STOCK PURCHASE AGREEMENT
Exhibit
2
EXECUTION
COPY
THIS
STOCK PURCHASE AGREEMENT is made and entered into as of this 2nd
day of October,
2007, by and among TELKONET, INC., a Utah corporation (“Purchaser”),
Geeks On Call America, Inc., a Virginia corporation (the “Company”),
Xxxxxxx X. Xxxx and Xxxxxxxxx Xxxx (collectively, “Xxxx”), Xxxxx Xxxxxxxx
and Xxxxxxxx Xxxxxxxx (collectively, “Xxxxxxxx”), and Xxxxxxx X. Xxxxx
and Xxxxxxx X. Xxxxx (collectively “Xxxxx,” and together with Xxxx and
Xxxxxxxx, the “Stockholders”). Capitalized terms used herein
and not otherwise defined herein shall have the meanings given to such terms
in
Section 1.1 hereof.
RECITALS
WHEREAS,
the Company is engaged in the business of computer support services (the
“Business”);
WHEREAS,
the Stockholders own, in the aggregate, 1,160,043.435 shares of the issued
and
outstanding common stock of the Company (the “Company Common
Stock”);
WHEREAS,
the Stockholders desire to sell, and Purchaser desires to purchase, in the
aggregate, 1,160,043.435 shares of the Company Common Stock (collectively,
the
“Company Shares”), on the terms and subject to the conditions set forth
herein.
NOW,
THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions. As
used in this Agreement, the following terms shall have the following
meanings:
“Affiliate”
means,
with respect
to any specified Person, any other Person which, directly or indirectly,
controls, is under common control with, or is controlled by, such specified
Person.
“Agreement”
means this Agreement and the Company Disclosure Schedules hereto, as this
Agreement may be amended from time to time.
“Benefit
Plan” means any
collective bargaining agreement, any Pension Plan or any bonus, profit sharing,
deferred compensation, incentive compensation, performance, retirement,
vacation, severance or termination, disability, death benefit, employment,
consulting, independent contractor, member, retention, hospitalization, fringe
benefit, medical, dental, vision or other material plan, program, policy,
arrangement or Contract (whether or not subject to the Laws of the United
States) established, maintained, contributed to or required to be established,
maintained or contributed to by the Company or any ERISA Affiliate, in each
case, providing benefits to any employee of the Company, and in each case
whether written or oral, informal or formal, subject to ERISA or
not.
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“Business
Day” means any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking institutions
located in Maryland are permitted or required by Law, executive order or decree
of a Governmental Entity to remain closed.
“Closing”
is
defined in Section
8.1.
“Closing
Date” is defined in Section 8.1.
“Closing
Date Price” is defined
in Section 2.2.
“Code”
means
the Internal
Revenue Code of 1986, as amended.
“Commission”
means
the
Securities and Exchange Commission, or any other federal agency at the time
administering the Securities Act.
“Company”
has the meaning set forth in the Recitals.
“Company
Certificate” is defined in Section 7.2(a).
“Company
Common Stock” has the meaning set forth in the Recitals.
“Company
Indemnified Party” is defined in Section 10.3.
“Company
Intellectual Property”
means all Intellectual Property owned, used, under development or filed
by or
licensed to the Company.
“Constitutive
Documents” means
the Company’s Certificate of Incorporation and Bylaws.
“Contract”
means
any loan or
credit agreement, bond, debenture, note, mortgage, indenture, guarantee, lease
or other contract, commitment, agreement, instrument, obligation, undertaking,
concession, franchise, license or legally binding arrangement or understanding,
whether written or oral.
“Copyright”
means
any registered
copyright (i) licensed from any third party (other than “shrink-wrap” software),
or (ii) assigned, registered or applied for.
“Disclosure
Schedule” means a
schedule of exceptions to the representations and warranties of the Company
and
the Stockholders set forth in Article III, delivered contemporaneously with
this
Agreement.
“Encumbrances”
is
defined in
Section 4.2.
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“Environment”
means
any and all
environmental media, including, but not limited to, ambient air, surface water,
ground water, drinking water supply, land surface, subsurface strata, wetlands
or sediments.
“Environmental
Law” means any
and all federal, state, local or foreign statutes, laws, codes, regulations,
rules, orders, judgments, binding judicial decisions, permits, writs, decrees,
licenses, approvals, injunctions, written policies, ordinances and binding
directives pertaining to or relating to protection or restoration of the
Environment, pollution, health and safety, noise, radiation, or the manufacture,
generation, handling, storage, use, emission, discharge, release,
transportation, treatment, disposal or remediation of any Hazardous Material
and
the health or safety of employees in the workplace environment with respect
to
Hazardous Material, including the Clean Air Act, the Clean Water Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation, and Liability Act, the Occupational Safety and Health
Act, the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, the Federal Insecticide, Fungicide, and Rodenticide Act,
the
Safe Drinking Water Act, the Hazardous Materials Transportation Act and any
similar federal, state or local law, as each is in effect as of the date
hereof.
“ERISA”
means
the Employee
Retirement Income Security Act of 1974.
“ERISA
Affiliate” means any
Person which is (or at any relevant time was) a member of a “controlled group of
corporations” with, under “common control” with, or a member of an “affiliate
service group” with the Company as such terms are defined in Section 414(b),
(c), (m) or (o) of the Code.
“Escrow
Account” is defined in
Section 2.2
“Escrow
Agent” is defined in
Section 2.2.
“Escrow
Agreement” is defined in
Section 2.2.
“Financial
Statements” are
defined in Section 3.9(a).
“GAAP”
means
United States
generally accepted accounting principles, consistently applied.
“Governmental
Entity” means any
nation, state, province, county, city or political subdivision and any official,
agency, arbitrator, authority, court, department, commission, board, bureau,
instrumentality or other governmental or regulatory authority of any thereof,
whether domestic or foreign.
“Hazardous
Material” means,
whether alone or in combination, whether solid, liquid or gaseous: (i) any
pollutant, contaminant, substance, chemical or material that is listed,
classified or regulated pursuant to any Environmental Law; (ii) any petroleum,
petroleum product, waste oil, crude oil and its fractions, asbestos and
asbestos-containing material, urea formaldehyde, nuclear material, natural
or
synthetic gas, pesticide, or polychlorinated biphenyl; (iii) any pollutant,
contaminant, substance, material, chemical or waste that is explosive or
radioactive; or (iv) any hazardous chemical, pollutant, contaminant, hazardous
waste, toxic chemical, all as defined as hazardous under the Environmental
Law.
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“Indebtedness” of
any Person means, without duplication: (i) all indebtedness of such Person
for
borrowed money, with respect to deposits or advances of any kind or for the
deferred purchase price of property or services (other than current trade
liabilities incurred in the Ordinary Course of Business and payable in
accordance with customary practices or being disputed in good faith); (ii)
all
principal, interest, prepayment penalties and premiums and other obligations
of
such Person evidenced by bonds, debentures, notes or similar instruments; (iii)
all Indebtedness of third parties secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by)
any Lien or other claim on property owned or acquired by such Person, whether
or
not the obligations secured thereby have been assumed; and (iv) all guarantees
by such Person of Indebtedness of third parties.
“Indemnified
Party” means either
a Purchaser Indemnified Party or a Company Indemnified Party.
“Indemnifying
Party” means the
party from which indemnification is sought pursuant to Article IX.
“Intellectual
Property” means
any (i) Patents, (ii) Marks, (iii) Copyrights, (iv) trade secrets, as defined
in
the Uniform Trade Secrets Act, including confidential research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, methods, schematics, technology, technical data, designs, drawings,
flowcharts, block diagrams, specifications, customer and supply lists, pricing
and cost information, and business and marketing plans and proposals, (v)
software or computer programs, (vi) licenses and agreements pursuant
to which a Person has acquired rights in or to any of the foregoing or licenses
or agreements pursuant to which a Person has licensed or transferred the right
to use any of the foregoing, or (vii) domain names, and (viii) unregistered
rights in copyright to print or electronic publications and
content.
“Issued
Patent” means a Patent
which has been granted by the PTO, or any patent office of any other country,
which is unexpired and which has not been held invalid by a decision of a court
or other appropriate body of competent jurisdiction.
“IRS”
means
the United States
Internal Revenue Service.
“Xxxxxx”
is
defined in Section
6.1.
“Judgment”
means
any judgment,
order or decree of, or issued by, any Governmental Entity.
“Knowledge”
means,
with respect
to any matter in question, the actual knowledge of Xxxx after reasonable
inquiry. Known has a correlative meaning.
“Law”
means
any constitution,
act, statute, law, ordinance, treaty, rule or regulation of any Governmental
Entity.
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“Legal
Proceeding” means any
action, suit, proceeding, claim, arbitration or investigation before any
Governmental Entity or before any arbitrator or mediator or similar party,
or
any investigation or review by any Governmental Entity.
“Lien” means
any
lien, pledge, claim, charge, mortgage, encumbrance or other security interest
of
any kind, whether arising by Contract or by operation of Law.
