Document:

EXHIBIT 10.12

     THIS AMENMENT No. 1 to the DISTRIBUTION AGREEMENT is made and entered into
as of the 15th day of August 2003 by Earth Sciences, Inc., a Colorado
corporation ("ESI") and ADA-ES, Inc., a Colorado corporation ("ADA-ES").

                                    RECITALS

          WHEREAS, ESI and ADA-ES have entered into a Distribution Agreement
     dated March 17, 2003 (the "Distribution Agreement") in order to:

          (a) separate and divide the existing businesses of ESI so that the
     ADA-ES Business (as defined below) shall be owned directly by ADA-ES, and

          (b) distribute, following such separation and division, as a dividend
     to the holders of shares of common stock, $.01 par value per share, of ESI
     (the "ESI Common Stock") all of the outstanding shares of common stock, no
     par value, of ADA-ES (the "ADA-ES Common Stock") held by ESI; and

     WHEREAS, ESI and ADA-ES have determined that it is necessary and desirable
to amend the Distribution Agreement to provide for the accumulation and sale of
fractional shares to satisfy the requirements of the U.S. Securities and
Exchange Commission for registration of the spin-off contemplated in the
Distribution Agreement.

     NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in the Distribution Agreement and this Amendment No. 1, the
parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.01. General. Unless otherwise defined herein or unless the
context otherwise requires, the capitalized terms shall have the meanings set
forth in the Distribution Agreement.

     SECTION 1.02. References. References to a "Section" are, unless otherwise
specified, to one of the Sections in the Distribution Agreement, unless
otherwise specified as one of the Sections of this Amendment No. 1.

                                   ARTICLE II

                                    AMENDMENT

The parties agree to amend Sections 3.02 and Section 3.03 of the Distribution
Agreement by replacing those sections in their entirely with the language shown
below.

     SECTION 3.02. The Distribution.

     (a) Duties and Obligations of ESI. Subject to the conditions contained
herein, on the Distribution Date, but effective immediately following the close
of business on the Distribution Date, ESI shall:

          (i) deliver to the Agent the share certificates representing the
     ADA-ES Common Shares issued to ESI by ADA-ES pursuant to Section 2.02
     hereof, endorsed by ESI in blank, for the benefit of the ESI Holders; and

<PAGE>

          (ii) instruct the Agent to distribute, as soon as practicable
     following consummation of the Distribution, to the ESI Holders the
     following:

          (A)  one share of ADA-ES Common Stock for every ten shares of ESI
               Common Stock; and

          (B)  cash, if applicable, in lieu of fractional shares obtained in the
               manner provided in Section 3.03 hereof.

     (b) Duties and Responsibilities of ADA-ES. ADA-ES shall provide, or cause
to be provided, to the Agent sufficient certificates representing ADA-ES Common
Stock in such denominations as the Agent may request in order to effect the
Distribution. All shares of ADA-ES Common Stock issued pursuant to the
Distribution will be validly issued, fully paid and nonassessable and free of
any preemptive (or similar) rights.

SECTION 3.03. Fractional Shares

     (a) No Fractional Shares. Notwithstanding anything herein to the contrary,
no certificate or scrip evidencing a fractional share of ADA-ES Common Stock
shall be issued in connection with the Distribution, and any such fractional
share interests to which a ESI Holder would otherwise be entitled will not
entitle such ESI Holder to vote or to any rights of a stockholder of ADA-ES. In
lieu of any such fractional shares, each ESI Holder who, but for the provisions
of this Section 3.03, would be entitled to receive a fractional share interest
of ADA-ES Common Stock pursuant to the Distribution shall be paid cash, without
any interest thereon, as hereinafter provided. ESI shall instruct the Agent to
determine the number of whole shares and fractional shares of ADA-ES Common
Stock allocable to each ESI Holder, to aggregate all such fractional shares into
whole shares, to sell the whole shares obtained thereby in the open market at
the then prevailing prices on behalf of ESI Holders who otherwise would be
entitled to receive fractional share interests and to distribute to each such
ESI Holder his, her or its ratable share of the total proceeds of such sale,
after making appropriate deductions of the amount required for federal income
tax withholding purposes and after deducting any applicable transfer taxes. All
brokers' fees and commissions incurred in connection with such sales shall be
paid by ADA-ES.

     (b) Unclaimed Stock or Cash. Any ADA-ES Common Stock or cash in lieu of
fractional shares and dividends or distribution with respect to ADA-ES Common
Stock that remain unclaimed by any ESI Holder 180 days after the Distribution
Date shall be returned to ESI and any such ESI Holders shall look only to ESI
for the ADA-ES Common Stock, cash, if any, in lieu of fractional share interests
and any such dividends or distribution to which they are entitled, subject in
each case to applicable escheat or other abandoned property laws.

     (c) Beneficial Owners. Solely for purposes of computing fractional share
interests pursuant to Section 3.03(a), the beneficial owner of shares of ESI
Common Stock held of record in the name of a nominee will be treated as the
holder of record of such shares.

                                   ARTICLE III

                                NO OTHER CHANGES

The parties agree that no other change or alteration of the Distribution
Agreement is intended by this Amendment except for the replacement of the
sections noted above.

                   (BALANCE OF THIS PAGE INTENTIONALLY BLANK)

                                       2
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
the Distribution Agreement to be duly executed as of the day and year first
above written.

