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SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement (the “Agreement”) dated as of October 31, 2013 by and among Bar.pm, Inc., a corporation formed under the laws of the State of Nevada (“Bar.pm” or “Purchaser”), Clowd, Inc., a corporation formed under the laws of the State of Delaware (“Clowd Delaware”). Each of Bar.pm and Clowd Delaware is referred to herein individually as a “Party” and all are referred to collectively as the “Parties.”
RECITALS
WHEREAS, Purchaser desires to acquire 100% of the authorized and issued shares of Clowd Delaware (the “Exchanged Shares”), which shall represent 100% of the outstanding shares of Clowd Delaware in exchange for Twenty Two Million, Five Hundred Thousand (22,500,000) common shares of Bar.pm, (“Consideration Shares”); and
WHEREAS, Clowd Delaware will include all of its current business operations and assets, whether disclosed or not; and
WHEREAS, Both Parties agree that this Stock Exchange is intended to qualify under Section 368(a)(1)(B) of the Internal Revenue Code as a Stock for Stock Reorganization and that both Parties will take measures to ensure that proper corporate documents are prepared to effectuate such Reorganization; and
WHEREAS, the Parties desire and agree that in conjunction with the closing of the Agreement that a Change of Control of Bar.pm shall take place; and
WHEREAS, the Parties desire and agree to effect a name change as soon as practical following the closing. Purchaser will change its name from Bar.pm, Inc. to Clowd, Inc (“Clowd”), a corporation formed under the laws of the State of Nevada. All Parties will cooperate in taking the necessary actions with the State of Nevada to effect the name change; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants, representations and warranties contained herein, the Parties, intending to be legally bound, hereby agree as follows:
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
“Applicable Law” means any domestic or foreign law, statute, regulation, rule, policy, guideline or ordinance applicable to the businesses of the Parties, the Transactions and/or the Parties.
“Clowd Delaware Transferred Assets” means (i) all assets of Clowd Delaware immediately prior to the Share Exchange, plus (ii) the real estate holdings, if not already acquired.
“Clowd Delaware Assumed Liabilities” means (i) all liabilities of Clowd Delaware existing or arising immediately prior to the Share Exchange, whether known or unknown.
“Knowledge” means, in the case of Clowd Delaware, Clowd, or Purchaser, a particular fact or other matter of which its Chief Executive Officer, the Chief Financial Officer, or General Manager is actually aware or which a prudent individual serving in such capacity could be expected to discover or otherwise become aware of in the course of conducting a reasonable review or investigation of the corporation and its business and affairs.
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, claim, encumbrance, royalty interest, any other adverse claim of any kind in respect of such property or asset, or any other restrictions or limitations of any nature whatsoever.
“Material Adverse Effect” with respect to any entity or group of entities means any event, change or effect that has or would have a materially adverse effect on the financial condition, business or results of operations of such entity or group of entities, taken as a whole.
“Person” means any individual, corporation, partnership, trust or unincorporated organization or a government or any agency or political subdivision thereof.
Page 1 of 16
“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means:
(i) any income, alternative or add-on minimum tax, gross receipts tax, sales tax, use tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax, withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp tax, occupation tax, property tax, environmental or windfall profit tax, custom, duty or other tax, impost, levy, governmental fee or other like assessment or charge of any kind whatsoever together with any interest or any penalty, addition to tax or additional amount imposed with respect thereto by any governmental or Tax authority responsible for the imposition of any such tax (domestic or foreign), and
(ii) any liability for the payment of any amounts of the type described in clause (i) above as a result of being a member of an affiliated, consolidated, combined or unitary group for any Taxable period, and
(iii) any liability for the payment of any amounts of the type described in clauses (i) or (ii) above as a result of any express or implied obligation to indemnify any other person.
“Tax Return” means any return, declaration, form, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Transaction Documents” means this Agreement.
“Transactions” means the Share Exchange and the execution and delivery of any ancillary documents and/or agreements.
“Transfer” means to sell, assign, encumber, or otherwise transfer, directly or indirectly.
ARTICLE I
THE TRANSACTIONS
SECTION 1.01
THE SHARE EXCHANGE
Subject to the terms and conditions of this Agreement, on the Closing Date (as defined herein), the Share Exchange shall be consummated, in which the Purchaser shall acquire from Clowd Delaware, 100% of the authorized and issued shares of Clowd Delaware (the “Exchanged Shares”), which shall represent 100% of the outstanding shares of Clowd Delaware immediately after the exchange (the “Share Exchange”), in exchange for Twenty Two Million Five Hundred Thousand (22,500,000) common shares of Bar.pm (“Consideration Shares”):
(a)
The Exchanged Shares. The Exchanged Shares shall be delivered and retained by the post-merger entity Clowd, Inc. (f/k/a Bar.pm, Inc.); and
(b)
Consideration Shares. The Consideration Shares, provided to Clowd Delaware in completing the Agreement, either at the closing or as soon as possible following the closing, shall consist of Twenty Two Million Five Hundred Thousand (22,500,000) common shares of Bar.pm, to be distributed to the shareholders of Clowd Delaware.
