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): 07 February 2019

 

LANDSTAR, INC.

(Exact name of registrant as specified in its charter)

 

 

 

NEVADA   000-30542   86-0914051

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

 

101 J Morris Commons Lane, Suite 105

Morrisville, North Carolina 27560

(Address of Principal Executive Offices)

 

919-858-6542

(Registrant’s telephone number including area code)

 

1053 E. Whitaker Mill Road, Suite 115, Raleigh, North Carolina 27604

(Former name or former address, if changed since last report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

 

 

     
 

 

Item 1.01 Entry Into a Material Definitive Agreement.

 

On February 7, 2019, LandStar, Inc. (the “ Company ”) entered into an Exclusive License and Management Agreement (the “ License Agreement ”) with WALA, INC., which conducts business under the name ArcMail Technology (“ ArcMail” ). Under the License Agreement the Company was granted the exclusive right and license to receive all benefits from the marketing, selling and licensing, of the ArcMail business products, including, without limitation, the good will of the business. Rory Welch, the CEO of ArcMail (“ Welch ”), shall continue to serve as ArcMail’s CEO. The term of the License Agreement is twenty-seven (27) months, with the following payments to be made by the Company to ArcMail: (i) $200,000 upon signing the License Agreement; (ii) monthly payments starting 30-days after the execution of the License Agreement in the amount of $25,000 per month during months 1-6; (iii) monthly payments in the amount of $30,000 per month during months 7-17; and, (iv) on month 18, final payment in the amount of $765,000.

 

In connection with the execution of the License Agreement, two other agreements were also executed:

 

(a) Stock Purchase Rights Agreement : On February 7, 2019, the Company and Welch entered into a Stock Purchase Rights Agreement (the “ Stock Rights Agreement ”) under which the Company has the right, though not the obligation, to acquire 100% of the issued and outstanding shares of stock of ArcMail. The right can be exercised over a period of 27-months in accordance with the following schedule:

 

Date of Purchase Right   Cash Due     Cash Value of
Company Shares
    Percentage of
100% Share
Interest Acquired
 
Closing     -0-     $ 95,000       12.50 %
3-month anniversary   $ 50,000     $ 85,000       6.25 %
6-month anniversary   $ 50,000     $ 85,000       6.25 %
9-month anniversary   $ 50,000     $ 85,000       6.25 %
12-month anniversary   $ 50,000     $ 85,000       6.25 %
15-month anniversary   $ 50,000     $ 85,000       6.25 %
18-month anniversary   $ 50,000     $ 85,000       6.25 %
21-month anniversary   $ 50,000     $ 85,000       12.50 %
24-month anniversary   $ 50,000     $ 85,000       12.50 %
27-month anniversary   $ 50,000     $ 85,000       Remainder  

 

The value of the Company Shares shall be equal to the average closing price for shares of the Company’s common stock for the ten (10) trading days immediately preceding each respective date. If the Company fails to exercise any purchase right the remainder of the purchase rights shall terminate and Welch shall have the right to repurchase from the Company (at the same price paid by the Company) all of ArcMail shares acquired by the Company (the “ Repurchase Right ”).

 

(b) Business Covenants Agreement : On February 7, 2019, the Company, ArcMail, and Welch entered into a Business Covenants Agreement (the “ Covenants Agreement ”) under which ArcMail and Welch agreed to not compete with the Company’s use of the ArcMail business under the License for a period of twenty four (24) months from the later of (i) February 7, 2019; (ii) the date on which the Company acquires the 100% of the stock of ArcMail; or, (iii) the last date on which Welch renders services to the Company or any of its subsidiaries.

 

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The term of the restrictions will immediately and irrevocably terminate upon the exercise of the Repurchase Right by Welch. Further, thereafter, the Company will not, for a period of twenty-four (24) months, (i) engage in the business of E-Mail archiving; (iii) solicit any customer of ArcMail; or, (iii) solicit any ArcMail employees.

 

There are no material relationships between the Company, ArcMail, Welch, or any of the parties to the above described three agreements, other than in respect of such agreements themselves.

 

The foregoing descriptions of the License Agreement, Stock Rights Agreement, and Covenants Agreement, respectively, does not purport to be complete and is qualified in its entirety by reference to the full text of the License Agreement, Stock Rights Agreement, and Covenants Agreement, a copy of which is filed herewith as Exhibit 10.1; 10.2; and, 10.3 respectively, to this report and is incorporated by reference herein.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The discussion in Item 1.01 of this Form 8-K regarding the three agreements noted therein is hereby incorporated in this Item 2.03 by reference.

 

ITEM 7.01 Regulation FD Disclosure.

 

On February 11, 2019 the Company issued a press release (the “ Press Release ”) announcing the execution of the License Agreement, Stock Rights Agreement, and Covenants Agreement. A copy of the Press Release is attached hereto as Exhibit 99.1 and incorporated herein by this reference.

 

ITEM 9.01 Financial Statements and Exhibits.

 

(d) Exhibits .

 

The following exhibits are furnished with this report:

 

  Exhibit No.   Exhibit Description
       
  10.1   License Agreement
       
  10.2   Stock Rights Agreement
       
  10.3   Covenants Agreement
       
  99.1   Press Release issued by the Company on February 11, 2019.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: February 11, 2019 LANDSTAR, INC.
     
  By: /S/ JASON REMILLARD
    Jason Remillard,
    Chief Executive Officer

 

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EXCLUSIVE LICENSE AND MANAGEMENT AGREEMENT

 

 

WALA, INC.

 

and

 

LANDSTAR, INC.

 

_____________, 2019

 

     

 

 

EXCLUSIVE LICENSE AND MANAGEMENT AGREEMENT

 

 

I

PARTIES

 

THIS EXCLUSIVE LICENSE AND MANAGEMENT AGREEMENT (the “ Agreement ”) is entered into effective as of the ____ day of ________, 2019 (the “ Effective Date ”), by and between WALA, INC., a Louisiana corporation doing business under the name ARCMAIL TECHNOLOGY (“ ArcMail” ); and , LANDSTAR, INC., a Nevada corporation (“ LDSR” ). ArcMail and LDSR are sometimes referred to collectively herein as the “ Parties ”, and each individually as a “ Party ”.

 

II

RECITALS

 

A. ArcMail is in the business generally described as cybersecurity, with an emphasis on email archiving and encryption, and data loss prevention (the “ Business ”). As used herein, the term Business shall be all encompassing of all aspects of the business conducted by ArcMail, whether historical, current, or planned for the future.

 

B. LDSR is in the cybersecurity business.

 

C. ArcMail wishes to grant to LDSR hereunder an exclusive license for LDSR to operate, run, and exploit the Business on a worldwide basis, and LDSR wishes to receive the exclusive license, which exclusive license shall specifically include, without limitation, all goodwill of the Business.

 

D. In addition to the grant of the exclusive license hereunder, the Parties further wish to provide for the management of the Business.

 

E. The Parties has previously entered into that certain Term Sheet dated __ January 2019 (the “ Term Sheet ”). This Agreement shall expressly replace the Term Sheet, except for those provisions under the section titled “ Binding Provisions ”.

 

F. NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

III

GRANT OF EXCLUSIVE LICENSE

 

3.1 License . Subject to the terms and conditions of this License Agreement, ArcMail hereby licenses to LDSR, and LDSR holds, the exclusive right and license to use, sell, sublicense, market, and receive the benefits from the marketing, selling and licensing, of the ArcMail business products, including, without limitation, the good will of the Business (the “ Exclusive License ”).

 

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3.2 Scope of the Exclusive License . The scope of the Exclusive License shall be interpreted as broadly as possible, extending to all ArcMail products, product lines, new products, , including historical, current, and planned products. The Exclusive License shall permit LDSR the benefit of using all ArcMail assets, specifically excluding all Excluded Assets, and specifically including, without limitation, all good will; all intellectual property rights; intellectual property; know-how; trade secrets; technology; licensed technology; products; client lists; websites and social media accounts; and, improvements, corrections, and enhancements to all of the above (collectively, the “ Business Assets ”), for the purpose of marketing, selling and sublicensing the ArcMail productsand receiving the revenues and other financial benefits that flow from the sale and sublicensing of the ArcMail products and use of the Business Assets during the term of this Exclusive License.

 

3.3 Excluded Assets . For purposes of this Agreement, “Excluded Assets” is defined to include all assets of ArcMail not directly or indirectly used in the conduct of the Business, including, without limitation, office furniture and fixtures; equipment not otherwise specified; accounts receivable as of the Closing; pending or prospective legal actions on behalf of ArcMail for claims that have arisen prior to the Closing and, cash on hand at the Closing.

 

3.4 No Further Use or Licensing . As holders of the Exclusive License to all ArcMail products, LDSR shall have all right and control over the marketing, sale, sublicensing and distribution of the ArcMail business products during the Term of the License. ArcMail shall make no further use of the Business except as otherwise expressly provided for hereunder, and ArcMail shall grant no further licenses or sublicenses of any kind with regard to the Business to any third party during the Term.

 

3.5 Right to Sublicense . LDSR shall be permitted to grant sublicenses under the Exclusive License to any third party it controls by way of an ownership interest of at least eighty percent (80%). All sublicenses granted under this Section 3.5 shall comply with all provisions of this Agreement. ArcMail is to be notified 30 days in advance of sublicense grant. LDSR is still the party of contract with ArcMail and responsible for ensuring compliance with the agreement.

 

3.6 Relationship of the Parties . It is expressly agreed that each of the Parties shall be independent contractors and that the relationship between the Parties shall not constitute a partnership, joint venture, or agency. No Party shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other, without the prior consent of the other Party to do so. LDSR shall not be liable, as principal, surety, guarantor, agent or otherwise, for any of the debts, obligations, or liabilities of ArcMail except as expressly provided for herein to contrary.

 

IV

MANAGEMENT AND CONDUCT OF THE BUSINESS

 

4.1 Financial Rights and Obligations of LDSR .

 

4.1.1. Revenue . Any and all revenue generated by the Business during the Term of this Agreement (except for any revenue coming from the Excluded Assets) shall belong solely to LDSR, even if (in the sole discretion of LDSR) LDSR chooses to have revenues collected by ArcMail on its behalf.

 

4.1.2. Expenses . LDSR shall be solely responsible for the payment of all expenses related to the operation of the Business during the Term, including, without limitation, sales and marketing related expenses; maintenance of technology infrastructure and third-party licenses; ongoing support of existing customers and tech support team; storage of records and documents; and, the employee related expenses under Section 4.3, below.

 

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4.2 Financial Rights and Obligations of ArcMail .

 

4.2.1. Retained Liabilities . ArcMail shall retain all responsibility for the payment of any and all of its obligations accruing or otherwise incurred or becoming due as of or before the Closing Date (the “ Retained Liabilities ”). ArcMail shall pay all Retained Liabilities in a manner so as to not unduly jeopardize or negatively impact the Exclusive License or the Business after the Closing Date.

 

4.2.2. Retained Receivables . ArcMail shall retain all rights to all accounts receivable accrued, owed, and billed as of the Closing Date (the “ Retained Receivables ”). LDSR shall render reasonable assistance to ArcMail (if so requested by ArcMail) to collect Retained Receivables.

 

4.2.3. On-Going Obligations . At all times after Closing ArcMail shall continue to be responsible for the timely payment of all costs and expenses related to (i) maintaining its corporate existence; (ii) preparation of financial statements in accordance with Section 4.5, below; and, (iii) ArcMail’s office facilities.

 

4.3 Employees . The employees of ArcMail (the “ Employees ”) shall remain employees of ArcMail, subject to determination by LDSR as to continued employment. If during the Term of this Exclusive License LDSR has decided to terminate any ArcMail employee, LDSR shall give Welch reasonable notice its intent to do so, not less than five (5) days before the intended termination, and Welch shall have final approval of termination of any ArcMail employee. Should Welch decide against such termination for any non-technical employee which includes development and technical support staff, LDSR shall no longer be responsible for the payment of that employee’s salary and all related costs and expenses. LDSR shall be responsible for the timely payment to ArcMail of all costs and expenses related to the Employees, including, without limitation, salaries, withholding, approved (by LDSR) reimbursements, and employee benefits. All ArcMail employees shall maintain their current salaries, with reasonable and customary periodical increases. All such Employees shall work remotely as there will be no office space maintained by ArcMail.

 

4.4 Management . Subject to the oversight and final decision-making authority of LDSR, Rory Welch (“ Welch ”) shall continue to serve as the CEO of ArcMail (without compensation by LDSR as Welch is expressly excluded from the definition of Employees hereunder). Welch shall, as an employee of ArcMail, subject to the direction of LDSR, at all times exercise his best efforts to promote and advance the good will of the Business, and the revenue production flowing from the ArcMail products and product lines.

