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EXHIBIT 2.2
XXXXXXXXXXXXX.XXX, LLC
PURCHASE AGREEMENT
THIS AGREEMENT, dated as of the 5th day of July, 2000, by and among
XxxXxxxxxxxxx.xxx, LLC, a limited liability company organized under the laws of
the District of Colombia (the "Company"), E2Enet, Inc., a corporation organized
under the laws of the State of Delaware, ("E2E") and Xxxxxxx X. Xxxx, an
individual residing in the State of Maryland ("Xxxx") (collectively sometimes
referred to as "Investors") and Xxxxxxx Xxxxxx, an individual residing in the
District of Columbia ("Founder").
R E C I T A L S:
A. The Company is the successor in interest to Milestones, Inc.,
a corporation organized under the laws of the Commonwealth of
Virginia, through a merger which was effective in the District
of Columbia on the 16th day of May, 2000.
B. The currently issued and outstanding Membership Units of the
Company are as follows: Xxxxxxx Xxxxxx - 8,225 ("Xxxxxx"),
Xxxxxxx X. Xxxxxxx - 000, Xxxxx X. Xxxxxxx - 000, Xxxx X.
Xxxxxx - 150, Xxxxxx X Xxxxxx - 150, and WebWorld Studios,
Inc., a corporation organized under the laws of the
Commonwealth of Virginia - 600 (collectively with Xxxxxx,
"Founding Members").
C. E2E desires to purchase from the Company and the Company
desires to sell to E2E 8,225 Membership Units in the Company
for an aggregate purchase price of $100,000.
X. Xxxx desires to purchase from the Company and the Company
desires to sell to Xxxx 2,050 Membership Units in the Company
for an aggregate purchase price of $25,000.
E. Founder is a party hereto with regard to certain covenants
pertaining to the voting of Membership Units and otherwise as
may be provided herein.
NOW, THEREFORE, the parties agree as follows:
1. Purchase and Sale of Membership Units.
1.1 E2E Sale and Purchase. At the Closing, E2E shall purchase from
the Company and the Company shall sell to E2E, 8,225
Membership Units in the Company ("E2E Membership Units") for
an aggregate purchase price of $100,000 (the "E2E Purchase
Price") and subject to the terms and conditions of this
Agreement and on the basis of the representations, warranties,
covenants and agreements contained herein.
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1.2 Xxxx Sale and Purchase. At the Closing, Xxxx shall purchase
from the Company and the Company shall sell to Xxxx, 2,050
Membership Units in the Company ("Xxxx Membership Units") for
an aggregate purchase price of $25,000 (the "Xxxx Purchase
Price") and subject to the terms and conditions of this
Agreement and on the basis of the representations, warranties,
covenants and agreements contained herein.
1.3 Closing. The sale and purchase of the respective Membership
Units shall take place on the date hereof at the offices of
E2E in Washington, DC (which date and place are designated as
the "Closing").
1.4 Deliveries at Closing. At the Closing, the parties,
respectively, shall make the following and simultaneous
deliveries:
1.4.1 E2E Purchase.
A. The Company shall deliver to E2E: (i) a
certificate or certificates representing the
E2E Membership Units duly executed on behalf
of the Company, (ii) the Company's Operating
Agreement in the form of EXHIBIT A hereto,
duly executed on behalf of the Company, the
Founding Members and Xxxx, (iii) an opinion
of Xxxxxx & Xxxxxxx, PLLC, the Company's
legal counsel; (iv) an employment agreement
duly executed by the Founder in the form of
EXHIBIT B attached hereto, and (v) the
Registration Rights Agreement in the form of
EXHIBIT C attached hereto duly executed by
the Company.
B. E2E shall deliver to the Company, as the
purchase price for the E2E Membership Units
and a partial loan payment, the promissory
notes of Milestones, Inc., dated April 10,
2000 in the amount of $50,000 and the
Company's promissory note dated June 2, 2000
in the amount of $50,000 each payable to the
order of E2E marked "canceled." In addition,
E2E shall deliver to the Company the
Company's Operating Agreement duly executed
on behalf of E2E.
