REDEMPTION AGREEMENT
THIS REDEMPTION AGREEMENT ("Agreement"), effective as of this 8th day of
January, 2001, by and between e-automate Corporation ("E-Automate"), a
Delaware Corporation having a place of business at 000 X. 000 X., Xxxxxxxx
Xxxx, Xxxx 00000; and Aspen Capital Resources, LLC ("Aspen"), a Utah limited
liability company having a place of business at 0000 Xxxxx Xxxxxxxxx Xxxxxx,
Xxxxx, Xxxx 00000.
RECITALS
The parties deem the following to be relevant to their intent and decision to
enter into this agreement:
(1) The parties entered into a Securities Purchase Agreement ("Purchase
Agreement") dated June 19, 2000, pursuant to which Aspen agreed to purchase
from E-Automate Series 2000-A Preferred Stock and Warrants, as defined in the
Purchase Agreement; and
(2) Pursuant to the Purchase Agreement, Aspen purchased a total of 2,083
shares of Series 2000-A Preferred Shares and received 416,600 Warrants to
purchase additional Common Shares, in return for payments totally $2,083,000;
and
(3) The parties agree that it is in their mutual best interest to suspend
implementation of the terms of the Purchase Agreement and for E-Automate to
redeem the Series 2000-A Preferred Shares and a portion of the Warrants for
their initial purchase price.
TERMS OF AGREEMENT
In consideration of the mutual promises, representations, terms and conditions
set forth below, the parties hereby agree as follows:
(1) Suspension of Purchase Agreement. The rights and obligations of the
parties set forth in the Purchase Agreement are hereby suspended until May 1,
2001. The parties agree that neither will seek enforcement of rights or
remedies set forth in the Purchase Agreement so long as the other party is
not in material breach of the terms of this Agreement which breach remains
uncured fifteen (15) days after written notification of the nature of the
breach and the remedial action required to cure the breach.
(2) Redemption of Shares; Cancellation of Warrants. Not later than the close
of business on May 1, 2000, E-Automate agrees to redeem all the Series 2000-A
Preferred Shares held by Aspen (totaling 2,083 shares) and Aspen agrees to
cancel all Warrants (the Warrants to be cancelled representing the right to
purchase 416,600 shares), by tendering to Aspen a total of $2,083,000 in
same-day funds and delivering new Warrants, in the same form as the Warrants
granted under the Purchase Agreement, representing the right to purchase
200,000 shares of common stock of E-Automate at a price of one dollar ($1.00)
per share. Such newly issued Warrants shall be exercisable effective
immediately and continuing a period of forty-eight (48) months following
commencement of public trading of E-Automate stock.
(3) Cancellation or Restoration of Purchase Agreement. If E-Automate redeems
the shares and warrants as set forth in Article (2), above, the Purchase
Agreement shall be deemed cancelled and of no further force and effect. If
E-Automate fails to redeem the shares and warrants as set forth in Article (2),
above, suspension of the Purchase Agreement, as set forth in Article (1),
above, shall cease, and the terms and conditions of the Purchase Agreement
shall be restored, together with all rights and remedies set forth therein,
including such rights and remedies that would have accrued but for the
suspension set forth above.
(4) Piggyback Registration Rights. E-Automate covenants that if at any time
when any Warrant may be exercised, E-Automate should file a registration
statement on behalf of the Company pursuant to applicable federal or state
securities laws for a public offering of securities, E-Automate will provide
written notification to Aspen at least 30days but not more than 60 days prior
to the filing date of such registration statement or offering statement and
will register or quality or cause to be registered or qualified, subject to
the rights pursuant to which the registration or qualification is filed, at
the option of Aspen and at the sole cost and expense of E-Automate, the sale
and resale by Aspen of all of the shares issuable upon the Warrants, and
E-automate will maintain such registration statement effective for all periods
during which any of the Warrants may be exercised.
(5) Confidentiality. The parties agree that the existence and terms of this
Redemption Agreement shall be Confidential Information. The parties agree to
hold each other's Confidential Information in confidence using the same degree
of care used for their own Confidential Information but no less than
reasonable care. The parties agree, unless required by a lawful court order,
subpoena, or similar legal request, not to make the other's Confidential
Information available in any form to any third party or to use each other's
Confidential Information for any purpose other than the implementation of
this Agreement. Each party agrees to take all reasonable steps to ensure
that Confidential Information is not disclosed or distributed by its employees
or agents in violation of the terms of this Agreement. If a party is required
to disclose the other's Confidential Information by a lawful court order,
subpoena, or similar legal request, the party shall promptly notify the other
in writing of such requirement so that the other party may seek an appropriate
protective order.
(6) Dispute Resolution. Any unresolved dispute or controversy arising under
or in connection with this Agreement shall be settled by binding arbitration
under the rules of the American Arbitration Association then in effect.
Arbitration shall be held in Salt Lake City, Utah, and judgment on the
arbitrator's award may be entered in any court having appropriate jurisdiction.
(7) Time of the Essence. The parties acknowledge and agree that time is of
the essence for performance of all obligations under this Agreement.
(8) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah without giving effect to
provisions regarding conflicts of law.
(9) Entire Agreement; Amendment. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and
may be amended only by written agreement signed by authorized representatives
of the parties.
(10) Notices. Any notices required or permitted to be given under this
Agreement may be delivered to the addresses below in person, transmitted by
facsimile, sent by pre-paid registered mail or pre-paid by reputable courier,
provided that notice by facsimile must be followed within a reasonable time by
a supplemental delivery by one of the other permitted methods. Notices shall
be deemed given upon receipt by the receiving party.
If to E-Automate:
E-Automate Corporation
000 X. 000 X.
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
If to Aspen:
Aspen Capital Resources, LLC
0000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention Xxx X. Xxxxxxx
Fax: (000) 000-0000
IN WITNESS WHEREOF, the parties have caused their duly authorized officers to
execute this Agreement effective as of the date set forth above.
E-AUTOMATE CORPORATION
By _____/s/ Xxx X. Price_____________________
Xxx X. Xxxxx
President and CEO
ASPEN CAPITAL RESOURCES
By _____/s/ Xxx X. Johnson___________________
Xxx X. Xxxxxxx
Manager
