PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT (this "Agreement") is made as of April 2, 2004,
by and between IPVoice Communications, Inc., a Nevada corporation ("Purchaser")
and the stockholders of RKM Suministros C.A. ("RKM"), a Venezuelan corporation,
listed on the signature page hereto (the "Stockholders").
RECITALS
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WHEREAS, the Stockholders own all of the issued and outstanding stock
(the "Purchased Stock") of RKM, as set forth on Exhibit A hereto.
WHEREAS, the Stockholders desire to sell and the Purchaser desires to
purchase the Purchased Stock on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in reliance upon the representations, warranties and
agreements made herein and in consideration of the premises herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
I. PURCHASE AND SALE
1.1. Purchase and Sale. On the terms and subject to the conditions set
forth herein, at the Closing (as hereinafter defined), Stockholders will sell
and deliver the Purchased Stock to Purchaser, free and clear of all security
interests, liens, adverse claims, encumbrances, equities, proxies, options or
other agreement, instrument, arrangement, contract, obligation, commitment or
understanding of any character, whether written or oral, express or implied,
relating to the sale, assignment, encumbrance, conveyance, transfer of the
Purchased Stock (collectively, "Liens").
1.2. Purchase Price. Subject to adjustment pursuant to Section 1.3 hereof,
the purchase price (the "Purchase Price") for the Purchased Stock is $2,000,000,
which shall be paid in the form of 2,000 shares of Series E Convertible
Preferred Stock of the Purchaser (the "Preferred Stock"). The Purchase Price
shall be paid at the Closing by issuing to each Stockholder that number of
shares of Preferred Stock, calculated to two decimal places, equal to 2,000
multiplied by such Stockholder's Overall Ownership Percentage set forth opposite
such Stockholder's name on Exhibit A.
1.3. Purchase Price Adjustment.
(a) Within thirty days of the first anniversary of the Closing
Date, Purchaser shall prepare and deliver to the Stockholders a
statement (the "Revenue Statement") of the First-year Revenue of RKM.
Unless the Stockholders delivers a notice to Purchaser in writing of
its objection to the calculation of the First-year Revenue within 10
days after its receipt of the Revenue Statement, the Revenue Statement
shall be final and binding on the parties. For the purposes of this
Section 1.3, "First-year Revenue" shall mean the Gross Sales (as
hereafter defined) during the period beginning on the Closing Date and
ending on the first anniversary of the Closing Date. "Gross Sales" is
defined as the total sum of all sales closed, vendor commissions and
vendor back commissions, whether invoiced or not, of RKM Suministros
C.A. and RKM USA Corp., and of Purchaser on behalf of such entities, as
confirmed by its auditor, for the period commencing March 1, 2004
through February 28, 2005. Gross sales shall also include the annual
result of all outsourcing services, technical and networking projects
in process, contingency service contracts, manpower, software
development, project management, or any other contract, agreement or
customer service order or purchase order, that due to the nature of its
delivery is invoiced on a periodic basis.
(b) Purchaser and the Stockholders shall attempt in good faith
to resolve any disagreements raised by the Stockholders with respect to
the Revenue Statement. If, at the end of such period, Purchaser and the
Stockholders do not resolve such disagreements, either Purchaser or the
Stockholders may submit the matter to a mutually acceptable independent
accounting firm to review the Revenue Statement and resolve any
remaining disagreements regarding the calculation of the First-year
Revenue. In the event Purchaser and the Stockholders cannot agree upon
an accounting firm, they shall choose an accounting firm by lot from a
reasonable selected group of accounting firms having no material
relationship to Purchaser, the Stockholders, RKM and their respective
affiliates and having offices in locations suitable to conduct such
review (the "Accounting Firm"). The determination by the Accounting
Firm shall be final, binding and conclusive on the parties, and
judgment may be entered thereon in a court of competent jurisdiction.
The fees and expenses of the Accounting Firm shall be divided equally
among the Stockholders and Purchaser.
(c) In the event that the First-year Revenue is greater than
$2,000,000, then the Purchase Price shall be increased to $2,600,000
and the Purchaser shall issue a number of Purchaser's common stock, par
value $0.001 per share, equal to the amount of $600,000, to the
Stockholders (to be allocated among them in accordance with their
Overall Ownership Percentages). The number of shares of common stock
will be determined by dividing $600,000 by the average closing price
for the common stock for the 30 days immediately preceding the first
anniversary of the Closing Date (or if the common stock has not traded
at anytime during that period, then the average closing price for the
common stock for the most recent 30-day period preceding the first
anniversary of the Closing Date during which there was any trading
activity. Purchaser shall within 10 days upon determination of the
First Year Revenue statement, deliver certificates representing such
shares to the Stockholders'.
(d) In the event that the First-year Revenue is less than
$2,000,000, then the Purchase Price shall be reduced to $1,600,000 and
each Stockholder shall return to Purchaser a number of shares of
Preferred Stock equal to such amount divided by $1,000 and multiplied
by such Stockholder's Overall Ownership Percentage. The Stockholders
will deliver certificate(s) representing such shares (or shares of
Common Stock issued upon conversion thereof to Purchaser, and, in the
event that such certificate(s) represents more than the number of
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shares required to be returned, Purchaser will issue new certificate(s)
for the difference. In the event that a Stockholder does not so return
such certificate(s), Purchaser shall nevertheless be entitled to cancel
such shares on its stock ledger and regard such shares as cancelled for
all purposes.
II. CLOSING
2.1. Closing. The closing of the purchase and sale of the Stock
("Closing"), will take place on April 2, 2004 (the "Closing Date") at the
offices of Xxxxxxx Xxxxxx & Xxxxxxx LLP, 000 X. Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx or at such other time and place mutually agreed to by the
parties. The Closing Date shall be the date of this Agreement.
