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MERGER AGREEMENT
BY AND AMONG
RCM INTERESTS, INC.
RCM INTERESTS, INC. ACQUISITION CORP., AND
GRAPHCO TECHNOLOGIES, INC.
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MERGER AGREEMENT
Agreement dated as of the 21st day of November 2002 by and among, RCM
Interests, Inc., a Delaware corporation, with an address of 0000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxxx, XX ("RCMN"), RCM Interests, Inc. Acquisition Corp., a Delaware
corporation, with an address of 0000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxx, XX
("Acquisition Corp."), and Graphco Technologies, Inc. a New Jersey corporation,
with an address at 00 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxx 00000 ("Graphco").
WITNESSETH
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WHEREAS, RCMN is a reporting company registered with the Securities and
Exchange Commission, whose stock is eligible to be quoted on the OTC Bulletin
Board;
WHEREAS, Acquisition Corp. is, or will be formed as, a wholly owned
subsidiary of RCMN;
WHEREAS, the Board of Directors of RCMN, Acquisition Corp. and Graphco
deem it advisable and in the best interests of each corporation and their
respective stockholders that Acquisition Corp. and Graphco combine in order to
advance the long-term business interests of RCMN, Acquisition Corp. and Graphco;
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WHEREAS, the Board of Directors of RCMN shall cause Acquisition Corp.
to carry on Graphco's business as it was carried on prior to the date of this
Agreement and use its best efforts to preserve Graphco's organization, retain
its employees and maintain its business relationships;
WHEREAS, the stockholders of Graphco (hereinafter sometimes referred
to, individually, as a "Stockholder" and collectively as the "Stockholders"),
who are listed on Exhibit "A" which is annexed hereto and made a part hereof
(the "Stockholders Schedule") are each the owner of the number of shares of
Common and Preferred Stock, no par value, which is set forth on Exhibit "A" (the
total of such shares of Graphco's Common and Preferred stock is hereinafter
referred to as the "Graphco Shares");
WHEREAS, the Graphco Shares represent all of the issued and outstanding
shares of Graphco's Common and Preferred Stock on the date of this Agreement;
WHEREAS, for Federal income tax purposes, it is intended that the
transactions which are contemplated in this Agreement qualify as a tax-free
reorganization pursuant to the Internal Revenue Code of 1986, as amended;
WHEREAS, at the Effective Date (hereinafter defined in Paragraph "(A)"
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of Article "2" of this Agreement), Graphco shall be merged with and into
Acquisition Corp.;
WHEREAS, the Board of Directors of Graphco, RCMN and Acquisition Corp.
intend to and shall submit this Agreement and the Merger (hereinafter defined in
Paragraph "(A)" of Article "2" of this Agreement) to the stockholders of Graphco
and Acquisition Corp. for approval if, and as may be, required by the applicable
provisions of the New Jersey Business Corporation Act and the Delaware General
Corporation Law; and
WHEREAS, the Boards of Directors of Graphco, RCMN and Acquisition Corp.
have approved this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants of the parties
hereinafter set forth, and for good and valuable consideration, receipt of which
is hereby acknowledged,
IT IS AGREED:
1. Recitals. The parties hereby adopt as part of this Agreement each of
the recitals which is contained in the WHEREAS clauses, and agree that such
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recitals shall be binding upon the parties hereto by way of contract and not
merely by way of recital or inducement; and such clauses are hereby confirmed
and ratified as being true and accurate by each party as to itself.
2. Merger.
A. Subject to, and consistent with, the provisions of this Agreement,
and in accordance with the relevant provisions of the Delaware General
Corporation Law (the "DGCL") and the New Jersey Business Corporation Act
("NJBCA"), Graphco will merge with and into Acquisition Corp. (the "Merger"),
the separate existence of Graphco shall cease, and Acquisition Corp. shall be
the surviving corporation in the Merger (the "Surviving Corporation") effective
on the Effective Date (hereinafter defined in this Article "2" of this
Agreement). The articles of merger with respect to the Merger (the "Certificate
of Merger") shall be in the form of Exhibit "B" (Article "2(A)") which is
annexed hereto and made a part hereof, and shall be duly executed and
acknowledged and delivered to the Secretary of State of the State of Delaware
and the Secretary of the State of State of New Jersey for filing, as provided in
the DGCL and NJBCA, immediately after the Closing Date. The Merger shall become
effective upon the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware and the Secretary of the State of State of New
Jersey (the "Effective Date").
Without limiting the foregoing, and subject thereto, on the Closing
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Date, all the property, rights, privileges, powers and franchises of Graphco and
Acquisition Corp. shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Graphco and Acquisition Corp. shall become the debts,
liabilities and duties of the Surviving Corporation. The Merger will be effected
in a single transaction.
B. On the Closing Date, the certificate of incorporation of Acquisition
Corp., as in effect immediately prior to the Closing Date, shall be the
certificate of incorporation of the Surviving Corporation and thereafter shall
continue to be its certificate of incorporation until amended as provided
therein and pursuant to DGCL. The bylaws of Acquisition Corp., as in effect
immediately prior to the Closing Date, shall be the bylaws of the Surviving
Corporation and thereafter shall continue to be its bylaws until amended as
provided therein and pursuant to the DGCL.
C. (i) Effective upon the Closing Date, the Board of Directors of RCMN
shall appoint the directors designated by Graphco to serve as the directors of
RCMN and the Surviving Corporation, with each to hold office in accordance with
the certificate of incorporation and bylaws of RCMN and the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified, and thereafter the directors of RCMN as serving
immediately prior to the Closing shall resign.
(ii) Effective upon the Closing Date, the Board of Directors of RCMN
shall appoint the officers designated by Graphco to serve as the officers of
RCMN and the Surviving Corporation, each to hold office in accordance with the
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certificate of incorporation and bylaws of the RCMN and the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified, and thereafter the officers of RCMN shall resign.
3. Closing Date. The Closing of this transaction (the "Closing") shall
take place by the delivery of all required executed documents by the parties
hereto at the offices of Xxxxx & Fraade, P.C., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 11:00 A.M. on November __, 2002, or on such other date as is
mutually agreed to by the parties (the "Closing Date").
4. Exchange of Securities.
A. On the Closing Date, subject to and pursuant to the terms and
conditions of this Agreement, all of the outstanding shares of Graphco Common
Stock issued and outstanding as of the Closing Date, shall by virtue of the
Merger and without any action on the part of the holders thereof, be
automatically converted into seventeen million three hundred and fifty one
thousand and five hundred and fifty three (17,351,553) shares of Common Stock of
RCMN which shall be issued to Graphco. On the Closing Date, the total issued and
outstanding shares of Common Stock of RCMN shall be nine hundred thirteen
thousand and two hundred and forty (913,240) shares.
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B. On the Closing Date, subject and pursuant to the terms and
conditions of this Agreement, all of the shares of Graphco Series "A" and "B"
Preferred Stock issued and outstanding as of the Closing Date, shall by virtue
of the Merger and without any action on the part of the holders thereof, be
automatically converted into RCMN Series "A" and "B" Preferred Stock; the
holders of Graphco Series "A" or "B" Preferred Stock shall receive the same
number of RCMN Series "A" or "B" Preferred Stock with the same powers,
preferences, rights, qualifications, limitations and restrictions as the holders
of Graphco Preferred Stock had on the Closing Date. If the RCMN Series "A" and
"B" Preferred Stock does not have the same powers, preferences, rights,
qualifications, limitations and restrictions as the Graphco Series "A" or "B"
Preferred Stock, RCMN shall amend its Articles of Incorporation, subsequent to
the Closing, to give the holders of the RCMN Series "A" and "B" Preferred Stock
the same powers, preferences, rights, qualifications, limitations and
restrictions as the holders of Graphco Preferred Stock had on the Closing Date.
C. On the Closing Date, subject and pursuant to the terms and
conditions of this Agreement, all of the outstanding options, warrants, and
other debts or equity securities of Graphco which are convertible into shares of
Common Stock of Graphco shall automatically by virtue of the Merger and without
any action on the part of the holders thereof, be automatically converted into
outstanding options, warrants or other debts or equity securities of RCMN with
the same powers, preferences, rights, qualifications, limitations and
restrictions as the holders of such outstanding options, warrants, and other
debts or equity securities of Graphco on the Closing Date. If the outstanding
options, warrants or other debts or equity securities of RCMN do not have the
same powers, preferences, rights, qualifications, limitations and restrictions
as the outstanding options, warrants, and other debts or equity securities of
Graphco, RCMN shall amend its Articles of Incorporation, prior to the Closing
Date, to give the holders of the outstanding options, warrants or other debts or
equity securities of RCMN the same powers, preferences, rights, qualifications,
limitations and restrictions as the holders of the outstanding options, warrants
or other debts or equity securities of Graphco had on the Closing Date.
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5. Graphco's Representations, Warranties and Covenants.
