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EXHIBIT 10.2
INVESTMENT AGREEMENT
This Investment Agreement (this "Agreement") is made as of December 8,
1998 (the "Effective Date"), by and between InteReach Internet Services, L.L.C.,
a Georgia limited liability company (the "Company"), and Maxxis Group, Inc. (the
"Purchaser").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto mutually agree as follows:
1. AUTHORIZATION AND SALE OF THE CLASS C MEMBERSHIP INTERESTS
1.1 Authorization. The Company has authorized the sale and issuance to
the Purchaser of up to seven Class C Membership Interests (the "Class C Shares")
having the rights, restrictions, privileges and preferences set forth in the
Amended and Restated Operating Agreement of the Company attached hereto as
Exhibit 1.1 (the "Amended Operating Agreement"). The Company and its members
(the "Members") have adopted and executed the Amended Operating Agreement.
1.2 Sale and Purchase of the Class C Shares. Subject to the terms and
conditions hereof, at the Closing the Company will issue and sell five Class C
Shares to the Purchaser at a purchase price of $20,000 per Class C Share for a
total purchase price of $100,000 (the "Purchase Price").
2. CLOSING DATE
2.1 Closing Date. The closing for the purchase and sale of the Class C
Shares hereunder (the "Closing") shall be held on the Effective Date at the
offices of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P., 000 Xxxxxxxxx Xxxxxx,
First Xxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, at 10:00 a.m., or at such
other time and place as the Company and the Purchaser mutually agree upon (the
"Closing Date").
3. REPRESENTATIONS OF THE COMPANY
The Company hereby represents to the Purchaser as follows:
3.1 Organization and Standing. The Company is a limited liability
company duly organized, validly existing, and in good standing under the laws of
the State of Georgia. The Company has all requisite legal power and authority to
own and operate its properties and assets and to carry on its business as
presently conducted and as proposed to be conducted. The Company is qualified to
do business in each jurisdiction in which such qualification is required.
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3.2 Legal Power. The Company has all requisite legal power and
authority to execute and deliver this Agreement, to sell and issue the Class C
Shares hereunder and to carry out and perform its obligations under the terms of
this Agreement. All proceedings or other necessary action required to be taken
by the Company, its managers and Members to authorize the execution, delivery
and performance of this Agreement and the sale and issuance of the Class C
Shares and the agreements relating hereto and thereto have been properly taken,
and this Agreement constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms. Neither the execution, delivery or
performance of this Agreement by the Company will, with or without the giving of
notice or the passage of time, or both, conflict with, result in a default,
right to accelerate or loss of rights under, or result in the creation of any
lien, charge or encumbrance pursuant to, any provision of the Company's Amended
Operating Agreement or any franchise, mortgage, deed of trust, lease, license,
agreement, understanding, law, ordinance, rule or regulation or any order,
judgment or decree to which the Company is a party or by which it may be bound
or affected. This Agreement is a valid and binding obligation of the Company,
enforceable in accordance with its terms
3.3 Capitalization. The authorized membership interests of the Company
consist of Class A Membership Interests ("Class A Shares"), Class B Membership
Interests ("Class B Shares") and Class C Shares (collectively, the "Shares").
The rights, restrictions, privileges and preferences of the Shares are as stated
in the Amended Operating Agreement. As of the date of this Agreement, the
Members and their ownership interests in the Company are as set forth in the
Amended Operating Agreement. No Person (as defined herein) owns or has the right
to acquire any interest in the Company except as set forth in the Amended
Operating Agreement. The term "Person" shall mean any individual, partnership,
corporation, limited liability company, joint venture, association or other
business venture or entity.
There are no preemptive or other outstanding rights, options, warrants,
conversion rights or agreements for the purchase or acquisition from the Company
or any other Person of any Shares or other securities of the Company. All of the
outstanding Shares have been duly and validly issued in compliance with federal
and state securities laws. Other than the Shares, including the Class C Shares
to be sold and issued pursuant to this Agreement, there are no other outstanding
securities of the Company and no other rights to acquire any securities of the
Company. The consideration paid for the outstanding Class A Shares and the Class
B Shares was cash and has been paid in full.
3.4 Class C Shares. The Class C Shares, when issued, will be validly
issued, fully paid and nonassessable, and will be free of any liens or
encumbrances; provided, however, that the Class C Shares may be subject to
restrictions on transfer under state and federal securities laws.
