Attached files
Exhibit 10.2
FIRST ADDENDUM
TO ASSET PURCHASE AGREEMENT AND EMPLOYMENT AGREEMENT
THIS
FIRST ADDENDUM TO THE ASSET PURCHASE AGREEMENT and EMPLOYMENT
AGREEMENT (the “First Addendum”) is made as of this
16th day
of February 2018 (the “Effective Date”) by GrowLife,
Inc., a Delaware corporation (the “Company”), and David
Reichwein, a Pennsylvania resident (“Employee”), GIP
International Ltd, a Hong Kong corporation and DPR International
LLC, a Pennsylvania limited liability corporation (collectively,
the "Seller"). Company, Seller and Employee are sometimes referred
to herein as the “Party” or, collectively, the
“Parties.”
RECITALS
WHEREAS, the Parties entered into an
Asset Purchase Agreement dated October 2, 2017 (the “Purchase
Agreement”), attached hereto as “Exhibit A” and
incorporated herein by reference, pursuant to which the Company
purchased 51% of the Assigned Intellectual Property and Purchased
Assets in exchange for the Purchase Price;
WHEREAS, the Parties entered into an
Employment Agreement dated October 1, 2017 (the “Employment
Agreement”) setting forth the compensation terms surrounding
Employees employment by the Company, attached hereto as
“Exhibit B” and incorporated herein by
reference;
WHEREAS, the Parties wish to formally
supplement the Purchase Agreement and Employment Agreement by this
First Addendum to purchase the remaining 49% ownership of the
Assigned Intellectual Property and Purchased Assets including the
FreeFit properties and related assets (“FreeFit”) as of
the date of this First Addendum; and
WHEREAS, capitalized terms used herein,
but not otherwise defined, shall have the meanings ascribed to such
terms in the Purchase Agreement and Employment
Agreement.
NOW THEREFORE, in consideration of the
foregoing recitals and the mutual covenants and representations
contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
AGREEMENT
1.
Recitals. The foregoing recitals are true and
correct in all material respects and are hereby incorporated herein
as a material part of this First Addendum.
2.
Addendum to the Purchase Agreement – Purchase of Remaining
49% interest.
As of
the Effective Date, the Seller hereby sells, assigns, transfers,
and sets over unto the Company the remaining 49% rights, title and
interest in and to the Intellectual Property and Purchased Assets
as defined in the Purchase Agreement (the “49%
Interest”), in exchange for a one-time payment of $250,000
made by Company to Seller (the “Additional Purchase
Price”). The purchase and sale of the 49% Interest is subject
to all terms, conditions, representations and warranties as set
forth in the Asset Purchase Agreement. Seller further warrants that
all representations and warranties set forth in the Asset Purchase
Agreement are true and correct as of the Effective Date and as
applied to the 49% Interest.
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The
Parties agree that Section 3.4.A regarding the Compensation
Agreement and the 10% commission and any residual percentage
payments related to Free Fit is removed in its entirety and
replaced by the terms set forth in Section 3 herein.
As of
the Effective Date, Seller shall deliver a bill of sale in the form
of Exhibit C hereto (the "Bill of Sale") and duly executed by
Seller, transferring the 49% to Company and Company shall deliver
the Additional Purchase Price to Seller.
3.
Amendment to Section 1.b. of the
Employment Agreement. Section 1.b. currently
provides:
“b. Incentive
Compensation.
Starting on the first quarter (“Q1”)
you are eligible to earn a quarterly commission based on 10% of
tile gross margin dollars.”
Section
1.b. of the Employment Agreement is hereby revoked, repealed, and
replaced in its entirety with the following:
“b. Incentive
Compensation.
i.
Cash Bonus. The Company will
make up to a maximum of two $100,000 payments to Employee for any
two quarters based upon meeting the following FreeFit revenue and
gross margin goals in 2018:
a.
Upon achievement of
a minimum of $900,000 paid-in FreeFit revenue and at 30% cash after
cost of goods (“gross margin”) or at least $270,000,
during the quarter ending March 31, 2018;
b.