(c)
Assumed Liabilities of Clowd Delaware. Upon the closing, Purchaser shall assume all of liabilities of Clowd Delaware equal to $0.
SECTION 1.02
Clowd Delaware
All of the Clowd Delaware stock shall be owned and held by Clowd, Inc. (f/k/a Bar.pm, Inc.) at the Closing Date.
(a)
Management of Clowd Delaware. Commencing on the Closing Date, the Parties hereby agree that the management of Clowd Delaware shall be solely in the control of Clowd (f/k/a Bar.pm, Inc.), which shall result in a change of control of Bar.pm, Inc.).
(b)
Redistribution of Consideration Shares. Clowd Delaware shall further designate the Consideration Shares received in this Agreement to individual or corporate shareholders as they determine to be in the best interest of their organization. Clowd Delaware shall provide a stock distribution list at Closing and said shares shall be distributed as soon as practical following the Closing (which may take up to 45-60 days to account for corporate restructuring).
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SECTION 1.03
PURCHASERS MANAGEMENT AND FINANCIAL POSITION
(a)
Management of Clowd, Inc. (f/k/a Bar.pm, Inc.). Commencing on the Closing Date, the Parties hereby agree that the management of Clowd Delaware shall control Clowd (f/k/a Bar.pm, Inc.). The post-Closing management team of Clowd shall be the pre-Closing management team of Clowd Delaware, which shall result in a change of control of Clowd.
(b)
Clowd, Inc. Financial Status. The new Clowd, Inc. (f/k/a Bar.pm, Inc.) shareholders recognize and agree to accept the existing liabilities of Clowd Delaware , which total $0.
SECTION 1.04
CLOSING
The closing of the Transactions (the “Closing”) shall take place at the offices of Purchaser within three (3) business days following the satisfaction or written waiver of the conditions to closing set forth in Article VII or at such other place or on such other date as may be mutually agreeable to the Parties. The Parties shall use their reasonable best efforts to cause the Closing to occur not later than October 31, 2013. The date and time of the Closing are herein referred to as the “Closing Date.” At the Closing, the actions contemplated to occur on the Closing Date by Section(s) 1.01, 1.02, 1.03 and 1.04 shall occur. Additionally, the Parties agree to conduct a pre-closing not later than the business day prior to the Closing Date to verify that all closing documents are in acceptable form to the Parties. The Parties agree and acknowledge that some actions may need to be taken post closing, and the Parties agree to cooperate to complete any such post-closing actions.
SECTION 1.05
RESTRICTIONS ON RESALE
The Consideration Shares issued or transferred pursuant to this Agreement will not be registered under the Securities Act, or the securities laws of any state, and cannot be transferred, hypothecated, sold or otherwise disposed of until: (i) a registration statement with respect to such securities is declared effective under the Securities Act, or (ii) an exemption from the registration requirements of the Securities Act is available.
The certificates representing the Consideration Shares which are being issued or transferred hereunder shall contain a legend substantially as follows:
“THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.”
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CLOWD DELAWARE
Clowd Delaware hereby represents and warrants to Purchaser, as of the date of this Agreement, and as of the Closing Date, as follows:
SECTION 2.01
ORGANIZATION, STANDING AND POWER
Clowd Delaware is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and has corporate power and authority to conduct its business as presently conducted by it and to enter into and perform this Agreement and to carry out the transactions contemplated by this Agreement.
SECTION 2.02
SUBSIDIARIES
Clowd Delaware does not have any subsidiaries or any ownership interest in any other entity other than Clowd Delaware.
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SECTION 2.03
CAPITALIZATION
(a)
There are 15,000,000 shares of capital stock of Clowd Delaware authorized, consisting of 15,000,000 shares of common stock, $0.001 par value per share (the “Clowd Delaware Common Shares”), and no shares of preferred stock (“Clowd Delaware Preferred Shares”). Within five days of closing of this Agreement, there will be approximately 6,091,000 outstanding Clowd Delware Common Shares and no Clowd Delaware Preferred Shares issued and outstanding.
(b)
No Clowd Delaware Common Shares or Clowd Delaware Preferred Shares have been reserved for issuance to any Person, and there are no other outstanding rights, warrants, options or agreements for the exchange or purchase of Clowd Delaware Common or Clowd Delaware Preferred Shares except as provided in this Agreement.
(c)
All outstanding Clowd Delaware Common Shares are validly issued, fully paid, non-assessable, not subject to pre-emptive rights, and have been issued in compliance with all state and federal securities laws or other Applicable Law. The Exchanged Shares to be acquired by Bar.pm pursuant to the Share Exchange, will, when issued or transferred pursuant to this Agreement, be duly and validly authorized and issued, fully paid and non-assessable.