3.5 Financial Statements. The Company has furnished to the Purchaser
its financial statements as of and for the year ended December 31, 1997, and as
of and for the nine months ended September 30, 1998 (collectively, the
"Financial Statements"). The Financial Statements are unaudited but are believed
to be complete and correct in all material respects and have been prepared in
accordance with generally accepted accounting principals applied on a consistent
basis throughout the periods indicated. Such Financial Statements fairly present
the financial condition known to the Company as of the dates thereof, and
reflect all material liabilities, contingent or
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otherwise, of the Company as of such dates, and such statements of profit and
loss accurately present the operating results of the Company during the periods
indicated therein. Except as reflected on the Company's balance sheet dated
September 30, 1998, there is no outstanding indebtedness of the Company.
3.6 Absence of Changes. Since September 30, 1998, there has not been
any change in the assets, liabilities, financial condition or operations of the
Company except changes in the ordinary course of business which have not been,
either in any case or in the aggregate, materially adverse to the Company nor
has there been any other event or condition of any character which has
materially and adversely affected the Company's business or prospects.
3.7 Title to Properties and Assets; Liens, etc. Except as disclosed on
the Company's balance sheet as of September 30, 1998, the Company has good and
marketable title to all of its properties and assets, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than liens for
current taxes not yet due and payable.
3.8 Liabilities. Except as disclosed in the Financial Statements, the
Company has no material liabilities and knows of no material contingent
liabilities not disclosed in the Financial Statements.
3.9 Patents, Trademarks, and Trade Secrets. To the best of the
Company's knowledge, information and belief, after due inquiry, there are no
pending or threatened claims against the Company alleging that the conduct of
the Company's business infringes or conflicts with the rights of others under
patents, service marks, trade names, trademarks, copyrights, trade secrets or
other proprietary rights. The Company's business as now conducted and as
proposed to be conducted will not infringe or conflict with the rights of
others, including rights under patents, service marks, trade names, trademarks,
copyrights, trade secrets and other proprietary rights. The Company owns or
possesses sufficient legal rights to all the patents, copyrights, trademarks,
trade names, service marks, trade secrets and other rights necessary for the
operation of its business as now conducted and as proposed to be conducted. No
employee or consultant of the Company owns any rights in patents, trademarks,
trade names, processes, data or know-how directly or indirectly competitive with
those owned or to be used by the Company or derived from or in connection with
the conduct of the Company's business. The Company is not aware of any violation
or infringement by a third party of any of the Company's patents, licenses,
trademarks, service marks, trade names, copyrights, trade secrets or other
proprietary rights. The Company has taken and will take reasonable security
measures to protect the secrecy, confidentiality and value of all trade secrets
useful in the conduct of its business.
3.10 Compliance with Other Instruments, None Burdensome, etc. The
Company is not in violation of any term of its Amended Operating Agreement, or
of any term contained in any instrument or contract to which it is a party, and,
is not in violation of any order, statute, rule or regulation applicable to the
Company. No event or failure of performance has occurred which, with the passage
of time or the giving of notice or both, would constitute such a violation.
Neither the execution, delivery and performance of this Agreement, nor the sale
and issuance of the Class C Shares, will result in any such violation or be in
conflict with or constitute a default under any such term, or result in the
creation of any mortgage, pledge, lien, encumbrance or
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charge upon any of the properties or assets of the Company; and there is no such
violation or default, nor any such term, which materially and adversely affects
the business of the Company as presently conducted or as proposed to be
conducted or any of its properties or assets. To the best of the Company's
knowledge, no other party is in material default of any such instrument or
contract.
3.11 Litigation, etc. To the best of the Company's knowledge, no
action, suit, proceeding or investigation is pending or threatened against the
Company, nor, to the best of its knowledge, is there any basis therefor. The
foregoing includes any action, suit, proceeding or investigation, pending or
threatened, which questions the validity of this Agreement or the right of the
Company to enter into it, or which might result, either individually or in the
aggregate, in any material adverse change in the assets, condition, affairs or
prospects of the Company, financial or otherwise, and also includes any
litigation pending or threatened, against the Company, by reason of the past
employment relationships of any employee, officer or consultant of the Company,
the activities or proposed activities of the Company, or negotiations by the
Company with possible backers of, or investors in, the Company or its proposed
business. No action, suit, proceeding or investigation is pending or threatened
by the Company.
