EXHIBIT 2.0
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is entered into on October 2, 2006 by and
among XXXXXX X. XXXXX, an individual ("X. Xxxxx"), XXXXX X. XXXXX, an individual
("B Flood"), WHWW FOUR, LLC, a Florida limited liability company ("WFour"),
CHESAPEAKE LOGISTICS, LLC, a Maryland limited liability company (the "Company"),
and LAST MILE LOGISTICS GROUP, INC., a Florida corporation (the "Parent"). X.
Xxxxx and X. Xxxxx are hereinafter collectively referred to as the "Principal
Members." The Principal Members and WFour are hereinafter collectively referred
to as the "Members" and, individually, as a "Member."
RECITALS:
A. Each of the Members legally and beneficially owns the number of
Units (as such term is hereinafter defined) of the Company set forth beside his,
her or its name on Exhibit A attached hereto.
B. Each of the Members desires to transfer and convey to the Parent, as
a contribution to the capital of the Parent, the number of Units set forth
beside his, her or its name on Exhibit A attached hereto in exchange for the
number of shares of common stock, par value $.0001 per share, of the Parent
(collectively, the "Shares") set forth beside his, her or its name on Exhibit A
attached hereto, in accordance with the provisions of this Contribution
Agreement (the "Agreement");
NOW THEREFORE, in consideration of the Recitals and the respective
representations, warranties, covenants and agreements of the parties set forth
herein, each of the parties agrees as follows:
ARTICLE I
CONTRIBUTION TO CAPITAL
1.1 CONTRIBUTION. Each of the Members hereby transfers and conveys to
the Parent, as a contribution to the capital of the Parent pursuant to the
provisions of Section 351 of the Internal Revenue Code and the regulations
promulgated thereunder, the number of Units of the Company set forth beside his,
her or its name on Exhibit A attached hereto. The transfers and conveyances set
forth in the immediately preceding sentence shall be effective for all purposes
as of October 1, 2006.
1.2 ISSUANCE OF SHARES. In exchange for the contribution to the capital
of the Parent described in Section 1.1 above, the Parent is issuing to each of
the Members the number of Shares set forth beside his, her or its name on
Exhibit A attached hereto. Simultaneously with the execution and delivery of
this Agreement, the Company is causing stock certificates evidencing the Shares
to be issued to each of the Members.
1.3 FURTHER ASSURANCES. From and after the date of this Agreement, each
of the parties shall cooperate with one another, shall do and perform such
actions and things, and shall execute and deliver such documents and
instruments, as may be reasonable and necessary to effectuate the purposes and
intents of this Agreement.
1.4 WHOLLY-OWNED SUBSIDIARY. It is intended by the parties that, upon
completion of the transactions contemplated by this Agreement, the Company will
become a wholly-owned subsidiary of the Parent.
1.5 CONSENT AND WAIVER. Each of the Company and the Members consents to
the transfers and conveyances by each of the other Members set forth in Section
1.1 above and waives any right of first refusal it, he or she may have in
connection with such transfers and conveyances pursuant to that certain Amended
and Restated Operating Agreement of the Company.
ARTICLE II
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE PARENT
In order to induce each of the Company and the Members to execute and
deliver this Agreement, and to perform their respective obligations hereunder,
the Parent represents and warrants to each of the Company and the Members as
follows:
2.1 ORGANIZATION. The Parent is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida and has
the corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the Parent's articles of
incorporation or bylaws.
2.2 AUTHORITY AND VALIDITY. The Parent has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder; the
execution and delivery by the Parent of this Agreement and the performance by
the Parent of its obligations hereunder have been authorized by all necessary
corporate action of the Parent; this Agreement has been duly and validly
executed and delivered by the Parent and constitutes the legal, valid and
binding obligation of the Parent; and this Agreement is enforceable against the
Parent in accordance with its terms.
2.3 CAPITALIZATION. The authorized capital stock of the Parent consists
of Five Million (5,000,000) shares of preferred stock, par value $.0001 per
share, of which no shares are issued or outstanding, and One Hundred Million
(100,000,000) shares of common stock, par value $.0001 per share, of which, on
the date of this Agreement, there are Thirteen Million Nine Hundred Eighty-Six
Thousand (13,986,000) shares issued and outstanding. All such outstanding shares
are fully paid and non-assessable, free of all liens, encumbrances, options,
restrictions and legal or equitable rights of others not a party to this
Agreement. There are no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments obligating the Parent
to issue or to transfer from treasury any additional shares of its capital
stock. None of the outstanding shares of the Parent are subject to any stock
restriction or rights agreements.
