CONFIDENTIAL
DIGICORP
September 30, 2005
Attn: Xxx Xxxxxx
Rebel Crew Films, Inc.
0000 Xxxxxxx Xxx.
Xxxxxx Del Xxx, CA 90292
RE: Letter of Intent for Digicorp, a Utah corporation (OTCBB: DGCO)
("DIGICORP"), to purchase (the "Share Purchase") all the issued and
outstanding shares of capital stock of Rebel Crew Films, Inc., a
California corporation ("RCFINC") owned by the stockholders of
RCFINC ("RCFINC Stockholders").
Dear Xx. Xxxxxx:
This Letter of Intent ("LOI") will confirm the following general terms
upon which DIGICORP will purchase all of the issued and outstanding shares of
RCFINC capital stock (the "Shares") pursuant to the terms of a definitive Stock
Purchase Agreement (the "Agreement") for consideration consisting of shares of
DIGICORP common stock, $0.001 par value ("DIGICORP Common Stock"), as set forth
below, which the Parties intend to be a tax-free transaction.
This LOI sets forth the basic terms of the Share Purchase and reflects the
current, good faith intentions of DIGICORP, RCFINC and the RCFINC Stockholders
(each a "Party" and collectively the "Parties") with respect thereto.
Concurrently herewith, DIGICORP is entering into a term sheet to purchase a
$331,023.89 loan receivable of Rebel Holdings, LLC, a California limited
liability company ("RHLLC"), in exchange for the issuance to RHLLC of a
$331,023.89 principal amount convertible note.
1. The Share Purchase.
(a) At the closing (the "Closing"), DIGICORP will purchase from the
RCFINC Stockholders and the RCFINC Stockholders will sell to
DIGICORP all of the issued and outstanding Shares of RCFINC. The
time of Closing shall be no later than ninety (90) calendar days
after the Agreement is executed by all Parties hereto (the "Closing
Date"), unless extended by mutual consent of such Parties.
(b) DIGICORP shall issue 20,000,000 shares of DIGICORP Common Stock to
the RCFINC Stockholders as compensation for their Shares (the
"Purchase Price"). All of the DIGICORP Common Stock to be issued to
the RCFINC Stockholders shall be "unregistered" and "restricted"
shares
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September 30, 2005
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and shall be issued in accordance with and subject to applicable
laws, rules and regulations, and when issued for the consideration
indicated, shall be deemed fully paid and non-assessable. The
Purchase Price shall be allocated to the RCFINC Stockholders in
accordance with Annex A. Annex B hereto sets forth the proposed
capital structure of DIGICORP at Closing.
(c) From the Purchase Price, 4,000,000 shares of DIGICORP Common Stock
(the "Escrowed Performance Shares") shall be held in escrow pursuant
to the terms of an escrow agreement pending satisfaction of the
following performance milestone: if RCFINC generates revenue
(determined in accordance with United States generally accepted
accounting principles ("GAAP")) of at least $1,200,000 during any
twelve (12) month period beginning on the execution date of this LOI
and through March 31, 2007 (the "Revenue Milestone"), then the
Escrowed Performance Shares shall be released from escrow and issued
to the RCFINC Stockholders. For each $12,000 (1%) that the revenue
of RCFINC is below $1,200,000, 200,000 (5%) of the Escrowed
Performance Shares shall be cancelled and returned to treasury of
DIGICORP. For purposes of clarification, if, for example, RCFINC
generates a maximum of $960,000 of revenue during any twelve (12)
month period beginning on the Closing Date and through March 31,
2007, then all of the Escrowed Performance Shares would be cancelled
and returned to treasury of DIGICORP. Notwithstanding the foregoing,
the Revenue Milestone shall not be applicable in the event: (i)
DIGICORP sells RCFINC (or sells, conveys or otherwise disposes of
all of the assets of RCFINC) on or before March 31, 2007 for
consideration equal or greater to $1,200,000; and (ii) such sale of
RCFINC (or sale, conveyance or disposition of all of the assets of
RCFINC) is approved by an affirmative vote of all directors
designated or elected by Xxxxxx "Xxxx" Xxxx, III pursuant to Section
2(c)(iv) of this LOI.