3.12 Computer Software.
3.12.1 Exhibit 3.12.1 contains a complete and accurate list of
the computer software that is owned by the Company and used in its business (the
"Owned Software"), except for commercially available business software
applications and other commercially available over-the-counter "shrink-wrap"
software that is generally used by the Company in the ordinary course of its
business (the "Business Software"). Except for the Licensed Software (as such
term is defined below) incorporated within the Owned Software, and except as
otherwise set in Exhibit 3.12.1, the Company has exclusive rights and title to
the Owned Software, free and clear of all claims, including claims or rights of
joint owners and employees, agents, consultants, customers, licensees or any
other parties who may have been involved in the development, creation,
marketing, maintenance, enhancement or licensing of such Owned Software. Each
contract programmer, independent contractor, nonemployee agent and Person or
other entity (other than employees) who has performed development or computer
programming services for the Company in connection with the Owned Software has
executed a confidentiality agreement in favor of the Company, and the Company
has obtained an assignment or license of, or otherwise owns, the intellectual
property resulting therefrom. No Owned Software has been published or disclosed
to any other parties except pursuant to contracts requiring such other parties
to keep the Owned Software confidential. (For purposes of the preceding
sentence, marketing materials that describe the Owned Software and its functions
in general shall not be deemed a publication or disclosure of the Owned
Software). No such other party has breached any such obligation of
confidentiality.
3.12.2 The Company has the right and license to use, sublicense,
modify and copy all software (other than the Business Software) of which the
Company is a licensee or lessee or that the Company otherwise has obtained the
right to use (collectively, the "Licensed Software") to the extent necessary to
operate the Company's business, free and clear of any limitations or
encumbrances, including Licensed Software that has been incorporated into or
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made a part of any Owned Software. The Company is in full compliance with all
material provisions of each license, lease or other agreement relating to the
Licensed Software. The Company has not published or disclosed any Licensed
Software to any other party except, in the case of Licensed Software, if any,
that the Company leases or markets to others, pursuant to contracts requiring
such other parties to keep the Licensed Software confidential. No party to whom
the Company has disclosed Licensed Software has breached such obligation of
confidentiality.
3.12.3 The Owned Software, the Licensed Software, and the
Business Software constitute all software used in the Company's business (the
"Company Software"). The transactions contemplated herein will not cause a
breach or default under any licenses, leases or similar agreements relating to
the Company Software or impair the Company's ability to use the Company Software
in the same manner as the Company Software is currently used or is contemplated
to be used by the Company. The Company has not infringed and is not infringing
any intellectual property rights of any third party with respect to the Owned
Software, and no other Person or entity is infringing any intellectual property
rights of the Company with respect to the Owned Software.
3.12.4 Except as disclosed in Exhibit 3.12.4, the Company has
not granted any licenses or other rights, and the Company has no obligation to
grant licenses or other rights, with respect to the Company Software. The
Company has complied in all material respects with the obligations to its
customers, licensees and lessees in respect of the Company Software, if any,
listed in Exhibit 3.12.4.
3.12.5 The Company has not granted marketing or brokering rights
in the Company Software to any third party.
3.12.6 The Business Software that is material to the operation
of the Company's business, the Owned Software and any Licensed Software that has
been incorporated into any Owned Software is capable of correctly processing,
providing and/or receiving date data within and between the Twentieth and
Twenty-First Centuries, provided that all hardware, software and firmware used
with the Company Software and computer equipment properly exchanges accurate
date data with it. The business of the Company does not depend to any extent on
embedded computer technology or computer information systems of its current
vendors or suppliers that would, in the event that the embedded chips or
vendor/supplier computer systems fail to be Year 2000 compliant, have a material
adverse effect on the Company's business or properties.
3.13 Governmental Consent, etc. No consent, approval or authorization
of, or designation, declaration or filing with, any governmental authority on
the part of the Company is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or issuance of the Class C Shares
or the consummation of any other transaction contemplated, by this Agreement.
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3.14 Offering. The offer, sale and issuance of the Class C Shares in
conformity with the terms of this Agreement constitute transactions exempt from
the registration requirements of Section 5 of the Securities Act of 1933, as
amended (the "Securities Act").
3.15 No Conflicting Agreements. No employee of the Company is, or will
be in connection with the proposed operations of the Company, in violation of
any term of any employment contract, proprietary information and inventions
agreement, noncompetition agreement or any other contract or agreement relating
to the relationship of any such employee with the Company or any previous
employer.
3.15 Registration Rights. The Company is not under any obligation to
register any of its presently outstanding securities or any of its securities
which may hereafter be issued.