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2.4 CONTRACT AND LEASES. The Parent is not currently carrying on any
business and is not a party to any contract, agreement or lease. No person holds
a power of attorney from the Parent.
2.5 COMPLIANCE WITH LAWS. To the best of its knowledge, the Parent is
not in material violation of any federal, state, or local statute, law, rule
and/or regulation.
2.6 LITIGATION AND PROCEEDINGS. There are no actions, suits,
proceedings, or investigations pending or, to the knowledge of the Parent after
reasonable investigation, threatened by or against the Parent or affecting the
Parent or its properties and assets, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. The Parent does not have any knowledge of any material
default on its part with respect to any judgment, order, injunction, decree,
award, rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality.
2.7 CORPORATE DOCUMENTS. Copies of each of the following documents of
the Parent, which are true complete and correct in all material respects, have
been delivered to the Company:
Articles of Incorporation;
Bylaws;
Minutes of Shareholders' Meetings; and
Minutes of Directors' Meetings.
2.8 VALIDITY OF DOCUMENTS. All minutes, consents or other documents
pertaining to the Parent delivered to the Company are valid.
2.9 TITLE TO SHARES. The Shares to be issued by the Parent pursuant to
this Agreement are free and clear of all liens, security interests, pledges,
charges, claims, encumbrances and restrictions of any kind. None of such Shares
is subject to any voting trust or agreement. No person holds or has the right to
receive any proxy or similar instrument with respect to such shares and, except
as provided in this Agreement, the Parent is not a party to any agreement which
offers or grants to any person the right to purchase or acquire any securities
of the Parent. There is no applicable local, state or federal law, rule,
regulation, or decree which would, as a result of the issuance of the shares,
impair, restrict or delay any voting rights with respect to the shares.
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ARTICLE III
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS CONCERNING THE COMPANY
In order to induce the Parent to execute and deliver this Agreement,
and to perform its obligations hereunder, each of the Company and the Principal
Members jointly and severally represents and warrants to the Parent as follows:
3.1 ORGANIZATION. The Company is a limited liability company duly
organized, validly existing, and in good standing under the laws of the State of
Maryland and has the power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business as it is now being conducted. True, complete and correct copies of the
Articles of Organization and the Second Amended and Restated Operating Agreement
of the Company as in effect on the date hereof have previously been delivered to
the Parent. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of the Company's Articles of Organization or Second Amended and
Restated Operating Agreement.
3.2 AUTHORITY AND VALIDITY. The Company has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder; the
execution and delivery by the Company of this Agreement and the performance by
the Company of its obligations hereunder have been authorized by all necessary
action of the Company; this Agreement has been duly and validly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company; and this Agreement is enforceable against the Company in
accordance with its terms.
3.3 CAPITALIZATION. The authorized capital of the Company consists of
One Hundred Million (100,000,000) units of ownership (collectively, the
"Units"), of which Thirty-Six Million (36,000,000) Units are currently issued
and outstanding. All of the issued and outstanding Units are legally issued,
fully paid, and non-assessable and not issued in violation of the preemptive or
other rights of any person. All such outstanding Units are free of all liens,
encumbrances, options, restrictions and legal or equitable rights of others not
a party to this Agreement. There are no outstanding subscriptions, options,
rights, warrants, convertible securities, or other agreements or commitments
obligating the Company to issue or to transfer from treasury any additional
Units. None of the outstanding Units of the Company are subject to any stock
restriction or rights agreements, other than as is set forth in the Second
Amended and Restated Operating Agreement.
3.4 FINANCIAL AND TAX INFORMATION.
(a) The Company has filed all federal and state income tax
returns required to be filed by it, and has delivered true, correct and complete
copies of such income tax returns to the Parent. The Company has no liabilities
with respect to the payment of any federal, state, county, local or other taxes
(including any deficiencies, interest or penalties).