 

4.4.1. Affirmative Obligations . At all times during the term of this Agreement Welch shall render services typically associated with the chief executive officer of a similarly sized company in the same industry, including, without limitation:

 

(a) Manage all costs and all pricing on a customer-by-customer basis, estimate all costs on new contracts, bid on and enter into new contracts, and control all costs for contracts in progress.

 

(b) Supervise and control the purchase of all materials, supplies, and services necessary for the Business to operate in an efficient manner.

 

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4.4.2. Negative Covenants . Welch shall have no authority, without the express written consent of LDSR, to purchase in the name of ArcMail or LDSR any assets outside the ordinary course of business, or incur any indebtedness outside the ordinary course of business. Welch further agrees that at no time shall Welch:

 

(a) permit anything to be done which will or might cause ArcMail to operate in an improper or illegal manner;

 

(b) cause a default in any of the terms, conditions and obligations of any of the contracts and other agreements of ArcMail;

 

(c) allow any of ArcMail’s licenses, permits, or approvals necessary for the operation of the Business to lapse, expire, or otherwise be deemed invalid; or

 

(d) deny LDSR access to the books and records of ArcMail.

 

4.5 Financial Books and Records .

 

4.5.1. GAAP Books and Records . After Closing, Welch and LDSR shall jointly maintain and manage the books and records of ArcMail in a manner consistent with past practice, and in accordance with GAAP so that LDSR can direct the preparation of audited financials for ArcMail, in its sole discretion and expense. This will be done through a new QuickBooks account in order to keep the financial records going forward separate from the historical financial records.

 

4.5.2. Operating Reports . After Closing, Welch and LDSR shall jointly prepare weekly operating reports and statements including but not limited to cash flow statements, income statements, accounts payable and accounts receivable reports and such other reports and information as may be reasonably requested LDSR from time-to-time.

 

4.5.3. Other Financial Functions . After Closing, Welch and LDSR shall work cooperatively and in good faith to agree, from time-to-time, on the manner in which all other finances of the Business, including payroll, taxes, accounting, bookkeeping, record keeping, managing or accounts payable, and accounts receivable, banking, financial records and reporting functions as they pertain to the Business, will be administered, supervised, and maintained.

 

4.5.4. Historical Financial Books and Records . Welch shall retain, maintain, and make available for inspection and review by LDSR all historical financial books and records of ArcMail.

 

4.6 Right to Offset . In the event ArcMail fails to make any payment with respect to any of its liabilities, obligations or commitments not expressly assumed or the responsibility of LDSR hereunder (the “ Unpaid Liabilities ”), LDSR may elect to pay such Unpaid Liabilities, in addition to any other costs or charges, if any, associated with the Unpaid Liabilities (the “ Associated Costs ”), if the LDSR determines, in its sole and absolute discretion, that such payment is necessary or desirable to allow the Business to continue on an uninterrupted basis. However, (i) LDSR shall be required to give Welch five (5) days prior written notice, which notice shall set forth the amount and identity of the Unpaid Liabilities and Associated Costs; and, (ii) Welch shall not have paid such Unpaid Liabilities and Associated Costs within such five (5) day period or taken reasonable steps to contest such Unpaid Liabilities where ArcMail has reasonable basis to contest such Unpaid Liabilities. ArcMail hereby acknowledges and agrees that if LDSR pays any Unpaid Liabilities or Associated Costs, LDSR shall have the right to offset the amount of such Unpaid Liabilities and/or Associated Costs against amounts then or thereafter due ArcMail under this Agreement.

 

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V

PAYMENT TERMS

 

5.1 License Fees . As full and complete payment for the Exclusive License and the rendering of all services required of Welch hereunder, LDSR shall make the following payments to ArcMail (collectively, the “ License Fees ”):

 

5.1.1. Initial Payment . A total of Fifty Thousand Dollars ($50,000), payable as follows: (i) a payment in the amount of Twenty Thousand Dollars ($20,000), the receipt of which by ArcMail is hereby acknowledged; and, (ii) the balance of Thirty Thousand Dollars ($30,000), payable upon execution of this Agreement and placed into an escrow account at the expense of LDSR, and released from escrow at Closing in accordance with wire transfer instruction to be provided by Welch.

 

5.1.2. Closing Payment . Immediately upon Closing, LDSR shall tender payment to ArcMail in the amount of One Hundred Fifty Thousand Dollars ($150,000).

 

5.1.3. Monthly Payments . LDSR shall tender monthly payments to ArcMail as follows, with the first payment due 30-days after Closing, and each successive payment due on the same day of each successive month:

 

(a) Months 1 – 6: $25,000 per month.

 

(b) Months 7 – 17: $30,000 per month.

 

5.1.4. Final Payment . On Month 18, final payment of the License Fess shall be tendered by LDSR to ArcMail in the amount of Seven Hundred Sixty Five Thousand Dollars ($765,000).

 

5.2 Use of the License Fees . As a priority payment, and before ArcMail makes any other use of the receipt of each payment of the License Fees, ArcMail shall apply each of the License Fees in the amount necessary to stay current under the terms and conditions of that certain Forbearance Agreement dated 16 July 2018 by and between ArcMail and the additional parties referred to therein as the Noteholders, a copy of which is attached hereto as Exhibit 5.2 (the “ Forbearance Agreement ”). ArcMail further agrees to at all times be in full compliance with the terms and conditions of the Forbearance Agreement.

 

VI

CLOSING

 

6.1 Closing Date . The closing of the transactions contemplated under this Agreement (the “ Closing ”) shall take place on the ____ day of February, 2019, at such place as the Parties may agree, or at such other time as the Parties may agree. The date on which the Closing occurs is also referred to herein as the “Closing Date”.

 

6.2 Concurrent Transactions . In addition to all other conditions to Closing herein, the Parties agree that the following concurrent transactions (the “ Concurrent Transactions ”) must be closed: (i) execution of the Stock Purchase Rights Agreement;(ii) execution of the Business Covenants Agreement by and between Welch and LDSR; and, (iii) any and all other documents and agreements deemed necessary by the Parties in order to effect the transactions envisioned under this Agreement and the Concurrent Transactions. All such items are collectively referred to herein as the “ Concurrent Agreements ”.

 

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6.3 Representations and Warranties of ArcMail to be True . The representations and warranties of ArcMail contained in this Agreement or in any statement, certificate, schedule or other document delivered pursuant to this Agreement or in connection with the transactions contemplated hereby, shall be true and correct in all material respects on the Closing with the same force and effect as though made at such time. ArcMail shall have performed all obligations and complied with all covenants required by this Agreement, and the other agreements referred to herein, to be performed or complied with by it prior to the Closing.

 

6.4 Representations and Warranties of LDSR to be True . The representations and warranties of LDSR contained in this Agreement or in any statement, certificate, schedule or other document delivered pursuant to this Agreement or in connection with the transactions contemplated hereby, shall be true and correct in all material respects on the Closing with the same force and effect as though made at such time. LDSR shall have performed all obligations and complied with all covenants required by this Agreement, and the other agreements referred to herein, to be performed or complied with by it prior to the Closing.

 

6.5 Deliverables .

 

6.5.1. By ArcMail . At the Closing, ArcMail shall deliver to LDSR executed versions of this Agreement, the Concurrent Agreements, and all other required documents (including all documents to be signed by Welch); and, executed Board of Directors resolution authorizing the transactions contemplated hereunder.

 

6.5.2. By LDSR . At the Closing, LDSR shall deliver to ArcMail the Closing Payment by wire transfer; executed versions of this Agreement, the Concurrent Agreements, and all other required documents; and, executed Board of Directors resolution authorizing the transactions contemplated hereunder.

 

VII

TERM, AND TERMINATION

 

7.1 Term . The term of this Agreement shall commence on the Closing Date and continue in full force and effect for twenty seven (27) months, unless terminated earlier pursuant to this Agreement.

 

7.2 Early Termination . This Agreement may be terminated prior to the end of the Term in the following circumstances:

 

7.2.1. Upon Material Breach . Upon any material breach of this Agreement by either Party (in such capacity, the “ Breaching Party ”), the other Party may terminate this Agreement by providing thirty (30) days written notice to the Breaching Party, specifying the material breach. The termination shall become effective at the end of the thirty (30) day period unless: (i) the Breaching Party cures such breach during such thirty (30) day period; or, (ii) if such breach is not susceptible to cure within thirty (30) days of the receipt of written notice of the breach, and the Breaching Party is diligently pursuing a cure (unless such breach, by its nature, is incurable, in which case the Agreement may be terminated immediately. However , in the case of a failure to pay any amount due hereunder, such default may be the basis of termination fifteen (15) business days following the date that notice of such default was provided to the Breaching Party.

 

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7.2.2. Upon Bankruptcy . Either Party may terminate this Agreement immediately if the other Party: (i) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property; (ii) becomes unable, or admits in writing its inability, to pay its debts generally as they mature; (iii) makes a general assignment for the benefit of its creditors; (iv) is dissolved or liquidated in full or in part; (v) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consents to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; (vi) takes any action for the purpose of effecting any of the foregoing; or, (vii) becomes the subject of an involuntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect that is not dismissed within sixty (60) calendar days of commencement. In the event that LDSR intends to file for bankruptcy, LDSR shall notify ArcMail before filing, and without further notice, or demand, this Agreement will immediately terminate.

 

7.3 Effect of Termination . Termination shall be without prejudice to the rights, remedies, obligations, and liabilities which may have accrued on or at any time up to the date of termination. Upon termination, the Exclusive License shall terminate and be of no further force and effect.

 

7.4 Cross Default . This License Agreement is further conditioned on the continued enforceability of the Stock Purchase Rights Agreement. If at any time LDSR fails to tender timely payment under the Stock Purchase Rights Agreement, and ArcMail rightfully terminates the Stock Purchase Rights Agreement, then as of the termination of the Stock Purchase Rights Agreement all remaining rights and obligations under this License Agreement shall terminate and this License Agreement shall be of no further force and effect.

 

7.5 Survival . The provisions of Articles X and XIII shall survive the expiration or termination of this Agreement.

 

VIII

REPRESENTATIONS AND WARRANTIES OF ARCMAIL

 

Except as expressly set forth to the contrary in Schedules attached to this Agreement, corresponding to the lettered and numbered Sections contained in this Article VIII, ArcMail hereby represents and warrants to LDSR as follows, as of the Execution Date and as of the Closing Date, as supplemented and updated pursuant to this Agreement:

 

8.1 Organization and Good Standing . ArcMail is a corporation duly organized, validly existing, and in good standing under the laws of the State of Louisiana. ArcMail has all requisite corporate power and authority to carry on the Business and to own and use the properties owned and used by it. ArcMail has no subsidiaries.

 

8.2 Foreign Qualifications . ArcMail is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification.

 

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8.3 Authorization .

 

8.3.1. Operation of Business . ArcMail has the requisite corporate power and authority and all requisite licenses, permits, and franchises necessary to own and operate its properties and to carry on the Business as now being conducted.

 

8.3.2 Execution of Agreements . ArcMail has the requisite corporate power and authority to enter into and carry out the terms and conditions of this Agreement and each of the Concurrent Agreements to which it is a party, as well as all transactions contemplated hereunder. All corporate proceedings have been taken and all corporate authorizations have been secured which are necessary to authorize the execution, delivery, and performance by ArcMail of this Agreement and the Concurrent Agreements to which it is a party. This Agreement has been duly and validly executed and delivered by ArcMail and constitutes the valid and binding obligations of ArcMail, enforceable in accordance with the respective terms.

 

8.4 Effect of Agreement . As of the Closing, the consummation by ArcMail of the transactions herein contemplated, including the execution, delivery, and consummation of this Agreement, will not:

 

(a) Violate any judgment, statute, law, code, act, order, writ, rule, ordinance, regulation, governmental consent or governmental requirement, or determination or decree of any arbitrator, court, or other governmental agency or administrative body, which now or at any time hereafter may be applicable to and enforceable against the relevant party, work, or activity in question or any part thereof (collectively, “ Requirement of Law ”) applicable to or binding upon ArcMail or the Assets;

 

(b) Violate (i) the terms of the Articles of Incorporation or Bylaws of ArcMail; (ii) the Forbearance Agreement; or, (iii) any material agreement, contract, mortgage, indenture, bond, bill, note, or other material instrument or writing binding upon ArcMail or to which ArcMail or the Assets is subject;

 

(c) Accelerate or constitute an event entitling the holder of any indebtedness of ArcMail to accelerate the maturity of such indebtedness; or

 

(d) Result in the breach of, constitute a default under, constitute an event which with notice or lapse of time, or both, would become a default under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the Assets under any agreement, commitment, contract (written or oral) or other instrument to which ArcMail is a party or by which it is bound or affected.