2.2. Purchaser Closing Deliveries. At the Closing, Purchaser shall deliver
(i) to the the Stockholders, certificates representing the Preferred Stock,
which shall be deemed to have been fully paid for at the Closing, (ii) a pledge
agreement, substantially in the form attached hereto as Exhibit B, securing the
guaranty set forth in Section 6.5, (iii) to Xxxxxx Xxxxxxxxx, a consulting
agreement, duly executed by Purchaser, pursuant to which Xx. Xxxxxxxxx will
provide certain consulting services to Purchaser (the "Xxxxxxxxx Agreement"),
(iv) to Xxxxxxxx Xxxxx, a consulting agreement, duly executed by VergeTech,
Inc., pursuant to which Xx. Xxxxx will provide certain consulting services to
VergeTech, Inc. (the "Xxxxx Agreement") and (v) such other documents or
instruments as RKM may reasonably request in connection with the consummation of
the transactions contemplated by this Agreement.
2.3. Stockholder Closing Deliveries. At the Closing, the Stockholders (i)
shall cause RKM's stock records to be amended to reflect the sale of the
Purchased Stock to Purchaser (ii) shall deliver the Xxxxxxxxx Agreement, duly
executed by Xx. Xxxxxxxxx, (iii) shall deliver the Xxxxx Agreement, duly
executed by Xx. Xxxxx, (iv) shall deliver a general release and waiver for the
benefit of RKM executed by each Stockholder, substantially in the form attached
hereto as Exhibit C, and (v) shall deliver such other documents or instruments
as Purchaser may reasonably request in connection with the consummation of the
transactions contemplated by this Agreement.
III. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
The Stockholders, jointly and severally, hereby represent and warrant
to Purchaser that, to the best of their knowledge, without any independent
inquiry (this limitation is expressly intended to limit each and every
representation, warranty and statement made in this Article III without the
necessity of repeating the reference to this limitation in each section of this
Article III):
3.1. Organization and Good Standing; Qualification. RKM is a corporation
duly organized and validly existing under the laws of Venezuela, with all
requisite corporate power and authority to carry on the business in which it is
engaged, to own the properties it owns, to execute and deliver this Agreement
and to consummate the transactions contemplated hereby and is duly qualified and
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licensed to do business and is in good standing in all jurisdictions where the
nature of its business makes such qualification necessary, which jurisdictions
are listed in Schedule 3.1, except, in each case, where the failure to have such
power and authority or to be so qualified or licensed would not, when taken
together with all other such failures, reasonably be expected to have material
adverse effect on the condition (financial or otherwise), operations, assets,
liabilities, business or prospects of RKM (a "Material Adverse Effect"). RKM
does not have any assets, employees or offices in any jurisdiction other than
the states listed in Schedule 3.1.
3.2. Capitalization of RKM. The authorized capital stock of RKM consists of
49, 200, of which 49,200 are issued and outstanding and no shares of such
capital stock are held in the treasury of RKM. All of the issued and outstanding
shares of capital stock of RKM are duly authorized, validly issued, fully paid
and nonassessable. Except as set forth on Schedule 3.2, there exist no options,
warrants, subscriptions or other rights to purchase, or securities convertible
into or exchangeable for, the capital stock of RKM. Except as set forth herein,
neither Stockholder nor RKM is party to or bound by, nor do they have any
knowledge of, any agreement, instrument, arrangement, contract, obligation,
commitment or understanding of any character, whether written or oral, express
or implied, relating to the sale, assignment, encumbrance, conveyance, transfer
or delivery of any capital stock of RKM. No shares of capital stock of RKM have
been issued or disposed of in violation of the preemptive rights of any of RKM's
shareholders. All accrued dividends on the capital stock of RKM, whether or not
declared, have been paid in full.
3.3. Subsidiaries. RKM does not own, directly or indirectly, any of the
capital stock of any other corporation or any equity, profit sharing,
participation or other interest in any corporation, partnership, joint venture
or other entity, other than RKM Consulting C.A..
3.4. No Violation. Neither the execution, delivery or performance of this
Agreement or the other agreements contemplated hereby nor the consummation of
the transactions contemplated hereby or thereby will (a) conflict with, or
result in a violation or breach of the terms, conditions or provisions of, or
constitute a default under, the Articles of Incorporation or Bylaws (or foreign
equivalent) of any Stockholder or RKM, or any agreement, indenture or other
instrument under which RKM or any Stockholder is bound or to which the Purchased
Stock or any of the assets of RKM are subject, or result in the creation or
imposition of any security interest, lien, charge or encumbrance upon the
Purchased Stock or any of the assets of RKM, or (b) violate or conflict with any
judgment, decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over RKM, or the
Purchased Stock.
3.5. Consents. Except as set forth on Schedule 3.5, no consent,
authorization, approval, permit or license of, or filing with, any governmental
or public body or authority, any lender or lessor or any other person or entity
is required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement or the agreements contemplated hereby
on the part of RKM or any Stockholder.
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3.6. Financial Statements. RKM has furnished to Purchaser the consolidated
balance sheet and related consolidated statements of income, retained earnings
and cash flows for the twelve-month periods ended December 31, 2002 and 2003,
including the notes thereto (collectively, the "Financial Statements"), copies
of which are set forth on Schedule 3.6. The Financial Statements are in
accordance with the books and records of RKM, fairly present the financial
condition and results of operations of RKM as of the dates and for the periods
indicated and have been prepared in conformity with applicable accounting
standards applied on a consistent basis with prior periods.
3.7. Liabilities and Obligations. The Financial Statements reflect all
liabilities of RKM, accrued, contingent or otherwise arising out of transactions
effected or events occurring on or prior to the date hereof. All reserves shown
in the Financial Statements are appropriate, reasonable and sufficient to
provide for losses thereby contemplated. Except as set forth in the Financial
Statements, RKM is not liable upon or with respect to, or obligated in any other
way to provide funds in respect of or to guarantee or assume in any manner, any
debt, obligation or dividend of any person, corporation, association,
partnership, joint venture, trust or other entity, and RKM knows of no basis for
the assertion of any other claims or liabilities of any nature or in any amount.
3.8. Employee Matters. To the best of the Stockholders knowledge, Schedule
3.8(a) contains a complete and accurate list of all material compensation plans,
arrangements or practices (the "Compensation Plans") sponsored by RKM or to
which RKM contributes on behalf of its employees. The Compensation Plans include
without limitation plans, arrangements or practices that provide for severance
pay, deferred compensation, incentive, bonus or performance awards, and stock
ownership or stock options. RKM has no employment agreements or employee
handbooks or manuals, except as set forth on Schedule 3.8(b). RKM: (i) has been
and is in compliance with all laws, rules, regulations and ordinances respecting
employment and employment practices, terms and conditions of employment and
wages and hours; and (ii) is not liable for any arrears of wages or penalties
for failure to comply with any of the foregoing. RKM has not engaged in any
unfair labor practice or discriminated on the basis of race, color, religion,
sex, national origin, age or handicap in its employment conditions or practices.
There are no: (A) unfair labor practice charges or complaints or racial, color,
religious, sex, national origin, age or handicap discrimination charges or
complaints pending or threatened against RKM before any federal, state or local
court, board, department, commission or agency nor does any basis therefor
exist; or (B) existing or threatened labor strikes, disputes, grievances,
controversies or other labor troubles affecting RKM, nor does any basis therefor
exist. RKM has never been a party to any agreement with any union, labor
organization or collective bargaining unit. No employees of RKM are represented
by any union, labor organization or collective bargaining unit. To the best
knowledge of RKM, the employees of RKM have no intention to and have not
threatened to organize or join a union, labor organization or collective
bargaining unit.
3.9. Absence of Certain Changes. Except as set forth on Schedule 3.9, since
Xxxxx 00xx, 0000, XXX has not: (a) suffered any material adverse change in its
condition (financial or otherwise), operations, assets, liabilities, business or
prospects; (b) contracted for the purchase of any capital assets having a cost
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in excess of $50,000 or paid any capital expenditures in excess of $50,000; (c)
incurred any indebtedness for borrowed money or issued or sold any debt
securities; (d) incurred or discharged any liabilities or obligations except in
the ordinary course of business; (e) paid any amount on any indebtedness prior
to the due date, or forgiven or cancelled any debts or claims; (f) mortgaged,
pledged or subjected to any security interest, lien, lease or other charge or
encumbrance any of its properties or assets; (g) suffered any damage or
destruction to or loss of any assets (whether or not covered by insurance) that
has materially and adversely affected, or could materially and adversely affect,
its business; (h) acquired or disposed of any assets except in the ordinary
course of business; (i) written up or written down the carrying value of any of
its assets; (j) changed the costing system or depreciation methods of accounting
for its assets; (k) lost or terminated any employee, customer or supplier, the
loss or termination of which has materially and adversely affected, or could
materially and adversely affect, its business or assets; (l) increased the
compensation of any director or officer; (m) increased the compensation of any
employee except in the ordinary course of business; or (n) entered into any
other commitment or transaction or experienced any other event that is material
to this Agreement or to any of the other agreements and documents executed or to
be executed pursuant to this Agreement or to the transactions contemplated
hereby or thereby, or that has had or could reasonably be expected to have a
Material Adverse Effect.
3.10. Title; Leased Assets. RKM does not own any real property. Except as
set forth in Schedule 3.10, RKM has good, valid and marketable title to all
tangible and intangible personal property owned by it (collectively, the
Personal Property"). The Personal Property and the leased personal property
referred to in Schedule 3.10 constitute the only personal property used in the
conduct of the business of RKM. A list of all leases of real and personal
property to which RKM is a party, either as lessor or lessee, are set forth in
Schedule 3.10. All such leases are valid and enforceable in accordance with
their respective terms except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies.
3.11. Commitments. Schedule 3.11 (which shall be provided within 60 days
after the Closing) contains a list of all material contracts, agreements and
understandings, oral or written, to which RKM is a party (the "Commitments").
There are no existing defaults, events of default or events, occurrences, acts
or omissions that, with the giving of notice or lapse of time or both, would
constitute defaults by RKM , and no penalties have been incurred nor are
amendments pending. The Commitments are in full force and effect and are valid
and enforceable obligations of the parties thereto in accordance with their
respective terms, and no defenses, off-sets or counterclaims have been asserted
or, to the best knowledge of RKM, may be made by any party thereto, nor has RKM
waived any rights thereunder. RKM has not received notice of any default with
respect to any Commitment. Except as contemplated hereby, RKM has received no
notice of any plan or intention of any other party to any Commitment to exercise
any right to cancel or terminate any Commitment or agreement, and RKM knows of
no fact that would justify the exercise of such a right. RKM does not currently
contemplate, or have reason to believe any other person or entity currently
contemplates, any amendment or change to any Commitment. None of the customers
or suppliers of RKM has refused, or communicated that it will or may refuse, to
purchase or supply goods or services, as the case may be, or has communicated
that it will or may substantially reduce the amounts of goods or services that
it is willing to purchase from, or sell to, RKM.
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3.12. Insurance. RKM carries property, liability, workers' compensation and
such other types of insurance as is customary in the industry of the insured. A
list and brief description of all insurance policies of RKM are set forth in
Schedule 3.12. Such insurance shall be outstanding and duly in force without
interruption up to and including the Closing Date.
3.13. Patents, Trade-marks, Service Marks and Copyrights. RKM has no
knowledge of any claim that, or inquiry as to whether, any product, activity or
operation of RKM infringes upon or involves, or has resulted in the infringement
of, any proprietary right of any other person, corporation or other entity; and
no proceedings have been instituted, are pending or are threatened that
challenge the rights of RKM with respect thereto.
3.14. Trade Secrets and Customer Lists. RKM has the right to use, free and
clear of any claims or rights of others, all trade secrets, customer lists and
proprietary information required for the marketing of all merchandise and
services formerly or presently sold or marketed by RKM. RKM is not using or in
any way making use of any confidential information or trade secrets of any third
party, including without limitation any past or present employee of RKM.
3.15. Taxes. Except as set forth in Schedule 3.15, RKM has paid or accrued
all taxes, penalties and interest which have become due with respect to any
returns that it has filed and any assessments of which it is aware. RKM is not
delinquent in the payment of any tax, assessment or governmental charge. No tax
deficiency or delinquency has been asserted against RKM. There is no unpaid
assessment, proposal for additional taxes, deficiency or delinquency in the
payment of any of the taxes of RKM that could be asserted by any taxing
authority. There is no taxing authority audit of RKM pending, or, to the
knowledge of RKM, threatened. RKM has not violated any federal, state, local or
foreign tax law. RKM has not granted an extension to any taxing authority of the
limitation period during which any tax liability may be assessed or collected.