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(b) There has previously been delivered to the Parent a true,
complete and correct copy of the Company's audited financial statements as of
and for the periods ended December 31, 2005 and December 31, 2004 (the "Audited
Financial Statements"), including the balance sheets and related statement of
operations, changes in members' equity and changes in financial position for the
periods then ended, and the related notes and schedules thereto. The Audited
Financial Statements were all prepared in accordance with the books and records
of the Company, are all true, correct and complete in all material respects and
all fairly present the financial condition and results of operations of the
Company at the dates and for the periods covered thereby, all in accordance with
generally accepted accounting principles consistently applied with prior
periods.
(c) There has previously been delivered to the Parent a true,
correct and complete copy of the Company's unaudited financial statements as of
and for the periods ended June 30, 2006 and June 30, 2005 (the "Unaudited
Financial Statements"), including the balance sheets and related statement of
operations, changes in members' equity and changes in financial position for the
periods then ended, and the related notes and schedules thereto. The Unaudited
Financial Statements were all prepared in accordance with the books and records
of the Company, are all true, correct and complete in all material respects and
all fairly present the financial condition and results of operations of the
Company at the dates and for the periods covered thereby, all in accordance with
generally accepted accounting principles consistently applied with prior
periods, subject to normal year end adjustments.
(d) The books and records, financial and otherwise, of the
Company are in all material respects complete and correct and have been
maintained in accordance with good business and accounting practices.
(e) All of the Company's assets are reflected on the balance
sheet included in the Unaudited Financial Statements and, except as set forth
therein, the Company has no material liabilities, direct or indirect, matured or
unmatured, contingent or otherwise.
3.5 INFORMATION. The information concerning the Company set forth in
this Agreement is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material fact
required to make the statement made, in light of the circumstances under which
it was made, not misleading. In addition, the Company has fully disclosed in
writing to the Parent all information relating to matters involving the Company
or its assets or its present or past operations or activities which (i)
indicated or may indicate, in the aggregate, the existence of a greater than
Five Thousand Dollars ($5,000) liability or diminution in value, (ii) have led
or may lead to a competitive disadvantage on the part of the Company or (iii)
either alone or in aggregation with other information covered by this Section
3.5, otherwise have led or may lead to a material adverse effect on the
transactions contemplated herein or on the Company, its assets, or its
operations or activities as presently conducted or as contemplated to be
conducted after the date hereof, including, but not limited to, information
relating to governmental, employee, environmental, litigation and securities
matters and transactions with the Members.
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3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in this
Agreement or otherwise disclosed in writing to the Parent, since June 30, 2006:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of the Company or (ii)
any damage, destruction, or loss to the Company (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of the Company;
(b) the Company has not (i) amended its Articles of
Organization or Second Amended and Restated Operating Agreement; (ii) declared
or made, or agreed to declare or make, any payment of dividends or distributions
of any assets of any kind whatsoever to stockholders or purchased or redeemed,
or agreed to purchase or redeem, any of its capital stock; (ii) waived any
rights of value which in the aggregate are outside of the ordinary course of
business or material considering the business of the Company; (iv) made any
material change in its method of management, operation or accounting; (v)
entered into any other material transaction other than sales in the ordinary
course of its business; (vi) made any accrual or arrangement for payment of
bonuses or special compensation of any kind or any severance or termination pay
to any present or former officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers or
directors or any of its salaried employees whose monthly compensation exceeds
One Thousand Dollars ($1,000); or (viii) made any increase in any profit
sharing, bonus, deferred compensation, insurance, pension, retirement, or other
employee benefit plan, payment, or arrangement made to, for, or with its
officers, directors, or employees;
(c) the Company has not (i) borrowed or agreed to borrow any
funds or incurred, or become subject to, any material obligation or liability
(absolute or contingent) except as disclosed herein and except liabilities
incurred in the ordinary course of business; (ii) paid or agreed to pay any
material obligations or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent the Company balance sheet,
and current liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses in connection with the
preparation of this Agreement and the consummation of the transactions
contemplated hereby; (iii) sold or transferred, or agreed to sell or transfer,
any of its assets, properties, or rights (except assets, properties, or rights
not used or useful in its business which, in the aggregate have a value of less
than One Thousand Dollars ($1,000)), or canceled, or agreed to cancel, any debts
or claims (except debts or claims which in the aggregate are of a value of less
than One Thousand Dollars ($1,000)); (iv) made or permitted any amendment or
termination of any contract, agreement, or license to which it is a party if
such amendment or termination is material, considering the business of the
Company; or (v) issued, delivered, or agreed to issue or deliver any Units,
bonds or other corporate securities including debentures (whether authorized and
unissued or held as treasury stock), other than a convertible promissory note to
Xxxxxxx X. XxXxxxx.