3.17 Contracts and Other Commitments. Except as set forth on Exhibit
3.17 hereto, the Company does not have any contract, agreement, lease, or other
commitment, written or oral, absolute or contingent, other than (i) contracts
for the purchase of supplies and services that were entered into in the ordinary
and usual course of business and that do not involve more than $10,000, and do
not extend for more than one year beyond the date hereof, (ii) sales contracts
entered into in the ordinary course of business, and (iii) contracts terminable
at will by the Company on no more than 30 days notice without cost or liability
to the Company. For the purpose of this section, employment and consulting
contracts and contracts with labor unions, and license agreements and any other
agreements relative to the Company's technology, shall not be considered to be
contracts entered into in the ordinary and usual course of business.
3.18 Subsidiaries. The Company does not presently own or control,
directly or indirectly, and has no stock or other interest as owner or principal
in, any other corporation, partnership, limited liability company, joint
venture, association or other business venture or entity.
3.19 Transactions with Principals. Except as shown on Exhibit 3.19
hereto, no employee, shareholder, officer or director of the Company is indebted
to the Company, nor is the Company indebted (or committed to make loans or
extend or guarantee credit) to any of them. Set forth on Exhibit 3.19 is a list
of each agreement, instrument or other writing constituting legal rights and
obligations between the Company and any member or manager at the time of the
Closing.
3.20 Employees. The Company has no employment contract with any officer
or employee or any other consultant or person which is not terminable by it at
will without liability, except as the Company's right to terminate its employees
at will may be limited by applicable Georgia law. The Company has no deferred
compensation, pension, health, profit sharing, bonus, equity purchase, option
plan, hospitalization, insurance, severance or any other employee benefit or
welfare benefit plan or obligation covering any of its officers or employees.
3.21 Voting Agreements. Except as set forth in the Amended Operating
Agreement, the Company has no agreement, obligation or commitment with respect
to the election of any Persons to serve as managers. To the best knowledge of
the Company, there are no agreements,
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obligations or commitments among the Members with respect to the election of any
Persons to serve as managers of the Company.
4. INVESTMENT REPRESENTATION
The Purchaser hereby represents and warrants to the Company with
respect to this purchase as follows:
4.1 Access to Information. Purchaser acknowledges that documents,
records, and books pertaining to the Company have been made available for
inspection by Purchaser. Purchaser has a pre-existing business or personal
relationship with the Company or with one or more of the Company's managers,
Members or controlling persons. Purchaser has had a reasonable opportunity to
ask questions of and receive answers from the managers, Members or controlling
persons of the Company concerning the terms and conditions of the offering of
the Class C Shares, and to obtain additional information, to the extent
possessed or obtainable without unreasonable effort or expense by the managers,
Members or controlling persons of the Company. All such questions have been
answered to the satisfaction of Purchaser.
4.2 Experience; Investment. Purchaser has such knowledge and experience
in financial and business matters as to enable Purchaser (a) to utilize the
information made available to it in connection with the offering of the Class C
Shares, (b) to evaluate the merits and risks associated with a purchase of the
Class C Shares, and (c) to make an informed decision with respect thereto.
Purchaser's business and financial experience is such that the Company could
reasonably assume Purchaser has the capacity to protect its own interests in
connection with the offer, sale and issuance of the Class C Shares. Purchaser is
acquiring the Class C Shares solely for its own account, not as a nominee or
agent, and not with a view to, or for sale in connection with, any distribution
thereof.
4.3 Registration Under the Securities Act. Purchaser understands that
(a) neither the offering nor the sale of the Class C Shares has been registered
under the Securities Act or applicable state securities laws, in reliance upon
exemptions from the registration provisions of the Securities Act and applicable
state securities laws, (b) the Class C Shares purchased by Purchaser must be
held by it indefinitely unless the sale or transfer thereof is subsequently
registered under the Securities Act and applicable state securities laws or an
exemption from such registration is available, and the certificates or documents
representing all Class C Shares will be legended to reflect such restrictions,
and (c) the managers of the Company will rely upon the representations and
warranties made by Purchaser in this Agreement in order to establish such
exemption from the registration provisions of the Securities Act and applicable
state securities laws.
4.4 Transfer. Purchaser will not transfer the Class C Shares without
registration under the Securities Act and applicable state securities laws
unless the transfer is exempt from registration under the Securities Act and
such laws.
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5. CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING
The Purchaser's obligation to purchase the Class C Shares at the
Closing is subject to the fulfillment on or prior to the Closing Date of all of
the conditions set forth below in this Section 5.
5.1 Representations and Warranties Correct. The representations and
warranties made in Section 3 hereof shall be true and correct when made, and
shall be true and correct on the Closing Date.
5.2 Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all respects.
5.3 Election of Managers. The managers of the Company shall be as set
forth in Section 7.1 hereof.
