LLC INTEREST PURCHASE AGREEMENT
THIS AGREEMENT is made this 24th day of February, 2004, by and between
MULTITRADE TECHNOLOGIES LLC, a limited liability company organized under the
laws of New York ("MTT"), JOE KHAN, an individual, as the sole owner and
principal of MTT ("Khan"), and JACKSON RIVERS TECHNOLOGIES, INC., a Nevada
corporation ("JRT"). Khan and MTT are herein sometimes collectively referred to
as the "Sellers."
WHEREAS, Khan owns 100 percent of the limited liability company interest in
MTT; and
WHEREAS, Khan desires to transfer all of his right, title and interest in
MTT to JRT in exchange for 20,000,000 shares of the common stock of JRT, par
value $0.001 per share (the "JRT Common Stock") as hereinafter provided; and
WHEREAS, JRT desires to acquire all of Khan's right, title and interest in
MTT from Khan in exchange for 20,000,000 shares of the JRT common stock, valued
at approximately $1,000,000;
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the parties hereto agree as follows:
1. The LLC Interest Purchase. Upon the terms and subject to the
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conditions set forth in this Agreement Khan shall exchange, sell, assign, and
transfer to JRT at the closing of this Agreement (the "Closing"), free and clear
of all liens and encumbrances, and JRT shall accept from Khan at the Closing all
of Khan's right, title and interest in and to the interest owned by Khan in MTT.
In consideration therefor, JRT shall deliver to Khan and MTT at the Closing,
20,000,000 shares of JRT Common Stock valued at approximately $1,000,000.
2. Restrictive Legend. All shares of the JRT Common Stock to be
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delivered to Khan hereunder shall be issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), inasmuch such shares to be issued to Khan will be issued for
investment purposes without a view to distribution. In addition, Khan will have
had access to information concerning JRT and its business prospects, as required
by the Securities Act. Furthermore, there will be no general solicitation or
advertising for the purchase of the shares of the JRT Common Stock covered by
this Agreement. The securities are to be issued to Khan after thorough
discussions that comprise less than 35 Non-Accredited Investors as defined in
the Securities Act. Finally, JRT's stock transfer agent will be instructed not
to transfer any of such shares, unless such shares are registered for resale or
there is an exemption with respect to their transfer.
All shares of the JRT Common Stock to be delivered to Khan hereunder shall
bear a restrictive legend in substantially the following form:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT."
3. Tax Treatment. The receipt of the JRT Common Stock by Khan will not
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be taxable, while the acquisition of the MTT limited liability company interest
by JRT will qualify as a "C" type reorganization under Section 368 of the
Internal Revenue Code of 1986, as amended. In order to ensure compliance with
said provisions, the parties agree to take whatever steps may be necessary,
including, but not limited to, the amendment of this Agreement.
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4. Representations and Warranties of the Sellers. Where a
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representation contained in this Agreement is qualified by the phrase "to the
best of the Sellers' knowledge" (or words of similar import), such expression
means that, after having conducted a due diligence review, the Sellers believe
the statement to be true, accurate, and complete in all material respects.
Knowledge shall not be imputed nor shall it include any matters which such
person should have known or should have been reasonably expected to have known.
The Sellers represent and warrant to JRT as follows:
(a) Power and Authority. The Sellers have full power and authority to
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execute, deliver, and perform this Agreement and all other agreements,
certificates or documents to be delivered in connection herewith, including,
without limitation, the other agreements, certificates and documents
contemplated hereby (collectively the "Other Agreements").
(b) Binding Effect. Upon execution and delivery by the Sellers, this
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Agreement and the Other Agreements shall be and constitute the valid, binding
and legal obligations of the Sellers, enforceable against the Sellers in
accordance with the terms hereof and thereof, except as the enforceability
hereof or thereof may be subject to the effect of (i) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally, and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(c) Effect. Neither the execution and delivery of this Agreement or
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the Other Agreements nor full performance by the Sellers of their obligations
hereunder or thereunder will violate or breach, or otherwise constitute or give
rise to a default under, the terms or provisions of the Certificate of
Formation, or the Limited Liability Company Agreement of MTT or, subject to
obtaining any and all necessary consents, of any contract, commitment or other
obligation of MTT or necessary for the operation of MTT's business (the
"Business") following the Closing or any other material contract, commitment, or
other obligation to which MTT is a party, or create or result in the creation of
any encumbrance on any of the property of MTT. MTT is not in violation of its
Certificate of Formation, or the Limited Liability Company Agreement, or of any
indebtedness, mortgage, contract, lease, or other agreement or commitment.
(d) No Contracts, Arrangements, Understandings or Relationships With
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Respect to Securities of JRT. There are no contracts, arrangements,
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understandings or relationships (legal or otherwise) among any of the parties to
this Agreement, or any other person with respect to any other securities of JRT,
including but not limited to transfer or voting of any of securities of JRT,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies, naming the persons with whom such contracts, arrangements,
understandings or relationships have been entered into.
(e) No Consents. No consent, approval or authorization of, or
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registration, declaration or filing with any third party, including, but not
limited to, any governmental department, agency, commission or other
instrumentality, will, except such consents, if any, delivered or obtained on or
prior to the Closing, be obtained or made by the Sellers prior to the Closing to
authorize the execution, delivery and performance by the Sellers of this
Agreement or the Other Agreements.