(d) to the best knowledge of the Company, the Company has not
become subject to any law or regulation which materially and adversely affects,
or in the future may adversely affect the business, operations, properties,
assets, or condition of the Company.
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3.7 TITLE AND RELATED MATTERS.
(a) The Company has good and marketable title to all of its
properties and assets, real and personal, which are reflected in the most recent
the Company balance sheet or acquired after that date (except properties and
assets sold or otherwise disposed of since such date in the ordinary course of
business), free and clear of all liens, pledges, charges, or encumbrances except
(i) statutory liens or claims not yet delinquent and (ii) such imperfections of
title and easements as do not and will not materially detract from or interfere
with the present or proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties.
(b) The Company owns, free and clear of any liens, claims,
encumbrances, royalty interests, or other restrictions or limitations of any
nature whatsoever, any and all products and services it is currently providing,
including the underlying technology and data, and all procedures, techniques,
marketing plans, business plans, methods of management, or other information
utilized in connection with the Company's business.
(c) No third party has any right to, and the Company has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
propriety techniques, patent, pending patent, trademarks, service marks, trade
names, or copyrights owned or utilized by the Company.
3.8 LITIGATION AND PROCEEDINGS. There are no actions, suits,
proceedings, or investigations pending or, to the knowledge of the Company after
reasonable investigation, threatened by or against the Company or affecting the
Company or its properties and assets, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. The Company does not have any knowledge of any material
default on its part with respect to any judgment, order, injunction, decree,
award, rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality.
3.9 MATERIAL AGREEMENTS.
(a) Except as previously disclosed in writing to the Parent,
there are no "material" contracts, agreements, franchises, license agreements,
debt instruments or other commitments to which the Company is a party or by
which it or any of its assets, products, technology, or properties are bound
other than those incurred in the ordinary course of business (as used in this
Agreement, a "material" contract, agreement, franchise, license agreement, debt
instrument or commitment is one which (i) will remain in effect for more than
six months after the date of this Agreement or (ii) involves aggregate
obligations of at least Ten Thousand Dollars ($10,000));
(b) All contracts, agreements, franchises, license agreements,
and other commitments to which the Company is a party or by which its properties
are bound and which are material to the operations of the Company taken as a
whole are valid and enforceable by the Company in all respects, except as
limited by bankruptcy and insolvency laws and by other laws affecting the rights
of creditors generally;
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(c) The Company is not a party to or bound by, and the
properties of the Company are not subject to any contract, agreement, other
commitment or instrument; any charter or other corporate restriction; or any
judgment, order, writ, injunction, decree, or award which materially and
adversely affects, the business operations, properties, assets, or condition of
the Company; and
(d) Except as previously disclosed in writing to the Parent or
reflected in the most recent the Company balance sheet, the Company is not a
party to any oral or written (i) contract for the employment of any officer or
employee which is not terminable on thirty days or less notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay, pension
benefit or retirement plan; (iii) agreement, contract, or indenture relating to
the borrowing of money; (iv) guaranty of any obligation, other than one on which
the Company is a primary obligor, for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties of obligations
which, in the aggregate do not exceed more than one year or providing for
payments in excess of Ten Thousand Dollars ($10,000) in the aggregate; (v)
collective bargaining agreement; or (vi) agreement with any present or former
officer or director of the Company.
3.10 MATERIAL CONTRACT DEFAULTS. The Company is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets or condition of the Company.
3.11 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of, any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which the Company is a party or to which any of its
properties or operations are subject.
3.12 GOVERNMENTAL AUTHORIZATIONS. The Company has all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof. No authorization, approval, consent, or order of,
or registration, declaration, or filing with, any court or other governmental
body is required in connection with the execution and delivery by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby.
3.13 COMPLIANCE WITH LAWS AND REGULATIONS. The Company has complied
with all applicable laws, statutes, rules and regulations of all federal, state
and other governmental entities and agencies, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of the Company or except to the
extent that noncompliance would not result in the occurrence of any material
liability for the Company.