 

8.5 Consents . No consents, approvals or other authorizations or notices, other than those which have been obtained and are in full force and effect, are required by any state or federal regulatory authority or other Person or entity in connection with the execution and delivery of this Agreement and the performance of any obligations contemplated hereunder.

 

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8.6 Financial Statements . The financial statements of ArcMail dated _____________, 2018 (the “ Financial Statements ”), which have been previously delivered by ArcMail to LDSR, are true, complete and accurate in all material respects, have been prepared in accordance with generally accepted accounting principles consistently applied, and present fairly the financial position of ArcMail as of the date thereof. Except to the extent reflected and reserved against in the Financial Statements, ArcMail did not have, as of the date of the Financial Statements, any debts, liabilities or obligations of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, except for those obligations that are not required by generally accepted accounting principles to be included in the Financial Statements.

 

8.7 Changes in Financial Condition . Since the date of the Financial Statements, there has not been:

 

(a) Any material change in the condition (financial or otherwise) or business of ArcMail, except changes in the ordinary course of business, none of which has been materially adverse;

 

(b) Any damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting the properties, assets, business or prospects of ArcMail;

 

(c) Any change in the accounting methods or practices followed by ArcMail or any change in the depreciation or amortization policies or rates adopted by ArcMail (whether or not presently outstanding), except liabilities incurred, and obligations under agreements entered into, in the ordinary course of business; or

 

(d) Any sale, lease, abandonment or other disposition by ArcMail, other than in the ordinary course of business, of any machinery, equipment or other operating properties directly or indirectly related to the Business.

 

8.8 Legal Proceedings . Except as set forth in Schedule 8.10, attached hereto and incorporated herein by reference, there is no claim, legal action, suit, arbitration, investigation or hearing, notice of claims or other legal, administrative or governmental proceedings pending or to the best knowledge of ArcMail, threatened against ArcMail (or in which ArcMail is plaintiff or otherwise a party thereto), and, to the best knowledge of ArcMail, there are no facts existing which might result in any such claim, action, suit, arbitration, investigation, hearing, notice of claim or other legal, administrative or governmental proceeding that might reasonably be expected to have a material adverse effect or that might reasonably be expected to threaten or impede the consummation of the transactions contemplated by this Agreement. ArcMail has not waived any statute of limitations or other affirmative defense with respect to any of its liabilities. There is no continuing order, injunction, or decree of any court, arbitrator, or governmental or administrative authority to which ArcMail is a party. ArcMail has not been permanently or temporarily enjoined or barred by order, judgment or decree of any court or other tribunal or any agency or regulatory body from engaging in or continuing any conduct or practice.

 

8.9 Permits and Licenses . ArcMail has all licenses and permits (federal, state and local) required by governmental authorities to own, operate, and carry on the Business as now being conducted, and such licenses and permits are in full force and effect. No violations are or have been recorded in respect to the licenses or permits, included but not limited to fire and health and safety law violations, and no proceeding is pending or threatened looking toward the revocation or limitation of any of them. All permits, licenses, orders or approvals of governmental or administrative authorities required to permit ArcMail to carry on after the Closing the Business as currently conducted have been obtained and are in full force and effect.

 

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8.10 Customers and Suppliers . The books and records of ArcMail contain a correct and complete list of each of the customers and suppliers of the Business who have dealt with the Business during the three (3) year period ending on the date hereof (the “ Customers and Suppliers ”). ArcMail has taken all commercially reasonable steps to maintain the confidentiality of the Customers. To the best knowledge of ArcMail, as of the Closing:

 

(a) ArcMail has no reasonable cause to believe that any of its Customers or Suppliers, or any other person or entity having material business dealings with the Business, will cease to continue such relationship with immediately after the Closing;

 

(b) ArcMail has no reasonable cause to believe that any of its Customers or Suppliers, or any other person or entity having material business dealings with the Business, will substantially reduce the extent of such relations with the Business at any time from or after the Closing;

 

(c) ArcMail has no reasonable cause to believe that there are no existing or contemplated material modifications or changes in the business relationship of any Customers or Suppliers with ArcMail; and

 

(d) ArcMail has no reasonable cause to believe that there are existing conditions or states of facts or circumstances which have materially affected adversely, or will materially adversely affect, the relationship of the Business with Customers or Suppliers after the Closing, or which has prevented or will prevent the Business from being carried on after the Closing, in essentially the same manner as it is currently carried on.

 

8.11 Material Agreements . Except as set forth in Schedule 8.11, attached hereto and incorporated herein by reference, ArcMail is not a party to, nor are is the Business or Business Assets bound by or subject to, any of the following:

 

(a) license agreement or assignment (whether as licensor or licensee, assignor or assignee) relating to trademarks, trade names, patents or copyrights (or applications therefore), know-how or technical assistance, or other proprietary rights (other than trademark agreements which are entered into in the ordinary course of the Business in conjunction with sales agreements);

 

(b) agreement with any vendor, distributor, dealer, sales agent or representative other than contracts or orders for the purchase or sale of goods made in the usual and Ordinary Course of Business at an aggregate price per contract or order of less than $50,000 and a terms of less than ninety days under any such contract or order;

 

(c) agreement with any supplier or customer with respect to discounts (other than those reflected on ArcMail’s current price lists) or allowances or extended payment terms;

 

(d) joint venture or partnership agreement with any other person;

 

(e) agreement which restricts ArcMail from doing business anywhere in the world; or

 

(f) long-term services agreement.

 

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8.12 Employees . Prior to Closing ArcMail has delivered to LDSR a list of (i) all employees of ArcMail, along with the position and the annual rate of compensation of each such person; and, (ii) all independent contractors of ArcMail rendering services to ArcMail, along with a brief description of the terms of each such contractor’s arrangement. Since delivery of that list there have no material changes to any information contained therein. ArcMail is not aware of any key employee or group of employees that have any plans to not work for ArcMail after the Closing. Except as set forth in Schedule 8.12, and except as otherwise provided for herein, ArcMail is not a party to any employment agreement, independent contractor agreement, or similar arrangement or agreement, whether it be reduced to written form or an oral promise.

 

8.13 Insurance Policies . All insurance policies maintained by ArcMail on the Business, Business Assets, officers, and personnel provide adequate and sufficient liability and property damage coverage commensurate with the business practices of the Business. ArcMail does not conduct any business which would result in the cancellation of, or a material increase in the premiums, for any of its insurance policies.

 

8.14 Intellectual Property Rights . The “Intellectual Property Assets” are all those necessary for the operation of the Business by ArcMail as it is currently conducted, and are listed on Schedule 8.14, attached hereto and incorporated herein by reference. ArcMail 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, equities, and other adverse claims, and has the right to use without payment to a third party all of the Intellectual Property Assets. To the extent that any employee or former employee of ArcMail has developed or invented or otherwise produced any of the Intellectual Property Assets, all such former and current employees of ArcMail have executed written contracts that assign to ArcMail all rights to any inventions, improvements, discoveries, or information relating to the Intellectual Property Assets. No such employee or former employee has entered into any contract 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 ArcMail.

 

8.15 Other Arrangements . Other than the Forbearance Agreement and that certain Security Agreement dated 01 September 2014, a copy of which is attached hereto as Exhibit 8.15, ArcMail is not a party to any contract, commitment or agreement, nor is the Business or any of the Business Assets subject to, or bound or affected by, any order, judgment, decree, law, statute, ordinance, rule, regulation or other restriction of any kind or character which is not applicable to the Business generally, which would, individually or in the aggregate, materially adversely affect the Business or any of the Business Assets. ArcMail is also not a party or subject to any agreement, contract or other obligation which would require the making of any payment, other than payments contemplated by this Agreement, to any other person as a result of the consummation of the transactions contemplated herein.

 

8.16 Disclosure . No representation or warranty made by ArcMail in this Agreement or in any writing furnished or to be furnished pursuant to or in connection with this Agreement knowingly contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact required to make the statements herein or therein contained not misleading. ArcMail has disclosed to LDSR all material information known to it related to ArcMail and the Business, and their respective condition, operations and prospects.

 

8.17 Material Defaults . ArcMail is not in material default, or alleged to be in default, under any material agreement, contract, lease, mortgage, commitment, instrument or obligation, and no other party to any agreement, contract, lease, mortgage, commitment, instrument or obligation to which ArcMail is a party is in default thereunder, which default would materially and adversely affect the properties, assets, or prospects of the Business.

 

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8.18 Tax Matters .

 

(a) ArcMail has filed all tax returns (federal, state and local) required to be filed by it, and all such tax returns filed are complete and accurate in all material respects.

 

(b) ArcMail has paid all taxes due and payable on the returns or any assessments or penalties received by it and all other taxes (federal, state and local) due and payable by it.

 

(c) ArcMail has collected and withheld all taxes required to collect or withhold and has timely submitted all such collected and withheld amounts to the appropriate authorities.

 

(d) ArcMail is in compliance with all back-up withholding and information reporting requirements under federal, any state, local, or foreign laws, and the rules and regulations thereunder.

 

(e) No examination or audit of any tax returns of ArcMail by any governmental entity is currently in progress or, to the knowledge of ArcMail, threatened or contemplated. ArcMail has not waived any statute of limitations with respect to taxes or agreed to an extension of time with respect to a tax assessment or deficiency.

 

8.19 Other Matters . ArcMail has not taken and has not agreed to take any action, and has no knowledge of any fact or circumstances that would materially impede or delay the consummation of the transactions contemplated under this Agreement or the Concurrent Agreements.

 

8.20 Advice of Changes . Between the Execution Date and the Closing Date, ArcMail shall promptly advise LDSR in writing of any fact which, if existing or known at the Execution Date, would have been required to be set forth or disclosed in or pursuant to this Agreement or of any fact which, if existing or known at the Execution Date, would have made any of the representations herein untrue.

 

IX

REPRESENTATIONS AND WARRANTIES BY BUYER

 

Except as expressly set forth to the contrary in Schedules attached to this Agreement, corresponding to the lettered and numbered Sections contained in this Article IX, LDSR hereby represents and warrants to ArcMail as follows, as of the Execution Date and as of the Closing Date, as supplemented and updated pursuant to this Agreement:

 

9.1 Organization . LDSR is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. LDSR is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required.

 

9.2 Authorization .

 

9.2.1. Operation of Business . LDSR has the corporate power and authority to own and operate its properties and to carry on its business as now being conducted. LDSR has the corporate authority to enter into, execute, and deliver this Agreement, and the agreements referred to herein, and to consummate the transactions contemplated hereunder.

 

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9.2.2. Execution of Agreement . LDSR has the requisite corporate power and authority to enter into and carry out the terms and conditions of this Agreement and each of the Concurrent Agreement to which it is a party, as well as all transactions contemplated hereunder. All corporate proceedings have been taken and all corporate authorizations have been secured which are necessary to authorize the execution, delivery and performance by LDSR of this Agreement, and each of the Concurrent Agreements to which it is a party. This Agreement has been duly and validly executed and delivered by LDSR and constitutes the valid and binding obligations of LDSR, enforceable in accordance with the respective terms.

 

9.3 Effect of Agreement . As of the Closing, the consummation by LDSR of the transactions herein contemplated, including the execution, delivery and consummation of this Agreement, will not:

 

(a) Violate any Requirement of Law applicable to or binding upon LDSR;

 

(b) Violate (i) the terms of the Articles of Incorporation or Bylaws of LDSR; or, (ii) any material agreement, contract, mortgage, indenture, bond, bill, note, or other material instrument or writing binding upon LDSR or to which LDSR is subject; or

 

(c) Accelerate or constitute an event entitling the holder of any indebtedness of LDSR to accelerate the maturity of such indebtedness; or

 

(d) Result in the breach of, constitute a default under, constitute an event which with notice or lapse of time, or both, would become a default under, or result in the creation of any lien, security interest, charge or encumbrance upon any part of the assets of LDSR or any other assets of LDSR under any agreement, commitment, contract (written or oral) or other instrument to which LDSR is a party, or by which any of its assets (or any part thereof) is bound or affected.

 

9.4 Investigation . On or prior to the Closing, will have had the opportunity to investigate the books, records, and the Financial Statements of ArcMail. As of the Closing, LDSR will consummate the transactions envisioned hereunder based upon its own independent investigation and evaluation of the Business and its prospects, and the covenants, representations, and warranties of ArcMail set forth herein. LDSR is expressly not relying on any oral representations made by ArcMail with regard to the Business.

 

X

INDEMNIFICATION

 

10.1 ArcMail Obligations . ArcMail agrees to defend, indemnify and hold LDSR, its affiliates and their respective directors, officers, employees and agents and their respective successors, heirs and assigns, harmless from and against any losses, costs, claims, damages, liabilities or expenses (including reasonable attorneys’ and professional fees and other expenses of litigation) (collectively, “ Liabilities ”) arising out of or in connection with third party claims, suits, actions, demands or judgments relating to (i) all Liabilities of ArcMail arising or accruing prior to the Closing Date; (ii) all Liabilities of ArcMail arising or accruing after the Closing Date and not otherwise the obligation of LDSR hereunder; (iii) as a result of a material breach by ArcMail of any of its representations and warranties made hereunder; or, (iv) as a result of any other material breach by ArcMail of this Agreement.

