiscal years
ended December 31, 2013 and December 31, 2014, and the unaudited balance sheet,
statement of operations, cash flows and footnotes for the quarter ended March 31, 2016.
(oo)
“ PARALLAX SEC Documents ” means a true and complete copy of PARALLAX ’ s
Annual Reports filed on Form 10-K for the year ending December 31, 2013, and filed on
Form 10-K for the year ending December 31, 2014 and an unaudited draft 10K for the
year ending December 31, 2015 and its Quarterly Report filed on Form 10-Q for the
period ending March 31, 2016, and Current Reports, if any, subsequently filed with the
SEC.
(pp)
“ PARALLAX Stock Options ” , means the common stock options that have been
authorized by the PARALLAX Employee Stock Option Plan that is further defined in
this Agreement in Definitions (S).
(qq)
“ Party ” or “ Parties ” means PARALLAX, QOLPOM and the Selling Shareholders,
collectively or individually, as the context requires .
(rr)
“ Patents ” means all patents, patent applications, and inventions, methods, processes and
discoveries that may be patentable.
(ss)
“ Regulatory Compliance ” means all State and Federal Agencies that regulate In-home
health Monitoring, State and Federal Pharmacy laws and regulations.
(tt)
“ QOLPOM ” means QOLPOM, Inc., an Arizona Corporation organized under the laws
of the State of Arizona, with its principal address as provided on the first page of this
Agreement.
(uu)
“ QOLPOM Interests ” means the QOLPOM Shares, Assets and Inventory.
(vv)
“ QOLPOM Authorized Shares ” means 1,000,000 shares authorized.
(ww) “ QOLPOM Shares ” means one hundred and fifty (150) issued shares of common stock
that represent one hundred (100%) percent of the issued and outstanding common shares
of QOLPOM, with a par value of $1.00, owned by the Selling Shareholders.
(xx)
“ Sale Shares ” means the five million (5,000,000) shares of PARALLAX Common Stock
that are being sold to Selling Shareholders, through a grant, as part of the Equity
Consideration of the Transaction, at par value $0.001.
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(yy)
“ Schedules ” means those schedules attached to this Agreement and as described in
Section 1.2.
(zz)
“ SEC ” means the Securities and Exchange Commission.
(aaa) “ Securities Act ” means the United States Securities Act of 1933, as amended.
(bbb) “ Sellers ” means the Selling Entity and the Selling Shareholders, collectively, or
individually, as the context requires.
(ccc) “ Sellers ’ Documents ” means, all documents to be provided by Sellers pursuant to this
Agreement.
(ddd) “ Selling Entity ” means QOLPOM, Inc.
(eee) “ Selling Entity ’ s Accounting Date ” means, for QOLPOM, the unaudited balance sheet,
statement of operations, cash flows and footnotes from inception to July 31, 2016.
(fff)
“ Selling Entity ’ s Documents ” means all of Selling Entity ’ s documents contemplated by
this Agreement.
(ggg) “ Selling Entity ’ s Financial Statements ” means unaudited financial statements, prepared
under GAAP, which are true, correct, and complete copies of its unaudited balance sheets
for the period since inception.
(hhh) “ Selling Shareholders, ” means David Bradley, Michael Prudence, Daniel J. Ranieri and
the Intellectual Property Network, Inc. that collectively represent one hundred (100%)
percent of the issued and outstanding Shares of the common stock of QOLPOM.
(iii)
“ Stock Option Agreement ” , means the legal instrument that represents the number of
options of common stock in PARALLAX and their strike price.
(jjj)
“ Stock Option Consideration ” means the granting of Options to purchase the common
stock of PARALLAX that PARALLAX has provided as part of its Consideration in the
Sale and Purchase of one hundred (100%) percent of the issued and outstanding stock of
QOLPOM and the Assets and Inventory as defined in detail in Section 2
(kkk) “ Taxes ” includes international, federal, state, provincial and local income taxes, capital
gains tax, value-added taxes, franchise, personal property and real property taxes, levies,
assessments, tariffs, duties (including any customs duty), business license or other fees,
sales, use and any other taxes relating to the assets of the designated party or the business
of the designated party for all periods up to and including the Closing Date, together with
any related charge or amount, including interest, fines, penalties and additions to tax, if
any, arising out of tax assessments.
(lll)
“ Trade Secrets ” means all know-how, confidential information, customer lists, software,
technical information, data, process technology, plans, drawings, and blue prints owned,
used, or licensed by a Party for its business to obtain advantage over competitors who do
not know or use it, and which are not generally known to the public.
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(mmm) “ Transaction ” means the purchase by PARALLAX of the QOLPOM Shares, the Assets
and the Inventory pursuant to this Agreement.
(nnn) “ US Certificate ” means the Selling Shareholder ’ s affidavit of non-foreign status.
1.2
Schedules. The following Schedules are attached to and form part of this Agreement:
Schedule A
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Selling Shareholders and Consideration
Schedule B
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U.S. Certificate of Selling Shareholders
Schedule C
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Directors and Officers of Selling Entity
Schedule D
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PARALLAX Board Resolution to Approve Acquisition
Schedule E
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PARALLAX Treasury Order
Schedule F
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QOLPOM ’ s Corporate Documents
Schedule G
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QOLPOM Intellectual Property
Schedule H
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QOLPOM Intellectual Property Assignment
Schedule I
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QOLPOM Board Resolution to Approve Sale
Schedule J
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QOLPOM Shares
Schedule K
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QOLPOM Regulatory Licenses
Schedule L
List of all i(in)ventor-y and assets of QOLPOM
Schedule M
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Directors and Officers of PARALLAX
Schedule N
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PARALLAX Corporate Documents
Schedule O
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QOLPOM Power of Attorney to Transfer Shares
Schedule P
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Executive Employment Agreement
Schedule Q
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PARALLAX Common Stock Purchase Agreement
Schedule R
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PARALLAX Employee Stock Option Plan
Schedule S
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PARALLAX Common Stock Options
Schedule T
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QOLPOM-Lafrontera Royalty Agreement
Schedule U
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QOLPOM Agreements
Schedule V
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QOLPOM Officers Certificate
Schedule W
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PARALLAX Officers Certificate
1.3
Currency. All references to currency referred to in this Agreement are in United States
Dollars (US $), unless expressly stated otherwise.
2.
PURCHASE AND SALE OF QOLPOM SHARES; INVENTORY, ASSETS &
INTELLECTUAL PROPERTY
2.1
Purchase and Sale of QOLPOM Shares. At the Closing Selling Shareholders hereby
sells, assigns and transfers to PARALLAX, and PARALLAX hereby purchases from Selling
Shareholders the QOLPOM Shares, as long as PARALLAX has fully complied with Section 2.5 and 2.6
of the Agreement.
2.2
Inventory Purchase. Sellers at the Closing hereby sell, assign and transfer to
PARALLAX, and PARALLAX hereby purchases from Sellers the Inventory of QOLPOM.
2.3
Intellectual Property.
Sellers agree to sell and or assign all Intellectual Property as
defined in Schedule “ G ” , to include but not be limited to Patents, Patent Pending Applications,
Trademarks and Copyrights and or draft versions of any of the identified Intellectual Property named in
Section 2.3 and the Assignment of the Intellectual Property defined in Schedule “ H ” of this Agreement.
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2.4
Asset Purchase. Sellers agree to sell and or assign all assets of QOLPOM, to include,
but not be limited to physical assets to PARALLAX, as defined in Schedule “ L ” ,
2.5
Equity Consideration. As consideration for the purchase of the QOLPOM Shares,
PARALLAX grants to Selling Shareholders the right to purchase, at par value $.001, the PARALLAX Sale
Shares, which shall be 5,000,000 (Five Million) shares of PARALLAX common stock, which right shall be
exercised by Selling Shareholders by giving written notice by 5:00 p.m. on August 31, 2016 to PARALLAX
of the amount of Sale Shares that the Selling Shareholders wishes to purchase as of the Closing and by
delivering a check to PARALLAX at the Closing for payment of such amount of Sale Shares.
2.6
Stock Option Consideration.
QOLPOM Shareholders will be granted two million
five hundred thousand (2,500,000) options that will vest over three (3) years and have multiple strike
prices set forth as:
A.
500,000 options granted for the first full year from the date of the signing of the Sale
and Purchase Agreement that vest quarterly commencing at the end of the first quarter
after
the
issuance of the options and the options will have a strike price of ten
($.10) cents attached hereto in
Schedule “ S ”
B.
1,000,000 options first full year from the date of the signing of the Sale and
Purchase Agreement that vest quarterly commencing at the end of the first quarter after the
issuance of the options and the options will have a strike price of fifteen ($.15) cents
attached hereto
in Schedule “ S ”
C.
1,000,000 options first full year from the date of the signing of the Sale and
Purchase Agreement that vest quarterly commencing at the end of the first quarter after the
issuance of the options and the options will have a strike price of twenty-five ($.25)
cents attached
hereto in Schedule “ S ”
2.7
Cash Consideration. As partial consideration for the purchase of the QOLPOM Shares,
Inventory, Assets, Intellectual Property La Frontera Community Solutions, Inc. ( “ La Frontera ” ) will be paid
up to two million ($2,000,000) dollars through an Earn-Out from the Adjusted Gross Revenue generated by
the QOLPOM business.
A.
Adjusted Gross Revenue. For the purposes of this Agreement, Adjusted Gross Revenue
will be will be defined as cash available to be distributed after Cost of Goods Sold (COGS).
B.
Cash Earn-Out Schedule.
i.
La Frontera will be paid ten (10%) percent of the Adjusted Gross
Revenue up to one million ($1,000,000) dollars net monies received from the sale
of QOLPOM Hardware and Monitoring services; and
ii.
La Frontera will be paid seven (7%) percent of the Adjusted Gross
Revenue after it has received one million ($1,000,000) dollars of net monies
received from the sale of QOLPOM Hardware and monitoring services.
2.8
Royalty Fee. La Frontera will receive a Royalty Fee equal to three (3%) percent of the
gross revenue generated from the sale of QOLPOM hardware and Service Fees associated with the
monitoring service as defined in Schedule “ T ” .
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2.9
Key Management.
Nathan Bradley will enter into an Executive Employment
Agreement with QOLPOM for a period of not less than four (4) years from Closing. The BRADLEY
employment agreement is further defined and included in the Agreement as Schedule “ P ” ..
2.10
Payment of Cash Consideration. The cash consideration of Two Million Dollars paid
through the Cash Earn-Out defined in Section 2.7 of this Agreement.
2.11
Issuance of Equity Consideration. The PARALLAX Sale Shares shall be issued to
Selling Shareholders effective on or before September 30, 2016.
2.12
Selling Shareholders ’ Share Delivery Procedure. The Selling Shareholders shall deliver
the certificate representing the QOLPOM Shares at the Closing by delivering such certificate to
PARALLAX duly executed and endorsed in blank (or accompanied by duly executed stock powers
endorsed in blank), in each case in proper form for transfer, with signatures guaranteed, and, if applicable,
with all stock transfer and any other required documentary stamps affixed thereto, and with appropriate
instructions to allow the transfer agent to transfer the QOLPOM Shares to the name of PARALLAX.
2.13
PARALLAX ’ s Share Delivery Procedure. PARALLAX shall deliver to Selling
Shareholders on or before September 30, 2016 and after the Closing the certificate representing the
PARALLAX Sale Shares by delivering such certificate to Selling Shareholders or Selling Shareholders ’
attorney, duly executed and endorsed in blank (or accompanied by duly executed stock powers endorsed
in blank), in each case in proper form for transfer, with signatures guaranteed, and, if applicable, with all
stock transfer and any other required documentary stamps affixed thereto, and with appropriate
instructions to allow the transfer agent to transfer the PARALLAX Sale Shares to the name of Selling
Shareholders.
2.14
Closing Date. A date mutually agreed upon by the Parties hereto in writing following the
satisfaction or waiver by PARALLAX and Selling Shareholders of the conditions precedent specified
herein, such date to be in any event no later than September 30, 2016.
2.15
Restricted Shares. Selling Shareholders acknowledges that the PARALLAX Sale Shares
will have such hold periods as are required under applicable securities laws and as a result may not be
sold, transferred or otherwise disposed of, except pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption from, or in a transaction not subject to the registration
requirements of the Securities Act, and in each case only in accordance with all applicable securities laws.
2.16
Exemptions. Selling Shareholders acknowledges that PARALLAX has advised Selling
Shareholders that PARALLAX is relying upon the representations and warranties of Selling Shareholders
set out in the US Certificate to issue the PARALLAX Sale Shares under an exemption from the
prospectus and registration requirements of the 1933 Act and, as a consequence, certain protections, rights
and remedies provided by the 1933 Act, including statutory rights of rescission or damages, will not be
available to Selling Shareholders.
2.17
QOLPOM Bank Accounts. The parties agree that the funds in any current bank accounts
of Selling Entity will remain in place as corporate bank accounts and acknowledge that PARALLAX
Chief Financial Officer, Calli Bucci will become a signatory to the corporate bank accounts of QOLPOM.
2.18
Non-Compete. As part of the consideration, Selling Shareholders agrees that as of the
Closing Date and through September 30, 2020 Bradley will work exclusively for PARALLAX pursuant
to that document titled Employment Agreement made between PARALLAX and BRADLEY effective as
of September 30, 2016 and will not provide services for any other entity that provides remote healthcare
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monitoring or related services, without written approval from the President of PARALLAX. Selling
Shareholders acknowledges that because of Selling Shareholders ’ position, Selling Shareholders will have
access to material intellectual property and Confidential Information. Selling Shareholders shall not, for
Selling Shareholders or any third party, directly or indirectly through September 30, 2020 (a) divert or
attempt to divert from PARALLAX any business of any kind, including without limitation the solicitation
of or interference with any of its customers, clients, members, business partners or suppliers, or (b) solicit
or otherwise induce any person employed by the PARALLAX to terminate his or her employment with
PARALLAX.
2.19
Product Sourcing Agreements. The parties agree that the acquisition of certain products
on satisfactory terms is integral to the current business of QOLPOM and will be integral to the future
development and expansion of the business of QOLPOM. The parties shall agree on the identity of and
providers of such products and the Sellers will cause QOLPOM to enter into product sourcing agreements
with such providers on terms specified by and satisfactory to PARALLAX. Such product sourcing
agreements are Material contracts of QOLPOM
3.
REPRESENTATIONS AND WARRANTIES OF SELLERS
As of the Closing, Sellers make the following representations and warranties to
PARALLAX, and acknowledge that PARALLAX is relying upon such representations and warranties in
connection with the execution, delivery and performance of this Agreement, notwithstanding any
investigation made by or on behalf of PARALLAX.
3.1
Organization and Good Standing. Selling Entity is a corporation or company duly
organized, validly existing and in good standing under the laws of the State of Arizona and has the
requisite corporate power and authority to own, lease and to carry on its business as now being conducted.
Complete and correct copies of Selling Entity ’ s articles of incorporation or articles of organization,
including amendments, and bylaws or operating agreement, have been disclosed pursuant to this
Agreement and are listed on Schedule “ F ” .
3.2
Authority. Sellers have all requisite corporate power and authority to execute and deliver
this Agreement and Sellers ’ Documents to be signed by Sellers and to perform their obligations hereunder
and to consummate the transactions contemplated hereby. Selling Entity ’ s respective board of directors
has duly authorized the execution and delivery of each of Sellers ’ Documents by Sellers and the
consummation of the transactions contemplated hereby. No other corporate or shareholder proceedings
on the part of Sellers are necessary to authorize such documents or to consummate the transactions
contemplated hereby. This Agreement has been, and the other Sellers ’ Documents when executed and
delivered by Sellers as contemplated by this Agreement will be, duly executed and delivered by Sellers.
This Agreement is, and the other Sellers ’ Documents when executed and delivered by Sellers as
contemplated hereby will be, valid and binding obligations of Sellers enforceable in accordance with their
respective terms except as limited by:
(a)
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors ’ rights generally;
(b)
laws relating to the availability of specific performance, injunctive relief, or other
equitable remedies; and
(c)
public policy.