“Losses”
means
any debts,
obligations and other liabilities (whether known or unknown, absolute or
contingent, liquidated or unliquidated, due or to become due, accrued or not
accrued, asserted or unasserted or otherwise), losses, claims, damages, Taxes,
interest obligations, deficiencies, Judgments, assessments, fines, fees,
penalties, expenses (including amounts paid in settlement, interest, court
costs, costs of investigators, fees and reasonable expenses of attorneys,
accountants, financial advisors, consultants and other experts, and other
expenses of litigation).
“Xxxx”
means
any trademark,
trade name, trade dress, service xxxx or domain name.
“Material
Adverse Change” means
any change, circumstance, development, state of facts, event or effect (i)
that
has had or would reasonably be expected to have a material adverse change or
effect (taken alone or in the aggregate with any other adverse change or effect)
in or with respect to the business, properties, assets, condition (financial
or
otherwise), liabilities (contingent or otherwise) or results of operations
of
the Business in an amount in excess of $250,000, or (ii) that would reasonably
be expected to prevent or materially impede, interfere with, hinder or delay
the
consummation by the Company of the transactions contemplated by this Agreement;
provided that none of the following shall be deemed to constitute, and none
of
the following shall be taken into account in determining whether there has
been
or will be a Material Adverse Change: (a) any change relating to the United
States economy or securities markets in general, so long as any impact on the
Business is not disproportionate, (b) any adverse change, effect, event,
occurrence, state of facts or development described in clause (i) or (ii) above
resulting from conditions generally affecting the industry in which the Company
participates, (c) the announcement or consummation of the closing of the
transactions contemplated hereby, and (d) changes in any applicable
Law.
“Merger
Transaction” is defined
in Section 6.6.
“Most
Recent Balance Sheet” is
defined in Section 3.8.
“Most
Recent Balance Sheet Date”
means December 31, 2006.
“Ordinary
Course of
Business” means any action taken if: (i) such action is consistent
with past practice including as to amount and frequency and is taken in the
course of normal day-to-day operations and (ii) such action complies with
Law.
“Party”
means
a party to this
Agreement.
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“Patent”
means
any United States
or foreign patent, any application for a United States or foreign patent, or
any
continuation, continuation-in-part, division, renewal, extension (including
any
supplemental protection certificate), reexamination or reissue
thereof.
“Pension
Plan” means any
“employee pension benefit plan,” as defined in Section 3(2) of
ERISA.
“Permit”
means
any federal,
state or local, domestic or foreign, governmental consent, approval, order,
authorization, certificate, filing, notice, permit, concession, registration,
franchise, license or right.
“Permitted
Liens” means the
following, to the extent not securing Indebtedness: (i) statutory Liens for
Taxes not yet due or payable or being contested in good faith by appropriate
proceedings; (ii) Liens for assessments and other governmental charges or Liens
of landlords, carriers, warehousemen, mechanics and repairmen incurred in the
Ordinary Course of Business, in each case for sums not yet due and payable
or
due but not delinquent or being contested in good faith by appropriate
proceedings; (iii) Liens incurred in the Ordinary Course of Business in
connection with workers’ compensation, unemployment insurance and other types of
social security; and (iv) any interest or title of a lessor under an operating
lease or capitalized lease or of any licensor under a license.
“Person”
means
an individual,
corporation, partnership, limited liability company, joint venture, association,
trust, Governmental Entity, unincorporated organization or other
entity.
“Preferred
Stock” is defined in
Section 3.5.
“Private
Placement” is defined
in Section 6.7.
“PTO”
means
the United States
Patent and Trademark Office.
“Purchase
Price” is defined in
Section 2.2.
“Purchase
Shares” means the
shares of Telkonet Common Stock issued as the Stock Consideration.
“Purchaser”
has the meaning set forth in the Recitals.
“Purchaser
Certificate” is defined in Section 7.3(a).
“Purchaser
Indemnifiable Loss” is defined in Section 10.2.
“Purchaser
Indemnified Party” is
defined in Section 10.2.
“Real
Property” is defined in
Section 3.12.
“Registration
Date” means the
date on which Purchaser files a registration statement covering the Purchase
Shares.
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“Representatives”
means,
with
respect to a Person, such Person’s legal, financial, internal and independent
accounting and other advisors and representatives.
“Securities
Act” means the
Securities Act of 1933, as amended, or any similar successor United States
statute, and the rules and regulations of the Commission issued under such
act,
as they each may, from time to time, be in effect.
“Series
A Stock” is defined in
Section 3.5.
“Series
B Stock” is defined in
Section 3.5.
“Series
C Stock” is defined in
Section 3.5.
“Subsidiary”
means,
with respect
to any Person, another Person (i) of which 50.0% or more of any class of capital
stock is owned or controlled, directly or indirectly, by such first Person,
or
(ii) of which such first Person is a general partner.
“Tax”
means
any United States
federal, state, local and foreign income, profits, franchise, license, capital,
transfer, ad valorem, wage, severance, occupation, import, custom,
gross receipts, payroll, sales, employment, use, stamp, alternative or add-on
minimum, environmental, withholding and any other tax, duty, assessment or
governmental tax charge of any kind whatsoever, imposed or required to be
withheld by any taxing authority, including any interest, additions to tax,
or
penalties applicable or related thereto.
“Tax
Return” means any return,
declaration, report, claim for refund, or information return or statement or
other form relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof.
“Third
Party Claim” means any
suit, proceeding, claim or demand by a Person other than a Person from which
indemnification may be sought under Article X.
“Trading
Market” means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ Global Market, the NASDAQ Capital Market
or
OTC Bulletin Board on which Common Stock is listed or quoted for trading on
the
date in question.
ARTICLE
II
PURCHASE
AND SALE OF COMPANY COMMON STOCK
2.1 Purchase
and Sale of Company Common Stock. Upon the terms and
conditions set forth in this Agreement, at the Closing, the Stockholders shall
sell to Purchaser, and Purchaser shall purchase from the Stockholders, the
Company Shares.
2.2 Purchase
Price. The purchase price for the Company Shares shall be
$4,466,167.22 in the aggregate (the “Purchase Price”). The
Purchase Price shall be payable by Purchaser, at Purchaser’s election, through
the delivery to the Stockholders of (a) shares of Purchaser’s common stock, par
value $0.001 per share (the “Telkonet Common Stock”), (b) cash, or (c) a
combination of cash and Telkonet Common Stock. If Purchaser elects to
pay all or a portion of the Purchase
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Price
in
Telkonet Common Stock, the number of shares of Telkonet Common Stock issuable
pursuant to this Section 2.2 shall be determined assuming a per share price
equal to the average closing price of the Telkonet Common Stock on the American
Stock Exchange (“AMEX”) during the ten (10) trading days immediately
preceding the Closing Date (the “Closing Date Price”). The
Telkonet Common Stock shall be held in escrow (the “Escrow Account”) in
accordance with the terms of an escrow agreement (the “Escrow Agreement”)
by and among Purchaser, the Stockholders and StockTrans, Inc. as escrow agent
(the “Escrow Agent”) until the Registration Date, subject to the
provisions of Section 2.3, it being the intent of the parties that title to
the
Telkonet Common Stock for tax purposes shall not transfer to the Stockholders
until the adjustment contemplated by Section 2.3 is
effectuated. Notwithstanding anything to the contrary contained in
this Agreement, the Purchaser may elect, in its sole discretion, at any time
on
or before the Registration Date to modify the percentage of cash versus Telkonet
Common Stock paid as the Purchase Price and the number of shares of Telkonet
Common Stock held in the Escrow Account shall be increased or decreased
proportionately in accordance with such election.
2.3 Adjustment
to the Number of Purchase Shares. If the average closing price of
Telkonet Common Stock on the AMEX during the ten (10) trading days immediately
preceding the Registration Date (the “Registration Date Average”) is less
than 100% of the Closing Date Price, Purchaser shall issue and deliver to each
Stockholder on the Registration Date, at Purchaser’s option, either (a) that
number of additional shares of Telkonet Common Stock (the “Adjustment
Shares”) such that the aggregate value of shares of Telkonet Common Stock
received by such Stockholder (assuming a value per share equal to the
Registration Date Average) is equal to the number of Company Shares sold by
such
Stockholder to Purchaser hereunder times the Purchase Price, or (b) cash in
amount equal to the value of the Adjustment Shares, assuming a value per share
equal to the Registration Date Average. If the Registration Date
Average is more than 100% of the Closing Date Price, the number of Purchase
Shares held in the Escrow Account for the benefit of such Stockholder shall
be
reduced such that the aggregate value of such Purchase Shares held in the Escrow
Account for the benefit of such Stockholder following such reduction (assuming
a
value per share equal to the Registration Date Average) is equal to the number
of Company Shares sold by such Stockholder to Purchaser hereunder times the
Purchase Price.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as
set forth in the Company Disclosure Schedule delivered to Purchaser
simultaneously with the execution hereof, the Company represents and warrants
to
the Purchaser as follows, as of the Closing Date:
3.1 Organization
and Standing. The Company: (a) is a corporation duly organized,
validly existing and in current status under the Laws of the Commonwealth of
Virginia; (b) has all requisite power and authority to own its properties,
carry
on its business as now being conducted; and (c) is duly qualified or licensed
to
do business and is in good standing in each jurisdiction in which the nature
of
its business or the ownership, leasing or operation of its properties makes
such
qualification or licensing necessary, except to the extent that the failure
to
be so qualified or licensed would not reasonably be expected to result in a
Material Adverse Change. The Company is not in violation of any of
the provisions of its Constitutive Documents.