1.4.2 Xxxx Purchase.
A. The Company shall deliver to Xxxx: (i) a
certificate or certificates representing the
Xxxx Membership Units duly executed on
behalf of the Company, (ii) the Company's
Operating Agreement in the form of EXHIBIT A
hereto, duly executed on behalf of the
Company, the Founding Members and E2E, (iii)
an opinion of Xxxxxx & Xxxxxxx, PLLC, the
Company's legal counsel; (iv) an employment
agreement duly executed by the Founder in
the form of EXHIBIT B attached
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hereto, and (v) the Registration Rights
Agreement in the form of EXHIBIT C attached
hereto duly executed by the Company.
X .Xxxx shall deliver to the Company, as the
purchase price for the Xxxx Membership
Units, the promissory note of Milestones,
Inc., dated April 10, 2000 in the amount of
$25,000 payable to the order of Xxxx marked
"canceled." In addition, Xxxx shall deliver
to the Company the Company's Operating
Agreement duly executed on behalf of Xxxx.
1.4.3 E2E Loan.
A. The Company shall deliver to E2E a duly
executed promissory note of the Company in
the principal amount of $300,000 bearing
interest at a rate per annum from and
including the date of issuance with respect
to the note equal to the interest rate
published in The Wall Street Journal from
time to time as the "prime rate" (the "E2E
Note").
B. E2E shall deliver to the Company: (i) the
Company's promissory note dated June 21,
2000 in the amount of $50,000 marked
"cancelled" and (ii) by wire transfer of
immediately available funds to an account
designated in writing by the Company the sum
of $250,000.
1.4.4 Xxxx Loan.
C. The Company shall deliver to Xxxx a duly
executed promissory note of the Company in
the principal amount of $75,000 bearing
interest at a rate per annum from and
including the date of issuance with respect
to the note equal to the interest rate
published in The Wall Street Journal from
time to time as the "prime rate" (the "Xxxx
Note" and, together with the E2E Note the
"Notes").
X. Xxxx shall deliver to the Company by wire
transfer of immediately available funds to
an account designated in writing by the
Company the sum of $75,000.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to E2E and Xxxx as follows:
2.1 Organization. The Company is a limited liability company duly
organized and validly existing under the laws of the District
of Columbia. The Company has all requisite power and authority
to carry on its business as currently conducted, other
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than such failures that would not reasonably be expected to
have a material adverse impact on the Company's business,
assets, results of operations, properties or condition
(financial or otherwise) (a "Material Adverse Effect"). The
Company is duly qualified to transact business in each
jurisdiction in which the failure to be so qualified would
reasonably be expected to have a Material Adverse Effect. The
copies of the Company's Certificate of Formation and Operating
Agreement which were furnished to E2E and Xxxx by the Company
reflect all amendments made thereto at any time prior to
Closing.
2.2 Capitalization. Immediately prior to Closing, the outstanding
equity of the Company will consist of 9,725 Membership Units.
As of the Closing, there shall be no warrants outstanding to
acquire Membership Units of the Company nor any options or
other rights to acquire any such Membership Units except as
provided in this Agreement and the attachments hereto.
Assuming the accuracy of the representations of E2E and Xxxx
contained herein, all outstanding equity interests in the
Company have been issued in compliance with state and federal
securities laws. The Company is not now obligated and is not
subject to any future obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any Membership Units
of the Company.
2.3 Subsidiaries. As of the Closing, the Company shall have no
subsidiaries and shall not own or control, directly or
indirectly, any corporation, association or other business
entity; nor shall it be a participant in any joint venture,
partnership or similar arrangement.