(e) From the Purchase Price, 16,666,667 shares of DIGICORP Common Stock
shall be subject to lockup agreements (the "Lockup") as follows: (i)
3,333,333 shares of DIGICORP Common Stock shall be subject to a
lockup agreement for a period of one year; (ii) 6,666,667 shares of
DIGICORP Common Stock shall be subject to a lockup agreement for a
period of two years; and (iii) 6,666,667 shares of DIGICORP Common
Stock, of which the 4,000,000 Escrowed Performance Shares are a
component of, shall be subject to a lockup agreement for a period of
three years.
(f) DIGICORP will undertake to prepare and file with the Securities and
Exchange Commission (the "SEC") no later than 90 days from the
Closing Date, a registration statement (the "Registration
Statement") on Form SB-2
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September 30, 2005
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(or other applicable form) pursuant to the Securities Act of 1933,
as amended (the "Securities Act"), registering the resale of the
DIGICORP Common Stock comprising the Purchase Price (the
"Registrable Securities"). The RCFINC Stockholders will also have
"piggyback" registration rights with respect to the Registrable
Securities. DIGICORP shall prepare and file with the SEC such
amendments and supplements to the Registration Statement as may be
necessary and use commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective for
the period of time required for the RCFINC Stockholders to effect
the sale of the Registrable Securities in accordance with the
Securities Act.
2. Definitive Agreement. The Agreement shall include, contain or provide:
(a) Representations and warranties. Customary and usual representations
and warranties and covenants by DIGICORP and RCFINC, and a principal
executive officer or managing member of DIGICORP and RCFINC, as the
case may be, shall certify that these representations and warranties
are true as of the Closing Date. Such representations and warranties
shall include, but not be limited to the following:
(i) Each of DIGICORP and RCFINC shall have good title to all of
its tangible and intangible assets including, but not limited
to, intellectual properties necessary to develop and
commercially exploit its business enterprise as more fully
described in its current business plan. Such assets shall
include the assets of RHLLC which shall be transferred into
RCFINC prior to Closing;
(ii) The RCFINC Stockholders own 100% of the issued and outstanding
stock of RCFINC;
(iii) All RCFINC Stockholders shall be accredited investors within
the meaning of Rule 501(a) of Regulation D under the
Securities Act or be eligible for a suitable exemption
therefrom and shall complete and sign accredited investor
questionnaires attesting to such fact;
(iv) Except for Xxxxxxxxx Xxxxxx and Aegis Equity, LLC, no agent,
broker, investment banker, person or firm is acting on behalf
of the Parties or under their authority is or will be entitled
to any broker's or finder's fee or any other commission or
similar fee, directly or indirectly, in connection with any of
the transactions contemplated herein;
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September 30, 2005
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(v) The Agreement will include representations and warranties with
respect to the absence of undisclosed liabilities, liens and
encumbrances of the assets of each of DIGICORP and RCFINC and
the financial condition and results of operations of DIGICORP
and RCFINC and with respect to the absence of any material
adverse changes in DIGICORP's and RCFINC's financial
condition, earnings, and business operations since the date of
the most recent audited financial statements supplied by each
of DIGICORP and RCFINC to the other;
(vi) The Agreement will include representations and warranties by
DIGICORP and RCFINC with respect to (a) the absence of any
pending litigation, investigation, proceeding or controversy
before or with any court, administrative agency, governmental
authority or regulatory agency; (b) compliance with
instruments and laws; (c) disclosure of all proprietary
information and similar agreements with employees and
consultants, shareholder agreements and employee compensation
and pension plans; (d) the disclosure of all other contracts,
commitments and liabilities, direct or contingent; (e) the
filing of all tax returns and the payment of all taxes in
respect thereof; and (f) the due incorporation, organization,
valid existence, good standing and capitalization of each;
(vii) The Agreement will include representations and warranties by
DIGICORP that it has made all of the filings required by the
Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, required to be made and no
such filings contains any untrue statement of a material fact
or omits to state a material fact necessary to make the
statements made, not misleading;
(viii) The Agreement will include representations and warranties by
DIGICORP that its stock is currently listed in and is quoted
on the OTC Bulletin Board and is in compliance with the
listing requirements thereunder; and
(ix) None of the representations and warranties of the Parties
shall survive Closing.