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3.3
Capitalization. The QOLPOM Shares are set forth on Schedule “ J ” and each have a par
value $1.00 per share and have been duly authorized, are validly issued, were not issued in violation of
any pre-emptive rights and are fully paid and non-assessable, are not subject to pre-emptive rights and
were issued in full compliance with the laws of the State of Arizona and each of the Selling Entity ’ s
articles of incorporation, articles of organization, bylaws and/or operating agreement as applicable. There
are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements, or
commitments obligating Selling Entity to issue any additional common shares or units of Selling Entity ’ s
shares or units, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe
for or acquire from Selling Entity any shares or units. There are no agreements purporting to restrict the
transfer of the QOLPOM Shares, no voting agreements, shareholders ’ agreements, voting trusts, or other
arrangements restricting or affecting the voting of the QOLPOM Shares.
3.4
Shareholder of the Selling Entity. As of the Closing Date, the Selling Shareholders owns
all QOLPOM Shares.
3.5
Directors and Officers of Selling Entity. The duly elected or appointed directors and
officers of Selling Entity are as set out in Schedule “ C ” .
3.6
Corporate Records of Selling Entity. The corporate records of Selling Entity, as required
to be maintained by it pursuant to all applicable laws, are accurate, complete and current in all Material
respects, and the minute books of Selling Entity are, in all Material respects, correct and contain all
records required by all applicable laws, as applicable, in regards to all proceedings, consents, actions and
meetings of the shareholders, unit holders and board of directors of Selling Entity.
3.7
Non-Contravention. The Parties acknowledge and agree that Sellers are parties to certain
Disclosed Contracts provided pursuant to this Agreement, which may contain various provisions or
conditions that may affect the Transaction contemplated hereunder. The Parties agree that they will
discuss these issues and that at or prior to Closing, these issues will be addressed and resolved to the
reasonable satisfaction of the Parties, and any other parties to the Contracts, such that the Transaction can
be completed. Upon such satisfaction by and among the Parties and the other parties to the Contracts,
Sellers represent that to the best knowledge of Sellers, neither the execution, delivery or performance of
this Agreement, nor the consummation of the Transaction, will:
(a)
conflict with, result in a violation of, cause a default under (with or without notice, lapse
of time or both) or give rise to, a right of termination, amendment, cancellation or
acceleration of any obligation contained in or the loss of any Material benefit under, or
result in the creation of any lien, security interest, charge or encumbrance upon any of the
Material properties or assets of Selling Entity under any term, condition or provision of
any loan or credit agreement, note, Note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Selling Entity, or any of its respective Material property
or assets;
(b)
violate any provision of the articles of incorporation, articles of organization, bylaws,
operating agreement or any other organizational documents of Selling Entity or any
applicable laws; or
(c)
violate any order, writ, injunction, decree, statute, rule, or regulation of any court or
governmental or regulatory authority applicable to Selling Entity or any of its respective
Material property or assets.
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3.8
Actions and Proceedings. To the best knowledge of Sellers, there is no basis for and
there is no undisclosed action, suit, judgment, claim, demand or proceeding outstanding or pending, or
threatened against or affecting Selling Entity or which involves any of the business, or the properties or
Assets of Selling Entity that, if adversely resolved or determined, would have a Material Adverse Effect
on the business, operations, Assets, properties, prospects, or conditions of Selling Entity taken as a whole.
There is no reasonable basis for any claim or action that based upon the likelihood of its being asserted
and its success if asserted, would have such a Material Adverse Effect on Sellers.
3.9
Environmental. To the best knowledge of Sellers, Selling Entity has not violated any
Environmental Laws and for greater certainty, without limitation, to the best knowledge of Sellers, other
than as contained in Disclosures provided pursuant to this Agreement:
(a)
Selling Entity has, at all times in relation to its business, received, handled, used, stored,
treated, shipped and disposed at all times of all Hazardous Substances in strict
compliance with all Environmental Laws;
(b)
There have been no spills, releases, deposits or discharges of Hazardous Substances on or
near the land or premises subject to the Leases;
(c)
Except as contained in Disclosures provided pursuant to this Agreement, there are no
underground storage vessels located on land subject to Selling Entity ’ s Leases;
(d)
No orders, directions or notices have been issued under any Environmental Laws relating
to Selling Entity.
3.10
Compliance.
(a)
To the best knowledge of Sellers, Selling Entity is in compliance with, is not in default or
violation in any Material respect under, and has not been charged with or received any
notice at any time of any Material violation of any statute, law, ordinance, regulation,
rule, decree or other regulation applicable to the business or operations of Selling Entity;
(b)
To the best knowledge of Sellers, Selling Entity is not subject to any judgment, order or
decree entered in any lawsuit or proceeding applicable to its business and operations that
would constitute a Material Adverse Effect;
(c)
Selling Entity has duly filed all reports and returns required to be filed by it with
governmental authorities and has obtained all governmental permits and other
governmental consents, except as may be required after the execution of this Agreement.
All of such permits and consents are in full force and effect, and no proceedings for the
suspension or cancellation of any of them, and no investigation relating to any of them, is
pending or to the best knowledge of Sellers, threatened, and none of them will be
adversely affected by the consummation of the Transaction; and
(d)
To the best knowledge of Sellers, Selling Entity has operated in Material compliance with
all laws, rules, statutes, ordinances, orders and regulations applicable to Selling Entity ’ s
business. Sellers have not received any notice of any violation thereof, nor are Sellers
aware of any valid basis therefore.
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3.11
Financial Representations. Selling Entity has provided Selling Entity ’ s Financial
Statements which are true, correct, and complete copies for the three (3) months ending July 31, 2016 for
the Selling Entity ’ s Accounting Date which are:
(a)
in accordance with the books and records of Selling Entity;
(b)
present fairly the financial condition of Selling Entity as of the respective dates indicated
and the results of operations for such periods; and
(c)
have been prepared in accordance with GAAP.
Selling Entity has not received any advice or notification from its independent certified public
accountants that Selling Entity has used any improper accounting practice that would have the effect of
not reflecting or incorrectly reflecting in the Selling Entity ’ s Financial Statements or the books and
records of Selling Entity, any properties, assets, Liabilities, revenues, or expenses. The books, records,
and accounts of Selling Entity accurately and fairly reflect, in reasonable detail, the assets and Liabilities
of Selling Entity. Selling Entity has not engaged in any transaction, maintained any bank account, or
used any funds of Selling Entity, except for transactions, bank accounts, and funds, which have been and
are reflected in the normally maintained books and records of Selling Entity.
3.12
Absence of Undisclosed Liabilities. Except as contained in Selling Entity ’ s Financial
Statements, Schedules and Disclosures provided pursuant to this Agreement, Selling Entity has no
Material Liabilities or obligations either direct or indirect, matured or unmatured, absolute, contingent or
otherwise, which:
(a)
are not set forth in Selling Entity ’ s Financial Statements or have not heretofore been paid
or discharged;
(b)
did not arise in the regular and ordinary course of business under any written agreement,
contract, commitment, lease or plan; or
(c)
have not been incurred in amounts and pursuant to practices consistent with past business
practice, in or as a result of the regular and ordinary course of its business since the date
of the last Selling Entity ’ s Financial Statements.
3.13
Tax Matters.
(a)
Other than as has been Disclosed pursuant to this Agreement, Selling Entity is not
presently under, and has not received notice of, any contemplated investigation or audit
by the IRS or any foreign or state taxing authority concerning any fiscal year or period
ended prior to the date hereof;
(b)
All Taxes required to be withheld on or prior to the date hereof from employees for
income taxes, social security taxes, unemployment taxes and other similar withholding
taxes have been properly withheld and, if required on or prior to the date hereof, have
been deposited with the appropriate governmental agency; and
To the best knowledge of Sellers, other than as has been Disclosed pursuant to this
Agreement, the Selling Entity ’ s Financial Statements contain full provision for all Taxes
including any deferred taxes that may be assessed to Selling Entity for the accounting
period ended on the Selling Entity ’ s Accounting Date or for any prior period in respect of
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any transaction, event or omission occurring, or any profit earned, on or prior to the
Selling Entity ’ s Accounting Date or for any profit earned by Selling Entity on or prior to
the Selling Entity ’ s Accounting Date or for which Selling Entity are accountable up to
such date, and all contingent Liabilities for Taxes have been provided for or Disclosed
pursuant to this Agreement in the Selling Entity ’ s Financial Statements.
3.14
Filings, Consents and Approvals. No filing or registration with, no notice to and no
permit, authorization, consent, or approval of, any public or governmental body or authority or other
person or entity is necessary for the consummation by Sellers of the Transaction contemplated by this
Agreement or to enable PARALLAX to continue to conduct Selling Entity ’ s business after the Closing
Date in a manner which is consistent with that in which the business is presently conducted.
3.15
Personal Property. Selling Entity possesses, and has good and marketable title of all
property necessary for the continued operation of the business of Selling Entity as presently conducted
and as represented to PARALLAX. All such property is used in the business of Selling Entity. All such
property is in reasonably good operating condition (normal wear and tear excepted), and is reasonably fit
for the purposes for which such property is presently used. Other than as contained in the Disclosures
provided pursuant to this Agreement, all equipment, furniture, fixtures and other tangible personal
property and assets owned or leased by Selling Entity is owned by Selling Entity free and clear of all
liens, security interests, charges, encumbrances, and other adverse claims.
3.16
Intellectual Property. To the best of knowledge of Sellers:
(a)
Intellectual Property Assets. As set out in Schedule “ G ” , Selling Entity owns or holds an
interest in all Intellectual Property Assets necessary for the operation of the business of
Selling Entity as it is currently conducted, including all Marks, Patents, Copyrights and
Trade Secrets.
(b)
Agreements. Schedule “ U ” contains a complete and accurate list and summary
description, including any royalties paid or received by Selling Entity, of all Contracts
and agreements relating to the Intellectual Property Assets to which Selling Entity is a
party or by which Selling Entity is bound, except for any license implied by the sale of a
product and perpetual, paid-up licenses for commonly available software programs with a
value of less than $500 under which Selling Entity is the licensee. To the best knowledge
of Sellers, there are no outstanding or threatened disputes or disagreements with respect
to any such license agreement other than as contained in the Disclosures provided
pursuant to this Agreement.
(c)
Intellectual Property and Know-How Necessary for the Business. Except as set forth in
Schedule “ U ” and as Disclosed pursuant to this Agreement, Selling Entity is the owner of
all right, title, and interest in and to each of the Intellectual Property Assets, free and clear
of all liens, security interests, charges, encumbrances, and other adverse claims, and has
the right to use, without payment to a third party, all of the Intellectual Property Assets.
Other than as has been disclosed pursuant to this Agreement, no employee, director,
officer or shareholder of Selling Entity owns, directly or indirectly, in whole or in part,
any Intellectual Property Asset, which Selling Entity is presently using or which is
necessary for the conduct of its business. To the best knowledge of Sellers, no employee
or contractor of Selling Entity has entered into any contract or agreement that restricts or
limits in any way the scope or type of work in which the employee may be engaged or
requires the employee to transfer, assign, or disclose information concerning his work to
anyone other than Selling Entity.
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(d)
Patents. Sellers do not hold any right, title or interest in and to any Patent not already
disclosed to PARALLAX, and Sellers have not filed any patent application with any third
party not already disclosed to PARALLAX. To the best knowledge of Sellers, none of
the products manufactured and sold, nor any process or know-how used by Selling Entity
infringes or is alleged to infringe any patent or other patent proprietary right of any other
person or entity other than as contained in the Disclosures provided pursuant to this
Agreement.
(e)
Trademarks. Selling Entity holds title and interest in a Mark and Selling Entity has
registered and filed an application to register the Mark with the United States Patent and
Trademark Office. To the best knowledge of Sellers, none of the Marks, if any, used by
Selling Entity infringes or is alleged to infringe any trade name, trademark, or service
mark of any third party other than as contained in the Disclosures provided pursuant to
this Agreement.
(f)
Copyrights. Sellers do not hold any right, title or interest in and to any Copyright, which
has been filed with the United States Copyright Office that has not been disclosed to
PARALLAX, and Sellers have not filed any copyright application with any third party.
(g)
Trade Secrets. Each Seller has taken all reasonable precautions to protect the secrecy,
confidentiality, and value of its Trade Secrets. Selling Entity has good title and an
absolute right to use the Trade Secrets. The Trade Secrets are not part of the public
knowledge or literature, and to the best knowledge of Sellers, have not been used,
divulged, or appropriated either for the benefit of any person or entity or to the detriment
of Selling Entity. No Trade Secret is subject to any adverse claim or has been challenged
or threatened in any way.
(h)
Licensed Intellectual Property. Sellers are the licensees of various patents, trademarks
and copyrights, all of which are set forth in Schedule “ G ” .
3.17
Employees and Consultants. All employees and consultants of Selling Entity have been
paid all salaries, wages, income and any other sum due and owing to them by Selling Entity at the end of
the most recent completed pay period. Sellers are not aware of any Labor conflict with any employees
that might reasonably be expected to have a Material Adverse Effect on Selling Entity. To the best
knowledge of Sellers, no employee of Selling Entity is in violation of any term of any employment
contract, non-disclosure agreement, non-competition agreement or any other contract or agreement
relating to the relationship of such employee with Selling Entity or any other nature of the business
conducted or to be conducted by Selling Entity.
3.18
Real Property. Selling Entity does not own any real property of material value. Each of
the Leases to which Selling Entity is a party or is bound, is legal, valid, binding, enforceable and in full
force and effect in all material respects. All rental and other payments required to be paid by Selling
Entity pursuant to any such Leases have been duly paid and no event has occurred which, upon the
passing of time, the giving of notice, or both, would constitute a breach or default by any Party under any
of the Leases. The Leases will continue to be legal, valid, binding, enforceable and in full force and
effect on identical terms following the Closing Date unless otherwise renegotiated by PARALLAX.
Selling Entity has not assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the Leases or the leasehold property pursuant thereto.
3.19
Material Contracts and Transactions. Schedule “ U ” attached hereto lists each Material
Contract to which Selling Entity is a party. Each Contract is in full force and effect, and there exists no
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Material breach or violation of or default by Selling Entity under any Contract, or any event that with
notice or the lapse of time, or both, will create a Material breach or violation thereof or default under any
Contract by Selling Entity. Other than as Disclosed pursuant to this Agreement, the continuation,
validity, and effectiveness of each Contract will in no way be affected by the consummation of the
Transaction and there exists no actual or threatened termination, cancellation, or limitation of, or any
amendment, modification, or change to any Contract.
3.20
Certain Transactions. Selling Entity is not a guarantor or indemnitor of any indebtedness
of any third party, including any person, firm or corporation.
3.21
No Brokers. Selling Entity has not incurred any independent obligation or liability to any
party for any brokerage fees, agent ’ s commissions, or finder ’ s fees in connection with the Transaction.
3.22
Completeness of Disclosure. No representation or warranty by Sellers in this Agreement,
nor any certificate, Schedule, statement, document or instrument furnished or to be furnished to Sellers
pursuant hereto, contains or will, to the best of Seller ’ s knowledge, contain any untrue or misleading
statement of a Material fact or omit or will omit to state a Material fact required to be stated herein.
3.23
Absence of Certain Changes or Events. Other than as set forth in this Agreement or the
Schedules, or as contained in the Disclosures provided pursuant to this Agreement, since the Selling
Entity ’ s Accounting Date, there has been no Material change in the business and assets of Selling Entity
and to the best knowledge of Selling Entity ’ s management, Selling Entity has not become subject to any
law or regulation which Materially and adversely affects, or in the future may adversely affect the
business, operations, properties, assets, or condition of Selling Entity.
3.24
PARALLAX Requests.
Sellers represent that they have responded to all of
PARALLAX ’ s requests for information and Disclosures to the best of their knowledge and agree to
supplement their responses and Disclosures if additional information is received.
4.
