PURCHASE AGREEMENT

PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (“Agreement”) is made by and between Zhimin Li and VNC Development, LLC. 

RECITALS:

  1. VNC Development, LLC, owns 55% membership interest in La Jolla, LLC.   That ownership interest is referred to herein as the “Ownership Interests.”
  2. Zhimin Li wants to purchase all the Ownership Interests from VNC Development, LLC and Zhimin Li wants to sell the Ownership Interests to VNC Development.

E. This Purchase Agreement reflects the agreement by and among the Parties regarding the sale and purchase of the Ownership Interests and matters related thereto.

AGREEMENT:

The Parties hereby agree as follows:

  1. Purchase and Sale of Ownership Interests.  VNC Development, LLC, hereby sells, assigns and transfers to Zhimin Li and Zhimin Li hereby purchases from VNC Development, LLC: a fifty five percent (50%) ownership interest in La Jolla, LLC for $100.00 (there is no certificate representing that ownership interest). The sale of the Ownership Interests shall be deemed effective as of the close of business on {DATE} (the “Effective Date”) and La Jolla, LLC will not allocate any profits or losses to VNC Development, LLC for any time period after the Effective Date.  After the Effective Date, VNC Development, LLC will not have any form of ownership interest (or any right to acquire any form of ownership interest) in La Jolla, LLC. The transfer of the ownership interests contemplated in Section 1 shall be evidenced by a written assignment in the form attached hereto as Exhibit A.
  2. Purchase Price.  The total purchase price for the Ownership Interests is $100.00 and Zhimin Li will pay that amount to VNC Development, LLC, within 30 days from the Effective Date in the form of either a check payable to “VNC Development, LLC” or a wire transfer to a bank account designated by VNC Development, LLC. VNC Development, LLC acknowledges and agrees that it is not owed any amounts by, or otherwise entitled to receive any payments from, from Zhimin Li for the Ownership Interests other than the $100.00 payment expressly required by this Agreement.   
  3. Acknowledgments.
    1. Acknowledgments Regarding Financial Matters. VNC Development, LLC and Zhimin Li each acknowledge the following:
      1. La Jolla, LLC is a closely-held company and, as such, is not susceptible of precise valuation; and
      2. They have each had the opportunity to investigate the financial status and prospects of La Jolla, LLC and have had access to such financial and business information regarding La Jolla, LLC as they each required.
    2. Tax and Legal Advice. VNC Development, LLC and Zhimin Li each acknowledge that they have had the opportunity to obtain independent tax and legal advice concerning this Agreement.  
    3. Reliance on Acknowledgments.  Each Party has entered into this Agreement in reliance on the acknowledgments and representation and warranties of the other parties hereto.  The making, signing and delivery of this Agreement by the parties has been induced by no representations, statements, warranties or agreements other than those expressly set forth in this Agreement or any of the exhibits attached hereto.
  4. Representations of VNC Development, LLC. VNC Development, LLC represents and warrants to Zhimin Li as follows: (i) VNC Development, LLC owns a fifty five percent (55%) ownership interest in La Jolla, LLC and has no other ownership interest in La Jolla, LLC or any rights to acquire any other ownership interest in La Jolla, LLC; (viii) by signing and performing this Agreement, neither VNC Development, LLC nor Zhimin Li will violate any agreement, promissory note, security arrangement, order or other instrument to which La Jolla, LLC is a party or by which any of them may be bound; (ix) VNC Development, LLC has not previously sold, assigned, transferred, pledged or encumbered any or all of the Ownership Interests that are being sold to Zhimin Li pursuant to this Agreement; (x) the Ownership Interests that are being sold to Zhimin Li pursuant to this Agreement are being sold and transferred to Zhimin Li free and clear of all liens, claims and encumbrances. The representations and warranties in this Section 4 survive the Effective Date.
  5. Further Action. VNC Development, LLC and Zhimin Li each agrees to take any other actions and sign any other documents reasonably requested by VNC Development, LLC to complete the transactions contemplated by this Agreement. 
  6. Mutual General Releases.
    1. Release of Zhimin Li and Related Parties.  Except for the obligations expressly imposed on Zhimin Li by this Agreement (or the Construction Agreement or the Other Purchase Agreement as defined below), VNC Development, LLC, for itself and its respective heirs, executors, trustees, administrators, assigns, successors, agents, representatives, shareholders, owners, officers, directors, managers, employees, consultants and attorneys (collectively, the “VNC Development Affiliates”), hereby fully and without limitation releases and forever discharges Zhimin Li and any other private company in which Zhimin Li has an ownership interest as of the date of this Agreement, and its respective parents, direct or indirect subsidiaries, affiliates, divisions and related entities, and each of their respective heirs, executors, trustees, administrators, agents, representatives, shareholders, owners, officers, directors, managers, employees, consultants, attorneys, successors and assigns (collectively, the “Zhimin Li Releasees”), both individually and collectively, from any and all rights, claims, demands, liabilities, actions, causes of action, damages, losses, costs, expenses and compensation, of whatever nature whatsoever, known or unknown, fixed or contingent, which the VNC Development, LLC and any other VNC Development Affiliate has or may have or may claim to have against any of the Zhimin Li Releasees by reason of any matter, cause, or thing whatsoever, from the beginning of time to the date of this Agreement (“Claims”), including, without limiting the generality of the foregoing, any Claims arising out of, based upon, or relating to (i) any agreement or compensation arrangement between, on the one hand, VNC Development, LLC or any other VNC Development Affiliate and, on the other hand, any of the Zhimin Li Releasees, (ii) VNC Development LLC’s ownership of the Ownership Interests or its rights as an owner in La Jolla, LLC; or (iii) any claimed ownership interest of any nature whatsoever of VNC Development, LLC in La Jolla, LLC. VNC Development, LLC specifically and expressly releases any Claims arising out of or based on: the California Fair Employment and Housing Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; the Americans With Disabilities Act; the National Labor Relations Act, as amended; the Equal Pay Act; ERISA; any provision of the California Labor Code; the California common law and each other applicable law on fraud, misrepresentation, negligence, defamation, infliction of emotional distress or other tort, breach of contract or covenant, violation of public policy or wrongful termination; state or federal wage and hour laws; or any other state or federal law, rule, or regulation dealing with the employment relationship. VNC Development, LLC agrees that it nor any other VNC Development Affiliate will institute or prosecute any Claim that is the subject of the release contained in this Section 6.A. in any state or federal court, or with any state, federal or local government agency.  
    2. Release of VNC Development, LLC and Related Parties.  Except for the obligations expressly imposed on VNC Development, LLC by this Agreement (or the Construction Agreement or the Other Purchase Agreement as defined below), Zhimin Li, on behalf of himself and the other Zhimin Li Releasees, hereby fully and without limitation release and forever discharge VNC Development, LLC and all the other VNC Development Affiliates from any and all Claims which Zhimin Li or any of the other Zhimin Li Releasees ever had or now has or may claim to have against VNC Development, LLC or any of the other VNC Development Affiliates.  Zhimin Li agrees that he nor any of the other Zhimin Li Releasees will institute or prosecute any Claim that is the subject of the release contained in this Section 6.B. in any state or federal court, or with any state, federal or local government agency.  
    3. Waiver of Unknown Claims.  Each Party understands that Section 1542 of the Civil Code of California provides as follows:

 “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

SECTION 1542 OF THE CIVIL CODE OF CALIFORNIA IS HEREBY EXPRESSLY WAIVED BY EACH OF THE PARTIES.

  1. No Admission of Liability.  Each of the Parties agrees that the releases pursuant to this Section 6 represent a compromise of disputed claims which were raised or could have been raised by one or more Parties and shall not be construed or asserted for any purpose as an admission by any Party of liability or responsibility.
  1. Factual Differences.  Each Party understands and accepts the risk that the facts with respect to which this Agreement is entered into may be different from the facts now known or believed by her, him or it to be true.  This Agreement shall remain in all respects effective and shall not be subject to termination or rescission by virtue of any such differences in fact, absent a showing of intentional fraud by one or more parties in inducing another party to enter into this Agreement.  Each Party acknowledges that there is a risk that, subsequent to the execution of this Agreement, one or more Parties will incur damage or loss which it deems in some way attributable to one or more other Party’s prior actions, but which are unknown and unanticipated at the time this Agreement is signed.  Each Party acknowledges and assumes such risk that damages presently known may become progressive, greater or more serious than is now known, expected or anticipated, and that any such damages are being released in their entirety.  
  2. Non-Assignment.  VNC Development, LLC hereby represents and warrants to Zhimin Li that there has been no assignment or other transfer by the VNC Development, LLC or any other VNC Development Affiliate of any Claims or any other rights that are the subject of the releases set forth in Section 6.A. above.  Zhimin Li hereby represents and warrants to VNC Development, LLC that there has been no assignment or other transfer by Zhimin Li or any other Zhimin Li Releasee of any Claims or any other rights that are the subject of the release set forth in Section 6.B. above.
  3. Indemnification.

VNC Development, LLC hereby agrees to indemnify and hold harmless Zhimin Li and all the other Zhimin Li Releasees, both individually and collectively, from and against any and all loss, liability or expense incurred or suffered by any of the Zhimin Li Releasees (including, but not limited to, any legal fees incurred in defending any claim or proceeding) to the extent arising from: (i) any business conducted by VNC Development, LLC (or any of its subcontractors, agents, subsidiaries or affiliates) after March 26, 2018; or (ii) any act or omission by VNC Development, LLC (or any of its subcontractors, agents, subsidiaries or affiliates) arising under or related to any services performed or to be performed by VNC Development, LLC (or any of his or its subcontractors, agents, subsidiaries or affiliates).

