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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
among
E2ENET, INC.,
NORTHWOOD CAPITAL PARTNERS LLC,
NORTHWOOD VENTURES LLC,
XXXXXXXX X. XXXXXXX
and
XXXXXXX.XXX, INCORPORATED
Dated as of April 26, 2000
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS
1.1 Definitions.......................................................................................1
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1.2 Interpretation....................................................................................4
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1.3 Accounting Terms..................................................................................5
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ARTICLE II PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale of Shares.......................................................................5
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2.2 The Closing.......................................................................................5
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ARTICLE III CONDITIONS PRECEDENT TO THE INVESTORS' OBLIGATION TO
CLOSE
3.1 Documentation at Closing..........................................................................6
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3.2 E2E Merger........................................................................................7
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ARTICLE IV CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO
CLOSE
4.1 Documentation at Closing..........................................................................7
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
5.1 Organization......................................................................................8
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5.2 Authority.........................................................................................8
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5.3 Consents and Approvals............................................................................8
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5.4 No Conflict or Violation..........................................................................8
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5.5 Litigation........................................................................................9
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5.6 Certain Fees......................................................................................9
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5.7 Investment Representation.........................................................................9
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY
6.1 Organization.....................................................................................10
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6.2 Authority........................................................................................10
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6.3 Capitalization of the Company and Status of Capital Stock........................................11
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6.4 Consents and Approvals...........................................................................11
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6.5 No Conflict or Violation.........................................................................11
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6.6 Taxes............................................................................................12
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6.7 Financial Statements.............................................................................13
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6.8 Litigation.......................................................................................13
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6.9 Legal Compliance.................................................................................13
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6.10 ERISA............................................................................................13
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6.11 Labor Matters....................................................................................14
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6.12 Contracts........................................................................................14
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6.13 Absence of Undisclosed Liabilities...............................................................15
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6.14 Business Plan....................................................................................15
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6.15 Certain Fees......................................................................................16
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6.16 Books and Records.................................................................................16
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6.17 Investments in Other Persons......................................................................16
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6.18 Related-Party Transactions and Certain Actions....................................................16
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6.19 Patents and Trademarks............................................................................17
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6.20 Proprietary Information and Inventions Agreements.................................................17
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6.21 Disclosure........................................................................................17
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ARTICLE VII ARTICLE VII INDEMNIFICATION
7.1 Indemnification...................................................................................18
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ARTICLE VIII MISCELLANEOUS
8.1 Severability......................................................................................19
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8.2 Survival of Representations and Warranties........................................................19
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8.3 Entire Agreement; Amendments......................................................................19
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8.4 Notices...........................................................................................19
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8.5 Waivers...........................................................................................21
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8.6 Headings..........................................................................................21
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8.7 Successors and Assignees..........................................................................21
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8.8 No Third Party Beneficiaries......................................................................21
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8.9 Counterparts......................................................................................22
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8.10 Governing Law.....................................................................................22
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8.11 Dispute Resolution................................................................................22
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8.12 Drafting..........................................................................................23
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8.13 Waiver of Jury Trial..............................................................................23
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8.14 Expenses..........................................................................................23
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8.15 Further Assurances................................................................................23
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8.16 Disclosure to Other Persons.......................................................................23
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SCHEDULES
Schedule 6.12(a) Contracts
Schedule 6.18 Related Party Transactions
Schedule 6.19 Patents and Trademarks
Schedule 6.20 Proprietary Information and Inventions Agreements
EXHIBITS
Exhibit A Form of Xxxx of Sale and Assignment Agreement
Exhibit B Form of Noncompetition Agreement
Exhibit C Form of Amended and Restated Stockholder Agreement
Exhibit D Form of Voting Agreement
Exhibit E Form of Registration Agreement
Exhibit F Form of Promissory Note
Exhibit G Form of Stock Pledge Agreement
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made as of this
26th day of April, 2000, by and among XXXXXXX.XXX, INCORPORATED, a Delaware
corporation (the "Company"), E2ENET, INC., a Delaware corporation ("E2E"),
NORTHWOOD CAPITAL PARTNERS LLC, a New York limited liability company
("Northwood Capital"), NORTHWOOD VENTURES LLC, a New York limited liability
company ("Northwood Ventures" and, together with Northwood Capital,
"Northwood"), and XXXXXXXX X. XXXXXXX ("Ledecky" and, collectively with E2E and
Northwood, the "Investors" and, individually, an "Investor") (each of the
foregoing, individually, a "Party" and, collectively, the "Parties").
WITNESSETH:
WHEREAS, the Company desires to sell to each of X0X, Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx Ventures and Ledecky, and each of X0X, Xxxxxxxxx Xxxxxxx,
Xxxxxxxxx Ventures and Ledecky desires to purchase from the Company, Company
Shares (as defined herein), upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby mutually
acknowledged, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"AAA" shall have the meaning given to it in Section 8.11(a).
"Action or Proceeding" means any action, suit, arbitration, proceeding
or Government Entity investigation or audit.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Person. For the purposes of this definition, a Person
shall be deemed to control another Person if it possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" means this Stock Purchase Agreement, as from time to time
amended and in effect between the Parties, including all schedules and exhibits
hereto.
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"Board" means the Board of Directors of the Company.
"Books and Records" means all titles, documents, instruments, papers,
books and records relating to the business and operations of any Party,
including financial statements, tax returns and related workpapers and letters
from accountants, budgets, pricing guidelines, ledgers, journals, deeds, title
policies, minute books, stock certificates, corporate books, stock transfer
ledgers, contracts, Licenses, customer lists, computer files and programs,
retrieval programs, operating data and plans and environmental studies and
plans.
"Business Day" means any day other than a Saturday, Sunday or public
holiday or the equivalent for banks under the laws of Washington, D.C.
"Capital Lease" means any lease of property (real, personal or mixed)
which, in accordance with GAAP, is required to be capitalized on the lessee's
balance sheet.
"Closing" has the meaning given to it in Section 2.2.