REPRESENTATIONS AND WARRANTIES OF PARALLAX
As of the Closing, PARALLAX represents and warrants to Sellers, and acknowledges that Sellers are
relying upon such representations and warranties in connection with the execution, delivery and
performance of this Agreement, notwithstanding any investigation made by or on behalf of Sellers, as
follows:
4.1
Organization and Good Standing. PARALLAX is duly incorporated, organized, validly
existing and in good standing under the laws of the State of Nevada and has all requisite corporate power
and authority to own, lease and to carry on its business as now being conducted. PARALLAX is
qualified to do business and is in good standing as a foreign corporation in each of the jurisdictions in
which it does business, or is otherwise required to do so, where the failure to be so qualified would have a
Material Adverse Effect on the businesses, operations, or financial condition of PARALLAX.
4.2
Authority. PARALLAX has all requisite corporate power and authority to execute and
deliver this Agreement and the PARALLAX Documents to be signed by PARALLAX and to perform its
obligations hereunder and to consummate the transactions contemplated hereby. The execution and
delivery of each of the PARALLAX Documents by PARALLAX and the consummation by PARALLAX
of the transactions contemplated hereby have been duly authorized by its board of directors and no other
corporate or shareholder proceedings on the part of PARALLAX is necessary to authorize such
documents or to consummate the transactions contemplated hereby. This Agreement has been, and the
other PARALLAX Documents when executed and delivered by PARALLAX as contemplated by this
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Agreement will be, duly executed and delivered by PARALLAX and this Agreement is, and the other
PARALLAX Documents when executed and delivered by PARALLAX, as contemplated hereby will be,
valid and binding obligations of PARALLAX enforceable in accordance with their respective terms,
except as limited by:
(a)
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors ’ rights generally;
(b)
laws relating to the availability of specific performance, injunctive relief, or other
equitable remedies; and
(c)
public policy.
4.3
Capitalization of PARALLAX. The authorized capital stock and other equity securities
of PARALLAX consists of Two Hundred and Fifty Million (250,000,000) shares of the PARALLAX
Common Stock and Ten Million (10,000,000) shares of preferred stock. As of August 3, 2016, there
were, One Hundred Million Five Hundred and Sixty-Six Thousand and Seven Hundred and Seventy-Four
(100,566,774) shares of Common stock and outstanding with a par value of $0.001 and outstanding with
Eight Hundred and Twenty Three Thousand Six Hundred and Ninety One Shares of Preferred stock
issued.
With the exception of Shares in the amount of 11,459,279, which were authorized and issued
pursuant to a Common Stock Purchase Agreement entered into by the Company on December 31, 2013,
but were never paid for and are currently deemed by the Company to be invalid and as such are not
included on its capitalization table for issued and outstanding stock, all of the issued and outstanding
shares of PARALLAX Common Stock have been duly authorized, are validly issued, were not issued in
violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to pre-emptive
rights and were issued in full compliance with all federal, state, and local laws, rules and regulations.
Except as stated herein, there are no other outstanding options, warrants, subscriptions, phantom shares,
conversion rights, or other rights, agreements, or commitments obligating PARALLAX to issue any
additional shares of PARALLAX Common Stock, or any other securities convertible into, exchangeable
for, or evidencing the right to subscribe for or acquire from PARALLAX any shares of PARALLAX
Common Stock as of the date of this Agreement. There are no agreements purporting to restrict the
transfer of the PARALLAX Common Stock, no voting agreements, voting trusts, or other arrangements
restricting or affecting the voting of the PARALLAX Common Stock.
4.4
Directors and Officers of PARALLAX. The duly elected or appointed directors and
officers of PARALLAX are as listed on Schedule “ M ” .
4.5
Corporate Records of PARALLAX. The corporate records of PARALLAX, as required
to be maintained by it pursuant to the laws of the State of Nevada, are accurate, complete and current in
all material respects, and the minute book of PARALLAX is, in all material respects, correct and contains
all material records required by the law of the State of Nevada in regards to all proceedings, consents,
actions and meetings of the shareholders and the board of directors of PARALLAX.
4.6
Non-Contravention. Neither the execution, delivery or performance of this Agreement,
nor the consummation of the Transaction, will:
(a)
conflict with, result in a violation of, cause a default under (with or without notice, lapse
of time or both) or give rise to a right of termination, amendment, cancellation or
acceleration of any obligation contained in or the loss of any Material benefit under, or
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result in the creation of any lien, security interest, charge or encumbrance upon any of the
Material properties or assets of PARALLAX under any term, condition or provision of
any loan or credit agreement, note, Note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to PARALLAX or any of its Material property or assets;
(b)
violate any provision of the applicable incorporation or charter documents of
PARALLAX, or any applicable law; or
(c)
violate any order, writ, injunction, decree, statute, rule, or regulation of any court or
governmental or regulatory authority applicable to PARALLAX or any of its Material
property or assets.
4.7
Validity of PARALLAX Common Stock Issuable upon the Transaction.
The
PARALLAX Sale Shares to be issued to Selling Shareholders upon consummation of the Transaction in
accordance with this Agreement will, upon issuance, have been duly and validly authorized and, when so
issued in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and
non-assessable.
4.8
Actions and Proceedings. To the best knowledge of PARALLAX, there is no claim,
charge, arbitration, grievance, action, suit, investigation or proceeding by or before any federal or state
court, arbiter, administrative agency or other governmental authority now pending or, to the best
knowledge of PARALLAX, threatened against PARALLAX which involves any of the stock, business,
or the properties or assets of PARALLAX that, if adversely resolved or determined, would have a
Material Adverse Effect on the business, operations, assets, properties, prospects or conditions of
PARALLAX taken as a whole, other than the lawsuit disclosed to Selling Shareholders brought against
PARALLAX by the former owner of Roxsan Pharmacy, Inc. Shahla Melamed, and the lawsuit brought
against Shahla Melamed by PARALLAX. Management believes that there is no reasonable basis for
Shahla Melamed ’ s claim or action that, based upon the likelihood of it being asserted and its success if
asserted, would have such a Material Adverse Effect on PARALLAX.
4.9
Compliance.
(a)
To the best knowledge of PARALLAX, PARALLAX is in compliance with, is not in
default or violation in any Material respect under, and has not been charged with or
received any notice at any time of any Material violation of any statute, law, ordinance,
regulation, rule, decree or other applicable regulation to the business or operations of
PARALLAX, with the exception of those violations, that include the delinquency in
timely filing of SEC reporting obligations, that has been disclosed to the Seller;
(b)
To the best knowledge of PARALLAX, PARALLAX is not subject to any judgment,
order or decree entered in any lawsuit or proceeding applicable to its business and
operations that would constitute a Material Adverse Effect;
(c)
PARALLAX has duly filed all reports and returns required to be filed by it with
governmental authorities and has obtained all governmental permits and other
governmental consents, except as may be required after the execution of this Agreement.
All of such permits and consents are in full force and effect, and no proceedings for the
suspension or cancellation of any of them, and no investigation relating to any of them, is
pending or to the best knowledge of PARALLAX, threatened, and none of them will be
affected in a Material adverse manner by the consummation of the Transaction; and
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(d)
To the best knowledge of PARALLAX, PARALLAX has operated in Material
compliance with all laws, rules, statutes, ordinances, orders and regulations applicable to
its business. PARALLAX has not received any notice of any violation thereof, nor is
PARALLAX aware of any valid basis therefore.
4.10
Filings, Consents and Approvals. No filing or registration with, no notice to and no
permit, authorization, consent, or approval of any public or governmental body or authority or other
person or entity is necessary for the consummation by PARALLAX of the Transaction contemplated by
this Agreement to continue to conduct its business after the Closing Date in a manner which is consistent
with that in which it is presently conducted.
4.11
SEC Filings. PARALLAX has furnished or made available to Sellers the PARALLAX
SEC Documents. As of their respective dates, to the best knowledge of PARALLAX, the PARALLAX
SEC Documents complied in all material respects with the requirements of the Securities Act, or the
Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such
PARALLAX SEC Documents, with the exception of those violations, that include the delinquency in
timely filing of SEC reporting obligations, that has been disclosed to the Seller. The PARALLAX SEC
Documents constitute all of the documents and reports that PARALLAX was required to file with the
SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder by the SEC.
4.12
Financial Representations. Included with the PARALLAX SEC Documents are true,
correct, and complete copies of audited and/or unaudited Financial Statements for PARALLAX and
ROXSAN for the interim periods 2013, 2014 and 2015, which are:
(a)
in accordance with the books and records of PARALLAX;
(b)
present fairly the financial condition of PARALLAX as of the respective dates indicated
and the results of operations for such periods; and
(c)
have been prepared in accordance with GAAP.
PARALLAX has not received any advice or notification from its independent certified public accountants
that PARALLAX has used any improper accounting practice that would have the effect of not reflecting
or incorrectly reflecting in the PARALLAX Financial Statements or the books and records of
PARALLAX, any properties, assets, Liabilities, revenues, or expenses. The books, records, and accounts
of PARALLAX accurately and fairly reflect, in reasonable detail, the assets, and Liabilities of
PARALLAX. PARALLAX has not engaged in any transaction, maintained any bank account, or used
any funds of PARALLAX, except for transactions, bank accounts, and funds, which have been and are
reflected in the normally maintained books and records of PARALLAX.
4.13
Absence of Undisclosed Liabilities. Except as Disclosed in this Agreement and the
PARALLAX SEC Documents, PARALLAX has no Material Liabilities or obligations either direct or
indirect, matured or unmatured, absolute, contingent or otherwise, which:
(a)
are not set forth in the PARALLAX Financial Statements or have not heretofore been
paid or discharged;
(b)
did not arise in the regular and ordinary course of business under any agreement,
contract, commitment, lease or plan specifically provided in writing to PARALLAX; or
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(c)
have not been incurred in amounts and pursuant to practices consistent with past business
practice, in or as a result of the regular and ordinary course of its business since the date
of the last PARALLAX Financial Statements.
4.14
Tax Matters.
(a)
PARALLAX is not presently under and has not received notice of, any contemplated
investigation or audit by the Internal Revenue Service or any foreign or state taxing
authority concerning any fiscal year or period ended prior to the date hereof;
(b)
To the best knowledge of PARALLAX, all Taxes required to be withheld on or prior to
the date hereof, including but not limited to, those pertaining to employees for income
taxes, social security taxes, unemployment taxes and other similar withholding taxes,
have been properly withheld and, if required on or prior to the date hereof, have been
deposited with the appropriate governmental agency; and
(c)
To the best knowledge of PARALLAX, the PARALLAX Financial Statements contain
full provision for all Taxes including any deferred taxes that may be assessed to
PARALLAX for the accounting period ended on the PARALLAX Accounting Date or
for any prior period in respect of any transaction, event or omission occurring, or any
profit earned, on or prior to the PARALLAX Accounting Date or for any profit earned by
PARALLAX on or prior to the PARALLAX Accounting Date or for which PARALLAX
is accountable up to such date and all contingent Liabilities for Taxes have been provided
for or Disclosed in the PARALLAX Financial Statements.
4.15
Absence of Changes. Since the PARALLAX Accounting Date, except as Disclosed in
the PARALLAX SEC Documents and or as Disclosed to Sellers pursuant to this Agreement,
PARALLAX has not:
(a)
incurred any Liabilities, other than Liabilities incurred in the ordinary course of business
consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid
any Liabilities, other than in the ordinary course of business consistent with past practice,
or failed to pay or discharge when due any Liabilities of which the failure to pay or
discharge has caused or will cause any Material damage or risk of Material loss to it or
any of its assets or properties;
(b)
sold, encumbered, assigned or transferred any Material fixed assets or properties;
(c)
created, incurred, assumed or guaranteed any indebtedness for money borrowed, or
mortgaged, pledged or subjected any of the Material assets or properties of PARALLAX
to any mortgage, lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever;
(d)
made or suffered any amendment or termination of any Material agreement, contract,
commitment, lease or plan to which it is a party or by which it is bound, or cancelled,
modified or waived any substantial debts or claims held by it or waived any rights of
substantial value, other than in the ordinary course of business;
(e)
declared, set aside or paid any dividend or made or agreed to make any other distribution
or payment in respect of its capital shares or redeemed, purchased or otherwise acquired
or agreed to redeem, purchase or acquire any of its capital shares or equity securities;
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(f)
suffered any damage, destruction or loss, whether or not covered by insurance, that
Materially and adversely effects its business, operations, assets, properties or prospects;
(g)
suffered any Material adverse change in its business, operations, assets, properties,
prospects or condition (financial or otherwise);
(h)
received notice or had knowledge of any actual or threatened labor trouble, termination,
resignation, strike or other occurrence, event or condition of any similar character which
has had or might have an adverse effect on its business, operations, assets, properties or
prospects;
(i)
made commitments or agreements for capital expenditures or capital additions or
betterments exceeding in the aggregate $1,000;
(j)
other than in the ordinary course of business, increased the salaries or other compensation
of, or made any advance (excluding advances for ordinary and necessary business
expenses) or loan to, any of its employees or directors or made any increase in, or any
addition to, other benefits to which any of its employees or directors may be entitled;
(k)
entered into any transaction other than in the ordinary course of business consistent with
past practice; or
(l)
agreed, whether in writing or orally, to do any of the foregoing.
4.16
Absence of Certain Events. Since the PARALLAX Accounting Date, except as and to
the extent Disclosed in the PARALLAX SEC Documents, there has not been:
(a)
any PARALLAX Material Adverse Effect; or
(b)
any Material change by PARALLAX in its accounting methods, principles or practices.
4.17
No Brokers. PARALLAX has not incurred any obligation or Liability to any party for
any brokerage fees, agent ’ s commissions, or finder ’ s fees in connection with the Transaction
contemplated by this Agreement.
4.18
Internal Accounting Controls. PARALLAX maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management ’ s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management ’ s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. PARALLAX ’ s certifying officers have
evaluated the effectiveness of PARALLAX ’ s controls and procedures as of the Evaluation Date.
PARALLAX presented in its most recently filed Form 10-K the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant changes in PARALLAX ’ s
internal controls or, to PARALLAX ’ s knowledge, in other factors that could significantly affect
PARALLAX ’ s internal controls.
4.19
Public Listing. PARALLAX is currently quoted on the OTC Quotation Board
( “ OTCQB ” ) under the symbol “ PRLX ” .
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4.20
Application of Takeover Protections. PARALLAX and its board of directors have taken
all necessary action, if any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under PARALLAX ’ s certificate or articles of incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become applicable to PARALLAX as
a result of the transactions under this Agreement or the exercise of any rights pursuant to this Agreement.
4.21
SEC or FINRA Inquiries. On March 8, 2013, the Company was notified that the
Securities and Exchange Commission ( “ SEC ” ) had suspended the trading of the Company ’ s securities for
10 days, until March 21, 2013. This temporary suspension of trading arose out of concerns that the
Company had incorrectly stated within its public filings and press releases that certain components related
to the Company ’ s Target Antigen Detection System ( “ Target System ” ) are patented, when these patents
have expired. The Company, after discussions with the SEC and with the Company ’ s counsel, has
addressed any questions raised regarding the accuracy of assertions in the Company ’ s public filings. The
Company has clarified the status of the patents in question, and the way in which the Company refers to
its Target System components. The Company has also clarified that it currently has filed four patent
applications with the USPTO, which are deemed “ patent pending ” , and the Company has disclosed that
there can be no assurance that the patents will be granted. On May 10, 2013, the Company filed its new
form 15c211 with a FINRA Member Market Maker, in order that the Company ’ s shares can resume
trading on the OTCBB and OTCQB markets, pursuant to Rule 15c2-11 under the Exchange Act, which
states that at the termination of the trading suspension, no quotation may be entered unless and until the
Company has strictly complied with all of the provisions of the rule, including the filing of a new Form
15c2-11 and obtaining FINRA approval to commence trading. The Company received a letter from
FINRA that the Agency had approved the Company for trading and the Company commenced trading on
August 19 th 2013.
4.22
Completeness of Disclosure. No representation or warranty by PARALLAX in this
Agreement, nor any certificate, Schedule, statement, document or instrument furnished or to be furnished
by PARALLAX pursuant hereto, contains or will, to the best of PARALLAX ’ s knowledge, contain any
untrue or misleading statement of a Material fact or omits or will omit to state a Material fact required to
be stated herein.