2.4 Authorization. As of the Closing, all actions on the part of
the Company, its officers, managers and Founders necessary for
the authorization, execution and delivery of this Agreement,
the Operating Agreement the Notes and any other documents
delivered by the Company pursuant to this Agreement
(collectively the "Transaction Documents") and the performance
of all obligations of the Company under the Transaction
Documents shall have been taken, and the Transaction
Documents, assuming due execution by E2E and Xxxx, will
constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective
terms, subject to: (i) judicial principles limiting the
availability of specific performance, injunctive relief and
other equitable remedies and (ii) bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or
hereafter in effect generally relating to or affecting
creditor's rights.
2.5 Valid Issuance of Membership Units. The E2E Membership Units
and the Xxxx Membership Units, when issued, sold and delivered
in accordance with the terms of this Agreement for the
consideration expressed herein, shall be duly and validly
issued, fully paid and nonassessable and will be free of
restrictions on transfer directly or indirectly created by the
Company other than restrictions on transfer
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under this Agreement and the Operating Agreement and under
applicable state and federal securities laws.
2.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required
in connection with the offer, sale or issuance of the E2E
Membership Units and the Xxxx Membership Units.
2.7 Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Company's
knowledge, threatened before any court, administrative agency
or other governmental body against the Company which questions
the validity of Transaction Documents or the right of the
Company to enter into any of them, or to consummate the
transactions contemplated hereby or thereby, or which would
reasonably be expected to have a Material Adverse Effect on
the Company. The Company is not a party or subject to, and
none of its assets is bound by, the provisions of any order,
writ, injunction, judgment or decree of any court or
government agency or instrumentality which would reasonably be
expected to have a Material Adverse Effect on the Company.
2.8 Employees. The Company is not a party to or bound by any
current employment contract, deferred compensation agreement,
bonus plan, incentive plan, profit sharing plan, retirement
agreement, or other employee compensation agreement or
arrangement with any collective bargaining agent excepting the
employment agreement by and between the Company and Xxxxxxx
Xxxxxx which has been executed as of the Closing.
2.9 Intellectual Property. The Company has sufficient title to and
ownership of, or other rights to use, all trade secrets,
copyrights, information, proprietary rights, trademarks,
service marks and trade names in each case necessary for its
business as now conducted without any conflict with or
infringement of the rights of others, except where such
failures or conflicts would not reasonably be expected to have
a Material Adverse Effect. Except for license agreements
entered into in the ordinary course of business or otherwise
as set forth on Schedule 2.9 hereto, there are no material
outstanding options, licenses or agreements of any kind
relating to the foregoing, nor is the Company bound by or a
party to any material options, licenses or agreements of any
kind with respect to the trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information,
proprietary rights and processes of any other person or
entity. The Company has not received any written or oral
communications alleging that the Company has violated or, by
conducting its business as proposed, would violate any of the
trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or
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entity, except for such violations as would not reasonably be
expected to have a Material Adverse Effect.
2.10 Compliance with Other Instruments. The Company is not in
violation or default of any provision of its Articles of
Formation or the Operating Agreement, each as in effect
immediately prior to the Closing. The Company is not in
violation or default of any provision of any instrument,
mortgage, deed of trust, loan, contract, commitment, judgment,
decree, order or obligation to which it is a party or by which
it or any of its properties or assets are bound which would
reasonably be expected to have a Material Adverse Effect. The
Company is not in violation or default in any material respect
of any provision of any federal, state or local statute, rule
or governmental regulation. The execution, delivery and
performance of the Transaction Documents and the issuance and
sale of the Membership Units hereunder will not result in any
violations, be in conflict with or constitute, with or without
the passage of time or giving of notice, a default under any
of the foregoing provisions, require any consent or waiver
under any of the foregoing provisions or result in the
creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company.
2.11 Permits. The Company has all franchises, permits, licenses and
any similar authority necessary for the conduct of its
business as now being conducted by it. The Company is not in
default in any material respect under any of such franchises,
permits, licenses or other similar authority.
2.12 Environmental and Safety Laws. The Company is not in violation
in any material respect of any applicable statute, law or
regulation relating to the environment or occupational health
and safety.