(b) Audited Financial Statements. Prior to Closing, RCFINC shall deliver
to DIGICORP audited financial statements for the last two completed
fiscal years as well as unaudited financial statements for the
interim period(s) ended at the Closing Date in accordance with GAAP
(the "Financial Statements"). Such Financial Statements: (i) shall
be complete and correct in all material respects; (ii) shall be
prepared in accordance with GAAP
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September 30, 2005
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(subject to normal year-end adjustments in the case of the unaudited
statements): (iii) shall be in conformity with the practices
consistently applied by the Company without modification of the
accounting principles used in the preparation thereof; and (iv)
shall present fairly the financial position, results of operations
and cash flows of RCFINC and its subsidiaries, if any, as at the
dates and for the periods indicated therein.
(c) Conditions Precedent. In addition, the Agreement shall contain
customary and usual conditions precedent, including, but not limited
to, the following:
(i) For a period of at least seventy-five (75) days prior to the
Closing Date, as between DIGICORP, on one hand, and RCFINC, on
the other, each will afford to the officers and authorized
representatives of the other full access to the properties,
books and records of each in order that each may have a full
opportunity to make such reasonable investigation as it shall
desire to make of the affairs of the other, and each will
furnish the other with such additional financial and operating
data and other information as to the business and properties
of each (the confidentiality of which each agrees to retain)
as each shall from time to time reasonably request. Any such
investigation and examination shall be conducted at reasonable
times and under reasonable circumstances, and each Party
hereto shall cooperate fully therein. In order that each may
investigate as it may wish the business affairs of the other,
each shall furnish the other during such period with all such
information and copies of such documents concerning the
affairs of each as the other may reasonably request, and cause
its officer, employees, consultants, agents, accountants, and
attorneys to cooperate fully in connection with such review
and examination, and to make full disclosure to the other all
material facts affecting the financial condition, business
operations, and the conduct of operations of each;
(ii) DIGICORP, Xxx Xxxxxx and certain other shareholders of
DIGICORP including but not limited to the shareholders listed
on Annex C (to be specified by the Parties prior to Closing)
shall enter into a voting agreement authorizing Xx. Xxxxxx to
vote the shares of DIGICORP Common Stock owned by parties to
such voting agreement on certain matters including, but not
limited to, amendments to DIGICORP's articles of
incorporation, the sale of substantially all of DIGICORP's
assets, any other material transactions and other matters
which may be specified by the Parties in the Agreement and
prior to Closing;
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September 30, 2005
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(iii) DIGICORP shall enter into a three-year employment agreement
with Xxx Xxxxxx, whereby Xx. Xxxxxx will serve as chief
executive officer of DIGICORP with an initial salary of
$150,000 per year and options entitling Xx. Xxxxxx to purchase
4,400,000 shares of DIGICORP Common Stock which shall be
granted at the FMV of DIGICORP common stock on the date of
execution of this LOI, will vest annually over a period of
three years from the Closing Date and, shall be exercisable
either for cash, or, unless prohibited by applicable law or
the stock option and restricted stock plan to be adopted by
DIGICORP, through the delivery of shares of DIGICORP already
owned by Xx. Xxxxxx or shares subject to the option being
exercised, valued at the fair market value on the date of
delivery. At the sole discretion of Xx. Xxxxxx, such options
shall be either non-qualified stock options or incentive stock
options and issued from DIGICORP's stock option and restricted
stock plan to be adopted by DIGICORP. Xx. Xxxxxx'x employment
agreement shall also include other terms to be negotiated in
good faith between DIGICORP and Xx. Xxxxxx;
(iv) At Closing, DIGICORP's board of directors shall consist of
five persons. Xxxxxx "Xxxx" Xxxx, III shall designate or elect
two of the five board members, which shall initially be
Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxxxxx. Xxx Xxxxxx shall
designate or elect three of the five board members, one of
which shall be Xx. Xxxxxx. If after the Closing the number
directors on DIGICORP's board increases to seven, then Xx.
