EXHIBIT 10.8
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into this
28th day of April 2006 by and among EVOLVE ONE, INC., a Delaware corporation
("EVLO"), XXXXX XXXXXXXX ("Xxxxxxxx"), DIVERSIFAX, INC., a Delaware corporation
("Diversifax") and CERTAIN PRINCIPAL STOCKHOLDERS OF EVLO in addition to
Xxxxxxxx and Diversifax as listed on the signature pages and Exhibit A hereto
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(Xxxxxxxx, Diversifax and such other stockholders are hereinafter sometimes
referred to collectively as the "Stockholders"), and the purchasers of common
stock consisting of PROGRESS PARTNERS, INC., a Florida corporation, YEWEN XI and
XXXXX XXXXX (collectively referred to as the "Purchasers").
RECITALS:
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A. The Stockholders are the beneficial owners of 42,692,228 shares of Common
Stock of EVLO hereinafter described, exclusive of any warrants or options to
purchase Common Stock of EVLO;
B. It is the intention of the parties hereto that: (i) the Purchasers shall
acquire 41,557,078 shares of Common Stock (the "Shares") of EVLO from the
Stockholders in consideration for the payment described below (the "Stock
Purchase"); and (ii) the Stock Purchase shall qualify as a transaction in
securities exempt from registration or qualification under the Securities Act of
1933 (the "Act"); and
C. The Stockholders and Purchasers agree that in order to facilitate the Stock
Purchase that the Stockholders will deposit the Shares in escrow, and the
Purchasers will deposit the consideration therefor in escrow pending the closing
of the Stock Purchase.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agrees as follows:
SECTION 1. PURCHASE OF SHARES
1.1. Share Purchase. The Stockholders and the Purchasers hereby agree that the
Purchasers shall on the Closing Date purchase from the Stockholders the Shares
in consideration for $371,661 and other consideration as hereinafter provided.
The cash payment that each of the Stockholders is to receive and the Shares of
each of the Stockholders beneficially owned by them and to be delivered in
escrow for ultimate transmittal to the Purchasers is set forth on Exhibit A
hereto. Concomitantly, the number of the Shares which each of the Purchasers
will be entitled to receive pursuant to this Agreement is also set forth on
Exhibit A hereto.
1.2. Discharge of Certain Expenses. Upon execution of this Agreement, the
Purchasers agree to defray the expenses to be incurred by Xxxx & Company, P.A.
and Xxxxxxxxx Xxxxxxxxxx & Beilly LLP in connection with the completion of the
fiscal 2005 year end audit, and the preparation of the Annual Report on Form
10-KSB to be filed by EVLO with the Securities and Exchange Commission. Except
for any liabilities associated with such professional services not discharged at
the time of the closing of this transaction, at the time of Closing (hereinafter
described), there shall be no liabilities of EVLO. In addition, at the time of
Closing, Purchasers shall reimburse Diversifax for expenses incurred and paid by
Diversifax in the amount of $53,339.
1.3. Investment Intent. The Shares have not been registered under the Act and
may not re resold unless the Shares are registered under the Act or an exemption
from such registration is available.
The Purchasers represent and warrant that they are acquiring the Shares for
their own account, for investment, and not with a view to the sale or
distribution of the Shares. Each certificate representing the Shares will have
legends thereon incorporating language as follows:
"The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the "Act"). The shares have been acquired
for investment and may not be sold or transferred in the absence of an effective
Registration Statement for the shares under the Act unless, in the opinion of
counsel satisfactory to the Company, registration is not required under the
Act."
1.4. Escrow Arrangements. Upon execution hereof by the Stockholders and the
Purchasers and pending the closing, $371,661 shall be deposited in a
non-interest bearing escrow account with Xxxxxxxxx Xxxxxxxxxx & Beilly LLP as
escrow agent (the "Escrow Agent") together with the Shares, pursuant to the
terms of an Escrow Agreement attached hereto as Exhibit B. Subject to
satisfaction of the terms and conditions of this Agreement, on the Closing Date,
(i) the Escrow Agent shall deliver to the Purchasers in accordance with the
terms of the Escrow Agreement the Shares, which shall be duly executed and with
appropriate medallion guaranteed stock powers and corporate powers as required,
and (ii) the Escrow Agent shall deliver to the Stockholders the consideration
payable to each of the Purchasers as listed on Exhibit A hereto. By execution of
this Agreement, the Stockholders agree to the terms and provisions of the Escrow
Agreement, notwithstanding that they have not executed the Escrow Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
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The Purchasers hereby represent and warrant as follows:
2.1. No Breach. The Purchasers are duly authorized to acquire the Shares, and
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not violate, conflict with or
result in the breach or a default under any contract or agreement to which any
of the Purchasers is a party.