2.13 Registration Rights. The Company has not granted or agreed to
grant any registration rights, including piggyback rights to
any person or entity except as set forth herein.
2.14 Title to Property and Assets. The Company has good and
marketable title to all of the properties and assets owned by
it, free and clear of all mortgages, liens and encumbrances,
except liens for current taxes and assessments not yet due and
payable, minor liens and encumbrances which do not, in any
case, materially detract from the value of the property
subject thereto or materially impair the operations of the
Company. With respect to the property and assets it leases,
the Company is in material compliance with such leases and
holds a valid leasehold interest free of all liens, claims or
encumbrances, except such which would not materially impair
the operations of the Company. The Company's properties and
assets are in good condition and repair for the purposes for
which they are currently used, ordinary wear and tear
excepted.
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2.15 Financial Statements. The Company has delivered to E2E and to
Xxxx (a) an unaudited statement of financial position and
statement of operations of the Company as and for the fiscal
year ended December 31, 1999, and (b) an unaudited
consolidated statement of financial position and statement of
operations for the Company as of and for the period ended
March 31, 2000 (the "Financial Statements"). The Financial
Statements fairly present, in all material respects, the
financial position and results of operations of the Company as
of the dates and for the periods indicated, subject in the
case of the March 31, 2000 Financial Statements, to normal
year-end adjustments. Except as set forth on SCHEDULE 2.15,
the Company has no liabilities or obligations which are
reflected or reserved against in the December 31, 1999
statement of financial position (the "Company Balance Sheet")
which would be required to be reflected thereon if prepared as
of the date hereof in accordance with U.S. generally accepted
accounting principles, except for liabilities or obligations
incurred since the date of the Company Balance Sheet in the
ordinary course of business or which are not material.
2.16 Agreements; Actions.
A. Except for agreements described herein and in the
Operating Agreement and the employment agreements and
other agreements set forth on SCHEDULE 2.16A hereto,
there are no agreements, understandings or proposed
transactions between the Company and any of its
officers, managers, consultants, Members or
affiliates, including affiliates of Members.
B. Except as reflected in the Financial Statements, in
this Agreement or as set forth on SCHEDULE 2.16C,
since January 1, 2000, the Company has not incurred
indebtedness for money borrowed in excess of $5,000
individually or $10,000 in the aggregate or sold,
exchanged or otherwise disposed of any of its assets
or rights, other than the sale of licensee agreements
in the ordinary course of business.
2.17 Tax Returns. The Company (a) is characterized as a partnership
for United States federal income tax purposes and (b) has
prepared and filed all Unites States federal, state and local
income tax returns required to be filed by it. No deficiency
assessment or proposed adjustment by any taxing authority to
the Company's federal, state or local income taxes is pending.
2.18 No Implied Representations. Except as expressly set forth
herein or in the Operating Agreement, the Company makes no
representations or warranties of any kind whatsoever to E2E
and/or to Xxxx.
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2.19 Brokers or Finders. The Company has agreed to pay a 2.5%
finder's fee to Xxxxxxx Xxxxxxx and a 2.5% finder's fee to
Xxxxx & Associates on the aggregate amount of the E2E purchase
and loan as stated herein and a 5% finder's fee to Xxxxxxx
Xxxxxxx on the aggregate amount of the Xxxx purchase and loan
as stated herein. The Company had an agreement with Corporate
Investment Partners, Incorporated ("CIP"), dated October 27,
1999 under which it was obligated to pay a "success fee" in
regard to capital funding of the Company whether or not
procured by CIP which agreement terminated according to its
terms on May 8, 2000. Under the said agreement between the
Company and CIP, CIP is entitled to a fee if a source
introduced by CIP should provide material capital financing to
the Company in the future. Except as described in this
subparagraph, the Company has not entered into any other
agreement, arrangement or understanding with any person that
will result in the obligation of the Company or of the
Investors to pay any finder's fee, brokerage commission or
similar payment in connection with the transactions
contemplated hereby. The Company shall pay and shall hold E2E
and Xxxx harmless from and against any liability, loss or
expense (including without limitation, attorney's fees and
costs of defense) arising in connection with any claims for
brokerage commissions, finders fees or similar compensation in
connection with the transactions contemplated herein based on
any arrangement or agreement binding upon the Company.