"Common Stock" means (a) the Company's common stock, with a par value
of $0.00001 per share, as authorized on the date of this Agreement, (b) any
other capital stock of any class or classes (however designated) of the Company
authorized on or after the date hereof, the holders of which shall have the
right, without limitation as to amount per share, either to all or to a share
of the balance of current dividends and liquidating distributions after the
payment of dividends and distributions on any shares entitled to preference in
the payment thereof, and the holders of which shall ordinarily, in the absence
of contingencies, be entitled to vote for the election of directors of the
Company, and (c) any other securities into which or for which any of the
securities described in (a) or (b) above may be converted or exchanged pursuant
to a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.
"Company" has the meaning set forth in the introduction hereof.
"Company Shares" means shares of the Company's common stock, par value
$0.00001 per share, to be sold and purchased pursuant to Section 2.1.
"Contracts" has the meaning given to it in Section 6.12(a).
"GAAP" shall mean the generally accepted accounting principles of the
United States consistently applied.
"Government Entity" means any court or tribunal or administrative,
governmental or regulatory body, agency, commission, division, department,
public body or other authority.
"Indebtedness" means all obligations, contingent and otherwise which
should, in accordance with GAAP, be classified upon the obligor's balance sheet
as liabilities, but in any
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event including, without limitation, liabilities secured by any mortgage on
property owned or acquired subject to such mortgage, whether or not the
liability secured thereby shall have been assumed, and also including, without
limitation, (a) all guaranties, endorsements and other contingent obligations
in respect of Indebtedness of others, whether or not the same are or should be
so reflected in said balance sheet except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, and (b) the present value of any Capital Leases.
"Investment Documents" shall mean this Agreement, the Xxxx of Sale,
the Noncompetition Agreement, the Stockholder Agreement, the Voting Agreement,
the Registration Agreement, the Note and the Stock Pledge.
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law in the United States, or any
state, province, county, municipality or other political subdivision thereof.
"Liabilities" means all Indebtedness, obligations, and other
liabilities of a Person, including any impairment of any asset (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become
due).
"Licenses" means all licenses, permits, certificates, approvals,
registrations, franchises and similar consents granted or issued by a
Government Entity or any other Person.
"Lien" means any mortgage, security interest, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge, preference, priority or other security agreement, option, warrant,
attachment, right of first refusal, preemptive, conversion, put, call or other
claim or right, restriction on transfer (other than restrictions imposed by
applicable securities Laws), or preferential arrangement of any kind or nature
whatsoever (including any restriction on the transfer of any assets), any
conditional sale or other title retention agreement, any financing lease
involving substantially the same economic effect as any of the foregoing and
the filing of any financing statement or similar document with any pertinent
public or private registry.
"Order" means any writ, judgment, decree, injunction or similar order
of any Government Entity (in each case whether preliminary or final).
"Organizational Documents" means with respect to any Person, articles
of incorporation, certificates of incorporation, by-laws, partnership
agreement, articles of association, joint venture or other agreement,
instrument or document, individually or collectively, pursuant to which such
Person is established or organized, and that governs the internal affairs of
such Person, as such documents may be amended from time to time.
"Party" has the meaning set forth in the introduction hereof.
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"Person" means and includes any individual, partnership, joint
venture, corporation, trust, limited liability company, joint stock company,
unincorporated organization, Government Entity or any political subdivision or
agency thereof, or any other entity.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar successor federal statute, and the rules and regulations of the United
States Securities and Exchange Commission (or any other federal agency at that
time administering the Securities Act) thereunder, all as the same shall be in
effect at the time.
"Subsidiary" or "Subsidiaries" means (a) any entity more than fifty
percent (50%) of whose capital stock of any class or classes having by the
terms thereof ordinary voting power to elect directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such entity shall have or might have voting power by reason of the happening of
any contingency) is at the time owned directly or indirectly by any one or more
members and (b) any partnership, association, joint venture or other entity in
which any one or more of its members has more than a fifty percent (50%) equity
interest at the time.
"Tax Return" means any report, return, statement or other written
information required to be supplied to a taxing authority in connection with
Taxes.
"Taxes" means (a) any and all taxes, levies or other like assessments,
charges or fees (including estimated taxes, charges and fees), including,
without limitation, income, corporation, add-on minimum, ad valorem, advances,
gross receipts, transfer, excise, property, sales, use, value-added, License,
payroll, employment, severance, pay as you earn, withholding on amounts paid by
or to the relevant party, social security and franchise or other governmental
taxes or charges, imposed by the United States or by any other nation, state,
province, county, local or foreign government or by any subdivision or agency
of the foregoing; and such term shall include any interest (punitive or
otherwise), penalties or additions to tax related or attributable to such
taxes; and (b) Liability for the payment of any amounts of the type described
in (a) as a result of any obligation to indemnify any other Person.
1.2 Interpretation. Unless otherwise expressly provided herein (a)
defined terms in the singular include the plural and vice versa, and the
masculine, feminine and neuter gender include all genders; (b) the words
"hereof," "herein" and "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement; (c)
the words "include," "includes," and "including" mean include, includes and
including "without limitation" and "without limitation by specification"; (d)
references to any Person shall be construed as a reference to such Person and
any permitted successors or assigns of such Person; (e) references to "consent"
shall mean prior consent evidenced in writing; (f) terms such as "satisfactory
to ______," "acceptable to _________," "in such manner as ______ may
determine," " to ______'s satisfaction," and phrases of similar import
authorize and permit such Party to approve, disapprove, act or decline to act,
unless otherwise specified herein, in its reasonable discretion
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without unreasonable delay or condition; and (g) references to Sections refer
to Sections of this Agreement.