2.2. Ownership of Common Stock. The Stockholders are the beneficial owners of
the number of shares of Common Stock listed on Exhibit A hereto and have no
beneficial ownership of any additional shares of common stock of EVLO except for
common stock issuable under options or warrants previously issued to them.
2.3. Brokers or Finders. No broker's or finder's fee will be payable by the
Purchasers in connection with the transactions contemplated by this Agreement,
nor will any such fee be incurred as a result of any actions by the Purchasers.
2.4. Full Disclosure. No representation or warranty by the Purchasers in the
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement certificate or instrument furnished or to be
furnished to EVLO pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any fact necessary
to make any statement herein or therein not materially misleading.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF EVLO, XXXXXXXX AND DIVERSIFAX
EVLO, Xxxxxxxx and Diversifax hereby represent and warrant to the
Purchasers as follows:
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3.1. Organization, Good Standing and Capitalization. EVLO is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is entitled to own or lease its properties and to carry on its
business as and in the places where such properties are now owned, leased or
operated and such business is now conducted. The authorized capital stock of
EVLO consists of 10,000,000 shares of "blank check" preferred stock, of which no
shares are presently issued and outstanding, and 1,000,000,000 shares of Common
Stock, of which 52,451,348 shares are presently issued and outstanding.
Outstanding options, warrants and convertible securities are listed in Schedule
3.1 hereto. EVLO is duly licensed or qualified and in good standing as a foreign
corporation where the character of the properties owned by EVLO or the nature of
the business transacted by it make such license or qualification necessary,
except where the failure to do so would not have a material adverse effect on
the business or financial condition of EVLO. EVLO's subsidiaries are listed on
Exhibit 3.1 hereto.
3.2. The Shares. The Shares to be transferred to the Purchasers have been duly
authorized by all necessary corporate and stockholder actions and are validly
issued, fully paid and non-assessable.
3.3. Financial Statements; Books and Records. There has been previously
delivered to the Purchasers the audited balance sheet of EVLO as at December 31,
2005 (the "Balance Sheet") and the related statements of operations for the year
and period then ended (the "Financial Statements"). The Financial Statements are
true and accurate in all material respects and fairly represent the financial
position of EVLO as at such dates and the results of its operations for the
periods then ended, and have been prepared in accordance with general accepted
accounting principles consistently applied.
3.4. No Material Adverse Changes. Since the date of the Balance Sheet and except
as otherwise substantially disclosed in EVLO's reports or filings made under the
Securities Exchange Act of 1934, there has not been:
(i) any material adverse change in the assets, operations, condition (financial
or otherwise0 or prospective business of EVLO;
(ii) any damage, destruction or loss materially affecting the assets,
prospective business, operations or condition (financial or otherwise) of EVLO,
whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any dividend or distribution
with respect to any redemption or repurchase of EVLO's capital stock;
(iv) any sale of an asset (other than in the ordinary course of business) or any
mortgage or pledge by EVLO of any properties or assets; or
(v) adoption of any pension, profit sharing, retirement, stock bonus, stock
option or similar plan or arrangement.
3.5. Taxes. EVLO has prepared and filed all appropriate federal, state and local
tax returns for all periods prior to and through the date hereof for which any
such returns have been required to be filed by it and has paid all taxes shown
to be due by said returns or on any assessments received by it or has made
adequate provision for the payment thereof.
3.6. Compliance with Laws. EVLO has complied with all federal, state, county and
local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to their businesses, including federal
and state securities laws, which, if not complied with, would materially and
adversely affect the business of EVLO or the trading market for the shares of
EVLO's Common Stock.