SECTION 2.04
AUTHORITY FOR AGREEMENT
The execution, delivery, and performance of each of the Transaction Documents to which Clowd Delaware is a party by Clowd Delaware has been duly authorized by all necessary corporate and shareholder action, and each of such Transaction Documents, upon its execution by the Parties, will constitute the valid and binding obligation of Clowd Delaware, enforceable against it in accordance with and subject to its terms, except as enforceability may be affected by bankruptcy, insolvency or other laws of general application affecting the enforcement of creditors' rights. The execution and consummation of the transactions contemplated by this Agreement and compliance with the provisions of the Transactions by Clowd Delaware to which it is a party will not violate any provision of Applicable Law and will not conflict with or result in any breach of any of the terms, conditions, or provisions of, or constitute a default under, Clowd Delaware’s Articles of Incorporation or its Bylaws, in each case as amended, or, in any material respect, any indenture, lease, loan agreement or other agreement or instrument to which Clowd Delaware is a party or by which it or any of its properties is bound, or any decree, judgment, order, statute, rule or regulation applicable to Clowd Delaware.
SECTION 2.05
FINANCIAL CONDITION
The financial statements attached hereto (the “Financial Statements”), were prepared in accordance with generally accepted accounting principles and fairly reflect the financial condition of Clowd Delaware as of the dates stated and the results of its operations for the periods presented.
SECTION 2.06
ABSENCE OF CERTAIN CHANGES OR EVENTS
Since September 30, 2013, except as contemplated by this Agreement:
(a)
there has not been any Material Adverse Change in the business, operations, properties, assets, or condition of Clowd Delaware;
(b)
Clowd Delaware has not (i) amended its Articles of Incorporation, other than to increase its authorized common shares to 15,000,000; (ii) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any outstanding capital stock; (iii) made any material change in its method of management, operation, or accounting; (iv) entered into any material transaction; or (v) made any accrual or arrangement for payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer or employee;
(c)
Clowd Delaware has not (i) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (ii) paid any material obligation or liability (absolute or contingent) other than current liabilities reflected in or shown on the most recent Clowd Delaware balance sheet, and current liabilities incurred since that date in the ordinary course of business; (iii) sold or transferred, or agreed to sell or transfer, any material assets, properties, or rights, or canceled, or agreed to cancel, any material debts or claims; or (iv) made or permitted any material amendment or termination of any contract, agreement, or license to which it is a party.
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SECTION 2.07
GOVERNMENTAL AND THIRD PARTY CONSENTS
No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other federal, state, county, local or other foreign governmental authority, instrumentality, agency or commission or any third party, including a party to any agreement with Clowd Delaware, is required by or with respect to Clowd Delaware in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under (i) applicable securities laws, or (ii) the Delaware Division of Corporations.
SECTION 2.08
LITIGATION
There is no action, suit, investigation, audit or proceeding pending against, or to the Knowledge of Clowd Delaware, threatened against or affecting, Clowd Delaware or any of its assets or properties before any court or arbitrator or any governmental body, agency or official.
SECTION 2.09
INTERESTED PARTY TRANSACTIONS
Except as disclosed herein, Clowd Delaware is not indebted to any officer or director of Clowd Delaware, and no such person is indebted to Clowd Delaware.
SECTION 2.10
COMPLIANCE WITH APPLICABLE LAWS
To the Knowledge of Clowd Delaware, the business of Clowd Delaware has not been, and is not being, conducted in violation of any Applicable Law.
SECTION 2.11
FINDERS’ FEES
Clowd Delaware has not incurred, nor will it incur, directly or indirectly, any liability for brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees or any similar charges in connection with this Agreement or any transaction contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BAR.PM
Bar.pm hereby represents and warrants to Clowd Delaware, as of the date of this Agreement, and as of the Closing Date, as follows:
SECTION 3.01
ORGANIZATION, STANDING AND POWER
Bar.pm is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada, and has corporate power and authority to conduct its business as presently conducted by it and to enter into and perform this Agreement and to carry out the transactions contemplated by this Agreement.
SECTION 3.02
SUBSIDIARIES
Bar.pm does not have any subsidiaries, and does not have any ownership interest in any other entity.
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SECTION 3.03
CAPITALIZATION
(a)
At the Closing, there will be 260,000,000 shares of capital stock of Bar.pm authorized, consisting of 250,000,000 shares of common stock, $0.001 par value per share (the “Bar.pm Common Shares”), and 10,000,000 shares of preferred stock (“Bar.pm Preferred Shares”). As of the date of the Closing, there will be approximately 27,500,000 Bar.pm Common Shares and 0Bar.pm Preferred Shares issued and outstanding.
(b)
No Bar.pm Common Shares or Bar.pm Preferred Shares have been reserved for issuance to any Person, and there are no other outstanding rights, warrants, options or agreements for the exchange or purchase of Bar.pm Common or Bar.pm Preferred Shares except as provided in this Agreement.
(c)
All outstanding Bar.pm Common Shares are validly issued, fully paid, non-assessable, not subject to pre-emptive rights, and have been issued in compliance with all state and federal securities laws or other Applicable Law. The Consideration Shares to be issued by Bar.pm pursuant to the Share Exchange, will, when issued or transferred pursuant to this Agreement, be duly and validly authorized and issued, fully paid and non-assessable.