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3.14 NO PENSION OR OTHER PLANS. The Company does not have in effect,
and has never had in effect, any pension, profit-sharing, 401(k), retirement,
incentive, bonus, compensation, stock option, stock purchase or other similar
plan or arrangement in effect, regardless of whether any such plan was or is
subject to the Employee Retirement Income Security Act of 1974.
ARTICLE IV
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE MEMBERS
In order to induce the Parent to execute and deliver this Agreement,
and to perform its obligations hereunder, each of the Members severally
represents and warrants to the Parent, and covenants and agrees with the Parent,
as follows:
4.1 EXEMPTION FROM REGISTRATION. The Member acknowledges that the
offer, issuance and sale to him of the Shares is intended to be exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
in reliance on one or more exemptions for private offerings.
4.2 ACCREDITED INVESTOR. The Member has reviewed the definition of an
"accredited investor," as that term is defined in Regulation D promulgated under
the Act, set forth in Exhibit B attached hereto and confirms that he is, in
fact, an "accredited investor." The Member has completed, executed and delivered
to the Parent a Confidential Purchaser Questionnaire.
4.3 INFORMATION. The Member has had access to all information about the
Company that he desired. The Member has received all information about the
Parent that he desired. The Member has had the opportunity to ask questions of,
and to receive answers from, officers and employees of the Parent and the
Company concerning the Parent and its business, affairs and operations, the
Company and its business, operations and affairs, and the transactions
contemplated by this Agreement, and to obtain any additional information desired
by him. The Member acknowledges that the officers and employees of the Parent
and the Company have answered all inquiries made on his behalf to his
satisfaction.
4.4 EVALUATION OF INFORMATION. The Member, by virtue of his education,
training and experience, has such knowledge and experience in financial and
business matters that he is capable of understanding the information provided to
him by the Parent and the Company and of evaluating the merits and risks of his
investment in the Shares to be issued to him pursuant to this Agreement.
4.5 INVESTMENT. The Shares are being acquired solely for the account of
the Member, for investment, and not with a view to, or for resale in connection
with, any "distribution" within the meaning of the Act. By such representation,
the Member means that no other person has a beneficial interest in the Shares,
and that no other person has furnished or will furnish, directly or indirectly,
any part of or guarantee the payment of any part of the consideration paid to
the Parent in connection therewith. The Member does not intend to distribute all
or any part of the Shares and understands that the Shares are being offered
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pursuant to a specific exemption or exemptions under the provisions of the Act,
which exemption(s) depends, among other things, upon the investment intent of
the Member. The Member realizes that, in the view of the Securities and Exchange
Commission, a purchase now with an intent to resell by reason of any foreseeable
specific contingency or an anticipated change in market value or in the
condition of the Parent or of its property, or in connection with a contemplated
liquidation or settlement of any loan obtained by the Member for the acquisition
of such security would represent a purchase with an intent inconsistent with the
foregoing representation and warranty by the Member, and that such a sale or
disposition might be regarded as a deferred sale as to which the exemption is
not available.
4.6 NO REGISTRATION. The Member understands and acknowledges that the
Parent has not registered, and has no obligation or present intention to
register, under the Act or any applicable securities laws of any jurisdiction
the Shares. The Member further acknowledges that no representations to the
contrary have been made by any person on behalf of the Parent in connection with
his acquisition of the Shares.
4.7 RESTRICTED SECURITIES. The Member acknowledges and agrees that the
Shares may not be sold, assigned, transferred, conveyed, pledged or otherwise
disposed of unless they are registered under the Act or an exemption from such
registration is available. The Member acknowledges and agrees that the Shares
constitute "restricted securities," as such term is defined in Rule 144
promulgated by the Securities and Exchange Commission under the Act, and, unless
sooner registered for sale under the Act, may not be sold for a period of one
year from and after the date of this Agreement. Further, the Member understands
and acknowledges that significant restrictions on his ability to sell or
transfer the Shares are set forth in Article V of this Agreement. Stop transfer
instructions will be placed by the Parent against the Shares and the Parent
shall not permit the transfer or other disposition of the Shares, unless and
until such transfer or other disposition complies with all applicable laws,
rules and regulations.