2.20 Business Plan. The Business Plan, as revised on June 15, 2000,
delivered to E2E and Xxxx by the Company was prepared in good
faith by the Company and does not contain any untrue statement
of a material fact, nor does it omit to state a material fact
necessary to make the statements therein not misleading,
except that with respect to assumptions, projections and
expressions of opinion or predictions contained in the
Business Plan, the Company represents only that such
assumptions, projections, expressions of opinion or
predictions were made in good faith and that the Company
believes there is a reasonable basis therefor.
2.21 Preemptive Rights. E2E and Xxxx shall have (i) the right to
approve the sale of any existing or additional membership
units to third party investors, (ii) the right to purchase up
to 100% of any Membership Units offered to third party
investors, and (iii) the right to participate ratably in the
sale of Membership Units by any party other than the Company
to third party investors. Except as provided in this
subparagraph, there are no statutory or contractual preemptive
right or rights of first refusal with respect to the issuance
of the Membership Units of the Company.
3. Representations and Warranties of E2E and Xxxx. E2E and Xxxx
hereby severally represent and warrant that:
3.1 Experience. It/he is experienced in evaluating companies such
as the Company, is able to fend for itself/himself in
transactions such as contemplated by this
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Agreement, has such knowledge and experience in financial and
business matters that it/he is capable of evaluating the
merits and risks of the prospective investment in the Company
and has the ability to bear the economic risks of the
investment.
3.2 Investment. It/he is acquiring the Membership Units in the
Company for investment for its/his own account and not with
the view to, or for resale in connection with, any
distribution thereof, it/he understands that the Membership
Units have not been registered under the Securities Act of
1933, as amended, or the District of Columbia securities laws,
by reasons of a specific exemption from the registration
provisions of the Securities Act, which depends upon, among
other things, the bone fide nature of the investment intent as
expressed herein. It/he further represents that it/he does not
have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to any
third person or party with respect to any of the Membership
Units. It/he understands and acknowledges that the offering of
Membership Units pursuant to this Agreement will not be
registered under the Securities Act nor under any state
securities laws on the ground that the sales provided for in
the Agreement and the issuance of the securities hereunder are
exempt from registration requirements of the Securities Act
and any applicable state securities laws.
3.3 Rule 144. It/he acknowledges that the Membership Units must be
held indefinitely unless subsequently registered under the
Securities Act and any applicable state securities laws or an
exemption from such registration is available and the transfer
thereof is otherwise permitted under the Operating Agreement.
He/it is aware of the provisions of Rule 144 promulgated under
the Securities Act that permit limited resale of securities
purchased in a private placement subject to the satisfaction
of certain conditions. It/he covenants that, in the absence of
an effective registration statement covering the Membership
Units in question, he/it will sell, transfer, distribute or
otherwise dispose of (collectively "Transfer") the Membership
Units only in a manner consistent with its representations and
covenants set forth in this Section 3 and will transfer
Membership Units on the books of the Company only to the
extent not inconsistent therewith.
3.4 No Public Market. It/he understands that no public market now
exists for the Membership Units and that there may never be a
public market for the Membership Units.
3.5 Access to Data. It/he has received and reviewed information
about the Company and has had an opportunity to discuss the
Company's business, management and financial affairs with its
management and to review the Company's facilities. It/he
understands that such discussions, as well as any written
information provided by the Company, were intended to describe
the aspects of the Company's business and prospects which the
Company believes to be material, but were not necessarily a
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thorough or exhaustive description, and except as expressly
set forth in this Agreement (including Section 2.20), the
Company makes no representation or warranty with respect to
the completeness of such information and makes no
representation or warranty of any kind with respect to any
information provided by any entity other that the Company.