4.23
Information from Sellers. PARALLAX has made all requests for information and
Disclosures that it requires and Sellers have responded to all those requests.
5.
CLOSING CONDITIONS
5.1
Conditions Precedent to Closing by PARALLAX. The obligation of PARALLAX to
consummate the Transaction is subject to the satisfaction or written waiver of the conditions set forth
below by a date mutually agreed upon by the Parties hereto in writing and in accordance with this
Agreement, which shall in any event be no later than 5:00 p.m. PST on September 30, 2016. The Closing
of the Transaction will be deemed to mean a waiver of all conditions to Closing. These conditions
precedent are for the benefit of PARALLAX and may be waived by PARALLAX in its sole discretion.
(a)
Representations and Warranties. The representations and warranties of Sellers set forth
in this Agreement will be true, correct and complete in all Material respects as of the
Closing Date, to the best of Sellers ’ knowledge, as though made on and as of the Closing
Date and Sellers will have delivered to PARALLAX a certificate dated as of the Closing
Date, to the effect that the representations and warranties made by Sellers in this
Agreement are true and correct to the best of Sellers ’ knowledge.
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(b)
Performance. All of the covenants and obligations that Sellers are required to perform or
to comply with pursuant to this Agreement at or prior to the Closing must have been
performed and complied with in all Material respects.
(c)
Transaction Documents.
This Agreement, Schedules and Exhibits, the Sellers ’
Documents, and all other documents necessary or reasonably required to consummate the
Transaction, all in form and substance reasonably satisfactory to PARALLAX, will have
been executed and delivered to PARALLAX.
(d)
Third Party Consents. PARALLAX will have received duly executed copies of all third
party consents and approvals contemplated by this Agreement, in form and substance
reasonably satisfactory to PARALLAX.
(e)
No Material Adverse Effect. No Material Adverse Effect by Selling Entity will have
occurred since the date of this Agreement.
(f)
No Action. No suit, action, or proceeding, except as already disclosed between the
former owner of the PARALLAX subsidiary Roxsan Pharmacy, will be pending or
threatened which would:
(i)
prevent the consummation of any of the transactions contemplated by this
Agreement; or
(ii)
cause the Transaction to be rescinded following consummation.
(g)
Due Diligence Generally. PARALLAX and its legal counsel will be reasonably satisfied
with their due diligence investigation of Selling Entity that is reasonable and customary
in a transaction of similar nature to that contemplated by this Transaction, including:
(i)
receipt and review of materials, documents, third party contracts and information
in the possession and control of Sellers which are reasonably germane to the
Transaction;
(ii)
a physical inspection of the assets of Selling Entity by PARALLAX or its
representatives; and
(iii)
title to the Material assets of Selling Entity.
5.2
Conditions Precedent to Closing by Sellers. The obligation of Sellers to consummate the
Transaction is subject to the satisfaction or written waiver of the conditions set forth below by a date
mutually agreed upon by the Parties hereto in writing and in accordance with this Agreement, which shall
in any event be no later than 5:00 p.m. PST on September 30, 2016 or as otherwise stated in this
Agreement. The Closing of the Transaction will be deemed to mean a waiver of all conditions to Closing.
These conditions precedent are for the benefit of Sellers and may be waived by Sellers in their discretion.
(a)
Employment Agreement. QOLPOM and Selling Shareholders will agree to and execute
that employment agreement with Nathaniel Bradley ( “ Bradley Employment Agreement ” )
attached hereto as Exhibit “ A ” .
(b)
Representations and Warranties. The representations and warranties of PARALLAX set
forth in this Agreement will be true, correct and complete in all respects as of the Closing
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Date, as though made on and as of the Closing Date and PARALLAX will have delivered
to Sellers a certificate dated as of the Closing Date, to the effect that the representations
and warranties made by PARALLAX in this Agreement are true and correct.
(c)
Performance. All of the covenants and obligations that PARALLAX is required to
perform or to comply with pursuant to this Agreement at or prior to the Closing,
including delivery of PARALLAX Documents, must have been performed and complied
with in all Material respects, which in some instances is by no later than 3:00 p.m. on the
day before the Closing.
(d)
Transaction Documents. This Agreement, including Schedules, the PARALLAX
Documents and all other documents necessary or reasonably required to consummate the
Transaction, all in form and substance reasonably satisfactory to Sellers, will have been
executed and delivered by PARALLAX.
(e)
No Material Adverse Effect. No PARALLAX Material Adverse Effect will have
occurred since the date of this Agreement.
(f)
No Action. No suit, action, or proceeding, will be pending or threatened before any
governmental or regulatory authority wherein an unfavorable judgment, order, decree,
stipulation, injunction or charge would result in and/or:
(i)
prevent the consummation of any of the transactions contemplated by this
Agreement; or
(ii)
cause the Transaction to be rescinded following consummation.
(g)
Public Market. On the Closing Date, the shares of PARALLAX Common Stock will be
quoted on the OTC Quotation Board.
(h)
Due Diligence Generally. Sellers and their legal counsel will be reasonably satisfied with
their due diligence investigation of PARALLAX that is reasonable and customary in a
transaction of a similar nature to that contemplated by the Transaction, including receipt
of PARALLAX ’ s Disclosures and any information reasonably requested by Sellers.
6.
ADDITIONAL COVENANTS OF THE PARTIES
6.1
Notification of Financial Liabilities. Sellers will immediately give notice to PARALLAX
if Selling Entity receives any advice or notification from its independent certified public accounts that
Selling Entity has used any improper accounting practice that would have the effect of not reflecting or
incorrectly reflecting in the books, records, and accounts of Selling Entity, any properties, assets,
Liabilities, revenues, or expenses. This covenant will survive Closing and continue in full force and
effect.
6.2
Access and Investigation. Between the date of this Agreement and the Closing Date,
Selling Entity and PARALLAX will cause each of their respective representatives to:
(a)
afford the other and its representatives reasonable access to its personnel, properties,
assets, Contracts, books and records, and other documents and data;
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(b)
furnish the other and its representatives with copies of all such Contracts, books and
records, and other existing documents and data as required by this Agreement and as
reasonably requested; and
(c)
furnish the other and its representatives with such additional financial, operating, and
other data and information as reasonably requested.
All of such access, investigation and communication by a Party and its representatives will be conducted
during normal business hours and in a manner designed not to interfere unduly with the normal business
operations of the other Party. Each Party will instruct its auditors to cooperate with the other Party and its
representatives in connection with such investigations.
6.3
Confidentiality. All information regarding the business of Selling Entity including,
without limitation, financial information that Sellers provide to PARALLAX during PARALLAX ’ s due
diligence, will be kept in strict confidence by PARALLAX and will not be used (except in connection
with due diligence and presentation of the material to PARALLAX ’ s investors), dealt with, exploited or
commercialized by PARALLAX or disclosed to any third party (other than PARALLAX ’ s accountant
and legal advisors) without the prior written consent of Selling Shareholders. If the Transaction
contemplated by this Agreement does not proceed for any reason, then PARALLAX will immediately
return to Sellers (or as directed by Sellers) any information received regarding Selling Entity ’ s business.
Likewise, all information regarding the business of PARALLAX including, without limitation, financial
information that PARALLAX provides to Sellers during its due diligence, will be kept in strict
confidence by Sellers and will not be used (except in connection with due diligence), dealt with, exploited
or commercialized by Sellers or disclosed to any third party (other than Sellers ’ accountant and legal
advisors) without PARALLAX ’ s prior written consent. If the Transaction contemplated by this
Agreement does not proceed for any reason, then Sellers will immediately return to PARALLAX (or as
directed by PARALLAX) any information received regarding PARALLAX ’ s business.
6.4
Notification. Between the date of this Agreement and the Closing Date, each Party will
promptly notify the other Parties in writing if it becomes aware of any fact or condition that causes or
constitutes a Material breach of any of its representations and warranties as of the date of this Agreement,
or if it becomes aware of the occurrence after the date of this Agreement of any fact or condition that
would cause or constitute a Material breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery of such fact or condition.
Should any such fact or condition require any change in the Schedules relating to such Party, such Party
will promptly deliver to the other Parties a supplement to the Schedules specifying such change. During
the same period, each Party will promptly notify the other Parties of the occurrence of any Material
breach of any of its covenants in this Agreement or of the occurrence of any event that may make the
satisfaction of such conditions impossible or unlikely.
6.5
Conduct of Selling Entity and PARALLAX Business Prior to Closing. From the date of
this Agreement to the Closing Date, and except to the extent agreed to in writing by the Parties, Selling
Entity and PARALLAX will each operate their businesses substantially as presently operated and only in
the ordinary course and in compliance with all applicable laws, and use their best efforts to preserve intact
their good reputation and present business organization and to preserve their relationships with persons
having business dealings with them.
6.6
Certain Acts Prohibited – Selling Entity. Except as expressly contemplated by this
Agreement or for purposes in furtherance of this Agreement, between the date of this Agreement and the
Closing Date, Selling Entity will not, without the prior written consent of PARALLAX:
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(a)
amend its articles of incorporation, articles of organization, bylaws, operating agreement
or other corporate documents;
(b)
incur any Liability or obligation other than in the ordinary course of business or
encumber or permit the encumbrance of any properties or assets of Selling Entity except
in the ordinary course of business;
(c)
dispose of or contract to dispose of any Selling Entity ’ s property or assets, including the
Intellectual Property Assets, except in the ordinary course of business consistent with
past practice;
(d)
issue, deliver, sell, pledge or otherwise encumber or subject to any lien any shares of the
QOLPOM Shares, or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities;
(e)
except as provided in this Agreement:
(i)
declare, set aside or pay any dividends on, or make any other distributions in
respect of the QOLPOM Shares, or
(ii)
split, combine or reclassify any QOLPOM Shares or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution for
shares of the QOLPOM Shares; or
(f)
Materially increase benefits or compensation expenses of Selling Entity, other than as
contemplated by the terms of any employment agreement in existence on the date of this
Agreement, increase the cash compensation of any director, executive officer or other key
employee or pay any benefit or amount not required by a plan or arrangement as in effect
on the date of this Agreement to any such person.
6.7
Certain Acts Prohibited - QOLPOM. Except as expressly contemplated by this
Agreement, between the date of this Agreement and the Closing Date, PARALLAX will not, without the
prior written consent of Sellers:
(a)
amend its articles, bylaws or other incorporation documents;
(b)
incur any Liability or obligation or encumber or permit the encumbrance of any
properties or assets of QOLPOM except in the ordinary course of business consistent
with past practice;
(c)
dispose of or contract to dispose of any QOLPOM property or assets except in the
ordinary course of business consistent with past practice;
(d)
Materially increase benefits or compensation expenses of QOLPOM, increase the cash
compensation of any director, executive officer or other key employee or pay any benefit
or amount to any such person.
6.8
Public Announcements. PARALLAX and Sellers each agree that they will not release or
issue any reports or statements or make any public announcements relating to this Agreement or the
Transaction contemplated herein without the prior written consent of the other Party, except as may be
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required upon written advice of counsel to comply with applicable laws or regulatory requirements after
consulting with the other Party hereto and seeking their reasonable consent to such announcement.
6.9
Purchase and Sale of QOLPOM Shares not occur by September 30, 2016. Should the
purchase and sale of the QOLPOM Shares as provided for by Section 2.1 herein not occur by September
30, 2016, then no matter what the reason therein the terms and conditions and provision of this
Agreement shall be null and void and of no legal effect and no party hereto shall have any rights or
obligations arising out of this Agreement unless the parties in writing agree to extend the Closing Date. In
any event, however, and even if the parties so extend the Closing Date, Sellers shall have the right to
discuss and negotiate with and agree with any third party as to the sale of the business or assets or any of
the capital stock of Selling Entity.
7.
CLOSING
7.1
Closing. The Closing shall take place at the offices of PARALLAX. Notwithstanding
the location of the Closing, each Party agrees that the Closing may be completed by the exchange of
undertakings between the respective legal counsel for the Sellers and PARALLAX, provided such
undertakings are satisfactory to each Party ’ s respective legal counsel.
7.2
Closing Deliveries of Sellers. At Closing, Sellers will deliver or cause to be delivered the
following, fully executed and in the form and substance reasonably satisfactory to PARALLAX:
(a)
copies of all resolutions and/or consent actions adopted by or on behalf of the board of
directors of the Selling Entity evidencing approval of this Agreement and the
Transaction;
(b)
share certificates representing the QOLPOM Shares;
(c)
all certificates and other documents required by this Agreement; and
(d)
the Selling Entity ’ s Documents and any other necessary documents, each duly executed
by Selling Entity or Selling Shareholders, as required to give effect to the Transaction.
(e)
Philips TeleMonitoring Sales and Service Agreement.
(f)
Trapollo, LLC Master Service Agreement.
(g)
Victory Medical Solutions, LLC.
(h)
Telivita, Inc. Service Agreement
(i)
QOLPOM, La Frontera, Inc. Service Agreement
(j)
Office Lease Agreement
(k)
the QOLPOM-Lafrontera Royalty Agreement;
7.3
Closing Deliveries of PARALLAX. At Closing, PARALLAX will deliver or cause to be
delivered within ten days following, fully executed and in the form and substance reasonably satisfactory
to Sellers:
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(a)
its delivery of a Common Stock Purchase Agreement granting to Selling Shareholders the
right to purchase Five Million (5,000,000) Shares of PARALLAX common stock with a
par value of $.001, which shall have been received by Selling Shareholders no later than
September 30, 2016 at such location as stated in Section 2.6 herein or by payment at the
Closing by an escrow company reasonably acceptable to Sellers;
(b)
the Cash Earn-Out Agreement;
(c)
copies of all resolutions and/or consent actions adopted by or on behalf of the board of
directors of PARALLAX evidencing approval of this Agreement and the Transaction;
(d)
all other certificates, amendments and other documents required by this Agreement; and
(e)
the PARALLAX Documents and any other necessary documents, each duly executed by
PARALLAX, as required to give effect to the Transaction.
8.
TERMINATION
8.1
Termination. This Agreement shall be terminated at any time prior to the Closing Date
contemplated hereby by:
(a)
mutual agreement of PARALLAX and Sellers;
(b)
PARALLAX, if there has been a Material breach by Sellers of any Material
representation, warranty, covenant or agreement set forth in this Agreement on the part of
Sellers that is not cured, to the reasonable satisfaction of PARALLAX, within ten (10)
business days after notice of such breach is given to PARALLAX (except that no cure
period will be provided for a breach by Sellers that by its nature cannot be cured);
(c)
Sellers, if there has been a Material breach by PARALLAX of any Material
representation, warranty, covenant or agreement set forth in this Agreement on the part of
PARALLAX that is not cured, to the reasonable satisfaction of Sellers, within ten (10)
business days after notice of such breach is given to Sellers, except that no cure period
will be provided for a breach by PARALLAX of its obligation to make the timely and
full payments stated in Sections 7.3 (a) and 7.3 (b), and PARALLAX ’ s failure to make
any such full and timely payment shall in any such case be a material breach of this
Agreement and shall entitle Sellers to all rights and remedies therein;
(d)
the parties pursuant to Section 6.10 herein, if the Transaction contemplated by this
Agreement has not been consummated on or before September 30, 2016 unless such date
is extended by both parties in writing; and
(e)
PARALLAX or Sellers if any permanent injunction or other order of a governmental
entity of competent authority preventing the consummation of the Transaction
contemplated by this Agreement has become final and non-appealable.
8.2
Effect of Termination. In the event of the termination of this Agreement pursuant to its
terms, this Agreement will be of no further force or effect; provided, however, that no termination of this
Agreement will relieve any Party of liability for any breaches of this Agreement that are based on a
wrongful refusal or failure to perform any obligations.
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9.
INDEMNIFICATION, REMEDIES, SURVIVAL
9.1
Agreement of Selling Entity to Indemnify. Selling Entity will indemnify, defend, and
hold harmless, to the full extent of the law, PARALLAX and its Directors, Officers and shareholders
from, against, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred
by PARALLAX and its shareholders by reason of, resulting from, based upon or arising out of:
(a)
the breach by Selling Entity of any representation or warranty of Selling Entity contained
in or made pursuant to this Agreement, any Selling Entity Document or any certificate or
other instrument delivered pursuant to this Agreement; or
(b)
the breach or partial breach by Selling Entity of any covenant or agreement of Sellers
made in or pursuant to this Agreement, any Selling Entity Documents or any certificate
or other instrument delivered pursuant to this Agreement.
9.2
Agreement of the Selling Shareholders to Indemnify. Selling Shareholders will
indemnify, defend, and hold harmless, to the full extent of the law, PARALLAX and its shareholders
from, against, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred
by PARALLAX and its shareholders by reason of, resulting from, based upon or arising out of:
(a)
any breach by Selling Shareholders of this Agreement.
9.3
Agreement of PARALLAX to Indemnify. PARALLAX will indemnify, defend, and hold
harmless, to the full extent of the law, Sellers from, against, for, and in respect of any and all Losses
asserted against, relating to, imposed upon, or incurred by Sellers by reason of, resulting from, based
upon or arising out of:
(a)
the breach by PARALLAX of any representation or warranty of PARALLAX contained
in or made pursuant to this Agreement, any PARALLAX Document or any certificate or
other instrument delivered pursuant to this Agreement; or
(b)
the breach or partial breach by PARALLAX of any covenant or agreement of
PARALLAX made in or pursuant to this Agreement, any PARALLAX Document or any
certificate or other instrument delivered pursuant to this Agreement.
10.
MISCELLANEOUS PROVISIONS
10.1
Effectiveness of Representations; Survival. Each Party is entitled to rely on the
representations, warranties and agreements of each of the other Parties and all such representations,
warranties and agreements will be effective regardless of any investigation that any Party has undertaken
or failed to undertake. Unless otherwise stated in this Agreement, and except for instances of fraud, the
representations, warranties and agreements will survive the Closing Date and continue in full force and
effect until one (1) year after the Closing Date.
10.2
Further Assurances. Each of the Parties hereto will cooperate with the others and execute
and deliver to the other Parties hereto such other instruments and documents and take such other actions
as may be reasonably requested from time to time by any other Party hereto as necessary to carry out,
evidence, and confirm the intended purposes of this Agreement.
10.3
Amendment. This Agreement may not be amended except by an instrument in writing
signed by each of the Parties.
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10.4
Expenses. PARALLAX and Seller will bear all their respective costs incurred in
connection with the preparation, execution and its performance of this Agreement and the Transaction
contemplated hereby, including all fees and expenses of agents, representatives and accountants, except
the fee of the professional independent valuer of the Inventory, which shall be borne equally by
PARALLAX and QOLPOM.
10.5
Entire Agreement. This Agreement, the Schedules attached hereto and the other
documents in connection with this transaction contain the entire agreement between the Parties with
respect to the subject matter hereof and supersede all prior arrangements and understandings, both written
and oral, expressed or implied, with respect thereto. Any preceding correspondence or offers are
expressly superseded and terminated by this Agreement.
10.6
Notices. All notices and other communications required or permitted under this
Agreement must be in writing and will be deemed given if sent by personal delivery, faxed with
electronic confirmation of delivery, internationally-recognized express overnight courier, or registered or
certified mail (return receipt requested), postage prepaid, to the Parties at the addresses provided on the
first page of this Agreement.
All such notices and other communications will be deemed to have been received:
(a)
in the case of personal delivery, on the date of such delivery;
(b)
in the case of a fax, when the party sending such fax has received electronic confirmation
of its delivery;
(c)
in the case of delivery by internationally-recognized express overnight courier, on the
business day following dispatch; and
(d)
in the case of mailing, on the fifth (5 th ) business day following mailing.
10.7
Headings. The headings contained in this Agreement are for convenience purposes only
and will not affect in any way the meaning or interpretation of this Agreement.
10.8
Benefits. This Agreement is and will only be construed as for the benefit of or
enforceable by those persons who are parties to this Agreement.
10.9
Assignment. This Agreement may not be assigned (except by operation of law) by any
Party without the consent of the other Parties in this sole discretion and any purported assignment without
such consent shall be null and void and of no legal effect whatsoever.
10.10
Governing Law. This Agreement will be governed by and construed in accordance with
the laws of the State of California applicable to contracts made and to be performed therein. If a party
should commence an action alleging a breach of this Agreement, venue will lie in any federal or state
court of competent jurisdiction in Los Angeles County, California. In such action, the prevailing party
therein as part of its award shall be entitled to receive its attorneys ’ fees and costs of such action.
10.11
Construction. The language used in this Agreement will be deemed to be the language
chosen by the Parties to express their mutual intent, and no rule of strict construction will be applied
against any Party.
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10.12
Gender. All references to any Party will be read with such changes in number and gender
as the context or reference requires.
10.13
Business Days. If the last or appointed day for the taking of any action required or the
expiration of any rights granted herein shall be a Saturday, Sunday or a United States legal holiday, then
such action may be taken or right may be exercised on the next succeeding day which is not a Saturday,
Sunday or such a legal holiday.
10.14
Counterparts. This Agreement may be executed in one or more counterparts, all of which
will be considered one and the same agreement and will become effective when one or more counterparts
have been signed by each of the Parties and delivered to the other Parties, it being understood that all
Parties need not sign the same counterpart.
10.15
Electronic Execution. This Agreement may be executed by delivery of executed
signature pages by electronic reproduction, email, fax and such email or fax reproduction execution will
be effective for all purposes.
10.16
Schedules and Exhibits. The Schedules and Exhibits are attached to this Agreement and
incorporated herein.
(The remainder of this page intentionally left blank)
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the effective
date first above written.
PARALLAX HEALTH SCIENCES, INC.
Per:
Authorized Signatory
Name: J. Michael Redmond
Title: CEO/President
QOLPOM, INC.
Per:
_________________________________
Authorized Signatory
Name: Nathanial T. Bradley
Title: President
SELLING SHAREHOLDERS:
INTELLECTUAL PROPERTY NETWORK, INC.
Per:
Name: Nathanial T. Bradley
Title: President
Shares: 100
DANIEL J. RANIER
Per: _______________________________
Name: Daniel J. Ranieri
Shares: 20
DAVID BRADLEY
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Per: _______________________________
Name: David Bradley
Shares: 20
MICHAEL PRUDENCE
Per: _______________________________
Name: Michael Prudence
Shares: 10
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SCHEDULES
Schedule “ A ” -
Selling Shareholders and Consideration
Schedule “ B ” -
U.S. Certificate of Selling Shareholders
Schedule “ C ” -
Directors and Officers of Selling Entity
Schedule “ D ” -
PARALLAX Board Resolution to Approve Acquisition
Schedule “ E ” -
PARALLAX Board Resolution to sell Shares
Schedule “ F ” -
QOLPOM ’ s Corporate Documents
Schedule “ G ” -
QOLPOM Intellectual Property
Schedule “ H ” -
QOLPOM Intellectual Property Assignment
Schedule “ I ”
-
QOLPOM Board Resolution to Approve Sale
Schedule “ J ”
-
QOLPOM Shares
Schedule “ K ” -
QOLPOM Regulatory Licenses
Schedule “ L ”
List of all i(in)ventor-y and assets of QOLPOM
Schedule “ M ” -
Directors and Officers of PARALLAX
Schedule “ N ” -
PARALLAX Corporate Documents
Schedule “ O ” -
QOLPOM Power of Attorney to Transfer Shares
Schedule “ P ” -
Executive Employment Agreement
Schedule “ Q ” -
PARALLAX Common Stock Purchase Agreement
Schedule “ R ” -
PARALLAX Employee Stock Option Plan
Schedule “ S ” -
PARALLAX Common Stock Options
Schedule “ T ” -
QOLPOM-Lafrontera Royalty Agreement
Schedule “ U ” -
QOLPOM Agreements
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SCHEDULE “ A ”
Selling Shareholders & Consideration
Intellectual Property Network, Inc.
100 Shares
Daniel J. Ranieri
20 Shares
David Bradley
20 Shares
Michael Prudence
20 Shares
__________________________________________________________________
SCHEDULE “ B ”
U.S Certificate of Selling Shareholders
SCHEDULE “ C ”
Directors and Officers of Selling Entity
Nathaniel T. Bradley
President, Director
Debbie Hughes
Secretary, Treasurer
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SCHEDULE “ D ”
Parallax Board Resolution to Approve Acquisition
SCHEDULE “ E ”
Parallax Board Resolution to Sell Shares & Issue Options
SCHEDULE “ F ”
QOLPOM ’ S Corporate Documents:
By Laws, Article of Incorporation & Certificate of Good Standing
SCHEDULE “ G ”
QOLPOM ’ s Intellectual Property
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SCHEDULE “ H ”
QOLPOM ’ s Assignment of Intellectual Property
SCHEDULE “ I ”
QOLPOM ’ s Board Resolution to Approve Sale
SCHEDULE “ J ”
QOLPOM Shares
SCHEDULE “ K ”
QOLPOM Regulatory Licenses
SCHEDULE “ L ”
List of all Inventory and Assets of QOLPOM
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SCHEDULE “ M ”
Directors and Officers of PARALLAX
SCHEDULE “ N ”
PARALLAX Corporate Documents
SCHEDULE “ O ”
QOLPOM Power of Attorney to Transfer Shares
SCHEDULE “ P ”
QOLPOM Executive Employment Agreement
SCHEDULE “ Q ”
PARALLAX Common Stock Purchase Agreement
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SCHEDULE “ R ”
PARALLAX Employee Stock Option Plan
SCHEDULE “ S ”
PARALLAX Common Stock Options
SCHEDULE “ T ”
QOLPOM - La Frontera Royalty Agreement
SCHEDULE “ U ”
QOLPOM Agreements
(a)
Philips TeleMonitoring Sales and Service Agreement.
(b)
Trapollo, LLC Master Service Agreement.
(c)
Victory Medical Solutions, LLC.
(d)
Telivita, Inc. Service Agreement
(e)
QOLPOM, La Frontera, Inc. Service Agreement
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LICENSE ROYALTY AGREEMENT
Effective August 29, 2016 (the “ Effective Date ” ) La Frontera Community Solutions, Inc., an
Arizona nonprofit corporation, with offices at 504 W 29 th , Tucson, AZ. 85713 ( “ Licensor ” ) and
QOLPOM, Inc, an Arizona corporation with offices at P. O. Box 186Vail, AZ, 85641 United States
( “ Licensee ” ), for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, enter into this agreement (this “ Agreement ” ) as set forth below:
ARTICLE I
BACKGROUND
SECTION 1.1. Licensor is a nonprofit corporation that links job-seeking persons with disabilities
with potential employers, and in furtherance thereof, Licensor has developed a web-based job search
platform (the “ Platform ” ) that contributes importantly to the accomplishment of Licensor ’ s tax-exempt
purpose.
SECTION 1.2. Licensor is the owner of certain Intellectual Property Rights (as defined below) in
the Platform and other aspects of its business, including its trademarks and service marks.
SECTION 1.3. Licensee is engaged in the development of software products for use in the job
search field, and desires to use certain aspects of the Platform and Licensee ’ s intellectual property in the
development of Licensee ’ s software applications, and use certain trademarks and service marks of
Licensor in the promotion thereof.
SECTION 1.4. Licensee desires to obtain from Licensor licenses under aspects of Licensor ’ s
intellectual property for the development of Integrated Applications (as defined herein) in the Field in the
Territory, as provided herein, and Licensor is willing to grant those licenses under the terms and
conditions of this Agreement.
ARTICLE II
DEFINITIONS
In addition to the terms defined elsewhere in this Agreement, the following terms have the
following meanings:
“ Documentation ” means the documentation, materials, and manuals associated with the Platform
provided by Licensor to Licensee under this Agreement.
“ Field ” means the development and use of software products in the provision of job search
services on the Internet for persons with disabiliõ 瀄 쀄 者 态 က M
“ Improvements ” means any modification of any Licensed IP.
“ Integrated Application ” means any of Licensee ’ s software products, platforms, services, and
applications for use within the Field and within the Territory that: (a) incorporate, integrate, embody,
contain, or reference any Licensed IP or reproductions or derivative works thereof; or (b) the
development, use, marketing, or commercialization of which have been supported by, or benefitted from
access to, any Licensed IP.
“ Intellectual Property Rights ” means rights granted under applicable law to a person with respect
to: (a) works of authorship, including, without limitation, all exclusive exploitation rights, copyrights,
moral rights, and mask-works; (b) trade secret rights and other confidential information; (c) patents,
patent applications, and disclosures (including, without limitation, reissues, divisions, reexaminations,
extensions, provisionals, continuations and continuations-in-part thereof), designs, and other industrial
property rights; (d) trademark, trade dress, and similar rights based on designation of origin; and (e) all
registrations, applications, renewals, extensions, continuations, divisions, reissues, and the like based on
or deriving from any of the foregoing.
“ Licensed Copyrights ” means Licensor ’ s copyright rights in the Licensed Technology.
“ Licensed Information ” means the following information owned or controlled by Licensor that
may contribute or be reasonably necessary to the development or sale of products or services based on or
containing the Licensed Technology, including Integrated Applications, including: (a) all know-how
owned or controlled by Licensor relating to the Licensed Technology, including but not limited to the
Documentation; (b) all data owned or controlled by Licensor relating to the Licensed Technology that
may be useful to exercise the rights granted under this Agreement, including the Licensor Database; and
(c) the source code of the Platform.
“ Licensed IP ” means the Licensed Information, Licensed Copyrights, Licensed Technology, and
Licensed Trademarks.
“ Licensed Technology ” means: Licensor ’ s know how in connection with the creation and
maintenance of the Licensed technology.
“ Licensed Trademarks ” means the marks shown on Exhibit A . “ QOLPOM ” & “ QOLPOM
Stylized ”
“ Licensee ’ s Technology ” means the technology currently owned by Licensee or created by
Licensee as more fully described and defined in Section 5.4 below.
“ Representative ” means any director, officer, employee, agent, consultant, attorney, accountant,
or subcontractor of a party.
“ Royalty Reporting Period ” means each six-month period ending on the last days of June and
December of every year.
“ Territory ” means the United States.
ARTICLE III
GRANT OF RIGHTS
SECTION 3.1. Grant of License to the Licensed Trademarks . Subject to the terms and conditions
of this Agreement, Licensor grants to Licensee a non-assignable (except as expressed provided herein),
exclusive, non-sublicensable license to use the Licensed Trademarks, within the Field occurring within
the Territory, to: (a) identify Licensor as the source of content embodied in an Integrated Application;
and (b) indicate that Licensee is a “ sponsor ” or “ supporter ” of Licensor.
Subsection 3.1.1. Approval of Form . Licensee will not use the Licensed Trademarks in
any form or in connection with goods and services without the prior written approval of
Licensor. Any modification of a form of use approved by Licensor must be approved by
Licensor. Licensor may at its discretion specify, from time to time, which marks comprise the
Licensed Trademarks, the form in which Licensee may use the Licensed Trademarks, and the
goods and services with which the Licensed Trademarks may be associated. Licensee will only
use the Licensed Trademarks as so specified by Licensor.
Subsection 3.1.2. Proper Notice and Acknowledgment . Every use of the Licensed
Trademarks by Licensee will incorporate in an appropriate manner an “ R ” enclosed by a circle
for federally registered marks, or “ TM ” enclosed in a circle for unregistered marks, as
appropriate.
Subsection 3.1.3. Licensors Rights and Remedies . Licensor has, will retain, and may
exercise, both during the term of this Agreement and thereafter, all rights and remedies available
to Licensor, whether derived from this Agreement, from statute, or otherwise, as a result of or in
connection with Licensee ’ s breach of this Agreement, misuse of the Licensed Trademarks, or
any other use of the Licensed Trademarks by Licensee that is not expressly permitted by this
Agreement.
Subsection 3.1.4. Goodwill . Any and all goodwill or other benefit arising from or
connected with Licensee ’ s use of the Licensed Trademarks will inure to the exclusive benefit of
Licensor.
Subsection 3.1.5. Inspection . Licensor may at any time, upon reasonable notice to
Licensee, examine representative samples of the goods and services provided by Licensee under
the Licensed Trademarks to determine whether the quality of those goods and services conforms
to the quality standards approved by Licensor.
SECTION 3.2. Grant of License to the Licensed Copyrights . Subject to the terms and conditions
of this Agreement, Licensor grants to Licensee a non-assignable (except as expressed provided herein),
exclusive, non-sublicensable license under the Licensed Copyrights, within the Field occurring within the
Territory, to reproduce and prepare derivative works of the Licensed Technology for the purpose of
integrating those reproductions or derivative works into Integrated Applications; provided, however, that
preparation of such derivative works must be limited to the extent reasonably necessary to integrate
components of the Licensed Technology into the Integrated Applications. No right is granted under this
license to distribute, publicly perform, or publicly display the Licensed Technology. However, Licensee
may present, to third parties, the functionality of Licensor ’ s job board and may provide a link to
Licensor ’ s job board, on Licensee ’ s website.
Subsection 3.2.1. Licensor Ownership . Licensor will own the copyright and all other
rights in any derivative works created by Licensee and retains ownership of the Licensed
Copyrights and Licensed Technology. However, Licensee will own the copyright and all other
rights in any derivative works created by Licensee with respect to Licensee ’ s copyrighted and
patented works, including but not limited to its HR Assistant software.
Subsection 3.2.2. Attribution . All uses, reproductions, and derivative works of the
Licensed Technology, and any other documentation, material, or expression protected under the
Licensed Copyrights, must include the copyright notice: “ © Copyright Linkages, Inc. ” or
substantial equivalent.
SECTION 3.3. Grant of License to the Licensed Information. Subject to the terms and conditions
of this Agreement, Licensor grants to Licensee a non-assignable (except as express provided herein),
exclusive, non-sublicensable license to use the Licensed Information solely in the development, use,
marketing, and maintenance of the Integrated Applications within the Field occurring within the
Territory. No license or rights are granted or implied under any information or know-how outside the
Licensed Information, as it may be constituted from time to time.
SECTION 3.4. Obligations Beyond Licensing. Subject to any confidentiality or legal constraints,
Licensor will provide Licensee, at the request of Licensee, Licensor Database so that Licensee can assist
in connecting Licensor ’ s clients with potential employers.
SECTION 3.5. Reservation of Rights . All rights of Licensor not expressly granted in this
Agreement are hereby reserved to Licensor. Without limiting the generality of the foregoing, Licensor
reserves and retains for itself: (a) the right to practice under and use the Licensed IP, including the
Licensed Technology, and all related Intellectual Property Rights for its own purposes in all Fields in all
Territories; (b) the right to grant licenses and sublicenses, as appropriate, to third parties under the
Licensed IP and all related Intellectual Property Rights in any field outside the Field and in all countries
outside the Territory; and (c) the right to file and control prosecution of patent and trademark
applications, copyright registrations, and other Intellectual Property Rights corresponding to the Licensed
IP worldwide. Licensee may not sublicense any of the licenses or grants under this Agreement to third
parties.
SECTION 3.6. Covenants . Licensee will, at all times, limit the exercise of its rights under the
licenses and rights granted herein to the Field and the Territory. Licensee will not at any time, whether
during or after the term of this Agreement, do or cause to be done any act or anything challenging,
contesting, impairing, invalidating, or tending to impair or invalidate any of the Licensed IP or Licensor ’ s
Intellectual Property Rights or registrations derived from such rights. Licensee will not file state or
federal trademark applications for marks that may be, in Licensor ’ s sole discretion, confusingly similar to
the Licensed Trademarks or other of Licensor ’ s trademarks, whether registered or not.
SECTION 3.7. Confidential Treatment of the Licensed Information . During the term of this
Agreement, and at all times thereafter, Licensee must: (a) treat the Licensed Information as strictly and
absolutely confidential; (b) use the Licensed Information only for purposes expressly permitted under
this Agreement; (c) protect the Licensed Information from unauthorized use, disclosure, or
misappropriation by using the same degree of care as its uses to protect its most valuable and
competitively sensitive confidential information and trade secrets, but no less than a reasonable degree of
care; and (d) limit access to the Licensed Information in the manner set forth below. Except as provided
in Subsection 3.7.2, the foregoing obligations and restrictions are perpetual.
Subsection 3.7.1. Permitted Disclosures . Licensee may disclose the Licensed
Information, and will limit access to the Licensed Information, solely as may be required to
further the purposes of performing under this Agreement and solely to those of its trusted
Representatives who require access to the Licensed Information for purposes of Licensee ’ s
enjoying the rights and benefits of this Agreement and who are aware of Licensee ’ s obligations
and restrictions under this Agreement (each, an “ Authorized Representative ” ). Disclosures to
Authorized Representatives must be kept to the minimum necessary for that Authorized
Representative to perform his or her duties effectively for the purposes of this Agreement only. If
the repository of Licensed Information maintained by Licensee is on a computer, server, or other
electronic medium, the restriction on access required hereunder and the other measures taken to
ensure and confirm limited access must be taken electronically.
Subsection 3.7.2. Compelled Disclosure . If Licensee is required to disclose one or more
elements of the Licensed Information by an order of a court of competent jurisdiction or a
government agency properly exercising its delegated authority, Licensee must promptly inform
Licensor in writing of those circumstances, and consult with Licensor on the steps to be taken to
avoid or restrict the disclosure, and give Licensor the opportunity to contest, defend against, or
limit the ordered disclosure at Licensor ’ expense. If disclosure of the Licensed Information is
nonetheless required, License must endeavor to put in place arrangements designed to maintain
the confidentiality and commercial value of the Licensed Information and, in any event, must
limit its disclosure of any portion of the Licensed Information pursuant to that order, law or
regulation to the minimum required to comply with its terms.
Subsection 3.7.3. Unauthorized Disclosure. If Licensee becomes aware that it or any
authorized recipient of any portion of the Licensed Information hereunder has breached the
provisions of this SECTION, then Licensee must notify Licensor as soon as practicable, and the
parties must promptly confer as to the course of action to take as may be appropriate under the
circumstances to cure the breach and to mitigate the harm or damage arising from it. Any breach
of the provisions of this SECTION by a Representative of Licensee of any portion of the
Licensed Information will be deemed a breach by Licensee of this SECTION. In the case of any
breach of this SECTION, Licensee must promptly notify the third party improperly receiving or
using the Licensed Information that its receipt or use of the Licensed Information is unlawful and
must request the third party promptly return all Licensed Information and agree not to further
disclose or use it for any purpose. Licensee must promptly pay for or reimburse Licensor for any
fees, costs, and expenses incurred by Licensor in remedying the unauthorized disclosure or use,
for taking any action to protect its rights in, and benefits from, the Licensed Information
improperly disclosed, and to mitigate the damages or harm arising from that improper disclosure.
At its sole cost and expense, Licensee must assist and cooperate with Licensor in any effort of
that type.
Subsection 3.7.4. Remedies . The Licensed Information is valuable, special, and unique,
constitutes a trade secret of Licensor, and gives Licensor a commercial and competitive
advantage because it is not generally known or readily available to the public or those competing
with Licensor. Thus, if Licensee or any authorized recipient breaches or threatens to breach any
provision of this SECTION, Licensor may be irreparably damaged or injured such that no
remedy at law will afford it adequate protection against, or appropriate compensation for, that
damage or injury. Accordingly, notwithstanding SECTION 11.9, Licensor may: (a) enforce the
provisions of this SECTION by equitable remedies, including without limitation injunction and
specific performance, although those remedies are not the exclusive remedies under this
Agreement but will be in addition to all other remedies available at law or equity; and (b) bring
any action seeking any of those remedies in any court of the United States or any state having
subject matter jurisdiction. Licensee will submit to the jurisdiction of any such court and hereby
waives any claim or defense that there is an adequate remedy at law for such breach or threatened
breach. Licensee hereby waives any requirement for the posting of any bond or other collateral
that may be required to seek equitable relief. However, nothing in this SECTION will prevent
Licensee from enforcing any other rights it may have.
SECTION 3.8. Confidentiality Generally . Each party will protect any information, identified at
the time of disclosure as confidential, or ought reasonably to be considered confidential given the
nature of the information or the circumstances of disclosure, of the other party against
unauthorized disclosure by using the same degree of care as it take to preserve and safeguard its
own confidential information of similar nature, being at least a reasonable degree of care. Such
information may be disclosed by the receiving party to its employees, affiliates, and professional
advisors, provided that that the recipient is bound to maintain the confidentiality of such
information received.
SECTION 3.9. Term . Unless earlier terminated, this Agreement and the licenses and rights
granted hereunder will automatically expire on the date 20 years after the Effective Date. If this
Agreement is terminated before expiration as provided above, then the licenses and rights granted
hereunder will cease upon termination. Expiration of this Agreement does not constitute a termination or
a waiver of any rights of either party against the other party accruing at or before the time of expiration,
nor does it terminate or waive either party's surviving obligations under this Agreement, as specified in
ARTICLE VI. On or before the date 30 days after the effective date of expiration or termination of this
Agreement, Licensee must prepare and deliver to Licensor a Royalty Report (as defined herein) with
respect to all Licensee ’ s activities in the Royalty Reporting Period before the expiration occurred, which
must be accompanied by payment of any earned royalties or other amounts due in respect of Licensee ’ s
activities covered by that Royalty Report, and the obligation to make such payment will be so
accelerated. Without limiting the generality of the foregoing, Licensee ’ s obligations to pay any amount
payable to Licensor under this Agreement, to report and pay royalties to Licensor accrued before
expiration of this Agreement, even if a transaction or a portion thereof occurs after the expiration of this
Agreement, survive the expiration of this Agreement.
SECTION 3.11. No Further Rights or Licenses. Except as expressly provided in this ARTICLE
III, no further, other, or different license, sublicense, option, or right is granted to Licensee or implied.
No additional rights hereunder are or may be deemed granted by estoppel or otherwise.
ARTICLE IV
CONSIDERATION
SECTION 4.1. License Issue Fee . Upon Licensee ’ s execution and delivery of this Agreement,
Licensee must pay to Licensor non-refundable, non-creditable license issue fee of $1,500 (the “ Issue
Fee ” ). Licensor hereby acknowledges receipt of the Issue Fee. All amounts described herein are in
United States dollars.
SECTION 4.2. Running Royalties . As consideration, for the licenses granted herein, Licensee
must pay to Licensor a non-refundable earned royalty equal to 3 (three) percent of all amounts received
( “ Gross Sales ” ) for services transacted or products sold through, for, or with the use of any Integrated
Application, including amounts for subscriptions or other access to the Integrated Application (each, a
“ Sales Transaction ” ) Licensee ’ s obligation to pay a royalty accrues, and is earned by Licensor, at the
time a Sales Transaction is invoiced by Licensee to a third party. Earned royalties in a given Royalty
Reporting Period must be paid by Licensee to Licensor on or before the date 31 days after the end of the
pertinent Royalty Reporting Period.
SECTION 4.3. Use of Licensee ’ s Trade Marks. Licensee will provide Licensor with trademark
materials, either by hard copy or electronically, for Licensor ’ s use and presentation both on Licensor ’ s
website and in other marketing and business material used by Licensor. During the term of this
Agreement, Licensor may use these materials. In the event Licensee purchases a fully paid up license in
accordance with SECTION 4.9, Licensor may continue to use the materials in perpetuity. The trade mark
materials supplied by Licensee will include all marks used by Licensee in conjunction with the Licensed
IP, including, but not limited to, the ‘ Audioeye, ’ ‘ People Assistant, ’ and ‘ Linkages Experience ’ marks.
SECTION 4.4. Periodic Reports .
Subsection 4.4.1. Frequency of Reports. Upon each January 31 and July 31 during the
term of this Agreement, Licensee must deliver to Licensor a true, correct, and complete written report
showing the items specified in Subsection 4.3.3 below as they pertain to Licensee ’ s activities under this
Agreement in the Royalty Reporting Period just ended (each, a “ Royalty Report ” ). A responsible
financial officer of Licensee or a responsible representative of Licensee ’ s independent accounting firm
must certify in writing that each Royalty Report delivered under this Subsection is true, correct, and
complete. Licensee ’ s payment of the earned royalties based on the Royalty Report must be paid in
accordance with SECTION 4.5 below on or before the date on which the Royalty Report is due.
Subsection 4.4.2. Reports After Expiration . After the expiration or earlier termination of
this Agreement, Licensee must continue to provide Royalty Reports and corresponding payments in
accordance with this SECTION for so long as Licensee conducts Sales Transactions or bills, invoices, or
receives amounts in connection with Sales Transactions. If, notwithstanding its obligation to cease all
activities under this Agreement upon termination of this Agreement pursuant to ARTICLE VI below,
Licensee conducts Sales Transactions or bills, invoices, or receives amounts in connection with Sales
Transactions after termination of this Agreement, Licensee must provide a Royalty Report with respect
to those unauthorized activities that complies in all respects with this SECTION, accompanied by
payment of royalties equal to three times the royalty payment that would have been due under this
Agreement as if this Agreement had not been terminated.
Subsection 4.4.3. Content of Royalty Reports. Each Royalty Report must provide the
following information as it pertains to the preceding Royalty Reporting Period just ended: (a) the type
and number of each Sales Transaction billed by Licensee; (b) the U.S. dollar value of the billings on the
quantities in clause (a) immediately above; and (c) the total amount of earned royalties to be paid with
respect to the Royalty Reporting Period that is the subject of that Royalty Report.
SECTION 4.5. Payment Procedure . Licensee must pay all amounts due to Licensor under this
Agreement in United States currency, collectible at par and without deduction of any fees, by check or
other immediately available funds.
SECTION 4.6. Late Payment . All amounts not timely paid will be subject to a charge of interest
compounded monthly until payment, at a rate of 10% per annum or $500, whichever is greater. If that
interest rate exceeds the rate allowed by applicable law, then the highest interest rate allowed by law will
apply. Licensor must apply any payments received first to the satisfaction of unpaid, accrued interest and
then to the satisfaction of unpaid principal.
SECTION 4.7. Taxes . Licensee is responsible for the payment of all taxes, duties, levies, and
other charges imposed, on Licensee, by any taxing authority with respect to the royalties and other fees
payable to Licensor under this agreement. If Licensee is required under any law or regulation of any
government entity or authority to withhold or deduct any portion of the payments on royalties due to
Licensor, then the sum payable to Licensor will be increased by the amount necessary to yield to
Licensor an amount equal to the sum it would have received had no withholdings or deductions been
made. Licensor will cooperate reasonably with Licensee in the event Licensee elects to assert, at its own
expense, any exemption from any such tax or deduction.
SECTION 4.8. Recordkeeping and Audit . Licensee must keep true, correct and complete books
and records, with reasonable supporting documentation, containing data reasonably required for the
computation and verification of payments due under this Agreement and Licensee ’ s compliance in other
respect with its obligations under this Agreement. Licensee must keep those books, records and
documentation at its principal place of business for at least six years beyond the Royalty Reporting
Period applicable to which they pertain and Licensee ’ s access to those books may not be denied
thereafter if they are reasonably available. Licensor may, during the Term of this Agreement, appoint an
auditor to inspect and copy those books, records, and documentation during Licensee ’ s business hours
and without unreasonably interfering with Licensee ’ s business and operations to verify the accuracy of
the Royalty Reports and Licensee ’ s compliance with this Agreement. Licensor must provide Licensee
with reasonable advance notice of its desire for such audit. All audits by Licensor will be at Licensor ’ s
own expense unless the audit reveals an underpayment of more than 5% of the amounts actually due for
any Royalty Reporting Period, in which case Licensee must reimburse Licensor for the cost of the audit,
in addition to the amount of the underpayment plus interest. If audit reveals that Licensee paid more than
required under this Agreement, Licensor must, at Licensee ’ s election, either fully reimburse Licensee for
the underpayment within 30 days after advising Licensor in writing of its election, or offset any future
payments under this Agreement by the amount of the overpayment.