5.4 Virtual ISP Agreement. The Company and the Purchaser shall have
entered into a Virtual ISP Agreement on terms and conditions satisfactory to the
Purchaser.
5.5 Amended Operating Agreement. The Company shall provide a true,
correct and complete copy of the Amended Operating Agreement to Purchaser at the
Closing. The Amended Operating Agreement shall have been entered into and signed
by all Members in accordance with Georgia law.
5.6 Promissory Note. The Company shall enter into a Secured Promissory
Note with the Purchaser substantially in the form set forth on Exhibit 5.6
hereto.
5.7 Closing. At the Closing, the Company shall deliver to Purchaser a
certificate representing five Class C Shares against payment of the Purchase
Price.
5.8 Legal Opinion. The Purchaser shall have received an opinion of
Company's counsel, dated the Closing Date, to the effect that:
a. The Company was duly organized as a limited liability
company and is existing and in good standing under the laws of the State of
Georgia;
b. The Company has the legal power and authority to execute
and deliver the Agreement, to perform its obligations under the Agreement, to
own and use its assets and to conduct its business;
c. The Company has authorized Class A Membership Interests,
Class B Membership Interests and Class C Membership Interests. Fifty percent of
the Class A Membership Interests are owned by each of Xxxxxx Xxxxxxxxxx and
Xxxxx Xxxxxx, three Class B Membership Interests are outstanding and no Class C
Membership Interests are outstanding;
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d. All of the outstanding membership interests of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable; and none of the outstanding membership interests were issued in
violation of the preemptive rights of any member of the Company; and
e. The Class C Membership Interests have been duly authorized
for issuance and sale to Maxxis Group, Inc., and, when issued and delivered by
the Company against payment therefor, will be validly issued, fully paid and
nonassessable and no holder thereof will be subject to personal liability by
reason of being such a holder.
5.9 Proceedings and Documents. All legal and other proceedings in
connection with the transactions contemplated at the Closing hereby and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser and the Purchaser shall have
received all such counterpart originals or certified or other copies of such
documents as reasonably requested.
6. CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING
The Company's obligation to sell the Class C Shares at the Closing is
subject to the fulfillment of the following conditions to the extent not waived
by the Company:
6.1 Representations Correct. The representations made by the Purchaser
in Section 4 hereof shall be true and correct on the Closing Date.
7. AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
7.1 Directors. Upon the Closing, the Amended Operating Agreement shall
provide that the Company shall have no more than four directors. On the Closing
Date, the following persons shall be directors of the Company: Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxx and Xxxxxxx Xxxxx.
7.2 Exclusive Agreement. Upon the Closing, the Company and the Members
agree that neither the Company nor the Members shall market, solicit or sell the
services of the Company to any multilevel or network marketing company other
than the Purchaser.
7.3 Class C Shares. Upon the Closing, the Company agrees that it shall
not issue any Class C Shares to any Person other than the Purchaser without
obtaining Purchaser's prior written consent.
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7.4 Issuance of Additional Class C Shares. The parties acknowledge
that, on the Closing Date, the Company will have agreed to provide the Company
with a line of credit in accordance with Section 8 hereof. If at any time the
Company accesses any funds available to it pursuant to such line of credit, the
Company shall, prior to the Purchaser being required to deliver any such funds
to the Company pursuant to the line of credit, immediately issue two additional
Class C Shares to Purchaser for no additional consideration.
8. LINE OF CREDIT
8.1 Line of Credit. Subject to Section 8.2 hereof and the continued
truthfulness and accuracy of the representations and warranties of the Company
made in Section 3 hereof, the Purchaser shall advance to the Company, such sums
as the Company may request in writing prior to December 8, 1999, but which
advanced sums (the "Advances") shall not exceed in the aggregate $150,000 (the
"Maximum Amount"). All Advances shall be due in full and payable on December 8,
1999 (the "Due Date"). Borrower shall not request any Advances which exceed the
Maximum Amount or would cause the aggregate amount of Advances (including
Advances that have been repaid by the Company) made pursuant hereto to exceed
the Maximum Amount. Even if the aggregate amount of Advances made and
outstanding under the Loan Agreement shall at any time and for any reason exceed
the Maximum Amount, Borrower shall nevertheless be liable for the entire amount
outstanding. Each request for an Advance by the Company shall be a reaffirmation
by the Company that each representation and warranty made in Section 3 hereof is
complete and accurate as of the date of the request.
