CANNEX, KUBBY, GULF ONSHORE, INC ASSET PURCHASE AGREEMENT
CANNEX,
KUBBY, GULF ONSHORE, INC
CANNEX
THERAPEUTICS LLC a California Limited Liability Company with its corporate
offices located at 000 Xxxxxx Xxxxxx Xxxxx 00000 Xxx Xxxxxxxxx, XX 00000 and
XXXXXX X. XXXXX an individual located at 000 Xxxxxx Xxxxxx Xxxxx 00000 Xxx
Xxxxxxxxx, XX 00000.
And
GULF
ONSHORE, INC. a Nevada Corporation with its corporate offices located at 0000
Xxxxx Xxxx Xxxx, Xxxxx 000 Xxxxxxx, Xxxxx 00000.
And
K&D
Equities, Inc. a Nevada Corporation with its corporate offices
located at 0000 Xxxxx Xxxx Xxxx, Xxxxx 000X Xxxxxxx, Xxxxx 00000.
This
Asset Purchase Agreement ("Purchase Agreement") is entered into as of March 23,
2009, by and among Cannex Therapeutics LLC/Xxxxxx X. Xxxxx ("CXSK"), GULF
ONSHORE, INC ("GULF"), and K&D
Equities, Inc. (“KDE”).
I. RECITALS
A.
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CXSK
desires to sell, assign, transfer and convey to GULF all of CXSK’s rights,
titles, and interest in and to its Cannabis Research & Development
Business (“CXSK Assets”).
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B.
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Subject
to the terms and conditions of this Purchase Agreement, CXSK agrees to
sell to GULF and GULF agrees to purchase from CXSK the CXSK Assets with no
liabilities or obligations or encumbrances attached to the CXSK
Assets.
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C.
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A
management agreement between GULF and Xxxxxx X. Xxxxx is an essential part
of this agreement.
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D.
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Schedule
A to be provided according to CXSK Assets as listed below (“CXSK
Assets”):
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a.
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Website
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b.
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Client
Base
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c.
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All
Hardware and Software
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d.
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Intellectual
Property
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e.
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Billing
System
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f.
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All
rights, properties, patents, trademarks, formulas, pertaining to its
Cannabis Research & Business.
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E.
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GULF
shall assume no liabilities and obligations with respect to the CXSK
Assets.
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F.
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CXSK
represents that there are no liabilities, litigations and obligations with
respect to the CXSK Assets.
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G.
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GULF
warrants that its financial condition as of September 30, 2009, is as
represented by its Q3 2008 Form 10-Q as filed with the Securities and
Exchange Commission, excepting as affected by the release of $250,000 in
debt by South Beach Live, Inc., and its delivery of 100% of the shares of
Curado Energy Resources, Inc. and the Xxxxxx “M” lease, as more fully
described in GULF’s October 31, 2008 Form 8-K
filing.
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II. CLOSING
DATE
The
closing date (“CLOSING DATE”) shall occur on a date that the parties hereto
shall mutually agree; provided, however, that the Closing Date shall not occur
later than March 27, 2009.
III. CONDITIONS
PRECEDENT
The
parties, intending to be legally bound, agree as follows:
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1.
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Xxxxxx
X. Xxxxx, Xx. Xxxxxxx Xxxxxxxx and Xxxxxxx Xxxxx shall immediately
appointed to serve on the Board of Directors of GULF as President and CEO,
Director and Chief Science Officer, Director and Chief Financial Officer
respectively.
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2.
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CXSK
shall not accept any offers from other parties to purchase the CXSK Assets
during the term of this agreement.
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3.
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GULF
represents that immediately prior to this transaction it had 12,597,279
shares of common stock issued and outstanding, and that afterwards it will
have 14,697,279 shares of common stock issued and
outstanding. The ten million six hundred thousand (10,600,000)
shares paid to Cannex and its assigns will represent approximately seventy
three percent 73% of the total shares outstanding in GULF at the closing
of this agreement. GULF has no shares of preferred stock issued
and outstanding, and has not filed a certificate of designation with the
State of Nevada to declare the rights of any preferred shares that may be
issued.
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4.
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GULF
represents that it has thirty million (30,000,000) authorized common
shares and one million authorized preferred
shares.
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IV. PURCHASE
PRICE AND NON-DILUTION
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1.
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The
parties agree that on or prior to the Closing Date, GULF and KDE shall pay
to CXSK and or its assigns the Purchase Price in the amount of ten million
six hundred thousand (10,600,000) Rule 144 restricted shares of GULF
(“PURCHASE PRICE”). KDE shall deliver 8,500,000 shares, and
GULF shall issue an additional 2,100,000
shares.
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2.
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The
parties agree that for a period of one year after the issuance of these
shares (“Non-Dilution Period”), GULF will not conduct a reverse split of
any class of its shares or increase the number of authorized shares
without prior approval of KDE. Furthermore, in the event that
GULF issues additional shares for aggregate consideration (cash,
securities or in-kind) of less than $1.00 per share during the
Non-Dilution Period, the Company shall issue to KDE without additional
payment one share of restricted stock for each ten shares
sold. This provision shall not apply to shares issued to
officers or directors of the Company as compensation so long as such
shares are issued with a restriction permitting sale only after one year
from issuance.
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V. INDEMNIFICATION
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1.
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Each
party hereto shall bear its own costs and expenses with respect to the
negotiation and consummation of the transaction contemplated hereunder;
provided, however, that should either party fail to negotiate in good
faith to effect the consummation of the transaction contemplated
hereunder, such party shall fully indemnify the other for all such costs
and expenses.
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2.