4.8 RESTRICTIVE LEGEND. The Member acknowledges that any and all
certificates representing the Shares will bear a restrictive legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED, CONVEYED, PLEDGED, HYPOTHECATED, ENCUMBERED OR
OTHERWISE DISPOSED OF UNLESS (A) THEY ARE COVERED BY A REGISTRATION
STATEMENT OR POST-EFFECTIVE AMENDMENT THERETO, EFFECTIVE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) SUCH SALE, ASSIGNMENT,
TRANSFER, CONVEYANCE, PLEDGE, HYPOTHECATION, ENCUMBRANCE OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THAT ACT AND
ANY OTHER APPLICABLE SECURITIES LAWS.
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4.9 AUTHORITY. The Member represents and warrants to the Parent that
(i) he has full power and authority to execute and deliver this Agreement, (ii)
this Agreement has been duly and validly executed and delivered by the Member
and constitutes the legal, valid and binding obligation of the Member and (iii)
this Agreement is enforceable against the Member in accordance with its terms.
ARTICLE V
CERTAIN COVENANTS AND AGREEMENTS
5.1 AUDITED FINANCIAL STATEMENTS. The Parent shall engage a firm of
independent certified public accountants to perform an audit of the financial
statements of the Parent and the Company as of and for the periods ending
December 31, 2005 and December 31, 2004, and, if necessary, as of and for a
period ending subsequent to December 31, 2005.
5.2 REGISTRATION STATEMENT ON FORM 10-SB. The Parent shall prepare and,
as soon as reasonably practicable, file with the United States Securities and
Exchange Commission a Registration Statement on Form 10-SB. It is the intention
of the Parent to take all necessary actions, as expeditiously as possible, to
cause its shares of common stock to trade on The National Association of
Securities Dealers, Inc. Over-the-Counter Bulletin Board (the "OTCBB").
5.3 MANUAL. The Parent shall prepare and, as soon as reasonably
practicable, file an application for inclusion in the Mergent Industrial and
International Manuals & News Reports.
5.4 RESTRICTIONS ON CERTAIN TRANSACTIONS. During the period commencing
on the date of this Agreement and terminating on the date which is two years
from and after the date that the Parent's shares of common stock commence to
trade on the OTCBB, the Parent shall not engage in any reverse stock split,
recapitalization, reorganization or other transaction which has the effect of
reducing the number of shares of common stock of the Parent without the payment
of fair and reasonable consideration to all of the shareholders affected thereby
or the granting of appraisal rights to the shareholders of the Parent in
connection therewith.
5.5 TRANSFER AND CANCELLATION. Simultaneously with the execution and
delivery of this Agreement, Ten Million (10,000,000) Shares are being purchased
and redeemed by the Parent. Upon the completion of all of the transactions
contemplated by this Agreement, the number of issued and outstanding shares of
common stock of the Parent shall be Forty-Eight Million Nine Hundred Eighty-Six
Thousand (48,986,000).
5.6 CERTAIN AGREEMENTS AND INSTRUMENTS. Simultaneously with the
execution and delivery of this Agreement, the Parent is:
(a) entering into an Employment Agreement with Xxxxxx X.
Xxxxx;
(b) entering into a Stock Option Agreement with Xxxxxx X.
Xxxxx;
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(c) entering into an Employment Agreement with Xxxxx X. Xxxxx;
(d) entering into a Stock Option Agreement with Xxxxx X.
Xxxxx;
(e) entering into a Modification Agreement with the Company
and Xxxxxxx X. XxXxxxx;
(f) pursuant to the Modification Agreement, executing together
with the Company a promissory note to the order of Xxxxxxx X. XxXxxxx;
(g) pursuant to the Modification Agreement, issuing Warrants
to Xxxxxxx X. XxXxxxx; and
(h) for certain consulting services rendered to the Company,
issuing Warrants to Xxxxx X. Xxxx, XX.
5.7 CERTAIN COVENANTS AND AGREEMENTS OF THE PRINCIPAL MEMBERS.
(a) Each of the Principal Members shall take all appropriate
actions (i) to cause the Parent and the Company to comply with each and every
one of its covenants, agreements and obligations set forth in this Agreement and
(ii) to cause the Parent and the Company to refrain from breaching or violating
any or all of its covenants, agreements and obligations set forth in this
Agreement.