8.2 Advances. Both the Company and Purchaser agree that the obligation
of Purchaser to make any Advance to the Company is subject to Purchaser's
determination, in its sole discretion, that the Company is in good financial
condition and will be able to repay any Advance in full on or prior to the Due
Date. All Advances pursuant to this Section 8 shall be in the principal amount
of $25,000. The Company agrees that it shall not request an Advance if it shall
have previously requested and been granted an Advance within the previous two
months. No interest shall be payable on the Advances. With respect to each
Advance and all matters and transactions in connection herewith, the Company
hereby irrevocably authorizes the Purchaser to accept, rely upon, act upon and
comply with any oral or written instructions, requests, confirmations and orders
of Xxxxxx Xxxxxxxxxx or Xxxxx Xxxxxx.
8.3 Prepayment. The Company may, at any time and from time to time,
prepay all or any Advances remaining unpaid, without penalty or premium.
8.4 Use of Proceeds. Borrower represents and agrees that the proceeds
from the Advances shall be used solely for working capital business purposes and
shall not be used for any personal, family, household, consumer or other
purpose, including but not limited to the purchase or carrying of margin stock
or other securities.
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9. MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, without regard to its
conflicts of law principles.
9.2 Survival. The representations, warranties, covenants and agreements
made by the parties herein shall survive any investigation made by Purchaser or
the Company and shall survive the closing of the transactions contemplated
hereby.
9.3 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
9.4 Entire Agreement; Amendment. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
Any term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), with the written consent of the Company and the
holders of at least two-thirds of the outstanding Class C Shares. Any amendment
or waiver effected in accordance with this section shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities have been converted), each
future holder of all such securities, and the Company.
9.5 Effect of Amendment or Waiver. Purchaser acknowledges that by the
operation of Section 9.4 hereof the holders of two-thirds of the outstanding
Class C Shares will have the right and power to diminish or eliminate all rights
of such Purchaser under this Agreement.
9.6 Rights of Purchaser. Purchaser shall have the absolute right to
exercise or refrain from exercising any right or rights that such holder may
have by reason of this Agreement or the Class C Shares, including without
limitation the right to consent to the waiver of any obligation of the Company
under this Agreement and to enter into an agreement with the Company for the
purpose of modifying this Agreement or any agreement effecting any such
modification, and Purchaser shall not incur any liability to any other holder or
holders of the Class C Shares with respect to exercising or refraining from
exercising any such right or rights.
9.7 Acknowledgement of Purchaser. Purchaser acknowledges that it is not
relying upon any person, firm, corporation or other legal entity other than the
Company and its managers and Members in making its investment in the Company.
9.8 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be effective five days after
mailed by first-class, registered, or certified mail, postage prepaid, or upon
delivery if delivered by hand or by messenger or a courier delivery service,
addressed to the Company or the Purchaser at the respective address appearing on
the signature pages hereto.
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9.9 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to Purchaser upon any breach or default of the Company
under this Agreement shall impair any such right, power or remedy of such holder
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereunder
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
holder of any breach or default under this Agreement, or any waiver on the part
of any holder of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
9.10 Expenses. The Company and the Purchaser shall bear their own
expenses and legal fees incurred on its behalf with respect to this Agreement
and the transactions contemplated hereby.
9.12 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one instrument.
9.14 Severability. In the case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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The foregoing Investment Agreement is hereby executed as of the date
first above written.
COMPANY: PURCHASER:
InteReach Internet Services, L.L.C. Maxxis Group, Inc.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000 0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxx 00000
By: /s/ Xxxxxx Xxxxxxxxxx By: Xxxxxx X. Xxxxx
---------------------------------- -------------------------------
Name: Xxxxxx Xxxxxxxxxx Name: Xxxxxx X. Xxxxx
Title: Executive Director Title: President and CEO
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Exhibit 1.1
Amended and Restated Operating Agreement
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Exhibit 3.12.1
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Exhibit 3.12.4
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Exhibit 3.17
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Exhibit 3.19
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Exhibit 5.4
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Exhibit 5.6
Secured Promissory Note
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SECURED PROMISSORY NOTE
$150,000.00 DECEMBER 8, 1998
INTEREACH INTERNET SERVICES, L.L.C., a Georgia limited liability
company ("Borrower"), for value received, hereby promises to pay to the order of
MAXXIS GROUP, INC., a Georgia corporation ("Lender"), the aggregate principal
sum of ONE HUNDRED FIFTY THOUSAND 00/100 DOLLARS ($150,000.00) or such portion
as may have been advanced to Borrower by Lender (the "Principal") pursuant to
the Investment Agreement between Borrower and Lender of even date herewith, no
later than December 8, 1999 (the "Payment Date"). The Principal is payable, in
coin or currency of the United States of America, at 0000 Xxxxxxxx Xxxx, Xxxxx
000, Xxxxxx, XX 00000, or at such other place as Lender may from time to time
designate to Borrower in writing.