Graphco represents, warrants and covenants to RCMN and Acquisition
Corp. as follows:
A. Corporate Status.
(i) Graphco is a corporation duly organized, validly existing and in
good standing pursuant to the laws of the State of New Jersey, with all
requisite power and authority to carry on its business as presently conducted in
all jurisdictions where presently conducted, to enter into this Agreement and to
consummate the transactions set forth in this Agreement; and
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(ii) Copies of (a) the Articles of Incorporation of Graphco, and all
amendments thereto to date, certified by the Secretary of State of the State of
New Jersey, (b) the By-Laws of Graphco, as amended to date, certified by the
Secretary of Graphco, and (c) a good standing certificate for Graphco issued by
the Secretary of New Jersey as of a date not more than thirty (30) days prior to
the date of this Agreement, are annexed hereto and made a part hereof as the
following Exhibits: "C" (Article "5 (A)(ii)"), "D" (Article "5 (A)(ii)") and "E"
(Article "5 (A)(ii)") respectively, and are complete and correct as of the date
of this Agreement.
B. Capitalization. Graphco's authorized capital stock consists of
50,000,000 shares of Graphco Common Stock, no par value, of which 17,351,553
shares are issued and outstanding, or reserved for issuance, all of which are,
or will be prior to the Closing Date validly issued, fully paid and
nonassessable and 5,000,000 shares of Preferred Stock, no par value, in one or
more series as determined by the Board of Directors. As of the date hereof
225,029 shares of Graphco Series A Preferred Stock are issued and outstanding.
Each share of Series A Preferred Stock is convertible into three shares of
Graphco Common Stock. The Series A Preferred Stock has limited voting rights.
The holders of the Series A Preferred Stock are entitled to an annual dividend
of seventy-five ($.75) cents per share. Graphco is presently conducting a
Private Offering of Graphco Series B Preferred Stock. Holders of the Series B
Preferred Stock shall have the same rights and privileges as holders of the
Series A Preferred Stock, with the exception of conversion and dividend rights.
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Each share of Series B Preferred Stock shall be convertible into one share of
Graphco Common Stock. The holders of the Series B Preferred Stock are not
entitled to any dividends. As of the date hereof there are 5,289,032 warrants
and 2,230,500 options issued and outstanding to purchase shares of Common Stock
of Graphco, which does not include certain conversion rights held by Xxxxx &
Fraade, P.C. pursuant to an Agreement between Graphco and Xxxxx & Fraade, P.C.
dated as of September 20, 2002. Except as set forth on Exhibit "F" (Article
"5(B)"), there are no subscriptions, options, warrants, rights or other
agreements outstanding to acquire shares of stock of Graphco or any other equity
security or security convertible into an equity security. There are no
agreements or commitments to increase, decrease or otherwise alter the
authorized capital stock of Graphco. Except as set forth on Exhibit "F" (Article
"5(B)"), Graphco has not granted any registration rights with respect to any
series of Graphco stock outstanding.
C. Authority of Graphco. Graphco has the full corporate power and
authority to execute, deliver, and perform this Agreement and has taken all
corporate action required by law and its organizational documents to authorize
the execution and delivery of this Agreement and the consummation of the
transactions set forth in this Agreement. This Agreement and the consummation by
Graphco of the transactions set forth in this Agreement have been duly and
validly authorized, executed, and delivered by Graphco, and this Agreement are
valid and binding upon Graphco and enforceable against Graphco in accordance
with their terms (except as the enforceability thereof may be limited by
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bankruptcy, bank moratorium or similar laws affecting creditors' rights
generally and laws restricting the availability of equitable remedies and may be
subject to general principles of equity whether or not such enforceability is
considered in a proceeding at law or in equity). A certified resolution of the
Board of Directors of Graphco is annexed hereto and made a part hereof as
Exhibit "G" (Article "5(C)").
D. Ownership. The Stockholders are the record, beneficial and equitable
owners of the Graphco Shares, free and clear of all liens, claims or
encumbrances, except as set forth on Exhibit "H", which is attached hereto and
made a part hereof. To Graphco's knowledge each Stockholder has full right and
authority to convert the Graphco Shares for shares of the Capital Stock of RCMN.
E. Compliance with the Law and Other Instruments. Except as otherwise
provided in this Agreement and in the Exhibits annexed hereto, the business and
operations of Graphco have been and are being conducted in all material respects
in accordance with all applicable laws, rules and regulations of all authorities
which affect Graphco or its properties, assets, businesses or prospects.
F. Absence of Conflicts. The execution and delivery of this Agreement,
the transfer of the Graphco Shares, and the consummation by Graphco of the
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transactions set forth in this Agreement: (i) do not and shall not conflict with
or result in a breach of any provision of Graphco's articles of incorporation or
bylaws, (ii) do not and shall not result in any breach of, or constitute a
default or cause an acceleration under any arrangement, agreement or other
instrument to which Graphco is a party to or by which any of its assets are
bound, (iii) do not and shall not cause Graphco to violate or contravene any
provision of law or any governmental rule or regulation, and (iv) will not and
shall not result in the imposition of any lien, or encumbrance upon, any
property of Graphco. Graphco has performed in all material respects all of its
obligations which are, as of the date of this Agreement, required to be
performed, pursuant to the terms of any such agreement, contract or commitment.
G. Environmental Compliance. To Graphco's knowledge, it is in
compliance with all applicable environmental laws (the "Environmental Laws").
Graphco is presently authorized, if required, to generate, transport through
third parties, store, use, treat, dispose of, release, and conduct other
handling of, as required, those hazardous substances used in Graphco's business,
which consist of, hazardous waste, hazardous material, hazardous constituents,
toxic substances, pollutants, contaminants, asbestos, radon, polychlorinated
biphenyls, petroleum product or waste (including crude oil or any fraction
thereof), natural gas, liquefied gas, synthetic gas and other material defined,
regulated, controlled or subject to any remediation requirement under any
Environmental Law.
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H. OSHA Compliance. To Graphco's knowledge, it is in compliance with
all applicable federal, state and local laws, rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder and
other governmental requirements relating to occupational health and safety,
including but not limited to the Occupational Safety and Health Act of 1970, as
amended, and the rules and regulations promulgated thereunder.
I. Financial Statements. Annexed hereto and made a part hereof as
Exhibit "I" (Article "5(I)") are true copies of Graphco's audited statements of
profit and loss for the fiscal years ended December, 1999 and 2000, and balance
sheets as of December 31, 1999 and 2000 (collectively, the "Audited Financial
Statements"); an unaudited statement of profit and loss for the fiscal year
ended December 31, 2001 and the nine month period ending September 30, 2002 (the
"Financial Statement Date") and the balance sheets as of December 31, 2001 and
September 30, 2002 (the "Unaudited Financial Statements" and together with the
Audited Financial Statements, the "Financial Statements"), which have been
prepared using generally accepted accounting principles ("GAAP") applied on a
consistent basis. The Audited Financial Statements fairly present the financial
condition and results of operations for Graphco. Except as indicated in the
Financial Statements, or in any Exhibit to this Agreement, Graphco does not have
any outstanding indebtedness or other liabilities or obligations of any nature
(whether absolute, accrued, contingent or otherwise, and whether due or to
become due). Except as listed on Exhibit "I" (Article "6(I)"), which is annexed
hereto and made a part hereof to this Agreement, since the Financial Statement
Date, there has not been any material adverse change in Graphco's financial
condition, assets, liabilities or business, or any damage, destruction or loss,
whether or not covered by insurance, materially affecting Graphco's properties,
assets or business, and except as listed on Exhibit "I" (Article "6(I)"),
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Graphco has not incurred any indebtedness, liability or other obligation of any
nature whatsoever except in the ordinary course of business and Graphco has not
made any change in its accounting methods or practices.
J. Taxes. Graphco has timely filed and has paid or has made adequate
provision for the payment of all required federal, state, city and local tax
returns for income, franchise, social security, withholding, sales, excise,
unemployment insurance, real estate and other taxes.
K. Contracts. Annexed hereto and made a part hereof as Exhibit "J"
(Article "5(K)") is a true and complete schedule of all of Graphco's material
contracts including, but not limited to, license agreements. All of the
contracts so listed have been entered into in the ordinary course of business
and neither Graphco nor any other party to any such contract is in default under
any such contract except as denoted in Exhibit "J".
L. Litigation. Except as set forth on Exhibit "K" (Article "5(L)")
which is annexed hereto and made a part hereof, there are no material legal,
administrative, arbitration, or other proceeding or governmental investigations
adversely affecting Graphco or its properties, assets or businesses, or with
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respect to any matter arising out of the conduct of the Graphco's business
pending or to its knowledge threatened, by or against, any officer or director
of Graphco in connection with its affairs, whether or not covered by insurance.
Except as set forth on Exhibit "K" (Article "5(L)"), neither Graphco nor its
officers or directors are subject to any order, writ, injunction, or decree of
any Court, department, agency, or instrumentality, affecting Graphco. Except as
set forth on Exhibit "K" (Article "5(L)"), Graphco is not presently engaged in
any legal action.
M. Patents, Trademarks and Trade Names. Except as set forth on Exhibit
"L" (Article "5(M)"), Graphco is the sole and exclusive owner of all right,
title and interest in the Intellectual Property and all proprietary rights
therein, free and clear of any security interest, license or restriction, and
except as set forth on Exhibit "L" (Article "5(M)"), Graphco has not granted to
any other person, firm, or corporation, any right, license, shop-right, or
privilege with respect to the Intellectual Property. Graphco knows of no
statutory bars or prior act which would adversely affect the Intellectual
Property.