1.3 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP, and all financial data
submitted pursuant to this Agreement and all financial tests to be calculated
in accordance with this Agreement shall be prepared and calculated in
accordance with GAAP.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale of Shares. Subject to and in reliance upon the
representations, warranties, terms and conditions of this Agreement, the
Company agrees to issue and sell to each Investor, and each Investor agrees to
purchase from the Company, duly issued, fully paid, and non-assessable Company
Shares as follows (it being understood and agreed that the obligations of each
Investor to purchase Company Shares are several and not joint):
(a) The Company agrees to issue and sell to Northwood Ventures,
and Northwood Ventures agrees to purchase from the Company, 3,105,000 Company
Shares for an aggregate purchase price of Four Hundred Thousand Dollars
($450,000);
(b) The Company agrees to issue and sell to Northwood Capital,
and Northwood Capital agrees to purchase from the Company, 345,000 Company
Shares for an aggregate purchase price of One Hundred Thousand Dollars
($50,000);
(c) The Company agrees to issue and sell to Ledecky, and Ledecky
agrees to purchase from the Company, 1,725,000 Company Shares for an aggregate
purchase price of Two Hundred Fifty Thousand Dollars ($250,000); and
(d) The Company agrees to issue and sell to E2E, and E2E agrees
to purchase from the Company, 20,700,005 Company Shares for an aggregate
purchase price consisting of: (i) $645,838.89 in cash; (ii) the cancellation by
E2E and U.S. Technologies Inc. ("USXX") of all indebtedness owed by the Company
to E2E and USXX under the promissory notes outstanding on the date hereof (the
"Notes"); and (iii) the Company's acknowledgment hereby of having received, as
a capital contribution by E2E to the Company, certain in-kind services.
2.2 The Closing. Such purchase and sale shall take place at a closing
("Closing") to be held at the offices of Xxxxxxxxxx and Xxxxx, L.L.P., counsel
to E2E, at 10:00 a.m., local time, on the date hereof (the "Closing Date"). At
the Closing: (i) the Company will issue to each Investor a certificate
evidencing such Investor's Company Shares, registered in the name of each
Investor; (ii) each of the Investors will pay their respective cash purchase
prices to the Company in immediately available funds by wire transfer to an
account or accounts designated by the
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Company prior to the Closing, and (iii) E2E will deliver the Notes, marked
canceled, to the Company.
ARTICLE III
CONDITIONS PRECEDENT TO THE INVESTORS' OBLIGATION TO CLOSE
The obligations of the Investors to purchase their respective Company
Shares is subject to the satisfaction of each of the following conditions, all
or any of which may be waived in writing by the Investors:
3.1 Documentation at Closing. Each of the Investors shall have
received prior to or at the Closing all of the following, each in form and
substance reasonably satisfactory to them and their respective counsel:
(a) Stock certificates, duly executed by the Company,
representing their respective Company Shares.
(b) Certified copies of the resolutions of the Board of Directors
evidencing (to the extent legally required prior to the Closing) approval of:
(i) this Agreement, and (ii) all other matters contemplated hereby.
(c) The opinion of X'Xxxxx, Xxxxx & Xxxxxxx, P.C., special
counsel for the Company, in form and scope reasonably acceptable to the
Investors and their respective counsel.
(d) A duly executed copy of the Xxxx of Sale and Assignment
Agreement substantially in the form attached hereto as Exhibit A (the "Xxxx of
Sale").
(e) A duly executed copy of the Noncompetition Agreement
substantially in the form attached hereto as Exhibit B (the "Noncompetition
Agreement").
(f) A duly executed copy of the Amended and Restated Stockholder
Agreement substantially in the form attached hereto as Exhibit C (the
"Stockholder Agreement").
(g) A duly executed copy of the Voting Agreement substantially in
the form attached hereto as Exhibit D (the "Voting Agreement").
(h) A duly executed copy of the Registration Rights Agreement
substantially in the form attached hereto as Exhibit E (the "Registration
Agreement").
(i) Such other documents referenced in or relating to the
transactions contemplated hereby as the Investors or their special counsel may
reasonably request.
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3.2 E2E Merger. The Stock Exchange Agreement, dated as of February 21,
2000, among XXXX, X0X and the E2E Stockholders (as defined therein), including,
without limitation, the capital infusion in USXX contemplated by Section 4.5
therein, shall have been consummated.
ARTICLE IV
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO CLOSE
The obligation of the Company to issue Company Shares to the Investors
at the Closing is subject to the satisfaction of each of the following
conditions, all or any of which may be waived in writing by the Company:
4.1 Documentation at Closing. The Company shall have received prior to
or at the Closing all of the following, each in form and substance satisfactory
to the Company and its special counsel:
(a) A duly executed copy of the Stockholder Agreement.
(b) A duly executed copy of the Promissory Note substantially in
the form attached hereto as Exhibit F (the "Note").
(c) A duly executed copy of the Stock Pledge Agreement
substantially in the form attached hereto as Exhibit G (the "Stock Pledge").
(d) Such other documents referenced in or relating to the
transactions contemplated hereby as the Company or its special counsel may
reasonably request.
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each of the Investors, as to itself, hereby represents and warrants
that:
5.1 Organization. Each Investor that is not an individual is duly
organized, validly existing and in good standing under the laws of its
respective state of organization.
5.2 Authority. It has the power and authority, and in the case of any
Investor who is an individual the legal capacity, to enter into the Investment
Documents to which it is a party, and to carry out its respective obligations
hereunder and thereunder. The execution, delivery and performance of the
Investment Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by all
necessary internal proceedings on the part of each Investor (other than
Ledecky). The Investment Documents to which it is a party have been duly and
validly executed and delivered by it and (assuming this Agreement and the other
Investment Documents constitute valid and binding obligations of the Company
and the other Investors) constitute valid and binding agreements of it,
enforceable
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against it in accordance with their respective terms, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
and by general principles of equity.
5.3 Consents and Approvals. No filing with, and no License of, any
Government Entity is necessary for the execution, delivery and performance of
this Agreement and the consummation by it of the transactions contemplated
hereby.
5.4 No Conflict or Violation. The execution, delivery and performance
by each Investor of this Agreement and the other Investment Documents to which
it is a party, the consummation of the transactions contemplated hereby and
thereby, the fulfillment of the terms hereof and thereof, and the compliance
with any of the provisions hereof and thereof:
(a) if such Investor is not an individual, will not conflict with
or result in a breach or violation of its Organizational Documents;
(b) will not conflict with, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, vesting, payment,
exercise, acceleration, suspension, revocation or modification) under, any of
the terms, conditions or provisions of any note, credit agreement, bond,
mortgage, deed of trust, security instrument, indenture, lease, License,
Contract, plan or other instrument or obligation to which it is a party or by
which it or any of its respective properties or assets may be bound or
affected, or result in the creation or imposition of any material Lien on any
of the assets or properties of it pursuant to (i) any Law to which it or any of
its property is subject, or (ii) any Order to which it is bound or any of its
respective property is subject;
(c) do not require the consent, approval or authorization of, or
registration or filing with, any Person; and
(d) will not violate any Order or Law applicable to it or any of
its properties or assets.