(b) During the period commencing on the date of this Agreement
and terminating on the date which is one year from and after the date that the
Parent's shares of common stock commence to trade on the OTCBB, neither of the
Principal Shareholders shall offer, agree to offer to sell, sell, grant an
option for the purchase or sale of, transfer, pledge, assign, hypothecate,
distribute or otherwise encumber or dispose of any Shares legally or
beneficially owned by him or her.
ARTICLE VI
SURVIVAL AND INDEMNITIES; OTHER REMEDIES
6.1 SURVIVAL. All of the representations, warranties, covenants,
agreements and indemnities of the parties set forth in this Agreement shall
survive the consummation of the transactions contemplated by this Agreement
indefinitely, notwithstanding any audit or investigation made by or on behalf of
any such party.
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6.2 INDEMNIFICATION OF THE PARENT.
(a) Each of the Company and the Principal Members shall
jointly and severally indemnify and hold harmless the Parent and each and every
one of its current shareholders, directors, officers, attorneys and agents,
from, against and in respect of the full amount of any and all liabilities,
damages, claims, taxes, deficiencies, assessments, losses, penalties, interest,
costs and expenses (including without limitation fees and disbursements of trial
and appellate counsel)(collectively, the "Indemnified Expenses") arising from,
in connection with, or incident to any breach or violation of any or all of the
representations, warranties, covenants and agreements made by it, him or them in
Articles I, III, V, VI, VII or VIII of this Agreement.
(b) Each of the Members shall severally indemnify and hold
harmless the Parent and each and every one of its current shareholders,
directors, officers, attorneys and agents, from, against and in respect of the
full amount of any and all Indemnified Expenses arising from, in connection
with, or incident to any breach or violation of any or all of the
representations, warranties, covenants and agreements made by him in Article IV
of this Agreement.
6.3 INDEMNIFICATION OF THE COMPANY AND MEMBERS. The Parent shall
indemnify and hold harmless the Company and the Members from, against and in
respect of the full amount of any and all Indemnified Expenses arising from, in
connection with, or incident to any breach or violation of any or all of the
representations, warranties, covenants and agreements made by the Parent in this
Agreement.
6.4 ADDITIONAL REMEDIES.
(a) Each of the Parent, the Company and the Members
acknowledges and agrees that any or all of the covenants and agreements made by
any of them in this Agreement may be enforced by any present or future
shareholder of the Parent, each of whom shall be deemed to be a third party
beneficiary of this Agreement.
(b) It is recognized and acknowledged by each of the parties
that a breach or violation by any party of any or all or the provisions
contained in this Agreement will cause irreparable harm and damage to the Parent
and to the shareholders of the Parent in a monetary amount which would be
virtually impossible to ascertain. As a result, each of the parties recognizes
and acknowledges that the Parent and/or each and every present or future
shareholder of the Parent shall be entitled to the remedies of injunction and/or
specific performance from any court of competent jurisdiction enjoining and
restraining any breach or violation by any party of any or all of the provisions
contained herein and/or requiring the specific performance of any or all of the
provisions contained herein, and that such rights to injunction and specific
performance shall be cumulative and in addition to whatever other rights and
remedies any party may possess hereunder, at law and in equity.
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ARTICLE VII
SIMULTANEOUS DELIVERY OF DOCUMENTS
7.1 BY THE PARENT:
(a) Board of Directors Minutes authorizing the issuance of a
certificate or certificates for the shares of the Parent to be issued pursuant
to this Agreement.
(b) The resignations of the current officers and directors of
the Parent.
(c) A Board of Directors resolution appointing each of the
Principal Members as a director of the Parent.
(d) All of the business and corporate records of the Parent,
including but not limited to correspondence files, bank statements, checkbooks,
savings account books, minutes of shareholder and directors meetings, financial
statements, shareholder listings, stock transfer records, agreements and
contracts.
7.2 BY THE COMPANY:
(a) Delivery to the Parent, or to its Transfer Agent, of
evidence of transfer of all of the Units.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 EXPENSES.
(a) All of the legal, accounting and other costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be borne and paid by the party to this Agreement incurring such
costs and expenses, and no party shall be obligated for any cost or expense
incurred by any other party to this Agreement.