N. Absence of Changes. Except as indicated on Exhibit "M" (Article
"5(N)"), subsequent to the Financial Statement Date and through the date of this
Agreement, there has not been any material adverse change in, or any event or
condition (financial or otherwise) affecting the business, properties, assets,
liabilities, historical operations or prospects of Graphco, and except as in the
ordinary course of business and with respect to any items reserved by Graphco
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and reflected in its Financial Statements, there are no liabilities or
obligations of any nature, whether absolute, contingent or otherwise, whether
due or to become due (including, without limitation, liabilities for taxes with
respect to or measured by income of Graphco for any period prior to, and/or
subsequent to, the Financial Statement Date or arising out of any transaction of
Graphco prior to, and/or subsequent to, such date). Subsequent to the Financial
Statement Date, there has not been any declaration, or setting aside, or payment
of any dividend or other distribution with respect to Graphco's securities, or
any direct or indirect redemption, purchase, or other acquisition of any of
Graphco's securities. To Graphco's knowledge, there has not been an assertion
against Graphco of any liability of any nature or in any amount not fully
reflected or reserved against in the Financial Statements. O. No Approvals. No
approval of any governmental authority is required in connection with
consummation of the transactions set forth in this Agreement.
P. Broker. Graphco has not had any dealing with respect to this
transaction with any business broker, firm or salesman, or any person or
corporation, investment banker or financial advisor who is or shall be entitled
to any broker's or finder's fee or any other commission or similar fee with
respect to the transactions set forth in this Agreement, except for a Finder's
Fee Agreement by and between Xxxxxxxx Xxxxxxxxxx and Graphco dated November 19,
2002. Graphco represents that it has not dealt with any person, firm or
corporation and Graphco agrees to indemnify and hold harmless RCMN from and
against any and all claims for brokerage commissions by any person, firm or
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corporation on the basis of any act or statement alleged to have been made by
Graphco or its affiliates or agents.
Q. Complete Disclosure. No representation or warranty of Graphco which
is contained in this Agreement, or in a writing furnished or to be furnished
pursuant to this Agreement, to Graphco's knowledge contains or shall contain any
untrue statement of a material fact, omits or shall omit to state any fact which
is required to make the statements which are contained herein or therein, in
light of the circumstances under which they were made, not materially
misleading. There is no fact relating to the business, affairs, operations,
conditions (financial or otherwise) or prospects of Graphco which would
materially adversely affect same which has not been disclosed to RCMN in this
Agreement.
R. No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of covenant or warranty that RCMN knew or had reason
to know that any covenant, representation or warranty in this Agreement
furnished or to be furnished to RCMN contained untrue statements.
S. Share Distribution. Graphco covenants to make all distributions of
the Common Stock of RCMN issued under this Agreement in accordance with all
applicable Federal and state securities laws.
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6. RCMN Representations, Warranties and Covenants. RCMN represents,
warrants and covenants to Graphco as follows:
A. Corporate Status.
(i) RCMN is a corporation duly organized, validly existing and in good
standing pursuant to the laws of the State of Delaware, with all requisite power
and authority to carry on its business as presently conducted in all
jurisdictions where presently conducted, to enter into this Agreement and to
consummate the transactions set forth in this Agreement.
(ii) On or before the Closing Date, Acquisition Corp shall be duly
organized, validly existing and in good standing pursuant to the laws of the
State of Delaware, with all requisite power and authority to carry on its
business as then conducted in all jurisdictions where then conducted, to enter
into this Agreement and to consummate the transactions set forth in this
Agreement.
(iii) Copies of (a) the Articles of Incorporation of RCMN, and all
amendments thereto to date, certified by the Secretary of State of the State of
Delaware, (b) the By-Laws of RCMN, as amended to date, certified by the
Secretary of RCMN and (c) a good standing certificate for RCMN issued by the
Secretary of State of the State of Delaware as of a date not more than thirty
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(30) days prior to the date of this Agreement, are annexed hereto and made a
part hereof as the following: Exhibits "N" (Article "6 (A)(iii)"), "O" (Article
"6 (A)(ii)") and "P", (Article "7 (D)(iii)") respectively, and are complete and
correct as of the date of this Agreement.
B. Capitalization. RCMN authorized capital stock consists of 40,000,000
shares of RCMN Common Stock, $.001 par value, of which 10,500,509 shares are
issued and outstanding, or reserved for issuance, all of which are, or will be
prior to the Closing Date, validly issued, fully paid and nonassessable. Except
as set forth on Exhibit "Q" (Article "6(B)"), there are no subscriptions,
options, warrants, rights or other agreements outstanding to acquire shares of
stock of RCMN or any other equity security or security convertible into an
equity security. There are no agreements or commitments to increase, decrease or
otherwise alter the authorized capital stock of RCMN. Except as set forth on
Exhibit "Q" (Article "6(B)"), RCMN has not granted any registration rights with
respect to any series of RCMN stock outstanding. Upon Closing, the
capitalization of RCMN, on a fully diluted basis, shall be as reflected on
Exhibit "Q" (Article "6(B)") which is attached hereto and made a part hereof.
Upon issuance in accordance with the terms hereof, the RCMN Common Stock will be
validly issued, fully paid and non-assessable.
C. Authority of RCMN. RCMN has the full corporate power and authority
to execute, deliver, and perform this Agreement and has taken all corporate
action required by law and its organizational documents to authorize the
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execution and delivery of this Agreement and the consummation of the
transactions set forth in this Agreement. This Agreement and the consummation by
RCMN of the transactions set forth in this Agreement have been duly and validly
authorized, executed, and delivered by RCMN, and this Agreement is valid and
binding upon RCMN and enforceable against RCMN in accordance with its terms
(except as the enforceability thereof may be limited by bankruptcy, bank
moratorium or similar laws affecting creditors' rights generally and laws
restricting the availability of equitable remedies and may be subject to general
principles of equity whether or not such enforceability is considered in a
proceeding at law or in equity). A certified resolution of the Board of
Directors of RCMN is annexed hereto and made a part hereof as Exhibit "R"
(Article "6(C)"). D. Ownership. Annexed hereto and made a part hereof as Exhibit
"S" (Article "6(D)"), is a schedule of "beneficial owners" of more than five
(5%) percent of the common stock of RCMN (the "5% Beneficial Stockholders"). E.
Compliance with the Law and Other Instruments. Except as otherwise provided in
this Agreement and in the Exhibits annexed hereto, the business and operations
of RCMN have been and are being conducted in all material respects in accordance
with all applicable laws, rules and regulations of all authorities which affect
RCMN or its properties, assets, businesses or prospects.
F. Absence of Conflicts. The execution and delivery of this Agreement
and the transfer of the RCMN shares, and the consummation by RCMN of the
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transactions set forth in this Agreement: (i) do not and shall not conflict with
or result in a breach of any provision of RCMN 's articles of incorporation or
bylaws, (ii) do not and shall not result in any breach of, or constitute a
default or cause an acceleration under any arrangement, agreement or other
instrument to which RCMN is a party to or by which any of its assets are bound,
(iii) do not and shall not cause RCMN to violate or contravene any provision of
law or any governmental rule or regulation, and (iv) will not and shall not
result in the imposition of any lien, or encumbrance upon, any property of RCMN.
RCMN has performed in all material respects all of its obligations which are, as
of the date of this Agreement, required to be performed, pursuant to the terms
of any such agreement, contract or commitment.
G. Environmental Compliance. To RCMN's knowledge, it is in compliance
with all applicable environmental laws (the "Environmental Laws"). RCMN is
presently authorized, if required, to generate, transport through third parties,
store, use, treat, dispose of, release, and conduct other handling of, as
required, those hazardous substances used in RCMN business, which consist of,
hazardous waste, hazardous material, hazardous constituents, toxic substances,
pollutants, contaminants, asbestos, radon, polychlorinated biphenyls, petroleum
product or waste (including crude oil or any fraction thereof), natural gas,
liquefied gas, synthetic gas and other material defined, regulated, controlled
or subject to any remediation requirement under any Environmental Law.
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H. OSHA Compliance. To RCMN's knowledge, it is in compliance with all
applicable federal, state and local laws, rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder and
other governmental requirements relating to occupational health and safety,
including but not limited to the Occupational Safety and Health Act of 1970, as
amended, and the rules and regulations promulgated thereunder.
I. Taxes. Since July 2000, the date of confirmation of the Amended Plan
of Reorganization of Supershops, Inc., a Kansas corporation and predecessor of
RCMN, RCMN has timely filed all required federal, state, city and local tax
returns for income, franchise, social security, withholding, sales, excise,
unemployment insurance, real estate and other taxes, and has paid or made
adequate provision for the payment of all such taxes shown to be due on said
returns.
J. Litigation. Except as set forth on Exhibit "T" (Article "6(I)")
which is annexed hereto and made a part hereof, there are no legal,
administrative, arbitration, or other proceeding or governmental investigations
adversely affecting RCMN or its properties, assets or businesses, or with
respect to any matter arising out of the conduct of RCMN business pending or to
its knowledge threatened, by or against, any officer or director of RCMN in
connection with its affairs, whether or not covered by insurance. Except as set
forth on said Exhibit "T" (Article "6(I)"), neither RCMN nor its officers or
directors are subject to any order, writ, injunction, or decree of any Court,
department, agency, or instrumentality, affecting RCMN. Except as set forth on
Exhibit "T" (Article "6(I)"), RCMN is not presently engaged in any legal action.
22
K. Contracts. Annexed hereto and made a part hereof as Exhibit "U"
(Article "6(K)") is a true and complete schedule of all of RCMN's material
contracts including, but not limited to, license agreements. All of the
contracts so listed have been entered into in the ordinary course of business
and neither RCMN nor any other party to any such contract is in default under
any such contract.