  1. Operating Agreement.  The Operating Agreement of La Jolla, LLC shall be binding upon this Purchase Agreement. Costs and Expenses.  Each party will bear its own fees, costs and expenses related to or in any way arising from or related to the negotiation and drafting of this Agreement. 
  2. Other Provisions.
    1. Governing Law.  The internal laws of California, regardless of any law concerning choice of law or conflicts of law of any jurisdiction, govern this Agreement and any exhibits attached hereto, any agreement to adopt or amend this Agreement or any exhibits attached hereto, and any dispute arising under or related to this Agreement or any exhibits attached hereto.  
    2. Dispute Resolution.   Any controversy or claim arising out of or relating to this Agreement or any alleged rights or obligations related to La Jolla, LLC shall be resolved exclusively in state court in Orange County, California.  The prevailing party in any such controversy or claim shall be entitled to recover from the non-prevailing party its reasonable expenses, including attorneys’ fees and costs actually incurred.  The Parties hereby submit to the above stated exclusive jurisdiction and venue and waive any objections thereto.      
    3. Entire Agreement.  This Agreement constitutes the entire agreement among the parties pertaining to the sale, purchase and disposition of the Ownership Interests and the other matters addressed in this Agreement, and this Agreements supersedes all prior agreements, summaries of agreements, understandings, negotiations and discussions, whether oral or written, concerning those matters.   
    4. Amendment or Waiver.  No amendment or waiver of any provision of this Agreement shall be effective until an instrument reflecting the amendment or waiver has been signed by the party against whom it is sought to be enforced.
    5. Severable Provisions.  Wherever possible, each provision of this Agreement shall be interpreted so that it is valid under applicable law.  The provisions of this Agreement are severable, and if any provision is determined to be illegal or otherwise unenforceable, in whole or in part, then the remaining provisions, and any partially unenforceable provisions to the extent enforceable, shall nevertheless be binding and enforceable and shall be construed as closely as possible to their original meanings.
    6. Headings; Interpretation.  The headings of the Sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.  As used in this Agreement, unless the context expressly indicates otherwise, the word “or” is inclusive and means “and/or” and the word “including” (or any variation of that word) means “including without limitation” (or a phrase of equivalent meaning).  The terms of this Agreement have been negotiated by the Parties hereto and the language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent.  This Agreement shall be construed without regard to any presumption or rule requiring construction against the Party causing such instrument or any portion thereof to be drafted, or in favor of the Party receiving a particular benefit under the Agreement.  No rule of strict construction will be applied against any Party.
    7. Remedies.  All rights and remedies under this Agreement are cumulative and shall be in addition to every other remedy given hereunder, or now or hereafter existing at law or in equity including, without limitation, injunctive relief and specific performance and not one of them shall be exclusive of any other.
    8. Waiver.  No waiver of any provision of this Agreement shall be valid unless in writing and signed by the Party against whom that waiver is sought to be enforced.  No failure or delay on the part of any Party in exercising any right, power or privilege hereunder, and no course of dealing between or among any of the Parties, shall operate as a waiver of any right, power or privilege hereunder.
    9. Notices.  All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered, sent by overnight mail (Federal Express or the like) or sent by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if sent by overnight mail, the business day following its deposit in such overnight mail facility, or (iii) if mailed, four (4) business days after the date of posting by the United States post office.  

To VNC Development, LLC: {Address}

To Zhimin Li: {Address}

Notice of change of address shall be given by written notice in the manner detailed in this Section 11.I.  Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice, demand, request or communication sent.

  1. No Admission of Wrongdoing.  It is understood and agreed by the Parties that this Agreement represents a compromise and settlement for various matters and that the promises and payments and consideration of this Agreement shall not be construed as an admission of any liability or obligation by either party to the other party or any other person.
  2. Counterparts; Facsimile and pdf Signatures.  This Agreement and any other document or instrument related hereto may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same Agreement.  This Agreement and any other document or instrument relating hereto may be executed by a party’s signature transmitted by facsimile (“fax”) or transmitted electronically in pdf or other electronic format, and copies of this Agreement and any such document or instrument executed and delivered by means of faxed or electronic format signatures shall have the same force and effect as copies hereof executed and delivered with original signatures.  All parties may rely upon faxed and electronic format signatures as if such signatures were originals.  Any party executing and delivering this Agreement and any such document or instrument by fax or electronic format shall promptly thereafter deliver a counterpart signature page of this Agreement and the fully executed original or counterpart original of any such document or instrument containing said party’s original signature.  All parties agree that a faxed or electronic format signature may be introduced into evidence in any proceeding arising out of or related to this Agreement or any such document or instrument as if it were an original signature.

[Signature page follows this page.]

IN WITNESS WHEREOF, the parties have signed this Purchase Agreement as of the date first written above.

VNC Developmenta California limited liability company
By: ________________________________Print Name: Title: _______________________________		 ______________________________________ZHIMIN LI, an individual
   
_____________________________________  
   
   

EXHIBIT A

Ownership Interest Assignment

VNC Development, LLC (“Assignor”) hereby sells, assigns, conveys and transfers a fifty five percentage (55%) ownership interest in La Jolla, a California Limited Liability Company to Zhimin Li effective as of December 31, 2016.

Print Name of Assignor:_______________________________

Signature: ___________________________________

Print Name of Signer: ______________________________

Title of Signer: ____________________________________

EXHIBIT B

Financial Statements

[Copies of Financial Statements follow this page.]

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