Xxxx shall have the right to designate or elect three of the
seven board members and Xx. Xxxxxx shall have the right to
designate or elect four of the seven board members;
(v) Before Closing, the board of directors of DIGICORP, the board
of directors of RCFINC and the RCFINC Stockholders shall have
approved the Share Purchase and the Agreement;
(vi) DIGICORP and RCFINC shall have obtained and delivered to the
other all consents, waivers and approvals necessary to effect
the Share Purchase from the board of directors of each and its
Stockholders;
(vii) On or before the Closing Date, DIGICORP, RCFINC and all of the
RCFINC Stockholders will have received all permits,
authorizations, regulatory approvals and third party consents
necessary for the consummation of the Share Purchase, and all
applicable legal requirements shall have been satisfied;
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September 30, 2005
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(viii) All RCFINC Stockholders shall be accredited investors within
the meaning of Rule 501(a) of Regulation D under the
Securities Act or be eligible for a suitable exemption
therefrom and shall complete and sign accredited investor
questionnaires attesting to such fact;
(ix) RCFINC shall deliver to DIGICORP the Financial Statements and
the Financial Statements shall be in compliance with the
requirements of Section 2(b) hereof;
(x) There shall not be any material adverse change in the
business, assets or financial condition of RCFINC and any
subsidiaries taken as a whole nor shall there have occurred
any event which is reasonably likely to result in a material
adverse change in the business, assets or financial condition
of RCFINC and any subsidiaries taken as a whole since the date
of the most recent audited Financial Statements;
(xi) There shall not be any material adverse change in the
business, assets or financial condition of DIGICORP and any
subsidiaries taken as a whole nor shall there have occurred
any event which is reasonably likely to result in a material
adverse change in the business, assets or financial condition
of DIGICORP and any subsidiaries taken as a whole since the
date of the most recent audited financial statements filed by
DIGICORP with the SEC;
(xii) There shall not be any pending or threatened litigation
regarding the Share Purchase and the Agreement or any related
transactions contemplated thereby or therein;
(xiii) Customary legal opinions, closing certificates and other
documentation in a form satisfactory to each of the Parties
shall be delivered by DIGICORP, RCFINC, the RCFINC
Stockholders and/or counsel to such Parties;
(xiv) There shall not be any material breach by the Parties of any
representation or warranty contained in the Agreement, and the
Parties shall be in compliance with each covenant contained in
the Agreement;
(xv) Each of DIGICORP and RCFINC shall have completed usual,
customary and reasonable due diligence of the other to its
reasonable satisfaction; and
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September 30, 2005
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(xvi) The Agreement shall contain additional mutually acceptable
closing conditions to be determined by the Parties.
3. Expenses. Except for audit fees, or reimbursements specified herein and
in the definitive agreements, which shall be shared equally between DIGICORP and
RCFINC, associated with RCFINC's audited financial statements as required under
Section 2(b), each Party shall pay its own legal and accounting expenses in
connection with the Share Purchase.
4. Conduct of Business of DIGICORP and RCFINC Pending Closing.
(a) Until consummation or termination of the contemplated Share
Purchase, as between DIGICORP, on the one hand, and RCFINC, on the
other, each will conduct business only in the ordinary course and no
material assets shall be sold, encumbered, hypothecated or disposed
of except in the ordinary course of business and only with the
written consent of the other which consent will not be unreasonably
withheld.
(b) The Parties agree that until consummation or termination of the
Share Purchase, each of DIGICORP and RCFINC, the board of directors
of each and/or the RCFINC Stockholders shall not directly or
indirectly: (i) offer for sale, sell, assign, pledge, distribute or
enter into any contract for the sale of or otherwise dispose of any
shares without the express written consent of the current board of
directors of RCFINC and DIGICORP; (ii) issue or cause to be issued
additional shares, options, warrants or any other right to purchase
shares to any person, entity or party; (iii) offer for sale, sell,
assign, pledge, distribute or enter into any contract for the sale
of or otherwise dispose of all or substantially all of a material
portion of the assets of either DIGICORP or RCFINC; or (iv) assume
or incur a significant amount of liabilities or take any other
actions outside the ordinary course of its business. Notwithstanding
the foregoing, DIGICORP may issue up to one million (1,075,000)
stock options to employees which shall have exercise prices equal to
the fair market value of DIGICORP's common stock on the date of
grant of such options and, in Xx. Xxxxxx'x discretion, contain the
exercise features set forth in Section 2(c)(iii) hereof.