L. Reporting Company Status. RCMN is a reporting company registered
with the SEC and as of the Closing Date its stock is eligible to be quoted on
the OTC Bulletin Board. RCMN has not received any notice with respect to non
compliance with any rules or regulations that would affect the eligibility of
the Common Stock to be quoted on the OTC Bulletin Board.
M. SEC Filings. Except as set forth on Exhibit "U" (Article "6(K)"),
RCMN has timely filed all forms, reports and documents required to be filed by
RCMN with the SEC since February 27, 2002 (collectively, the "SEC Reports").
Except as set forth on Exhibit "U" (Article "7(K)"), the SEC Reports (i) at the
time filed, complied in all material respects with the applicable requirements
of the Securities Act of 1933 as amended, (the "33 Act") and the Securities
Exchange Act of 1934, as amended, as the case may be, and (ii) did not, to RCMN
knowledge, at the time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing) contain
any untrue statement of a material fact or omit to state a fact required to be
23
stated in such SEC Reports or necessary in order to make the statements in such
SEC Reports, in the light of the circumstances under which they were made, not
materially misleading. None of RCMN Subsidiaries are required to file any forms,
reports or other documents with the SEC.
N. Absence of Changes. Except as indicated on Exhibit "V" (Article
"6(L)"), subsequent to RCMN last quarterly report on Form 10QSB for the period
ended September 30, 2002 (the "Form 10QSB") and through the date of this
Agreement, there has not been any material adverse change in, or any event or
condition (financial or otherwise) affecting the business, properties, assets,
liabilities, historical operations or prospects of RCMN, there are no
liabilities or obligations of any nature, whether absolute, contingent or
otherwise, whether due or to become due (including, without limitation,
liabilities for taxes with respect to or measured by income of RCMN for any
period prior to, and/or subsequent to, the Form 10QSB or arising out of any
transaction of RCMN prior to, and/or subsequent to, such date). Subsequent to
the Form 10QSB, there has not been any declaration, or setting aside, or payment
of any dividend or other distribution with respect to RCMN securities, or any
direct or indirect redemption, purchase, or other acquisition of any of RCMN
securities. To RCMNs' knowledge, there has not been an assertion against RCMN of
any liability of any nature or in any amount not fully reflected or reserved
against in the Form 10QSB.
O. No Approvals. No approval of any governmental authority is required
in connection with the consummation of the transactions set forth in this
Agreement.
24
P. Broker. RCMN has not had any dealing with respect to this
transaction with any business broker, firm or salesman, or any person or
corporation, investment banker or financial advisor who is or shall be entitled
to any broker's or finder's fee or any other commission or similar fee with
respect to the transactions set forth in this Agreement. RCMN represents that it
has not dealt with any person, firm or corporation and agrees to indemnify and
hold harmless Graphco from and against any and all claims for brokerage
commissions by any person, firm or corporation on the basis of any act or
statement alleged to have been made by RCMN or its affiliates or agents.
Q. Complete Disclosure. No representation or warranty of RCMN which is
contained in this Agreement, or in a writing furnished or to be furnished
pursuant to this Agreement, to RCMNs knowledge contains or shall contain any
untrue statement of a material fact, omits or shall omit to state any fact which
is required to make the statements which are contained herein or therein, in
light of the circumstances under which they were made, not materially
misleading. There is no fact relating to the business, affairs, operations,
conditions (financial or otherwise) or prospects of RCMN which would materially
adversely affect same which has not been disclosed to Graphco in this Agreement.
R. No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of covenant or warranty that Graphco knew or had
25
reason to know that any covenant, representation or warranty in this Agreement
furnished or to be furnished to Graphco contained untrue statements.
7. Acquisition Corp. Representations, Warranties and Covenants. On or
before the Closing Date, Acquisition Corp. represents, warrants and covenants to
Graphco as follows:
A. Corporate Status. (i) Acquisition Corp is duly organized, validly
existing and in good standing pursuant to the laws of the State of Delaware,
with all requisite power and authority to carry on its business as then
conducted in all jurisdictions where then conducted, to enter into this
Agreement and to consummate the transactions set forth in this Agreement.
(ii) On or before the Closing Date, Acquisition Corp shall be duly
organized, validly existing and in good standing pursuant to the laws of the
State of Delaware, with all requisite power and authority to carry on its
business as then conducted in all jurisdictions where then conducted, to enter
into this Agreement and to consummate the transactions set forth in this
Agreement.
(iii) Copies of (a) the Articles of Incorporation of Acquisition Corp,
and all amendments thereto to date, certified by the Secretary of State of
Acquisition Corp., (b) the By-Laws of Acquisition Corp, as amended to date,
certified by the Secretary of State of Delaware and (c) a good standing
certificate for Acquisition Corp issued by the Secretary of State of the State
of Delaware as of a date not more than thirty (30) days prior to the date of
26
this Agreement, are annexed hereto and made a part hereof as the following:
Exhibits "N" (Article "6 (A)(iii)"), "O" (Article "6 (A)(ii)") and "P", (Article
"7 (D)(iii)") respectively, and are complete and correct as of the date of this
Agreement.
B. Capitalization. Acquisition Corp.'s authorized capital stock shall
consist of one thousand (1,000) shares of Acquisition Corp. Common Stock, $.001
par value, of which five hundred (500) shares are issued and outstanding or
reserved for issuance, all of which are, or will be prior to the Closing Date,
validly issued, fully paid and non-assessable. There are no agreements or
commitments to increase, decrease or otherwise alter the authorized capital
stock of Acquisition Corp.
C. Authority of Acquisition Corp. Acquisition Corp. has the full
corporate power and authority to execute, deliver, and perform this Agreement
and has taken all corporate action required by law and its organizational
documents to authorize the execution and delivery of this Agreement and the
consummation of the transactions set forth in this Agreement. This Agreement and
the consummation by Acquisition Corp. of the transactions set forth in this
Agreement have been duly and validly authorized, executed, and delivered by
Acquisition Corp., and this Agreement is valid and binding upon Acquisition Corp
and enforceable against Acquisition Corp. in accordance with its terms (except
27
as the enforceability thereof may be limited by bankruptcy, bank moratorium or
similar laws affecting creditors' rights generally and laws restricting the
availability of equitable remedies and may be subject to general principles of
equity whether or not such enforceability is considered in a proceeding at law
or in equity). A certified resolution of the Board of Directors of Acquisition
Corp. is annexed hereto and made a part hereof as Exhibit "W" (Article "7(C)").
D. Compliance with the Law and Other Instruments. Except as otherwise
provided in this Agreement and in the Exhibits annexed hereto, the business and
operations of Acquisition Corp. have been and are being conducted in all
material respects in accordance with all applicable laws, rules and regulations
of all authorities which affect Acquisition Corp. or its properties, assets,
businesses or prospects.
E. Absence of Conflicts. The execution and delivery of this Agreement
and the transfer of the Acquisition Corp shares, and the consummation by
Acquisition Corp. of the transactions set forth in this Agreement: (i) do not
and shall not conflict with or result in a breach of any provision of
Acquisition Corp 's articles of incorporation or bylaws, (ii) do not and shall
not result in any breach of, or constitute a default or cause an acceleration
under any arrangement, agreement or other instrument to which Acquisition Corp.
is a party to or by which any of its assets are bound, (iii) do not and shall
28
not cause Acquisition Corp. to violate or contravene any provision of law or any
governmental rule or regulation, and (iv) will not and shall not result in the
imposition of any lien, or encumbrance upon, any property of Acquisition Corp.
Acquisition Corp. has performed in all material respects all of its obligations
which are, as of the date of this Agreement, required to be performed, pursuant
to the terms of any such agreement, contract or commitment.
F. No Approvals. No approval of any governmental authority is required
in connection with consummation of the transactions set forth in this Agreement.
G. Broker. Acquisition Corp. has not had any dealing with respect to
this transaction with any business broker, firm or salesman, or any person or
corporation, investment banker or financial advisor who is or shall be entitled
to any broker's or finder's fee or any other commission or similar fee with
respect to the transactions set forth in this Agreement, Acquisition Corp.
represents that it has not dealt with any person, firm or corporation and
Acquisition Corp. agrees to indemnify and hold Graphco harmless from and against
any and all claims for brokerage commissions by any person, firm or corporation
on the basis of any act or statement alleged to have been made by Acquisition
Corp. or its affiliates or agents.
H. Complete Disclosure. No representation or warranty of Acquisition
Corp. which is contained in this Agreement, or in a writing furnished or to be
furnished pursuant to this Agreement to Acquisition Corp.'s knowledge contains
or shall contain any untrue statement of a material fact, omits or shall omit to
29
state any fact which is required to make the statements which are contained
herein or therein, in light of the circumstances under which they were made, not
materially misleading. There is no fact relating to the business, affairs,
operations, conditions (financial or otherwise) or prospects of Acquisition
Corp. which would materially adversely affect same which has not been disclosed
to Graphco in this Agreement.
I. No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of covenant or warranty that Graphco knew or had
reason to know that any covenant, representation or warranty in this Agreement
furnished or to be furnished to Graphco contained untrue statements. J. No
Liabilities. Acquisition Corp. represents that it has no debts, liabilities or
obligations except as may be required pursuant to this Agreement.