Some of the information includes projections as to the future
performance of the Company, which projections may not be
realized, are based on assumptions which may not be correct
and are subject to numerous factors beyond the Company's
control.
3.6 Authorization. As of Closing, all action on the part of it/he
necessary for the authorization, execution and delivery of
this Agreement and the Operating Agreement and the performance
of the obligations of E2E and/or Xxxx hereunder and thereunder
shall have been taken, and this Agreement and the Operating
Agreement, assuming due execution by the parties hereto and
thereto, constitute valid and legally binding obligations of
E2E and/or Xxxx, enforceable in accordance with their
respective terms, subject to (i) judicial relief, and other
equitable remedies and (ii) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect generally relating to or affecting
creditors' rights.
3.7 Compliance with Other Instruments. E2E is not in violation or
default under any provisions of its certificate of
incorporation or other organizational documents, as
applicable, each as in effect immediately prior to the
Closing, except for such failures as would not be reasonably
expected to materially adversely affect the ability of E2E to
perform its obligations under the Agreement (a "Buyer Material
Adverse Effect"). Neither E2E nor Xxxx is in violation or
default of any provision of any material instrument, mortgage,
deed of trust, loan, contract, commitment, judgment, decree,
order or obligation to which it/he is a party or by which
it/he or any of its/his properties or assets are bound which
would reasonably be expected to have a Buyer Material Adverse
Effect. To the best of its/his knowledge, neither E2E nor Xxxx
is in violation or default of any provision of any federal,
state or local statute, rule or governmental regulation which
would reasonably be expected to have a Buyer Material Adverse
Effect. The execution, delivery and performance of and
compliance with the Agreement and the Operating Agreement will
not result in any such violation, be in conflict with or
constitute, with or without the passage of time or giving of
notice, a default under any such provision, require any
consent or waiver under any such provision (other than any
consents or waivers that have been obtained), or result in the
creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of E2E and/or Xxxx
pursuant to such provision.
3.8 Accredited Investor. Each of E2E and Xxxx represents and
warrants that it/he is an "accredited investor" as defined in
Rule 501 of Regulation D as promulgated by the Securities and
Exchange Commission under the Securities Act and shall submit
to
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the Company such further assurances of such status as may be
reasonably requested by the Company.
4. Covenants.
4.1 Confidentiality. Xxx Xxxxxxx, X0X and Xxxx, and their
respective officers, directors, partners, agents and
affiliates, agree to keep the terms and conditions of this
Agreement and the transactions contemplated hereby
confidential and agree not to disclose to any party not a
party to this Agreement or the Operating Agreement any of the
terms hereof, except as may be required by applicable law.
4.2 Business Development. Xxx Xxxxxxx, X0X and Xxxx agree to act
in good faith and to use their reasonable best efforts in
developing the business of the Company. E2E and Xxxx shall
assist the Company in developing business plans and strategies
for the Company's business operations and provide the Company
with advice regarding the execution of these business plans
and strategies.
4.3 Restrictions on Transfer.
A. Prior to an initial public offering, if any, of the
Company or a successor entity, E2E and Xxxx shall
not, directly or indirectly, transfer any Membership
Units, or any rights with respect thereto, except as
permitted by the Operating Agreement.
B. E2E and Xxxx acknowledge and agree that any
certificates representing the Membership Units or
other equity securities or common stock described in
this paragraph may contain an appropriate legend
reflecting the limitations described in this
paragraph and that the Company, or its transfer
agent, may enter in the stock transfer books an
appropriate stop-transfer order reflecting these
provisions.