(c) Notwithstanding anything to the contrary, it is understood that
since September 1, 2005, Xxx Xxxxxx or his affiliated companies have
been making, and will continue to make, at their sole discretion,
until the Closing, loans to RCFINC for working capital purposes.
Such loans will be repaid from accounts receivable of RCFINC.
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September 30, 2005
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5. Miscellaneous Provisions:
(a) Prior to execution of this LOI, DIGICORP shall ensure to the
satisfaction of Xxx Xxxxxx that sufficient D&O insurance is in
place. Upon execution of this LOI, Xx. Xxxxxx shall be appointed
interim President of DIGICORP. While interim President, Xx. Xxxxxx
shall be entitled to attend any and all meetings of the Board of
Directors of DIGICORP. If this LOI is terminated for any reason, if
the definitive Agreement is not signed by all Parties or if the
Share Purchase is not consummated for any reason, then Xx. Xxxxxx
shall immediately resign as interim President of DIGICORP.
(b) The Share Purchase shall be consummated and the Agreement shall be
executed as soon as practicable, and DIGICORP shall instruct its
legal counsel to immediately prepare all necessary documentation
upon execution of this LOI.
(c) All notices or other information deemed required or necessary to be
given to any of the Parties shall be given at the following
addresses:
DIGICORP: DIGICORP
Attn: Xxxxxx "Xxxx" Xxxx, III
000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx Xxxxxx, XX 00000
Facsimile: (000) 000-0000
With Copy to (which shall not constitute notice):
Xxxxxxxxx Xxxx Xxxxxxxx Xxxxxxx LLP
Attn: Xxxx X. Xxxx, Esq.
0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Rebel Crew Films, Inc.:
Rebel Crew Films, Inc.
Attn: Xxx Xxxxxx
0000 Xxxxxxx Xxx.
Marina Del Rey, CA 90292
Facsimile: (000) 000-0000
Rebel Crew Films, Inc. CONFIDENTIAL
September 30, 2005
Page 10 of 13
With Copy to: Danzig Xxxx Xxxxxx Xxxxx & Xxx, LLP
Attn: Xxxxx X. Xxxx, Esq.
00X Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
(d) The Agreement shall contain customary and usual investment
representation language.
(e) Except where the laws of another jurisdiction are necessarily
applicable, the transactions which are contemplated herein and the
legal relationships among the Parties hereto, to the extent
permitted, shall be governed by and construed in accordance with the
laws (except for conflict of law provisions) of the State of
California.
(f) The substance of any press release or other public announcement with
respect to the Share Purchase, the Agreement and the transactions
contemplated herein and therein, other than notices required by law,
shall be approved in writing in advance by all Parties and their
respective legal counsel.
6. Counterparts. This LOI may be executed in any number of counterparts and
each such counterpart shall be deemed to be an original instrument, but all of
such counterparts together shall constitute but one agreement.
7. Amendments. Subject to applicable law, this LOI and any attachments hereto
may be amended only by an instrument in writing signed by an officer or
authorized representative of each of the Parties hereto.
8. Headings. The descriptive headings of the sections and subsections of this
LOI are inserted for convenience only and do not constitute a part of this LOI.
9. Waiver. No purported waiver by any Party of any default by any other Party
of any term, covenant or condition contained herein shall be deemed to be waiver
of such term, covenant or condition unless the waiver is in writing and signed
by the waiving Party. No such waiver shall in any event be deemed a waiver of
any subsequent default under the same or any other term, covenant or condition
contained herein.
10. Entire Agreement. This LOI, together with the exhibits or other documents
given or delivered pursuant hereto, sets forth the entire understanding among
the Parties concerning the subject matter of this LOI and incorporates all prior
negotiations and understandings. There are no covenants, promises, agreements,
conditions or understandings, either oral or written, between them relating to
the subject matter of this
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September 30, 2005
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LOI other than those set forth herein. No alternation, amendment, change or
addition to this LOI shall be binding upon any Party unless in writing and
signed by the Party to be charged.