SECTION 3.04
AUTHORITY FOR AGREEMENT
The execution, delivery, and performance of each of the Transaction Documents to which Bar.pm is a party by Bar.pm has been duly authorized by all necessary corporate and shareholder action, and each of such Transaction Documents, upon its execution by the Parties, will constitute the valid and binding obligation of Bar.pm, enforceable against it in accordance with and subject to its terms, except as enforceability may be affected by bankruptcy, insolvency or other laws of general application affecting the enforcement of creditors' rights. The execution and consummation of the transactions contemplated by this Agreement and compliance with the provisions of the Transactions by Bar.pm to which it is a party will not violate any provision of Applicable Law and will not conflict with or result in any breach of any of the terms, conditions, or provisions of, or constitute a default under, Bar.pm's Articles of Incorporation or its Bylaws, in each case as amended, or, in any material respect, any indenture, lease, loan agreement or other agreement or instrument to which Bar.pm is a party or by which it or any of its properties is bound, or any decree, judgment, order, statute, rule or regulation applicable to Bar.pm.
SECTION 3.05
FINANCIAL CONDITION
The financial statements attached hereto, (the “Financial Statements”) were prepared in accordance with generally accepted accounting principles and fairly reflect the financial condition of Bar.pm as of the dates stated and the results of its operations for the periods presented.
SECTION 3.06
ABSENCE OF CERTAIN CHANGES OR EVENTS
Since September 30, 2013, except as contemplated by this Agreement:
(a)
there has not been any Material Adverse Change in the business, operations, properties, assets, or condition of Bar.pm;
(b)
Bar.pm has not (i) amended its Articles of Incorporation; (ii) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any outstanding capital stock; (iii) made any material change in its method of management, operation, or accounting; (iv) entered into any material transaction; or (v) made any accrual or arrangement for payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer or employee;
(c)
Bar.pm has not (i) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (ii) paid any material obligation or liability (absolute or contingent) other than current liabilities reflected in or shown on the most recent Bar.pm balance sheet, and current liabilities incurred since that date in the ordinary course of business; (iii) sold or transferred, or agreed to sell or transfer, any material assets, properties, or rights, or canceled, or agreed to cancel, any material debts or claims; or (iv) made or permitted any material amendment or termination of any contract, agreement, or license to which it is a party.
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SECTION 3.07
GOVERNMENTAL AND THIRD PARTY CONSENTS
No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other federal, state, county, local or other foreign governmental authority, instrumentality, agency or commission or any third party, including a party to any agreement with Bar.pm, is required by or with respect to Bar.pm in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under (i) applicable securities laws, or (ii) the Nevada Division of Corporations.
SECTION 3.08
LITIGATION
There is no action, suit, investigation, audit or proceeding pending against, or to the Knowledge of Bar.pm, threatened against or affecting, Bar.pm or any of its assets or properties before any court or arbitrator or any governmental body, agency or official.
SECTION 3.09
INTERESTED PARTY TRANSACTIONS
Bar.pm is not indebted to any officer or director of Bar.pm, and no such person is indebted to Bar.pm.
SECTION 3.10
COMPLIANCE WITH APPLICABLE LAWS
To the Knowledge of Bar.pm, the business of Bar.pm has not been, and is not being, conducted in violation of any Applicable Law.
SECTION 3.11
FINDERS’ FEES
Bar.pm has not incurred, nor will it incur, directly or indirectly, any future liability for brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees or any similar charges in connection with this Agreement or any transaction contemplated hereby.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
SECTION 4.01-1
COVENANTS OF CLOWD DELAWARE
Clowd Delaware covenants and agrees that, during the period from the date of this Agreement until the Closing Date, Clowd Delaware shall, other than as contemplated by this Agreement or for the purposes of effecting the Closing pursuant to this Agreement, conduct its business as presently operated and solely in the ordinary course, and consistent with such operation, and, in connection therewith, without the written consent of Bar.pm:
(a)
shall not amend its Articles of Incorporation or Bylaws;
(b)
shall not pay or agree to pay to any employee, officer or director compensation that is in excess of the current compensation level of such employee, officer or director other than salary increases or payments made in the ordinary course of business or as otherwise provided in any contracts or agreements with any such employees;
(c)
shall not merge or consolidate with any other entity or acquire or agree to acquire any other entity;
(d)
shall not sell, transfer, or otherwise dispose of any material assets required for the operations of Clowd Delaware’s business, except in the ordinary course of business consistent with past practices;
(e)
shall not declare or pay any dividends on or make any distribution of any kind with respect to the Clowd Delaware common stock;
(f)
shall not issue any equity securities of Clowd Delaware or any right or option to purchase or otherwise acquire any equity security of Clowd Delaware or take any action affecting the capitalization of Clowd Delaware;
(g)
shall use commercially reasonable efforts to comply with and not be in default or violation under Applicable Law where such violation would have a Material Adverse Effect on Clowd Delaware; and
(h)
shall not grant any severance or termination pay to any director, officer or any other employees of Clowd Delaware.