5.5 Litigation. There is no claim, Action or Proceeding (whether at
law or equity, before or by any Government Entity or before any arbitrator)
pending, or to the knowledge of the Investor, threatened, the outcome of which
would in any manner impair the ability of the Investor to perform its
obligations under the Investment Documents to which it is a party.
5.6 Certain Fees. Each Investor has not entered into, nor will it
enter into, during the term of this Agreement, any agreement, arrangement or
understanding with any Person that will result in the obligation of the Company
to pay any finder's fee, brokerage commission or similar payment in connection
with the transactions contemplated hereby.
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5.7 Investment Representation.
(a) Each Investor acknowledges that the Company Shares are not
registered under the securities laws of any jurisdiction and that it is
acquiring the Company Shares for its own account, and not as nominee or agent.
(b) The Company Shares are being and will be acquired by the
Investor for the purpose of investment and not with a view to distribution or
resale thereof, subject, nevertheless, to the condition that, except as
otherwise provided herein and subject to compliance with applicable securities
laws, the disposition of the property of the Investor shall at all times be
within its control.
(c) Each Investor hereby acknowledges that the Company Shares and
any other securities issued in respect of such securities upon any stock split,
stock dividend, recapitalization, merger or similar event (unless no longer
required in the opinion of counsel) shall bear a legend substantially in the
following form (in addition to any other legend required by the Investment
Documents):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD
OR TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT AN OPINION OF LEGAL
COUNSEL (REASONABLY SATISFACTORY TO XXXXXXX.XXX, INCORPORATED AND ITS LEGAL
COUNSEL) THAT SUCH SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION IS IN COMPLIANCE
WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND
STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
(d) Each Investor represents and warrants to the Company that (i)
at the time it was offered the Company Shares, it was, and (ii) at the date
hereof, it is an "accredited investor" as defined in Regulation D under the
Securities Act.
The acquisition at Closing by each Investor of the Company Shares
shall constitute a confirmation by it of each of the foregoing representations
and warranties.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants that:
6.1 Organization. The Company is duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company (a) has
all requisite corporate power and authority to own, lease and operate its
property and to conduct its business as it is now being conducted and presently
proposed to be conducted, (b) is in compliance in all material respects
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with all Laws applicable to it or its business, including but not limited to
any tax Laws, and (c) has obtained and maintained all Licenses required to
conduct its business as it is currently being conducted and presently proposed
to be conducted. The Company is duly qualified, licensed or admitted to do
business and is in good standing in all jurisdictions in which the ownership,
use or leasing of its assets and properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary. True,
complete and correct copies of the Organizational Documents of the Company
presently in effect have been delivered to the Investors. The Company is not in
violation of its Organizational Documents.
6.2 Authority. It has the power and authority to enter into the
Investment Documents and to carry out its obligations hereunder and thereunder.
The execution, delivery and performance of the Investment Documents to which it
is a party and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary internal proceedings of the
Company. The Investment Documents to which the Company is a party have been
duly and validly executed and delivered by it and (assuming the Investment
Documents constitute valid and binding obligations of the parties thereto other
than the Company) constitute valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally and by general principles of equity.
6.3 Capitalization of the Company and Status of Capital Stock. (a) As
of the date hereof, the Company has a total authorized capitalization
consisting of 150,000,000 shares of common stock, par value $0.00001 per share,
of which 13,800,000 shares will be issued and outstanding immediately prior to
the issuance of the Company Shares. All of such shares of Common Stock of the
Company have been duly authorized, validly issued and are fully paid and
nonassessable. As of the Closing Date, all of the Company Shares will be duly
authorized, validly issued, fully paid and nonassessable and free and clear of
all Liens.
(b) Except for the Company Shares or as contemplated by the
Letter Agreement, dated as of February 28, 2000, by U.S. Technologies Inc. to
Xxxxxxx Xxxxx, as of the Closing, there will be no options, warrants or rights
(including conversion rights) to purchase shares of capital stock or other
securities of the Company issued or outstanding, nor will the Company be
obligated in any other manner to issue shares of its capital stock or other
securities. There are no restrictions on the transfer of shares of capital
stock of the Company other than those imposed by relevant state and federal
securities laws. Except as set forth in this Agreement, no holder of any
security of the Company is entitled to rights of refusal or preemptive or
similar statutory or contractual rights, either arising pursuant to any
agreement or instrument to which the Company is a party, or which are otherwise
binding upon the Company. Except for the Stockholders Agreement and the Voting
Agreement, there are no agreements between the Company's stockholders with
respect to the voting or transfer of the Company's capital stock or with
respect to any other aspect of the Company's affairs.
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(c) The Company does not have any Subsidiaries nor does it
presently own, of record or beneficially, or control, directly or indirectly,
any capital stock, securities convertible into capital stock, or any other
equity or similar interest, in any Person, nor, directly or indirectly, is a
participant in any joint venture, partnership or other noncorporate entity.
(d) Except as provided in the Registration Agreement, the Company
is not presently under any obligation and has not granted any rights to
register under the Securities Act any of its presently outstanding securities
or any of its securities that may be subsequently issued.
6.4 Consents and Approvals. No filing with, and no License of, any
Government Entity is necessary for the execution, delivery and performance by
the Company of the Investment Documents to which it is a party or the other
documents contemplated hereby.
6.5 No Conflict or Violation. The execution, delivery and performance
by the Company of the Investment Documents to which it is a party, the
consummation of the transactions contemplated hereby and thereby, the
fulfillment of the terms hereof and thereof, and the compliance with any of the
provisions hereof and thereof:
(a) will not conflict with or result in a breach or violation of
the Organizational Documents of the Company;
(b) will not conflict with, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, vesting, payment,
exercise, acceleration, suspension, revocation or modification) under, any of
the terms, conditions or provisions of any note, credit agreement, bond,
mortgage, deed of trust, security instrument, indenture, lease, License,
Contract, plan or other instrument or obligation to which it is a party or by
which it or its properties or assets may be bound or affected, or result in the
creation or imposition of any material Lien on any of the assets or properties
of it pursuant to (i) any Law to which it or any of its property is subject, or
(ii) any Order to which it is bound or any of its respective property is
subject;
(c) do not require the consent, approval or authorization of, or
registration or filing with, any Person; and
(d) will not violate any Order or Law applicable to it or any of
its properties or assets.