 

10.2 LDSR Obligations . LDSR agrees to defend, indemnify and hold ArcMail, its affiliates and their respective directors, officers, employees and agents and their respective successors, heirs and assigns, harmless from and against any Liabilities arising out of or in connection with third party claims, suits, actions, demands or judgments relating to (i) all Liabilities of LDSR not otherwise provided for hereunder; (ii) the use of the Exclusive License pursuant to this Agreement; (iii) as a result of a breach by LDSR of any of its representations and warranties made hereunder; or, (iv) as a result of a material breach by LDSR of any other provision of this Agreement.

 

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10.3 Procedure . In the event that a Party (an “ Indemnitee ”) intends to claim indemnification under this Article X, such Party shall promptly notify the indemnifying Party of any Liability in respect of which the Indemnitee intends to claim such indemnification, and the indemnifying Party shall assume the defense thereof with mutually satisfactory counsel. However, an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying Party, if representation of such Indemnitee by the counsel retained by the indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other party represented by such counsel in such proceedings. The Indemnitee under this Article X shall cooperate fully with the indemnifying Party and its legal representatives in the investigation of any Liability covered by this Agreement.

 

XI

ADDITIONAL AGREEMENTS AND OBLIGATIONS

 

11.1 Best Efforts . Each Party hereby agrees to use their respective best efforts to perform the duties delegated to it pursuant to this Agreement, taking all reasonable, ordinary and necessary measures to ensure an orderly and smooth relationship under this Agreement, and further agree to work together and negotiate in good faith to resolve any differences or problems which may arise in the future. However , the obligations under this Section 11.1 shall not include any obligation to incur substantial expense or liability.

 

11.2 Audit Rights . Each Party shall permit accountants retained by that Party to have access to its records and books for the sole purpose of verifying information provided by one Party to the other. Such examination shall be conducted during regular business hours and upon reasonable notice, at the requesting Party’s own expense and no more than four (4) times in each calendar year during the term of this Agreement, and once during the three (3) calendar years following the termination hereof.

 

11.3 Post-Closing Business . ArcMail hereby agrees that, except as otherwise consented to in writing by LDSR or otherwise expressly permitted hereunder or under the Concurrent Agreements, at all times after the Closing:

 

(a) ArcMail will carry on the Business in a manner consistent with this Agreement, and will use its best efforts to preserve its business organization intact, and to keep available the services of all of its present employees, agents, and representatives.

 

(b) No change will be made in the authorized or issued capital stock of ArcMail, nor shall any rights, warrants, or options relating thereto be issued inconsistent with the transactions contemplated hereunder.

 

(c) No dividend or other distribution will be declared, set aside, or paid on or in respect of the common capital stock of ArcMail, nor will ArcMail directly redeem, retire, purchase, or otherwise reacquire any of its stock.

 

(d) ArcMail will not sell or otherwise dispose of any of the Business Assets or any other properties or assets, purchase or otherwise acquire any properties or assets, incur any liabilities or enter into any transactions, outside of the ordinary course of the ArcMail Business, except with the express written consent of LDSR.

 

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(e) From and after the Closing, ArcMail will permit LDSR and its duly authorized agents to have reasonable access to the offices, properties, books, and records of ArcMail for the purpose of investigating the business and examining the records of ArcMail, verifying the representations made in this Agreement and the performance of the conditions set forth in this Agreement, consistent with the provisions of 11.2, herein.

 

XII

NOTICES

 

All notices, requests, demands, and other communications required or permitted to be given hereunder shall be effected pursuant to Section 13.15, below, as follows:

 

If to LDSR : With a copy to:
Mr. Keith A. Rosenbaum, Esq.
SPECTRUM LAW GROUP, APC, INC.
23 Corporate Plaza, Suite 150., Suite
Newport Beach, California 92660,
  keith@spectrumlawgroup.com
   
If to ArcMail: With a Copy to :
Mr. Michael P. Mangan, Esq.
Mangan Ginbserg, LLP, INC.
80 Maiden Lane, Suite 304.
  New York, New York 10038
  mpm@mangan-ginsberg.com
____,

 

XIII

ADDITIONAL PROVISIONS

 

13.1 Executed Counterparts . This Agreement may be executed in any number of counterparts, when taken together shall be considered one and the same agreement, it being understood that all Parties need not sign the same counterpart. In the event that any signature is delivered by Fax or by E-Mail, such signature shall create a valid and binding obligation of that Party (or on whose behalf such signature is executed) with the same force and effect as an original thereof. Any photographic, photocopy, or similar reproduction copy of this Agreement, with all signatures reproduced on one or more sets of signature pages, shall be considered for all purposes as if it were an executed counterpart of this Agreement.

 

13.2 Entire Agreement . This Agreement, and all references, documents, or instruments referred to herein, contains the entire agreement and understanding of the Parties in respect to the subject matter contained herein. The Parties have expressly not relied upon any promises, representations, warranties, agreements, covenants, or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes (i) any and all prior written or oral agreements, understandings, and negotiations between the Parties with respect to the subject matter contained herein; and, (ii) any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

 

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13.3 Severability . Each and every provision of this Agreement is severable and independent of any other term or provision of this Agreement. If any term or provision hereof is held void or invalid for any reason by a court of competent jurisdiction, such invalidity shall not affect the remainder of this Agreement.

 

13.4 Governing Law . This Agreement shall be governed by the laws of the State of North Carolina, without giving effect to any choice or conflict of law provision or rule (whether of the State of North Carolina or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of North Carolina. If any court action is necessary to enforce the terms and conditions of this Agreement, the Parties hereby agree that Wake County Superior Court, Raleigh, North Carolina, shall be the sole jurisdiction and venue for the bringing of such action.

 

13.5 Enforcement . The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that the Parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which any person may be lawfully entitled.

 

13.6 Waiver . No failure by any Party to insist on the strict performance of any covenant, duty, agreement, or condition of this Agreement or to exercise any right or remedy on a breach shall constitute a waiver of any such breach or of any other covenant, duty, agreement, or condition.

 

13.7 Recovery of Fees by Prevailing Party . In the event of any legal action (including arbitration) to enforce or interpret the provisions of this Agreement, the non-prevailing Party shall pay the reasonable attorneys’ fees and other costs and expenses including expert witness fees of the prevailing Party in such amount as the court shall determine.

 

13.8 Recitals . The facts recited in Article II, above, are hereby conclusively presumed to be true as between and affecting the Parties.

 

13.9 Amendment . This Agreement may be amended or modified only by a writing signed by all Parties.

 

13.10 Successors and Assigns . Except as expressly provided in this Agreement, each and all of the covenants, terms, provisions, conditions, and agreements herein contained shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties.

 

13.11 Assignability . Except as otherwise provided for herein, this Agreement is not assignable by either Party without the expressed written consent of all Parties.

 

13.12 Provision Not Construed Against Party Drafting Agreement . This Agreement is the result of negotiations by and between the Parties, and each Party has had the opportunity to be represented by independent legal counsel of its choice. This Agreement is the product of the work and efforts of all Parties, and shall be deemed to have been drafted by all Parties. In the event of a dispute, no Party shall be entitled to claim that any provision should be construed against any other Party by reason of the fact that it was drafted by one particular Party.

 

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13.13 Agreement Provisions, Exhibits, and Schedules . When a reference is made in this Agreement to an Article, Section, Subsection, Exhibit, or Schedule, such reference shall be to said item of this Agreement unless otherwise indicated. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof as if set out in full herein.

 

13.14 Further Assurances . Each Party agrees (i) to furnish upon request to each other Party such further information; (ii) to execute and deliver to each other Party such other documents; and, (iii) to do such other acts and things, all as another Party may reasonably request for the purpose of carrying out the intent of this Agreement and the transactions envisioned hereunder. However , this provision shall not require that any additional representations or warranties be made and no Party shall be required to incur any material expense or potential exposure to legal liability pursuant to this Section 13.14.

 

13.15 Notices .

 

13.15.1. Method and Delivery . All notices, requests and demands hereunder shall be in writing and delivered by hand, by Electronic Transmission, by mail, or by recognized commercial over-night delivery service (such as Federal Express or UPS), and shall be deemed given (a) if by hand delivery, upon such delivery; (b) if by Electronic Transmission, upon telephone confirmation of receipt of same; (c) if by mail, forty-eight (48) hours after deposit in the United States mail, first class, registered or certified mail, postage prepaid; or, (d) if by recognized commercial over-night delivery service, upon such delivery.

 

13.15.2. Consent to Electronic Transmission . Each Party hereby expressly consents to the use of Electronic Transmission for communications and notices under this Agreement. For purposes of this Agreement, “Electronic Transmission” means a communication (i) delivered by Fax or E-Mail when directed to the Fax number or E-Mail address, respectively, for that recipient on record with the sending Party; and, (ii) that creates a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form.

 

13.15.3. Address Changes . Any Party may alter the Fax number, E-Mail address, physical address, or postage address to which communications or copies are to be sent by giving notice of such change of address to the other Parties in accordance with the provisions of this Section 13.18.

 

13.16 Definitional Provisions . For purposes of this Agreement, (i) those words, names, or terms which are specifically defined herein shall have the meaning specifically ascribed to them; (ii) wherever from the context it appears appropriate, each term stated either in the singular or plural shall include the singular and plural; (iii) wherever from the context it appears appropriate, the masculine, feminine, or neuter gender, shall each include the others; (iv) the words “hereof”, “herein”, “hereunder”, and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, and not to any particular provision of this Agreement; (v) all references to “Dollars” or “$” shall be construed as being United States Dollars; (vi) the term “including” is not limiting and means “including without limitation”; and, (vii) all references to all statutes, statutory provisions, regulations, or similar administrative provisions shall be construed as a reference to such statute, statutory provision, regulation, or similar administrative provision as in force at the date of this Agreement and as may be subsequently amended.

 

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XIV

EXECUTION

 

IN WITNESS WHEREOF , this Agreement has been duly executed by the Parties in Wake County, North Carolina, and shall be effective as of and on the Effective Date. Each of the Parties hereby represents and warrants that it (i) has the requisite power and authority to enter into and carry out the terms and conditions of this Agreement, as well as all transactions contemplated hereunder; and, (ii) it is duly authorized and empowered to execute and deliver this Agreement.

 

ARCMAIL :   LDSR :
     
WALA, INC.,   LANDSTAR, INC.,
a Louisiana corporation   a Nevada corporation
     
BY:                BY:                     
         
NAME:   NAME:
         
TITLE:   TITLE:
         
DATED:   DATED:

 

WELCH, as to those provisions requiring his agreement :

 

                                                                         
RORY WELCH    
     
DATED:    

 

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STOCK PURCHASE RIGHTS

AGREEMENT

 

 

RORY WELCH,

As the Party Responsible for the Sale of 100%

of the Issued and Outstanding Shares of 100% Share Interest of

WALA, INC.

 

and

LANDSTAR, INC.,

As the LDSR of the Shares

 

_____________, 2019

 

     
 

 

STOCK PURCHASE RIGHTS AGREEMENT

 

 

I

PARTIES

 

THIS STOCK PURCHASE RIGHTS AGREEMENT (the “ Agreement ”) is entered into effective as of the ____ day of ________, 2019 (the “ Effective Date ”), by and between RORY WELCH, an individual residing in the State of Illinois, (the “ Welch ”), as the selling shareholder of WALA, INC., a Louisiana corporation doing business under the name ARCMAIL TECHNOLOGY (the “ ArcMail ”); and , LANDSTAR, INC., a Nevada corporation (the “ LDSR ”). LDSR and Welch are sometimes referred to collectively herein as the “Parties”, and each individually as a “Party”.

 

II

RECITALS

 

A. Welch is the owner of that number of shares of stock of ArcMail as reflected on Exhibit II-A, attached hereto and incorporated herein by reference (the “ Welch Shares ”).

 

B. Welch is a party to that certain Stock Purchase and Redemption Agreement dated 01 September 2014 (the “ Stock Purchase Agreement ”), and a Series B Preferred Stock Purchase Agreement, under which, among other things, Welch has the right to issue and acquire additional shares of stock of ArcMail which, when combined with the Welch Shares, currently represents 79% of the duly authorized, validly issued, and currently outstanding shares of capital stock of ArcMail (the “ Welch Share Interest ”). A copy of the Stock Purchase Agreement is attached hereto as Exhibit II-B-1; copy of the Series B Preferred Stock Purchase Agreement is attached hereto as Exhibit II-b-2.