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SECTION 4.01-.2
COVENANTS OF BAR.PM
Bar.pm covenants and agrees that, during the period from the date of this Agreement until the Closing Date, Bar.pm shall, other than as contemplated by this Agreement or for the purposes of effecting the Closing pursuant to this Agreement, conduct its business as presently operated and solely in the ordinary course, and consistent with such operation, and, in connection therewith, without the written consent of Clowd Delaware:
(i)
shall not amend its Articles of Incorporation or Bylaws;
(j)
shall not pay or agree to pay to any employee, officer or director compensation that is in excess of the current compensation level of such employee, officer or director other than salary increases or payments made in the ordinary course of business or as otherwise provided in any contracts or agreements with any such employees;
(k)
shall not merge or consolidate with any other entity or acquire or agree to acquire any other entity;
(l)
shall not sell, transfer, or otherwise dispose of any material assets required for the operations of Bar.pm’s business, except in the ordinary course of business consistent with past practices;
(m)
shall not declare or pay any dividends on or make any distribution of any kind with respect to the Bar.pm common stock;
(n)
shall not issue any equity securities of Bar.pm or any right or option to purchase or otherwise acquire any equity security of Bar.pm or take any action affecting the capitalization of Bar.pm, except as contemplated in this Agreement;
(o)
shall use commercially reasonable efforts to comply with and not be in default or violation under Applicable Law where such violation would have a Material Adverse Effect on Bar.pm; and
(p)
shall not grant any severance or termination pay to any director, officer or any other employees of Bar.pm.
SECTION 4.02
COVENANTS OF THE PARTIES
(a)
Announcement. No Party shall issue any press release or otherwise make any public statement with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other Parties (which consent shall not be unreasonably withheld), except as may be required by applicable law or securities regulation. Upon execution of this Agreement, Bar.pm shall file any required documents related to the execution of the Agreement with the Nevada Secretary of State.
(b)
Notification of Certain Matters. Each Party shall give prompt written notice to the other Parties of:
(i)
The occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be reasonably likely to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time; and
(ii)
Any material failure of a Party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder.
(c)
Reasonable Best Efforts. Upon the terms and subject to the conditions of this Agreement and the other Transaction Documents, the Parties agree to use their respective reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable (subject to applicable laws) to consummate and make effective the Transactions and to comply with the terms thereof.
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(d)
Access to Information
(i)
Inspection by Clowd Delaware. Bar.pm will, if requested, make available for inspection by Clowd Delaware during normal business hours and in a manner so as not to interfere with normal business operations, all of Bar.pm’s record, books of account, premises, contracts and all other documents in Bar.pm’s possession or control that are reasonably requested by Clowd Delaware to inspect and examine the business and affairs of Bar.pm. Bar.pm will cause its managerial employees and regular independent accountants to be available upon reasonable advance notice to answer questions of Clowd Delaware concerning the business and affairs of Bar.pm. Clowd Delaware will treat and hold as confidential any information they receive from Bar.pm in the course of the reviews contemplated by this Section 4.02(d)(i). No examination by Clowd Delaware will, however, constitute a waiver or relinquishment by Clowd Delaware of their rights to rely on Bar.pm’s covenants, representations and warranties made herein or pursuant hereto.
(ii)
Inspection by Bar.pm. Clowd Delaware will, if requested, make available for inspection by Bar.pm, during normal business hours and in a manner so as not to interfere with normal business operations, all of Clowd Delaware’s records, books of account, premises, contracts and all other documents in their possession or control that are reasonably requested by Bar.pm to inspect and examine the business and affairs of Clowd Delaware. Clowd Delaware will cause its managerial employees and regular independent accountants to be available upon reasonable advance notice to answer questions of Bar.pm concerning the business and affairs of Clowd Delaware. Bar.pm will treat and hold as confidential any information it receives from Clowd Delaware in the course of the reviews contemplated by this Section 4.02(d)(ii). No examination by Bar.pm will, however, constitute a waiver or relinquishment by Bar.pm of its rights to rely on Clowd Delaware’s covenants, representations and warranties made herein or pursuant hereto.
SECTION 4.03
POST-CLOSING COVENANTS
Each Party covenants and agrees that:
(a)
Purchaser shall effect a name change of the Company from Bar.pm, Inc. to Clowd, Inc.; and
(b)
No Party or affiliate of a Party shall challenge, whether in court or arbitration, the validity or enforceability of any Transaction Document or any provision thereof, unless any of the other Parties shall have breached in any material respect any of its or his representations, warranties, covenants or other agreements contained in any of the Transaction Documents; and
(c)
Each Party will use its or his reasonable good faith efforts to cause the transfer agent for Bar.pm to (i) permit transfers of Consideration Shares authorized by the Transaction Documents and (ii) refuse transfers of Consideration Shares in violation of the Transaction Documents; and
(d)
The Parties shall use their reasonable good faith efforts, taking into account their respective positions with Bar.pm, Clowd Delaware and Clowd, to cause Bar.pm (and Clowd upon effective name change) to comply with Applicable Law.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01
CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS
The obligations of the Parties as provided herein shall be subject to each of the following conditions precedent, unless waived in writing by both Clowd Delaware and Purchaser:
(a)
Consents and Approvals. The Parties shall have obtained all necessary consents and approvals of their respective boards of directors, and all consents, approvals and authorizations required under their respective charter documents, and all material consents, including any material consents and waivers by the Parties’ respective lenders and other third-parties, if necessary, to the consummation of the transactions contemplated by this Agreement.