1. Security. Sums due under this Note are secured by, and Borrower
hereby assigns, conveys and grants a security interest to Lender, in and to, all
tangible and intangible property, property rights and assets of Borrower now
owned or hereafter acquired, including but not limited to all accounts,
receivables, money, securities, equipment, furniture, fixtures, inventory,
goods, software, patents, trademarks, service marks, tradenames, copyrights,
works, works in progress, programs, program documentation, intellectual property
and rights, contracts, contract rights, instruments, documents, general
intangibles, chattel paper, notes, and other choses in action, all deposits and
property of Borrower now or at any time hereafter in the possession of the
Lender, and all proceeds and products of the foregoing and all rights related
thereto. In addition, this Note is secured by all property described as
collateral in any security agreement, financing statement, mortgage, deed of
trust, pledge agreement or other document previously, simultaneously, or
hereafter entered into by Borrower in connection with any obligation or
liability of Borrower to the Lender, such other security document(s) including
but not limited to the UCC-1 financing statement filed in connection herewith.
This Note specifically incorporates by reference, as if fully set forth herein,
all of the language and provisions of the security documents described generally
or specifically above. The lien created by the security interest granted herein
shall not expire until Lender has been paid all amounts due under this Note.
2. Default. Any of the following will be a default under this Note: (a)
failure to pay any principal, expense, fee, charge or interest when due, or
failure to perform any other obligations hereunder; (b) a default by any
Borrower upon any of the existing or future obligations of any Borrower to the
Lender; (c) a default in any other agreement, instrument or document between
Borrower and any Lender, including, without limitation, any security document
referred to above, whether previously, simultaneously, or hereafter entered
into; (d) a material adverse change in the financial condition of Borrower from
that expressed in the financial statement most recently submitted to the Lender
prior to the date of this Note, as determined in good faith by the Lender in its
sole discretion; (e) institution of bankruptcy, insolvency, reorganization or
receivership proceedings by or against Borrower in any state or federal court;
(f) the appointment of a receiver, assignee, custodian, trustee or similar
official under any federal or state insolvency or creditors' rights law for any
property of Borrower; (g) failure of Borrower
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to furnish to the Lender such collateral or additional collateral as the Lender
may in good faith request; (h) any warranty, representation, or statement to the
Lender by or on behalf of Borrower proving to have been incorrect in any
material respect when made or furnished; (i) the occurrence of any event which
is, or would be with the passage of time or the giving of notice or both, a
default under any indebtedness of Borrower to any person other than the Lender;
(j) any material loss, theft or substantial damage, not fully insured for the
benefit of the Lender, to any of the assets of Borrower, or the sale, transfer,
lease, encumbrance or other disposition of all or any material part of the
assets of Borrower other than in the ordinary course of business of Borrower;
(k) the entry of any final judgment against Borrower for the payment of money in
excess of $5,000; (l) the levy upon or attachment of any assets of Borrower; (m)
the recordation of any federal, state or local tax lien against Borrower; (n) a
change of ownership or dissolution, merger, consolidation, liquidation or
reorganization of Borrower; (o) the failure of Borrower to furnish to the Lender
such financial information as the Lender may require from time to time; or (p)
the determination in good faith by the Lender, in its sole discretion, that the
ability of Borrower to pay or perform any of its obligations to the Lender is
impaired for any reason.
3. Remedies. Upon a default, in addition to all other rights and
remedies available to the Lender under any other document or agreement between
Borrower and the Lender or under applicable law (including the Uniform
Commercial Code), the Lender, in its sole discretion and without notice or
demand, may: (a) declare the entire unpaid Principal and all other sums due
hereunder immediately due and payable; and (b) exercise any rights of a secured
creditor under the Uniform Commercial Code and other law, including the right to
take possession of the collateral without the use of judicial process or hearing
of any kind and the right to require the debtor to assemble the collateral at
such place(s) as the Lender may specify. Borrower agrees that a default under
this Note is a default by Borrower under all other liabilities and obligations
of Borrower to the Lender, and that the Lender shall have the right to declare
immediately due and payable all of such other liabilities and obligations.