(f) Stock Ownership. Khan has good, absolute, and marketable title to
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100 percent of the issued and outstanding interest in MTT. Khan has the
complete and unrestricted right, power and authority to cause the sale,
transfer, and assignment of the interest in MTT pursuant to this Agreement. The
delivery of the interest in MTT to JRT as herein contemplated will vest in JRT
good, absolute and marketable title to the interest in MTT as described herein,
free and clear of all liens, claims, encumbrances, and restrictions of every
kind, except those restrictions imposed by applicable securities laws or this
Agreement.
(g) Organization and Standing of MTT. MTT is a duly organized and
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validly existing New York limited liability company in good standing, with all
requisite corporate power and authority to carry on the Business as presently
conducted. MTT has not qualified to do business in any other jurisdiction.
(h) No Subsidiaries. MTT has no subsidiaries.
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(i) Capitalization. There are no outstanding options, contracts,
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commitments, warrants, preemptive rights, agreements or any rights of any
character affecting or relating in any manner to the issuance of the MTT limited
liability interests or other securities or entitling anyone to acquire the MTT
limited liability interests or other securities of MTT.
(j) Liabilities and Assets. Except as set forth on Attachment A to
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this Agreement, MTT does not have any liabilities. The assets of MTT are set
forth on Attachment B to this Agreement.
(k) Present Status. Since January 31, 2004, MTT has not: (i) incurred
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any material obligations or material liabilities, absolute, accrued, contingent,
or otherwise; (ii) discharged or satisfied any liens or encumbrances, or paid
any obligations or liabilities, except current Financial Statement liabilities
and current liabilities incurred since the dates reflected on the Financial
Statement, in each case, in the ordinary course of business; (iii) declared or
made any stockholder payment or distribution or purchased or redeemed any of its
securities or agreed to do so; (iv) waived any rights of a material value; or
(v) entered into any transaction other than in the ordinary course of business.
(l) Litigation. Other than as reflected on Attachment C attached
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hereto and incorporated herein by reference for all purposes, there are no legal
actions, suits, arbitrations, or other legal, administrative or other
governmental proceedings pending or threatened against MTT, and the Sellers are
not aware of any facts which to their knowledge may result in any such action,
suit, arbitration, or other proceeding.
(m) No Employees. As of the date of this Agreement as well as at the
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Closing, MTT does not have and will not have any employees.
(n) Compliance with Law and Other Instruments. The business and
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operations of MTT have been and are being conducted in accordance with all
applicable laws, rules and regulations of all authorities, except those which do
not (either individually or in the aggregate) materially and adversely affect
MTT.
(o) Contracts. Except as disclosed by documents presented to JRT
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prior to the Closing and expressly accepted by JRT prior to the Closing, MTT is
not a party to, or otherwise bound by any: (i) written or oral contract; (ii)
employment or consultant contract not terminable at will without cost or other
liability; (iii) labor union contracts; (iv) bonus, pension, profit sharing,
retirement, share purchase, stock option, hospitalization, group insurance, or
similar employee benefit plan; (v) any real or personal property lease, as
lessor or lessee; (vi) advertising or public relations contract; (vii) purchase,
supply or service contract, which cannot be terminated without cost or expense
to MTT if such termination occurs with less than 30 days' notice; (viii) deed of
trust, mortgage, conditional sales contract, security agreement, pledge
agreement, trust receipt, or any other agreement or arrangement whereby any of
the assets or property of MTT is subject to a lien, encumbrance, charge or other
restriction except such as shall be satisfied prior to the Closing; (ix) license
agreement, whether as licensee or licensor; (x) contract or agreement involving
any expenditure by MTT of more than $500.00 in the aggregate; (xi) contract or
agreement which MTT cannot terminate by giving less than 30 days' notice; and
(xii) contract to be performed in whole or in part more than 90 days from the
date thereof and which cannot be terminated without cost or liability to MTT.
Other than as disclosed on Attachment D attached hereto and incorporated
herein by reference for all purposes, to the best of the Sellers' knowledge and
belief, MTT has in all respects performed all obligations required to be
performed to date, and is not in material default in any respect under any of
the contracts, agreements, leases, documents, or other commitments to which it
is a party or otherwise bound or affected. All parties having material
contracts with MTT are in material compliance therewith, and are not in material
default thereunder.
(p) Records. The books of account and minute books of MTT are
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complete and correct, and reflect all those transactions involving its business
which properly should have been set forth in such books.
(q) Absence of Certain Changes or Events. Since February 15, 2004,
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there has not been any change in or any event or condition (financial or
otherwise) affecting the property, assets, liabilities, operations, or prospects
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of MTT, other than changes in the ordinary course of its business, none of which
has (either when taken by itself or taken in conjunction with all other such
changes) been materially adverse.
(r) The Sellers' Representations and Warranties True and Complete.
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All representations and warranties of the Sellers in this Agreement and the
Other Agreements are true, accurate and complete in all material respects as of
the Closing.
(s) No Knowledge of JRT's Default. The Sellers have no knowledge that
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any of JRT's representations and warranties contained in this Agreement or the
Other Agreements are untrue, inaccurate or incomplete or that JRT are in default
under any term or provision of this Agreement or the Other Agreements.
(t) No Untrue Statements. No representation or warranty by the
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Sellers in this Agreement or in any writing furnished or to be furnished
pursuant hereto, contains or will contain any untrue statement of a material
fact, or omits, or will omit to state any material fact required to make the
statements herein or therein contained not misleading.