(b)
Absence of Certain Litigation. No action or proceeding shall be threatened or pending before any governmental entity or authority which, in the reasonable opinion of counsel for the Parties, is likely to result in a restraint, prohibition or the obtaining of damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby.
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SECTION 5.02
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
The obligations of Purchaser on the Closing Date as provided herein shall be subject to the satisfaction, on or prior to the Closing Date, of the following conditions precedent, unless waived in writing by Clowd Delaware:
(a)
Consents and Approvals. Purchaser shall have obtained all required consents to the consummation of the transactions contemplated by this Agreement.
(b)
Representations and Warranties. The representations and warranties by Purchaser in this Agreement shall be true and accurate in all material respects on and as of the Closing Date with the same force and effect as though such representations and warranties had been made at and as of the Closing Date, except to the extent that any changes therein are specifically contemplated by this Agreement.
(c)
Performance. Purchaser shall have performed and complied in all material respects with all agreements to be performed or complied with by either of them pursuant to this Agreement and the other Transaction Documents at or prior to the Closing.
(d)
Proceedings and Documents. All corporate, company and other proceedings of Purchaser in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to Clowd Delaware and their counsel, and they shall have received all such counterpart originals (or certified or other copies) of such documents as they may reasonably request.
(e)
Material Changes. Except as contemplated by this Agreement, since the date hereof, the Purchaser shall not have suffered a Material Adverse Effect, and, without limiting the generality of the foregoing, there shall be no pending litigation to which any of the foregoing is a party which is reasonably likely to have a Material Adverse Effect on such Party or on the Transactions.
(f)
Due Diligence. Clowd Delaware shall have completed to its own satisfaction due diligence in relation to Purchaser, except that this shall cease to be a condition precedent unless on or within ten (10) days after the date of this Agreement Clowd Delaware shall have delivered a written notice stating that it is not satisfied with the results of its due diligence.
(g)
Transaction Documents. Purchaser shall have executed and delivered all Transaction Documents required to be executed by such Party.
SECTION 5.03
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CLOWD DELAWARE
The obligations of Clowd Delaware on the Closing Date as provided herein shall be subject to the satisfaction, on or prior to the Closing Date, of the following conditions precedent, unless waived in writing by Purchaser:
(a)
Consents and Approvals. Clowd Delaware shall have obtained all required consents to the consummation of the transactions contemplated by this Agreement.
(b)
Representations and Warranties. The representations and warranties by Clowd Delaware shall be true and accurate in all material respects on and as of the Closing Date with the same force and effect as though such representations and warranties had been made at and as of the Closing Date, except to the extent that any changes therein are specifically contemplated by this Agreement.
(c)
Performance. Clowd Delaware shall have performed and complied in all material respects with all agreements to be performed or complied with by either of them pursuant to this Agreement prior to or at the Closing.
(d)
Proceedings and Documents. All corporate, company and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to Purchaser and their counsel, and they shall have received all such counterpart originals (or certified or other copies) of such documents as they may reasonably request.
(e)
Certificates of Good Standing. Purchaser shall have delivered to Clowd Delaware a certificate as to the good standing of Purchaser certified by the Secretary of State of the State of Nevada, dated on or within fourteen (14) business days of the Closing Date.
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(f)
Material Changes. Except as contemplated by this Agreement, since the date hereof, Clowd Delaware shall not have suffered a Material Adverse Effect and, without limiting the generality of the foregoing, there shall be no pending litigation to which Clowd Delaware is a party which is reasonably likely to have a Material Adverse Effect on Clowd Delaware.
(g)
Due Diligence.
Bar.pm shall have completed to their own satisfaction due diligence in relation to Clowd Delaware, except that this shall cease to be a condition precedent unless on or within ten (10) days after the date of this Agreement Bar.pm shall have delivered a written notice stating that it is not satisfied with the results of its due diligence;
(h)
Transaction Documents. Clowd Delaware shall have executed and delivered all Transaction Documents required to be executed by such Party.