All monies required to be withheld by RKM and paid to governmental agencies for
all income, social security, unemployment insurance. Sales excise, use and other
taxes have been: (a) collected or withheld and either paid to the respective
governmental agencies or set aside in accounts for such purpose; or (b) properly
reflected in the Financial Statements.
3.16. Compliance with Laws. RKM has complied with all laws, regulations and
licensing requirements and has filed with the proper authorities all necessary
statements and reports. There are no existing violations by RKM of any federal,
state or local law or regulation that could affect the property or business of
RKM. RKM possesses all necessary licenses, franchises, permits and governmental
authorizations to conduct its business as now conducted.
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3.17. Finder's Fee. Neither RKM nor any Stockholder has incurred any
obligation for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
3.18. Litigation. Except as set forth on Schedule 3.18, there are no
material legal actions or administrative proceedings or investigations
instituted, or to the best knowledge of RKM threatened, against or affecting, or
that could affect, RKM, any of the Shares, or the business of RKM. Neither RKM
nor any Stockholder is: (i) subject to any continuing court or administrative
order, writ, injunction or decree applicable specifically to RKM or to its
business, assets, operations or employees; or (ii) in default with respect to
any such order, writ, injunction or decree. RKM knows of no basis for any such
action, proceeding or investigation.
3.19. Accuracy of Information Furnished. All information furnished to
Purchaser by RKM in this Agreement and any exhibits and schedules to this
Agreement is true, correct and complete in all material respects.
3.20. Corporate Name. There are no actions, suits or proceedings pending,
or to the best knowledge of RKM threatened, against or affecting RKM that could
result in any impairment of the right of RKM to use the name "RKM Suministros".
The use of the name "RKM Suministros" does not infringe the rights of any third
party nor is it confusingly similar with the corporate name of any third party.
After the Closing Date, no person or business entity other than RKM will be
authorized, directly or indirectly, to use the name "RKM Suministros" or any
name confusingly similar thereto.
3.21. Accounts Receivable. All accounts receivable of RKM have arisen from
bona fide transactions in the ordinary course of business and are valid and
enforceable claims subject to no right of set-off or counterclaim.
3.22. Product Warranties. There is no claim against or liability of RKM on
account of product warranties or with respect to the manufacture, sale or rental
of defective products.
3.23. Banking Relations. Set forth in Schedule 3.23 is a complete and
accurate list of all arrangements that RKM has with any bank or other financial
institution, indicating with respect to each relationship the type of
arrangement maintained (such as checking account, borrowing arrangements, safe
deposit box, etc.) and the person or persons authorized in respect thereof.
IV. REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Each Stockholder, severally, hereby represents and warrants to
Purchaser that:
4.1. Investment Intent. Such Stockholder is acquiring the Preferred Stock
for its own account for investment and not with a view to, or for sale or other
disposition in connection with, any distribution thereof, nor with any present
intention of selling or otherwise disposing of the same.
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4.2. Securities Act Applications. Such Stockholder is a sophisticated
investor, understands the risks and illiquidity of owning the Preferred Stock
and that the sale of the Preferred Stock has not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), but is being sold
pursuant to an exemption under Section 4(2) of the Securities Act. Such
Stockholder is aware that the Preferred Stock may not be resold without
registration under the Securities Act or some other exemption therefrom and the
certificate(s) representing such shares of Preferred Stock (and the Common Stock
into which the Preferred Stock is convertible) will contain the customary
restrictive legends. Nothing in this Article IV is deemed to prohibit
Stockholders from selling in accordance with requirements and as permitted under
Securities laws.
4.3. Place of Business. Such Stockholder resides in the jurisdiction listed
opposite such Stockholder's name on Exhibit A.
4.4. Authorization. Such Stockholder has the requisite power and authority
to execute, deliver and perform its obligations under this Agreement and each of
the other agreements required to be delivered by such Stockholder hereunder.
This Agreement and each of the other agreements required to be delivered by such
Stockholder have been duly and validly executed and delivered by such
Stockholder and constitute the valid and binding obligations of such Stockholder
enforceable against such Stockholder in accordance with their terms, except to
the extent such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws in effect relating to
creditors' rights generally and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any procedure may be brought (whether at law or in equity).
Such Stockholder has obtained all consents, authorizations and approvals of, and
has made or will timely make all declarations and filings with, all judicial
authorities and federal and state governmental authorities required on the part
of such Stockholder in connection with the consummation of the transactions
contemplated by this Agreement and each of the other agreements required to be
delivered by such Stockholder hereunder.
4.5. Title. Such Stockholder owns, beneficially and of record, good and
marketable title to the shares of Purchased Stock set forth opposite its name on
Exhibit A, free and clear of all Liens. At the Closing, such Stockholder will
convey to Purchaser good and marketable title to such shares of Purchased Stock,
free and clear of any Liens.
4.6. Commissions and Fees. Such Stockholder (either alone or together with
others) has not retained, and does not owe any fees to, any finder, broker,
agent, financial advisor or other intermediary in connection with the
transactions contemplated by this Agreement.
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V. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Stockholders that:
5.1. Existence; Good Standing. Purchaser is duly incorporated, validly
existing and in good standing under the laws of the state of Nevada, and has all
requisite power and authority to enter into, deliver and consummate the
transactions contemplated by this Agreement.
5.2. Authorization. Purchaser has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of Purchaser. No other corporate
proceedings on the part of Purchaser are necessary to approve this Agreement or
to consummate the transactions contemplated hereby and thereby. This Agreement
has been duly and validly executed and delivered by Purchaser and constitutes
the valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms except to the extent such enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws in
effect relating to creditors' rights generally and except that the availability
of equitable remedies, including specific performance, is subject to the
discretion of the court before which any procedure may be brought (whether at
law or in equity).
