Memorandum of Understanding
The parties hereto acknowledge and agree as follows:
1. Xxxxxx Xxx is investing the sum of $100,000.00 US in good funds in
Cynet, Inc., at the request and insistance of Cynet, Inc., by
Securities Purchase Agreement of even date herewith and a Stock
Purchase Warrant.
2. Cynet, Inc. has agreed to issue to Xxxxxx Xxx the 1,600,00 shares of
Class A common stock with "piggy-back" rights and hereby agree to
amend the Securities Purchase Agreement as follows:
A. Any shares issued to Xxxxxx Xxx or his assigns, hereunder shall
be subject to restrictions as to transfer under Rule 144
promulgated by the Securities Exchange Commission ("SEC"). All of
the said shares of stock so issued will have "piggyback
registration rights" to be included in any Registration Statement
undertaken by Cynet, inc., without cost or expense. The shares
thereupon shall be unrestricted as to transferability and the
Certificates shall not bear any legends or restrictions.
B. ARBITRATION. Any claims or controversies relating to this
Agreement or any agreement incident hereto shall be heard and
resolved by arbitration held in the English language under the
provisions of the Texas Arbitration Act ("TAA") but conducted
under the auspices and pursuant to the rules (if not in conflict
with the TAA) of the American Arbitration Association ("AAA").
Venue of all arbitration shall be Houston, Texas. Arbitration
shall be before one (1) arbitrator (a) selected by mutual
agreement of the parties reached fifteen (15) days after the AAA
has sent confirmation of notice of filing of the demand for
arbitration, or, (b) if no mutual agreement can be reached within
that time, appointed by the AAA. Such arbitrator shall be an
attorney at law who has practiced law for at least ten (10) years
in either general commercial litigation or general corporate and
commercial matters. Any award of arbitration shall be in United
States Dollars if monetary in nature unless the winning party
makes written election to accept (i) alternative assets which may
be the subject of the Arbitration (such as shares of stock) or
(ii) alternative remedy such as specific performance, within ten
(10) days of receiving notice of the award; shall be final and
legally binding; may be entered into judgment in any court of
competent jurisdiction; and may be enforced in any jurisdiction
in which the party against whom enforcement is sought maintains
assets. Except as required by applicable law, all arbitration and
related proceedings and any evidence submitted therein (and
particularly, but without limitation, any trade secrets,
intellectual property and other information in which either of
the parties has an expectation of privacy) shall be kept
confidential. This Agreement and all matters related hereto shall
be governed by the internal laws of the State of Texas without
reference to conflicts of laws principles or principles of
comity. The Texas Rules of Evidence shall apply.
3. Cynet Holdings, LLC, for valuable consideration the receipt and
sufficiency of which is hereby acknowledged, hereby agrees to secure
Xxxxxx Xxx to receive his certificate for 1,600,000 shares of the
common stock Class A, no par value, of Cynet, Inc., by delivering to
him to hold as security certificate 994, for 1,600,000 shares of
Cynet, Inc., to be returned upon receipt by Xxxxxx Xxx of a
certificate for like kind and number of shares. If the certificate is
not received by him within 15 days, he will have the rights of a
secured party under the Uniform Commercial Code and have the right to
foreclose on said certificate 994 in the manner provided by law, at
public or private sale.
4. Cynet, Inc. has engaged Level Jump Financial Group, Inc. as a
consultant to advise it regarding documentation of the financial
transaction with Xxxxxx Xxx, and shall issue to it a warrant for
800,000 shares of the Class A common shares of Cynet, Inc., at $0.30
per share.
5. Each of the undersigned parties represent that he has the authority to
sign and bind their respective principals.
Signed at Houston, Texas this March 30, 2001.
Xxxxxx Xxx Cynet, Inc.
/s/ Xxxxxx Xxx By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Xxxxxx Xxx, Individually Chief Executive Officer
Level Jump Financial Group, Inc.
By: /s/ Xxxx Xxxxxx
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President