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3.7. No Breach. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of Incorporation or
By-Laws of EVLO;
(ii) violate, conflict with or result in the breach of any of the terms of,
result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice
or lapse of time or both constitute) a default under, any contract or
other agreement to which EVLO is a party or by or to which it or any
of its assets or properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon
EVLO or upon the properties or business of EVLO; or
(iv) violate any statute, law or regulation or any jurisdiction applicable to
the transactions contemplated herein which could have a material adverse
effect on the business or operations of EVLO.
3.8. Actions and Proceedings. There is not outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving EVLO. There is no action, suit or
claim or legal, administrative or arbitral proceeding or (whether or not the
defense thereof or liabilities in respect thereof are covered by insurance)
pending or threatened against or involving EVLO or any of its properties or
assets. Except as set forth on Schedule 3.8, there is no fact, event or
circumstances that may give rise to any suit, action or claim, investigation or
proceeding.
3.9. Brokers or Finders. No broker's or finder's fee will be payable by EVLO,
Xxxxxxxx or Diversifax in connection with the transactions contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions by EVLO,
Xxxxxxxx or Diversifax.
3.10. Liabilities. EVLO does not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured,
accrued or absolute, contingent or otherwise, including, without limitation, any
liability on account of taxes, any other governmental charge of lawsuit (all of
the foregoing collectively defined to as "Liabilities"), which were not fully,
fairly and adequately reflected on the Balance Sheet. As of the Closing Date.
EVLO will not have any Liabilities.
3.11. Operations of EVLO. Except as set forth on Schedule 3.11 or in EVLO's
reports or filings made under the Securities Exchange Act of 1934, since the
date of the EVLO Balance Sheet and through the Closing Date hereof, EVLO has not
and will not have:
(i) incurred any indebtedness for borrowed money;
(ii) declared or paid any dividend or declared or made any distribution of any
kind to any shareholder, or made any direct or indirect redemption, retirement,
purchase or other acquisition of any shares in its capital stock;
(iii) made any loan or advance to any stockholder, officer, director, employee,
consultant, agent or other representative or made any other loan or advance
otherwise than in the ordinary course of business;
(iv) except in the ordinary course of business, incurred or assumed any
indebtedness or liability (whether or not currently due and payable);
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v) disposed of any assets of EVLO except in the ordinary course of
business;
(vi) increased the annual level of compensation of any executive
employee of EVLO;
(vii) increased, terminated, amended or otherwise modified any plan for the
benefit of employees of EVLO;
(viii) issued any equity securities or rights to acquire such equity
securities; or
(ix) except in the ordinary course of business, entered into or modified any
contract, agreement or transaction.
3.12. Authority to Execute and Perform Agreements. EVLO, Xxxxxxxx and Diversifax
each have the full legal right and power and all authority and approval required
to enter into, execute and deliver this Agreement and to perform fully their
obligations hereunder. This Agreement has been duly executed and delivered and
is the valid and binding obligation of EVLO and the Stockholders enforceable in
accordance with its terms, except as may be limited by bankruptcy, moratorium,
insolvency or other similar laws generally affecting the enforcement of
creditors' rights. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and the performance by
EVLO, Xxxxxxxx and Diversifax of this Agreement in accordance with its
respective terms and conditions will not:
(i) require the approval or consent of any governmental or regulatory body, the
stockholders of EVLO, or the approval or consent of any other person;
(ii) conflict with or result in any breach or violation of any of the terms and
conditions of, or constitute (or with any notice or lapse of time or both would
constitute) a default under any order, judgment or decree applicable to EVLO, or
any instrument, contract or other agreement which EVLO is a party or by or to
which EVLO is bound or subject; or
(iii) result in the creation of any lien or other encumbrance on the assets or
properties of EVLO.
3.13. Delivery of Periodic Reports; Compliance with 1934 Act. EVLO has provided
the Purchasers with all of its Periodic Reports filed with the Securities and
Exchange Commission since December 31, 2003. EVLO has filed all required
Periodic Reports and is in compliance with its reporting obligations under the
Securities Exchange Act of 1934. All reports, as amended, filed pursuant to such
Act are complete and correct in all material respects. All material contracts
relative to EVLO are included in the Periodic Reports.
