XXXXXXXX & XXXXXXXX
000 XXXXXXX XXXXXX, X.X.
WASHINGTON, D.C. 20005
000-000-0000
February 25, 1999
e-Net, Inc.
00000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Re: Shares of Common Stock, par value $0.01, of e-Net, Inc. (THE
"COMPANY") to be offered and sold pursuant to the Company's
Registration Statement on Form S-8, as filed on or about
February 25, 1999 (SUCH SHARES OF COMMON STOCK, THE "COMMON
STOCK" AND SUCH REGISTRATION STATEMENT, AS IT MAY BE AMENDED
FROM TIME TO TIME, THE "REGISTRATION STATEMENT")
Ladies & Gentlemen:
We have acted as counsel to the Company in connection with the proposed
issuance of the Common Stock pursuant to the Registration Statement.
We are members of the Bar of the District of Columbia. We do not hold
ourselves out as experts on, nor do we express any opinion as to or with respect
to the applicability of, the laws of any jurisdiction other than the laws of the
District of Columbia, the federal laws of the United States, and the General
Corporation Law of the State of Delaware (THE "OPINING JURISDICTIONS").
We express no opinion with respect to any of the following legal
issues: (a) state or federal securities laws or regulations; (b) fraudulent
transfer and fraudulent conveyance laws; or (c) federal and state tax laws and
regulations.
In connection with this Opinion, we have examined the Registration
Statement, the prospectus related thereto (THE "PROSPECTUS") and the Company's
1998 Stock Compensaton Plan, as amended (THE "PLAN"). In addition to the
Registration Statement, we have reviewed such documents and given consideration
to such matters of law and fact as we have deemed appropriate, in our
professional judgment, to render this Opinion. We have also relied, without
further independent investigation, as to certain matters of fact, on information
obtained from
e-Net, Inc.
February 25, 1999
Page 2
public officials, from officers of the Company and from other sources believed
by us to be responsible.
The assumptions, opinions and conclusions stated below are subject to:
(a) bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally; and (b)
general principles of equity and the exercise of judicial discretion.
We have assumed, without further investigation, the following: (a) all
natural persons who are involved have sufficient legal capacity to enter into
and perform the offer, issuance, sale and delivery by the Company of the shares
of Common Stock and the purchase of such shares by the purchasers thereof, all
as contemplated by the Registration Statement, the Prospectus and the Plan (THE
"TRANSACTIONS") or to carry out their respective roles in the Transactions; (b)
each party to the Transactions has satisfied those legal requirements that are
applicable to it to the extent necessary to make the agreements contemplated by
the Registration Statement, the Prospectus and the Plan (THE "AGREEMENTS") to
which it is a party enforceable against it; (c) each party to the Transactions
has complied with all legal requirements pertaining to its status as such status
relates to its rights to enforce the Agreements against the other parties to the
Transactions; (d) each document submitted to us for review is accurate and
complete, each such document that is an original is authentic, each such
document that is a copy conforms to an authentic original, and all signatures on
each such document are genuine; (e) each certificate issued by a government
official concerning a person or entity's property or status is accurate,
complete and authentic and all official public records (including their proper
indexing and filing) are accurate and complete; (f) the conduct of the parties
to the Transactions has complied with any requirement of good faith, fair
dealing and unconscionability; (g) the parties have acted in good faith and
without notice of any defense against the enforcement of any rights created by
the Transactions; (h) there are no agreements or understandings among the
parties, written or oral, and there is no usage of trade or course of prior
dealing among the parties that would, in either case, define, supplement or
qualify the terms of the Agreements; (i) all statutes, judicial and
administrative decisions, and rules and regulations of governmental agencies
constituting the law of the Opining Jurisdictions are generally available (I.E.,
in terms of access and distribution following publication or other release) to
lawyers practicing in the Opining Jurisdictions, and are in a format which makes
legal research reasonably feasible; (j) the constitutionality or validity of a
relevant statute, rule, regulation or agency action is not in issue unless a
reported decision in the Opining Jurisdiction has specifically addressed but not
resolved, or has established, its unconstitutionality or validity; (k) the
parties will obtain all permits and governmental approvals required in the
future, and take all actions similarly required, relevant to subsequent
consummation of the Transactions or performance of the Agreements; (l) all
parties to the Transactions will act in accordance with, and will refrain from
taking any action that is forbidden by, the terms and conditions of the
Agreements; and (m) the Transactions and the execution, delivery and performance
of the Agreements will not (i) breach, or result in a default under, any
existing obligation of a party to the Transactions to a contract to which such
party is a party or by which its property is bound, or (ii) breach or otherwise
violate any existing obligation of any court and administrative order, writ,
judgment or decree that names any such party and is specifically directed to it
or its property. Each assumption specifically described in this Opinion
e-Net, Inc.
February 25, 1999
Page 2
is made with the express consent and approval of the Company. However, we have
not relied on information (including certificates or other documentation) or
assumptions, otherwise appropriate in the circumstances, if we have knowledge
that the information or assumptions are false or if we have knowledge of facts
that under the circumstances would make the reliance unreasonable.
This Opinion speaks only as of its date. We have no obligation to
advise the Company (or any third party) of changes in law or fact that occur
after the date of this Opinion, even though the change may affect the legal
analysis, a legal conclusion or an informational confirmation in this Opinion.
Based upon the foregoing and subject to the qualifications contained in
the next paragraph, we are of the opinion that the shares of Common Stock are
validly authorized and, when (a) the pertinent provisions of the Securities Act
of 1933 and such "blue sky" and other securities laws as may be applicable have
been complied with and (b) such shares have been duly delivered against payment
therefor as contemplated by the Registration Statement, the Prospectus and the
Plan, such shares will be validly issued, fully paid, and nonassessable.
We note that the Company intended to increase the number of its
authorized shares of Common Stock from 10,000 to 50,000,000 (THE "INCREASE") by
mean of a Certificate of Amendment to its Certificate of Incorporation, which
amendment was filed with the Delaware Secretary of State on January 25, 1996
(THE "PRIOR AMENDMENT"). However, the Increase was not formally ratified by the
shareholders of the Company until a special meeting held on March 15, 1996. On
April 14, 1998, the Company filed a Certificate of Correction (the "Correction")
correcting the effective date of the Increase from January 25, 1996 to March 15,
1996. On December 18, 1998, the shareholders of the Company approved a Restated
Certificate of Incorporation (THE "RESTATEMENT") that reiterated the contents of
the Correction, and thereby ratified the Correction.
This Opinion deals only with the specific legal issues it explicitly
addresses. Accordingly, the express opinions set forth above concerning a
particular legal issue do not address any other matters.
We consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving this consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the rules and regulations thereunder.
Very truly yours,
/s/ Xxxxxxxx & Xxxxxxxx
XXXXXXXX & XXXXXXXX