ARTICLE VI
TERMINATION
SECTION 6.01
TERMINATION
This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Effective Time by:
(a)
The mutual written consent of the Parties;
(b)
Any Party, if any governmental entity or court of competent jurisdiction shall have issued an order, decree or ruling or taken any other action (which order, decree, ruling or other action the Parties shall use their commercially reasonable best efforts to lift), which restrains, enjoins or otherwise prohibits the Transactions or any of them as contemplated herein and such order, decree, ruling or other action shall have become final and non-appealable;
(c)
Clowd Delaware, if Purchaser shall have breached in any material respect any of its or his representations, warranties, covenants or other agreements contained in this Agreement, or by Clowd Delaware, if it or he is not satisfied with the results of its due diligence investigation and it so notifies Purchaser within ten (10) days after the date of this Agreement;
(d)
Purchaser, if Clowd Delaware shall have breached in any material respect any of its or his representations, warranties, covenants or other agreements contained in this Agreement, or by Purchaser, if it or he is not satisfied with the results of its due diligence investigation and it so notifies Clowd Delaware within ten (10) days after the date of this Agreement;
(e)
Without any action on the part of the Parties if required by Applicable Law or if the Closing shall not be consummated by November 30, 2013, unless extended by written agreement of the Parties. The Parties agree and acknowledge that some actions may need to be taken post closing, and any such post-closing actions will not be a violation of this Section 6.01(e).
SECTION 6.02
EFFECT OF TERMINATION
If this Agreement is terminated as provided in Section 6.01, written notice of such termination shall be given by the terminating Party to the other Parties specifying the provision of this Agreement pursuant to which such termination is made, this Agreement shall become null and void and there shall be no liability on the part of any Party provided, however, that (a) the provisions of Articles VI, VII and VIII hereof shall survive the termination of this Agreement; (b) nothing in this Agreement shall relieve any Party from any liability or obligation with respect to any willful breach of this Agreement; and (c) termination shall not affect accrued rights or liabilities of any Party at the time of such termination.
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ARTICLE VII
CONFIDENTIALITY
SECTION 7.01
CONFIDENTIALITY
Each Party will keep confidential all information and documents obtained from any of the other Parties pursuant this Agreement (except for any information disclosed to the public pursuant to a press release authorized by the Parties or for information required to be provided in a filing with the Secretary of State of Nevada or Delaware by any of the Parties); and in the event the Closing does not occur or this Agreement is terminated for any reason, will promptly return such documents and all copies of such documents and all notes and other evidence thereof, including material stored on a computer, and will not use such information for its own advantage, except to the extent that (i) the information must be disclosed by law, (ii) the information becomes publicly available by reason other than disclosure by the Party subject to the confidentiality obligation, (iii) the information is independently developed without use of or reference to the other Party’s confidential information, (iv) the information is obtained from another source not obligated to keep such information confidential, or (v) the information is already publicly known or known to the receiving Party when disclosed as demonstrated by written documentation in the possession of such Party at such time.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01
INDEMNIFICATION
Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless each of the other Parties, any subsidiary or affiliate thereof and each person who is now, or has been at any time prior to the date hereof or who becomes prior to the Closing, a shareholder, officer, director or partner of a Party, any subsidiary or affiliate thereof or an employee of any subsidiary or affiliate thereof, and their respective heirs, legal representatives, successors and assigns (the “Indemnified Parties”) against all losses, claims, damages, costs, expenses (including reasonable attorneys’ fees), liabilities or judgments or amounts that are paid in settlement of or in connection with any threatened or actual third party claim, action, suit, proceeding or investigation based in whole or in part on or arising in whole or in part out of any material breach of this Agreement by the Indemnifying Party, or any subsidiary or affiliate thereof, including but not limited to failure of any representation or warranty to be true and correct in any material respect at or before the Closing. Any Indemnified Party wishing to claim indemnification under this Section 8.01, upon learning of any such claim, action, suit, proceeding or investigation, shall notify the Indemnifying Party in writing, but the failure to so notify shall not relieve the Indemnifying Party from any liability that it may have under this Section 8.01, except to the extent that such failure would materially prejudice the Indemnifying Party.
SECTION 8.02
LIMITATION ON INDEMNIFICATION
Each Party hereto acknowledges and agrees that this Agreement and the Transactions contemplated hereby are the result of arms-length negotiation between the Parties, and that neither the Agreement nor the Transaction is intended to involve a personal loan to a director or executive officer of Bar.pm or Clowd Delaware. For purposes of this Agreement and the Transaction Documents, the Agreement and the Transactions contemplated hereby shall be conclusively presumed not to involve a personal loan to a director or executive officer of Bar.pm or Clowd Delaware.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01
EXPENSES
Except as contemplated by this Agreement, all costs and expenses incurred in connection with this Agreement and the other Transaction Documents and the consummation of the transactions contemplated by this Agreement shall be paid by the Party incurring such expenses.
SECTION 9.02
APPLICABLE LAW
This Agreement shall be governed by the laws of the State of Nevada, without giving effect to the principles of conflicts of laws thereof, as applied to agreements entered into and to be performed in such state.
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SECTION 9.03
NOTICES
All notices and other communications under this Agreement shall be in writing and shall be deemed to have been duly given or made as follows:
(a)
If sent by reputable overnight air courier (such as Federal Express) for delivery on the next business day, the first business day after being sent;
(b)
If sent by facsimile transmission, with a copy mailed on the same day in the manner provided in clause (a) above, when transmitted and receipt is confirmed by the fax machine; or
(c)
If otherwise actually personally delivered, when delivered.
