EXHIBIT 10.7
AGREEMENT
THIS AGREEMENT (this "Agreement") is dated as of February 16, 1999, by
and among ENERGY TRADING COMPANY, a PECO Energy company subsidiary and a
Delaware corporation ("ETCO"), WORLDWIDE WEB NETWORX CORPORATION, a Delaware
corporation ("WWWX"), and NA ACQUISITION CORP., a Pennsylvania corporation
("NAAC"). Each of ETCO, WWWX and NAAC are sometimes referred to herein
individually as a "PARTY" and, together, as the "PARTIES."
RECITALS
A. WWWX and ETCO are parties to that certain BarterOne Membership
Interest Sale Agreement (the "BARTERONE SALE AGREEMENT") dated December 16,
1998, pursuant to which ETCO has agreed to transfer to WWWX, and WWWX has agreed
to acquire from ETCO, ETCO's 51% membership interest in BarterOne, LLC, d/b/a
xxxxxxx.xxx, a Delaware limited liability company ("BARTERONE"), subject to
ETCO's right to an unencumbered equity interest in a new company ("ETCO'S
RETAINED INTEREST") to be formed by WWWX to hold all of the assets of BarterOne
(the "BARTERONE ASSETS"). Reference is made to Sections 2.2.1 and 2.2.2 of the
BarterOne Sale Agreement for a full statement of the terms and conditions of
ETCO's Retained Interest.
B. WWWX and NAAC intend to enter into an Acquisition Agreement dated or
about the date of this Agreement(the "WWWX/NAAC AGREEMENT"), substantially in
the form attached hereto as Exhibit "A" (with only such modifications therein as
do not have a material adverse effect on ETCO's rights hereunder or on ETCO's
interest in NAAC), pursuant to which, inter alia, WWWX will agree to transfer to
NAAC, and NAAC will agree to acquire from WWWX, all of the BarterOne Assets.
C. WWWX and ETCO are closing under the BarterOne Sale Agreement
concurrently with the execution of this Agreement, and in connection therewith,
the Parties wish to provide for the issue to ETCO of shares of the commmon stock
of NAAC, in substitution for ETCO's Retained Interest.
D. WWWX and NAAC are presently negotiating with Artra Group
Incorporated, a publicly traded Pennsylvania corporation ("ARTRA"), to effect a
merger (the "PROPOSED MERGER"), and the Parties wish to further provide for
certain changes in the capital structure of NAAC if the Proposed Merger is not
consummated.
NOW THEREFORE, in consideration of the mutual covenants herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties agree
as follows:
SECTION 1. CLOSING UNDER BARTERONE SALE AGREEMENT
1.1 PRIOR PAYMENTS BY WWWX. Prior to the date hereof, ETCO has received
from WWWX $250,000 in cash and 416,666 shares of the common stock of WWWX
(together, the
"INITIAL PAYMENT"), in accordance with Section 2.1 of the BarterOne Sale
Agreement.
1.2 PAYMENT AT CLOSING. By its execution of this Agreement, ETCO
acknowledges receipt from WWWX of the Initial Payment, plus an additional
payment of $230,000 in cash ("FINAL CASH PAYMENT"), as required by Section 2.2.1
of the BarterOne Sale Agreement.
1.3 TRANSFER. Subject only to its receipt of the Final Cash Payment and
the issue of ETCO's NAAC Shares in accordance with Section 2.2 hereof, ETCO
hereby grants, conveys, transfers, assigns and delivers to NAAC all of its
right, title and interest in and to ETCO's fifty-one percent (51%) membership
interest in BarterOne, free and clear of all liens, encumbrances and charges of
any kind.
SECTION 2. CLOSING UNDER WWWX/NAAC AGREEMENT
2.1 ACQUISITION CLOSING. The Parties acknowledge and agree that, within
two weeks following the execution and delivery of this Agreement, WWWX shall
dissolve BarterOne, and transfer all of the BarterOne Assets to NAAC in
accordance with the terms and conditions of the WWWX/NAAC Agreement (the
"ACQUISITION CLOSING"). The Parties further acknowledge that NAAC intends to
thereafter transfer the BarterOne Assets into a wholly owned operating company
to be called "xxxxxxx.xxx, Inc." ("ENTRADE"). Neither WWWX nor ETCO shall have
any direct ownership interest in entrade.
2.2 ISSUE OF NAAC STOCK TO ETCO. Concurrently with the Acquisition
Closing, NAAC shall issue and deliver to ETCO Two Hundred Thousand (200,000)
fully paid and non-assessable shares of the common stock of NAAC ("ETCO'S NAAC
SHARES"), which shares are being issued in a private placement subject to all
applicable Federal and State securities laws, regulations and restrictions, and
shall bear a legend to that effect. NAAC shall have no more than 2,000,000
shares of its capital stock issued and outstanding prior to the Proposed Merger.