3.14. Capitalization. The authorized capitalization is as set forth in EVLO's
Form 10-KSB for the year ended December 31, 2005. Neither EVLO, Xxxxxxxx nor
Diversifax has granted, issued or agreed to grant, issue or make available any
warrants, options, subscription rights or any other commitments of any character
relating to the issued or unissued shares of capital stock of EVLO except as
disclosed in Schedule 3.14.
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3.15. Full Disclosure. No representation or warranty by EVLO or the Stockholders
in this Agreement or in any document or schedule to be delivered by it pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished to the Purchasers or the Purchasers pursuant hereto or in connection
with the execution or performance of this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state any fact
necessary to make any statement herein or therein not materially misleading or
necessary to a complete and correct presentation of all material aspects of the
business of EVLO.
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3.16. Representations and Warrants on Closing Date. The representations and
warranties contained in this Section 3 shall be true and complete on the Closing
Date with the same force and effect as through such representations and
warranties had been made on and as of the Closing Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
Each Stockholder represents, warrants and agrees as to such Stockholder as
follows:
4.1. Ownership. Each of the Stockholders is the beneficial owner of the number
of Shares listed after each such Stockholder's name on Exhibit A hereto.
4.2. The Shares. The Shares to be transferred by each Stockholder to the
Purchasers hereunder are free and clear of all voting trusts, agreements,
arrangements, encumbrances, liens, claims and liabilities of every nature, and
each such Stockholder is conveying clear and unencumbered title thereto to his,
her or its Shares.
4.3. Due Authorization. Each of the Stockholders is duly authorized, empowered
and has the right to sell, transfer and convey to the Purchasers the Shares to
be transferred, assigned, conveyed to the Purchasers pursuant to this Agreement.
4.4. No Restrictions On Transfer. There are no agreements to which a Stockholder
is a party that would preclude the consummation of this Agreement.
4.5. Finders. There are no brokers or finders with whom any Stockholder has
dealt with in connection with this transaction.
SECTION 5. COVENANTS OF PURCHASERS
The Purchasers covenant to EVLO and the Stockholders as follows:
5.1. Litigation. The Purchasers shall promptly notify EVLO and the Stockholders
of any lawsuits, claims, proceedings or investigations, which after the date
hereof are threatened or commenced against the Purchasers with respect to the
affairs of the Purchasers.
5.2. Assumption of Expenses. Purchasers shall defray the expenses listed on
Schedule 5.2 hereof of Xxxx & Company, P.A., Xxxxxxxxx Xxxxxxxxxx & Beilly LLP,
Xxxxxx Xxxxx and Xxxxxxxxx, Xxxxx & Company, P.A. in connection with the
preparation and completion of EVLO's 2005 audit and the filing of EVLO's Form
10-KSB Annual Report. In addition, at the time of Closing, Purchasers shall
reimburse Diversifax for expenses incurred and paid by Diversifax in the amount
of $53,339.
5.3. Continued Effectiveness of Representations and Warranties. The
representations and warranties contained in Section 2 shall continue to be true
and correct on and as of the Closing Date and as if made on and as of the
Closing Date, and shall:
(i) promptly give notice to EVLO or any event, condition or circumstance
occurring from the date hereof through the Closing Date which would render any
of the representations or warranties materially untrue, incomplete, insufficient
or constitute a violation or breach of this Agreement; and
(ii) supplement the information contained herein in order that the information
contained herein is kept current, complete and accurate in all material
respects.
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SECTION 6. COVENANTS OF EVLO, XXXXXXXX AND DIVERSIFAX
EVLO, Xxxxxxxx and Diversifax covenant to the Purchasers as follows:
6.1. Conduct of Business. From the date hereof through the Closing Date, EVLO
shall conduct its business in the ordinary course and, without the prior written
consent of the Purchasers, shall ensure that EVLO does not undertake any of the
actions specified in Section 3.11 hereof.
6.2. Preservation of Business. From the date hereof through the Closing Date,
EVLO shall preserve its business organization intact and use its best efforts to
preserve EVLO's good will.
6.3. Litigation. EVLO, Xxxxxxxx and Diversifax shall promptly notify the
Purchasers of any lawsuits, claims, proceedings or investigations which, after
the date hereof, are threatened or commenced against EVLO or against any
officer, director, employee, consultant, agent or stockholder with respect to
the affairs of EVLO.