(u) Reliance. The foregoing representations and warranties are made
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by the Sellers with the knowledge and expectation that JRT is placing complete
reliance thereon.
5. Representations and Warranties of JRT. Where a representation
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contained in this Agreement is qualified by the phrase "to the best of JRT's
knowledge" (or words of similar import), such expression means that, after
having conducted a due diligence review, the principal of JRT believes the
statement to be true, accurate, and complete in all material respects.
Knowledge shall not be imputed nor shall it include any matters which such
person should have known or should have been reasonably expected to have known.
JRT hereby represents and warrants to the Sellers as follows:
(a) Power and Authority. JRT has full power and authority to execute,
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deliver and perform this Agreement and the Other Agreements.
(b) Binding Effect. Upon execution and delivery by JRT, this
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Agreement and the Other Agreements shall be and constitute the valid, binding
and legal obligations of JRT enforceable against JRT in accordance with the
terms hereof or thereof, except as the enforceability hereof and thereof may be
subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally, and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(c) No Consents. No consent, approval or authorization of, or
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registration, declaration or filing with any third party, including, but not
limited to, any governmental department, agency, commission or other
instrumentality, will, except such consents, if any, delivered or obtained on or
prior to the Closing, be obtained or made by JRT prior to the Closing to
authorize the execution, delivery and performance by JRT of this Agreement or
the Other Agreements.
(d) No Contracts, Arrangements, Understandings or Relationships With
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Respect to Securities of JRT. There are no contracts, arrangements,
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understandings or relationships (legal or otherwise) among any of the parties to
this Agreement, or any other person with respect to any other securities of JRT,
including but not limited to transfer or voting of any of securities of JRT,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies, naming the persons with whom such contracts, arrangements,
understandings or relationships have been entered into.
(e) JRT's Representations and Warranties True and Complete. All
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representations and warranties of JRT in this Agreement and the Other Agreements
are true, accurate and complete in all material respects as of the Closing.
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(f) No Knowledge of the Sellers' Default. JRT has no knowledge that
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any of the Sellers' representations and warranties contained in this Agreement
are untrue, inaccurate or incomplete in any respect or that the Sellers are in
default under any term or provision of this Agreement or the Other Agreements.
(g) No Untrue Statements. No representation or warranty by JRT in
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this Agreement or in any writing furnished or to be furnished pursuant hereto,
contains or will contain any untrue statement of a material fact, or omits, or
will omit to state any material fact required to make the statements herein or
therein contained not misleading.
(h) Reliance. The foregoing representations and warranties are made
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by JRT with the knowledge and expectation that the Sellers are placing complete
reliance thereon.
6. Actions of MTT Pending the Closing. The Sellers agree that from the
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date hereof through the Closing:
(a) Operations. The Sellers will use their best efforts to cause MTT
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to (i) be operated in keeping with its customary practices and in compliance
with all applicable laws, rules and regulations; and (ii) not engage in any
transaction or make any commitment or expenditure.
(b) No Change in Corporate Charter. No change will be made in the
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Certificate of Formation or the Limited Liability Company Agreement of MTT,
except as may be first approved in writing by JRT.
(c) No Change in Interest. No change will be made in the authorized
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or issued limited liability interest in MTT, including the issuance of any
bonds, notes, or other securities.
(d) No Default. MTT shall timely pay and/or not suffer any default
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with respect to any of its contracts, commitments or obligations. MTT shall
also continue to pay as they become due all accounts payable of MTT.
(e) No Contracts. No contract or commitment will be entered into by
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or on behalf of MTT.
(f) No Liabilities. MTT shall not incur any obligation or liability,
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except as may be first approved in writing by JRT.
(g) Access to Records. The Sellers shall cause MTT to afford JRT
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access, during normal business hours, to all of its business operations,
properties, books, files, and records, and will cooperate in JRT's examination
thereof. No such examination, however, shall constitute a waiver or
relinquishment by JRT of its right to rely upon the Sellers' covenants,
representations, and warranties made herein or pursuant hereto. Until the
Closing hereunder or the termination of this Agreement, whichever shall occur
first, and after the termination of this Agreement in the event this Agreement
does not close, JRT will hold in confidence all information so obtained by JRT
as a result of such examination.
(h) Compliance. The Sellers shall cause MTT and its officers and
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employees to comply with all applicable provisions of this Agreement.
7. Conditions Precedent to Obligations of JRT. All obligations of JRT
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under this Agreement are subject to the fulfillment, prior to or at the Closing,
of the following conditions:
(a) Representations and Warranties True at the Closing. The
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representations and warranties of the Sellers herein shall be deemed to have
been made again as of the Closing, and then be true and correct, subject to any
changes contemplated by this Agreement. The Sellers shall have performed all of
the obligations to be performed by them hereunder on or prior to the Closing.
(b) Proof of Authority. JRT's counsel shall have received evidence
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reasonably sufficient to such counsel that the Sellers have all requisite
authorizations necessary for consummation by the Sellers of the transactions
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contemplated hereby, and there has not been issued, and there is not in effect,
any injunction or similar legal order prohibiting or restraining consummation of
any of the transactions herein contemplated, and no legal or governmental
action, proceeding or investigation which might reasonably be expected to result
in any such injunction or order is pending.