6.6 Taxes.
(a) The Company has (i) duly filed (or has had filed on its
behalf) with the appropriate Government Entities all Tax Returns required to be
filed by it, all of which Tax Returns are true, correct and complete in all
material respects and (ii) duly paid in full all Taxes owed by it whether or
not shown on any Tax Return;
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(b) The Company has withheld and paid to the proper Government
Entity all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party;
(c) No Actions or Proceedings, or other administrative or court
claims are pending, or to the Company's knowledge, threatened, with regard to
any Taxes or Tax Returns of the Company;
(d) The income Tax Returns of the Company required to be filed as
of the date hereof have been filed with the appropriate Government Entities,
and no deficiencies have been asserted as a result of any such filings that
have not been resolved and fully paid; the Company has not granted any
requests, agreements, consents or waivers to extend the statutory period of
limitations applicable to the assessment, collection or payment of any Taxes
for which the Company may be liable;
(e) There are no Liens outstanding against any assets, properties
or businesses of the Company which arise from or are otherwise related to Taxes
or Tax Returns, other than Liens securing Taxes which are not yet due and
payable or which are being contested in good faith;
(f) True, correct and complete copies of all Tax Returns,
examination reports and statements of deficiencies assessed against or agreed
to by the Company since December 31, 1999 have been made available to the
Investors for review; and
(g) The Company is not a party to any Tax sharing, Tax indemnity
or other agreement or arrangement relating to Taxes with any Person.
6.7 Financial Statements. The Company has made available to each
Investor true, correct and complete copies of its audited financial statements
for the six-month period ending June 30, 1999, including therein a balance
sheet of the Company as of June 30, 1999 and statements of income and of
shareholders' equity and of cash flows of the Company for the six-month period
ending June 30, 1999, together with all schedules and notes thereto, and its
unaudited financial statements for the period ending December 31, 1999,
including therein a balance sheet of the Company as of December 31, 1999 and
statements of income and of shareholders' equity and of cash flows of the
Company for the period ending December 31, 1999 (collectively, the "Financial
Statements"). The Financial Statements fairly present, or will fairly present,
in conformity with GAAP, applied on a consistent basis in accordance with past
practice (except as may be indicated in the notes thereto), the consolidated
financial position of the Company as of the respective dates thereof and the
results of its operations and its cash flows for the periods then ended. Except
as disclosed in the Financial Statements, the Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation.
6.8 Litigation. There is no claim, Action or Proceeding (whether at
law or equity, before or by any Government Entity or before any arbitrator)
pending, or to the knowledge of the
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Company, threatened, against or affecting the Company or any of its assets or
properties that would have a material adverse effect upon the Company. There
are no Orders, stipulations or awards (whether rendered by a Government Entity
or by arbitration) against the Company or any of its properties, assets or
businesses.
6.9 Legal Compliance. The Company has conducted its operations in
compliance in all material respects with all applicable Laws. The Company has
not received any written complaint or notice from any Government Entity
alleging that it has violated any Order or Law and, to the Company's knowledge,
no such complaint or notice is threatened.
6.10 ERISA. The Company does not maintain or have any obligation to
contribute to or any other liability with respect to or under (including but not
limited to current or potential withdrawal liability), nor has it ever
maintained or had any obligation to contribute to or any other liability with
respect to or under: (i) any plan or arrangement whether or not terminated,
which provides medical, health, life insurance or other welfare type benefits
for current or future retired or terminated employees (except for limited
continued medical benefit coverage required to be provided under Section 4980B
of the Internal Revenue Code of 1986, as amended (the "Code"), or as required
under applicable state law; (ii) any "multiemployer plan" (as defined in Section
3(37) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); (iii) any employee plan which is a tax-qualified "defined benefit
plan" (as defined in Section 3(35) of ERISA), whether or not terminated; (iv)
any employee plan which is tax-qualified "defined contribution plan" (as defined
in Section 3(34) of ERISA), whether or not terminated; or (v) any other plan or
arrangement providing benefits to current or former employees, including any
bonus plan, plan for deferred compensation, employee health or other welfare
benefit plan or other arrangement, whether or not terminated. For purposes of
this Section 6.10, the term "Company" includes all organizations under common
control with the Company pursuant to Section 414(b) or (c) of the Code.
6.11 Labor Matters.
(a) The Company is not engaged in any unfair labor practices as
defined in any applicable Law, and the Company is in compliance in all material
respects with all applicable Laws respecting employment and employment
practices, including, without limitation, terms and conditions of employment,
wages, employment discrimination, workers' compensation, family and medical
leave, the Immigration Reform and Control Act, hours of work and occupational
safety and health requirements.
(b) There is no unfair labor practice, charge or complaint
brought by any employee pending, or to the knowledge of the Company,
threatened, against the Company and, to the Company's knowledge, there is no
basis for any such charge, complaint or grievance.
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(c) There is no labor strike, lock-out, slow-down,
employment-related arbitration or work stoppage pending, or to the Company's
knowledge, threatened, against the Company, nor have there been any such
actions or threats since the Company's formation.
(d) The Company has not experienced any significant work stoppage
or been a party to any Action or Proceeding for the past three (3) years.
(e) All Persons classified by the Company as independent
contractors do satisfy and have satisfied the requirements of Law to be so
classified, and the Company has fully and accurately reported their
compensation on IRS Forms 1099 or other comparable reports when required to do
so.
(f) There is no charge or compliance proceeding actually pending,
or to the Company's knowledge, threatened, against it before the Equal
Employment Opportunity Commission or any state, local or foreign agency
responsible for the prevention of unlawful employment practices.