6.4. Discharge of Liabilities. Except for any expenses of Xxxx & Company, P.A.,
Xxxxxxxxx Xxxxxxxxxx & Beilly LLP, Xxxxxx Xxxxx and Xxxxxxxxx, Xxxxx & Company,
P.A. in connection with preparation and completion of the 2005 audit and the
related Form 10-KSB Annual Report, which had not been discharged by the time of
the Closing, and reimbursement of expenses due to Diversifax in the amount of
$53,339, there shall no liabilities of EVLO which have not been paid, satisfied
or otherwise discharged.
6.5. Continued Effectiveness of Representations and Warranties. From the date
hereof through the Closing Date, EVLO shall conduct its business in such a
manner so that the representations and warranties contained in Section 3 shall
continue to be true and correct on and as of the Closing Date and as if made on
and as of the Closing Date, and shall:
(i) promptly give notice to the Purchasers of any event, condition or
circumstance occurring from the date hereof through the Closing Date which would
render any of the representations or warranties materially untrue, incomplete,
insufficient or constitute a violation or breach of this Agreement; and
(ii) supplement the information contained herein in order that the information
contained herein is kept current, complete and accurate in all material
respects.
SECTION 7. COVENANTS
7.1. Examinations and Investigations. Prior to the Closing Date, t he parties
acknowledge that they have been entitled, through their employees and
representatives, to make such investigation of the assets, properties, business
and operations, books, records and financial condition of the other as they each
may reasonably require. No investigation by a party hereto shall, however,
diminish or waive in any way any of the representations, warranties, covenants
or agreements of the other party under this Agreement.
7.2. Expenses. Each party hereto agrees to pay its own costs and expenses
incurred in negotiating this Agreement and consummating the transactions
described herein.
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7.3. Further Assurances. The parties shall execute such documents and other
papers and take such further actions as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated hereby.
Each such party shall use its best efforts to fulfill or obtain the fulfillment
of the conditions to the Closing, including, without limitation, the execution
and delivery of any documents or other papers, the execution and delivery of
which are necessary or appropriate to the Closing.
7.4. Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, each of the parties hereto agree to keep
confidential any information disclosed to each other in connection therewith for
a period of one (1) year from the date hereof; provided, however, such
obligation shall not apply to information which:
(i) at the time of disclosure was public knowledge;
(ii) after the time of disclosure becomes public knowledge (except due to the
action of the receiving party); or
(iii) the receiving party had within its possession at the time of
disclosure.
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATION OF EVLO AND STOCKHOLDERS TO
CLOSE
The obligation of EVLO and the Stockholders to enter into and complete the
Closing is subject, at the option of EVLO and the Stockholders, to the
fulfillment on or prior to the Closing Date of the following conditions, any one
or more of which may be waived by EVLO and the Stockholders in writing.
8.1. Representations and Covenants. The representations and warranties of the
Purchasers contained in this Agreement shall be true in all material respects on
and as of the Closing date with the same force and effect as though made on and
as of the Closing Date. The Purchasers shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Purchasers on or prior to the Closing
Date. The Purchasers shall have delivered to EVLO, if requested, a certificate,
dated the Closing Date, to the foregoing effect.
8.2. Third Party Consents. All consents, permits and approvals from parties to
any contracts, loan agreements or other agreements required in connection with
the performance by the Purchasers of their obligations under such contracts or
other agreements after the Closing shall have been obtained.
8.3. Litigation. No action, suit or proceeding shall have been instituted before
any court or governmental or regulatory body or instituted or threatened by any
governmental or regulatory body to restrain, modify or prevent the carrying out
of the transactions contemplated hereby or to seek damages or a discovery order
in connection with such transactions.
8.4. Other Documents. The Purchasers shall have delivered such other documents,
instruments and certificates, if any, as are required to be delivered pursuant
to the provisions of the Agreement or which may be reasonably requested in
furtherance of the provisions of this Agreement.
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SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASERS TO CLOSE
The obligation of the Purchasers to enter into and complete the Closing is
subject, at the option of the Purchasers, to the fulfillment on or prior to the
Closing Date of the following conditions, any one or more of which may be waived
by the Purchasers in writing.