8. Mutual Covenants
A. Best Efforts. Each of the parties shall use its best efforts to
perform or satisfy each covenant or condition to be performed or satisfied by
each of them before and after the Closing Date.
B. Notice of Developments and Updates. Each of the parties shall give
30
prompt written notice to the other parties hereto to of any act, event or
occurrence which may cause or constitute a breach of any of its own
representations and warranties in Article "5," Article "6" and Article "7"of
this Agreement.
C. No Public Announcement. None of the Parties hereto shall, without
the prior written approval of the other Party, make any press release or other
public announcement or communicate with any customer, competitor or supplier of
the other party concerning the transactions contemplated by this Agreement,
except as and to the extent that such Party shall determine is required by law
(which determination shall be made by such Party based upon the advice of its
counsel), in which event the other Party shall be advised and the Parties shall
use their best efforts to cause a mutually agreeable release or announcement to
be issued.
9. Conduct of Graphco's Business Prior to the Closing Date. Between the
date of this Agreement and the Closing Date, Graphco shall carry on its business
in the ordinary course and in the same manner as heretofore conducted and shall
preserve intact the existing business organization of Graphco, and use its best
efforts to (i) keep available to Graphco the services of Graphco's present
officers and employees, (ii) maintain all of Graphco's properties in their
present condition (ordinary wear and tear excepted), (iii) maintain insurance
policies with respect to Graphco's business and properties consistent with
current practice, and (iv) maintain Graphco's rights and franchises. Without the
prior written consent of RCMN, Graphco shall not:
31
A. make any change in the Certificate of Incorporation or By-Laws of
Graphco;
B. authorize or issue any capital stock or any rights, warrants, options or
convertible securities to acquire such stock.
C. conduct the business of Graphco in any manner other than in the
ordinary course;
D. take any action or omit to do any act which would cause the
representations or warranties of Graphco contained herein to be untrue or
incorrect in any material respect;
E. hire any employee other than in the ordinary course of business;
F. except for liabilities incurred and obligations under contracts
entered into in the ordinary course of business, incur any obligation or
liability (absolute or contingent), including, but not limited to, any debt or
guarantee any such debt or issue or sell any debt securities or guarantee any
debt securities of others;
32
G. declare or make any payment or distribution to its Stockholders
(other than payment of compensation for services rendered, if applicable) or
purchase or redeem any shares of capital stock, except pursuant to the terms and
conditions of this Agreement;
H. mortgage, pledge or subject to lien, charge or any other
encumbrance, any asset, whether tangible or intangible, of Graphco, except for
those encumbrances which are set forth in Exhibit "X" (Article "10(H)");
I. sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets except in the ordinary course of
business unless any such successor assumes any and all outstanding liabilities;
J. commit any act or omit to do any act which would cause a material
breach of any agreement, contract or commitment which is listed in an Exhibit
annexed to this Agreement; or
K. commit any other act or omit to do any other act which would have a
material adverse effect upon the business, or financial condition of Graphco.
10. Conduct of RCMN Business Prior to the Closing Date. Between the
33
date of this Agreement and the Closing Date, RCMN shall carry on its business in
the ordinary course and in the same manner as heretofore conducted and shall
preserve intact the existing business organization of RCMN, and use its best
efforts to (i) keep available to RCMN the services of RCMN present officers and
employees, (ii) preserve RCMN relationships, if any, with customers, suppliers
and others having business dealings with RCMN, to the end that its goodwill and
ongoing business shall not be materially impaired on the Closing Date. Without
the prior written consent of Graphco, RCMN shall not:
A. make any change in the Certificate of Incorporation or By-Laws of
RCMN;
B. conduct the business of RCMN in any manner other than in the
ordinary course;
C. authorize or issue any capital stock or any rights, warrants,
options or convertible securities to acquire such stock.
D. pay any accrued and unpaid compensation, nor increase the
compensation payable to, or to become payable by RCMN to any officer, director
or employee or make any bonus, insurance, pension, or other benefit plan,
payment or arrangement to or with any officer, director or employee;
34
E. hire any employee other than in the ordinary course of business;
F. except for liabilities incurred and obligations under contracts
entered into in the ordinary course of business, incur any obligation or
liability (absolute or contingent), including, but not limited to, any debt or
guarantee any such debt or issue or sell any debt securities or guarantee any
debt securities of others;
G. declare or make any payment or distribution to its Stockholders
(other than payment of compensation for services rendered, if applicable) or
purchase or redeem any shares of capital stock, except pursuant to the terms and
conditions of this Agreement;
H. mortgage, pledge or subject to lien, charge or any other
encumbrance, any asset, whether tangible or intangible, of RCMN, except for
those encumbrances which are set forth in Exhibit "X" (Article "10(H)");
I. sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets except in the ordinary course
of business unless any such successor assumes any and all outstanding
liabilities;
35
J. take any action or omit to do any act which would cause the
representations or warranties of RCMN contained herein to be untrue or incorrect
in any material respect;
K. commit any act or omit to do any act which would cause a material
breach of any agreement, contract or commitment which is listed in an Exhibit
annexed to this Agreement; or
L. commit any other act or omit to do any other act which would have a
material adverse effect upon the business, financial condition or earnings of
RCMN.
11. Conditions of Closing.
A. Conditions to RCMN Obligation to Close. The obligation of RCMN to
close the transactions set forth in this Agreement shall be subject to the
following conditions:
(i) Representations and Warranties of Graphco to be True. To Graphco's
knowledge, the representations and warranties of Graphco set forth in this
Agreement shall be true in all material respects on the Closing Date with the
same effect as though made at such time, except to the extent waived or affected
by the transactions set forth in this Agreement; and Graphco shall have
delivered to RCMN a certificate of Graphco in the form annexed hereto and made a
36
part hereof as Exhibit "Y" (Article "11(A)(i)"), signed by the Chairman of
Graphco and dated the Closing Date to such effect.
(ii) Performance of Obligations of Graphco. Graphco shall have
performed all obligations and complied with all covenants set forth in this
Agreement to be performed or complied with in all material respects by it prior
to the Closing Date, and Graphco shall have delivered to RCMN a certificate of
Graphco in the form annexed hereto as Exhibit "Y" (Article "11(A)(ii)") signed
by the Chairman of Graphco and dated the Closing Date to such effect.
(iii) No Adverse Change. There shall not have occurred any material
adverse change since the Financial Statement Date and through the date of the
Closing Date in the business, properties, results of operations or business or
financial condition of Graphco and Graphco shall have delivered to RCMN a
certificate of Graphco in the form annexed hereto as Exhibit "Y" (Article
"11(A)(i)"), signed by the Chairman of Graphco and dated the Closing Date to
such effect.
(iv) Statutory Requirements. Any statutory requirement for the valid
consummation by Graphco of the transactions set forth in this Agreement shall
have been fulfilled; any authorizations, consents and approvals of all federal,
state and local governmental agencies and authorities required to be obtained,
in order to permit consummation by Graphco of the transactions set forth in this
Agreement and to permit the business presently carried on by Graphco to continue
37
unimpaired following the Closing Date, shall have been obtained, and Graphco
shall have delivered to RCMN a certificate of Graphco in the form annexed hereto
as Exhibit "Y" (Article "11(A)(i)"), signed by the Chairman of Graphco and dated
the Closing Date to such effect.
(v) No Governmental Proceedings. No action or proceeding shall have
been instituted before a court or other governmental body by any governmental
agency or public authority to restrain or prohibit the transactions set forth in
this Agreement and Graphco shall have delivered to RCMN a certificate of Graphco
in the form annexed hereto as Exhibit "Y" (Article "11(A)(i)"), signed by the
Chairman of Graphco and dated the Closing Date to such effect.
(vi) Consents Under Agreements. Graphco shall have obtained the consent
or approval of each person whose consent or approval shall be required in
connection with the transactions set forth in this Agreement and RCMN shall have
obtained the consent or approval of each person whose consent or approval shall
be required in connection with the transactions set forth in this Agreement, and
Graphco shall have delivered to RCMN a certificate of Graphco in the form
annexed hereto as Exhibit "Y" (Article "11(A)(i)") signed by the Chairman of
Graphco and dated the Closing Date to such effect.
(vii) Good Standing Certificate. On the Closing Date, Graphco shall
provide a good standing certificate for Graphco issued by the Secretary of State
of the State of New Jersey complete and correct as of five (5) business days
prior to the Closing Date; and
38
(viii) Shareholder Approval. The approval of the transactions set forth
in this Agreement by the holders of a majority of the shares of the Common Stock
of Graphco.
(ix) Services Agreement. Services Agreement. RCMN and Graphco shall
have entered into a services agreement with HFG, substantially in the form
attached hereto as Exhibit "BB". In consideration for HFG's services, Graphco
shall pay to HFG one hundred and seventy five thousand dollars ($175,000), all
or part of the consideration shall be paid pursuant to a Promissory Note,
substantially in the form attached hereto as Exhibit "CC," secured by one
million and five hundred thousand (1,500,000) Graphco Shares which are available
to be pledged which will be held in escrow pursuant to the Escrow Agreement
which will be executed simultaneously herewith, substantially in the form
attached hereto as Exhibit "DD".
B. Conditions to Graphco Obligation to Close. The obligation of Graphco
to close the transactions set forth in this Agreement shall be subject to the
following conditions:
39
(i) Representations and Warranties of RCMN to be True. To RCMNs
knowledge, the representations and warranties of RCMN set forth in this
Agreement shall be true in all material respects on the Closing Date with the
same effect as though made at such time, except to the extent waived or affected
by the transactions set forth in this Agreement; and RCMN shall have delivered
to Graphco a certificate of RCMN in the form annexed hereto and made a part
hereof as Exhibit "AA" (Article "11(B)(i)"), signed by the President of RCMN and
dated the Closing Date to such effect;
(ii) Performance of Obligations of RCMN. RCMN shall have performed all
obligations and complied with all covenants set forth in this Agreement to be
performed or complied with in all material respects by it prior to the Closing
Date, and RCMN shall have delivered to Graphco a certificate of RCMN in the form
annexed hereto as Exhibit "AA" (Article "11(B)(i)"), signed by the President of
RCMN and dated the Closing Date to such effect;
(iii) No Adverse Change. There shall not have occurred any material
adverse change since the Form 10Q and through the date of the Closing Date in
the business, properties, results of operations or business or financial
condition of RCMN and RCMN shall have delivered to Graphco a certificate of RCMN
in the form annexed hereto as Exhibit "AA" (Article "11(B)(i)"), signed by the
President of RCMN and dated the Closing Date to such effect.
40
(iv) Statutory Requirements. Any statutory requirement for the valid
consummation by RCMN of the transactions set forth in this Agreement shall have
been fulfilled; any authorizations, consents and approvals of all federal, state
and local governmental agencies and authorities required to be obtained, in
order to permit consummation by RCMN of the transactions set forth in this
Agreement and to permit the business presently carried on by RCMN to continue
unimpaired following the Closing Date, shall have been obtained and RCMN shall
have delivered to Graphco a certificate of RCMN in the form annexed hereto as
Exhibit "AA" (Article "11(B)(i)") signed by the President of RCMN and dated the
Closing Date to such effect.
(v) No Governmental Proceedings. No action or proceeding shall have
been instituted before a court or other governmental body by any governmental
agency or public authority to restrain or prohibit the transactions set forth in
this Agreement and RCMN shall have delivered to Graphco a certificate of RCMN in
the form annexed hereto as Exhibit "AA" (Article "11(B)(i)"), signed by the
President of RCMN and dated the Closing Date to such effect.
(vi) Consents Under Agreements. RCMN shall have obtained the consent or
approval of each person whose consent or approval shall be required in
connection with the transactions set forth in this Agreement, and Graphco shall
have obtained the consent or approval of each person whose consent or approval
41
shall be required in connection with the transactions set forth in this
Agreement and RCMN shall have delivered to Graphco a certificate of RCMN in the
form annexed as Exhibit "AA" (Article "11(B)(i)"), signed by the President of
RCMN and dated the Closing Date to such effect;
(vii) Good Standing Certificate. On the Closing Date, RCMN shall
provide a good standing certificate for RCMN and Acquisition Corp issued by the
Secretary of State of the State of Delaware complete and correct as of five (5)
business days prior to the Closing Date; and
(viii) Shareholder Approval. The approval of the transactions set forth
in this Agreement by RCMN, the sole shareholder of Acquisition Corp.
(ix) No Assets or Liabilities. On the Closing Date, subject and
pursuant to the terms and conditions of this Agreement, RCMN shall not have any
assets or liabilities outstanding.
(x) Services Agreement. RCMN and Graphco shall have entered into a
services agreement with HFG, substantially in the form attached hereto as
Exhibit "BB". In consideration for HFG's services, Graphco shall pay to HFG one
hundred and seventy five thousand dollars ($175,000), all or part of the
consideration shall be paid pursuant to a Promissory Note, substantially in the
42
form attached hereto as Exhibit "CC," secured by one million and five hundred
thousand (1,500,000) Graphco Shares which are available to be pledged which will
be held in escrow pursuant to the Escrow Agreement which will be executed
simultaneously herewith, substantially in the form attached hereto as Exhibit
"DD".
(xi) Redemption Transaction. Graphco shall have entered into redemption
transaction with Xxxxxx X. Xxxxxx, wherein Xxxxxx X. Xxxxxx agrees to cancel, at
Closing, nine million five hundred and sixty two thousand and two hundred and
sixty nine (9,562,269) of his shares of RCMN common stock to Graphco shall pay
to Xxxxxx X. Xxxxxx the sum of one hundred and fifty thousand dollars ($150,000)
of which at least seventy five thousand dollars ($75,000) shall be paid at
Closing, and the balance shall be paid pursuant to a Promissory Note,
substantially in the form attached hereto as Exhibit "CC," secured by one
million and five hundred thousand (1,500,000) Graphco Shares which are available
to be pledged which will be held in escrow pursuant to the Escrow Agreement
which will be executed simultaneously herewith, substantially in the form
attached hereto as Exhibit "DD" shall be delivered at the Closing.
(xii) Accountants Consents. During the period beginning on the Closing
Date and ending the last date for which such statements would be required to be
included in a filing made by Graphco with the Securities and Exchange Commission
("SEC"), RCMN will, at its expense, procure and deliver to Graphco, the consent
of X.X. Xxxxxxxx to include and incorporate their reports on the Closing Balance
Sheet in filings with the SEC.
43
12. Documents, Certificates, etc. to be Delivered at Closing.
A. At the Closing, Graphco shall deliver to RCMN the Graphco
Certificate of Representations and Warranties signed by the Chairman of Graphco
in the form annexed hereto and made a part hereof as Exhibit "X" (Article
"11(A)(i)").
B. At the Closing, RCMN shall deliver the following items to Graphco:
(i) a stock certificate evidencing the RCMN shares to Graphco;
(ii) the stock certificate and stock transfer books of RCMN;
(iii) the minute books of RCMN;
(iv) the corporate seal of RCMN;
(v) all original insurance policies of RCMN;
(vi) all book and records of RCMN including, but not limited
to, contracts, deeds, bonds, notes, mortgages, leases, books, records,
documents, instruments, invoices, bills, vouchers, cancelled checks, checkbooks,
bank books of RCMN and credit cards which are billed to RCMN; and
(vii) the RCMN Certificate of Representations and Warranties
signed by the President of RCMN in the form annexed hereto and made a part
hereof as Exhibit "AA" (Article "11(A)(i)").
44
13. Equitable Relief.
A. Graphco acknowledges that RCMN shall be irreparably damaged if this
Agreement is not consummated. Therefore, in the event of any breach by Graphco
of this Agreement, RCMN shall have the right, at its election, to obtain
equitable relief including, but not limited to, an order for specific
performance of this Agreement or an injunction, without the need to: (i) post a
bond or other security, (ii) to prove any actual damage or (iii) to prove that
money damages would not provide an adequate remedy. Resort to such equitable
relief, however, shall not be construed to be a waiver of any other rights or
remedies which RCMN may have for damages or otherwise.
B. RCMN acknowledges that Graphco shall be irreparably damaged if this
Agreement is not consummated. Therefore, in the event of any breach by RCMN of
this Agreement, Graphco shall have the right, at its election, to obtain
equitable relief including, but not limited to, an order for specific
performance of this Agreement or an injunction, without the need to: (i) post a
bond or other security, (ii) to prove any actual damage or (iii) to prove that
money damages would not provide an adequate remedy. Resort to such equitable
relief, however, shall not be construed to be a waiver of any other rights or
remedies which RCMN may have for damages or otherwise.
45
14. Method of Termination. This Agreement may be terminated prior to
the Closing Date, by any of the following methods:
A. mutual consent of RCMN and Graphco;
B. by written notice from either of RCMN or Graphco. (i) if the Closing
does not occur on or prior to December 31, 2002(the "Termination Date");
provided, however, that if the Closing shall not have occurred on, or prior to,
the Termination Date as a result of any action taken, or failure to act, by any
governmental or regulatory authority including, but not limited to, the
withholding of, or a delay in, any approval in connection with any aspect of the
transactions contemplated hereby, then the Termination Date shall automatically
be extended until a date which is a reasonable time subsequent to the date upon
which such governmental or regulatory action is resolved which will allow the
parties to complete the procedures required to consummate the transactions
contemplated hereby; provided, further, however, that the right to terminate
this Agreement pursuant to this Paragraph "(B)" of this Article "14" of this
Agreement shall not be available to any party whose failure to fulfill any
obligation pursuant to this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such date;
C. by Graphco if there is a material breach of any representation or
warranty set forth in Article "6" of this Agreement or any covenant or agreement
46
to be complied with or performed by RCMN and Acquisition Corp. pursuant to the
terms of this Agreement, including, but not limited to, the covenants set forth
in Article "8" of this Agreement, or the failure of a condition set forth in
Article "11" of this Agreement to be satisfied (and such condition is not waived
in writing by Graphco) on or prior to the Closing Date, or the occurrence of any
event which results in the failure of a condition set forth in Article "11" of
this Agreement to be satisfied on or prior to the Closing Date; provided
however, that, Graphco may not terminate this Agreement prior to the Closing if
RCMN has not had an adequate opportunity to cure such failure, pursuant to
Article "16" of this Agreement; or
D. by RCMN if there is a material breach of any representation or
warranty set forth in Article "5" of this Agreement or any covenant or agreement
to be complied with or performed by Graphco pursuant to the terms of this
Agreement, including, but not limited to, the covenants set forth in Article "8"
of this Agreement, or the failure of a condition set forth in Article "11" of
this Agreement to be satisfied (and such condition is not waived in writing by
RCMN) on or prior to the Closing Date, or the occurrence of any event which
results in the failure of a condition set forth in Article "11" of this
Agreement to be satisfied on or prior to the Closing Date; provided however,
that, RCMN may not terminate this Agreement prior to Closing if Graphco has not
had an adequate opportunity to cure such failure.
47
15. Effect of Termination. If this Agreement is terminated pursuant to
the provisions set forth in Article "14" of this Agreement, this Agreement shall
become null and void and shall have no further effect, and no Party shall have
any liability with respect to this Agreement, including but not limited to the
provisions set forth in Subparagraph "(ii)" of Paragraph "(A)" of Article "19"
of this Agreement and Subparagraph "(ii)" of Paragraph "(B)" of Article "19" of
this Agreement.
16. Cooperation; Notice; Cure. Subject to compliance with applicable
law, from the date of this Agreement until the Closing Date, each of RCMN,
Acquisition Corp. and Graphco shall confer on a regular and frequent basis with
one or more representatives of the other party to report on the general status
of ongoing operations. RCMN shall promptly provide Grapcho or its counsel with
copies of all of its filings made with the SEC or with any Governmental Entity
in connection with this Agreement, the Merger and the transactions contemplated
hereby and thereby. Each of RCMN, Acquisition Corp. and Graphco shall notify the
other of, and will use all commercially reasonable efforts to cure before the
Closing Date, any event, transaction or circumstance, as soon as practical after
it becomes known to such party, that causes or will cause any covenant or
agreement of RCMN, Acquisition Corp. or Graphco under this Agreement to be
breached or that renders or will render untrue any representation or warranty of
RCMN, Acquisition Corp. or Graphco contained in this Agreement. Each of RCMN,
Acquisition Corp. and Graphco also shall notify the other in writing of, and
48
will use all commercially reasonable efforts to cure, before the Closing Date,
any violation or breach, as soon as practical after it becomes known to such
party, of any representation, warranty, covenant or agreement made by RCMN,
Acquisition Corp. or Graphco. No notice given pursuant to this paragraph shall
have any effect on the representations, warranties, covenants or agreements
contained in this Agreement for purposes of determining satisfaction of any
condition contained herein.
17. Expenses. Each Party to this Agreement shall bear and pay its own
costs and expenses incurred in connection with the preparation, execution, and
delivery of this Agreement and the transactions set forth in this Agreement.
18. Survival of Representations, Warranties and Covenants.
All covenants, agreements, representations and warranties made in or in
connection with this Agreement shall survive the Closing Date hereof, and shall
continue in full force and effect for two (2) years after the Closing Date, it
being understood and agreed that each of such covenants, agreements,
representations and warranties is of the essence of this Agreement and the same
shall be binding upon and shall inure to the benefit of the parties hereto, its
successors and assigns.
19. Indemnification.
49
A. Indemnification by Graphco.
(i) In order to induce RCMN to enter into and perform this Agreement,
Graphco does hereby indemnify, protect, defend and save and hold harmless RCMN
and Acquisition Corp. and each of its shareholders, affiliates, officers,
directors, control persons, employees, attorneys, agents, partners and trustees
and personal representatives of any of the foregoing ("Indemnified Parties"),
from and against any loss resulting to any of them from any material loss,
liability, cost, damage, or expense which the Indemnified Parties may suffer,
sustain or incur arising out of or due to a breach by Graphco of the
representations, warranties and covenants set forth in this Agreement and from
any claim resulting from the delivery and or distribution of shares of Common
Stock of RCMN by Graphco to its Stockholders under this Agreement.
(ii) In order to induce RCMN to enter into and perform this Agreement,
Graphco does hereby indemnify, protect, defend and save and hold harmless the
Indemnified Parties against any claims including, but not limited to shareholder
appraisal rights pursuant to the applicable provisions of NJBCA, made by any
Graphco Stockholder who has not consented, as set forth in Subparagraph "(vii)"
of Paragraph "A" of Article "11" of this Agreement, to Graphco entering into
this Agreement and the transactions set forth in this Agreement.
B. Indemnification by RCMN, Acquisition Corp. and Surviving Corp. In
order to induce Graphco to enter into and perform this Agreement, RCMN,
50
Acquisition Corp. and Surviving Corp. hereby jointly and severally indemnify,
protect, defend and save and hold harmless Graphco and each of its shareholders,
affiliates, officers, directors, control persons, employees, attorneys, agents,
partners and trustees and personal representatives of any of the foregoing
("Indemnified Parties"), from and against any loss resulting to any of them from
any material loss, liability, cost, damage, or expense which the Indemnified
Parties may suffer, sustain or incur arising out of or due to a breach by RCMN
and/or Acquisition Corp. and/or Surviving Corp. of the representations,
warranties and covenants set forth in this Agreement.
C. Reasonable Costs, Etc. The indemnification, which is set forth in
this Article "19" of this Agreement shall be deemed to include not only the
specific liabilities or obligation with respect to which such indemnity is
provided, but also all counsel fees, reasonable costs, expenses and expenses of
settlement relating thereto, whether or not any such liability or obligation
shall have been reduced to judgment.
D. Third Party Claims. If any demand, claim, action or cause of action,
suit, proceeding or investigation (collectively, the "Claim") is brought against
an Indemnified Party for which the Indemnified Party intends to seek indemnity
from the other party hereto (the "Indemnifying Party"), then the Indemnified
Party within twenty-one (21) days after such Indemnified Party's receipt of the
Claim, shall notify the Indemnifying Party pursuant to Paragraph "(C)" of
51
Article "21" of this Agreement which notice shall contain a reasonably thorough
description of the nature and amount of the Claim (the "Claim Notice"). The
Indemnifying Party shall have the option to undertake, conduct and control the
defense of such claim or demand. Such option to undertake, conduct and control
the defense of such claim or demand shall be exercised by notifying the
Indemnified Party within ten (10) days after receipt of the Claim Notice
pursuant to Paragraph "(C)" of Article "21" of this Agreement (such notice to
control the defense is hereinafter referred to as the "Defense Notice"). The
failure of the Indemnified Party to notify the Indemnifying Party of the Claim
shall not relieve the Indemnifying Party from any liability which the
Indemnifying Party may have pursuant to this Article "19" of this Agreement
except to the extent that such failure to notify the Indemnifying Party
prejudices the Indemnifying Party. The Indemnified Party shall use all
reasonable efforts to assist the Indemnifying Party in the vigorous defense of
the Claim. All costs and expenses incurred by the Indemnified Party in defending
the Claim shall be paid by the Indemnifying Party. If, however, the Indemnified
Party desires to participate in any such defense or settlement, it may do so at
its sole cost and expense (it being understood that the Indemnifying Party shall
be entitled to control the defense). The Indemnified Party shall not settle the
Claim. If the Indemnifying Party does not elect to control the defense of the
Claim, within the aforesaid ten (10) day period by proper notice pursuant to
Paragraph "(C)" of Article "21" of this Agreement, then the Indemnified Party
52
shall be entitled to undertake, conduct and control the defense of the Claim (a
failure by the Indemnifying Party to send the Defense Notice to the Indemnified
Party within the aforesaid ten (10) day period by proper notice pursuant to
Paragraph "(C)" of Article "21" of this Agreement shall be deemed to be an
election by the Indemnifying Party not to control the defense of the Claim);
provided, however, that the Indemnifying Party shall be entitled, if it so
desires, to participate therein (it being understood that in such circumstances,
the Indemnified Party shall be entitled to control the defense). Regardless of
which party has undertaken to defend any claim, the Indemnifying Party may,
without the prior written consent of the Indemnified Party, settle, compromise
or offer to settle or compromise any such claim or demand; provided however,
that if any settlement would result in the imposition of a consent order,
injunction or decree which would restrict the future activity or conduct of the
Indemnified Party, the consent of the Indemnified Party shall be a condition to
any such settlement. Notwithstanding the foregoing provisions of this Article
"19" of this Agreement, as a condition to the Indemnifying Party either having
the right to defend the Claim, or having control over settlement as indicated in
this Article "19" of this Agreement, the Indemnifying Party shall execute an
agreement which shall be in the form of Exhibit "DD" (Article "19(D)") which is
annexed hereto and made a part hereof, acknowledging its liability for
indemnification pursuant to this Article "19" of this Agreement. Whether the
Indemnifying Party shall control and assume the defense of the Claim or only
participate in the defense or settlement of the Claim, the Indemnified Party
shall give the Indemnifying Party and its counsel access, during normal business
hours, to all relevant business records and other documents, and shall permit
them to consult with its employees and counsel.
20. Construction. Each of the parties hereto hereby further
acknowledges and agrees that each has been advised by counsel during the course
53
of negotiations and had significant input in the development of this Agreement
and this Agreement shall not, therefore, be construed more strictly against any
party responsible for its drafting regardless of any presumption or rule
requiring construction against the party whose attorney drafted this agreement.
21. Miscellaneous.
A. Headings. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
B. Enforceability. If any provision which is contained in this
Agreement, should, for any reason, be held to be invalid or unenforceable in any
respect under the laws of any State of the United States, such invalidity or
unenforceability shall not affect any other provision of this Agreement and in
this Agreement shall be construed as if such invalid or unenforceable provision
had not been contained herein.