5.3. No Violation; Consents. The execution, delivery and performance of
this Agreement will not (with or without notice or passage of time or both) (i)
violate any law, judgment, order, writ, injunction, decree, statute, rule or
regulation of any court, administrative agency, bureau, board, commission,
office, authority, department or other governmental entity applicable to
Purchaser, or (ii) violate or conflict with any of the provisions of the
Articles of Incorporation or By-Laws of Purchaser, nor will contravene, conflict
with or result in a violation of any resolution adopted by Purchaser, or the
board of directors or any committee of the board of directors of Purchaser or
(iii) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default or breach) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration under, or increase the amount payable by Purchaser under any
contract or permit. No Consent of any Governmental Authority, or any other
person is necessary in connection with the execution and delivery by Purchaser
of this Agreement.
5.4. Commissions and Fees. Purchaser has not retained, and does not owe any
fees to, any finder, broker, agent, financial advisor or other intermediary in
connection with the transactions contemplated by this Agreement.
5.5. Purchaser Preferred Stock. The Preferred Stock has been duly and
validly authorized and when issued will be fully paid and nonassessable an free
from any security interest, lien or other encumbrance.
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VI. COVENANTS
6.1. Closing Efforts; Additional Agreements. Each of the parties will use
its reasonable best efforts to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Closing any
further action is necessary (a) to carry out the intents and purposes of this
Agreement or (b) to vest Purchaser with full title to the Purchased Stock, free
and clear of all Liens, the Parties shall take all such necessary actions.
6.2. Public Announcements. Except as required by applicable law, securities
rules or regulations, neither Purchaser nor any Stockholder shall make, issue or
release any oral or written public announcement or statement concerning, or
acknowledge the existence of, or reveal the terms, conditions and status of, the
transactions contemplated by this Agreement, without the other party's prior
written approval of, and concurrence in, the contents of such announcement,
acknowledgement or statement.
6.3. Conversion of Preferred Stock. Notwithstanding any rights or
preferences of the Preferred Stock to the contrary, Purchaser and the
Stockholders agree that, except as expressly permitted in this Section 6.3, no
Stockholder shall convert any Preferred Stock in to shares of common stock,
$0.001 par value, of the Company (the "Common Stock"), and that any attempted
conversion shall be null and void. At any time after the six-month anniversary
of the Closing Date, the Stockholders shall be entitled to direct the conversion
of 600 shares of Preferred Stock, with each Stockholder that desires to
participate in such conversion participating in proportion to its respective
Overall Ownership Percentage. At any time after the nine-month anniversary of
the Closing Date, the Stockholders shall be entitled to direct the conversion of
an additional 400 shares of Preferred Stock, with each Stockholder that desires
to participate in such conversion participating in proportion to its respective
Overall Ownership Percentage; provided, however, that as a condition precedent
to such conversion, the weighted average price per share of the Common Stock for
the thirty days prior to such conversion shall be at least $1.00. At any time
after the one-year anniversary of the Closing Date, any Stockholder may convert
any of its Preferred Stock, subject only to the terms of such Preferred Stock.
The conversion terms are set forth in the Certificate of Designation to be filed
with the State of Nevada, a copy of which is attached as Exhibit D hereto. The
Purchaser agrees to file the Certificate of Designation with the Secretary of
Sate of Nevada by no later than 10 days after the Closing Date. Notwithstanding
anything to the contrary in this Section 6.3, no Stockholder shall be entitled
to convert any Preferred Stock if the effect of such conversion would result in
such Stockholder owning more than 4.9% of the issued and outstanding Common
Stock of Purchaser. Notwithstanding any prohibitions to the contary herein, , in
the event Purchaser enters into a transaction that will result in a change of
control of Purchaser, the Stockholders shall be entitled to immediately convert
all shahres of Preferred Stock into common stock.
6.4. Restrictions on Transfer. Each Stockholder hereby covenants and agrees
with Purchaser that it shall not, for a period of one year following the Closing
Date, sell, assign, transfer, gift, pledge, hypothecate or otherwise grant any
11
interest in the Preferred Stock (or any shares of Common Stock issued upon
conversion of the Preferred Stock) to any person without the prior written
consent of Purchaser. Notwithstanding anything herein to the contrary, the
Purchaser agrees that the Stockholders may transfer shares of Preferred Stock to
Xxxxx Xxxxxx Xxxxxxx and Purchaser hereby agrees to any such transfer and will
cooperate with Stockholders to effect the same. Xx. Xxxxxxx has executed this
Agreement to acknowledge his agreement to be bound by all of the terms and
conditions of this Agreement and its schedules and exhibits.
6.5. Guaranty of RKM Debt. The Stockholders and Purchaser acknowledge the
debt of RKM in the amount of $ 219,156.25 (including principal and interest
accrued thereon to date), divided in two parts, Stockholders' Debt for $
96,259.80 and Workers Compensation Due for $122,896.46, owed to certain
Stockholders (the "Stockholder Indebtedness") and that prior to Closing,
one-half of the Stockholders' Debt will be paid by RKM in cash. Thirty percent
(30%) of the remaining Stockholder Debt will be paid by RKM to the Stockholders
within 30 days after the execution of this Agreement and twenty percent (20%) of
the remaining Stockholder Debt will be paid by RKM to the Stockholders within 60
days after the execution of this Agreement. With respect to the remaining
Stockholder Indebtedness, Purchaser, for and on behalf of RKM, hereby
unconditionally and irrevocably guarantees to the Stockholders the payment of
the Stockholder Indebtedness, subject to the terms and conditions set forth
therein. This is a continuing guaranty of RKM's obligation of the Stockholder
Indebtedness and shall remain in full force and effect until payment and
performance in full of the Stockholder Indebtedness. Such guaranty shall be
secured by a first-priority pledge of that number of shares of Common Stock of
the Purchaser equal to (a) the amount of the Stockholder Indebtedness plus
twelve percent, divided by (b) the weighted sale price of Purchaser's Common
Stock for the thirty days prior to the Closing Date, as evidenced by the Pledge
Agreement. Such shares of Common Stock shall be unregistered and restricted, but
subject to certain piggyback registration rights set forth in the Pledge
Agreement. The Common Stock underlying the pledge shall be issued in the names
of the Stockholders and held by an agent to be appointed by the Stockholders and
reasonably acceptable to the Purchaser. In the event the Stockholder
Indebtedness is paid in full no later than the first anniversary of the Closing,
the shares of Common Stock in the pledge shall be returned to the Purchaser for
cancellation. In the event the Stockholder Indebtedness is not paid in full on
the first anniversary of the Closing, the agent shall be authorized by the
parties to release the shares of Common Stock to the Stockholders.