SECTION 4.9. Licensee ’ s Option to Purchase Lifetime Paid Up License . Licensee is hereby
granted an option to purchase a royalty-free, fully paid-up, perpetual, exclusive, irrevocable, license, of
the Integrated Applications for use within the Territory and within the Field, with the right to assign the
paid up license and to grant sublicenses, for a one-time fee of $2,000,000.
SECTION 4.11. Non-Profit Status . Licensee understands that Licensor is a tax-exempt non-
profit qualified under section 501 (c) (3) of the United States Internal Revenue Code (the “ Code ” ). This
Agreement is intended to comply with the provisions of the Code and applicable Regulations which
permit qualified tax-exempt non-profits to receive royalty income without having such income treated as
“ unrelated business income, ” as that income is defined in the Code and applicable Regulations. This
Agreement will interpreted and enforced consistent with this intent.
ARTICLE V
RIGHTS TO INTELLECTUAL PROPERTY
SECTION 5.1. Rights of Each Party . As between the parties the Licensed IP is, and at all times
will remain, solely and exclusively owned or controlled by Licensor. Licensor will solely and exclusively
own any and all other Intellectual Property Rights that it may develop or obtain in connection with the
Licensed IP.
SECTION 5.2. License Grant to Licensor of Licensee ’ s Improvements . As further consideration,
in part, for the licenses and rights granted to Licensee, Licensee hereby grants to Licensor a royalty-free,
fully paid-up, perpetual, irrevocable, worldwide license, without the right to grant sublicenses, to
Licensee ’ s Improvements and to use Licensee ’ s Improvements, including all Licensee ’ s patents and
patent applications claiming any such Improvements. Without limiting the generality of the foregoing,
Licensee ’ s Improvements includes any improvements or modifications made by Licensee to the Licensed
Technology, including the Platform.
SECTION 5.3. Derivative Works. Licensee retains and will retain all its right, title, and interest
worldwide to all derivative works under the Licensed Copyrights and expressions thereof, the Licensed
Technology, and all expressions or embodiments contained therein or relating thereto, and all other
documentation and materials protected under Licensor ’ s copyright rights, immediately upon its creation,
authorship, or expression.
SECTION 5.4. Mutual Disclosure ; Cooperation; and Future Use. Licensor maintains a patent
applications and technologies related to home healthcare monitoring and medicine regime compliance
systems ( “ Licensee ’ s Technology ” ). Licensee ’ s Technology may include, but is not limited to
Integrated Applications and Improvements. Licensor and Licensee have agreed to cooperate so that
Licensee can utilize the Licensed Technology to assist Licensee in developing, refining, and marketing
the Licensee ’ s Technology. Licensee herby grants Licensor a perpetual fully paid up license in the
Licensee ’ s Technology for use by Licensor both during the term and after the expiration of this
Agreement.
SECTION 5.5. Inspection of Integrated Applications . Upon reasonable notice, Licensee will
demonstrate the Integrated Applications and Licensee ’ s use of the Licensed IP. Licensee will keep
Licensor reasonably informed as to the progress of development of Integrated Applications, and any bugs
or technical issues discovered by Licensee pertaining to the Platform. Licensee may at any time, upon
reasonable notice to Licensor, at Licensee ’ s expense, examine any modifications made by Licensor to the
Integrated Applications or embodiments of Licensed IP developed by Licensor, and the source code,
documentation, and data related thereto.
ARTICLE VI
TERMINATION
SECTION 6.1. Termination for Breach or Insolvency. If Licensee or Licensor breaches this
Agreement, or Licensee becomes Insolvent (as defined below), the non-breaching party may terminate
this Agreement by giving written notice of that breach to the breaching party and affording breaching
party the opportunity to cure that breach on or before the date 30 days after the date of written notice. If
that breach is not timely cured, this Agreement and the licenses granted hereunder will then terminate,
subject to each party ’ s surviving obligations. Licensee will be “ Insolvent ” if Licensee becomes the
subject of a voluntary or involuntary petition in bankruptcy or any proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors if such petition or proceeding is not
dismissed with prejudice within sixty days after filing.
SECTION 6.2. Termination for IP Challenge . Licensor may terminate this Agreement if
Licensee files any claims of invalidity, unenforceability, or non-infringement of the Licensed IP.
Licensee must notify Licensor in advance of any claims of that nature that Licensee intends to assert and
include in that notice the details and bases for those claims. Failure to provide that notice constitutes a
material breach of this Agreement.
SECTION 6.3. Termination by Termination of Underlying Licenses . The licenses granted under
this Agreement pertaining to the Licensed IP will terminate immediately upon the termination of any
underlying third party software or other license under which Licensor developed or used the Licensed IP.
Licensor will promptly provide Licensee written notice of termination of such license, whereupon
Licensee must cease all activities under the affected Licensed IP, subject to any successor license that
Licensee may later obtain from the third party.
SECTION 6.4. Termination by Notice from Licensor . Licensor may terminate this Agreement at
its sole discretion for any reason upon 90 days written notice to Licensee; provided, however, should
Licensor provide Licensee a notice of termination in accordance with this SECTION, Licensee will have
the right to elect to purchase a fully paid-up, perpetual, exclusive, irrevocable, license, of the Integrated
Applications for use within the Territory and within the Field as provided in SECTION 4.9 prior to the
expiration of the 90 day notice period.
SECTION 6.5. Effect of Expiration or Termination . Upon termination of this Agreement, all
licenses and rights granted under this Agreement will terminate and Licensee must immediately: (a) cease
using any Licensed IP and any embodiments thereof; (ii) cease using the Licensed Trademarks, and
destroy or delete all materials bearing the Licensed Trademarks; (iii) cease using, reproducing, and
making derivative works of the Licensed Technology, and all other materials protected under the Licensed
Copyrights; (v) cease any and all activity that infringes upon the Licensed IP; (vi) cease and refrain from
entering into Sales Transactions; (vii) cease use of all Integrated Applications; and (viii) return or destroy,
at Licensor ’ s option, all Confidential Information and all documentation, expressions, and other materials
protected under the Licensed IP, including all instances and portions of the Licensed Technology and
derivative works thereof. On or before the date 30 days after the Termination Date, Licensee must
disclose to Licensor all undisclosed Licensee Improvements.
SECTION 6.6. Surviving Obligations . Termination of this Agreement does not constitute a
termination or a waiver of any rights of either party against the other party accruing at or before the
Termination Date, nor does it terminate or waive either party's surviving obligations under this
Agreement. In addition to any provision of this Agreement that expressly provides for acts or obligations
to continue beyond the expiration or earlier termination of this Agreement, the provisions of ARTICLES
II, IV, VIII, IX, and X, and SECTIONS 3.5-3.9, 5.1, and 5.2 survive the expiration or earlier termination
of this Agreement, together with any other provisions necessary to effect the intent of this Agreement.
SECTION 6.7. Reverter. Upon termination of this Agreement, except as otherwise expressly
provided in this Agreement, all the licenses and rights granted herein will immediately, automatically,
and completely revert to Licensor for its sole benefit.
ARTICLE VII
ENFORCEMENT
SECTION 7.1. Notice of Infringement or Misappropriation. Licensee and Licensor must
promptly inform the other party in writing if either learns that a third party (an “ Infringer ” ): (a) is
infringing, or is suspected of infringing, any Licensed IP; (b) has misappropriated or is suspected of
misappropriating any Licensed IP; or (c) has brought any proceeding alleging invalidity or non-
infringement of any Licensed IP (collectively, “ Infringing Activities ” ).
SECTION 7.2. Licensor ’ s Rights . (a) As between the parties, Licensor has the sole right to sue
for infringement or misappropriation of the Licensed IP; and (b) Licensor has no duty to pursue
Infringers. Licensor has the exclusive right in the first instance, but not the obligation, to defend any
proceeding alleging invalidity or non-infringement of any of the Licensed IP. If Licensor initiates or
conducts any legal proceedings to enjoin or seek damages caused by Infringing Activities or any other
relief or remedy in response to the Infringing Activities, Licensee must fully cooperate with Licensor in
that effort. Licensor is entitled to keep for its own account all damages are awarded to it or paid in
settlement thereof, subject to Arizona ’ s rights under the Arizona License.
ARTICLE VIII
CONFIDENTIAL INFORMATION
This ARTICLE applies to Confidential Information other than the Licensed Information. The
parties ’ respective obligations regarding the confidential treatment of the Licensed Information is
governed by SECTION 3.7.
SECTION 8.1. Confidential Information. Licensee and Licensor may choose, from time to time,
to disclose confidential information as defined herein. “ Confidential Information ” means: (a) all
information provided by one party (the “ Disclosing Party ” ) to the other party (the “ Receiving Party ” )
pertaining to the Disclosing Party ’ s employees, officers, directors, customers, or contractors, or the
business, research, products, or finances of the Disclosing Party, including but not limited to all technical
information and data, marketing data, techniques and plans, suppliers, business proposals to customers,
customer lists and contact information, trade secrets, computer software, medical records, information
provided to Receiving Party in confidence by a third party, financial information, costs of providing
services to customers, pricing and profit information, technology solutions developed and being
developed for customers, methods of doing business, sales information, and any other information about
the Disclosing Party's business that is not publicly available or has or could have commercial value or
other utility in the Field; (b) the terms of this Agreement; (c) disclosures of Licensee Improvements; and
(d) any information or communication, written or otherwise, concerning the prosecution, prosecution
strategy, defense, or assertion of the Licensed IP. The definition of Confidential Information is to be
broadly interpreted. Confidential Information is deemed to be owned by the party who disclosed it,
except that Confidential Information falling under clause (d) is deemed to be Licensor ’ s Confidential
Information.
SECTION 8.2. Obligations of Confidentiality and Limited Use . During the term of this
Agreement, and at all times thereafter, the Receiving Party must maintain the Confidential Information in
confidence, and may not disclose, divulge or otherwise communicate it or any portion of it to any third
party, except to its directors, officer, employees, agents, investors, potential investors, advisors
(accounting, legal and investment banking), and prospective assigns who are bound by like terms of
confidentiality, nor use it for any purpose, except pursuant to, and in order to carry out, the terms and
objectives of this Agreement, or to assert or enforce its rights or the other party ’ s obligations under this
Agreement. The Receiving Party will exercise every reasonable precaution to prevent and restrain the
unauthorized disclosure of such Confidential Information by any of its directors, officers, employees, and
agents.
SECTION 8.3. Exceptions . The foregoing obligations do not apply to Confidential Information
that: (a) is generally known to the public through no act or omission of the Receiving Party; (b) is
received by the Receiving Party on a non-confidential basis from a third party who has come to lawfully
know or possess the Confidential Information without any breach of an obligation of confidentiality or
non-use to the Disclosing Party or any third party, and whose disclosure to the Receiving Party does not
result in any breach of any obligation of confidentiality or non-use to the Disclosing Party; (c) is
independently known by the Receiving Party at the time of receipt; (d) is reported by the Receiving Party
in strict confidence solely to a United States state or federal securities agency, including the Securities
and Exchange Commission, under applicable state or federal securities laws, including Section 21F of the
Securities Exchange Act of 1934, for the sole purpose of reporting a violation of United States state or
federal securities laws and meeting all of the requirements for whistleblower protection described in such
laws; (e) is required to be disclosed under applicable governmental laws or regulations or under order of
a court of competent jurisdiction, but then only to the extent minimally required to comply with the
order ’ s terms; or (f) the Disclosing Party consents to its disclosure.
SECTION 8.4. Press Releases and Other Public Statements . No party will make any other public
statements about this Agreement without the other party ’ s prior written consent.
ARTICLE IX
INSURANCE, INDEMNIFICATION, AND LIMITATION OF LIABILITY
SECTION 9.1. Insurance. Licensee must maintain commercial general liability insurance,
including professional and products liability insurance and errors and omissions insurance, that protects
Licensee and Licensor with respect to the events covered by SECTION 9.2. Each insurance policy must
provide reasonable coverage for all claims with respect to the Licensed IP and must specify Licensor as
additional insured. Licensee will furnish certificate(s) of such insurance to Licensor upon request.
SECTION 9.2. Indemnification by Licensee . During the term of this Agreement and for two
years beyond the term of any statute of limitations with respect to any claim described below, Licensee
must indemnify, defend, and hold harmless Licensor, and their respective governing boards, officers,
agents, and employees, from and against any liability, loss, or damage resulting from claims, demands,
costs, or judgments that arise out of or are related to Licensee ’ s use of the Licensed IP or practice
thereunder, or Licensee ’ s breach of this Agreement. Licensee is not obligated to defend Licensor for
claims arising from Licensor ’ s negligence, willful misconduct, or failure to apply with applicable
governmental requirements.
SECTION 9.3. Procedures for Indemnification. Licensee is responsible for the management of
defense of any actions or claims at its own expense, and will pay Licensor ’ s reasonable expenses to assist
Licensee in such defense. Licensee will not compromise or settle any claim or action without the prior
written approval of Licensor. Licensor may participate at its option and expense through counsel of its
own selection.
SECTION 9.4. Licensee Responsible for Use of Licensed IP. It is the full and sole responsibility
of Licensee to use appropriate care in the practice or use of any Licensed IP and Integrated Applications.
Licensor does not: (a) control the manner in which any Licensed IP or Integrated Application is practiced
or used by Licensee; or (b) make any representation or warranty whatsoever with respect to any Licensed
IP, including but not limited to the Licensed Technology, the Platform, or the Licensed Information, or
Integrated Application.
SECTION 9.5. Limitation of Liability . In no event is Licensor liable for damages, losses or
claims, whether direct or otherwise, arising out of or related to: (a) Licensee ’ s use or practice of the
Licensed IP or Integrated Applications; (b) the performance of any service or use or sale of any product or
application by any person, including the Integrated Application, that benefits from use or availability of
the Licensed IP; or (c) any claim by a third party against Licensee; except to the extent those damages,
losses, or claims arise from Licensor ’ s gross negligence or willful misconduct. IN NO EVENT IS
LICENSOR OR LICENSEE LIABLE TO THE OTHER, WHETHER BASED IN CONTRACT OR
TORT, FOR ANY LOSS OF PROFITS (DEMONSTRATED OR PROSPECTIVE) OR BUSINESS
REVENUE, OR FOR ANY INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, WHETHER DIRECTLY OR INDIRECTLY,
ARISING OUT OF THIS AGREEMENT. EACH PARTY HEREBY RELEASES THE OTHER PARTY
FROM ANY LOSSES OR DAMAGES OF THAT TYPE. THE FOREGOING LIMITATION WILL
APPLY WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE POSSIBLITY OF THOSE
LOSSES OR DAMAGES. EACH PARTY ACKNOWLEDGES AND AGREES THAT THE
FOREGOING LIMITATIONS ON LIABILITY ARE ESSENTIAL ELEMENTS OF THE BASIS OF
THE BARGAIN BETWEEN THE PARTIES AND THAT IN THE ABSENCE OF SUCH
LIMITATIONS, THE MATERIAL AND ECONOMIC TERMS OF THIS AGREEMENT WOULD BE
SUBSTANTIALLY DIFFERENT. The provisions of this SECTION survive the expiration or earlier
termination of this Agreement.