(c) Deliveries at the Closing. The Sellers shall have delivered to
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JRT at the Closing all of the documents required to be delivered hereunder.
(d) Certification. The Sellers shall have delivered to JRT at the
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Closing a certificate dated as of the applicable closing, executed by the
Sellers, certifying that the conditions specified in subparagraphs (a), (b), and
(c) of this Paragraph 7 have been fulfilled.
(e) Resignations of Directors and Officers. The Sellers shall have
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delivered to JRT at the Closing, the written resignations of all of the
directors and officers, or members and managers, of MTT, as may be applicable.
(f) Status of Litigation. With respect to any matters affecting MTT
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and in litigation as described in Attachment C, JRT shall have the right to make
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an independent review of such matters. If JRT is not satisfied with such
review, then JRT shall have the option to terminate this Agreement pursuant to
the terms of this Paragraph 7.
(g) Corporate Records, etc. The Sellers shall have delivered to JRT
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the originals of the Certificate of Formation, Limited Liability Company
Agreement, minute books, and other corporate governance materials used since the
inception of MTT.
(h) Other Matters. All corporate and other proceedings and actions
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taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be satisfactory in form and substance
to JRT and its counsel, whose approval shall not be unreasonably withheld.
(i) MTT-Kisnet Agreement. All necessary actions have been taken and
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all necessary approvals have been obtained by Khan and/or MTT prior to the
Closing in order to ensure that all of the rights and obligations of MTT and
Kisnet Corporation, Inc. under the KISNET-MTT STEPS Distribution Agreement
continue without any modification or interruption immediately following the
Closing.
(j) Non-Competition Agreement. JRT and Khan shall have entered into a
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non-competition agreement for a period of one year following the Closing in the
form described in Attachment E hereto.
8. Conditions Precedent to Obligations of the Sellers. All obligations
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of the Sellers under this Agreement are subject to the fulfillment, prior to or
at the Closing, of the following conditions:
(a) Representations and Warranties True at Closing. The
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representations and warranties of JRT herein shall be deemed to have been made
again at the Closing, and then be true and correct, subject to any changes
contemplated by this Agreement. JRT shall have performed all of the obligations
to be performed by JRT hereunder on or prior to the Closing.
(b) Proof of Authority. The Sellers' counsel shall have received
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evidence reasonably sufficient to such counsel that JRT has all requisite
authorizations necessary for consummation by JRT of the transactions
contemplated hereby, and there has not been issued, and there is not in effect,
any injunction or similar legal order prohibiting or restraining consummation of
any of the transactions herein contemplated, and no legal or governmental
action, proceeding or investigation that might reasonably be expected to result
in any such injunction or order is pending.
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(c) Certification. JRT shall have delivered to the Sellers at the
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Closing a certificate dated as of the applicable closing, executed by the
President and Secretary of JRT, certifying that the conditions specified in
subparagraphs (a) and (b) of this Paragraph 8 have been fulfilled.
(d) No Orders. There has not been issued, and there is not in effect,
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any injunction or similar legal order prohibiting or restraining consummation of
any of the transactions herein contemplated, and no legal or governmental
action, proceeding or investigation which might reasonably be expected to result
in any such injunction or order is pending.
(e) Other Matters. All corporate and other proceedings and actions
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taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be satisfactory in form and substance
to the Sellers and their counsel, whose approval shall not be unreasonably
withheld.
9. The Nature and Survival of Representations, Covenants and
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Warranties. All statements and facts contained in any memorandum, certificate,
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instrument, or other document delivered by or on behalf of the parties hereto
for information or reliance pursuant to this Agreement, shall be deemed
representations, covenants and warranties by the parties hereto under this
Agreement. All representations, covenants and warranties of the parties shall
survive the Closing and all inspections, examinations, or audits on behalf of
the parties, shall expire one year following the Closing.
10. Indemnification by the Sellers. The Sellers agree to indemnify and
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hold harmless JRT and/or MTT against and in respect to all damages (as
hereinafter defined) in excess of $500.00. Damages, as used herein shall
include any claim, salary, wage, action, tax, demand, loss, cost, expense,
liability (joint or several), penalty, and other damage, including, without
limitation, counsel fees and other costs and expenses reasonably incurred in
investigating or attempting to avoid same or in opposition to the imposition
thereof, or in enforcing this indemnity, resulting to JRT and/or MTT from any
inaccurate representation made by or on behalf of the Sellers in or pursuant to
this Agreement, breach of any of the warranties made by or on behalf of the
Sellers in or pursuant to this Agreement, or breach or default in the
performance by the Sellers of any of the obligations to be performed by them
hereunder. Hereunder, JRT shall determine whether JRT, MTT or both JRT and MTT
are entitled to be indemnified and such determination shall be binding on the
Sellers.