 

C. Concurrent with the execution of this Agreement, (i) ArcMail and LDSR have entered into an Exclusive License And Management Agreement (the “ License Agreement ”); (ii) Welch, ArcMail and LDSR have entered into a Business Covenants Agreement; and, (iii) and related documents (collectively, the “ Transaction Documents ”). Capitalized terms not otherwise defined herein shall have the respective meanings assigned to them in the License Agreement.

 

D. Welch desires to make available for purchase hereunder by LDSR the Welch Share Interest, and LDSR desires to have the right to acquire the Welch Share Interest from the Welch pursuant to the terms, covenants, and conditions contained herein.

 

E. NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

III

SALE AND TRANSFER OF STOCK

 

3.1 Purchase Rights . As of and on the Closing, LDSR shall have the absolute right to acquire the shares constituting and comprising the Welch Share Interest (the “ Shares ”) in accordance with the schedule of Section 3.2, with each “Date of Purchase Right” referred to as a “ Purchase Right ”. In accordance therewith, Welch shall sell, transfer, convey and deliver to LDSR (whether from the Welch Shares or pursuant to his rights under the Stock Purchase Agreement), and LDSR shall acquire Shares from Welch, pursuant to this Agreement.

 

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3.2 Purchase Schedule . LDSR shall have the right to acquire Shares in accordance with the following schedule:

 

Date of Purchase Right   Cash Due     Cash Value of LDSR Shares    

Percentage of

100% Share
Interest Acquired

 
Closing     -0-     $ 95,000       12.50 %
                         
3-month anniversary of Closing   $ 50,000     $ 85,000       6.25 %
                         
6-month anniversary of Closing   $ 50,000     $ 85,000       6.25 %
                       
9-month anniversary of Closing   $ 50,000     $ 85,000       6.25 %
                       
12-month anniversary of Closing   $ 50,000     $ 85,000       6.25 %
                         
15-month anniversary of Closing   $ 50,000     $ 85,000       6.25 %
                       
18-month anniversary of Closing   $ 50,000     $ 85,000       6.25 %
                       
21-month anniversary of Closing   $ 50,000     $ 85,000       12.50 %
                       
24-month anniversary of Closing   $ 50,000     $ 85,000       12.50 %
                       
27-month anniversary of Closing   $ 50,000     $ 85,000       Remainder  

 

Payment of the above amounts shall be made in accordance with the Stock Purchase Agreement, the Series B Preferred Stock Purchase Agreement, and any other arrangements or agreements between Welch or ArcMail and shareholders and certain creditors of ArcMail, which have been disclosed to LDSR and not be otherwise in conflict with this Agreement.

 

3.3 Exercise of Each Purchase Right . On or before the date of each Purchase Right LDSR shall notify Welch of its intent to exercise the respective Purchase Right. LDSR shall then have five (5) days after the Date of Purchase Right to deliver the necessary consideration to acquire the Shares of that Purchase Right.

 

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3.4 Termination of Purchase Rights . In the event that LDSR fails to timely (i) exercise any Purchase Right; or, (ii) transfer the necessary consideration to Welch, then all remaining Purchase Rights shall terminate and this Agreement shall be of no further force and effect. In the event that this Agreement is terminated by LDSR’s failure to exercise all Purchase Rights, ArcMail and Welch shall each have the option to repurchase from LDSR all of the Shares that LDSR has purchased hereunder. The option must be exercised within 30-days of the early termination of this Agreement by payment to LDSR of the same amount paid by LDSR for the Shares.

 

3.5 Cross Default . This Agreement and the continuing right of LDSR to exercise the Purchase Rights is further conditioned on the continued enforceability of the License Agreement. If at any time LDSR fails to tender timely payment under the License Agreement and ArcMail rightfully terminates the License Agreement, then as of the termination of the License Agreement all remaining Purchase Rights shall terminate and this Agreement shall be of no further force and effect.

 

3.6 Delivery of Consideration . In order to timely deliver consideration for each Purchase Right, LDSR shall, within the time frame under Section 3.3, above, wire to Welch the cash proceeds, and have the transfer agent for LDSR confirm that the shares of LDSR restricted common stock (the “ LDSR Shares ”) has been issued.

 

3.7 Valuation of LDSR Shares . For purposes of valuing the LDSR Shares, and determining the number of LDSR Shares to be issued, under each Purchase Right, the Parties agree to use the average closing price for LDSR Shares for the ten (10) trading days immediately preceding each respective Date of Purchase Right.

 

3.8 ArcMail Share Certificates . Within five (5) days of closing each respective Purchase Right Welch shall deliver to LDSR an ArcMail share certificate representing the ArcMail shares acquired in the Purchase Right, duly endorsed for transfer, and free and clear of all liens and encumbrances.

 

IV

REPRESENTATIONS AND WARRANTIES BY WELCH

 

Welch hereby represents and warrants to LDSR that the representations and warranties contained in this Article IV are true, correct, and complete as of the Effective Date and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the Effective Date throughout this Article IV), except as otherwise expressly provided for to contrary herein:

 

4.1 Effect of Agreement . As of the Closing, the consummation by Welch of the transactions herein contemplated, including the execution, delivery and consummation of this Agreement and the Transaction Documents to which he is a party, will not:

 

(a) Violate any judgment, statute, law, code, act, order, writ, rule, ordinance, regulation, governmental consent or governmental requirement, or determination or decree of any arbitrator, court, or other governmental agency or administrative body, which now or at any time hereafter may be applicable to and enforceable against the relevant party, work, or activity in question or any part thereof (collectively, “ Requirement of Law ”) applicable to or binding upon Welch, ArcMail, or any of the Shares;

 

(b) Violate the terms of the Stock Purchase Agreement or any other material agreement, contract, mortgage, indenture, bond, bill, note, or other material instrument or writing binding upon Welch, ArcMail, or any of the Shares; or

 

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(c) Result in the breach of, constitute a default under, constitute an event which with notice or lapse of time, or both, would become a default under, or result in the creation of any lien, security interest, charge or encumbrance upon any part of the Business under any agreement, commitment, contract (written or oral) or other instrument to which Welch or ArcMail is a party, or by which any of the Shares are bound or affected.

 

4.2 Consents . No consents, approvals or other authorizations or notices, other than those which have been obtained and are in full force and effect, are required by any state or federal regulatory authority or other person or entity in connection with the execution and delivery of this Agreement by Welch.

 

4.3 Authorization . Welch has the requisite power and authority under the Stock Purchase Agreement to ensure that Welch can deliver the Welch Share Interest if and when LDSR exercises the Purchase Rights, according the purchase schedule set forth in this Agreement at Section 3.2.

 

4.4 Authorized and Outstanding Shares Interest . The authorized and the issued and outstanding shares of capital stock of ArcMail is summarized on Exhibit 4.4, attached hereto and incorporated herein by reference (the “ Capital Structure ”). The Capital Structure is true and correct. All of the Shares are validly issued and outstanding, fully paid and nonassessable. None of the Shares have been issued in violation of any preemptive rights or any federal or state securities laws.

 

4.5 Title to the Shares . Except as otherwise provided for under the Stock Purchase Agreement, and the Series B Preferred Stock Purchase Agreement, there are no outstanding subscriptions, options, warrants, calls, commitments or agreements to which ArcMail or Welch is a party or by which it is bound relating to its authorized stock or the Shares. The Shares are owned beneficially and of record as indicated in the Capital Structure. Welch has full right and title to the Welch Shares, free and clear of any lien or encumbrance whatsoever, and full and unrestricted right and power to sell and deliver the Welch Shares pursuant to the provisions of this Agreement without obtaining the consent or approval of any other person. Welch also has and full and unrestricted right and power to sell and deliver the remainder of the Welch Share Interest pursuant to the provisions of this Agreement.

 

4.6 Title to the Shares . Welch shall deliver to LDSR all of the Shares free and clear of any lien or encumbrance whatsoever.

 

4.7 Material Defaults . Neither Welch nor ArcMail 1 is in material default, or alleged to be in default, under any material agreement, contract, lease, mortgage, commitment, instrument or obligation, and no other party to any agreement, contract, lease, mortgage, commitment, instrument or obligation to which Welch or ArcMail is a party is in default thereunder, which default would materially and adversely affect the rights of LDSR hereunder.

 

4.8 Investor Related Matters . With regard to its receipt of LDSR Shares hereunder, Welch hereby represents as follows:

 

(a) Welch has been given the opportunity to obtain any information from LDSR he reasonably requested, and Welch has been furnished all such information so requested.

 

 

1 LDSR is aware of and has reviewed, the current July 2018 Forbearance Agreement between Welch and the Noteholders, setting for the rights of the Noteholders as derived from the Stock Purchase Agreement.

 

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(b) Welch has sufficient knowledge and experience in business and financial matters that he is capable of evaluating the risks and merits of acquiring the LDSR Shares hereunder.

 

(c) Welch is an “accredited investor” for purposes of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933 (the “ Securities Act ”).

 

(d) Welch will acquire the LDSR Shares hereunder in the ordinary course of his business, and for his own account and not with a view to or for distributing or reselling such LDSR Shares or any part thereof in violation of the Securities Act or any applicable state securities law.

 

(e) Welch understands that the LDSR Shares will be characterized as “restricted securities” under applicable federal securities laws inasmuch as they are being acquired hereunder in a transaction not involving a public offering and that under such laws and applicable regulations the LDSR Shares may be resold without registration under the Securities Act only in certain limited circumstances. In this connection, Welch represents that he is familiar with Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

 

(f) Welch understands that the LDSR Shares have not been and will not be registered under the Securities Act and have not been and will not be registered or qualified in any state in which they are offered, and therefore Welch will not be able to resell or otherwise transfer such LDSR Shares unless they are registered under the Securities Act and registered or qualified under applicable state securities laws, or an exemption from such registration or qualification is available. Welch has no immediate need for liquidity in connection with this investment, and does not anticipate that he will be required to sell such LDSR Shares in the foreseeable future.

 

4.9 Disclosure . No representation or warranty made by Welch in this Agreement or in any writing furnished or to be furnished pursuant to or in connection with the Transaction Documents knowingly contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact required to make the statements herein or therein contained not misleading. Welch has disclosed to LDSR all material information known to it related to the Shares.

 

V

REPRESENTATIONS AND WARRANTIES BY LDSR

 

LDSR hereby represents and warrants to Welch that the representations and warranties contained in this Article V are true, correct, and complete as of the Effective Date and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the Effective Date throughout this Article V), except as otherwise expressly provided for to contrary herein:

 

5.1 Organization . LDSR is a corporation, duly organized, validly existing, and in good standing under the laws of the State of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted, and is not in violation or default of any of the provisions of its Certificate or Articles of Incorporation, Bylaws, or other organizational or charter documents.

 

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5.2 Execution and Performance of Agreement . LDSR has the requisite right, corporate power, authority, and capacity to enter into, execute, deliver, perform, and carry out the terms and conditions of this Agreement and (i) each of the Transaction Documents; and, (ii) each of the other instruments and agreements to be executed and delivered by LDSR in connection with this Agreement, as well as all transactions contemplated hereunder. All requisite corporate proceedings have been taken and LDSR has obtained all approvals, consents, and authorizations necessary to authorize the execution, delivery, and performance by LDSR of this Agreement, and each of the Transaction Documents to which it is a party. This Agreement has been duly and validly executed and delivered by LDSR and constitutes the valid, binding, and enforceable obligation of LDSR, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law.

 

5.3 Effect of Agreement . As of the Closing, the consummation by LDSR of the transactions herein contemplated, including the execution, delivery and consummation of this Agreement and the Transaction Documents to which it is a party, will not:

 

(a) Violate any Requirement of Law applicable to or binding upon LDSR;

 

(b) Violate (i) the terms of the Certificate of Incorporation or Bylaws of LDSR; or, (ii) any material agreement, contract, mortgage, indenture, bond, bill, note, or other material instrument or writing binding upon LDSR or to which LDSR is subject; or

 

(c) Result in the breach of, constitute a default under, or constitute an event which with notice or lapse of time, or both, would become a default under, any agreement, commitment, contract (written or oral) or other instrument to which LDSR is a party or is otherwise bound or affected.

 

5.4 Consents . No consents, approvals or other authorizations or notices, other than those which have been obtained and are in full force and effect, are required by any state or federal regulatory authority or other person or entity in connection with the execution and delivery of the Transaction Documents and the performance of any obligations contemplated thereby.

 

5.5 Investigation . Prior to the Closing, LDSR will have had the opportunity to investigate the books, records and the Financial Statements. As of the Closing, LDSR will be executing this Agreement based upon its own independent investigation and evaluation of the Business and its prospects, and the covenants, representations and warranties of Welch set forth herein. LDSR is expressly not relying on any oral representations made by Welch with regard to the Welch Share Interest.