SECTION 9.6. Warranties and Disclaimers . Nothing contained in this Agreement may be
construed as a representation or warranty by Licensor: (a) that the Licensed IP and related Intellectual
Property Rights are valid or enforceable; (b) that any performance or practice under or use of the
Licensed IP is not an infringement of any Intellectual Property Rights of others; (c) that the Licensed IP is
suitable for commercial use or free from infringement of any third party ’ s Intellectual Property Rights; or
(d) that the Licensed IP is suitable for integration into Integrated Applications or compatible with any of
Licensee ’ s software products, platforms, services, and applications. To the maximum extent not
prohibited by applicable law, the Licensed IP is being licensed and provided to and accepted by Licensee
“ AS IS, ” “ WITH ALL FAULTS ” AND “ AS AVAILABLE. ” LICENSOR HEREBY DISCLAIMS, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY APPLICABLE LAW, ANY AND ALL
WARRANTIES, TERMS OR CONDITIONS, WHETHER EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, INCLUDING WITHOUT LIMITATION ANY (IF ANY) AND ALL WARRANTIES
OR CONDITIONS OF OR RELATED TO MERCHANTABILITY, FITNESS FOR ANY
PARTICULAR PURPOSE, SATISFACTORY QUALITY OR PERFORMANCE, RESULTS,
CONDITIONS OF TITLE, QUIET POSSESSION, CORRESPONDENCE WITH DESCRIPTION, OR
NON-INFRINGEMENT, THAT MAY ARISE FROM OR BE IMPLIED, EITHER IN FACT OR BY
OPERATION OF LAW, STATUTORY OR OTHERWISE, THIS AGREEMENT, LICENSEE ’ S
RECEIPT AND USE OF, OR RELIANCE ONE, THE LICENSED IP, OR ARISING FROM THE
COURSE OF DEALING BETWEEN THE PARTIES OR USAGE OF TRADE, THAT MAY APPLY
OR RELATE TO THE LICENSED IP OR ITS USE OR INTEGRATION INTO INTEGRATED
APPLICATIONS. THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE DESCRIPTION
ON THE FACE HEREOF.
THESE DISCLAIMERS OF WARRANTY CONSTITUTE AN
ESSENTIAL PART OF THIS AGREEMENT.
SECTION 9.7
No Inconsistent Statements . Neither party may make any statements,
representations, or warranties whatsoever to any person or entity, or accept any liabilities or
responsibilities whatsoever from any person or entity that are inconsistent with this ARTICLE IX. A
party making any such statement, representation, or warranty assumes and accepts all liability arising
therefrom. Licensee assumes full and absolute responsibility and liability for any and all warranties
provided in connection with the Licensed IP.
SECTION 9.8. Remedial Efforts. Without limiting and without prejudice to the disclaimers of
warranty in SECTION 9.6 above, if the Licensed IP is alleged to infringe the Intellectual Property Rights
of a third party, Licensor may, at its sole discretion and without obligation, repair or replace the
infringing component of the Licensed IP with functionally equivalent component that does not so
infringe. Nothing in this SECTION will be interpreted as a warranty of noninfringement, or an obligation
to so repair or replace infringing components, on the part of Licensor.
ARTICLE X
NON-COMPETITION
SECTION 10.1 Non-Compete . The parties recognize that the value of this License to Licensee,
and Licensor ’ s interest in maximizing royalties payable under this License, are both dependent upon
Licensee ’ s ability to utilize the Licensed IP and Licensee ’ s intellectual property to market the Licensed
IP and Licensee ’ s intellectual property for use by third parties in connection with identifying and
recruiting disabled individuals for employment. Accordingly, Licensee and Licensor jointly and
severally agree that, for the Term of this License, they shall not, directly or indirectly:
(i)
Have any direct or indirect interest (financial or otherwise) in, or serve in any capacity (such as
owner, investor, lender, principal, agent, consultant, partner, representative, officer or otherwise) with,
any person or entity (other than each other) that is engaged in the business of identifying or recruiting
disabled individuals for employment in the Territory; or
(ii)
Sell products, provide services, or otherwise assist others in identifying or recruiting disabled
individuals for employment.
SECTION 10.2 Termination/Exceptions .
Notwithstanding the other terms in this Article X:
(i)
The provisions of this Article X will expire upon the expiration of this
License. Additionally, if Licensee elects to acquire a fully paid-up license in
accordance with SECTION 4.9, the restrictions of this Article X will expire.
(ii)
The Provisions of this Article X will not restrict or prohibit Licensor from
identifying and recruiting disabled individuals and assisting them in finding
employment or restrict or prohibit Licensor from assisting other tax-exempt
or charitable organizations in doing so. Licensor is also free to work with for-
profit employers who wish to identify, recruit and hire disabled individuals.
The provisions of this this Article X are only intended to prohibit Licensor
from assisting for-profit businesses who sell applicant tracking systems or job
boards for recruiting and assisting disabled individuals in finding
employment.
.
SECTION 10.3 Remedies .
Licensee and Licensor recognize that their failure to comply with the
provisions of this Article X shall cause irreparable harm to the other and that money damages alone
would be insufficient to compensate for such damages. Licensee and Licensor therefore agree that any
court having jurisdiction may enter a preliminary or permanent restraining order or injunction against
Licensee or Licensor, as applicable, in the event of actual or threatened breach of any of the provisions of
this Article X. Any such relief shall not preclude Licensee or Licensor from seeking any other relief at
law or equity with respect to any such claim.
SECTION 10.3 Severability. If any provision of this Article X is deemed to be in violation of law or
unenforceable for any reason, the remainder of this Article X shall remain in full force and effect and
shall continue to be binding upon Licensee and Licensor. The parties agree that a court shall substitute a
reasonable, judicially enforceable limitation in place of any unenforceable provision to best serve the
intent of the parties as expressed herein and the reasonable business needs and expectations of Licensee
and Licensor in entering into this License.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Agreement in its Entirety . This Agreement and its Exhibits, when executed and
delivered by the parties, represent and constitute the entire agreement between the parties as to the subject
matter of those documents. Any and all prior and contemporaneous oral and written negotiations,
representations, warranties, agreements, statements, promises, and understandings with respect to that
subject matter, are merged into, and extinguished, superseded completely expressed by those documents.
No party is bound by or charged with any written or oral agreements, representations, warranties,
statements, promises, or understandings not specifically set forth in such documents.
SECTION 11.2. Addresses and Notices . All notices, requests, consents, demands and other
communications provided in this Agreement must be in writing and will be deemed to have been made or
given: (a) on the date delivered, if personally delivered; (b) if sent by facsimile or electronic mail,
confirmed by delivery of any other means permitted under this SECTION, at the date and time of
transmission as indicated on the received facsimile or email if sent during normal business hours of the
notified party, or if not, on the next business day; (c) on the date ten business days after being sent by
registered or certified mail, return receipt requested, postage prepaid; or (d) on the date two days after
deposit with an internationally recognized overnight courier, specifying two-day delivery, with written
verification of receipt. All notices must be addressed to the party entitled to notice at the address indicated
below or at such other address as such party may designate by ten days' advance written notice under this
SECTION to the other party to this Agreement:
To Licensor :
To Licensee :
La Frontera Community Solutions, Inc. QOLPOM, Inc.
Attn.: Dr.Daniel Raneri
Attn.: Nathaniel Bradley
504 W. 29 th St.
P. O. Box 186
Tucson, AZ 84713
Vail, AZ, 85641
A notice will be considered “ written ” or “ in writing ” if it is on conventional paper or facsimile, or if it is
in electronic form (such as an email). Notice of change of address will be effective only when done in
accordance with this SECTION.
SECTION 11.3. Amendment of this Agreement; Waiver. No supplement, modification or
amendment of this Agreement will be binding unless executed in writing by both parties. A party's
express or implied waiver of or consent to any provision of this Agreement or the other party's breach of
its obligations hereunder may not be deemed to be, or construed as, a consent to, or waiver of, any other
provisions or other breach of the same or any other obligations of the other party. A party's failure, no
matter how long, to: (a) complain of any act, or failure to act, by the other party; (b) declare the other
party in default, irrespective of how long the default continues; (c) insist upon the strict performance of
any obligation or condition of this Agreement; or (d) exercise any right or remedy consequent upon a
breach thereof; does not constitute a waiver by that party of its rights, the breach, or any other obligation
or condition. A party's consent in any one instance does not limit or waive the necessity to obtain that
party's consent in any future instance. No single or partial exercise of any right, power or privilege by a
party hereunder precludes any other or further exercise thereof or the exercise of any other right, power or
privilege by such party.
SECTION 11.4. Applicable Law . This Agreement and its effect are subject to and must be
construed and enforced in accordance with the laws of the State of Arizona, U.S.A., without regard to its
principles regarding conflicts of law.
SECTION 11.5. Assignment. Licensee may not assign this Agreement, nor any of its licenses,
rights, obligations, or duties under this Agreement, whether directly or indirectly by operation of law or
otherwise, including by way of a merger, acquisition or other sale event, or to an affiliate, without
Licensor ’ prior written consent, which consent may be withheld in its sole and absolute discretion. When
properly assigned, this Agreement will be binding upon and inure to the benefit of, and be enforceable by,
the parties, their respective successors and assigns.
SECTION 11.6. Compliance with Law; Severability. Nothing in this Agreement in intended, or
may be construed, to require the commission of any act contrary to any applicable law. Each party will
comply fully with all relevant laws and regulations, including export laws and regulations. If any
provision of this Agreement (which is to be applied in the narrowest sense as meaning the particular
provision within a single SECTION, Subsection, paragraph, sentence, or clause) conflicts with any
statute, law, ordinance, policy or treaty such that it is held or adjudged to be invalid, illegal, void or
otherwise unenforceable, then the affected provision must be curtailed and limited only to the extent
necessary to bring it within the applicable legal requirements and the validity, legality, and enforceability
of the remaining provisions of this Agreement will not in any way be affected or impaired thereby and
will remain enforceable to the fullest extent permitted by law. In that event, to the fullest extent possible,
the remaining provisions of this Agreement will be modified and construed to the extent necessary to
resolve the conflict and to give effect to the intent manifested by the provision held invalid, illegal, void
or unenforceable.
SECTION 11.7. Computation of Time . In computing any period of time for purposes of this
Agreement, the day or date of the act, notice, event or default from which the designated period of time
begins to run will not be included. The last day of the period so computed will be included, unless it is a
Saturday, Sunday, or a federal holiday in the United States, in which event the period runs until the end of
the next day which is not a Saturday, Sunday, or holiday. All references to days, months, quarters or years
are references to calendar days, calendar months, calendar quarters, or calendar years, unless otherwise
indicated. All references to “ business days ” or “ working days ” are references to days that are not a
Saturday, Sunday, or holiday.
SECTION 11.8. Counterparts. This Agreement may be executed in two or more identical
counterparts each of which will be deemed to be an original, and all of which, taken together, will
constitute one and the same instrument. Delivery of an executed counterpart signature by facsimile
transmission, by electronic mail in portable document format (.pdf) form , or by another electronic means
intended to preserve the original graphic and pictorial appearance of a document, will have the same
force and effect as physical delivery of the original paper document bearing the original signature, and
each party may use facsimile signatures as evidence of the execution and delivery of the Agreement by
all parties to the same extent that an original signature could be used.
SECTION 11.9. Dispute Resolution. Except as otherwise provided herein, all disputes arising out
of or related to this Agreement will be submitted to binding arbitration before a single arbitrator in the
City of Tucson in accordance with the Arizona Revised Uniform Arbitration Act, A.R.S. §§ 12-3001 et
sq. as amended from time to time. If the parties cannot agree to an arbitrator within 5 business days of
service of a Demand for Arbitration, then the arbitrator will be appointed by the presiding civil judge of
the Pima County Superior Court. The prevailing party in the arbitration and any related court proceedings
will be entitled to recover reasonable attorney ’ s fees, costs and expenses, including fees paid to the
arbitrator. The arbitration award may be entered as a judgment in any court of competent jurisdiction.
The Pima County Superior Court shall have exclusive original jurisdiction of all court proceedings
relating to the arbitration.
SECTION 11.11. Force Majeure. No failure or omission by any party in the performance of any
obligation of this Agreement (except payments hereunder) will be deemed a breach of this Agreement nor
create any liability if: (a) the failure or omission arises from any cause beyond the control of the party in
question; and (b) steps that could be taken to mitigate or eliminate the cause of the failure or omission
were not reasonably foreseeable or were not reasonably available or commercially practicable, and the
failure or omission is not caused or exacerbated by the negligence of the non-performing Party. Causes
falling within clause (a) above include: acts of God; acts or omissions of any government or any agency
thereof; compliance with any governmental authority or any officer, department, agency or
instrumentality thereof; fire; storm; flood; earthquake; accident; acts of the public enemy; war, declared
or undeclared; rebellion; insurrection; riot; sabotage; invasion; quarantine restrictions; strike; lockout;
disputes or differences with workmen; transportation embargoes or delays in transportation. In that event,
the non-performing party must give the other party prompt written notice upon discovery and use all
reasonable efforts to continue to so perform or cure.
SECTION 11.12. Independent Contractor . In its performance under this Agreement, each party
is an independent contractor, and neither party nor their respective Representative is a Representative of
the other party. Nothing in this Agreement may be construed as authorization for any party to act as agent
for any other. This Agreement does not constitute or create, nor may it in any way be interpreted as, a
joint venture, partnership, or formal business organization of any kind.
SECTION 10.13. No Third-Party Beneficiaries . None of the provisions of this Agreement are for
the benefit of, or enforceable by, any third-party. The agreements herein contained are made for the sole
benefit of the parties hereto, and no other person or entity is intended to or shall have any rights or
benefits hereunder, whether as a third party beneficiary or otherwise.
SECTION 11.14. Mutual Representations and Warranties . Each party represents and warrants to
the other that: (a) it is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization or formation; (b) has the full power and authority to enter into, deliver and
perform its obligations under, and carry out the provisions of, this Agreement; (c) the person executing
this Agreement on behalf of such entity has been duly authorized to do so, and such person has duly
signed and delivered this Agreement; (d) this Agreement constitutes a valid and binding agreement of the
representing and warranting party; (e) all action required to be taken to authorize, execute, deliver and
perform under this Agreement has been taken and no further approval of any governing person is
necessary to consummate this Agreement; (f) execution, delivery and performance of this Agreement by
the representing and warranting party do not conflict with any other agreement or arrangement to which
such entity is a party or by which it is bound; and (g) it will exercise its good faith in performing under
this Agreement.
SECTION 11.15. Further Assurances. Each party must take whatever additional action and
execute whatever additional documents as the other party may in its reasonable judgment deem necessary
or advisable to carry out or effect one or more of the obligations or restrictions imposed on a party under
this Agreement.
SECTION 11.16. Certain Rules of Interpretation . Interpretation of the Term Include. The
term “ include ” (and its conjugated verb or cognate noun forms) means “ to include without limitation ” and
“ to include but not limit to, ” regardless of whether the words “ without limitation ” or “ but not limited to ”
or their equivalent actually follow it. Conjugated Verb Forms and Cognate Noun Forms of Terms. If a
word or phrase is defined, its other grammatical forms, such as any conjugated verb form or cognate noun
form, have a corresponding meaning. If a word or phrase is not capitalized, then the word or phrase must
be interpreted in accordance with its commonly used meaning, although any words or phrases that have
well-known technical or trade meanings must be interpreted in accordance with that meaning. Gender and
Number . Whenever used in this Agreement: (a) the singular includes the plural, and the plural include the
singular; (b) any masculine, feminine or gender-neutral pronoun includes the other and any trust,
partnership, limited liability company, firm, or corporation, all as the context and meaning of this
Agreement may require. Headings. The headings of the various ARTICLES, SECTIONS and Subsections
of this Agreement are used solely for the convenience of the parties, do not form a part of this Agreement
and are not intended to affect the interpretation or meaning of this Agreement or to define, limit, extend or
describe its scope or intent. Recitals . ARTICLE I is integral to this Agreement. All references in this
Agreement to “ Agreement ” or “ this Agreement ” encompass ARTICLE I. No Presumptions. Each party
has reviewed this Agreement and had the benefit of representation by counsel. In light of the foregoing,
any rule of construction to the effect that ambiguities are to be resolved against the drafting party does not
apply to the interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have each caused a duly authorized officer to sign
this Agreement to be effective as of the Effective Date.
La Frontera Community Solutions, Inc.,
QOLPOM, Inc.
An Arizona non-profit corporation
An Arizona limited liability company
By : /s/ Daniel J. Ranieri
By: /s/ Nathaniel Bradley
Daniel J. Ranieri, President
Nathaniel Bradley, President
Date:
Date:_________________________