Notwithstanding the scope of the Sellers' representations and warranties
herein, or of any individual representation or warranty, or any disclosure to
JRT herein or pursuant hereto, or the definition of damages contained in the
preceding sentence, or JRT's knowledge of any fact or facts at or prior to the
Closing, damages shall also include: all debts, liabilities, and obligations of
any nature whatsoever (whether absolute, accrued, contingent, or otherwise, and
whether due or to become due) of MTT, as of the date hereof not reflected in the
Financial Statement or any other exhibit furnished hereunder, whether known or
unknown by the Sellers; all claims, actions, demands, losses, costs, expenses,
and liabilities resulting from any litigation from causes of action arising
prior to the Closing hereunder involving MTT or any owners thereof other than
the Sellers, whether or not disclosed to JRT; all claims, actions, demands,
losses, costs, expenses, liabilities and penalties resulting from (i) MTT's
infringement or claimed infringement upon or acting adversely to the rights or
claimed rights of any person under or in respect to any copyrights, trademarks,
trademark rights, patents, patent rights or patent licenses; or (ii) any claim
or pending or threatened action with respect to the matters described in clause
(i); all claims, actions, demands, losses, costs, expenses, liabilities or
penalties resulting from MTT's failure in any respect to perform any obligation
required by it to be performed at or prior to the effective date hereof or at or
prior to the Closing, or by reason of any default of MTT, at the effective date
hereof or at the Closing, under any of the contracts, agreements, leases,
documents, or other commitments to which it is a party or otherwise bound or
affected; and all losses, costs, and expenses (including without limitation all
fees and disbursements of counsel) relating to damages.
Khan shall reimburse and/or pay in the form of up to 10,000,000 shares of
JRT Common Stock on behalf of JRT and/or MTT on demand for any payment made or
required to be made by JRT and/or MTT at any time after the Closing based upon
the judgment of any court of competent jurisdiction or pursuant to a bona fide
compromise or settlement of claims, demands or actions, in respect to the
damages to which the foregoing indemnity relates. JRT shall give, or JRT shall
cause MTT to give Khan written notice within 30 days after notification of any
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litigation threatened or instituted against MTT which might constitute the basis
of a claim for indemnity by JRT and/or MTT against Khan.
Notwithstanding anything contained in this Agreement to the contrary, the
right to indemnification described in this paragraph shall expire one year after
the Closing hereunder, except in the case of the proven fraud by the Sellers
hereunder as determined by a court of competent jurisdiction in connection with
any such claim for indemnification, in which event such right to indemnification
shall expire one year after the discovery of such fraud.
11. Indemnification by JRT. JRT agrees to indemnify and hold harmless
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the Sellers against and in respect to all damages (as hereinafter defined) in
excess of $500.00. Damages, as used herein shall include any claim, salary,
wage, action, tax, demand, loss, cost, expense, liability (joint or several),
penalty, and other damage, including, without limitation, counsel fees and other
costs and expenses reasonably incurred in investigating or attempting to avoid
same or in opposition to the imposition thereof, or in enforcing this indemnity,
resulting to the Sellers from any inaccurate representation made by or on behalf
of JRT in or pursuant to this Agreement, breach of any of the warranties made by
or on behalf of JRT in or pursuant to this Agreement, or breach or default in
the performance by JRT of any of the obligations to be performed by them
hereunder.
JRT shall reimburse and/or pay on behalf of Khan on demand for any payment
made or required to be made by Khan at any time after the Closing based upon the
judgment of any court of competent jurisdiction or pursuant to a bona fide
compromise or settlement of claims, demands or actions, in respect to the
damages to which the foregoing indemnity relates.
Notwithstanding anything contained in this Agreement to the contrary, the
right to indemnification described in this paragraph shall expire one year after
the Closing hereunder, except in the case of the proven fraud by JRT hereunder
as determined by a court of competent jurisdiction in connection with any such
claim for indemnification, in which event such right to indemnification shall
expire one year after the discovery of such fraud.
12. Records of MTT. For a period of five years following the Closing,
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the books of account and records of MTT pertaining to all periods prior to the
Closing shall be available for inspection by Khan for use in connection with tax
audits.
13. Default by JRT. If the Sellers do not default hereunder and JRT
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defaults hereunder and fails to pay to the Sellers any portion of the purchase
price for MTT interest as described herein, the Sellers may assert any remedy,
including specific performance, which the Sellers may have by reason of any such
default. From and after the Closing, subject to the terms and provisions
hereof, in the event of a breach by any party of the terms of this Agreement or
any obligation of a party which survives the Closing hereunder, the
non-defaulting party may assert any remedy, either at law or in equity to which
such non-defaulting party may be entitled.
14. Default by the Sellers. If JRT does not default hereunder and the
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Sellers default hereunder, JRT may elect to terminate this Agreement as well as
any other agreement executed by JRT in connection with the transactions
contemplated by this Agreement, including but not limited to any independent
nondisclosure agreement or any other independent agreements, whereupon no party
shall be liable to the others hereunder, or JRT may assert any remedy, including
specific performance, which JRT may have by reason of any such default of the
Sellers. From and after the Closing, subject to the terms and provisions
hereof, in the event of a breach by any party of the terms of this Agreement or
any obligation of a party which survives the Closing hereunder, the
non-defaulting party may assert any remedy, either at law or in equity, to which
such non-defaulting party may be entitled.
15. Termination. In the event of the termination of this Agreement
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prior to the Closing, no party shall have any obligation to any other in
connection herewith or in connection with any other documents which may have
been executed by any party with respect to the transactions contemplated by this
Agreement whether or not such documents are described herein.
16. Cooperation. JRT and the Sellers will each cooperate with the
-----------
other, at the other's request and expense, in furnishing information, testimony,
and other assistance in connection with any actions, proceedings, arrangements,
8
disputes with other persons or governmental inquiries or investigations
involving the Sellers' or JRT's conduct of the Business or the transactions
contemplated hereby.