 

5.6 Securities Representations . With regard to its acquisition of Shares hereunder, LDSR hereby represents as follows:

 

(a) LDSR has been given the opportunity to obtain any information from Welch it reasonably requested, and LDSR has been furnished all such information so requested.

 

(b) LDSR has sufficient knowledge and experience in business and financial matters that it is capable of evaluating the risks and merits of acquiring the Shares hereunder.

 

(c) LDSR is an “accredited investor” for purposes of Regulation D under the Securities Act.

 

 

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5.7 Financial Statements . The financial statements of LDSR dated _____________, 2018 (the “ Financial Statements ”), which have been previously delivered by LDSR to ArcMail, are true, complete and accurate in all material respects, have been prepared in accordance with generally accepted accounting principles consistently applied, and present fairly the financial position of LSDR as of the date thereof. Except to the extent reflected and reserved against in the Financial Statements, ArcMail did not have, as of the date of the Financial Statements, any debts, liabilities or obligations of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, except for those obligations that are not required by generally accepted accounting principles to be included in the Financial Statements.

 

5.8 Changes in Financial Condition . Since the date of the Financial Statements, there has not been:

 

(a) Any material change in the condition (financial or otherwise) or business of LDSR, except changes in the ordinary course of business, none of which has been materially adverse;

 

(b) Any damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting the properties, assets, business or prospects of LDSR;

 

(c) Any change in the accounting methods or practices followed by LDSR or any change in the depreciation or amortization policies or rates adopted by LDSR (whether or not presently outstanding), except liabilities incurred, and obligations under agreements entered into, in the ordinary course of business; or

 

(d) Any sale, lease, abandonment or other disposition by LDSR, other than in the ordinary course of business, of any machinery, equipment or other operating properties directly or indirectly related to the Business.

 

5.9 Legal Proceedings . Except as set forth in Schedule 5.9, attached hereto and incorporated herein by reference, there is no claim, legal action, suit, arbitration, investigation or hearing, notice of claims or other legal, administrative or governmental proceedings pending or to the best knowledge of LDSR, threatened against LDSR (or in which LDSR is plaintiff or otherwise a party thereto), and, to the best knowledge of LDSR, there are no facts existing which might result in any such claim, action, suit, arbitration, investigation, hearing, notice of claim or other legal, administrative or governmental proceeding that might reasonably be expected to have a material adverse effect or that might reasonably be expected to threaten or impede the consummation of the transactions contemplated by this Agreement. LDSR has not waived any statute of limitations or other affirmative defense with respect to any of its liabilities. There is no continuing order, injunction, or decree of any court, arbitrator, or governmental or administrative authority to which LDSR is a party. LDSR has not been permanently or temporarily enjoined or barred by order, judgment or decree of any court or other tribunal or any agency or regulatory body from engaging in or continuing any conduct or practice.

 

5.10 Assistance to Welch . LDSR hereby agrees that upon Welch satisfying all applicable securities rules and regulations to enable his LDSR Shares to be treated as free-trading, LDSR shall render all reasonable assistance and take all action necessary to remove all such restrictions on the LDSR Shares acquired by Welch under this Agreement.

 

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VI

ADDITIONAL OBLIGATIONS AND AGREEMENTS

 

6.1 Survival of Representations . All of the covenants, agreements, representations, and warranties made by each Party, or pursuant hereto or in connection with the transactions contemplated hereby, shall survive the Closing for a period of three (3) years.

 

6.2 Brokers . Each Party represents and warrants that no broker or finder has acted for it in connection with this Agreement or the transactions contemplated hereby and that no broker or finder is entitled to any brokerage or finder’s fee or other commission. Each Party agrees to indemnify and hold harmless the other Parties with respect to any claim for any brokerage or finder’s fee or other commission.

 

6.3 Expenses . All costs and expenses incurred in conducting the purchase and sale described in this Agreement in the manner prescribed by this Agreement shall be borne by the Party incurring said expense.

 

6.4 Taxes . Each Party shall bear responsibility for their own respective taxes, if any, arising out of the consummation of the transactions contemplated herein and for the filing of all necessary tax returns and reports with respect to such taxes.

 

VII

NOTICES

 

All notices, requests, demands and other communications required or permitted to be given hereunder shall be effected pursuant to the provisions of Article VIII, below, as follows:

 

If to LDSR : With a copy to :
  Mr. Keith A. Rosenbaum, Esq.
  SPECTRUM LAW GROUP, APC, INC.
  23 Corporate Plaza, Suite 150.
  Newport Beach, California 92660,
  keith@spectrumlawgroup.com
   
If to Welch : With a Copy to :
  Mr. Michael P. Mangan, Esq.
  MANGAN GINSBERG LLP, INC.
  80 Maiden Lane, Suite 304.
  New York, New York 10038,
  mpm@mangan-ginsberg.com

 

VIII

ADDITIONAL PROVISIONS

 

The provisions of Article XIII of the License Agreement, inclusive, are incorporated herein by reference as if set forth in full herein. All such provisions shall be deemed amended for consistency and to expressly apply to this Agreement.

 

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IX

EXECUTION

 

IN WITNESS WHEREOF , this Agreement has been duly executed by the Parties in Wake County, North Carolina, and shall be effective as of and on the Effective Date. Each of the undersigned Parties hereby represents and warrants that it (i) has the requisite power and authority to enter into and carry out the terms and conditions of this Agreement, as well as all transactions contemplated hereunder; and, (ii) it is duly authorized and empowered to execute and deliver this Agreement.

 

WELCH :   LDSR :
     
    LANDSTAR, INC.,
    a Nevada corporation
RORY WELCH      
                  
DATED:   BY:
      NAME:
      TITLE:
      DATED:  

 

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BUSINESS COVENANTS AGREEMENT

 

 

RORY WELCH

 

and

 

WALA, INC.

 

and

 

LANDSTAR, INC.

 

___________, 2019

 

     

 

 

BUSINESS COVENANTS AGREEMENT

 

 

I

PARTIES

 

THIS BUSINESS COVENANTS AGREEMENT (the “ Agreement ”) is entered into effective as of the ____ day of ________, 2019 (the “ Effective Date ”), by and between RORY WELCH, an individual residing in the State of Illinois (“ Welch ”); WALA, INC., a Louisiana corporation doing business under the name ARCMAIL TECHNOLOGY (“ ArcMail ”); and, LANDSTAR, INC., a Nevada corporation (“ LDSR ”). Welch, ArcMail, and LDSR are sometimes referred to collectively herein as the “Parties”, and each individually as a “Party”.

 

II

RECITALS

 

A. Concurrent with the execution of this Agreement, (i) ArcMail and LDSR have entered into an Exclusive License And Management Agreement (the “ License Agreement ”); (ii) Welch and LDSR have entered into a Stock Purchase Rights Agreement (the “ Stock Purchase Agreement ”); and, (iii) and related documents (collectively, the “ Transaction Documents ”).

 

B. Welch (i) is the CEO of ArcMail; (ii) has material obligations under the License Agreement; (iii) has a substantial ownership interest in ArcMail; and, (iv) will ensure that LDSR, if it chooses to do so, will acquire 100% of the issued and outstanding shares of stock of ArcMail (the “ 100% Stock Interest ”) under the Stock Purchase Agreement. As such, Welch is an essential party to the Business and the transactions envisioned under the Transactions Documents, and Welch will receive significant benefit in connection with the Transaction Documents.

 

C. The Parties desire that ArcMail’s goodwill is available to LDSR in promoting LDSR’s rights under the License so that LDSR obtains the benefit of such goodwill, and LDSR’s failure to receive the benefit of the entire goodwill of ArcMail and the Business, as anticipated by the License, would have the effect of reducing the value of the License to LDSR.

 

D. As a condition and material and mutual inducement to the Transaction Documents, and to preserve the value and goodwill under the License Agreement and to protect the trade secrets of the Business, the Transaction Documents contemplate, among other things, that Welch shall enter into this Agreement and that this Agreement shall become effective at the Closing.

 

E. Welch is entering into this Agreement in order to induce ArcMail and LDSR to enter into the Transaction Documents, pursuant to which Welch will directly or indirectly receive a material benefit.

 

F. The Parties recognize and acknowledge Welch’s importance to the Business, and ArcMail and Welch both acknowledge the importance that neither he nor ArcMail not competing with LDSR and its rights under the License Agreement.

 

G. All Parties desire to restrict the ability of Welch and ArcMail to compete with the Business, and the Parties further agree that all such restrictions contained herein are reasonable in light of the Transaction Documents, which LDSR would not have entered into without the benefit of this Agreement.

 

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H. The Parties further recognize and acknowledge that execution of this Agreement is an integral part of the transaction envisioned under the Transaction Documents, and intend at all times to treat it as one transaction.

 

I. NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

III

DEFINED TERMS AND INTERPRETATION

 

3.1 Definitions . The following capitalized terms shall have the respective meanings specified in this Article III. Other terms defined elsewhere herein shall have meanings so given them. Capitalized terms not otherwise defined herein shall have the respective meanings assigned to them in the License Agreement.

 

100% Stock Interest ” has the meaning as provided in Paragraph B of Article II, above.

 

Affiliates ” means, when used with respect to a specified person, another person that either directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the specified person. For purposes of this definition, “control” means the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and affairs of a person, whether through the ownership of voting securities, by contract or otherwise, and “controlled” and “controlling” shall have correlative meanings.

 

Closing ” and “ Closing Date ” is defined, respectively, as in the License Agreement.

 

Covered Customer ” means any person who is or was an actual customer, client, or advertiser (or prospective customer, client, or advertiser with whom ArcMail actively marketed or made or took specific action to make a proposal regarding the Business, at the Closing or at any time during the three (3) years immediately preceding the Closing.

 

Covered Personnel ” means as of the Closing Date, or within thirty (30) days prior to the Closing Date, any employee, consultant, or independent contractor of ArcMail who continues in any such capacity with ArcMail or LDSR following the Closing.

 

Restricted Business ” means any business, which is directly competitive with the Business.

 

Restricted Period ” means, subject to the early termination under Section 4.8, below, that period of time commencing on the Closing Date and continuing thereafter for a period of twenty four (24) months from the later of the (i) Closing Date; (ii) date on which LDSR acquires the 100% Sock Interest; or, (iii) the last date on which Welch renders services to LDSR or any of its subsidiaries.

 

Restricted Territory ” means each and every country, state, city, or other political subdivision of the world in which ArcMail’s products or services previously have been or are as of the Closing Date marketed or sold, whether to dealers, distributors, or ultimate end-users.

 

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3.2 Accounting Terms and Determinations . All accounting terms used in this Agreement and not otherwise defined shall have the meaning accorded to them in accordance with GAAP and, except as expressly provided herein, all accounting determinations shall be made in accordance with GAAP, consistently applied. The term “ GAAP ” means generally accepted accounting principles consistently applied as in effect from time to time.

 

3.3 Interpretation .

 

3.3.1. Provision Not Construed Against Party Drafting Agreement . This Agreement is the result of negotiations by and between the Parties; is the product of the work and efforts of all Parties; and, shall be deemed to have been drafted by all Parties. Each Party has had the opportunity to be represented by independent legal counsel of its choice. In the event of a dispute, no Party shall be entitled to claim that any provision should be construed against any other Party by reason of the fact that it was drafted by one particular Party.

 

3.3.2. Agreement Provisions, Exhibits, and Schedules . When a reference is made in this Agreement to an Article, Section, Subsection, Exhibit, or Schedule, such reference shall be to said item of this Agreement unless otherwise indicated. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof as if set out in full herein.

 

3.3.3. Entire Agreement . This Agreement, together with all references to the Transaction Documents, or instruments referred to herein, contains the entire agreement and understanding of the Parties in respect to the subject matter contained herein. The Parties have expressly not relied upon any promises, representations, warranties, agreements, covenants, or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes (i) any and all prior written or oral agreements, understandings, and negotiations between the Parties with respect to the subject matter contained herein; and, (ii) any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

 

3.3.4. Severability . Each and every provision of this Agreement is severable and independent of any other term or provision of this Agreement. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

3.3.5. Successors and Assigns . Except as expressly provided in this Agreement, each and all of the covenants, terms, provisions, conditions, and agreements herein contained shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties. In the event that LDSR exercises its right under the License Agreement to assign its rights and obligations thereunder, LDSR shall similarly have the right to assign it position hereunder to the same assignee. With the exception of the preceding right, this Agreement is not assignable by either Party without the expressed written consent of all Parties.

 

3.3.6. Time . All Parties agree that time is of the essence as to this Agreement.

 

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3.3.7. Governing Law . This Agreement shall be governed by the laws of the State of North Carolina, without giving effect to any choice or conflict of law provision or rule (whether of the State of North Carolina, or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of North Carolina. If any court action is necessary to enforce the terms and conditions of this Agreement, the Parties hereby agree that the Wake County Superior Court (Raleigh, North Carolina) shall be the sole jurisdiction and venue for the bringing of such action.