6.12 Contracts.
(a) Schedule 6.12(a) lists or describes: (i) all unexpired
written or oral contracts, leases, agreements, arrangements, commitments,
instruments or understandings (collectively, "Contracts") that restrict the
Company from engaging in any business activity; (ii) all barter Contracts with
any Person; (iii) all Contracts of every nature to which the Company is a party
or to which it or any of its assets or properties are bound if such Contract
obligates the Company to pay more than $25,000 in remaining payment
obligations; and (iv) the license of any patent, copyright, trademark, trade
secret, or other proprietary right to or from the Company. Each Contract listed
on Schedule 6.12(a) represents a valid, binding and enforceable agreement of
the Company, and, to the knowledge of the Company, the other party or parties
thereto, except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally and by general principles of equity.
(b) True, complete and correct copies of all written Contracts
listed in Schedule 6.12(a) have been made available to the Investors and true,
complete and correct descriptions of all oral Contracts have been provided
therein. Each such Contract is enforceable in accordance with its terms (except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
and by general principles of equity) and is in full force and effect. The
Company is not, nor to its knowledge, is any other party to any of such
Contracts (with or without the lapse of time or the giving of notice, or both),
in material violation thereof or in material default thereunder.
6.13 Absence of Undisclosed Liabilities. Except for the Liabilities
set forth on the Financial Statements the Company does not have any Liabilities
of any kind whatsoever, either accrued,
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absolute, contingent, determined or determinable or otherwise, or any existing
condition, situation or set of circumstances that could reasonably be expected
to result in such a Liability (including documentary or standby letters of
credit, bid or performance bonds or customer or third party guarantees). To the
Company's knowledge, there are no asserted claims for indemnification by any
Person against the Company under any Law or agreement or pursuant to the
Organizational Documents of the Company, and the Company has no knowledge of
any facts or circumstances that could reasonably be expected to give rise to
the assertion of such a claim against the Company thereunder.
6.14 Absence of Certain Changes or Events. Since June 30, 1999, the
Company has conducted its business in the ordinary and regular course
consistent with past practices, and there has not been:
(a) any material adverse effect;
(b) any material damage, destruction or casualty loss to any
material asset or property of the Company that is not covered by insurance that
will promptly be paid to the Company;
(c) any entry into of any employment agreement, deferred
compensation or other similar agreement or any arrangement with any of its
officers or employees; any increase in the rate or terms of the compensation
payable or to become payable to employees of the Company, except increases
occurring in accordance with customary practices or in accordance with
employment agreements, or any modification in employee benefits, or any
borrowing of money from the Company by any employee of the Company (other than
routine travel and similar advances);
(d) any sale, assignment, lease, transfer or other disposition,
or the execution of any agreement for the sale, assignment, lease, transfer or
other disposition, of any material assets of the Company;
(e) any change by the Company in accounting or bookkeeping
methods, principles or practices, except as required by GAAP;
(f) any borrowing of money, including any increase or extension
of purchase money credit of the Company or any increase in the Liabilities of
the Company from those reflected in the Financial Statements;
(g) any transaction with any officer, director or shareholder
(including any of their respective family members) of the Company or any of
their respective Affiliates, other than payments of salary and employee
benefits in the ordinary course;
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(h) any declaration or payment of any dividend or other
distribution on or with respect to, or any redemption or purchase or other
acquisition of, the capital stock of the Company; or
(i) any change in any material Tax election or any other action
with respect to Taxes that is inconsistent with past practices.
6.15 Certain Fees. The Company has not entered into, nor will it enter
into, during the term of this Agreement, any agreement, arrangement or
understanding with any Person that will result in the obligation of the
Investors to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby.
6.16 Books and Records. The minute books and other similar records of
the Company contain a true, complete and correct record, in all respects, of
all actions taken at all meetings and by all written consents in lieu of
meetings of the stockholders and the boards of directors of the Company. The
stock book and the share certificate ledgers and other similar records of the
Company as made available to the Investors (or any of their representatives)
accurately reflect all record transfers and any rights or Contracts related to
or involving any shares of capital stock of the Company. The Company does not
have any of its Books and Records recorded, stored, maintained, operated or
otherwise wholly or partly dependent upon or held by any means (including any
electronic, mechanical or photographic process, whether computerized or not)
which (including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Company.
6.17 Investments in Other Persons. Except as disclosed in the
Contracts listed on Schedule 6.12(a), the Company has not made any investment
in, or loan or advance (other than trade credit advanced in the ordinary course
of business and consistent with past practices) to, any Person which is
outstanding on the date of this Agreement, nor is the Company obligated or
committed to make any such loan or advance. Each such investment constitutes a
duly authorized and valid investment by the Company pursuant to any written or
oral Contract.
6.18 Related-Party Transactions and Certain Actions. Except as set
forth on Schedule 6.18, no employee, officer, consultant, stockholder or
director of the Company or member of his or her immediate family is indebted to
the Company, nor is the Company indebted (or committed to make loans or
guarantee credit) to any of them, other than (i) for payment of salary for
services rendered; (ii) reimbursement for reasonable expenses incurred on
behalf of the Company; and (iii) for other standard employee benefits made
generally available to all employees. Other than as set forth on Schedule 6.18,
to the knowledge of the Company, none of such persons has any direct or
indirect ownership interest in any firm or corporation with which the Company
is affiliated or with which the Company has a business relationship, or any
firm or corporation that competes with the Company, except that employees,
stockholders, officers, or directors of the Company may own stock in publicly
traded companies that may compete with the Company. Other than as set forth on
Schedule 6.18, no officer, director, consultant or stockholder or any member of
their
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immediate families is, directly or indirectly, interested in any material
contract with the Company (other than such contracts as relate to any such
person's related ownership of capital stock or other securities of the Company
and employment agreements entered into in the ordinary course). The Company has
not (A) declared or paid any dividends or authorized or made any distributions
upon or with respect to any class or series of its capital stock, (B) incurred
any indebtedness for money borrowed or any other liabilities individually or in
excess of $10,000, (C) made any loans or advances to any person, other than
ordinary advances for travel expenses, or (D) sold, exchanged or otherwise
disposed of any of its assets or rights having a value in excess of $10,000,
other than the sale of its inventory in the ordinary course of business.