17. Further Conveyances and Assurances. After the Closing, Khan and
-------------------------------------
JRT, each, will, without further cost or expense to, or consideration of any
nature from the other, execute and deliver, or cause to be executed and
delivered, to the other, such additional documentation and instruments of
transfer and conveyance, and will take such other and further actions, as the
other may reasonably request as more completely to sell, transfer and assign to
and fully vest in JRT ownership of MTT interest and to consummate the
transactions contemplated hereby.
18. Deliveries at the Closing by the Sellers. At the Closing:
----------------------------------------
(a) Khan shall deliver to JRT certificates representing all of the
interests in MTT, duly endorsed in favor of JRT.
(b) The Sellers shall deliver the proof of authority described in
Paragraph 7(b) hereof.
(c) The Sellers shall deliver the certification described in
Paragraph 7(d) hereof.
(d) The Sellers shall deliver the resignations of all of the
directors and officers of MTT.
(e) Khan shall deliver the Non-Competition Agreement described in
Paragraph 7(l) hereof.
(f) Khan shall deliver the corporate records of MTT.
(g) The Sellers shall deliver any other document which may be
necessary to carry out the intent of this Agreement.
All documents reflecting any actions taken, received or delivered by the
Sellers pursuant to this Paragraph 18 shall be reasonably satisfactory in form
and substance to JRT and its counsel.
19. Deliveries at the Closing by JRT. At the Closing JRT shall deliver
--------------------------------
to Khan:
(a) Certificates representing 20,000,000 shares of the JRT Common
Stock, duly endorsed in favor of Khan free and clear of all liens, claims,
encumbrances, and restrictions of every kind, except those imposed by the
Securities Act and other applicable securities laws.
(b) The proof of authority described in Paragraph 8(b) hereof.
(c) The certification described in Paragraph 8(c) hereof.
(d) JRT shall deliver the Non-Competition Agreement described in
Paragraph 7(l) hereof.
(e) JRT shall deliver any other document which may be necessary to
carry out the intent of this Agreement.
All documents reflecting any actions taken, received or delivered by JRT
pursuant to this Paragraph 20 shall be reasonably satisfactory in form and
substance to the Sellers and their counsel.
20. No Assignment. This Agreement shall not be assignable by any party
-------------
without the prior written consent of the other parties, which consent shall be
subject to such parties' sole, absolute and unfettered discretion.
21. Additional Agreement. Following the Closing, Dennis Lauzon will be
--------------------
elected the Chairman of the Board of JRT, responsible for sales and marketing,
and Khan will be elected as a member of the board and President and Chief
Executive Officer of JRT, responsible for product delivery and strategic
alliances.
9
22. Brokerage. The Sellers and JRT agree to indemnify and hold
---------
harmless each other against, and in respect of, any claim for brokerage or other
commissions relative to this Agreement, or the transactions contemplated hereby,
based in any way on agreements, arrangements, understandings or contracts made
by either party with a third party or parties whatsoever.
23. Attorney's Fees. In the event that it should become necessary for
----------------
any party entitled hereunder to bring suit against any other party to this
Agreement for enforcement of the covenants contained in this Agreement, the
parties hereby covenant and agree that the party or parties who are found to be
in violation of said covenants shall also be liable for all reasonable
attorney's fees and costs of court incurred by the other party or parties that
bring suit.
24. Benefit. All the terms and provisions of this Agreement shall be
-------
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
25. Construction. Words of any gender used in this Agreement shall be
------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.
26. Waiver. No course of dealing on the part of any party hereto or
------
its agents, or any failure or delay by any such party with respect to exercising
any right, power or privilege of such party under this Agreement or any
instrument referred to herein shall operate as a waiver thereof, and any single
or partial exercise of any such right, power or privilege shall not preclude any
later exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
27. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
28. Invalidity. In the event any one or more of the provisions
----------
contained in this Agreement or in any instrument referred to herein or executed
in connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
29. Time of the Essence. Time is of the essence of this Agreement.
----------------------
30. Multiple Counterparts. This Agreement may be executed 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.
31. Controlling Agreement. In the event of any conflict between the
----------------------
terms of this Agreement or exhibits referred to herein, the terms of this
Agreement shall control.
32. Law Governing. This Agreement shall be construed and governed by
--------------
the laws of the State of New York, and all obligations hereunder shall be deemed
performable in Pleasantville, New York.
33. Entire Agreement. This instrument and the attachments hereto
-----------------
contain the entire understanding of the parties and may not be changed orally,
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought.
10
IN WITNESS WHEREOF, this Agreement has been executed in multiple
counterparts on the date first written above.
-------------------------------------------
JOE KHAN
MULTITRADE TECHNOLOGIES LLC
By
-----------------------------------------
Joe Khan, Managing Partner
JACKSON RIVERS TECHNOLOGIES
By
-----------------------------------------
Dennis Lauzon, President
Attachments:
-----------
Attachment A Liabilities of MTT
Attachment B Acquired Assets
Attachment C Litigation
Attachment D Contracts of MTT which are in Default
Attachment E Non-Competition Agreement between JRT and Joe Khan
11
Attachment A
Liabilities of MTT
NONE.
ATTACHMENT B
ASSETS OF MTT
KISNET - MTT / EXCLUSIVE DISTRIBUTION AGREEMENT FOR "STRAIGHT THROUGH ENTERPRISE
PROCESSING SOLUTION"
(OR STEPS)
ATTACHMENT C
LITIGATION
NONE.