11. No Partnership. Nothing contained in this LOI will be deemed to or
construed by the Parties hereto or by any third person to create the
relationship of principal and agent or partnership or joint venture.
12. Joint Preparation. This LOI has been negotiated and prepared jointly by
the Parties hereto and any uncertainty or ambiguity existing herein, if any,
shall not be interpreted against any Party, but shall be interpreted according
to the applicable rules of interpretation for arm's length agreements.
13. Partial Invalidation. If any term, covenant or condition in this LOI or
the application thereof to any Party, person or circumstance shall be invalid or
unenforceable, the remainder of this LOI or the application of such term,
covenant or condition to persons or circumstances, other than those as to which
it is held invalid, shall be unaffected thereby and each term, covenant or
condition of this LOI shall be valid and enforced to the fullest extent
permitted by law.
14. Non-Binding Effect. Except for Sections 3, 5(a), 14, 15 and 22, all of
which are intended to be binding, the Parties agree that this LOI is not
intended to be a binding agreement between the Parties but merely an expression
of their intent with regard to the transactions described herein, and each Party
covenants never to contend to the contrary. Each of the Parties agrees to hold
the others harmless for any attorney's fees, accountant's fee, expenses or other
damages which may be incurred by each from the other Party's failure to
consummate the contemplated Share Purchase. In the event a definitive Agreement
is not executed for any reason or in the event a Party is in breach of any of
its obligations hereunder which are intended to be binding as set forth above,
each of the Parties acknowledges that it shall have no cause of action for
monetary damages against any of the other Parties for any reason, and that the
only remedy will be for injunctive relief or specific performance.
15. No-Shop. During a period of sixty (60) days following the date this LOI
is signed by all Parties, none of the Parties nor any agent thereof, may solicit
any offer, engage in any discussion, or enter into any agreement or commitment
with respect to any equity investment in DIGICORP or RCFINC or sale of DIGICORP
or RCFINC.
16. Time is of the Essence. Provided D&O insurance has been obtained by
DIGICORP, RCFINC shall sign this LOI no later than 6:00 P.M., Eastern Standard
Time, September 30, 2005, as time is of the essence.
17. Currency. All references to currencies within this LOI are in US dollars
except where otherwise specified.
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September 30, 2005
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18. Access. From the date of this LOI until such time as this LOI is
terminated, as between DIGICORP, on the one hand, and RCFINC, on the other, each
Party shall have access to all information in the possession or control of the
other relating to the other's business, all of its assets and its financial
condition. Each of DIGICORP and RCFINC and its respective representatives shall
also assist the other in conducting its due diligence review.
19. Public Announcement. DIGICORP and RCFINC mutually agree that neither
Party shall issue any press release or make any public announcement of the Share
Purchase or any other matter which is the subject of this LOI or any subsequent
definitive Agreement without the prior consent of the other Party, except where
a public announcement is required by law as reasonably determined by such Party
or is in connection with such Party's enforcement of its rights or remedies
hereunder or thereunder for any breach by the other Party. Notwithstanding the
foregoing, RCFINC acknowledges that upon signing this LOI, DIGICORP is required
to and will file a Form 8-K with the SEC describing the material terms of the
LOI and RCFINC hereby consents to such filing.
20. Consents. DIGICORP and RCFINC will cooperate with one another and
proceed, as promptly as is reasonably practicable, to seek to obtain all
necessary consents and approvals from lenders, shareholders, landlords and other
third parties and to endeavor to comply with all other legal or contractual
requirements for or preconditions to the execution and consummation of the Share
Purchase and the Agreement.
21. Best Efforts. DIGICORP and RCFINC will negotiate in good faith and use
their best efforts to arrive at a mutually acceptable definitive agreements for
approval, execution and delivery on the earliest reasonably practicable date.
DIGICORP and RCFINC will thereupon use their best efforts to effect the Closing
and to proceed with the transactions contemplated by this LOI as promptly as is
reasonably practicable.
22. Confidentiality. DIGICORP and RCFINC agree that (except as may be
required by law) it will not disclose or use any Confidential Information (as
hereinafter defined) with respect to the other, furnished, or to be furnished in
connection herewith at any time or in any manner and will not use such
information other than in connection with its evaluation of the Share Purchase.