4.4 Preemptive Rights of E2E and Xxxx. Xxxxxxx, X0X, Xxxx and the
Company agree that E2E and Xxxx each shall have a preemptive
right to purchase their pro rata amount of any membership
units or equity securities which may be offered by the Company
after the date of this Agreement. In the event of any such
proposed offering of membership units or equity securities by
the Company, the Company shall give each of E2E and Xxxx
notice of the proposed issuance and a written offer containing
the terms of sale/purchase related thereto and E2E and Xxxx
shall have thirty (30) days in which to purchase all or a
portion of such membership units or equity securities. In the
event that E2E and/or Xxxx shall not exercise its/his/their
right to purchase with regard to some or all of such
membership units or equity securities, the Company may sell
said securities to third parties upon terms which
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shall be at least as favorable to the Company as stated in its
written offer to E2E and Xxxx within a period of ninety (90)
days following the election of E2E and/or Xxxx not to purchase
said securities. The foregoing notwithstanding, E2E's and
Xxxx'x said preemptive rights shall not apply to membership
units offered to employees of the Company as incentive
compensation or to membership units offered to service
providers to the Company in consideration of reduction in
their usual and customary fees for services provided. The
agreements between the Company and its service providers are
as described in SCHEDULE 4.4.
4.5 Voting of Membership Units. Xxxxxxx, X0X and Xxxx agree that
they shall vote their Membership Units in the Company so as to
cause the election of Managers of the Company, in accordance
with the Operating Agreement, as follows: Founder shall
designate three (3) Managers and E2E shall designate four (4)
Managers (one of whom shall be Xxxx so long as Xxxx owns at
least 5% of the outstanding Membership Units of the Company
and one of whom initially shall be Xxx Xxxx). Founder's
initial designees shall be Xxxxxxx X. Xxxxxxx, Xxxx Xxxxx and
Founder. The parties agree that they shall vote their
respective Membership Units for the election of the persons
designated pursuant to this paragraph, the Operating Agreement
and any other agreement between the parties hereto.
4.6 Financial Statements. The Company shall deliver to its members
within forty-five (45) days after the end of each quarterly
accounting period, unaudited and statements of income and cash
flows, and a balance sheet, of the Company for the quarterly
period then ended. Within ninety (90) days of the end of each
fiscal year, The Company shall provide its members with
audited statements of income and cash flows, and a balance
sheet, of the Company as of the end of the fiscal year;
provided that no such audited financial statements shall be
prepared and distributed for the fiscal year ending in 2000
unless requested by E2E.. At least thirty (30) days before the
beginning of each fiscal year, the Company shall prepare and
present an annual budget to each member prepared on a monthly
basis for the Company for such fiscal year.
4.7 Employment Agreements; Confidentiality/Nonsolicitation/
Noncompete Agreements. The Company has, or will promptly, put
into place sufficient confidentiality /nonsolicitation/
noncompete agreements for key employees, including Xxxxxxx
Xxxxxx.
4.8 Employee Option Plan. The Company shall establish an employee
option plan to reward current employees and to attract future
employees of the Company. The terms of the employee option
plan, and any grants made thereunder, shall be subject to the
approval of the Board of Managers of the Company following the
Closing, but in no event shall the membership units or equity
shares available under the employee
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option plan exceed 10% of all issued and outstanding
membership units or equity shares issued and outstanding (on a
fully diluted basis) as of the Closing.
4.9 Inspection of Property. The Company shall permit E2E and Xxxx,
upon reasonable notice and during normal business hours, to
(i) visit and inspect any of the properties of the Company,
(ii) examine the business and financial records of the Company
and make copies thereof and (iii) discuss the affairs,
finances and accounts of the Company with the managers, key
employees and with the independent accountants of the Company.
5. Miscellaneous.
5.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the District of Columbia, without
regard to any provisions thereof relating to conflicts of laws
among different jurisdictions.
5.2 Survival. The representations, warranties and covenants made
herein shall survive the Closing.