ATTACHMENT D
CONTRACTS OF MTT WHICH ARE IN DEFAULT
NONE.
ATTACHMENT E
NON-COMPETITION AGREEMENT
THIS AGREEMENT is made this 24th day of February, 2004, by and between JOE
KHAN ("Khan"), and JACKSON RIVERS TECHNOLOGIES, a Florida corporation, having
its principal place of business in Buffalo, New York (the "Company").
WHEREAS, this Agreement is being entered into pursuant to the provisions of
that certain LLC Interest Purchase Agreement dated February 24, 2004 by and
between Khan, Multitrade Technologies LLC ("MTT") and the Company (the "LLC
Interest Purchase Agreement"); and
WHEREAS, the execution and delivery of this Agreement by Khan and the
Company is a condition precedent to the consummation of the transactions
contemplated in the LLC Interest Purchase Agreement;
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the parties hereto do hereby agree as follows:
1. Payment toKhan. Contemporaneously with the execution and delivery
---------------
of this Agreement, and in full and final payment of all obligations of the
Company to Khan hereunder, there has been paid to Khan the sum of
$_________________, the receipt and sufficiency of which are hereby acknowledged
by Khan.
2. Covenant Not to Compete. It is recognized by Khan that the Acquired
-----------------------
Business of MTT pursuant to the LLC Interest Purchase Agreement, and the Company
and its affiliated corporations that provide similar products and services are
and will continue to be international in scope and that geographical limitations
on the below described covenant not to compete and the non-solicitation covenant
are therefore not appropriate. Consequently, for a period of one year from the
date hereof, on a world-wide basis, Khan shall not:
(a) Canvas, solicit, or accept any business for any other person,
partnership, firm, corporation or other legal entity from any present or past
customer of MTT or the Company, in connection with any business the same as the
Acquired Business of MTT and the Business of the Company on the date of this
Agreement.
(b) Give any other person, partnership, firm, corporation or other
legal entity the right to canvas, solicit or accept any business for any other
business, from any present or past customer of MTT or the Company, in connection
with any business the same as the Acquired Business of MTT and the Business of
the Company on the date of this Agreement.
(c) Directly or indirectly request or advise any past, present or
future customer of the Company to withdraw, curtail or cancel its business for
any other business, from any present or past customer of MTT or the Company, in
connection with any business the same as the Acquired Business of MTT and the
Business of the Company on the date of this Agreement.
(d) Directly or indirectly disclose to any other person, partnership,
firm, corporation or other legal entity the names of past, present or future
customers of MTT or the Company, in connection with any business the same as the
Acquired Business of MTT and the Business of the Company on the date of this
Agreement.
(e) Directly or indirectly induce, or attempt to influence any
employee of the Company to terminate his employment.
(f) Without the written consent of the Company, directly or
indirectly employ or attempt to employ any person, who, on the date of this
Agreement or at any time during the two years before the date of this Agreement,
is or was an employee the Company, whether full or part-time.
(g) Directly or indirectly own, manage, operate, join or participate
in, or be connected as an officer, director, stockholder, employee, partner or
1
otherwise with any business under any name similar to Multitrade Technologies
LLC in connection with the Acquired Business, or the name of the Company or any
of its affiliated corporations, except as may otherwise be specifically
authorized by the Company in writing.
(h) Directly or indirectly compete with, or become interested in any
competitor of the Company in any business the same as the Acquired Business of
MTT and the Business of the Company on the date of this Agreement.
As used herein, the "Acquired Business" as it relates to MTT shall include,
but not be limited to the _________________
As used herein, the "Business of the Company" shall include, but not be
limited to the business of the Company and The Jackson Rivers Company, Inc., the
parent company of the Company, and its affiliated corporations, as well as the
_________________________
This covenant on the part of Khan shall be construed as an agreement
independent of any other provision of this Agreement and the existence of any
claim or cause of action by Khan against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of this covenant.
3. Remedies for Breach. If Khan commits a breach, or threatens to
---------------------
commit a breach, of any of the provisions of this Agreement, the Company shall
have the following rights and remedies, in addition to any others, each of which
shall be independent of the other and severally enforceable:
(a) The right to have the provisions of this Agreement specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide an adequate remedy to the
Company; and
(b) The right and remedy to require Khan to account for and pay over
to the Company all compensation, profits, monies, accruals, increments, or other
benefits (the "Benefits") derived or received by Khan as a result of any
transactions constituting a breach of any of the provisions of this Agreement,
Khan agreeing to account for and pay over the Benefits as provided above.
4. Confidentiality. All information relating to the business and
---------------
affairs of the Company shall be treated as Confidential Information, as
hereinafter defined, by Khan both during and after the term hereof. Except with
the prior approval of the Company, Huff shall not disclose any of the
Confidential Information at any time to any person except authorized personnel
of the Company and its affiliated corporations. All data, records and written
material prepared or compiled by Huff or furnished to Huff during the term
hereof shall be the sole and exclusive property of the Company, and none of such
data, records or written materials, or copies thereof, shall be retained by Huff
after the term of this Agreement.