This issue to ETCO of ETCO's NAAC Shares, together with the other agreements set
forth herein, shall be in substitution for ETCO's Retained Interest, and shall
satisfy in full WWWX's obligations under Sections 2.2.1 and 2.2.2 of the
BarterOne Sale Agreement (subject to Section 3.4 hereof).
2.3 NO ASSUMPTION OF LIABILITIES. NAAC is not hereby assuming any of
the liabilities or obligations of either ETCO or WWWX under the BarterOne Sale
Agreement or otherwise.
SECTION 3. CLOSING OF THE PROPOSED MERGER
3.1 TERMS OF THE PROPOSED MERGER. The Proposed Merger shall by its
terms require that Artra and NAAC shall use all reasonable efforts to cause
ETCO's NAAC Shares to be registered for resale in accordance with filings made
with the Securities and Exchange Commission ("SEC"), and shall further require
that, prior to or concurrently with the closing of the transactions contemplated
thereby (the "MERGER CLOSING"), Artra shall have guaranteed funding of at least
$4,000,000 for the working capital needs of entrade. The Proposed Merger shall
by its terms provide that all shares of Artra common stock shall be converted
into shares of NAAC common stock on a one for one basis.
3.2 CONSUMMATION OF PROPOSED MERGER. Each of the Parties shall
cooperate together to cause the Proposed Merger to occur in accordance with the
foregoing provisions of this Section 3 and pursuant to an Agreement and Plan of
Merger substantially in the form attached hereto as Exhibit "B" (with only such
modifications therein as do not have a material adverse effect on ETCO's rights
hereunder or on ETCO's interest in NAAC). Without limiting the generality of the
foregoing, each of ETCO and WWWX shall vote their shares of NAAC common stock to
approve the Proposed Merger. In order to facilitate such approval, the execution
and delivery of this Agreement by ETCO and WWWX may be deemed the unanimous
consent of the shareholders of NAAC approving the Proposed Merger as described
herein.
3.3 MERGER CLOSING. Concurrently with the Merger Closing:
(a) NAAC shall make a cash payment to ETCO in the amount of $100,000;
and
(b) ETCO shall surrender to WWWX the 416,666 shares of WWWX common
stock received by ETCO as part of the Initial Payment, and WWWX shall issue to
ETCO in substitution thereof 73,450 shares of WWWX common stock, subject to
ETCO's right to an audit to affirm that WWWX's calculation of the number of
shares to be issued to ETCO hereunder conforms with the provisions of Section
2.2.4 of the BarterOne Sale Agreement.
3.4 FAILURE OF PROPOSED MERGER. If for any reason the Proposed
Merger is not consummated on or before September 30, 1999, then upon written
notice thereof from ETCO to NAAC, NAAC shall promptly issue to ETCO
sufficient additional shares of its common stock so that ETCO shall
thereafter hold a 33 1/3% interest in all of the issued and outstanding
capital stock of NAAC. In such event, WWWX and NAAC shall take all necessary
action to amend the Articles of Incorporation and By-Laws of NAAC as
necessary so that ETCO shall have all of the same protections as a minority
shareholder of NAAC as were accorded to Global Trade Group, Ltd. under the
terms of the Operating Agreement for BarterOne, as the same was amended prior
to the date hereof, and any dilution of ownership of NAAC shall be on a PARI
PASSU basis.
SECTION 4. REPRESENTATIONS, WARRANTEIS AND COVENANTS
4.1 AUTHORITY. Each of the Parties represents and warrants to the
others that (a) it has the full power and legal right to execute and deliver
this Agreement and to perform its obligations under this Agreement; (b) the
execution, delivery and performance of this Agreement have been authorized by
all necessary action, corporate or otherwise, and do not violate any provisions
of its charter or by-laws or any contractual obligations or requirements of law
binding on it; and (c) this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
4.2 WWWX. WWWX represents and warrants to ETCO and NAAC that all of the
obligations of BarterOne have been satisfied in full on or before the date of
this Agreement, and reaffirms to ETCO that all of its representations and
warranties contained in the BarterOne Sale Agreement are true and correct as of
the date hereof.
SECTION 5. MISCELLANEOUS
5.1 GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the Commonwealth of Pennsylvania.
5.2 ENTIRE AGREEMENT AND AMENDMENT. This document contains the entire
agreement among the Parties with respect to the transactions contemplated hereby
and supersedes all prior or contemporaneous agreements, understandings,
representations and warranties between the Parties, including without limitation
the BarterOne Sale Agreement, and may not be amended except by written
instrument executed by the Parties.
5.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed by their duly appointed officers as of the date first above written.
ENERGY TRADING COMPANY
By: //s// XXXXXX X. XXXX
--------------------------
Title: Vice President
NA ACQUISITION CORP.
By: //s// XXXXXX X. XXXX
--------------------------
Title: President
WORLDWIDE WEB NETWORX CORPORATION
By: //s// XXXXXX XXXX
--------------------------
Title: President