6.6. Commitment to Provide Financing. Purchaser hereby agrees to lend
$100,000 to RKM in accordance with the following schedule: on or before the 10th
day after the Closing Date, Purchaser shall advance $40,000 to RKM; on or before
the 60th day after the Closing Date, Purchaser shall advance an additional
$30,000 to RKM; and on or before the 90th day after the Closing Date, Purchaser
shall advance an additional $30,000 to RKM. In addition, Purchaser agrees to
lend up to $1,000,000 to RKM, for certain identified projects, that are expected
12
by Purchaser (in its reasonable discretion) to result in at least 25% pre-tax
return on investment. The amount lent to RKM will be 25% less than the total
sales amount of the identified projects Any amounts lent to RKM pursuant to this
Section 6.6 shall be evidenced by a promissory note in form and substance
reasonably acceptable to Purchaser and shall be subject to payment terms that
are reasonably acceptable to Purchaser.
6.7. Board of Advisers. Purchaser agrees to appoint Xxxxxx Xxxxxxxxx to its
Board of Advisers to serve in that position for so long as any Stockholder holds
any Preferred Stock (which Preferred Stock has not beeen converted into Common
Stock). For so long as any Stockholder holds any Preferred Stock (which
Preferred Stock has not been converted into Common Stock), Xx. Xxxxxxxxx will be
entitled to attend and receive notice of meetings of the Board of Directors of
Purchaser; provided, however, that Xx. Xxxxxxxxx will have no rights to vote in
such meeetings.
6.8. Option on Purchased Stock. Purchaser hereby grants to the Stockholders
an option to purchase the Purchased Stock at an exercise price equal to the
value of the Preferred Stock issued to the Stockholders and any shares of Common
Stock issued to the Stockholders upon conversion of the Preferred Stock. This
option shall not be exercisable until the second anniversary of the Closing Date
and then subject to the condition precedent that the Common Stock of the
Purchaser shall have experienced aggregate trading volume of less than
$20,000,000 during the twelve months prior to the second anniversary of the
Closing Date. This option shall expire on the date that is 120 days after the
second anniversary of the Closing Date (the "Expiration Date"). Notwithstanding
the foregoing, the Stockholders shall only exercise this option upon the
unanimous written consent of the Stockholders. To exercise this option, the
Stockholders shall deliver written notice of such exercise to the Purchaser and
RKM within 120 days after the second anniversary of the Closing Date, which
notice shall be accompanied by a copy of the unanimous written consent executed
by all Stockholders and certificates representing all of the issued and
outstanding Preferred Stock and any shares of Common Stock issued to the
Stockholders upon conversion of the Preferred Stock, endorsed in blank or
accompanied by duly executed stock powers. Upon receipt thereof, Purchaser shall
deliver the Purchased Stock to the Stockholders, endorsed in blank or
accompanied by duly executed stock powers.
Until the Expiration Date, RKM shall not, and Purchaser shall cause RKM not
to: sell, transfer or in any manner encumber the Purchased Stock; issue
additional shares of any class of capital stock of RKM; issue any securities
convertible into or exchangeable for shares of any class of capital stock of
RKM; or enter into any agreement that could require the issuance of shares of
any class of capital stock of RKM, or securities or instruments convertible into
capital stock; or take any other action that would cause the Stockholders not to
receive 100% of all issued and outstanding capital stock of RKM, free from any
liens or encumbrances, upon exercise of the option set forth in this Section
6.8.
6.9. Non-competition. In consideration of Purchaser's consummation of the
transactions contemplated by this Agreement, and as a material inducement to
Purchaser to enter into this Agreement, each Stockholder covenants and agrees as
follows:
13
(a) For one year after Closing, no Stockholder will at any
time, in any capacity, directly or indirectly, own an equity interest,
directly or indirectly, in a Competing Organization. "Competing
Organization" will include any Person, organization, business or other
enterprise (i) located or doing business anywhere in the world (the
"Geographic Area"), and (ii) then engaged in or about to become engaged
in, a business identical to or similar to the business of RKM. It is
expressly agreed by the parties that nothing herein shall prohibit a
Stockholder from being employed in any capacity in a Competing
Organization.
(b) During the period beginning on the Closing Date and ending
on the third anniversary of the Closing Date, no Stockholder will at
any time in any capacity, directly or indirectly, (i) induce or attempt
to induce any employee (including leased employees) of Purchaser or any
of its affiliates to leave their employ, or otherwise solicit the
employment of any such employee of Purchaser or any of its affiliates,
hire any such employee or in any way interfere with the relationship
between Purchaser or any of its affiliates and any of such employees,
(ii) induce or attempt to induce any supplier, licensee, licensor,
franchisee, or other business relation of either Purchaser or any of
its affiliates to cease doing business with them or in any way
interfere with the relationship between either Purchaser or any of its
affiliates and any of their respective customers or business relations,
or (iii) solicit the business of any then existing customer of
Purchaser or any of its affiliates.
(c) If, at the time of enforcement of any of the provisions of
this Section 6.9, a court of competent jurisdiction holds that the
restrictions stated in Section 6.9 are unreasonable under the
circumstances then existing or are otherwise illegal, invalid or
unenforceable in any respect by reason of its duration, definition of
Geographic Area or scope of activity, or any other reason, the parties
agree that the maximum period, scope or geographical area reasonable or
otherwise enforceable under such circumstances will be substituted for
the stated period, scope or area.