For the purposes of this paragraph "Confidential Information" means any
information identified as such in writing or, given the nature of the
information or the circumstances surrounding its disclosure, reasonably should
be considered as confidential or proprietary. If the Share Purchase is not
consummated, the receiving Party will promptly return all documents to the Party
that provided such documents. The provisions of this paragraph shall survive the
termination of this LOI.
[Remainder of Page Intentionally left Blank]
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September 30, 2005
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If the foregoing correctly sets forth the substance of the understanding
of the Parties, please execute this LOI in duplicate, and return the other
original copy to DIGICORP at the address listed above.
Also, please fax a signed copy to Xxxx X. Xxxx at (000) 000-0000 and Xxxxx
X. Xxxx at (000) 000-0000.
Yours truly,
DIGICORP
/s/ Xxxxxx Xxxx
--------------------------------
Xxxxxx "Xxxx" Xxxx, III
Chief Executive Officer
Accepted this 30th day of September 2005.
REBEL CREW FILMS, INC.
/s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
President
REBEL CREW FILMS, INC. STOCKHOLDERS:
/s/ Xxx Xxxxxx
--------------------------------
Name: Rebel Holdings, LLC
Number of Shares: 90,000
/s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Number of Shares: 10,000
ANNEX A
"Purchase Price Allocation"
Number of Shares of
Name of RCFINC Stockholder: DIGICORP Common Stock:
-------------------------- ---------------------
Rebel Holdings, LLC 18,000,000
Xxxxx Xxxxxx 2,000,000
ANNEX B
"DIGICORP Capital Structure"
Fully
Outstanding % Diluted %
Reported on 3/31/05 10Q 9,742,857 28.50% 23.35%
Xxxxxx Capital 2,941,176 8.60% 7.05%
Xxxxxxxxx Xxxx Xxxxxxxx Xxxxxxx 500,000 1.46% 1.20%
ICodeMedia 1,000,000 2.93% 2.40%
Rebel Crew Films 20,000,000 58.51% 47.94%
Shares Outstanding (excluding options/warrants) 34,184,033 100.00% 81.93%
Revised Vested
Option Vested @ Schedule @ Cash to Company
Grants 12/31/2005 12/31/2005 if exercised
Board
Xxxx
Xxxxxxxx 350,000 87,500 350,000 0.84% $ 87,500.00
Xxxxxx 300,000 75,000 75,000 0.18% $ 18,750.00
Xxxxxxxx 250,000 62,500 62,500 0.15% $ 15,625.00
Xxxxxxxxxxx 250,000 62,500 75,000 0.18% $ 18,750.00
Xxxxx 250,000 62,500 200,000 0.48% $ 50,000.00
Officers/Consultants
Xxxx 2,000,000 500,000 475,000 1.14% $ 118,750.00
Queen 750,000 187,500 237,500 0.57% $ 59,375.00
Xxxxx 250,000 62,500 250,000 0.60% $ 62,500.00
Xxxxx 250,000 62,500 200,000 0.48% $ 50,000.00
Xxxxxxxxxxx 150,000 37,500 37,500 0.09% $ 9,375.00
Olsky 100,000 25,000 50,000 0.12% $ 12,500.00
Soichet 100,000 25,000 50,000 0.12% $ 12,500.00
Thillairajah (warrants) 100,000 25,000 50,000 0.12% $ 12,500.00
Xxxxxxxxxx 100,000 25,000 25,000 0.06% $ 6,250.00
Rebel Holdings, LLC (Convertible Note) 500,000 1.20%
Xxxxxx Capital (warrants) 500,000 500,000 1.20% $ 5,000.00
Xxx Xxxxxx Option Grant 4,400,000 10.55%
Total Options/Warrants 7,537,500 18.07%
Fully Diluted Outstanding 5,700,000 1,300,000 41,721,533 100.00%
ANNEX C
"Voting Agreement Parties"
(obtained on a best efforts basis)
Xxxxxx "Xxxx" Xxxx, III
Patient Safety Technologies, Inc.
Xxxxxx Capital Management, LLC
Xxxx Xxxxx
Sichenzia Xxxx Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx, Xx.
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxxxx