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3.2 Power
and Authority; Binding Agreement. The Company has all requisite
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by the
Company and, assuming due execution and delivery by the other parties hereto,
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject in each case to bankruptcy,
reorganization, insolvency or similar laws affecting the enforcement of
creditors’ rights in general and to general principles of equity (regardless of
whether considered in a proceeding in equity or an action at law).
3.3 Noncontravention.
(a) The
execution and delivery by the Company of this Agreement, the consummation of
the
transactions contemplated by this Agreement and the compliance by the Company
with the provisions of this Agreement do not and will not conflict with, or
result in any violation or breach of, or default (with or without notice or
lapse of time or both) under, or give rise to a right of, or result in,
termination, cancellation or acceleration of any obligation or to a loss of
a
material benefit under, or result in the creation of any Lien in or upon any
of
the properties or assets of the Company under, or give rise to any increased,
additional, accelerated or guaranteed rights or entitlements under, any
provision of: (i) the Constitutive Documents; (ii) assuming all consents set
forth in Section 3.13 of the Disclosure Schedule are obtained, any
indebtedness, loan or credit agreement, bond, debenture, note, mortgage,
indenture, guarantee, lease or other contract that is material to the Company
to
which the Company is a party or bound by or its properties or assets are bound
by or subject to or otherwise under which the Company has rights or benefits;
or
(iii) any (A) Law, or (B) Judgment, in each case, applicable to the Company,
its
properties or assets other than in the cases of (ii) and (iii) above, any such
conflicts, violations, breaches, defaults, rights, entitlements, losses or
Liens
that have not given rise to, or would not reasonably be anticipated to give
rise
to, an event constituting a Material Adverse Change.
(b) No
consent, approval, order or authorization of, registration, declaration or
filing with, or notice to, any Governmental Entity is required by or with
respect to the Company in connection with the execution and delivery by the
Company of this Agreement, the consummation by the Company of the transactions
contemplated hereby or the compliance by the Company with the provisions of
this
Agreement, except for such consents, approvals, orders, authorizations,
registrations, declarations, filings and notices, the failure of which to be
obtained or made individually or in the aggregate would not impair in any
material respect the ability of the Company to perform its obligations under
this Agreement and will not result in a Material Adverse Change.
3.4 Compliance
with Laws. The Company is and has been in compliance in all
material respects with all applicable Laws and Judgments of any Governmental
Entity applicable to its businesses or operations. The Company has
not received a written notice or other written communication (or, to the
Knowledge of the Company, any oral notice or other communication) that is
currently pending alleging a possible violation by the Company of any applicable
Law or Judgment of any Governmental Entity applicable to the Company’s
businesses or operations.
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3.5 Capitalization. The
authorized capital stock of the Company consists of (a) 5,000,000 shares of
Common Stock, no par value per share (the “Company Common Stock”),
2,224,710.270 shares of which are issued and outstanding, (b) 403,389.985 shares
of Preferred Stock (as hereinafter defined), comprised of (i) Series A Preferred
Stock (the “Series A Stock”), 0 shares of which are issued and
outstanding, (ii) Series B Preferred Stock (the “Series B Stock”),
160,404.373 shares of which are issued and outstanding, (iii) Series C Preferred
Stock (the “Series C Stock”), 119,784.173 shares of which are issued and
outstanding, and (iv) Series D Preferred Stock (the “Series D Stock,”
together with the Series A Stock and Series B Stock, the “Preferred
Stock”), 123,201.439 shares of which are issued and
outstanding. All such issued and outstanding shares have been duly
authorized and validly issued, are fully paid and nonassessable, have been
offered, issued, sold and delivered by the Company in compliance with applicable
federal and state securities laws and not in violation of the right of any
third
party including, but not limited to, preemptive, first refusal or other rights
of shareholders. A capitalization table of the Company immediately
prior to the Closing is set forth in Section 3.5 of the Disclosure
Schedule. Except for the Preferred Stock which is convertible into
Company Common Stock as set forth in the Company’s Articles of Incorporation,
there are no outstanding options, warrants or other rights, or agreements,
arrangements or commitments of any character in effect relating to the issued
or
unissued capital stock of the Company, or obligating the Company to issue or
sell shares of capital stock of, or other equity interests in, the Company,
including any securities directly or indirectly convertible into or exercisable
or exchangeable for any capital stock or other equity securities of the
Company. The Company does not have outstanding any bonds, debentures,
notes or other obligations, the holders of which have the right to vote (or
convertible into or exercisable for securities having the right to vote) either
separately as a class or with the shareholders on any matter.
3.6 Subsidiaries. The
Company has the following subsidiaries: (a) GOC International, Inc., a Virginia
corporation (incorporated on April 12, 2007), which is the sole owner of GOC
Canada, ULC, an Alberta limited liability corporation (incorporated on January
19, 2007); and (b) GOC Canada, LLC, a Virginia limited liability company
(chartered on January 22, 2007), which currently has no operations.
3.7 Permits. The
Company validly holds and has in full force and effect, or has taken appropriate
steps to obtain or renew, all material Permits necessary for it to carry on
its
business as now conducted. The Company is in compliance in all
material respects with the terms and conditions of all such Permits and there
has occurred no material default (with or without notice or lapse of time or
both) or material violation of, or under, or event giving to any other Person
any right of termination, amendment or cancellation of, any such
Permit. None of such Permits will be subject to suspension,
modification, revocation or nonrenewal as a result of the consummation of the
transactions contemplated hereby or the execution and delivery of this
Agreement. No proceeding is pending or, to the Knowledge of the
Company, threatened, seeking the revocation or limitation of any
Permit. Material Permits are held in the name of the Company, and
none are held in the name of any Company employee or agent or otherwise on
behalf of the Company.
3.8 Financial
Statements. Section 3.8 of the Disclosure Schedule sets
forth the unaudited balance sheet of the Company for the eleven months ended
as
of July 31, 2007 (the “Most Recent Balance Sheet”), and the audited
balance sheets for the twelve months ended August 31, 2004, August 31, 2005
and
August 31, 2006, together with the related statements of income for the twelve
months ended August 31, 2004, August 31, 2005 and August 31, 2006 (collectively,
the “Financial Statements”). The Financial Statements: (i) are
consistent with the books and records of the Company; (ii) have been prepared
in
accordance with GAAP; and (iii) present fairly the financial condition and
results of operations of the Company as of the respective dates thereof and
for
the periods referred to therein in all material respects.
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3.9 Absence
of Changes or Events. Except as set forth in Section 3.9
of the Disclosure Schedule, since July 31, 2007:
(a) The
Company has conducted its business only in the Ordinary Course of
Business;
(b) there
has occurred no Material Adverse Change, nor any change, circumstance,
development, state of facts, event or effect that would reasonably be expected
to result in a Material Adverse Change;
(c) The
Company has not: (i) amended its Constitutive Documents; (ii) issued, sold,
transferred, pledged, disposed of or encumbered any of its capital stock or
any
commitments or rights of any kind to acquire any of its capital stock; or (iii)
purchased or otherwise acquired directly or indirectly any of its capital stock,
or any instrument or security which consists of or includes a right to acquire
such capital stock;
(d) The
Company has not adopted a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring or other reorganization of the
Company;
(e) The
Company has not changed in any material respect any of the accounting policies
or methods used by it;
(f) The
Company has not incurred loss of, or significant injury to, any of its assets
whether as a result of any natural disaster, labor trouble, accident, other
casualty or otherwise;
(g) The
Company has not mortgaged, pledged or subjected to any Lien (other than
Permitted Liens), any of its assets;
(h) The
Company has not sold, exchanged, transferred or otherwise disposed of any of
its
assets, except in the Ordinary Course of Business;
(i) The
Company has not canceled any debts or claims;
(j) The
Company has not reserved for or written down the value of any assets or written
off as uncollectible any accounts receivable, except in the Ordinary Course
of
Business and none of which, individually or in the aggregate, would result
in a
Material Adverse Change; and
(k) The
Company has not made any agreement to do any of the foregoing, other than
negotiations with Purchaser and its Representatives regarding the transactions
contemplated by this Agreement.
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3.10 Undisclosed
Liabilities. To the Knowledge of the Company, the Company does
not have any liabilities, obligations or commitments of any nature (whether
known or unknown, absolute, accrued, contingent, liquidated or otherwise),
except: (a) liabilities, obligations or commitments which are appropriately
reflected or reserved against on the Most Recent Balance Sheet; (b) liabilities,
obligations or commitments which have been incurred in the Ordinary Course
of
Business and consistent with past practice since the Most Recent Balance Sheet
Date; (c) liabilities, obligations or commitments disclosed in the Disclosure
Schedule; and (d) express performance obligations under the contracts and
agreements of the Company.
3.11 Assets
other than Real Property. The Company is the true and lawful
owner or lessee of and has good and valid title to, or a valid leasehold
interest in, all personal property (tangible or intangible) reflected on the
Most Recent Balance Sheet or thereafter acquired, except inventory that has
been
sold or otherwise disposed of in the Ordinary Course of Business since the
Most
Recent Balance Sheet Date and not in violation of this Agreement, in each case,
free and clear of all Liens (other than Permitted Liens).
3.12 Real
Property. The Company does not own any real
property. With respect to real property and interests in real
property leased by or to the Company (each, a “Real Property”), except as
set forth in Section 3.12 of the Disclosure Schedule: (i) the Company has
good and valid title to the leasehold estate relating to any leased Real
Property, free and clear of all Liens (other than Permitted Liens and Liens
which would not reasonably be expected to materially impair the current uses
or
the occupancy by the Company of such Real Property), leases, assignments,
subleases, easements, covenants, rights of way and other similar restrictions
of
any nature whatsoever, other than those identified in the leases and operating
agreements provided to Purchaser; (ii) any lease relating to any leased Real
Property is in writing and is legal, valid, binding, in full force and effect
and enforceable against the Company in accordance with its terms; (iii) any
lease relating to any leased Real Property will, immediately following the
Closing Date, continue to be legal, valid, binding, in full force and effect
and
enforceable in accordance with its terms as in effect on the date hereof; and
(iv) the Company is not and, to the Knowledge of the Company, no other party
to
any lease relating to a leased Real Property is, in breach or violation of,
or
in default under, such lease.
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3.13 Contracts. Each
Contract is in full force and effect, and is legal, valid, binding and
enforceable against the Company in accordance with its terms. There
is no material default, material violation or material breach under any Contract
by the Company or, to the Company’s Knowledge, by any other party thereto, and
no event has occurred or condition exists that with the lapse of time or the
giving of notice or both would constitute a material default, material violation
or material breach thereunder by the Company or, to the Company’s Knowledge, any
other party thereto, except to the extent such default, violation or breach
would not individually or in the aggregate cause a Material Adverse
Change. Except as set forth in Section 3.13 of the Disclosure
Schedule, no notice, waiver, consent or approval is required (or the lack of
which would give rise to a right of termination, cancellation or acceleration
of, or entitle any party to accelerate, whether after the giving of notice
or
lapse of time or both, any obligation under the Contracts) under or relating
to
any material Contract in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated
hereby.
3.14 Intellectual
Property. The Company owns or has valid licenses to use, free and
clear of all Liens or any other claims, including, without limitation, any
claim
of ownership or other right by any inventor on any Patent, all Company
Intellectual Property that is material to the Company or the operation of its
business as currently conducted and there are no claims or demands by any other
Person pertaining to any Company Intellectual Property, and no proceedings
have
been instituted, or are pending or, to the Knowledge of the Company, threatened,
which challenge the rights of the Company in respect thereof.
3.15 Litigation. There
is no Legal Proceeding that is pending (or, to the Company’s Knowledge,
threatened) against the Company, which could result in a Material Adverse
Change. The Company is not operating under and is not subject to any
Judgment, writ, injunction or award of any Governmental Entity, court, judge,
justice, magistrate, or arbitrator, including any bankruptcy court or
judge. There are no unsatisfied Judgments outstanding against the
Company.
3.16 Taxes. All
Tax Returns required to be filed by the Company have been timely filed and
are
true, correct and complete in all material respects and all Taxes owed by the
Company (whether or not shown on any Tax Return) have been timely
paid.
3.17 Insurance. The
insurance policies maintained by the Company comply with any requirements to
maintain insurance set forth in any contract or agreement to which the Company
is a party. There is no claim pending under any such policy as to
which coverage has been questioned, denied or disputed by the underwriter of
such policy. To the Knowledge of the Company, there has been no
notice of cancellation or termination (or any other threatened termination)
of,
or premium increase with respect to, any such policy.
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3.18 Warranty
and Product Liability Matters. The Company’s products have no
known design or manufacturing defects which individually or in the aggregate
would result in a Material Adverse Change to the Company or its assets and
such
products comply in all material respects with, and meet the current standards
of, federal, state, local and foreign codes, laws, regulations and statutes
dealing with such products.
3.19 Benefit
Plans. Each Benefit Plan has been operated and administered in all material
respects in accordance with its terms and applicable laws, including, but not
limited to, ERISA and the Code.
3.20 Employee
and Labor Matters. The Company’s employees are not members of any
union. There are no pending charges against the Company or any current or former
Company employees (based on conduct relating to their employment by the Company)
before the Equal Employment Opportunity Commission or any other Governmental
Entity responsible for the prevention of unlawful employment practices nor,
to
the Knowledge of the Company, does any basis exist therefore. The
Company has not received notice of the intent of any Governmental Entity
responsible for the enforcement of labor or employment Laws to conduct an
investigation of the Company and, to the Knowledge of the Company, no such
investigation is in progress. The Company has complied in all
material respects with all applicable Laws relating to employment and governing
payment of minimum wages and overtime rates, the withholding and payment of
Taxes from compensation of employees and the payment of premiums and/or benefits
under applicable worker compensation Laws.
3.21 Environmental
Matters. The Company is and has been in compliance in all
material respects with all applicable Environmental Laws. The Company
has received no written notice of any pending, or to its Knowledge, threatened,
and to the Knowledge of the Company, there is no basis for any action, demand,
claim, notice of noncompliance, suit, investigation, inquiry or proceeding
relating to any liability under any Environmental Law.
3.22 Effect
of Transaction. Except as set forth in Section 3.22 of the
Disclosure Schedule, to the Company’s Knowledge, no lender, creditor, lessor,
lessee, licensor, licensee, employee, contractor, distributor, vendor, client,
customer, supplier, Affiliate or other Person having a relationship with the
Company has informed the Company and the Company has no Knowledge that such
Person intends to change such relationship (in part or in whole) because of
the
consummation of the transactions contemplated by this Agreement.
3.23 Ownership
of Assets. Except as set forth in Section 3.23 of the
Disclosure Schedule, the Company is the sole and exclusive legal and equitable
owner of, and has good and marketable title to, its assets and such assets
are
free and clear of all Liens (other than Permitted Liens). Except as
set forth in Section 3.23 of the Disclosure Schedule, no Person or
Governmental Entity has an option to purchase, right of first refusal or other
similar right with respect to all or any part of the Company’s assets other than
in the Ordinary Course of Business.
3.24 Customers. Intentionally
omitted.
3.25 Disclosure. No
representations or warranties by the Company in this Agreement, and no statement
or information contained in the schedules hereto or any certificate furnished
by
the Company pursuant to the provisions of this Agreement, contain any untrue
statement of a material fact or omit to state any material fact necessary,
in
light of the circumstances under which they were made, to make the statements
herein or therein not materially misleading.
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3.26 Application
of Takeover Protections. There is no control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company's charter
documents or the laws of its state of incorporation that is or could reasonably
be expected to become applicable to Purchaser as a result of Purchaser, the
Company and/or the Stockholders fulfilling their obligations or exercising
their
rights under this Agreement, including, without limitation, the Stockholders’
transfer of the Company Shares and the Purchaser’s ownership of the Company
Shares.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE STOCKHOLDERS
Each
Stockholder represents and warrants to the Purchaser as follows, as of the
Closing Date:
4.1 Power
and Authority; Binding Agreement. Such Stockholder has all
requisite power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by
such Stockholder and, assuming due execution and delivery by the other parties
hereto, constitutes a valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms, subject
in
each case to bankruptcy, reorganization, insolvency or similar laws affecting
the enforcement of creditors’ rights in general and to general principles of
equity (regardless of whether considered in a proceeding in equity or an action
at law).
4.2 Title to
the Company Shares. Such Stockholder has good and marketable
title to the Company Shares, free and clear of all restrictions, Liens, voting
trusts, agreements, proxies, arrangements and encumbrances of any kind
whatsoever (collectively, “Encumbrances”). Upon the Closing,
such Stockholder shall transfer good and marketable title to the Company Shares
to Purchaser free and clear of all Encumbrances.
4.3 Disclosure. No
representations or warranties by such Stockholder in this Agreement, and no
statement or information contained in the schedules hereto or any certificate
furnished by such Stockholder pursuant to the provisions of this Agreement,
contain any untrue statement of a material fact or omit to state any material
fact necessary, in light of the circumstances under which they were made, to
make the statements herein or therein not materially misleading.
4.4 Investment
Representations. Such Stockholder understands that the Purchase
Shares have not been registered under the Securities Act or the securities
laws
of any state or other jurisdiction. Such Stockholder is acquiring the
Purchase Shares for its own account for purposes of investment and not for
the
account of any other Person, not for resale to any other Person, and not with
a
view to or in connection with a resale or distribution of the Purchase
Shares. Such Stockholder has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment for the
disposition of the Purchase Shares by such Stockholder. Except as
otherwise provided herein, such Stockholder will not sell or otherwise dispose
of any shares of capital stock of Purchaser without registration under the
Securities Act and under any applicable state or other jurisdiction’s respective
securities laws, or an exemption therefrom.
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ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
represents and warrants to the Company and the Stockholders as follows, as
of
the Closing Date:
5.1 Organization
and Standing. Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Utah. Purchaser has all requisite corporate power and authority to
own its properties and carry on its business as being now conducted and as
contemplated by this Agreement.
5.2 Power
and Authority; Binding Agreement. Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to perform its obligations
hereunder. The execution and delivery by Purchaser of this Agreement
and the consummation by Purchaser of the transactions contemplated hereby,
have
been duly authorized by all necessary corporate action on the part of Purchaser,
and no other proceedings on the part of Purchaser are necessary to authorize
this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by
Purchaser and, assuming the due execution of this Agreement by the other parties
thereto, constitutes a valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject to bankruptcy,
reorganization, insolvency or similar laws affecting the enforcement of
creditors’ rights in general and to general principles of equity (regardless of
whether considered in a proceeding in equity or an action at law).
5.3 Noncontravention.
(a) The
execution and delivery by Purchaser of this Agreement, the consummation of
the
transactions contemplated hereby, and the compliance by Purchaser with the
provisions of this Agreement do not and will not conflict with, or result in
any
violation or breach of, or default (with or without notice or lapse of time
or
both) under, or give rise to a right of, or result in, termination, cancellation
or acceleration of any obligation or to a loss of a material benefit under,
or
result in the creation of any Lien in or upon any of the properties or assets
of
Purchaser under, or give rise to any increased, additional, accelerated or
guaranteed rights or entitlements under, any provision of (i) Purchaser’s
certificate of incorporation or bylaws, (ii) any Law or Judgment, with respect
to Purchaser’s properties or assets, other than, in the case of clause (ii), any
such conflicts, violations, breaches, defaults, rights, losses, Liens or
entitlements that individually or in the aggregate are not likely to impair
in
any material respect the ability of Purchaser to perform its obligations under
this Agreement, or prevent or materially impede or delay the consummation of
the
transactions contemplated hereby.
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(b) No
consent, approval, order or authorization of, registration, declaration or
filing with, or notice to, any Governmental Entity is required by or with
respect to Purchaser in connection with the execution and delivery by Purchaser
of this Agreement, the consummation by Purchaser of the transactions
contemplated by this Agreement or the compliance by Purchaser with the
provisions of this Agreement, except for such consents, approvals, orders,
authorizations, registrations, declarations, filings and notices, the failure
of
which to be obtained or made individually or in the aggregate would not impair
in any material respect the ability of Purchaser to perform its obligations
under this Agreement, or prevent or materially impede or delay the consummation
of the transactions contemplated hereby.
5.4 Brokers. Purchaser
has not employed or entered into any Contract with any investment banker,
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement, pursuant to which the Company could be liable
for the fee or commission of such investment banker, broker, finder, consultant
or intermediary, or for any similar fee or commission in connection with this
Agreement or the transactions contemplated hereby.
5.5 Consents. No
consent, waiver, approval, order, permit or authorization of, or declaration
or
filing with, or notification to, any person or Governmental Entity is required
on the part of the Purchaser in connection with the execution and delivery
of
this Agreement or the compliance by the Purchaser with any of the provisions
hereof.
5.6 Litigation. There
is no Legal Proceeding pending or, to the knowledge of the Purchaser,
threatened, that seeks to enjoin or obtain damages in respect of the
consummation of the transactions contemplated by this Agreement or that
questions the validity of this Agreement, or any action taken or to be taken
by
the Purchaser in connection with the consummation of the transactions
contemplated hereby.
5.7 Investment
Representations. Purchaser understands that the Company Shares
have not been registered under the Securities Act or the securities laws of
any
state or other jurisdiction. Purchaser is acquiring the Company
Shares for its own account for purposes of investment and not for the account
of
any other Person, not for resale to any other Person, and not with a view to
or
in connection with a resale or distribution of the Company
Shares. Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment for the
disposition of the Company Shares by Purchaser. Purchaser will not
sell or otherwise dispose of any Company Common Stock without registration
under
the Securities Act and under any applicable state or other jurisdiction’s
respective securities laws, or an exemption therefrom.
5.8 Securities
Reports. Purchaser has filed all forms, reports and documents
required to be filed with the Commission (the “Purchaser
Reports”). The Purchaser Reports (a) were prepared in all
material respects in accordance with the requirements of all applicable Laws
of
any Governmental Entity, and (b) did not at the time they were filed, after
giving effect to any amendment thereto filed prior to the date hereof, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that information as of a later date (but before the date
of
this Agreement) will be deemed to modify information as of any earlier
date. There is no event or fact affecting Purchaser, its operations
or its financial condition which has not been disclosed in the Purchaser Reports
or otherwise to the Stockholders in writing which materially and adversely
affects or is reasonably likely to materially and adversely affect Purchaser,
its operations or its financial condition.
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5.9 Purchase
Shares. The Purchase Shares have been duly authorized, and when
issued in accordance with the terms of this Agreement, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens other than
restrictions on transfer imposed by applicable securities Laws and shall not
be
subject to preemptive or similar rights of shareholders. The Purchase
Shares and the Adjustment Shares, if any, will be issued in compliance with
all
applicable federal and state securities Laws.
5.10 Listing
and Maintenance Requirements. Except as specified in the
Purchaser Reports, Purchaser has not, in the two (2) years preceding the date
hereof, received notice (written or oral) from any Trading Market to the effect
that Purchaser is not in compliance with the listing and maintenance
requirements for continued listing of the Telkonet Common Stock on the Trading
Market on which the Telkonet Common Stock is currently listed or
quoted. The issuance of the Purchase Shares does not contravene the
rules and regulations of the Trading Market on which the Telkonet Common Stock
is currently listed or quoted, and no approval of the shareholders of Purchaser
thereunder is required for Purchaser to issue and deliver to the Stockholders
the Purchase Shares.
ARTICLE
VI
COVENANTS
6.1 Confidentiality. The
parties hereto (each, a “Receiving Party”) shall ensure that all
confidential and proprietary information disclosed by any other party hereto
or
any of their Affiliates, employees, attorneys, agents, investment bankers,
or
accountants (each, a “Disclosing Party”) shall not be published,
disclosed, or made accessible by any of them to any other person or entity
at
any time or used by any of them without the prior written consent of the
Disclosing Party; provided, however, that the restrictions of this
provision shall not apply: (i) as may otherwise be required by Law; (ii) as
may
be necessary or appropriate in connection with the enforcement of this
Agreement; (iii) to the extent such information shall have otherwise become
publicly available other than as the result of a breach by the Receiving Party
or any of their respective Affiliates of their obligations under this Agreement,
or (iv) to any disclosure made for the sole purpose of offering participation
in
this transaction to Xxxxx X. Xxxxxx, XX (“Xxxxxx”), provided that Xxxxxx
agrees to be bound by the terms of this Section 6.1. The restrictions
of this Section 6.1 shall survive for a period of five (5) years following
the
Closing.
6.2 Publicity. No
public announcement of this transaction shall be made without the express
written consent of Purchaser.
6.3 Filing
of Registration Statement on Form S-3. Purchaser agrees to file a
registration statement with the Commission covering the distribution of the
Purchase Shares no later than the 90th day following
the
Closing Date.
6.4 No
Shop.
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(a) From
the date of this Agreement until the Closing Date (the “No Shop Period”),
neither the Company nor any of the Stockholders shall, nor shall either of
them
authorize or permit any of their Affiliates or any officer, director, employee,
investment banker, attorney or other adviser or representative of the Company
or
the Stockholders or any of their Affiliates to, (i) solicit, initiate, or
intentionally encourage the submission of, any Acquisition Proposal (as
hereinafter defined), (ii) enter into any agreement with respect to any
Acquisition Proposal, or (iii) participate in any discussions or
negotiations regarding, or furnish to any Person any information for the purpose
of responding to, facilitating the making of, or take any other action for
the
purpose of responding to, facilitating any inquiries or the making of, any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal other than the transactions contemplated
hereby.
(b) For
purposes of this Agreement, “Acquisition Proposal” means any proposal for
a merger or other business combination involving the acquisition of the Company
by any Person other than Purchaser or any proposal or offer to acquire in any
manner, directly or indirectly, any of the equity securities, voting securities
or assets of the Company, other than the transactions contemplated
hereby.
(c) The
Company and the Stockholders will, and except as otherwise provided in this
Agreement, will cause their Affiliates to, immediately cease and cause to be
terminated any activities, discussions or negotiations existing as of the date
of this Agreement with any Persons (other than Purchaser and its
Representatives) conducted heretofore with respect to any Acquisition Proposal,
and will not pursue, directly or indirectly, any Acquisition Proposal received
on or prior to the date of this Agreement from any Person (other than Purchaser
and its Representatives) during the No Shop Period. Nothing in this
Section 6.4 shall permit the Company or the Stockholders to terminate this
Agreement (except as expressly provided in Article IX) or affect any other
obligations of the Company or the Stockholders under this
Agreement.
6.5 Further
Assurances. From time to time following the Closing, as and when
requested by any Party, the other Parties shall execute and deliver, or cause
to
be executed and delivered, all such documents and instruments and shall take,
or
cause to be taken, all such further or other actions as such other Party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated
hereby.
6.6 Merger
Transaction. Immediately following the Closing, the Company shall
use its best efforts to identify a publicly-traded “shell company,” as such term
is defined under the rules of the Commission (the “Public Shell
Company”), and cause the Company to be merged with and into the Public Shell
Company (the “Merger Transaction”).
6.7 Private
Placement. Simultaneously with or immediately following the
Merger Transaction, the Company shall use its best efforts to engage in a
private placement (the “Private Placement”) of the Company Common Stock
resulting in net proceeds to the Company of at least $4,250,000, which net
proceeds shall be used for working capital purposes. Notwithstanding
the foregoing, if the valuation of the Company for purposes of the Private
Placement is less than $20 million, then the terms of the Private Placement
shall be subject to the further approval of the Company’s Board of
Directors.
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6.8 Board
of Directors. Immediately following the Closing, the Company
shall use its best efforts to cause the appointment or election to the Company’s
Board of Directors two persons designated by Purchaser for such term(s) as
agreed to by Purchaser and the Company.
ARTICLE
VII
CONDITIONS
7.1 Conditions
to Each Party’s Obligations. The respective obligation of each
party to consummate the transactions contemplated hereby is subject to the
fulfillment, satisfaction or waiver at or prior to the Closing of each of the
following conditions:
(a) All
authorizations, consents, orders, declarations or approvals of, or filings
with,
or terminations or expirations of waiting periods imposed by any law or
Governmental Entity, necessary or required in order for the consummation of
any
of the transactions contemplated by this Agreement and which, if not obtained,
made or occurring, would make any of the transactions contemplated hereby
illegal or would result in a Material Adverse Change to the Company, shall
have
been obtained, made or occurred.
(b) No
Governmental Entity or court of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which (i) is in effect, and (ii) has the
effect of making the transactions contemplated hereby illegal or otherwise
prohibiting or preventing the consummation of the transactions contemplated
hereby.
7.2 Conditions
to Purchaser’s Obligations. Purchaser’s obligation to consummate
the transactions contemplated hereby shall be subject to the fulfillment or
satisfaction of the following conditions, any of which may be waived in writing
by Purchaser in whole or in part:
(a) The
representations and warranties of each of the Company and the Stockholders
contained in this Agreement that are qualified as to materiality or Material
Adverse Change shall be true and correct, and that are not so qualified shall
be
true and correct in all material respects on the date of this Agreement and
on
and as of the Closing Date, as though made on and as of the Closing Date (except
for representations and warranties made as of a specified date, which need
be
true and correct only as of the specified date). Purchaser shall have
received a certificate dated as of the Closing Date and signed by an executive
officer of the Company certifying that the conditions specified in Section
7.2(a) and (b) have been satisfied (the “Company
Certificate”).
(b) Each
of the Company and the Stockholders shall have performed and complied in all
material respects with all the agreements and covenants contained herein that
are required to be performed by them prior to or at the Closing.
(c) There
shall have occurred no effects, events, occurrences, developments or changes
that have resulted in, or are reasonably likely to result in, a Material Adverse
Change since the date of this Agreement, except for changes expressly
contemplated by this Agreement.
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(d) The
Company shall have received all necessary consents, waivers, assignments,
approvals, or transfers in form and substance reasonably satisfactory to
Purchaser, from all Governmental Entities, and all Contracts, leases or
agreements to which the Company is a party, or that concern or relate to the
Permits held by the Company, except where the failure to receive such consent,
waiver, assignment, approval or transfer would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse
Change.
(e) The
Purchaser shall have received final approval from its Board of
Directors.
7.3 Conditions
to the Company’s Obligations. The Company’s and the Stockholders’
obligation to consummate the transactions contemplated hereby shall be
subject
to the fulfillment or satisfaction of the following conditions, any of which
may
be waived in writing by the Company and the Stockholders in whole or in
part:
(a) The
representations and warranties of the Purchaser contained in this Agreement
that
are qualified as to materiality shall be true and correct, and that are not
so
qualified shall be true and correct in all material respects on the date of
this
Agreement and on and as of the Closing Date, as though made on and as of the
Closing Date (except for representations and warranties made as of a specified
date, which need be true and correct only as of the specified
date). The Company shall have received a certificate dated as of the
Closing Date and signed by an executive officer of Purchaser certifying that
the
conditions specified in Section 7.3(a) and (b) have been satisfied (the
“Purchaser Certificate”).
(b) Purchaser
shall have performed and complied in all material respects with all
the agreements and covenants contained herein that are required to be performed
by it prior to or at Closing.
ARTICLE
VIII
CLOSING
8.1 Closing. The
transactions contemplated hereby (the “Closing”) shall take place at the
offices of Xxxxx & Xxxxxxxxx LLP, 0000 Xxxxxxxxxxx Xxxxxx, XX, Xxxxx 0000,
Xxxxxxxxxx, XX 00000, on a date specified by the parties hereto, which date
shall be no later than the fifth Business Day after satisfaction or waiver
of
the conditions set forth in Article VII (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the fulfillment
or waiver of those conditions at Closing) or at such other date or place as
the
parties may agree (the “Closing Date”).
8.2 Deliveries. (a)
At the Closing, the Company and/or the Stockholders, as appropriate, shall
deliver to Purchaser the following:
(i) copies
of the resolutions of the board of directors of the Company authorizing the
execution, delivery and performance of this Agreement, and the incumbency of
the
persons executing this Agreement and other documents on behalf of the Company,
all certified by an executive officer of the Company.
(ii) certificates
evidencing the Company Shares duly endorsed for transfer.
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(iii) the
Private Label Agreement (the “Private Label Agreement”) in substantially
the form attached hereto and made a part hereof as Exhibit A.
(iv) the
Registration Rights Agreement (the “Registration Rights Agreement”) in
substantially the form attached hereto and made a part hereof as Exhibit
B.
(v) the
Escrow Agreement.
(vi) the
Company Certificate.
(b) At
the Closing, Purchaser shall deliver to the Company and/or the Stockholders,
or,
with regard to the Purchase Shares, to the Escrow Agent, as appropriate, the
following:
(i) copies
of the resolutions of the board of directors of Purchaser authorizing the
execution, delivery and performance of this Agreement, and the incumbency of
the
persons executing this Agreement and other documents on behalf of Purchaser,
all
certified by an executive officer of Purchaser.
(ii) the
Private Label Agreement.
(iii) the
Registration Rights Agreement.
(iv) the
Escrow Agreement.
(v) the
Purchaser Certificate.
(vi) the
Purchase Shares.
ARTICLE
IX
TERMINATION
9.1 Termination. This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written consent of the Company, the Stockholders and
Purchaser;
(b) by
either the Company and the Stockholders or Purchaser:
(i) if
the transactions contemplated hereby shall not have been consummated within
thirty (30) days following the date of this Agreement; provided that the
terminating party shall not have breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
contributed to the failure to consummate the transactions contemplated hereby
by
such date; or
(ii) if
any Governmental Entity of competent jurisdiction shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining
or
otherwise prohibiting the transactions contemplated hereby and such order,
decree or ruling or other action shall have become final and nonappealable;
provided, however, that the right to terminate this Agreement pursuant to this
Section 9.1(b)(ii) shall not be available to any party who has not used its
commercially reasonable efforts to cause such order, decree or ruling to be
lifted.
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22
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(c) by
Purchaser if (i) the representations and warranties of the Company or any
Stockholder contained in this Agreement shall not be true and correct in all
material respects, or (ii) the Company or any Stockholder shall have failed
to perform in any material respect any material obligation or to comply in
any
material respect with any material agreement or material covenant of the Company
or any Stockholder to be performed or complied with by it under this Agreement,
in each case, such that the conditions set forth in Sections 7.2(a) or (b)
would
not be satisfied, and in the case of clause (i) such untruth or
incorrectness cannot be or has not been cured within thirty (30) days after
the
giving of written notice to the Company and the Stockholders, and, in the case
of clause (ii), such failure cannot be or has not been cured within thirty
(30) days after the giving of written notice to the Company and the
Stockholders; or
(d) by
the Company and the Stockholders if (i) the representations and warranties
of Purchaser contained in this Agreement shall not be true and correct in all
material respects, except to the extent that any breach (either individually
or
in the aggregate with all other such breaches) would not have a material adverse
effect on Purchaser; or (ii) Purchaser shall have failed to perform in any
material respect any material obligation or to comply in any material respect
with any material agreement or material covenant of Purchaser to be performed
or
complied with by it under this Agreement, in each case such that the conditions
set forth in Sections 7.3(a) or (b) would not be satisfied, and in the case
of
clause (i) such untruth or incorrectness cannot be or has not been cured
within thirty (30) days after the giving of written notice to Purchaser, and,
in
the case of clause (ii), such failure cannot be or has not been cured
within thirty (30) days after the giving of written notice to
Purchaser.
9.2 Effect
of Termination. If this Agreement is terminated pursuant to
Section 9.1, all obligations of the Parties hereunder shall
terminate, except for the obligations set forth in Section 6.1
(Confidentiality) and 6.2 (Publicity), which shall survive the termination
of
this Agreement, and except that no such termination shall relieve any party
from
liability for any prior breach of this Agreement.
ARTICLE
X
INDEMNIFICATION
10.1 Survival. The
representations and warranties of the Parties contained in this Agreement,
and
in any certificate, schedule or document delivered pursuant hereto shall be
deemed to have been relied on by the parties hereto, and shall survive the
Closing for a period of two (2) years; provided, however, that the
representations and warranties contained in Sections 4.2 (Title to the Company
Shares) shall survive indefinitely.
10.2 Indemnification
of Purchaser. The Company and each Stockholder, respectively and
for themselves only, shall indemnify Purchaser against, and hold Purchaser
harmless from and against any and all Losses suffered or incurred by Purchaser,
arising from, relating to or otherwise in connection with the following
(collectively, the “Purchaser Indemnifiable Loss”):
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23
-
(a) any
material breach of any representation or warranty of the Company or any
Stockholder contained in this Agreement or in any other agreement or instrument
executed and delivered by the Company or any Stockholder pursuant to this
Agreement; or
(b) any
material breach or failure to perform any covenant or agreement of the Company
or the Stockholders contained in this Agreement or any agreement or instrument
furnished by the Company or the Stockholders pursuant to this
Agreement.
10.3 Indemnification
of the Company. Purchaser shall indemnify the Company and the
Stockholders (each a “Company Indemnified Party”) against and hold each
Company Indemnified Party harmless from any and all Losses suffered or incurred
by any such Company Indemnified Party arising from, relating to or otherwise
in
connection with:
(a) any
material breach, as of the Closing Date, of any representation or warranty
of
Purchaser contained in this Agreement or any other agreement or instrument
furnished by Purchaser to the Company or the Stockholders pursuant to this
Agreement; or
(b) any
material failure to perform any covenant or agreement of Purchaser contained
in
this Agreement or any agreement or instrument furnished by Purchaser to the
Company or the Stockholders pursuant to this Agreement.
10.4 Indemnification
Claims.
(a) In
order for an Indemnified Party to be entitled to any indemnification provided
for under Section 10.2 or 10.3 in respect of, arising out of or involving a
Third Party Claim, such Indemnified Party must notify the Indemnifying Party
in
writing of the Third Party Claim within twenty (20) Business Days after receipt
by such Indemnified Party of notice of the Third Party Claim; provided,
however, that failure to give such notification shall not affect the
indemnification provided under Section 10.2 or 10.3, except to the extent the
Indemnifying Party has been actually prejudiced as a result of such
failure. Thereafter, the Indemnified Party shall deliver to the
Indemnifying Party, within ten (10) Business Days after the Indemnified Party’s
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party
Claim. The Indemnifying Party alone shall conduct and control the
defense of such Third Party Claim and the Indemnified Party shall have the
right
to participate in the defense of such claim at its own expense. The
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party (such consent not to be unreasonably delayed, withheld or
conditioned), settle, compromise or offer to settle or compromise any such
claim
or demand on a basis which would result in the imposition of a consent order,
injunction or decree that does not include an unconditional release of the
Indemnified Party for any liability arising out of such claim or demand or
any
related claim or demand.
(b) In
order for an Indemnified Party to be entitled to any indemnification provided
for under this Agreement other than in respect of, arising out of or involving
a
Third Party Claim, such Indemnified Party shall deliver notice of such claim
with reasonable promptness to the Indemnifying Party; provided,
however, that failure to give such notification shall not affect the
indemnification provided under Section 10.2 or 10.3, except to the extent the
Indemnifying Party has been actually prejudiced as a result of such
failure. If the Indemnifying Party does not notify the Indemnified
Party within twenty (20) Business Days following its receipt of such notice
that
the Indemnifying Party disputes its liability to the Indemnified Party, such
claim specified by the Indemnified Party in such notice shall be conclusively
deemed a liability of the Indemnifying Party under Section 10.2 or 10.3 and
the
Indemnifying Party shall pay the amount of the Losses stated in such notice
to
the Indemnified Party on demand or, in the case of any notice in which the
Losses (or any portion thereof) are estimated, on such later date when the
amount of such Losses (or such portion thereof) becomes finally
determined.
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24
-
10.5 No
Double Recovery; Use of Insurance. Notwithstanding anything
herein to the contrary, no Indemnified Party shall be entitled to
indemnification or reimbursement under any provision of this Agreement for
any
amount to the extent such Indemnified Party has been indemnified or reimbursed
for such amount under any other provision of this Agreement or
otherwise. The amount of any indemnification payable under this
Agreement will be net of the receipt of any insurance proceeds paid or payable
to the Indemnified Party under any policies of insurance covering the Loss
giving rise to the claim. The Indemnified Party will use commercially
reasonable efforts to collect any such insurance and will account to the
Indemnifying Party therefor. If, at any time subsequent to the
Indemnified Party receiving an indemnity payment for a claim under this
Agreement, the Indemnified Party receives payment in respect of the Loss
underlying such claim through recovery, settlement or otherwise under or
pursuant to any insurance coverage, or pursuant to any claim, recovery,
settlement or payment by or against another Person, the amount of such payment,
less any costs, expenses or premiums incurred directly in connection therewith,
will promptly be repaid by the Indemnified Party to the Indemnifying
Party.
10.6 Mitigation. Each
party agrees to use reasonable efforts to mitigate any Loss that forms the
basis
of a claim hereunder.
10.7 Exclusive
Remedy. The exclusive remedy available to a party hereto with
respect to the matters covered by Sections 10.1 and 10.2 hereof shall be to
proceed in the manner contained in this Article X.
ARTICLE
XI
MISCELLANEOUS
11.1 Entire
Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the transactions contemplated herein and
shall only be modified or amended by an instrument in writing signed by or
on
behalf of the parties hereto.
11.2 Section
Headings; Interpretation. Reference in this Agreement to a
Section, Article, or Schedule, unless otherwise indicated, shall constitute
references to a Section or an Article of this Agreement or a Section of the
Disclosure Schedule, as the case may be. The section headings and
article titles contained in this Agreement are for convenience of reference
only
and do not form a part thereof and shall not affect in any way the meaning
or
the interpretation of this Agreement. Wherever the words “include,”
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation.” The words “herein,”
“hereinafter,” and “hereunder,” and words of similar import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The singular of a term shall also
include the plural of that term and the plural shall also include the singular
and the masculine shall include the feminine, unless the context clearly
indicates otherwise.
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25
-
11.3 Notices. Any
notice hereunder shall be in writing and shall be deemed given if personally
delivered to the other party or if delivered by confirmed facsimile or if
deposited in the United States Mail, postage prepaid, certified or registered,
addressed to the parties as follows:
|
To
the Company:
|
Geeks
On Call America, Inc.
000
Xxxxxxxxxx Xxxx
Xxxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxx
|
|
|
To
Stockholders:
|
Xxxxxxx
X. Xxxx and Xxxxxxxxx Xxxx
c/o
Xxxxxxx X. Xxxx, Chairman and CEO
Geeks
On Call America, Inc.
000
Xxxxxxxxxx Xxxx
Xxxxxxx,
Xxxxxxxx 00000
Xxxxxxx
X. Xxxxx and Xxxxxxx X. Xxxxx
000
Xxxxxx Xxxxx Xxxx
Xxxxxxxx
Xxxxx, Xxxxxxxx 00000
Xxxxx
Xxxxxxxx and Xxxxxxxx Xxxxxxxx
c/o
Xxxxxxx X. Xxxx, Chairman and CEO
Geeks
On Call America, Inc.
000
Xxxxxxxxxx Xxxx
Xxxxxxx,
Xxxxxxxx 00000
|
|
To
Purchaser:
|
Chief
Executive Officer
Telkonet,
Inc.
00000
Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxxx,
XX 00000
Facsimile
No.: (000) 000-0000
|
|
With
copies to:
|
Xxxxx
X. Xxxxxx, Esq.
Xxxxx
& Xxxxxxxxx LLP
0000
Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxx
0000
Xxxxxxxxxx,
XX 00000
Facsimile
No.: (000) 000-0000
|
or
to
such other address as any party notifies the other parties of in accordance
herewith.
11.4 No
Presumption Against Drafter. Each of the parties hereto has
jointly participated in the negotiation and drafting of this
Agreement. In the event there arises any ambiguity or question of
intent or interpretation with respect to this Agreement, this Agreement shall
be
construed as if drafted jointly by all of the parties hereto and no presumptions
nor burdens of proof shall arise favoring any party by virtue of the authorship
of any of the provisions of this Agreement.
-
26
-
11.5 Nonassignability. This
Agreement shall not be assigned, by operation of law or otherwise, and shall
be
binding upon, inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns; provided, however,
that Xxxxxx shall have the right to participate in the transactions contemplated
hereby without the prior written consent of the Purchaser on the condition
that
(a) Xxxxxx executes this Agreement and agrees to be bound by the terms hereof,
(b) such participation shall not effect the rights and obligations of the
Stockholders hereunder, and (c) Xxxxxx shall not sell to Purchaser in excess
of
332,897.27 shares of Company Common Stock.
11.6 No
Third Party Beneficiaries. Except as otherwise expressly provided
in this Agreement, this Agreement is for the sole benefit of the Parties and
their permitted successors and assigns and nothing herein expressed or implied
shall give or be construed to give to any Person, other than the Parties and
such successors and assigns, any legal or equitable rights
hereunder.
11.7 Governing
Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS AGREEMENT AND EACH OF THE ANCILLARY DOCUMENTS SHALL
BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF MARYLAND, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH
STATE.
11.8 Jurisdiction
and Venue. ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND EACH OF THE ANCILLARY DOCUMENTS SHALL BE BROUGHT IN,
AND
EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS WITH RESPECT
THERETO TO THE EXCLUSIVE JURISDICTION OF, ANY COURT OF THE STATE OF MARYLAND
LOCATED IN XXXXXXXXXX COUNTY, MARYLAND, OR THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA SITTING IN THE DISTRICT OF MARYLAND, AND ANY APPELLATE COURT
THEREFROM. EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW
OR
HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUCH COURT OF ANY SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF THE
PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT.
11.9 Severability. If
any term or provision of this Agreement shall, to any extent, be held by a
court
of competent jurisdiction to be invalid or unenforceable, the remainder of
this
Agreement or the application of such term or provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall not be affected thereby and this Agreement shall be deemed
severable and shall be enforced otherwise to the full extent permitted by law;
provided, however, that such enforcement does not deprive any party hereto
of
the benefit of the bargain.
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27
-
11.10 Counterparts. This
Agreement may be executed in one or more counterparts each of which shall be
deemed to constitute an original and shall become effective when one or more
counterparts have been signed by each party hereto and delivered to the other
parties.
[Signature
Page Follows]
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28
-
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective duly authorized representatives as of the date first written
above.
|
TELKONET,
INC.
By:
/s/ X. X.
Xxxxxxx
Name:
X.X. Xxxxxxx
Title:
President and CEO
GEEKS
ON CALL AMERICA, INC.
By: /s/
Xxxxxxx X.
Xxxx
Name:
Xxxxxxx X. Xxxx
Title:
CEO
/s/
Xxxxxxx X.
Xxxx
Xxxxxxx
X. Xxxx
/s/
Xxxxxxxxx
Xxxx
Xxxxxxxxx
Xxxx
/s/
Xxxxxxx X.
Xxxxx
Xxxxxxx
X. Xxxxx
/s/
Xxxxxxx X.
Xxxxx
Xxxxxxx
X. Xxxxx
/s/
Xxxxx
Xxxxxxxx
Xxxxx
Xxxxxxxx
/s/
Xxxxxxxx
Xxxxxxxx
Xxxxxxxx
Xxxxxxxx
|
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29
-
IN
WITNESS WHEREOF, Xxxxx X. Xxxxxx
hereby agrees to become a party to this Agreement with the consent of the
Stockholders, agrees to sell not more than 332,879.27 shares of the Company
Common Stock to Purchaser and has caused this Agreement to be signed effective
as the date first written above.
|
/s/
Xxxxx
X.
Xxxxxx
|
|
|
Xxxxx
X.
Xxxxxx
10/6/07
|
Acknowledged:
|
TELKONET,
INC.
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx
|
|
|
Chief
Executive Officer
|
|
|
GEEKS
ON CALL AMERICA, INC.
|
|
|
By:
/s/ Xxxxxxx X.
Xxxx
|
|
|
Xxxxxxx
X. Xxxx
|
|
|
Chief
Executive Officer
|
-
30
-
EXECUTION
COPY
IN
WITNESS WHEREOF, Xxxxx
Xxxxxxx hereby agrees to become a party to this Agreement as a
"Stockholder", with the consent of the Stockholders, Purchaser and Company,
and
agrees to sell 23,760 shares of the Company Common Stock to Purchaser and
has caused this Agreement to be signed effective as the date first written
below.
|
/s/ Xxxxx
Xxxxxxx
|
|
|
Xxxxx
Xxxxxxx
|
|
| Date: October 15, 2007 |
Acknowledged:
|
TELKONET,
INC.
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx
|
|
|
Chief
Executive Officer
|
|
|
GEEKS
ON CALL AMERICA, INC.
|
|
|
By:
/s/ Xxxxxxx X.
Xxxx
|
|
|
Xxxxxxx
X. Xxxx
|
|
|
Chief
Executive Officer
|
EXECUTION
COPY
IN
WITNESS WHEREOF, Xxxxx Xxxxxxxxx
("Additional Seller") hereby agrees to become a party to this Agreement
as a
"Stockholder", with the consent of the Stockholders, Purchaser and Company,
and
Additional Seller agrees to sell 5,940 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
Additional Seller agrees to sell 5,940 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
|
/s/ Xxxxx
Xxxxxxxxx
|
|
|
Xxxxx
Xxxxxxxxx
|
|
| Date: October __, 2007 |
Acknowledged:
|
TELKONET,
INC.
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx
|
|
|
Chief
Executive Officer
|
|
|
GEEKS
ON CALL AMERICA, INC.
|
|
|
By:
/s/ Xxxxxxx X.
Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx
|
|
|
Corporate
Secretary
|
EXECUTION
COPY
IN
WITNESS WHEREOF, Xxxxxxx and Xxxxx
Xxxx (collectively, "Additional Sellers") hereby agrees to become a party
to
this Agreement as a "Stockholder", with the consent of the Stockholders,
Purchaser and Company, and Additional Sellers agree to sell 5,400
shares of the Company Common Stock to Purchaser and has caused this Agreement
to
be signed effective as the date first written below.
|
/s/ Xxxxxxx
Xxxx
|
|
|
Xxxxxxx Xxxx
|
|
| Date: October 17, 2007 |
|
/s/ Xxxxx
Xxxx
|
|
|
Xxxxx
Xxxx
|
|
| Date: October 17, 2007 |
Acknowledged:
|
TELKONET,
INC.
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx
|
|
|
Chief
Executive Officer
|
|
|
GEEKS
ON CALL AMERICA, INC.
|
|
|
By:
/s/ Xxxxxxx X.
Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx
|
|
|
Corporate
Secretary
|
EXECUTION
COPY
IN
WITNESS WHEREOF, Xxxxxxx
Xxxxxxxxx ("Additional Seller") hereby agrees to become a party to this
Agreement as a "Stockholder", with the consent of the Stockholders, Purchaser
and Company, and
Additional Seller agrees to sell 5,400 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
Additional Seller agrees to sell 5,400 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
|
/s/ Xxxxxxx
Xxxxxxxxx
|
|
|
Xxxxxxx
Xxxxxxxxx
|
|
| Date: October 17, 2007 |
Acknowledged:
|
TELKONET,
INC.
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx
|
|
|
Chief
Executive Officer
|
|
|
GEEKS
ON CALL AMERICA, INC.
|
|
|
By:
/s/ Xxxxxxx X.
Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx
|
|
|
Corporate
Secretary
|
EXECUTION
COPY
IN
WITNESS WHEREOF, Xxxxxx and
Xxxxxxx Xxxxx ("Additional Seller") hereby agrees to become a party to
this Agreement as a "Stockholder", with the consent of the Stockholders,
Purchaser and Company, and
Additional Seller agrees to sell 5,940 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
Additional Seller agrees to sell 5,940 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
|
/s/ Xxxxxx
X. Xxxxx
|
|
|
Xxxxxx
X. Xxxxx
|
|
| Date: October 17, 2007 |
|
/s/ Xxxxxxx Xxxxx
|
|
|
Xxxxxxx
Xxxxx
|
|
| Date: October 17, 2007 |
Acknowledged:
|
TELKONET,
INC.
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx
|
|
|
Chief
Executive Officer
|
|
|
GEEKS
ON CALL AMERICA, INC.
|
|
|
By:
/s/ Xxxxxxx X.
Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx
|
|
|
Corporate
Secretary
|
EXECUTION
COPY
IN
WITNESS WHEREOF, H. Xxx
Xxxxxxx, III ("Additional Seller") hereby agrees to become a party to this
Agreement as a "Stockholder", with the consent of the Stockholders, Purchaser
and Company, and
Additional Seller agrees to sell 24,546.50 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
Additional Seller agrees to sell 24,546.50 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
|
/s/ H.
Xxx Xxxxxxx, III
|
|
|
H.
Xxx Xxxxxxx III
|
|
| Date: October 18, 2007 |
Acknowledged:
|
TELKONET,
INC.
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx
|
|
|
Chief
Executive Officer
|
|
|
GEEKS
ON CALL AMERICA, INC.
|
|
|
By:
/s/ Xxxxxxx X.
Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx
|
|
|
Secretary
|
EXECUTION
COPY
IN
WITNESS WHEREOF, Xxxxxxx
Xxxxxxx ("Additional Seller") hereby agrees to become a party to this
Agreement as a "Stockholder", with the consent of the Stockholders, Purchaser
and Company, and
Additional Seller agrees to sell 20,798 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
Additional Seller agrees to sell 20,798 shares of the Company Common Stock to Purchaser and has caused this Agreement to be signed effective as the date first written below.
|
/s/ Xxxxxxx
X. Xxxxxxx
|
|
|
Xxxxxxx
Xxxxxxx
|
|
| Date: October 18, 2007 |
Acknowledged:
|
TELKONET,
INC.
|
|
|
By:
/s/ Xxxxxx X.
Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx
|
|
|
Chief
Executive Officer
|
|
|
GEEKS
ON CALL AMERICA, INC.
|
|
|
By:
/s/ Xxxxxxx X.
Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx
|
|
|
Secretary
|