6.19 Patents and Trademarks. The Company owns or possesses, or will
acquire prior to use, sufficient legal rights to all patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information
and proprietary rights and processes necessary for its business as now
conducted (including without limitation its corporate names) and as proposed to
be conducted to the knowledge of the Company without any conflict with, or
infringement of the rights of, others. Except as set forth on Schedule 6.19,
the Company has no patents or pending patent applications. Except for
agreements with its own employees or consultants, substantially in the form
referenced in Section 6.20 below, and standard end-user license agreements,
there are no outstanding options, licenses, or agreements of any kind relating
to the foregoing, nor is the Company bound by or a party to any options,
licenses, or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information
and proprietary rights and processes of any other person or entity. To the
knowledge of the Company, the Company has not violated or, by conducting its
business as proposed, would not violate, any of the patents, trademarks,
service marks, trade names, copyrights, trade secrets or any other proprietary
rights or processes of any person or entity. To the knowledge of the Company,
none of its employees is obligated under any contract (including licenses,
covenants, or commitments of any nature) or any other agreement, or subject to
any judgment, decree or order of any court or administrative agency, that would
interfere with the use of such employee's best efforts to promote the interests
of the Company or that would conflict with the Company's business as proposed
to be conducted. To the Company's knowledge, neither the execution nor delivery
of this Agreement, nor the carrying on of the Company's business by the
employees of the Company, nor the conduct of the Company's business as
currently conducted, will conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant, or instrument under which any of such employees is now obligated. To
the knowledge of the Company, it is not, nor will it be, necessary for the
Company to use any inventions of any of its employees (or persons it currently
intends to hire) made prior to their employment by the Company.
6.20 Proprietary Information and Inventions Agreements. Other than as
set forth on Schedule 6.20, each current employee, officer and consultant of
the Company has executed a nondisclosure agreement substantially in the form or
forms which has or have been delivered to the Investors.
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6.21 Disclosure. No representation or warranty made by the Company in
this Agreement or any Schedule hereto, or any certificate furnished or to be
furnished by it in connection with this Agreement, contains or will contain an
untrue statement of material fact, or omits or will omit to state a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances in which they were made, not misleading.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification. The Company shall indemnify the Investors against
and agrees to hold the Investors harmless from any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) (collectively, "Damages")
actually incurred or suffered by the Investors on or after the date hereof
arising out of any misrepresentation, inaccuracy or breach of any
representation, warranty or covenant by the Company contained in this Agreement
(or in any certificate, document, list, schedule, Investment Document, or
exhibit expressly required by the terms of this Agreement to be delivered to
the Investors by the Company hereunder). The maximum aggregate liability of the
Company under this Article VII shall be the aggregate amount of the
consideration paid or contributed by the Investors for the Company Shares. If
the Investors shall seek indemnification pursuant to this Article VII, the
Investors shall give prompt notice to the Company of the assertion of any
claim, or the commencement of any action, suit or proceeding by a third party,
in each case in respect of which indemnity may be sought hereunder, but no
failure to give such notice shall relieve the Company of any liability
hereunder. The Company may, at its expense, participate in or assume the
defense of any such action, suit or proceeding involving a third party with
counsel reasonably acceptable to the Investors, and after notice from the
Company of its election to assume the defense thereof, the Company shall not be
liable to the Investors for any legal fees or other expenses subsequently
incurred by the latter in connection with the defense thereof. The Investors
will have the right to employ their counsel in any such action, but the fees
and expenses of such counsel will be at the expense of such Investors unless
(1) the employment of counsel by the Investors has been authorized in writing
by the Company, (2) the Investors have reasonably concluded that there may be
legal defenses available to them that are different from or in addition to
those available to the Company (in which case the Company will not have the
right to direct the defense of such action on behalf of the Investors) or (3)
the Company has not in fact employed counsel to assume the defense of such
action within a reasonable time after receiving notice of the commencement of
the action, in each of which cases the reasonable fees and expenses of only one
counsel will be at the expense of the Company, and the Company shall reimburse
or pay such fees and expenses as they are incurred. Whether or not the Company
chooses to defend or prosecute any claim involving a third party, all the
parties hereto shall cooperate in the defense or prosecution thereof and shall
furnish such records, information and testimony, and attend such conferences,
discovery proceedings, hearings, trials and appeals, as may be reasonably
requested in connection therewith. The Company shall not be liable under this
Article VII for any settlement effected without its consent of any claim,
litigation or proceeding by a third party in respect of which indemnity may be
sought hereunder (which consent shall not be unreasonably withheld),
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unless the Company refuses to acknowledge liability for indemnification under
this Article VII and/or declines to defend any of the Investors in such claim,
litigation or proceeding.
ARTICLE VIII
MISCELLANEOUS
8.1 Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, void or unenforceable, such provision
shall be amended by the Parties only to the extent necessary to be enforceable
consistent with the Parties' intent, and the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect, unless such action would substantially impair the benefits to
any Party of the remaining provisions of this Agreement.
8.2 Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement until the
second anniversary of the date hereof, regardless of any investigation made by
any Investor or on its behalf, provided, however, that the representations
contained in the last sentence of Section 6.2 and the third sentence of Section
6.3 shall survive indefinitely.
8.3 Entire Agreement; Amendments. This Agreement (including the
schedules and exhibits hereto) and the other documents and instruments referred
to herein contain the entire understanding of the Parties with respect to the
matters covered hereby and supersede all other prior agreements (including the
Agreement in Principle for Restructuring in connection with Acquisition of
E2Enet, dated as of February 28, 2000, between USXX and Buyline) and
understandings, both written and oral, among the Parties, with respect to the
subject matter hereof. This Agreement may be amended only by an instrument in
writing executed by the Parties.
8.4 Notices. Any notices or communications required or permitted
hereunder shall be in writing and addressed as follows:
If to Northwood, to:
Northwood Ventures LLC
000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to Ledecky, to:
Xx. Xxxxxxxx X. Xxxxxxx
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to E2E, to:
E2Enet, Inc.
c/o U.S. Viewing Corporation
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
In the case of each Investor, with a copy to:
Xxxxxxxxxx and Xxxxx L.L.P.
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to:
Xxxxxxx.xxx, Incorporated
c/o U.S. Viewing Corporation
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxxxxxx and Xxxxx, L.L.P.
