xXXXXXXXXXX.XXX
AGREEMENT WITH DOMINION CAPITAL FUND
This Agreement With Certain Securities Holders (this "Agreement") is
made effective as of May 31, 2000 (the "Effective Date"), by and between
xXxxxxxxxxx.xxx (the "Company"), a Nevada corporation, and Dominion Capital Fund
(the "Securities Holder").
Recitals
--------
This Agreement is made with reference to the following facts and
circumstances:
(a) Securities Holder owns shares of the Company's common stock
("Common Stock").
(b) Securities Holder also owns shares of the Company's Series A
Convertible Preferred Stock, $.001 par value per share ("Series A
Convertible Preferred"). The Series A Convertible Preferred is
convertible into shares of Common Stock.
(c) Securities Holder holds warrants (each a "Warrant" and
collectively, the "Warrants") to purchase shares of Common Stock.
(d) At the time that the Company issued securities to Securities
Holder, the Company and Securities Holder intended and agreed that
Securities Holder was acquiring those securities as a passive
investment only, and that Securities Holder was not acquiring those
securities for the purpose or with the intent of having the power to
control the Company, as the term "control" is defined under the
Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (collectively, the "Rules") of the Securities and
Exchange Commission (the "SEC"), or to obtain Company information by
reason of its ownership of those securities. Accordingly, the Company
and Securities Holder agreed that Securities Holder would not have the
ability to acquire an amount of Common Stock that would cause
Securities Holder to be deemed to beneficially own (as defined in Rule
13d-3 under the Exchange Act) __% or more of the Common Stock
outstanding from time to time.
In order to further evidence and document their purposes and intent set
forth in the foregoing recitals, the Company and Securities Holder have agreed
as follows:
1. Restrictions on Right and Power to Acquire Common Stock.
1.1. Any provision in the Series A Convertible Preferred, or any
Warrant, or any other document to the contrary notwithstanding, Securities
Holder shall not have the right or power, directly or indirectly, either alone
or in concert with others, to (i) convert any share of Series B Convertible
Preferred, or (ii) exercise any Warrant, or (iii) exercise any other right or
power to acquire Common Stock, and any attempt to exercise any of the foregoing
rights or powers shall be null and void, if, after having given effect to the
exercise of that right or power, Securities Holder shall be or shall be deemed
to beneficially own (as defined in Rule 13d-3 under the Exchange Act) more than
4.99% of the then outstanding Common Stock.
1.2. To the extent the limitation contained in Section 1.1 applies, the
determination of whether Series A Convertible Preferred or the Warrants are
convertible or exercisable, respectively (in relation to other securities owned
by Securities Holder) and of which portion of such securities are convertible or
exercisable shall be in the sole discretion of Securities Holder, and the
submission of a conversion notice or any Warrant shall be deemed to be
Securities Holder's determination of whether such securities are convertible or
exercisable (in relation to other securities owned by Securities Holder) and of
which portion of such securities are convertible or exercisable, in each case
subject to such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination. Nothing
contained herein shall be deemed to restrict the right of Securities Holder to
convert Series A Convertible Preferred, or to exercise any Warrant at such time
as such conversion or such exercise will not violate the provisions of Section
1.1.
2. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Nevada, without reference to its
principles of conflicts of laws.
3. Amendments. Any amendments to this Agreement must be made in writing and duly
executed by an authorized representative of each of the parties.
4. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all such counterparts shall constitute but one
instrument.
Each party has caused this Agreement to be duly executed on its behalf
as of the date first written above.
xXxxxxxxxxx.xxx, Inc.
By _________________________
Dominion Capital Fund
By: _______________________