9.1. Representations and Covenants. The representations and warranties of EVLO
and the Stockholders contained in this Agreement shall be true in all material
respects on the Closing Date with the same force and effect as though made on
and as of the Closing Date. EVLO and the Stockholders shall have performed and
complied with all covenants and agreements required by the Agreement to be
performed or complied with by EVLO and the Stockholders on or prior to the
Closing Date. EVLO and the Stockholders shall have delivered to the Purchasers,
if requested, a certificate, dated the Closing Date and signed by an executive
officer of EVLO and by Xxxxxxxx, to the foregoing effect.
9.2. Governmental Permits and Approvals; Corporate Resolutions. Any and all
permits and approvals from any governmental or regulatory body required for the
lawful consummation of the Closing shall have been obtained. The Board of
Directors of EVLO shall have approved the transactions contemplated by this
Agreement, and EVLO shall have delivered to the Purchasers, if requested,
resolutions by their Board of Directors certified by the Secretary of EVLO
authorizing the transactions contemplated by this Agreement.
9.3. Third Party Consents. All consents, permits and approvals from parties to
any contracts or other agreements with EVLO which may be required in connection
with the performance by EVLO of its obligations under such contracts or other
agreements after the Closing shall have been obtained.
9.4. Satisfactory Business Review. The Purchasers shall have satisfied
themselves, after review of the information provided hereby or in connection
herewith, or following any discussions with management or representatives of
EVLO that none of the information revealed thereby has resulted in or in the
reasonable opinion of the Purchasers may result in a material adverse change in
the assets, properties, business, operations or condition (financial or
otherwise) of EVLO.
9.5. Litigation. No action, suit or proceeding shall have been instituted before
any court or governmental or regulatory body or instituted or threatened by any
governmental or regulatory body to restrain, modify or prevent the carrying out
of the transactions contemplated hereby or to seek damages or a discovery order
in connection with such transactions, or which has or may in the reasonable
opinion of the Purchasers, have a materially adverse effect on the assets,
properties, business, operations or condition (financial or otherwise) of EVLO.
9.6. Stock Certificates. At the Closing, the Purchasers shall have received
certificates representing the Shares so as to make the Purchasers the sole
owners of the Shares. The stock certificates entered by the Stockholders shall
be accompanied by medallion guaranteed stock powers, and in the case of
corporate transfers, shall include medallion guaranteed corporate resolutions.
9.7. Resignations and Appointments. EVLO shall have appointed the designee(s) of
Purchasers to EVLO's Board of Directors effective as at Closing, and EVLO's
present officers and directors shall have resigned effective immediately after
such appointment.
9.8. Other Documents. EVLO and the Stockholders shall have delivered such other
instruments, documents and certificates, if any, including good standing
certificates, as are required to be delivered pursuant to the provisions of this
Agreement or which may be reasonably requested in furtherance of the provisions
of this Agreement, including the resignations of the officers and directors of
EVLO.
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SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF EVLO AND THE
STOCKHOLDERS
Notwithstanding any right of the Purchasers fully to investigate the affairs of
EVLO, the former shall have the right to rely fully upon the representations,
warranties, covenants and agreements of EVLO and the Stockholders contained in
this Agreement or in any document delivered by EVLO or the Stockholders or any
of its representatives, in connection with the transactions contemplated by this
Agreement. All such representations, warranties, covenants and agreements shall
survive the execution and delivery hereof and the Closing Date hereunder for
twelve (12) months following the Closing.
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Notwithstanding any right of EVLO and the Stockholders fully to investigate the
affairs of the Purchasers, EVLO and the Stockholders have the right to rely
fully upon the representations, warranties, covenants and agreements of the
Purchasers contained in this Agreement or in any document delivered to EVLO or
the Stockholders by the latter or any of their representatives in connection
with the transactions contemplated by this Agreement. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
hereof and the Closing Date hereunder for twelve (12) months following the
Closing.