Borrower waives the benefit of any and every statute, ordinance, or rule of
court which may be lawfully waived conferring upon Borrower any right or
privilege of exemption, homestead rights, stay of execution, or supplementary
proceedings, or other relief from the enforcement or immediate enforcement of a
judgment or related proceedings on a judgment.
4. Interest Rate After Judgment. If judgment is entered against
Borrower on this Note, the amount of the judgment entered (which may include
principal, interest, charges, fees, and expenses) shall bear interest at the
legal rate of interest then applicable to judgments in the jurisdiction in which
judgment was entered.
5. Expenses of Collection. Borrower shall pay all costs and expenses
incurred by the Lender in collecting sums due under this Note, including without
limitation the costs of any lien, judgment or other record searches, appraisals,
travel expenses and the like. In addition, if this Note is referred to an
attorney for collection, whether or not suit has been filed, Borrower shall pay
all of the Lender's costs, fees (including, but not limited to, the Lender's
attorneys' fees, charges and expenses) and all other expenses resulting from
such referral.
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6. Negotiable Instrument. Borrower agrees that this Note shall be
deemed to be a negotiable instrument, even though this Note may not qualify
under applicable law, absent this paragraph, as a negotiable instrument.
7. Waivers. Borrower, and all parties to this Note, whether maker,
endorser or guarantor, waive presentment, demand, notice of dishonor and
protest.
8. Notices. Any notice or demand required or permitted by or in
connection with this Note, without implying the obligation to provide any notice
or demand, shall be in writing at the address set forth below or to such other
address as may be hereafter specified by written notice to the Lender by
Borrower. Any such notice or demand shall be deemed to be effective as of the
date of hand delivery or facsimile transmission, one day after dispatch if sent
by telegram, mailgram, overnight delivery, express mail or Federal Express, or
three days after mailing if sent by first class mail with postage prepaid.
9. Assignability. This Note may be assigned by the Lender or any holder
at any time.
10. Binding Nature. This Note shall inure to the benefit of and be
enforceable by Lender and its successors and assigns and any other person to
whom Lender may grant an interest in Borrower's obligations to the Lender, and
shall be binding and enforceable against Borrower and Borrower's personal
representatives, successors and assigns.
11. Invalidity of Any Part. If any provision or part of any provision
of this Note shall for any reason be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Note, and this Note shall be construed as if such
invalid, illegal or unenforceable provision or part thereof had never been
contained herein, but only to the extent of its invalidity, illegality or
unenforceability.
12. Choice of Law; Consent to Venue and Jurisdiction. This Note shall
be governed, construed and interpreted in accordance with the laws of the State
of Georgia, even if the Georgia rules governing conflicts of laws would
otherwise require that the laws of another jurisdiction govern this Note.
Borrower consents to the jurisdiction and venue of the courts of any county in
the State of Georgia or to the jurisdiction and venue of the United States
District Court for the District of Georgia in any action or judicial proceeding
brought to enforce, construe or interpret this Note.
13. Unconditional Obligations. Borrower's obligations under this Note
shall be the absolute and unconditional duties and obligations of Borrower and
shall be independent of any rights of set-off, recoupment or counterclaim which
Borrower might otherwise have against the Lender, and Borrower shall pay
absolutely the payments of principal, interest, fees, charges and expenses
hereunder, free of any deductions and without abatement, diminution or set-off.
14. Actions Against Lender. Any action brought by Borrower against
Lender which is based, directly or indirectly, or in whole or in part, upon this
Note or any matter related to this Note shall be brought only in the courts of
the State of Georgia.
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15. Time is of the Essence. Time is of the essence in the payment and
performance of this Note.
16. Waiver of Jury Trial. Borrower (by execution of this Note) and
Lender (by acceptance of this Note) agree that any suit, action, or proceeding,
whether claim or counterclaim, brought or instituted by Borrower or the Lender
on or with respect to this Note or which in any way relates, directly or
indirectly, to the obligations of Borrower to the Lender under this Note, or the
dealings of the parties with respect thereto, shall be tried only by a court and
not by a jury. Borrower (by execution of this Note) and Lender (by acceptance of
this Note) hereby each expressly waive any right to a trial by jury in any such
suit, action, or proceeding. Borrower (by execution of this Note) and Lender (by
acceptance of this Note) acknowledges and agrees that this provision is a
specific and material aspect of the agreement between the parties and that the
Lender would not enter into the transaction with Borrower if this provision were
not a part of their agreement.
IN WITNESS WHEREOF, Borrower has duly executed this Note as of the date
first set forth above.
INTEREACH INTERNET SERVICES, L.L.C.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
By:
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Name:
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Title:
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