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Any Party may, on fifteen (15) days' notice given in accordance with
this Section 8.4 to the other Parties, designate another address or Person for
receipt of notices hereunder. All notices, claims, demands and other
communications hereunder shall be in writing and shall be deemed given (a) in
the case of a facsimile transmission, when received by recipient in legible
form and sender has received an electronic confirmation of receipt of the
transmission; (b) in the case of delivery by a standard overnight courier, upon
the date of delivery indicated in the records of such courier; (c) in the case
of delivery by hand, when delivered by hand; or (d) in the case of delivery by
first class (registered or certified) mail, upon the expiration of three (3)
Business Days after the day when mailed (postage prepaid, return receipt
requested), addressed to the respective Parties at the above address (or such
other address for a party as shall be specified by like notice).
8.5 Waivers. No waiver by any Party of any default with respect to any
provision, condition or requirement hereof shall be deemed to be a continuing
waiver in the future thereof or a waiver of any other provision, condition or
requirement hereof; nor shall any delay or omission of any Party to exercise
any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
8.6 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
8.7 Successors and Assignees. This Agreement shall be binding upon and
inure to the benefit of the Parties and their executors, administrators, heirs,
successors and permitted assigns. Neither this Agreement nor any of the rights
or obligations hereunder may be assigned by any Party without the prior written
consent of the other Parties hereto, provided that any Investor may assign its
rights and obligations hereunder to one or more Affiliates without the prior
written consent of any Party.
8.8 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the Parties hereto, and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.
8.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each Party and
delivered to the other Parties, it being understood that all Parties need not
sign the same counterpart.
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8.10 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
regard to the conflicts of laws principles thereof.
8.11 Dispute Resolution.
(a) All disputes, controversies, and claims directly or
indirectly arising out of or in relation to this Agreement or the validity,
interpretation, construction, performance, breach or enforceability of this
Agreement shall be finally, exclusively and conclusively settled by binding
arbitration, as provided in this Section, by a single arbitrator under the
Commercial Arbitration Rules, as then amended and in effect, of the American
Arbitration Association (the "AAA"). The arbitration proceedings shall be
conducted and any arbitral award shall be made in Washington, DC.
(b) The Parties agree: (i) to be bound by any arbitral award or
Order resulting from any arbitration conducted thereunder and that any such
award or Order shall be a reasoned award, shall be in writing, shall specify
the factual and legal basis for the award, and shall be final and binding; (ii)
not to commence, procure, participate in, or otherwise be involved as a party
in any claim, Action or Proceeding that might result in any Order concerning a
dispute (except for initiating Actions or Proceedings to obtain a judgment
recognizing or enforcing an arbitral award or Order and except for
applications, claims, Actions or Proceedings by the Parties, seeking interim
interlocutory or other provisional relief in any court having jurisdiction, but
only on the ground that the award to which the applicant may be entitled may be
rendered ineffectual without such provisional relief); and (iii) that judgment
on any arbitral award or Order resulting from an arbitration conducted under
this Section may be entered in any court of competent jurisdiction having
jurisdiction thereof or having jurisdiction over any Party or any of their
assets.
(c) Each of the Parties hereby irrevocably waives and excludes
all rights of appeal, challenge, or recourse to any court from any arbitral
award or Order resulting from any arbitration conducted under this Section
(except for initiating Actions or Proceedings to obtain a judgment recognizing
or enforcing an arbitral award or Order and except for Actions or Proceedings
seeking interim, interlocutory or other provisional relief in any court having
jurisdiction, but only on the ground that the award to which the applicant may
be entitled may be rendered ineffectual without such provisional relief). Each
of the Parties to this Agreement hereby consents to the non-exclusive
jurisdiction of any court of competent jurisdiction in Washington, DC for all
Actions or Proceedings to obtain a judgment recognizing or enforcing an
arbitral award or Order and waives any defense or opposition to such
jurisdiction.
(d) The arbitrator, in its discretion, may consolidate two or
more arbitrations or claims between any of the Parties arising pursuant to this
Agreement or any other agreement among the parties into one arbitration, or
terminate any such consolidation and/or establish other arbitration proceedings
for different claims that may arise in any one arbitration. Notwithstanding the
foregoing, the arbitrator shall consolidate arbitrations and/or claims if he
determines that it would be more efficient to consolidate such arbitrations
and/or claims than to continue them
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separately and (i) there are matters of fact or law that are common to the
arbitrations and/or claims to be consolidated, (ii) there are related payment
and performance obligations considered in the arbitrations and/or claims to be
consolidated or (iii) there is a danger of inconsistent awards.
(e) Each Party shall bear its own expenses in connection with the
arbitration provided in this Section, provided that the fees of the arbitrator
shall be divided equally between the Parties.
8.12 Drafting. Each Party acknowledges that its legal counsel
participated in the preparation of this Agreement. The Parties therefore
stipulate that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement to favor any Party against any other.
8.13 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
8.14 Expenses. Except as otherwise expressly provided herein, each of
the Parties hereto shall bear and pay all costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
8.15 Further Assurances. From and after the date of this Agreement,
each Party shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement, including,
without limitation, any of the foregoing that may be necessary in connection
with the transactions contemplated in Section 2.1(e).
8.16 Disclosure to Other Persons. No Party hereto shall issue, make or
cause the publication of any press release or other announcement with respect
to this Agreement or the transactions contemplated hereby, or otherwise make
any disclosures relating thereto, without the consent of the other Parties,
such consent not to be unreasonably withheld or delayed; provided, however,
that such consent shall not be required where such release or announcement is
required by applicable law or the rules or regulations of a securities
exchange, in which event the Party so required to issue such release or
announcement shall endeavor, wherever possible, to furnish an advance copy of
the proposed release to the other Parties.
[THE REMAINDER OF THIS PAGE INTENTIONALLY IS LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXXXX.XXX, INCORPORATED
By: /s/ Xxxxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: President and CEO
E2ENET, INC.
By: /s/ C. Xxxxxxx Xxxxx
------------------------------
Name: C. Xxxxxxx Xxxxx
Title: President
NORTHWOOD CAPITAL PARTNERS LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
NORTHWOOD VENTURES LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
XXXXXXXX X. XXXXXXX
By:
------------------------------
Xxxxxxxx X. Xxxxxxx