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CXSK
shall indemnify and hold harmless GULF from and against any and all debts,
claims, liabilities, damages and obligations (and related costs and
expenses) arising out of or in any way related to (i) any act, omission or
misrepresentation of CXSK, or (ii) the CXSK Assets prior to the Closing
Date.
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3.
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GULF
shall indemnify and hold harmless CXSK from and against any and all debts,
claims, liabilities, damages and obligations (and related costs and
expenses) arising out of or in any way related to (i) any act, omission or
misrepresentation of GULF or any of GULF's officers, employees or agents,
or (ii) the CXSK Assets subsequent to the Closing
Date.
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VI. DUE
DILIGENCE
CXSK
shall make available to GULF at reasonable times upon reasonable notice such of
its personnel and files, records and other documents as GULF shall reasonably
require in order to confirm the representations that have been made by CXSK with
respect to the CXSK Assets and the assumptions upon which GULF has based its
calculation of the Purchase. In the event that before signing this
agreement such due diligence reveals any material variation from such
representations and assumptions, GULF may elect to (i) terminate its
participation in this transaction without further obligation to the CXSK, or
(ii) propose an adjusted Purchase Price and/or other modifications to the
transaction that CXSK may accept or reject in its sole discretion
VII. ACCURACY
OF REPRESENTATIONS
All of
CXSK's representations and warranties in this Purchase Agreement (considered
collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date
of this Purchase Agreement, and must be accurate in all material respects as of
the Closing Date as if made on the Closing Date, without regard to any
supplement to the Disclosure Schedules.
VIII. NOTICES
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All
notices, consents, waivers, and other communications under this Purchase
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand, (b) sent by facsimile (with written confirmation of receipt),
or (c) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses and facsimile numbers set forth below:
If
to GULF:
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GULF
ONSHORE, INC
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0000
Xxxxx Xxxx Xxxx, Xxxxx 000
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Xxxxxxx,
Xxxxx 00000
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Attention:
Xxxxxxx Xxxxx
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If
to CXSK:
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Cannex
Therapeutics LLC/Xxxxx Xxxxx
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000
Xxxxxx Xx, Xxxxx 00000
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Xxx
Xxxxxxxxx, XX 00000
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Attention:
Xxxxxx X. Xxxxx
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IX. CONFIDENTIALITY
Unless
otherwise agreed to by GULF, CXSK shall make no public announcement or other
disclosure in any way relating to this proposed transaction to any person
including, but not limited to, the Retailers, Service Contract holders and
CXSK’s employees and suppliers.
X. ENFORCEABILITY
Notwithstanding
anything to the contrary set forth herein, GULF's obligation to consummate the
transaction described herein shall be subject to (i) negotiation of acceptable
documentation, (ii) approval of the transaction by its Board of
Directors and (iii) satisfactory completion of its due diligence as described in
Paragraph V.
XI. GOVERNING
LAW
Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Purchase Agreement may be brought against any of the
parties in the courts of the State of Nevada, and each of the parties consents
to the jurisdiction of such court (and of the appropriate appellate court) in
any such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world. In connection with any such action or
proceeding, the prevailing party (whether prevailing affirmatively or by means
of a successful defense with respect to the issues having the greatest value or
importance) will be entitled to recover its costs, including reasonable attorney
fees at trial and on any appeal.
XII. WAIVER
Neither
the failure nor any delay by any party in exercising any right, power, or
privilege under this Purchase Agreement or the documents referred to in this
Purchase Agreement will operate as a waiver of such right, power, or privilege,
and no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, no party will be deemed to have waived any of its
rights or privileges under this Purchase Agreement or the documents referred to
in this Purchase Agreement unless the waiver is in writing and no waiver given
by a party will be applicable except in the specific instance for which it is
given.
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XIII. MODIFICATION
This
Purchase Agreement may not be amended except by a written agreement executed by
the party to be charged with the amendment.
XIV. ASSIGNMENTS,
SUCCESSORS, AND THIRD-PARTY RIGHTS
Neither
party may assign any of its rights under this Purchase Agreement without the
prior consent of the other party, other than a wholly owned (direct or indirect)
Related Person that affirms in writing that it will be bound to the
representations, warranties, and obligation of Asset Company under this Purchase
Agreement as if it signed the Agreement as the original signatory Asset Company
(with such factual changes, such as jurisdiction of organization, as reasonably
may be required). Subject to the preceding sentence, this Purchase Agreement
will apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Purchase Agreement will be construed to give any Person other than
the parties to this Purchase Agreement any legal or equitable right, remedy, or
claim under or with respect to this Purchase Agreement or any provision of this
Purchase Agreement. This Purchase Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Purchase Agreement and their successors and assigns. The Liquidating Trust is an
express beneficiary of the covenants and obligations of the parties to this
Agreement.
XV.
SEVERABILITY
If any
provision of this Purchase Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Purchase Agreement
will remain in full force and effect. Any provision of this Purchase Agreement
held invalid or unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.
XVI. SECTION
HEADINGS; CONSTRUCTION
The
headings of Sections in this Purchase Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Purchase Agreement. All words used in this Purchase Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
XVII. COUNTERPARTS
This
Purchase Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Purchase Agreement and all of
which, when taken together, will be deemed to constitute the and the same
agreement.
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IN
WITNESS WHEREOF, the parties have executed and delivered this Purchase Agreement
as of the date first written above.
Xxxxxxx
Xxxxx, President
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Xxxxxx
X. Xxxxx, President
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GULF
ONSHORE, INC
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Cannex
Therapeutics LLC
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Xxxxx
X. Xxxxx, Individual
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K&D
Equities, Inc.
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Int____
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