                                          EARTH SCIENCES, INC.

                                          By: /s/ Mark H McKinnies

                                          Name: Mark H McKinnies
                                          ----------------------------

                                          Title: President
                                          ----------------------------

                                          ADA-ES, INC.

                                          By: /s/ Michael D. Durham

                                          Name: Michael D. Durham
                                          ----------------------------

                                          Title: President
                                          ----------------------------

                                       3SERIES B PREFERRED STOCK PURCHASE AGREEMENT

  

 

 

 

COMC, INC.  

SERIES B PREFERRED STOCK

PURCHASE AGREEMENT

 

 

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	
	Page	 
	 	 	 	 	 	 	 
	1	.	 	Purchase
      and Sale
      of Stock	 	1	 
	 	 	 	
    	 	 	 
	 	 	 	1.1	Sale
      and Issuance
      of Series
      B Preferred
      Stock.	 	1	 
	 	 	 	 	
    	 	 	 
	 	 	 	1.2	Term	 	1	 
	 	 	 	 	
    	 	 	 
	 	 	 	1.3	Interest
      Rate	 	1	 
	 	 	 	 	
    	 	 	 
	 	 	 	1.4	Liquidation
      and Sale
      Preferences	 	1	 
	 	 	 	 	
    	 	 	 
	 	 	 	1.5	Redemption
      Conversion
      and Sinking
      Fund	 	1	 
	 	 	 	 	
    	 	 	 
	 	 	 	1.6	Voting
      Rights	 	2	 
	 	 	 	 	
    	 	 	 
	 	 	 	1.7	Legend	 	2	 
	 	 	 	 	
    	 	 	 
	 	 	 	1.8	Closing	 	3	 
	 	 	 	 	
    	 	 	 
	 	 	 	1.9	Subsequent
      Sale of
      Series
      B Preferred
      Stock	 	3	 
	 	 	 	 	
    	 	 	 
	 	 	 	 	 	 	 	 
	2	.	 	Representations
      and Warranties
      of the
      Company	 	3	 
	 	 	 	
    	 	 	 
	 	 	 	2.1	Organization;
      Good Standing;
      Qualification	 	3	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.2	Authorization	 	3	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.3	Valid
      Issuance
      of Preferred
      and Common
      Stock	 	3	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.4	Governmental
      Consents	 	3	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.5	Capitalization
      and Voting
      Rights	 	4	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.6	Subsidiaries	 	5	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.7	Contracts
      and Other
      Commitments	 	5	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.8	Material
      Contracts
      and Commitments	 	5	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.9	Registration
      Rights	 	5	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.10	Permits	 	6	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.11	Compliance
      With Other
      Instruments	 	6	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.12	Litigation	 	6	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.13	Title
      to Property
      and Assets;
      Leases	 	6	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.14	Patents,
      Trademarks,
      etc.	 	7	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.15	Proprietary
      Agreements	 	7	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.16	Taxes	 	7	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.17	No
      Material
      Changes	 	7	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.18	Conflicts
      of Interest	 	7	 
	 	 	 	 	
    	 	 	 
	 	 	 	2.19	Employees;
      Absence
      of Restrictive
      Agreements	 	7	 
	 	 	 	 	
    	 	 	 
	 	 	 		 	 	 

  
	 	 	 	 	 	 	 
	3	.	 	Representations and Warranties of the Investors	 	8	 
	 	 	 	 	 	 	 
	 	 	 	3.1	Authorization	 	8	 
	 	 	 	 	 	 	 	 
	 	 	 	3.2	Purchase Entirely for Own Account	 	8	 
	 	 	 	 	 	 	 	 
	 	 	 	3.3	Receipt of Information	 	8	 
	 	 	 	 	 	 	 	 
	 	 	 	3.4	Investment Experience	 	8	 
	 	 	 	 	 	 	 	 
	 	 	 	3.5	Accredited Investor	 	8	 
	 	 	 	 	 	 	 	 
	 	 	 	3.6	Sale of Preferred Stock	 	8	 
	 	 	 	 	 	 	 	 
	 	 	 	3.7	Restricted Securities	 	8	 
	 	 	 	 	 	 	 	 
	4	.	 	Conditions of Investors’ Obligations at Closing	 	9	 

	 	 	4.1	Representations
      and Warranties	9	 
	 	 	 		 	 
	 	 	4.2	Performance	9	 
	 	 	 		 	 
	 	 	4.3	Qualifications	9	 
	 	 	 		 	 
	 	 	4.4	Forms	9	 
	 	 	 		 	 
	 	 	4.5	Proceedings
      and Documents	9	 
	 	 	 		 	 
	 	 	4.6	Registration
      Rights
      Series
      B Peferred
      Stock	9	 
	 	 	 		 	 
	5	.	Conditions
      of the
      Company’s
      Obligations
      at Closing	9	 
	 	 		 	 
	 	 	5.1	Representations
      and Warranties	9	 
	 	 	 		 	 
	 	 	5.2	Performance	10	 
	 	 	 		 	 
	 	 	5.3	Qualifications	10	 
	 	 	 		 	 
	 	 	5.4	Forms	10	 
	 	 	 		 	 
	6	.	Miscellaneous.	10	 
	 	 	6.1	Entire
      Agreement	10	 
	 	 	 		 	 
	 	 	6.2	Survival
      of Warranties	10	 
	 	 	 		 	 
	 	 	6.3	Successors
      and Assigns	10	 
	 	 	 		 	 
	 	 	6.4	Governing
      Law	10	 
	 	 	 		 	 
	 	 	6.5	Counterparts	10	 
	 	 	 		 	 
	 	 	6.6	Titles
      and Subtitles	10	 
	 	 	 		 	 
	 	 	6.7	Notices	10	 
	 	 	 		 	 
	 	 	6.8	Finders’
      Fees	11	 
	 	 	 		 	 
	 	 	6.9	Attorneys’
      Fees	11	 
	 	 	 		 	 
	 	 	6.10	Amendments
      and Waivers	11	 
	 	 	 		 	 
	 	 	6.11	Severability	11	 
	 	 	 		 	 
	 	 	6.12	Rights
      of Investors	11	 
	 	 	 		 	 
	 	 	6.13	Exculpation
      Among
      Investors	12	 
	 	 	 		 	 
	 	 	6.14	Delays
      or Omissions	12	 
	 	 	 		 	 
	 	 	 	 	 	 
	Schedule
      A	
        
        - List
        of Investors
	 	 
	Exhibit
      A	
        
        - Schedule
        of Exceptions
	 	 

  - ii -

 COMC,
  INC.  

  SERIES
  B PREFERRED
  STOCK PURCHASE
  AGREEMENT
   

      THIS
  SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is
  made as of June 2, 2003, by and between COMC, INC., a Delaware corporation (the
  “Company”), and each of the persons listed on Schedule
  A hereto,
  each of which is herein referred to as an “Investor.”  

 THE PARTIES HEREBY
  AGREE AS FOLLOWS:  

 1. Purchase
  and Sale of Stock.
   

1.1 	Sale and Issuance of Series B Preferred Stock. 

     (a) 	The Company shall file with the Secretary of State of Delaware any appropriate forms if required in connection with this Agreement. 

     (b) 	Subject to the terms and conditions of this Agreement, each Investor agrees, severally and not jointly, to purchase at the Closing and the Company agrees to
sell and issue to each Investor, severally and not jointly, at the Closing that number of shares of the Company’s Series B Preferred Stock set forth opposite each Investor’s name on Schedule A hereto at a price of twenty cents ($0.20) per share, up to a maximum of three million (3,000,000.00) shares of Series B Preferred Stock for a maximum
price of six hundred thousand dollars ($600,000) (“Series B Preferred Stock”), with an option to increase this amount by fifteen percent (15%) or an aggregate of an additional four hundred and fifty thousand (450,000.00) shares for an
additional total price of ninety thousand dollars ($90,000) for a sixty-day period. 

     1.2 	Term.  All the Series B
Preferred Stock will have a term of four years and approximately nine months from date of issuance of the original issuance of the Series B Preferred Stock and is redeemable on or before March 20, 2008. 

     1.3 	Dividend Rate. The Dividend
Rate on this Series B Preferred Stock will be a 5% annual Pay-In-Kind (PIK) dividend. A minimum of two-year dividend is due to Investors even if Investors are forced to convert or voluntarily convert before the two-year period expires.

     1.4 	Liquidation and Sale Preference. In the event that the Company is liquidated or sold, the Series B Preferred shareholders will receive, on an equal and pro-rata basis with the Series A Preferred Shareholders, the par value of their shares plus any accumulated
PIK interest before the common shareholders receive any proceeds whatsoever. Then the common shareholders will receive 1/10th of each Series A Preferred share and 1/20th of the amount each Series B Preferred share
received excluding accumulated PIK dividend for each share. In the event any proceeds distributed in excess thereof, the Series B Preferred stock will be treated as if it is the equivalent to 20 shares of common stock, plus shares attributable to
any PIK dividend. 

1.5 	Redemption, Conversion and Sinking Fund. 

      (a)
  The Series
  B Preferred
  Stock is redeemable
  four (4) years
  and approximately
  nine months
  after the
  date of issuance
  and become
  due on or
  before March
  20, 2008 and
  if not repaid,
  the holders
  of the Series
  B Preferred
  Stock have
  the right
  to force the
  Company into
  liquidation.

1

     (b) 	The Series B Preferred stockholders have the right at any time to convert their shares into common stock, each share of Series B Preferred Stock for 20 shares
of common stock. 

     (c) 	The Company, at any time, after a two-year period, has the right to prepay the Series B Preferred Stock, without a penalty. If the Company exercises their
right and shows they have the funds available to prepay, this Series B Preferred Stock, the Series B Preferred stockholders will have 10 business days to make a decision to either convert their Series B Preferred shares into common shares or have
their shares redeemed. 

      (d) In the event the Company raises in excess of $5,000,000 of
  new equity with rights junior to the Series B Preferred Stock, excluding the Series B Preferred Stock Issuance, the Company has a right to demand that
  the Series B Preferred Stock is converted into common stock. In the event such new equity is Senior to the Series B Preferred Stock, however, there is
  no conversion of the Series B into common stock. 

      (e) The Company will not have to establish a sinking fund for the
  redemption of this Series B Preferred Stock. The Series B Preferred Stock can only be redeemed the same time as the Series A Preferred Stock. 

     1.6 	Voting Rights.  Each share
of Series B Preferred Stock will have the equivalent voting rights of 20 shares of common stock as long as the Series B Preferred stock is outstanding. The Series B Preferred Shareholders can vote their shares on all matters that the common
shareholders have a right to vote on. 

     1.7 	Legend. To the extent
applicable, each certificate or other document evidencing any of the Series B Preferred Stock or any Common Stock issued upon conversion thereof shall be endorsed with the legend set forth below, and each Investor covenants that, except to the
extent such restrictions are waived by the Company, such Investor shall not transfer the shares represented by any such certificate without complying with the restrictions on transfer described in the legend endorsed on such certificate: 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT OR ANOTHER
APPLICABLE EXEMPTION.” 

      The
  foregoing
  legend shall
  be removed,
  and the Company
  shall issue
  a certificate
  without such
  legend to
  the holder
  of such security
  if such holder
  provides the
  Company with
  an opinion
  of counsel
  reasonably
  satisfactory
  to the Company
  to the effect
  that a sale,
  transfer,
  assignment,
  offer, pledge
  or distribution
  of such security
  may be made
  without registration
  and that such
  legend is
  not required
  to satisfy
  the applicable
  exemption
  from registration.
   

  
  2 

   1.8
  Closing.
  The purchase
  and sale of
  the Series
  B Preferred
  Stock shall
  take place
  at the offices
  of the Company,
  3040 Pike
  Lane, Concord,
  California,
  no later than
  June 2, 2003,
  or at such
  other time
  and place
  as the Company
  and Investors
  acquiring
  in the aggregate
  more than
  half 
  th
  e
  shares of
  Series B Preferred
  Stock sold
  pursuant hereto
  shall mutually
  agree, either
  orally or
  in writing
  (which time
  and place
  are designated
  as the “Closing”).
  At the Closing
  or as soon
  as possible
  thereafter,
  the Company
  shall deliver
  to each Investor
  a certificate
  representing
  the shares
  of Series
  B Preferred
  Stock that
  such Investor
  is purchasing
  against payment
  of the purchase
  price therefor
  by check,
  wire transfer
  or such other
  form of payment
  as shall be
  mutually agreed
  upon by such
  Investor and
  the Company.
   

1.9 	Subsequent Sale of Series B Preferred Stock.

     (a) 	Each shareholder of Series B Preferred Stock shall have the right for 90 days to purchase additional shares of Series B Preferred Stock for a price of $0.20
per share of Series B Preferred Stock equal to 25% of their original purchase. 

     2. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that, except as set forth on the Schedule of Exceptions attached hereto as Exhibit A, specifically identifying the relevant subparagraph(s) hereof, which exceptions shall be deemed to be representations and warranties as if made hereunder: 

     2.1 	Organization; Good Standing; Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own and operate its properties and assets and to
carry on its business as now conducted and as proposed to be conducted, to execute and deliver this Agreement, to issue and sell the Series B Preferred Stock and the Common Stock issuable upon conversion thereof, and to carry out the provisions of
the Agreements.

     2.2 	Authorization.  All
corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of the Agreements, the performance of all obligations of the Company hereunder and thereunder and the
authorization, issuance (or reservation for issuance), sale and delivery of the Series B Preferred Stock being sold hereunder and the Common Stock issuable upon conversion thereof has been taken or will be taken prior to the Closing or as soon as
possible thereafter, and the Agreements constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. 

     2.3 	Valid Issuance of Series B Preferred Stock. The Series B Preferred Stock that is being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable, and will be free of all pledges, liens, encumbrances or restrictions on transfer other than restrictions on transfer under this Agreement under applicable state and federal securities laws.  The Common Stock
issuable upon conversion of the Series B Preferred Stock purchased under this Agreement has been duly and validly reserved for issuance and will be duly and validly issued, fully paid and nonassessable except as mentioned in 2.5, and will be free of
all pledges, liens, encumbrances or restrictions on transfer other than restrictions on transfer under this Agreement, and under applicable state and federal securities laws. 

     2.4 	Governmental Consents. To
the best of the Company’s knowledge, no consent, approval, qualification, order or authorization of, or filing with, any local, state or federal 

  
  3 

governmental authority is required on the part of the Company in connection with the Company’s valid execution, delivery or performance of this Agreement, the offer, sale or issuance of the
Series B Preferred Stock by the Company or the issuance of Common Stock upon conversion of the Series B Preferred Stock, except (a) the filing of any forms with the Secretary of State of the State of Delaware, and (b) such filings as have been made
prior to the Closing, except that any notices of sale required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), or such post-closing filings as may
be required under applicable state securities laws, which will be timely filed within the applicable periods therefor. Any required consents not filed prior to closing will be filed as soon as possible thereafter. 

      2.5
  Capitalization
  and Voting
  Rights.
    The
  authorized
  capital of
  the Company
  consists,
  or will consist
  prior to the
  Closing, of:
   

     (a) 	Preferred Stock. Ten million (10,000,000) shares of Preferred Stock (the “Preferred Stock”), two million (2,000,000) shares of which have been
designated Series A Preferred Stock and three million (3,000,000) shares of which have been designated Series B Preferred Stock. Prior to the issuance of the Series A Preferred Stock Agreement, no shares of Preferred Stock have been issued or are
outstanding except for the Series A Preferred Stock and the issuance of the Series B Preferred Stock. The rights, privileges and preferences of the Series B Preferred Stock will be as stated herein and in any related filings with the State of
Delaware. 

 (b)  
  Common
  Stock.  
  Authorized:
  forty
  million
  (40,000,000)
  shares
  of
  common
  stock (“Common
  Stock”)
  of which thirty
  million four
  hundred and
  eighty five
  thousand three
  hundred and
  twenty eight
  (30,485,328)
  shares are
  issued and
  outstanding
  with three
  million eight
  hundred and
  one thousand
  two hundred
  and thirty
  seven (3,801,237)
  are currently
  held as treasury
  stock. Shareholders
  will have
  the right
  on the next
  proxy statement
  to vote to
  increase the
  authorized
  common shares
  from 40,000,000
  to 160,000,000.
  If increase
  in authorized
  shares is
  not approved,
  to the extent
  shares are
  not available
  upon conversion,
  each shareholder
  of Series
  B Preferred
  Stock and
  Series A Preferred
  Stock will
  only be able
  to convert
  his proportionate
  amount of
  preferred
  stock according
  to the common
  shares available.
   

     The outstanding shares of Common Stock are owned by the stockholders in the numbers specified in the Company’s stock register. The outstanding shares of Common
Stock have been issued in accordance with the registration or qualification provisions of the Securities Act and any relevant state securities laws or pursuant to valid exemptions therefrom. Except for (i) as provided in the Schedule of Exceptions
(other than valid options and warrants outstanding, etc.), and (ii) the conversion privileges of the Series A and Series B Preferred Stock, there are not outstanding any subscriptions, options, warrants, rights (including conversion or preemptive
rights and rights of first refusal), or agreements for the purchase or acquisition from the Company of any shares of its capital stock or other securities of any kind representing an ownership interest or contingent ownership interest in the
Company. Neither the offer nor the issuance or sale of the Series A and B Preferred Stock or the Common Stock issuable, except when noted above, upon conversion of the Series A and B Preferred Stock constitutes an event, under any anti-dilution
provisions of any securities issued or issuable, by the Company or any agreements with respect to the issuance of securities by the Company, which will either increase the number of shares issuable, except when noted above, pursuant to such
provisions or decrease the consideration per share to be received by the Company pursuant to such provisions. Except as set otherwise stated, the Company is not a party or subject to any agreement or understanding, and, to the best of the
Company’s knowledge, there is

  
  4 

no agreement or understanding between any persons that affects or relates to the voting or giving of written consents with respect to any security or the voting by a director of the Company.

     2.6 	Subsidiaries.  The Company
wholly owns one operating subsidiary, ICF Communication Solutions, Inc. and does not own or control, directly or indirectly, any interest in any other corporation, association or other business entity. The Company is not a participant in any joint
venture, partnership or similar arrangement. 

     2.7 	Contracts and Other Commitments. To the best of its knowledge, the Company does not have any contract, agreement, lease, license, purchase order, instrument, commitment or proposed transaction, written or oral, absolute or contingent, other than (a) contracts
for the purchase of supplies and services that were entered into in the ordinary course of business and that do not involve more than two hundred thousand dollars ($200,000), and do not extend for more than one (1) year beyond the date hereof except
for the Company’s Burbank, CA office lease, (b) sales contracts entered into in the ordinary course of business, and (c) contracts terminable at will by the Company on no more than thirty (30) days’ notice without cost or liability to the
Company (collectively, “Contracts”). 

     2.8 	Material Contracts and Commitments. To the best of its knowledge, all of the Contracts are valid, binding and in full force and effect in all material respects and enforceable by the Company in accordance with their respective terms in all material respects,
subject to the effect of applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, usury or other laws of general application relating to or affecting enforcement of creditors’ rights and rules or laws concerning
equitable remedies. The Company is not currently engaged in any discussion (a) with any representative of any corporation or corporations regarding the consolidation or merger of the Company with or into any such corporation or corporations, (b)
with any corporation, partnership, association or other business entity or any individual regarding the sale, conveyance or disposition of all or substantially all of the assets of the Company of a transaction or series of related transactions in
which more than fifty percent (50%) of the voting power of the Company is disposed of, or (c) regarding any other form of acquisition, liquidation, dissolution or winding up of the Company. 

      2.9
  Registration
  Rights.
  To the best
  of its knowledge,
  the Company
  is not obligated
  (either on
  a “demand,”
  “request,”
  “piggyback”
  or other basis)
  to register
  under the
  Securities
  Act any of
  its presently
  outstanding
  securities
  or any of
  its securities
  that may subsequently
  be issued
  unless 75%
  of the holders
  of this Series
  of Preferred
  B shares convert
  into shares
  of common
  stock of the
  Company and
  request that
  such common
  stock be registered
  under the
  Securities
  Act in which
  case, the
  Company will
  within sixty
  (60) days
  will file
  a Registration
  Statement
  for these
  shares under
  the Securities
  Act. In the
  event that
  the Series
  A Preferred
  Stock requests
  such a registration,
  the Series
  B Preferred
  Stock will
  automatically
  be included
  in such registration
  if 75% of
  the holders
  of Series
  B Preferred
  Stock so elect.
   

  
  5 

  

     2.10
  Permits.
  To the best
  of its knowledge,
  the Company
  has all franchises,
  permits, licenses,
  approvals
  and any similar
  authority
  necessary
  for the conduct
  of its business
  as now being
  conducted
  by it, the
  lack of which
  could materially
  and adversely
  affect the
  business,
  properties,
  prospects
  or financial
  condition
  of the Company
  and believes
  it can obtain,
  without undue
  burden or
  expense, any
  similar authority
  for the conduct
  of its business
  as planned
  to be conducted.
  The Company
  is not in
  default in
  any material
  respect under
  any of such
  franchises,
  permits, licenses
  or other similar
  authority.

     2.11
  Compliance With Other Instruments.   To the best of its knowledge, the
  Company is not in violation or default in any material respect of any provision of its Certificate
  or Bylaws or in any material respect of any provision of any lease, license, purchase order, agreement, instrument or contract to which it is a party
  or by which it is bound or, to the best of its knowledge, of any federal, state or local law, judgment, order, writ, decree, statute, rule or regulation
  applicable to the Company. To the best of the Company’s knowledge, all parties having material contractual arrangements with the Company are in substantial
  compliance therewith and none are in material default in any respect thereunder. The execution, delivery and performance by the Company of this Agreement
  and the other Agreements, and the consummation of the transactions contemplated hereby and thereby will not result in any such violation or be in material
  conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that
  results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture
  or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or
  properties. There is no agreement, obligation, instrument or transaction to which the Company is a party which materially adversely affects the business,
  conditions, affairs or operations of the Company or any of its properties or assets.  

     2.12 	Litigation. To the best of
its knowledge, except as set forth in the Company’s most recent 10Q filed with the Securities and Exchange Commission (“SEC”) and the litigation to be mentioned in the 10Q to be filed for the second quarter of 2003, there is no
action, suit, arbitration, proceeding or investigation pending or, to the Company’s knowledge, currently threatened against the Company, its properties, assets or business, nor is the Company aware that there is any basis for the foregoing.

      2.13
  Title
  to Property
  and Assets;
  Leases.
  To the best
  of its knowledge,
  except (a)
  for liens
  for current
  taxes not
  yet delinquent,
  (b) for liens
  imposed by
  law and incurred
  in the ordinary
  course of
  business for
  obligations
  not past due
  to carriers,
  warehousemen,
  laborers,
  materialmen
  and the like,
  (c) for liens
  in respect
  of pledges
  or deposits
  under workers’
  compensation
  laws or similar
  legislation,
  or (d) for
  minor defects
  in title,
  none of which,
  individually
  or in the
  aggregate,
  materially
  interferes
  with the use
  of such property,
  the Company
  owns its property
  and assets
  free and clear
  of all mortgages,
  liens, claims
  and encumbrances.
  With respect
  to the property
  and assets
  it leases,
  the Company
  is in compliance
  with such
  leases and,
  to the best
  of its knowledge,
  holds a valid
  leasehold
  interest free
  of any liens,
  claims or
  encumbrances,
  subject to
  clauses (a)-(d)
  above. The
  Company owns
  no real property.
   

  
  6 

  

     2.14
  Patents,
  Trademarks,
  etc.
  To the best
  of the Company’s
  knowledge,
  the Company
  owns and possesses
  or is licensed
  under all
  patents, patent
  applications,
  licenses,
  trademarks,
  trade names,
  brand names,
  inventions
  and copyrights
  employed in
  the operation
  of its business
  as now conducted
  with no infringement
  of or conflict
  with the rights
  of others
  respecting
  any of the
  same. To the
  Company’s
  knowledge,
  the operation
  of the Company’s
  business as
  now conducted
  does not infringe
  any patent
  or other proprietary
  rights of
  others respecting
  any of the
  same. The
  Company has
  not received
  any communications
  alleging that
  it has violated
  any of the
  patents, trademarks,
  service marks,
  trade names,
  copyrights
  or trade secrets
  or other proprietary
  rights of
  any other
  person or
  entity, nor
  is the Company
  aware of any
  basis for
  the foregoing.
  There are
  no agreements,
  understandings,
  instruments,
  contracts,
  judgments,
  orders or
  writs of decrees
  to which the
  Company is
  a party or
  by which it
  is bound which
  involve indemnification
  by the Company
  with respect
  to infringements
  of proprietary
  rights. 

     2.15 	Proprietary Agreements.  To
the best of its knowledge, each officer, director, and consultant of the Company has executed or will be asked to execute an agreement regarding confidentiality and proprietary information.

     2.16 	Taxes. To the best of its
knowledge, the Company has filed all tax returns, or appropriate legal extensions, that are required to have been filed with appropriate governmental agencies or instrumentalities, except where the failure to do so would not have a material adverse
effect upon the Company, taken as a whole. The Company has paid or established reserves for all income, franchise and other taxes, assessments, governmental charges, penalties, interest and fines due and payable by it as set forth on all tax returns
on or before the Closing. The Company is not delinquent in the payment of any such tax or in the payment of any assessment or governmental charge. There is no pending dispute with any taxing authority relating to any of such returns, and the Company
has no knowledge of any proposed liability for any tax to be imposed upon the properties or assets of the Company. 

     2.17 	No Material Changes. Since
January 1, 2003, the Company has conducted its business in its normal way and the following events have transpired since the issuance of the December 31, 2002 audited statements: (a) COMC has a new Chairman of the Board, President and CEO; (b)
Christopher Smith on February 28, 2003 resigned all his positions at ICF Communication Solutions, Inc. (“ICF”) and he also resigned on February 28, 2003 as CEO and CFO of COMC, Inc. These COMC resignations became effective on April 3,
2003; (c) Bank Agreements were switched from Comerica Bank to Greater Bay Banks; (d) William Burns has taken over as Executive Vice President and COO of ICF and has resigned as Chairman of COMC; (e) Janice B. Fuellhart was elected Chairman, CEO, and
President of ICF; (f) The Company during the first five months of 2003 has been in the process of re-negotiating its liabilities with all of its creditors; (g) this Offering is being made with the Company having provided audited financial statements
for the year ended December 31, 2002; (h) Revenues for the months of January through May 2003 were below projections supplied at the begin of the year; and (i) ALL DOCUMENTS IN CONNECTION WITH THIS TRANSACTION ARE AVAILABLE AT THE COMPANY’S
CORPORATE OFFICE.

     2.18 Conflicts
  of Interest. To the best of the Company’s knowledge, no officer, director or stockholder
  of the Company or any affiliate (as such term is defined in Rule 405 under the Securities Act) of any such person has any direct or indirect interest
  (a) in any entity which does business with the Company, or (b) in any property, asset or right which is used by the Company in the conduct of its business,
  or (c) in any contractual relationship with the Company other than as an employee or consultant. For the purpose of this Section 2.19, there shall be
  disregarded any interest which arises solely from the ownership of less than a one percent (1%) equity interest in a corporation whose stock is regularly
  traded on any national securities exchange or in the over-the-counter market.  

      2.19 Employees;
  Absence of Restrictive Agreements. To the best of the Company’s knowledge, subject to the terminations and changes mentioned in 2.17 above, (i) no officer or employee
  of the Company has any plans to terminate his or her employment with the Company, (ii) no officer or key employee of the Company, with the exception of
  one sales person, is subject to any secrecy or non-competition agreement or any agreement or restriction of any kind that would impede in any way the
  ability of such person to carry out fully all activities of such person in furtherance of the business of the Company, and (iii) William Burns has a non-compete
  clause in his employment contract. 

  

  7

  

  

     3. Representations and Warranties of the Investors. Each Investor hereby represents and warrants, severally and not jointly, that: 

     3.1 	Authorization.  Each
Investor has full power and authority to enter into this Agreement and that this Agreement constitutes a valid and legally binding obligation of such Investor. 

     3.2 	Purchase Entirely for Own Account.  This Agreement is made with each Investor in reliance upon such Investor’s representation to the Company, which by such Investor’s execution of this Agreement such Investor hereby confirms, that the Series B Preferred
Stock to be purchased by such Investor and the Common Stock issuable upon conversion thereof (collectively, the “Securities”) will be acquired for investment for such Investor’s own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, each Investor further represents that
such Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Securities. 

     3.3 	Receipt of Information.
Based in part on the Company’s representations and warranties contained herein, each Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Series B Preferred Stock.
Each Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Series B Preferred Stock and the business, properties, prospects and
financial condition of the Company and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished
to it or to which it had access. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 hereof or the right of the Investors to rely thereon. 

     3.4 	Investment Experience.  Each
Investor is experienced in evaluating and investing in securities of companies that are not cash flow positive and  experiencing financial difficulties and acknowledges that it is able to fend for itself, can bear the economic risk of its
investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Series B Preferred Stock. 

     3.5 	Accredited Investor.  Each
Investor is an “accredited investor” within the meaning of the Securities and Exchange Rule 501 of Regulation D, as presently in effect. 

3.6 	Sale of Preferred Stock.

     (a) 	Private sales of are Series B Preferred Stock are allowed pursuant to compliance with applicable rules and regulations under the Securities Act. At the
Company’s next registration of stock, all Series B Preferred Shareholders who convert their shares to Common Stock will have their shares included in a Registration Statement. 

     3.7 	Restricted Securities. Each
Investor understands that any Common Stock may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the
Common Stock or an available exemption from registration under the Securities Act, the Common Stock must be held. In particular, each Investor is aware that the Common Stock may not be sold 

  
  8 

pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of that Rule are met.

 4. Conditions of Investors’
  Obligations at Closing. The obligations of each Investor under Section
  1.1(b) are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against
  any Investor who does not consent in writing thereto:  

     4.1 	Representations and Warranties.  The representations and warranties of the Company contained in Section 2 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the
Closing. 

     4.2 	Performance. To the best of
its knowledge, the Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 

     4.3 	Qualifications.  To the best
of its knowledge, all authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Series B Preferred
Stock pursuant to this Agreement shall be duly obtained and effective as of the Closing. 

     4.4 	Forms. Any appropriate
filings if necessary will be made in a timely manner with the Delaware Secretary of State. 

     4.5 	Proceedings and Documents.
To the best of its knowledge, all corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Investors, who shall
have received all such counterpart original and certified or other copies of such documents as it may reasonably request. 

     4.6 	Registration Rights Series B Preferred Stock.  The Series B Preferred Stockholders shall have no Registration Rights until they convert their Series B Preferred Stock into common stock of the Company. In the event that more than 75% of the Series B Preferred Stockholders
convert their Series B Preferred Stock into Common Stock, they can request a Registration Statement for their shares of Common Stock. The Company must file the Registration Statement within 90 days of that request (i.e., if 900,000 shares of Series
B Preferred Stock are converted into 18,000,000 shares of Common Stock, if 13,500,000 of those converted shares request a Registration Statement, then the Company must honor that request within 90 days). In the event that the Series A Preferred
Stock requests a registration, then the Series B Preferred Stock will also be entitled to the same registration if 75% of the holders of the Series B Preferred Stock so elect. 

     5. Conditions of the Company’s Obligations at Closing. The obligations of the Company to each Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions by that Investor: 

     5.1 	Representations and Warranties.  The representations and warranties of each Investor contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing.

  
  9

     5.2 	Performance.  The Investor
shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Investor on or before the Closing. 

     5.3 	Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Series B Preferred Stock pursuant to this
Agreement shall be duly obtained and effective as of the Closing. 

     5.4 	Forms. Any appropriate
filings if necessary will be made in a timely manner with the Delaware Secretary of State. 

6. Miscellaneous. 

     6.1 	Entire Agreement.  This
Agreement and the documents referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof and no party shall be liable or bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein. 

     6.2 	Survival of Warranties.  The
warranties, representations and covenants of the Company and the Investors contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing. 

     6.3 	Successors and Assigns.
Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including permitted transferees of any shares of the Series B
Preferred Stock sold hereunder or any Common Stock issued upon conversion thereof). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 

     6.4 	Governing Law. This
Agreement shall be governed by and construed under the laws of the State of New York. 

     6.5 	Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

     6.6 	Titles and Subtitles. The
titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 

     6.7 	Notices. All notices and
other communications required or permitted hereunder shall be in writing and shall be mailed by United States first-class mail, postage prepaid, or delivered personally by hand or nationally recognized courier or sent via facsimile addressed (1) if
to an Investor, as indicated on the list of Investors attached hereto as Schedule A, or at such other address as such
holder or permitted assignee shall have furnished to the Company in writing, or (2) if to the Company, at the address indicated on the signature page hereto, or at such other address as the Company shall have furnished to each Holder in writing. All
such notices and other written communications shall be effective (a) if mailed, five (5) days after mailing, (b) if delivered, upon delivery and (c) if sent via facsimile, upon confirmation of receipt. 

  
  10

     6.8 	Finders’ Fees. Each
party represents that it neither is nor will be obligated for any finders’ fee or commission in connection with this transaction.  Each Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or
compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Investor or any of its officers, employees or representatives is responsible. The Company agrees
to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible. 

     6.9 	Attorneys’ Fees.  If
any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the other Agreements or the Restated Certificate, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and disbursements in
addition to any other relief to which such party may be entitled. 

     6.10 	Amendments and Waivers. Any
term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the
holders of at least seventy percent (75%) of the Series B Preferred Stock. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities have been converted), each future holder of all such securities and the Company. 

     6.11 	Severability.  If one or
more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms. 

     6.12 	Rights of Investors. Each
holder of the Series B Preferred Stock (and Common Stock issued upon conversion thereof) shall have the absolute right to exercise or refrain from exercising any right or rights that such holder may have by reason of this Agreement or any Series B
Preferred Stock, including, without limitation, the right to consent to the waiver of any obligation of the Company under this Agreement and to enter into an agreement with the Company for the purpose of modifying this Agreement or any agreement
effecting any such modification, and such holder shall not incur any liability to any other holder or holders of the Series B Preferred Stock (or Common Stock issued upon exercise thereof) with respect to exercising or refraining from exercising any
such right or rights. 

  

  
  11

      6.13
  Exculpation
  Among Investors.
  Each Investor
  acknowledges
  that it is
  not relying
  upon any person,
  firm or corporation,
  other than
  the Company
  and its officers
  and directors,
  in making
  its investment
  or decision
  to invest
  in the Company.
  Each Investor
  agrees that
  no Investor
  nor the respective
  controlling
  persons, officers,
  directors,
  partners,
  agents or
  employees
  of any Investor
  shall be liable
  for any action
  heretofore
  or hereafter
  taken or omitted
  to be taken
  by any of
  them in connection
  with the Series
  B Preferred
  Stock (and
  Common Stock
  issued upon
  conversion
  thereof).
   

      6.14 Delays
  or Omissions. It is agreed that no delay or omission to exercise any right, power or
  remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement, or the Investors’ Rights Agreement
  shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance,
  or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit,
  consent or approval of any kind or character on any Investor’s part of any breach, default or noncompliance under this Agreement, or the Investors’
  Rights Agreement or any waiver on such party’s part of any provisions or conditions of the Agreement, or the Investors’ Rights Agreement must
  be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or the Investors’
  Rights Agreement by law, or otherwise afforded to any party, shall be cumulative and not alternative.

     IN WITNESS WHEREOF, the parties have executed this
  Agreement as of the date first above written. 

 

	 COMPANY:  

       COMC, Inc. a Delaware corporation  

       By         ____________________________________

        Name:   Janice B. Fuellhart, Chairman of the Board 

       

       

       INVESTOR LIST FOLLOWS ON NEXT PAGES 

 

  

  

 

 

  

  

 

 

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 SCHEDULE A: LIST OF INVESTORS: 

 

	 	 

              
      

	 	Signature
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      Name
    
	 	 

       

       

       
      

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      &
      Printed
      Name
    
	 	 

           

       

            

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      &
      Printed
      Name
    
	 	 

       

       

               
      

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      &
      Printed
      Name
    
	 	 

          

       

             

	 	Signature
      &
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      Name
    
	 	  

            

       

         

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      Name
    
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 INVESTOR LIST CONTINUED ON NEXT PAGE 

  13 

EXHIBIT A

 NONE. 

 

 

  

  14

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