 

3.4 Additional Definitions and Interpretation Provisions . For purposes of this Agreement, (i) those words, names, or terms which are specifically defined herein shall have the meaning specifically ascribed to them; (ii) wherever from the context it appears appropriate, each term stated either in the singular or plural shall include the singular and plural; (iii) wherever from the context it appears appropriate, the masculine, feminine, or neuter gender, shall each include the others; (iv) the words “hereof”, “herein”, “hereunder”, and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, and not to any particular provision of this Agreement; (v) all references to “Dollars” or “$” shall be construed as being United States Dollars; (vi) the term “including” is not limiting and means “including without limitation”; and, (vii) all references to all statutes, statutory provisions, regulations, or similar administrative provisions shall be construed as a reference to such statute, statutory provision, regulation, or similar administrative provision as in force at the date of this Agreement and as may be subsequently amended.

 

IV

AFFIRMATIVE AND RESTRICTIVE COVENANTS OF WELCH AND LDSR

 

In furtherance of the transactions contemplated by the Transaction Documents and the substantial economic benefit to be conferred upon Welch and LDSR upon consummation thereof, Welch and LDSR hereby covenant and agree as follows:

 

4.1 Competition by Welch . Other than in connection with the collection efforts and services required of Welch under the License Agreement, during and throughout the Restricted Period, Welch will not, and will reasonably cause Welch’s Affiliates not to, without the prior written consent of LDSR (which may be withheld in its sole discretion), anywhere within the Restricted Territory, directly or indirectly:

 

(a) engage, own, manage, finance or control, or participate in the ownership, management, financing or control of, or become engaged or serve as an officer, director, member, partner, employee, agent, consultant, advisor or representative of, or otherwise be involved in, any business or entity that is a Restricted Business;

 

(b) provide any type of assistance to any person that is engaged in, or seeks to be engaged in, a Restricted Business;

 

(c) work for or become employed or engaged by a venture capital, private equity, debt fund, or any similar person that owns equity or debt interests in a Restricted Business, or seeks to owns such interests in a Restricted Business; or

 

(d) permit Welch’s name to be used, directly or indirectly, by any person engaged in, or seeking to be engaged in, a Restricted Business.

 

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4.2 Permitted Exceptions . Notwithstanding anything to the contrary in Section 4.1, above, Welch, and any Affiliatesof Welch, shall not be prohibited from:

 

(a) directly or indirectly, owning solely as a passive investment not in excess of one percent (1%) in the aggregate of any class of capital stock of any corporation if such stock is publicly traded and listed on any national exchange or quoted on the NASDAQ National Market, regardless of whether or not such corporation is engaging in a Restricted Business;

 

(b) owning a passive equity interest in a diversified private or public debt or equity investment fund (including without limitation hedge and mutual funds) in which Welch or any Affiliate of Welch does not have the ability to control or exercise any managerial influence over such fund;

 

(c) being employed by any government agency, college, university, or other non-profit research organization or performing speaking engagements and receiving honoraria in connection with such engagements; or

 

(d) engaging in any activity consented to in writing by LDSR , in its sole and absolute discretion;

 

provided that, in all such instances, Welch continues to abide by all other provisions of this Agreement.

 

4.3 Non-Solicitation; Employees and Consultants . During and throughout the Restricted Period Welch will not, and will cause Welch’s Affiliates not to, without the prior written consent of LDSR (which may be withheld in its sole discretion), either on Welch’s own behalf or on behalf of any other person, directly or indirectly:

 

(a) hire or engage as an employee, independent contractor, consultant or otherwise any Covered Personnel;

 

(b) solicit, induce, encourage, or otherwise cause (or attempt to do any of the foregoing) any Covered Personnel to leave the service (whether as an employee, consultant or independent contractor) of ArcMail or LDSR; or

 

(c) in any way interfere with or attempt to interfere with the relationship between any Covered Personnel and ArcMail or LDSR.

 

However , Welch will not be deemed to have violated this Section 4.3 if any Covered Personnel voluntarily and independently solicits an offer of employment from Welch (or any other person whom Welch is acting on behalf of) by responding to a general advertisement or solicitation program conducted by or on behalf of Welch (or such other Person whom Welch is acting on behalf of) that is not targeted at such Covered Personnel or Covered Personnel generally, so long as such Covered Personnel is not hired.

 

4.4 Non-Solicitation; Customers and Suppliers . During and throughout the Restricted Period Welch will not, and will cause Welch’s Affiliates not to, without the prior written consent of LDSR (which may be withheld in its sole discretion), either on Welch’s own behalf or on behalf of any other person, directly or indirectly:

 

(a) solicit, induce, encourage or otherwise cause (or attempt to do any of the foregoing) any Covered Customer to (i) cease being, or not become, a client, customer or advertiser of ArcMail or LDSR; or, (ii) reduce the amount of business of such Covered Customer with ArcMail or LDSR, or otherwise alter such business relationship in a manner adverse to ArcMail or LDSR;

 

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(b) interfere with or disrupt (or attempt to interfere with or disrupt) the contractual relationship between ArcMail or LDSR with any Covered Customer;

 

(c) divert any business with any Covered Customer from ArcMail or LDSR;

 

(d) solicit for business, provide services to, engage in or do business with, any Covered Customer for products or services that are part of the Restricted Business; or

 

(e) interfere with or disrupt (or attempt to interfere with or disrupt), any person that was a vendor, supplier, distributor, agent, or other service provider of ArcMail or LDSR at the time of such interference or disruption, for a purpose competitive with ArcMail or LDSR.

 

4.5 Confidentiality . At no time shall Welch, or any Affiliate of Welch, without the prior written consent of LDSR (which may be withheld in its sole discretion), either on Welch’s own behalf or on behalf of any other person, directly or indirectly, use, divulge, disclose, or communicate to any person, in any manner whatsoever, any confidential information concerning any matters affecting or relating to the Business, including, though not limited to, the names, buying habits, or practices of any of its customers; its’ marketing methods and related data; the names of any of its vendors or suppliers; recipes and formulas; costs of materials; the prices it obtains or has obtained or at which it sells or has sold its products or services; manufacturing and sales, costs, lists or other records used in the Business; compensation paid to employees and other terms of employment; or, any other confidential information of, about, or concerning the Business, its manner of operation, or other confidential data of any kind, nature, or description. The obligations set forth in this Section 4.5 will not apply to any such information otherwise covered hereunder where Welch can prove that such material or information: (i) is known or available through other lawful sources not bound by a confidentiality agreement with, or other confidentiality obligation, with respect to such material or information; (ii) is or becomes publicly known through no violation of this Agreement or other non-disclosure obligation of Welch or any Affiliate of Welch; (iii) is already in the possession of Welch at the time of disclosure through lawful sources not bound by a confidentiality agreement or other confidentiality obligation as evidenced by Welch’s documents and records; or, (iv) is required to be disclosed pursuant to an order of any administrative body or court of competent jurisdiction; provided that (A) LDSR is given reasonable prior written notice; (B) Welch cooperates with any reasonable request of LDSR to seek to prevent or narrow such disclosure; and, (C) if after compliance with clauses (A) and (B) such disclosure is still required, Welch and the Affiliates of Welch may only disclose such portion of information or material that is expressly required by such order.

 

4.6 Mutual Non-Disparagement . At no time shall Welch or LDSR, or any their respective Affiliates, directly or indirectly engage in any conduct that involves the making or publishing (including through electronic mail distribution or online social media) of any written or oral statements or remarks (including the repetition or distribution of derogatory rumors, allegations, negative reports or comments) that are disparaging, deleterious, or damaging to the integrity, reputation, or goodwill of the Business or the management, officers, employees, independent contractors, or consultants of ArcMail, LDSR, or Welch. Notwithstanding the foregoing, the provisions of this Section 4.6 shall not restrict Welch or ArcMail or LDSR or any other party hereto, from providing truthful testimony or information in response to an order of any administrative body or court of competent jurisdiction, or in connection with any legal action under this Agreement or any of the Transaction Documents.

 

4.7 Conduct of the Business . The Parties further recognize and acknowledge that LDSR will take every reasonable action to protect and promote the value of the Business during the term of the License Agreement and will not take any actions that knowingly or intentionally harm the Business, the Business Assets, the Good Will or any other aspect of the Business.

 

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4.8 Early Termination . Notwithstanding any other provision herein to the contrary, the Restriction Period will immediately and irrevocably terminate upon the repurchase of the Shares under Section 3.4 of the Stock Purchase Agreement (the “ Early Termination ”). Upon such Early Termination, LDSR agrees that neither it nor any Affiliate will thereafter, for a period of twenty-four (24) months from the Early Termination, (i) engage in the business of E-Mail archiving; (iii) solicit any Covered Customer; or, (iii) solicit any ArcMail employees. During that same 24-month period, LDSR and its Affiliates shall hold and protect as confidential all of ArcMail’s proprietary business information and any other confidential information.

 

4.9 Separate Covenants . The covenants contained in this Article IV shall be construed as a series of separate covenants, one for each county of the Restricted Territory. Except for geographic coverage, each separate covenant shall be deemed identical to the covenant contained in this Article IV. If, in any judicial proceeding, a court of competent jurisdiction shall refuse to enforce the separate covenants (or any part thereof) deemed included in this Article IV for any reason, including but not limited to covering too extensive a geographic area, the Parties intend that those such covenants (taken in order of the counties within the Territory which are the least populated) which, if eliminated, would permit the remaining separate covenants to be enforced in such proceedings, shall, for the purpose of such proceedings, be deemed eliminated from the provisions of this Article IV. In the event that any provisions of Article IV are deemed to exceed the time, geographic, or scope limitations permitted by applicable law, then the Parties agree that such provisions shall be reformed to the maximum time, geographic, or scope limitations, as the case may be, permitted by applicable law.

 

4.10 Independence of Obligations . The respective rights, covenants, and obligations of the Parties set forth in this Article IV shall be construed as independent of any other agreement or arrangement between the Parties.

 

4.11 Injunctive Relief . The remedy at law for breach of this Article IV is and will be inadequate, and in the event of a breach or threatened breach of this Agreement by Welch or LDSR or any of their Affiliates, the other party shall be entitled to an injunction restraining the breaching party and any Affiliate of the breaching party from breaching or otherwise violating any provision of this Agreement. Nothing herein contained shall be construed as prohibiting the non-breaching party from pursuing any other remedies available to it for such breach or threatened breach, including, without limitation, the recovery of damages from the breaching party and any Affiliate of the breaching party.

 

V

REPRESENTATIONS AND WARRANTIES OF WELCH

 

In addition to all other representations and warranties contained herein, Welch further represent and warrant to LDSR as follows:

 

5.1 Acknowledgment . Welch acknowledge and agree, based upon the advice of legal counsel , that: (i) Welch possesses knowledge of confidential information of ArcMail and the Restricted Business; (ii) because of Welch’s education, experience, and capabilities, the provisions of this Agreement will not prevent Welch from earning a livelihood; (iii) Welch’s execution of this Agreement is a material inducement to LDSRto consummate the Transaction Documents and for LDSR to realize the goodwill of ArcMail, for which Welch will receive a substantial direct or indirect financial benefit, and that LDSR would not have consummated the Transaction Documents but for Welch’s agreements set forth in this Agreement; (iv) it would impair the goodwill of the Business and cause serious and irreparable injury to LDSR if Welch were to use his ability and knowledge by engaging in the Restricted Business in competition with the Business, ArcMail or LDSR, and/or to otherwise breach the obligations contained herein and that LDSR would not have an adequate remedy at law because of the unique nature of the Restricted Business; (v) Welch has no intention of engaging in the Restricted Business in the Restricted Territory during the Restricted Period; (vi) the relevant public policy aspects of restrictive covenants, covenants not to compete, and non-solicitation provisions have been discussed, and every effort has been made to limit the restrictions placed upon Welch to those that are reasonable and necessary to protect the legitimate interests of LDSR; (vii) LDSR intends to conduct the Restricted Business everywhere in the Restricted Territory where legally permitted under applicable laws and compete with other businesses that are or could be located in any part of the Restricted Territory where legally permitted under applicable laws; (viii) the foregoing restrictions on competition are fair and reasonable in type of prohibited activity, geographic area covered, scope and duration; (x) the consideration provided to Welch under this Agreement and the Transaction Documents is not illusory; and, (x) such provisions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of LDSR.

 

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5.2 Independent Legal Counsel . Welch agrees that in executing this Agreement Welch does so with full knowledge of the rights it may have with respect to the other Parties, and that Welch has received, or has had the opportunity to receive, independent legal advice as to these rights. Welch has voluntarily executed this Agreement with full knowledge of these rights.