Upon achievement of
a minimum of $1,000,000 paid-in FreeFit revenue and at 30% gross
margins or at least $300,000, during the quarter ending June 30,
2018;
c.
Upon achievement of
a minimum of $1,000,000 paid-in FreeFit revenue and at 30% gross
margins or at least $300,000, during the quarter ending September
30, 2018; or,
d.
Upon achievement of
a minimum of $1,000,000 paid-in FreeFit revenue and at 30% gross
margins or at least $300,000, during the quarter ending December
31, 2018, and;
ii.
Common Stock Bonus.
a.
Upon FreeFit
generating $2,000,000 of paid-in revenue and at 30%+ gross margins
or at least $600,000 from FreeFit no later than the quarter ending
September 30, 2018, Employee will receive an additional 5,000,000
restricted shares of common stock at the current market
price;
b.
Upon achieving
$1,000,000 of revenue and at 30%+ gross margins from new GrowLife
patent pending products in 2018, such as GrowLife Rooms, GrowLife
Nutrient System, etc. Employee will receive an additional 2,500,000
restricted shares of common stock at the current market
price.”
4.
Full Force and Effect of Other
Terms. The Parties
hereby confirm that all other terms and conditions of the Purchase
Agreement and Employment Agreement are in full force and effect and
are un-amended except as expressly provided in this First
Addendum.
5.
Counterparts. This First Addendum may be executed in
one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same agreement.
6.
Electronic
Signatures. The
Parties agree that any form of electronic signature, including but
not limited to signatures via facsimile, scanning, or electronic
mail, may substitute for the original signature and shall have the
same legal effect as the original signature.
SIGNATURE PAGE FOLLOWS
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SIGNATURES
IN
WITNESS WHEREOF, the parties hereto have executed this THIS FIRST
ADDENDUM TO THE ASSET PURCHASE AGREEMENT and EMPLOYMENT AGREEMENT
on this 16th day of February,
2018.
GrowLife, Inc.
/s/ Marco Hegyi
Name: Marco Hegyi
Title: Chief Executive Officer
David Reichwein
/s/
David Reichwein
David Reichwein
GIP International Ltd
/s/
David Reichwein
David Reichwein
Its: Sole Shareholder
DPR International LLC
/s/
David Reichwein
David Reichwein
Its: Sole Shareholder
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Exhibit A
“ASSET
PURCHASE AGREEMENT”
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Exhibit B
“EMPLOYMENT
AGREEMENT”
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Exhibit C
BILL OF
SALE
BILL OF SALE AND GENERAL ASSIGNMENT
February
16th ,
2018
For
good and valuable consideration, including consideration under the
First Addendum to that certain Asset Purchase Agreement dated
approximately the same date as this instrument (that agreement, the
“First
Addendum”), David Reichwein, a Pennsylvania resident,
GIP International Ltd, a Hong Kong corporation and DPR
International LLC, a Pennsylvania limited liability corporation
(collectively, the "Seller"), hereby sells and transfers the
remaining 49% Interest in the Assigned Intellectual Property and
Purchased Assets (as defined in the Purchase Agreement) to
Growlife, Inc., a Delaware corporation (the “Company”). This instrument is
subject to and construed in accordance with the Purchase Agreement
and First Addendum thereto.
On one
or more occasions after the date of this instrument, the Seller, at
the request of the Company,
shall execute and deliver further instruments of transfer and
assignment and take any other action as the Company may reasonably
require to more effectively transfer to the Company each of the
Assigned Intellectual Property and Purchased Assets and to assist
the Company in exercising all rights with respect to the Assigned
Intellectual Property and Purchased Assets.
The
Sellers are signing this Bill of Sale and General Assignment on the
date stated in the heading.
David Reichwein
/s/
David Reichwein
David
Reichwein
GIP International Ltd
/s/
David Reichwein
David
Reichwein
Its:
Sole Shareholder
DPR International LLC
/s/
David Reichwein
David
Reichwein
Its:
Sole Shareholder
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