SECTION 12. INDEMNIFICATION
12.1. Obligation of EVLO and the Stockholders to Indemnify. Subject to the
limitations on the survival of representations and warranties contained in
Section 10, EVLO and the Stockholders hereby agree to indemnify, defend and hold
harmless the Purchasers from and against any losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
attorneys' fees and disbursements) (a "Loss") based upon, arising out of or
otherwise due to any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of EVLO and the Stockholders contained in this
Agreement or in any document or other writing delivered pursuant to this
Agreement.
12.2. Obligation of the Purchasers to Indemnify. Subject to the limitations on
the survival of representations and warranties contained in Section 11, the
Purchasers severally and not jointly agree to indemnify, defend and hold
harmless EVLO and the Stockholders from and against any Loss, based upon,
arising out of or otherwise due to any inaccuracy in or any breach of any
representation, warranty, covenant or agreement made by any of them and
contained in this Agreement or in any document or other writing delivered
pursuant to this Agreement.
SECTION 13. THE CLOSING
The Closing ("Closing") shall take place not later than May 15, 2006 (any such
date the "Closing Date"). At the Closing, the parties shall provide each other
with such documents as may be necessary or appropriate in order to consummate
the transactions contemplated hereby, including evidence of due authorization of
the Agreement and the transactions contemplated hereby.
SECTION 14. MISCELLANEOUS
14.1. Waivers. The waiver of a breach of this Agreement or the failure of any
party hereto to exercise any right under this Agreement shall in no event
constitute waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
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14.2. Amendment. This Agreement may be amended or modified only by an instrument
of equal formality signed by the parties or the duly authorized representatives
of the respective parties.
14.3. Assignment. This Agreement is not assignable except by operation
of law.
14.4. Notices. Until otherwise specified in writing, the mailing addresses of
both parties of this Agreement shall be as follows:
Purchasers: c/o Progress Partners, Inc.
00000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxx, XX 00000
EVLO: Evolve One, Inc.
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Stockholders: x/x Xxxxx Xxxxxxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Any notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address which shall have been furnished in
writing to the addressor.
14.5. Governing Law. This Agreement shall be construed, and the legal relations
by the parties determined, in accordance with the laws of the State of Florida,
thereby precluding any choice of law rules which may direct the applicable of
the laws of any other jurisdiction.
14.6. Publicity. No publicity release or announcement concerning this Agreement
or the transactions contemplated hereby shall be issued by either party hereto
at any time from the signing hereof without advance approval in writing of the
form and substance thereof by the other party.
14.7. Entire Agreement. This Agreement (including the Exhibits and Schedules
hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the purchase and issuance of the
Shares and contribute to capital of the Shares and related transactions, and
supersede all prior agreements, written or oral, with respect thereto.
14.8. Headings. The headings in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
14.9. Severability of Provisions. The invalidity or unenforceability of any
term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity of enforcement
of any other provision of any part thereof.
14.10. Counterparts. This Agreement may be executed in any number of
counterparts and by facsimile signatures, each of which when so executed, shall
constitute an original copy hereof, but all of which together shall consider but
one and the same document.
11
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
EVOLVE ONE, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx, President
/s/ Xxxxx X. Xxxxxxxx
---------------------
XXXXX X. XXXXXXXX
DIVERSIFAX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx, President
STOCKHOLDERS:
/s/ Xxxxx X. Xxxxxxxx
---------------------
XXXXX X. XXXXXXXX
DIVERSIFAX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx, President
/s/ Xxxx Xxxxxxxxxx
-------------------
XXXX XXXXXXXXXX
/s/ Xxxx Xxxxx
--------------
XXXX XXXXX
12
ONSPAN NETWORKING, INC.
By: /s/ Xxxx Xxxxx
--------------
Xxxx Xxxxx, President
/s/ Xxxxxx Xxxxx
----------------
XXXXXX XXXXX
/s/ Xxx Xxxxx
-------------
XXX XXXXX
/s/ Xxxxx Xxxxxx
----------------
XXXXX XXXXXX
/s/ Xxxxx Xxxxxxxxx
-------------------
XXXXX XXXXXXXXX
PURCHASERS:
/s/ Yewen Xi
------------
YEWEN XI
/s/ Xxxxx Xxxxx
---------------
XXXXX XXXXX
PROGRESS PARTNERS, INC.
By: /s. Xxxxx Xxxxxx
----------------
Authorized Person
13
EXHIBIT A
NO. OF SHARES NO. OF SHARES
BENEFICIALLY TO BE SHARES
STOCKHOLDERS OWNED DELIVERED RETAINED PAYOUT
Xxxxx X. Xxxxxxxx 6,125,656 5,955,858 169,798$ 53,265.54
Diversifax, Inc. 12,848,916 12,137,784 711,132 108,552.89
Xxxx Xxxxxxxxxx 8,145,096 8,085,173 59,923 72,308.82
Xxxx Xxxxx 7,102,560 7,040,062 62,498 62,961.99
OnSpan Networking, Inc. 1,220,000 1,191,172 28,828 10,653.11
Xxxxxx Xxxxx 6,050,000 5,955,858 94,142 53,265.54
Xxxxxx Xxxxx 600,000 595,586 4,414 5,326.55
Xxxxxxxx Xxxxxx 300,000 297,793 2,207 2,663.28
Xxxxx Xxxxxxxxx 300,000 297,793 2,207 2,663.28
Total 42,692,228 41,557,079 1,135,149 $371,661.00
A-1
SCHEDULE 3.1 SCHEDULE OF OUTSTANDING OPTIONS, WARRANTS AND CONVERTIBLE
SECURITIES
Options
a. Evolve One, Inc. Stock Option Plan:
Options to purchase 2,896,000 shares of common stock at exercise prices ranging
from $000125 to $0.5625 per share expiring between January 2007 and January
2009.
Stockholders who hold these options include:
b. 2005 Equity Compensation Plan:
Options to purchase 27,250,000 shares of common stock at exercise prices ranging
from $0.075 to $0.30 per share expiring between June 2008 and 2010.
Stockholders who hold these options include:
NAME NUMBER OF SHARES UNDERLYING OPTIONS EXERCISE PRICE
Xxxx Xxxxx 10,000,000 $ 0.30
Xxxx Xxxxxxxxxx 10,000,000 $ 0.30
Xxxxx Xxxxxx 150,000 $ 0.075
Xxxxx Xxxxxx 150,000 $ 0.15
Xxxxx Xxxxxxxxx 150,000 $ 0.075
Xxxxx Xxxxxxxxx 150,000 $ 0.15
Xxxxxx Xxxxx 300,000 $ 0.075
Xxxxxx Xxxxx 300,000 $ 0.15
21,200,000
c. Non-plan options:
Options to purchase an aggregate of 55,000,000 shares of common stock with
exercise prices ranging from $0.001 to $0.30 per share expiring in 2013.
Stockholders who hold these options include:
NAME NUMBER OF SHARES UNDERLYING OPTIONS EXERCISE PRICE
Xxxxx X. Xxxxxxxx 50,000,000 $ 0.30
Xxxxx X. Xxxxxxxx 5,000,000 $ 0.001
55,000,000
S-1
Warrants
Warrants to purchase an aggregate of 18,000,000 shares of common stock with
exercise prices ranging from $0.075 to $0.15 per share expiring in 2010.
Stockholders who hold these warrants include:
NUMBER OF SHARES
NAME UNDERLYING WARRANTS EXERCISE PRICE
Xxxxxx Xxxxx 3,000,000 $ 0.075
Xxxxxx Xxxxx 3,000,000 $ 0.15
Xxxxx X. Xxxxxxxx 3,000,000 $ 0.075
Xxxxx X. Xxxxxxxx 3,000,000 $ 0.15
Diversifax, Inc. 3,000,000 $ 0.075
Diversifax, Inc. 3,000,000 $ 0.15
18,000,000
SCHEDULE 3.8 ACTIONS AND PROCEEDINGS
Response: None
SCHEDULE 3.11 OPERATIONS OF EVLO
Response: None
SCHEDULE 3.14 CAPITALIZATION
Response: See Schedule 3.1
SCHEDULE 5.2 ASSUMPTION OF EXPENSES
Response: Xxxx & Company, P.A. $ 18,000.00
Xxxxxxxxx, Xxxxx & Company, P.A. $ 8,807.70
Xxxxxx Xxxxx $ 4,000.00
Xxxxxxxxx Xxxxxxxxxx & Beilly LLP $ 16,617.26*
*Includes acquisition costs
S-2