(d) Without limiting any of Purchaser's rights under this
Agreement, the parties hereto acknowledge that Purchaser will be
entitled to enforce its rights under this Section 6.9 specifically, to
recover damages and costs (including reasonable attorneys' fees) caused
by any breach of any provisions of this Section 6.9 and to exercise all
other rights existing in its favor. The parties acknowledge and agree
that the breach of any term or provision of this Section 6.9 by any
Stockholder will materially and irreparably harm Purchaser, that money
damages will accordingly not be an adequate remedy for any breach of
the provisions of this Section 6.9 by any Stockholder and that
Purchaser in its sole discretion and in addition to any other remedies
it may have at law or in equity may apply to any court of law or equity
of competent jurisdiction (without posting any bond or deposit) for
specific performance and/or other injunctive relief in order to enforce
or prevent any violations of the provisions of this Section 6.9.
6.10. Prohibition on Dividends. For so long as any Stockholder holds any
Preferred Stock (which Preferred Stock has not be converted into Common Stock),
RKM will not, and Purchaser will cause RKM not to, issue any new shares of its
capital stock, declare or pay any dividends or other distribution on any shares
of its capital stock, or sell, transfer or dispose of assets (including cash)
except in the ordinary course of business.
14
6.11. Employment. Purchaser and RKM agree that they will use their
commercially reasonable efforts not to terminate the existing senior management
of RKM for a period of three years following the Closing Date, and to maintain
for such senior management those benefits and equity participation opportunities
generally afforded to other similarly situated employees in Purchaser's
organization, as such benefits and equity plans are in effect from time to time,
and amended or terminated in Purchaser's sole discretion. Notwithstanding the
foregoing, nothing herein shall be deemed to prohibit Purchaser from terminating
any employee or member of senior management for cause, in the reasonable
discretion of Purchaser. "Cause" for this purpose is defined as willful
misconduct, fraud or other illegal conduct which damages RKM.
6.12. Surety Bonds. Purchaser agrees, within 90 days after the Closing
Date, to replace the Stockholders as guarantors under surety bonds issued in
connection with RKM contracts. Such replacement shall be coordinated with the
Purchaser's foreign investment registration.
6.13. RKM Board of Directors. Stockholders' agree to expand the RKM Board
of Directors from three to five seats. Xxxxxx X. Xxxxxx, the CEO and Chairman of
the Purchaser will have one seat on the RKM Board. The three existing board
members will remain on the RKM Board at least until such time that the preferred
stock has been fully converted into common stock.
VII. INDEMNIFICATION
7.1 Indemnification by the Stockholders. The Stockholders shall, severally,
indemnify and hold harmless the Purchaser, its successors and assigns, and their
respective officers, directors, agents, employees and representatives (the
"Purchaser Indemnitiees"), from and against, and will pay them the amount of,
any and all losses, costs, claims, liabilities, and damages, penalties and
expenses (including reasonable attorneys' and auditors' fees and the reasonable
costs of investigation and defense) (collectively, "Losses"), incurred or
suffered by the Purchaser Indemnitees relating to or arising out of or in
connection with any of the following: (i) any breach or inaccuracy as of the
date hereof in any representation or warranty made by the Stockholders in
Article III or Article IV of this Agreement or any closing document required to
be delivered by the Stockholders under this Agreement or (ii) any breach or
nonfulfillment by the Stockholders of any of their covenants, or agreements or
other obligations in this Agreement or any closing document required to be
delivered by the Stockholders under this Agreement.
7.2 Indemnification by the Purchaser. Purchaser shall indemnify and hold
harmless the Stockholders, their successors and assigns, and their respective
officers, directors, agents, employees and representatives (the "Stockholder
Indemnitiees"), from and against, and will pay them the amount of, any and all
15
Losses incurred or suffered by the Stockholder Indemnitees relating to or
arising out of or in connection with any of the following: (i) any breach or
inaccuracy as of the date hereof in any representation or warranty made by
Purchaser in Article V of this Agreement or any closing document required to be
delivered by Purchaser under this Agreement or (ii) any breach or nonfulfillment
by the Purchaser of any of its covenants, or agreements or other obligations in
this Agreement or any closing document required to be delivered by the Purchaser
under this Agreement.
7.3 Claims. Notwithstanding anything to the contrary herein, the
indemnities contained in this Article VII shall (i) expire twelve (12) months
following the Closing; provided, that if at the stated expiration of any
indemnification obligation there shall then be pending any indemnification
claim, such claimant shall continue to have the right to such indemnification
with respect to such claim notwithstanding such expiration, and (ii) any
indemnification obligation of a Stockholder shall be satisfied exclusively
through the return of shares of Preferred Stock received in this transaction (or
if there are no shares of Preferred Stock, then shares of common stock into
which the Preferred Stock has been converted or the proceeds from the sale of
any such common stock) and the Stockholders shall have no further obligations of
any nature. For purposes of calculating the number of shares of Preferred Stock
required to be returned on account of an indemnification obligation, each share
of Preferred Stock shall be valued at $1,000. If a claim for indemnification is
to be made by a party entitled to indemnification under this Agreement (the
"Indemnified Party"), the Indemnified Party shall promptly give notice to the
party obligated to provide indemnification under this Agreement (the
"Indemnifying Party") of such claim, including the amount the Indemnified Party
will be entitled to receive hereunder from the Indemnifying Party; provided,
however, that the failure of the Indemnified Party to promptly give notice shall
not relieve the Indemnifying Party of its obligations under this Article VII. If
the Indemnifying Party does not object in writing to such claim within 20 days
after receiving notice thereof, the Indemnified Party shall be entitled to
recover, on the 21st day after such notice was given, from the Indemnifying
Party the amount of such claim, and no later objection by the Indemnifying Party
shall be permitted or effective. If the Indemnifying Party agrees that it has an
indemnification obligation under this Article VII with respect to such claim,
but timely objects as to the amount of such claim, the Indemnified Party shall
nevertheless be entitled to recover, on the 21st day after such notice was
given, from the Indemnifying Party the undisputed lesser or liquidated amount of
such claim, without prejudice to the Indemnified Party's claim for the
difference.
7.4 Failure of Indemnifying Person to Act. In the event that the
Indemnifying Party does not assume the defense of any claim, suit, action or
proceeding covered by indemnification under this Article VII, then any failure
of the Indemnified Party to defend or to participate in the defense of any such
claim, suit, action or proceeding or to cause the same to be done, shall not
relieve the Indemnifying Party of its obligations under this Article VII.