All notices and other communications under this Agreement shall be sent or delivered as follows:
If to Purchaser to:
Bar.pm, Inc.
c/o Michael Penrod
187 E. Warm Springs Road
Suite B174
Las Vegas, NV 89119
with a copy to (which shall not constitute notice):
_____________________
Attn: ______________________
_____________________
_____________________
If to Clowd Delaware, to:
Clowd, Inc.
Attn: Bryce Knight
1930 Ocean Avenue, #205
Santa Monica, CA 90405
with a copy to (which shall not constitute notice):
Bart and Associates, LLC
c/o Ken Bart
8400 East Prentice Avenue
Suite 1500
Greenwood Village, CO 80111
Telephone: 720-226-7511
Facsimile: 303-745-1880
Each Party may change its address by written notice in accordance with this Section.
SECTION 9.04
ENTIRE AGREEMENT
This Agreement (including the documents and instruments referred to in this Agreement) contains the entire understanding of the Parties with respect to the subject matter contained in this Agreement, and supersedes and cancels all prior agreements, negotiations, correspondence, undertakings and communications of the Parties, oral or written, respecting such subject matter.
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SECTION 9.05
AMENDMENT AND WAIVER
This Agreement may be amended only if such amendment is set forth in a writing executed by all Parties. Any provision of this Agreement may be waived, provided that any such waiver shall be binding upon a Party only if such waiver is set forth in a writing executed by that Party.
SECTION 9.06
BINDING AGREEMENT; ASSIGNMENT
This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided that, except as specifically provided in this Agreement, neither this Agreement nor any of the rights, interests, or obligations hereunder may be assigned by any Party without the prior written consent of the other Parties.
SECTION 9.07
COUNTERPARTS; FACSIMILE OR EMAIL EXECUTION
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which shall be considered one and the same agreement. Execution and delivery of this Agreement by facsimile or scan and email shall be deemed to be equivalent to the execution and delivery of an original.
SECTION 9.08
NO THIRD PARTY BENEFICIARIES
Except as expressly provided by this Agreement, nothing herein is intended to confer upon any person or entity not a Party to this Agreement any rights or remedies under or by reason of this Agreement.
SECTION 9.09
DISPUTES
(a)
Arbitration; Attorney Fees. Any dispute involving the interpretation, application or enforcement of this Agreement shall be submitted to binding arbitration before the American Arbitration Association, whose rules applicable to commercial disputes shall apply except as modified by this Section 9.09(a). The arbitration hearing shall take place in Las Vegas, Nevada before one arbitrator, who shall be a retired judge (unless none is reasonably available). The arbitrator shall comply with the provisions of Section 9.09(b) below, unless the parties to the arbitration consent otherwise. The arbitrator shall submit a written finding of facts and conclusions of law. The arbitrator shall have authority only to interpret and apply provisions of this Agreement and shall have no authority to add to, subtract from or modify terms of this Agreement except to the extent otherwise provided in Section 9.09(c). The judgment of the arbitrator shall be binding and may be entered as a final judgment by any court having jurisdiction over the parties hereto. THE PARTIES UNDERSTAND AND ACKNOWLEDGE THAT UNDER THIS SECTION, EACH WAIVES THE RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY ARBITRABLE CONTROVERSY OR CLAIM. In the event that any party to this Agreement shall initiate arbitration based on this Agreement, or take other permitted legal action for the enforcement or interpretation of any of the provisions of this Agreement, including such suit or action as may be necessary or germane to resolve or address any issues peculiar to federal bankruptcy law, the prevailing party in such action shall, in addition to whatever judgment is rendered or award granted on its behalf, be entitled to its reasonable costs and expenses in connection with such action, including reasonable attorney’s fees.
(b)
Venue. Jurisdiction and venue for any action will be in Las Vegas, Nevada.
(c)
Severability. If a court or an arbitrator of competent jurisdiction holds any provision of this Agreement to be illegal, unenforceable or invalid in whole or in part for any reason, such provision shall be adjusted rather than voided, if possible, to achieve the intent of the parties to the extent possible, and in any event the validity and enforceability of the remaining sections shall not be affected unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision.
SECTION 9.10
SURVIVAL
All representations, warranties, covenants, and agreements (and exceptions thereto) set forth in this Agreement shall survive the Closing Date and the consummation of the transactions contemplated hereby.
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SECTION 9.11
RULES OF CONSTRUCTION
(a)
General. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
(b)
Gender; Number. Wherever applicable, references herein to the masculine, feminine or neuter shall equally apply to the neuter, feminine and masculine. Furthermore, wherever applicable in this Agreement, the singular shall include the plural.
(c)
Captions. The captions used in this Agreement are for convenience of reference only and do not constitute a part of this Agreement and shall not be deemed to limit, characterize, or in any way affect any provision of this Agreement, and all provisions of this Agreement shall be enforced and construed as if no caption had been used in this Agreement.
Remainder of Page Intentionally Left Blank
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first above written.
BAR.PM, INC.
By: /s/ Michael Penrod
Name: Michael Penrod
Title: President and Sole Direcor
CLOWD, INC.
By: /s/ Bryce Knight
Name: Bryce Knight
Title: President
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