5.3 Successors and Assigns. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, personal
representatives and administrators of the parties hereto;
provided, however, that the rights of E2E and Xxxx to purchase
Membership Units in the Company shall not be assignable
without the consent of the Company except that E2E may assign
its rights and obligations under this Agreement to any of its
affiliates. This Agreement shall not be construed so as to
confer any right or benefit on any party not a party hereto,
other than their respective successors, assigns, heirs,
personal representatives and administrators.
5.4 Entire Agreement; Amendment. This Agreement and the other
documents delivered pursuant hereto constitute the full and
entire understanding and agreement of the parties with regard
to the subject matter hereof and thereof and supersedes all
prior agreements and understandings relating thereto. Neither
this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
5.5 Notices, Etc. All notices under this Agreement shall be
sufficiently given for all purposes if made in writing and
delivered personally, sent by documented overnight
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delivery service or, to the extent receipt is confirmed,
facsimile or other electronic transmission to the following
persons, addresses and numbers:
Notices to the Company shall be addressed to:
XxxXxxxxxxxxx.xxx, LLC
0000 00xx Xxxxxx, XX
Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email:
Attn: Xxxxxxx Xxxxxx, CEO
With copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx & Xxxxxxx, PLLC
0000 00xx Xxxxxx, XX
Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxxx@xxx.xxx
or at such other address and to the attention of such other person as
the Company may designate by written notice to E2E and Xxxx.
Notices to the E2E shall be addressed to:
E2Enet, Inc.
c/o US Technologies Inc.
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxx@xxx.xxx
Attn: Xxxxxxx Xxxxx, President
With copy to:
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Xxxx X. Xxxxxx, Esq.
Xxxxxxxxxx and Xxxxx, LLP
0000 00xx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxx@xx-xxx.xxx
or at such other address and to the attention of such other person as
E2E may designate by written notice to the Company and Xxxx.
Notices to Xxxx shall be addressed to:
Xx. Xxxxxxx X. Xxxx
Xxxx-Xxxxxxxxx Management
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email:
or at such other address and to the attention of such other person as
Xxxx may designate by written notice to E2E and the Company
5.6 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party upon any breach
or default of another party under this Agreement shall impair
any such right, power or remedy of such first party, nor shall
it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of a single
breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the
part of the holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any
provisions or conditions of this Agreement, must be in writing
and shall be effective only to the extent specifically set
forth in such writing or as provided in this Agreement.
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5.7 Expenses. The parties hereto shall each bear its/his expenses
and legal fees incurred on its/his own behalf with respect to
the transactions contemplated hereby; provided, that the
Company shall bear the legal expenses of E2E and Xxxx for the
preparation of this Agreement and related instruments which
shall not exceed $25,000.
5.8 Indemnification. The Company shall indemnify E2E and/or Xxxx
against and agrees to hold it and him harmless from any and
all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable expenses of
investigation and attorney's fees and expenses in connection
with any action, suit or proceeding) actually incurred or
suffered by E2E and Xxxx, as the case may be, after the
Closing and arising out of any misrepresentation, inaccuracy
or breach of any representation, warranty, covenant or promise
by the Company contained in this Agreement or the Operating
Agreement.
5.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by only one party,
which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall
constitute one instrument.
5.10 Severability; Enforcement. In the event that any provision of
this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without such
provision; provided that no severability shall be effective if
it materially changes the economic benefit of this Agreement
to any party. The parties hereby agree that irreparable damage
for which money damages would not be an adequate remedy would
occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific
terms or was otherwise breached. It is accordingly agreement
that, in addition to any other remedies a party may have at
law or equity, the parties shall be entitled to seek an
injunction or injunctions to prevent such breaches of this
Agreement or to enforce specifically the terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXXXXXXXXXX.XXX, LLC
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx, Manager and CEO
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E2ENET, INC.
By: /s/ C. Xxxxxxx Xxxxx
------------------------------
C. Xxxxxxx Xxxxx, President
/s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx, individually
/s/ Xxxxxxx Xxxxxx
----------------------------------
Xxxxxxx Xxxxxx, individually
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