As used herein, the term "Confidential Information" includes, without
limitation, information and knowledge pertaining to products, inventions,
innovations, designs, ideas, plans, trade secrets, proprietary information,
manufacturing, packaging, advertising, distribution and sales methods and
systems, sales and profit figures, customer and client lists, and relationships
between the Company and its affiliated corporations and dealers, distributors,
customers, clients, suppliers and others who have had or will have had business
dealings with the Company and its affiliated corporations. The term
"Confidential Information" does not include information which (a) becomes
generally available to the public through no wrongful act on the part of Huff,
(b) can be shown to have been previously available to Huff on a non confidential
basis prior to its disclosure to Huff by the Company, or its representatives,
(c) becomes available to Huff on a non confidential basis from a source other
than the Company or its representatives, or (d) is required to be disclosed by
order of a court of competent jurisdiction.
5. Controlling Agreement. In the event of any conflict between the
----------------------
terms of this Agreement, or the LLC Interest Purchase Agreement, the terms of
the LLC Interest Purchase Agreement shall control.
2
6. Construction. Words of any gender used in this Agreement shall be
------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
7. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
8. Cumulative Rights. The rights and remedies of any party under this
------------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
9. Invalidity. In the event any one or more of the provisions
----------
contained in this Agreement or in any instrument referred to herein or executed
in connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
10. Headings. The headings used in this Agreement are for convenience
--------
and reference only and in no way define, limit, simplify or describe the scope
or intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
11. Excusable Delay. None of the parties hereto shall be obligated to
----------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of terrorists, acts of a public enemy, wars or war-like
action (whether actual, impending or expected and whether de jure or de facto),
arrest or other restraint of governmental (civil or military) blockades,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires,
hurricanes, storms, floods, washouts, sink holes, civil disturbances,
explosions, breakage or accident to equipment or machinery, confiscation or
seizure by any government of public authority, nuclear reaction or radiation,
radioactive contamination or other causes, whether of the kind herein
enumerated, or otherwise, that are not reasonably within the control of the
party claiming the right to delay performance on account of such occurrence.
12. No Third-Party Beneficiary. Any agreement to pay an amount and any
--------------------------
assumption of liability herein contained, express or implied, shall be only for
the benefit of the undersigned parties and their respective successors and
permitted assigns (as herein expressly permitted), and such agreements and
assumptions shall not inure to the benefit of the obligees or any other party,
whomsoever, it being the intention of the parties hereto that no one shall be or
be deemed to be a third-party beneficiary of this Agreement.
13. Law Governing. This Agreement shall be construed and governed by
--------------
the laws of the State of Texas, and all obligations hereunder shall be deemed
performable in ________ County, New York.
14. Mediation and Arbitration. All disputes arising or related to this
-------------------------
Agreement must exclusively be resolved first by mediation with a mediator
selected by the parties, with such mediation to be held in Pleasantville, New
York. If such mediation fails, then any such dispute shall be resolved by
binding arbitration under the Commercial Arbitration Rules of the American
Arbitration Association in effect at the time the arbitration proceeding
commences, except that (a) Texas law and the Federal Arbitration Act must govern
construction and effect, (b) the locale of any arbitration must be in
Pleasantville, New York, and (c) the arbitrator must with the award provide
written findings of fact and conclusions of law. Any party may seek from a
court of competent jurisdiction any provisional remedy that may be necessary to
protect its rights or assets pending the selection of the arbitrator or the
arbitrator's determination of the merits of the controversy. The exercise of
such arbitration rights by any party will not preclude the exercise of any
self-help remedies (including without limitation, setoff rights) or the exercise
of any non-judicial foreclosure rights. An arbitration award may be entered in
any court having jurisdiction.
3
15. Attorneys' Fees. In the event that it should become necessary for
----------------
any party entitled hereunder to bring suit (including, but not limited to, any
mediation or arbitration) against the other party to this Agreement for a breach
of this Agreement, the parties hereby covenant and agree that the party who is
found to be in breach of this Agreement shall also be liable for all reasonable
attorneys' fees and costs of court incurred by the other party. Provided,
however, in the event that there has been no breach of this Agreement, whether
or not the transactions contemplated hereby are consummated, each party shall
bear its own costs and expenses (including any fees or disbursements of its
counsel, accountants, brokers, investment bankers, and finder's fees.
16. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the successors of each of the parties hereto, but shall not be
assignable by either party without the prior written consent of the other party,
which consent shall be subject to such party's sole, absolute and unfettered
discretion.
17. Notices. All notices, requests, demands, and other communications
-------
hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, by
facsimile, or by e-mail, if to Khan, addressed to Mr. Joe Khan at 42 Orchard
Hill Road, Katonah, NY, 10536, telecopier 914-232-1117, and e-mail
joe.khan@kisnet.com; and if to the Company, addressed to Mr. Dennis Lauzon at
Jackson Rivers Technologies, 17-19 Marble Avenue, Pleasantville, New York
10570, telecopier (914) 232-3475, and e-mail dlauzon@aol.com. Any party hereto
may change its address upon 10 days' written notice to any other party hereto.
18. Multiple Counterparts. This Agreement may be executed 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.
19. Entire Agreement. This instrument contains the entire Agreement of
----------------
the parties with respect to the subject matter hereof, and may not be changed
orally, but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought.
IN WITNESS WHEREOF, this Agreement has been executed on the date first
written above.
-------------------------------------------
JOE KHAN
JACKSON RIVERS TECHNOLOGIES
By
-----------------------------------------
Dennis Lauzon, President
4