(b) The Parent shall pay all costs and expenses incurred by it
subsequent to the date of this Agreement, and the Parent shall pay all costs and
expenses:
(i) relating to the preparation and filing of the
registration statement or statements contemplated by
Section 5.2 above, including without limitation all filing fees and all legal,
accounting and financial printer costs and expenses incurred in connection
therewith;
(ii) of compliance with applicable state blue sky or
securities laws, including without limitation all
filing fees and legal costs and expenses;
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(iii) of applying for inclusion in the Mergent
Industrial and International Manuals & News Reports; and
(iv) incurred for services provided by the Parent's
transfer agent;
in each case regardless of whether such costs and expenses were incurred prior
to, on or subsequent to the date of this Agreement.
8.2 FURTHER ASSURANCES. From and after the date of this Agreement, each
of the parties shall cooperate with one another, shall do and perform such
actions and things, and shall execute and deliver such documents and
instruments, as may be reasonable and necessary to effectuate the purposes and
intents of this Agreement.
8.3 GOVERNING LAW. This Agreement shall be governed by, and shall be
construed and interpreted in accordance, with the laws of the State of Florida,
without giving effect to the principles of conflicts of laws thereof.
8.4 ENTIRE AGREEMENT. This Agreement, together with the exhibit
attached hereto, constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and arrangements, both oral and written, among the
parties with respect to such subject matter. This Agreement may not be amended
or modified in any manner, except by a written instrument executed by all of the
parties hereto.
8.5 BENEFITS; BINDING EFFECT. This Agreement shall be for the benefit
of, and shall be binding upon, the parties hereto and their respective heirs,
personal representatives, executors, legal representatives, successors and
assigns.
8.6 JURISDICTION AND VENUE. Any claim or dispute arising out of,
connected with, or in any way related to this Agreement shall be instituted by
the complaining party and adjudicated in a court of competent jurisdiction
located in Orange County, Florida, and the parties to this Agreement consent to
the personal jurisdiction of and venue in such courts. In no event shall any
party to this Agreement contest the personal jurisdiction of such courts over or
the venue of such courts. In recognition of the fact that the issues which would
arise under this Agreement are of such a complex nature that they could not be
properly tried before a jury, each of the parties waives trial by jury.
8.7 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of any or all of the provisions hereof.
8.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the separate parties in separate counterparts, each of which
shall be deemed to constitute an original and all of which shall be deemed to
constitute the one and the same instrument.
8.9 EFFECTIVE DATE. This Agreement shall be effective for all purposes
as of October 1, 2006.
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IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement on the date first written above.
/s/ Xxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxx
------------------------------ ------------------------------
Xxxxxx X. Xxxxx Xxxxx X. Xxxxx
WHWW FOUR, LLC
By /s/ X. X. Xxxxxxx, III
---------------------------
X.X. Xxxxxxx, III, Manager
CHESAPEAKE LOGISTICS, LLC LAST MILE LOGISTICS GROUP, INC.
By /s/ Xxxxxx X. Xxxxx By /s/ Xxxxx X. Xxxx, XX
--------------------------- ------------------------------
Xxxxxx X. Xxxxx, Xxxxx X. Xxxx, XX,
Chief Executive Officer President
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EXHIBIT A
CHESAPEAKE LAST MILE LOGISTICS
LOGISTICS, LLC GROUP, INC.
MEMBER NAME NUMBER OF UNITS NUMBER OF SHARES
----------- --------------- -------------------
Xxxxxx X. Xxxxx 27,809,200 34,761,500
Xxxxx X. Xxxxx 7,110,800 8,888,500
WHWW Four, LLC 1,080,000 1,350,000
Totals 36,000,000 45,000,000
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EXHIBIT B
DEFINITION OF "ACCREDITED INVESTOR"
"Accredited investor" means any person who comes within any of the
following categories or who the Parent reasonably believes comes within any of
the following categories:
1. Any bank, savings and loan association or other financial
institution whether acting in its individual or fiduciary capacity; any broker
or dealer; any insurance company; any investment company or a business
development company; any small business investment company licensed by the U.S.
Small Business Administration; any plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; any employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 if the investment decision
is made by a plan fiduciary, which is either a bank, savings and loan
association, insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;
2. Any private business development company;
3. Any organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;
4. Any director, executive officer, or general partner of the Parent;
5. Any natural person whose individual net worth, or joint net worth
with that person's spouse, exceeds $1,000,000;
6. Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
7. Any trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person; or
8. Any entity in which all of the equity owners are accredited
investors.
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