AGREEMENT TO TRANSFER A MEMBERSHIP INTEREST IN
NETWORKED ENERGY, LLC TO CEC, INC.
WHEREAS, NETWORKED ENERGY, LLC, a Pennsylvania limited liability company
("Network"), and CEC, Inc., a Delaware corporation ("CEC") have entered into
this Agreement dated August 24, 2000 whereby Network agrees to issue and CEC
agrees to purchase a membership interest in Network;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for good and valuable consideration duly acknowledged and received, Network
and CEC agree as follows:
1. PURCHASE AGREEMENT. Network agrees to sell and CEC agrees to purchase a
membership interest in the Company equivalent to thirty-five percent (35%)
of the total membership interest in the Company.
2. PURCHASE PRICE. The required capital contribution therefor from CEC is Five
Hundred Thousand Dollars ($500,000.00). CEC shall pay the capital
contribution as follows:
DUE DATE AMOUNT
-------- ------
1. At the time of closing $200,000.00
2. Not later than September 1, 2000 $150,000.00
3. Not later than December 1, 2000 $ 75,000.00
4. Not later than March 1, 2001 $ 75,000.00
3. REPRESENTATIONS OF AND WARRANTIES NETWORK
a. Network is a limited liability company duly formed and established
under the laws of and registered in the Commonwealth of Pennsylvania,
and is in good standing under the laws of said jurisdiction.
b. The Operating Agreement among the Members of Networked Energy, LLC
attached hereto
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and made a part hereof as Exhibit A (the "Operating Agreement") is a
true and correct copy, shall be adopted contemporaneously herewith by
Xxxxxx X. Xxxxxx and CEC, and shall be determinative of the rights of
CEC, Xxxxxx and Network after closing of this Agreement.
c. Xxxxxx X. Xxxxxx is the organizer and sole member of Network.
d. Network has one (1) class of membership interest.
e. Network has attached to this Agreement copies of financial statements
as Exhibit B which it warrants and represents accurately set forth the
current financial condition of Network.
f. Network has been duly authorized to issue the above referenced
membership interest in Network to CEC;
4. REPRESENTATIONS AND WARRANTIES OF CEC
a. CEC, is a corporation established under the laws of and registered in
the State of Delaware, and is in good standing under the laws of said
jurisdiction
b. The purchase of a membership interest in Network has been duly
authorized by CEC.
c. CEC represents that the membership interest will be acquired for
investment only, and not with a view to resale, or offer for sale or in
connection with the distribution or transfer thereof. Moreover, the
membership interest is not being purchased for subdivision or
fractionalization thereof, and that CEC does not have a contract,
undertaking, agreement, or plans with any person or entity to sell,
hypothecate, pledge, donate or otherwise transfer to any such person or
entity any part of the membership interest.
d. CEC understands that the purchase of this membership interest is a
speculative investment which involves a high degree of risk or loss.
CEC represents that it has both the knowledge and experience in
financial matters sufficient to evaluate the purchase of the membership
interest and that it is able to bear the economic risk of the purchase.
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e. CEC represents that it has sufficient funds available to complete this
purchase.
5. CLOSING OBLIGATIONS.
(a) Network will deliver to CEC at the time of closing:
(i) An copy of the Operating Agreement executed by all Members of
Network which sets forth the thirty-five percent (35%) membership
interest in the Company to be held by CEC.
(b) CEC will deliver to Network at the time of closing:
(i) The sum of Two Hundred Thousand Dollars ($200,000.00) in the form
of a wire to Networks's account pursuant to written instruction
from Network or certified or bank cashier's check, and
(ii) An interest-free promissory note payable to Network in the
principal amount of Three Hundred Thousand Dollars ($300,000.00),
payable in the amounts and on the dates set forth above.
5. DATE, TIME AND LOCATION OF CLOSING. The closing will be held on August 24,
2000 either in person at the offices of CEC in Radnor, Pennsylvania or by
facsimile signature.
6. NO ASSIGNMENT. This agreement shall not be assigned b either party without
the prior written consent of the other party. This means that CEC may not
transfer to anyone else its rights under this agreement to purchase a
membership interest in Network. After Closing, the provisions of the
Operating Agreement shall control rights to assign membership interest in
Network.
7. ENTIRE AGREEMENT. This contract contains the entire agreement of the
parties other than as set forth in the Operating Agreement. No
representations have been made by any of the parties except as set forth in
this agreement.
8. EXECUTION OF FURTHER DOCUMENTS. Each of the parties hereto agrees to
execute all such further documents and to take all such further action in
order to effectuate the terms and purposes of this agreement.
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9. APPLICABLE LAW. This agreement shall be interpreted in accordance with, and
the rights of the parties hereunder shall be determined by, the substantive
laws of the Commonwealth of Pennsylvania, and any proceedings brought by
any party relating to this agreement shall be held exclusively in Federal
and State courts sitting in Pennsylvania.
10. ATTORNEY REVIEW. The parties understand that this is a legally binding
contract and will become final upon execution of same. CEC understands that
this agreement was prepared by Network's attorney. CEC further understands
that it may choose to have an attorney review this contract.
11. MEMBERSHIP INTEREST NOT REGISTERED. The membership interest has not been
registered under the Securities Act of 1933 or applicable state securities
laws. It is the intent of the Company to operate its business so as not to
require any such registration. This may limit significantly the
transferability of the membership interest.
12. RIGHT TO WITHDRAW. CEC understands that it has the following right of
withdrawal set forth in Section 207 of the Pennsylvania Securities Act of
1972, as amended:
EACH PERSON WHO ACCEPTS AN OFFER TO PURCHASE SECURITIES EXEMPTED FROM
REGISTRATION BY SECTION 203(D), DIRECTLY FROM THE ISSUER OR AFFILIATE
OF THE ISSUER, SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE WITHOUT
INCURRING ANY LIABILITY TO THE SELLER, UNDERWRITER (IF ANY), OR ANY
OTHER PERSON WITHIN TWO (2) BUSINESS DAYS FROM THE DATE OF RECEIPT BY
THE ISSUER OR HIS WRITTEN BINDING CONTRACT OR PURCHASE OR, IN THE CASE
OF A TRANSACTION IN WHICH THERE IS NO BINDING CONTRACT OR PURCHASE.
WITHIN TWO (2) BUSINESS DAYS AFTER HE MAKES THE INITIAL PAYMENT FOR THE
SECURITIES BEING OFFERED.
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NETWORKED ENERGY, LLC
Witnessed or Attested by: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx XX Organizer and sole member
--------------------------
CEC, INC.
Witnessed or Attested by: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxx Xxxx Vice President and Chief Financial Officer
--------------------------
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Note
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
Networked Energy, LLC, the sum of Three Hundred Thousand Dollars ($300,000) as
follows:
Date Amount to be Paid
----------------- -----------------
September 1, 2000 $150,000
December 1, 2000 $ 75,000
March 1, 2001 $ 75,000
Upon default in making payment withing ten (10) days of demand, and
provided this note is turned over for collection, the undersigned agree to pay
all reasonable legal fees and costs of collection to the extent permitted by
law. This note shall take effect as a sealed instrument and be enforced in
accordance with the laws of the payee's state. All parties to this note waive
presentment, notice of non-payment, protest and notice of protest, and agree to
remain fully bound notwithstanding the release of any party, extension or
modification of terms, or discharge of any collateral for this note.
In the presence of:
/s/ Xxxxx Xxxx /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------- ----------------------------
Witness CEC, Inc.