C. Notices. Any notice or other communication required or permitted
hereunder shall be sufficiently given if sent by (i) mail by (a) certified mail,
postage prepaid, return receipt requested and (b) First Class mail, (ii)
overnight delivery with confirmation of delivery or (iii) facsimile transmission
with an original mailed by first class mail, postage prepaid, addressed as
follows:
54
If to Graphco: Graphco Technologies, Inc.
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx, Chairman
Facsimile No.: (000) 000-0000
with a copy to: Xxxxx & Fraade, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
If to RCMN: RCM Interests, Inc., Inc.
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: ______________
55
with a copy to: Xxxxxx Xxxxxxx, Esq.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
If to Acquisition Corp. RCM Interests, Inc.
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: ______________
with a copy to: Xxxxxx Xxxxxxx, Esq.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
56
or in each case to such other address and facsimile number as shall have last
been furnished by like notice. If mailing by certified mail is impossible due to
an absence of postal service, notice shall be in writing and personally
delivered to the aforesaid addresses. Each notice or communication shall be
deemed to have been given as of the date so mailed or delivered as the case may
be; provided, however that any notice sent by facsimile shall be deemed to have
been given as of the date so sent if a copy thereof is also mailed by first
class mail on the date sent by facsimile, if the date of mailing is not the same
as the date of sending by facsimile, then the date of mailing by first class
mail shall be deemed to be the date upon which notice is given.
D. Governing Law; Disputes. This Agreement shall in accordance with
Section 5-1401 of the General Obligations Law of New York in all respects be
construed, governed, applied and enforced under the internal laws of the State
of New York and the Corporate law of Delaware without giving effect to the
principles of conflicts of laws and be deemed to be an agreement entered into in
the State of New York and made pursuant to the laws of the State of New York.
Except as otherwise provided in this Article "21" of this Agreement, the parties
agree that they shall be deemed to have agreed to binding arbitration in New
York, New York, with respect to the entire subject matter of any and all
disputes relating to or arising under this Agreement including, but not limited
to, the specific matters or disputes as to which arbitration has been expressly
provided for by other provisions of this Agreement. Any such arbitration shall
be by a panel of three arbitrators and pursuant to the commercial rules then
existing of the American Arbitration Association in the State of New York,
57
County of New York. In all arbitrations, judgment upon the arbitration award may
be entered in any court having jurisdiction. The parties agree, further, that
the prevailing party in any such arbitration as determined by the arbitrators
shall be entitled to such costs and attorney's fees, if any, in connection with
such arbitration as may be awarded by the arbitrators. In connection with the
arbitrators' determination for the purpose of which party, if any, is the
prevailing party, they shall take into account all of the factors and
circumstances including, without limitation, the relief sought, and by whom, and
the relief, if any, awarded, and to whom. In addition, and notwithstanding the
foregoing sentence, a party shall not be deemed to be the prevailing party in a
claim seeking monetary damages, unless the amount of the arbitration award
exceeds the amount offered in a legally binding writing by the other party by
fifteen percent (15%) or more. For example, if the party initiating arbitration
("A") seeks an award of $100,000 plus costs and expenses, the other party ("B")
has offered A $50,000 in a legally binding written offer prior to the
commencement of the arbitration proceeding, and the arbitration panel awards any
amount less than $57,500 to A, the panel should determine that B has
"prevailed". The parties specifically designate the Courts in the City of New
York, State of New York as properly having jurisdiction for any proceeding to
confirm and enter judgment upon any such arbitration award. The parties hereby
consent to and submit to personal jurisdiction over each of them by the Courts
of the State of New York in any action or proceeding, waive personal service of
any and all process and specifically consent that in any such action or
proceeding, any service of process may be effectuated upon any of them by
certified mail, return receipt requested, in accordance with Paragraph "C" of
this Article "21" of this Agreement.
58
E. Entire Agreement. This Agreement and all documents and instruments
referred to herein (a) constitute the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and thereof, and (b) except as provided in
Paragraph "(I)" of this Article "21" of this Agreement, are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder. Each party hereto agrees that, except for the representations and
warranties contained in this Agreement, neither RCMN, Acquisition Corp. or
Graphco makes any other representations or warranties, and each hereby disclaims
any other representations and warranties made by itself or any of its officers,
directors, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement or
the transactions contemplated hereby, notwithstanding the delivery or disclosure
to the other or the other's representatives of any documentation or other
information with respect to any one or more of the foregoing. This Agreement may
not be amended, changed, modified, extended, terminated or discharged orally,
but only by an Agreement in writing, which is signed by all of the parties to
this Agreement.
F. Further Assurances. The parties agree to execute any and all such
other further instruments and documents, and to take any and all such further
actions which are reasonably required to effectuate this Agreement and the
intents and purposes hereof.
59
G. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
personal representatives, successors and assigns.
H. Non-Waiver. Except as otherwise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the party against whom
such waiver is charged; and (i) the failure of any party to insist in any one or
more cases upon the performance of any of the provisions, covenants or
conditions of this Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the future of any such
provisions, covenants or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge of the breach
or failure of a covenant, condition or provision hereof shall not be deemed a
waiver of such breach or failure, and (iii) no waiver by any party of one breach
by another party shall be construed as a waiver of any other or subsequent
breach.
I. Third Party Beneficiaries. This Agreement and all documents and
instruments referred to herein, except as provided in Article "4" of this
Agreement, are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
60
J. Confidentiality.
(i) RCMN and Acquisition Corp., on their own behalf or on behalf of
their respective directors, officers, employees, stockholders and/or other
representatives and/or agents, recognize and acknowledge that they had in the
past and currently have access to certain confidential information of Graphco
which is valuable, special and unique to Graphco. RCMN and Acquisition Corp.
agree that, they will not use any of the confidential information for any
purpose other than as contemplated by and in accordance with the terms of this
Agreement and will not disclose such confidential information to any person,
firm, corporation, association or other entity for any purpose or reason
whatsoever, except (a) to Graphco and to authorized representatives of Graphco,
and (b) to counsel and other advisers and representatives of RCMN, provided that
such advisors or representatives (other than counsel) agree in writing to the
confidentiality provisions of this Paragraph "(J)" of this Article "21" of this
Agreement, unless (1) such information becomes known to the public generally
through no fault of RCMN or Acquisition Corp., (2) disclosure is required by law
or the order of any governmental authority under color of law, provided, that
prior to disclosing any information pursuant to this Paragraph "(J)" of this
Article "21" of this Agreement, RCMN and Acquisition Corp. shall, if possible,
give prior written notice thereof to Graphco and provide Graphco with the
opportunity to contest such disclosure, or (3) the disclosing party reasonably
61
believes that such disclosure is required in connection with the defense of a
lawsuit against the disclosing party. In the event of a breach or threatened
breach by RCMN or Acquisition Corp. of the provisions of this Paragraph "(J)" of
this Article "21" of this Agreement, Graphco shall be entitled to an injunction
restraining RCMN and Acquisition Corp. from disclosing or using, in whole or in
part, such confidential information. Nothing herein shall be construed as
prohibiting Graphco from pursuing any other available remedy for such breach or
threatened breach, including the recovery of damages.
(ii) Graphco on its own behalf or on behalf of its respective
directors, officers, employees, stockholders and/or other representatives and/or
agents, recognizes and acknowledges that it had in the past and currently has
access to certain confidential information of RCMN and Acquisition Corp. which
is valuable, special and unique to RCMN and Acquisition Corp. Graphco agrees
that, prior to the Closing Date, or if the transactions contemplated by this
Agreement are not consummated, it will not use any of the confidential
information for any purpose other than as contemplated by and in accordance with
the terms of this Agreement and will not disclose such confidential information
to any person, firm, corporation, association or other entity for any purpose or
reason whatsoever, except (a) to RCMN and Acquisition Corp. and to authorized
representatives of RCMN and Acquisition Corp., and (b) to counsel and other
advisers and representatives of Graphco, provided that such advisors or
representatives (other than counsel) agree to the confidentiality provisions of
this Paragraph "(J)" of this Article "21" of this Agreement, unless (1) such
62
information becomes known to the public generally through no fault of Graphco,
(2) disclosure is required by law or the order of any governmental authority
under color of law, provided, that prior to disclosing any information pursuant
to this Paragraph "(J)" of this Article "21" of this Agreement, Graphco shall,
if possible, give prior written notice thereof to RCMN and Acquisition Corp. and
provide RCMN and Acquisition Corp. with the opportunity to contest such
disclosure, or (3) the disclosing party reasonably believes that such disclosure
is required in connection with the defense of a lawsuit against the disclosing
party. In the event of a breach or threatened breach by Graphco of the
provisions of this Section, RCMN and Acquisition Corp. shall be entitled to an
injunction restraining Graphco from disclosing or using, in whole or in part,
such confidential information. Nothing herein shall be construed as prohibiting
RCMN and Acquisition Corp. from pursuing any other available remedy for such
breach or threatened breach, including the recovery of damages.
K. Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
L. Exhibits. All Exhibits annexed or attached to this Agreement are
incorporated into this Agreement by reference thereto and constitute an integral
part of this Agreement.
63
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
Attest:
RCM Interests, Inc., Inc.
By:
-----------------------------------------
Xxxxxx X. Xxxxxx, Chief Executive Officer
and Chief Financial Officer
Graphco Technologies, Inc.
By:
-----------------------------------------
Xxxxxxxx Xxxxxxxx, Chairman
64
EXHIBIT INDEX
65