7.5 Survival. All representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing and shall be deemed to
have been relied upon and shall not be affected in any respect by the Closing,
any investigation conducted by any party or by any information which any party
16
may receive Notwithstanding the foregoing sentence, the representations and
warranties contained in this Agreement shall terminate on the first anniversary
of the Closing (the "Survival Period"); provided, however, that such liability
shall not terminate (but shall survive until resolved among the parties) with
respect to any claim, whether or not fixed as to liability or liquidated as to
amount, with respect to which the Indemnified Party has given notice to the
Indemnifying Party on or prior to the expiration date of the Survival Period.
VIII. MISCELLANEOUS
8.1. Counterparts; Facsimile. This Agreement may be executed in
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by facsimile transmission, and a facsimile of this Agreement or of a
signature of a party thereto shall be effective as an original.
8.2. Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed
by this Agreement shall be governed by the laws of the State of Florida, without
reference to its internal choice of law provisions.
8.3. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
8.4. Successors and Assigns. This Agreement and all of the provisions
hereof will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
8.5. Headings. The descriptive headings of this Agreement are inserted for
convenience of reference only and do not constitute a part of and shall not be
utilized in interpreting this Agreement,
8.6. Specific Performance. The parties hereto shall have all rights and
remedies set forth in this Agreement and all rights and remedies available under
any applicable law. The parties hereto agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this Agreement
and that any party may, in its sole discretion, apply to any court of law or
equity of competent jurisdiction for specific performance or injunctive relief
(without posting bond or other security) in order to enforce, or prevent any
violations of, the provisions of this Agreement.
8.7. Entire Agreement. This Agreement and the Schedules and Exhibits hereto
constitute and encompass the entire agreement and understanding of the parties
hereto with regard to the transactions to be effected hereby. The parties
17
acknowledge that at the time of signing this Agreement, the schedules referenced
in Article III are not available. The Stockholders shall prepare these schedule
and deliver them to the Purchaser within 30 days after the Closing Date at which
time the schedules will be appended to the Agreement and constitute a part of
the Agreement to the same extent as if they had been attached to the Agreement
on the Closing Date.
8.8. Amendments; Waivers. This Agreement shall not be altered, amended or
supplemented except by a writing signed by Purchaser and Stockholders'. Any
failure of any of the parties hereto to comply with any obligation, covenant,
agreement or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, provided that any such waiver of any term, covenant, agreement or
condition contained in this Agreement shall not be deemed a waiver of any other
term, covenant, agreement or condition, and any waiver of any default in any
such term, covenant, agreement or condition shall not be deemed a waiver of any
later default thereof or of any other term, covenant, agreement or condition.
8.9. Currency. All dollar ($) amounts in this Agreement shall be deemed to
be United States Dollars.
8.10. Notices. Any notices required or permitted to be sent hereunder shall
be in writing and shall be delivered personally or sent by facsimile
transmission, electronic mail or delivered by overnight courier service to the
following addresses, or such other address as any party hereto designates by
written notice to the other party, and shall be deemed to have been given upon
delivery, if delivered personally, upon the transmission thereof if sent by
facsimile (with telephonic confirmation) or by electronic mail (with delivery
notification) provided that receipt of transmission occurs during normal
business hours, or one business day after delivery to the courier, if delivered
by overnight courier service provided the deadline for overnight deliveries for
such courier service has been met:
If to Purchaser or RKM:
IPVoice Communications, Inc.
c/o Vergetech Incorporated
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Fax No. 000-000-0000
Telephone No.: 000-000-0000 (x209)
Attention: Xxxxxx Xxxxxx
18
With a copy to:
Xxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to the Stockholders:
Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxxx
0000 XX 00 Xx, Xxxxx 0,
Xxxxx, Xx 00000
Ph. 000 000-0000
Fax. 000 000-0000
With a copy to: Xxxxxxxx X. Xxxxxx, Esq
Xxxxxxxx X. Xxxxxx, P.A.
0000 XX 00 Xxxxxx
Xxxxx, XX 00000
Fax No: (000) 000-0000
Phone: (000) 000-0000
8.11 RKM USA Corp. The parties agree that within 10 days after the Closing Date,
they will execute an agreement for the sale of substantially all of the
stock of RKM USA Corp. to Purchaser.
[Signature page follows]
19
IN WITNESS WHEREOF, the parties have executed this Purchase Agreement
as of the date and year first above written.
IPVOICE COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------------
Its: CEO
----------------------------------------
STOCKHOLDERS:
-----------------
Xxxxxx Xxxxxxxxx
------------------
Xxxxxxx Xxxxxxxxxx
--------------
Xxxxxxxx Xxxxx
The undersigned has executed this Agreement to acknowledge his agreement to be
bound by all of the terms and conditions of this Agreement and its exhibits and
schedules.
--------------------
Xxxxx Xxxxxx Xxxxxxx
Exhibit A
Stockholders
----------------------------- ------------------------ --------------------- -----------------------
Stockholder Stockholder Address RKM Shares owned Overall Ownership
Name Percentage
----------------------------- ------------------------ --------------------- -----------------------
Xxxxxx Xxxxxxxx 0000 XX 00 Xxxxxx, 16,400 33.33
Xxxxx, XX 00000
----------------------------- ------------------------ --------------------- -----------------------
Xxxxxxx Xxxxxxxxxx 00000 XX 00 Xxxxxx, 16,400 33.33
Xxxxxxx, XX 00000
----------------------------- ------------------------ --------------------- -----------------------
Xxxxxxxx Xxxxx 00000 XX 00 Xxxxxx, 16,400 33.33
Xxxxxxx, XX 00000
----------------------------- ------------------------ --------------------- -----------------------
Total: 100%
----------------------------- ------------------------ --------------------- -----------------------
Exhibit B
---------
Form of Pledge Agreement
See Attached
Exhibit C
---------
Form of General Release
See Attached
Exhibit D
---------
Designation of Series E Preferred Stock