 

5.3 Power and Authority . Welch has full power and capacity to execute and deliver, and to perform all of Welch’s obligations under, this Agreement. Further, neither the execution and delivery of this Agreement nor the performance of Welch’s obligations hereunder will result directly or indirectly in a violation or breach of any agreement or obligation by which Welch is a party or otherwise bound.

 

5.4 Notification to Subsequent Employer . Welch agrees that during the Restricted Period, LDSR may notify any person employing or otherwise retaining the services of Welch or a person for whom LDSR has a good belief intends to employ or retain the services of Welch of the existence and provisions of this Agreement, if LDSR has a good faith belief that the person employing or retaining the services of Welch, or intending to, is a Restricted Business.

 

5.5 Survival of Obligations . The expiration of the Restricted Period will not relieve Welch or LDSR of any obligation or liability arising from any breach of this Agreement by Welch or LDSR during the Restricted Period. Welch and LDSR further agree that the time period during which the covenants contained in Article IV of this Agreement will be effective will be computed by excluding from such computation any time during which Welch or LDSR is in violation of any provision of such Article IV.

 

VI

ADDITIONAL PROVISIONS

 

6.1 Executed Counterparts . This Agreement may be executed in any number of counterparts, all of which when taken together shall be considered one and the same agreement, it being understood that all Parties need not sign the same counterpart. In the event that any signature is delivered by Fax or E-Mail, such signature shall create a valid and binding obligation of that Party (or on whose behalf such signature is executed) with the same force and effect as an original thereof. Any photographic, photocopy, or similar reproduction copy of this Agreement, with all signatures reproduced on one or more sets of signature pages, shall be considered for all purposes as if it were an executed counterpart of this Agreement.

 

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6.2 Enforcement . The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that the Parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which any person may be lawfully entitled.

 

6.3 Waiver . No failure by any Party to insist on the strict performance of any covenant, duty, agreement, or condition of this Agreement or to exercise any right or remedy on a breach shall constitute a waiver of any such breach or of any other covenant, duty, agreement, or condition.

 

6.4 Recovery of Fees by Prevailing Party . In the event of any legal action (including arbitration) to enforce or interpret this Agreement, the non-prevailing Party shall pay the reasonable attorneys’ fees and other costs and expenses (including expert witness fees) of the prevailing Party in such amount as the may be determined by a court of competent jurisdiction. In addition, such non-prevailing Party shall pay reasonable attorneys’ fees incurred by the prevailing Party in enforcing, or on appeal from, a judgment in favor of the prevailing Party. The preceding sentence is intended by the Parties to be severable from the other provisions of this Agreement and to survive and not be merged into such judgment.

 

6.5 Recitals . The facts recited in Article II, above, are hereby conclusively presumed to be true as between and affecting the Parties.

 

6.6 Amendment . This Agreement may be amended or modified only by a writing signed by all Parties.

 

6.7 Further Assurances . Each Party agrees (i) to furnish upon request to each other Party such further information; (ii) to execute and deliver to each other Party such other documents; and, (iii) to do such other acts and things, all as another Party may reasonably request for the purpose of carrying out the intent of this Agreement and the transactions envisioned hereunder. However , this provision shall not require that any additional representations or warranties be made and no Party shall be required to incur any material expense or potential exposure to legal liability pursuant to this Section 6.7.

 

6.8 Notices .

 

6.8.1. Method and Delivery . All notices, requests and demands hereunder shall be in writing and delivered by hand, by Electronic Transmission, by mail, or by recognized commercial over-night delivery service (such as Federal Express or UPS), and shall be deemed given (a) if by hand delivery, upon such delivery; (b) if by Electronic Transmission, upon telephone confirmation of receipt of same; (c) if by mail, forty-eight (48) hours after deposit in the United States mail, first class, registered or certified mail, postage prepaid; or, (d) if by recognized commercial over-night delivery service, upon such delivery.

 

6.8.2. Consent to Electronic Transmission . Each Party hereby expressly consents to the use of Electronic Transmission for communications and notices under this Agreement. For purposes of this Agreement, “Electronic Transmission” means a communication (i) delivered by Fax or E-Mail when directed to the Fax number or E-Mail address, respectively, for that recipient on record with the sending Party; and, (ii) that creates a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form.

 

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6.8.3. Address Changes . Any Party may alter the Fax number, E-Mail address, physical address, or postage address to which communications or copies are to be sent by giving notice of such change of address to the other Parties in accordance with the provisions of this Section 6.8.

 

6.9 Best Efforts . Each Party shall cooperate in good faith with the other Parties generally, and in particular, the Parties shall use and exercise their best efforts, taking all reasonable, ordinary and necessary measures to ensure an orderly and smooth relationship under this Agreement, and further agree to work together and negotiate in good faith to resolve any differences or problems which may arise in the future. However , the obligations under this Section 6.9 shall not include any obligation to incur substantial expense or liability.

 

VII

EXECUTION

 

IN WITNESS WHEREOF , this Agreement has been duly executed by the Parties in Wake County, North Carolina, and shall be effective as of and on the Effective Date. Each of the undersigned Parties hereby represents and warrants that it (i) has the requisite power and authority to enter into and carry out the terms and conditions of this Agreement, as well as all transactions contemplated hereunder; and, (ii) it is duly authorized and empowered to execute and deliver this Agreement.

 

ARCMAIL :   LDSR :
     
WALA, INC.,   LANDSTAR, INC.,
a Louisiana corporation   a North Carolina corporation
     
BY:                BY:                              
         
NAME:   NAME:
         
TITLE:   TITLE:
         
DATED:   DATED:

 

WELCH :

 

                                                                         
RORY WELCH    
     
DATED:    

 

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LANDSTAR INC ANNOUNCES THAT DATA443 HAS SIGNED AN EXCLUSIVE

GLOBAL AGREEMENT WITH ARCMAIL

 

Two-Year Agreement with Leading Provider of Enterprise Information and Email Archiving

Solutions Brings Strong Revenue Growth and Customer Expansion Opportunity

 

RALEIGH, N.C., February 11, 2019 - LandStar, Inc. (OTCPK: LDSR) (“LandStar” or the “Company”), the parent company of Data443™ Risk Mitigation, Inc. (“Data443”), a leading data security and privacy company, today announced that the Company has signed a two-year exclusive partnership agreement (the “Agreement”) with ArcMail, a leading provider of enterprise information and email archiving solutions for businesses of all sizes across a wide range of vertical markets. The Agreement is anticipated to add $2 million in revenue over the next twelve months for Data443 and enables cross-selling to its large existing customer base. The product line will be offered immediately to the International reseller and VAR channel that Data443 has established.

 

Founded in 2005, ArcMail is a pioneer and leader in the enterprise information and email archiving market. ArcMail offers customers a broad array of cost-effective, easy-to-use archiving solutions with comprehensive and tailorable features that ensure secure, compliant email, file, and other electronic data retention, storage, and retrieval. ArcMail solutions support all eDiscovery requests for electronically stored information for all regulated industries – Data Privacy, Healthcare, Financial Services, Legal Services, Government and Education. Key ArcMail product features include full-text indexing; granular retention rules; secure and customizable access and permissions; basic and advanced Boolean search; litigation and legal holds; and extensive import and export capabilities that accelerate and simplify eDiscovery requests and compliance audits.

 

Jason Remillard, CEO and President of LandStar, Inc. and founder of Data443, commented, “This technology is a key component of our Data Privacy and Governance offerings. Data search, retention and classification are all core tenants of any security program. One of the major attractive features of ArcMail’s technology is its ease of speed of deployment and immediate cost savings. Our cloud-based offerings will be expanded and integrated with this new technology.”

 

Rory Welch, President and CEO of ArcMail, stated, “We are thrilled to be teaming up with Jason and the Data443 team. This Agreement reflects the incredible value of a combined offering to take advantage of industry demand. We’ve been following the Data443 story for some time and are excited to be a part of Jason’s vision of building a suite of products that addresses growing global compliance and governance requirements. At ArcMail, we’ve always embraced these types of opportunities to work with our customers and bring them peace of mind.”

 

     
 

 

The ArcMail transaction is the latest in a series of transactions made by Data443 as it continues its path to scale the business, grow its customer base, and bring meaningful, high margin revenues to the Company. In October 2018, Data443 announced the acquisition of ARALOC, an industry-leading secure digital content distribution and communications platform that protects an organization’s confidential content and intellectual property assets from leakage – malicious or accidental – without impacting communications and collaboration between all stakeholders. In November 2018, Data443 announced a letter of intent to acquire N8 Identity, a leader in agile, cloud-based identity governance solutions.

 

“Whenever we evaluate partnerships, acquisitions, or licenses, we look for opportunities to find complementary technologies and skill-sets that can easily fit and rapidly enhance our market positioning, provide a healthy customer base, and are accretive to our bottom-line . ArcMail satisfied all of these factors, particularly within its utility for GDPR compliance, as well as the forthcoming California Consumer Privacy Act, along with several other states with similar proposed legislation. Partnering with a company like ArcMail, combined with our recent achievements, is a significant milestone on our roadmap to becoming a leader in the data security industry,” concluded Mr. Remillard. The agreement includes a purchase option after year two.

 

 

     
 

 

About ArcMail Technology

 

ArcMail is a leading provider of simple, secure and cost-effective email and enterprise archiving and management solutions. Honored with the Network Products Guide Product Innovation Award, ArcMail was founded to help companies and public sector organizations implement effective email archiving programs, boost email server performance and satisfy regulatory requirements. With the rapid growth of email usage, the Shreveport, LA-based company addresses a need for simple, secure email archiving that is affordable for small businesses yet robust enough to handle the demands of enterprise companies and government entities. ArcMail’s solution, the Defender, was developed to provide cost-effective email archiving hardware that improves the user experience, reduces the load on IT resources and safely secures the business information contained in emails, all in an easy-to-use appliance. We believe the Defender is the best email archiving solution for organizations with anywhere from 5 to 50,000+ mailboxes across a broad section of industries. ArcMail has also been listed by leading business analyst companies who report on email archiving appliance vendors. For more information, please visit www.arcmail.com .

 

About LandStar, Inc.

 

LandStar, Inc. ( OTCPK: LDSR ), through its wholly owned subsidiary DATA443™ Risk Mitigation, Inc., enables secure data – across local devices, network, cloud, and databases – at rest and in flight. ClassiDocs™, the company’s award-winning data classification and governance technology, supports CCPA, LGPD and GDPR compliance. The market leading ARALOC™ platform is a highly secure, cloud-based platform for the management, protection and distribution of digital content to the desktop and mobile devices, which protects an organization’s confidential content and intellectual property assets from leakage — malicious or accidental — without impacting collaboration between all stakeholders. The WordPress GDPR Framework enables organizations of all sizes to comply with the GDPR and other privacy frameworks. Privacy Manager™ is integrated with ClassiDocs to process DSARs, removal requests and inventory portions of privacy compliance regulations such as GDPR, CCPA and more. ClassiDocs™ for Blockchain provides an active implementation for the Ripple XRP that protects blockchain transactions from inadvertent disclosure and data leaks. For more information, please visit http://www.data443.com

 

Forward-Looking Statements

 

The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. The statements in this press release that are not historical statements, including statements regarding LandStar’s plans, objectives, future opportunities for LandStar’s services, future financial performance and operating results and any other statements regarding LandStar’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond LandStar’s control, which could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to the operations of LandStar; results of litigation, settlements and investigations; actions by third parties, including governmental agencies; volatility in customer spending; global economic conditions; ability to hire and retain personnel; loss of, or reduction in business with, key customers; difficulty with growth and in integrating acquisitions; product liability; cybersecurity risk; and, anti-takeover measures in our charter documents. These and other important risk factors are described more fully in our reports and other documents filed with the Securities and Exchange Commission (“the SEC”), including under “Part I, Item 1A. Risk Factors”, in our Registration Statement on Form 10 filed with the SEC on January 11, 2019.

 

     
 

 

Any forward-looking statement is made only as of the date of which such statement is made. Except as otherwise required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

 

Data443™, ClassiDocs™ and ARALOC™ are registered trademarks of Data443 Risk Mitigation, Inc.

 

All product names, trademarks and registered trademarks are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.

 

All other trademarks cited herein are the property of their respective owners.

 

For Further Information

 

Follow us on Twitter: https://twitter.com/data443Risk

Follow us on Facebook: https://www.facebook.com/data443/

Follow us on LinkedIn: https://www.linkedin.com/company/data443-risk-mitigation-inc/

Signup for our Investor Newsletter: https://www.data443.com/investor-relations/

 

Investor Relations Contact:

Matthew Abenante

Porter, LeVay & Rose, Inc.

data443@plrinvest.com

212.564.4700

 

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