Exhibit 2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
September 20, 2000, by and between WIDEPOINT CORPORATION, a Delaware
corporation formerly named ZMAX Corporation ("Seller"); eHOLDINGS, INC., a
Maryland corporation ("Buyer"), and Parker Management Consultants, Ltd., a
Delaware corporation ("PMC"). The Buyer and the Seller are referred to
collectively herein as the "Parties."
W I T N E S S E T H:
WHEREAS, the Seller previously acquired all of the outstanding capital
stock of PMC, pursuant to the terms of an Agreement and Plan of Merger, dated
as of October 1, 1999 (the "Merger Agreement"), by and among the Seller,
Parker Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of the Seller, PMC, the Westmont Non-Grantor Trust, a Delaware
trust which was then the sole shareholder of PMC ("Westmont Trust");
WHEREAS, part of the merger consideration paid by the Seller to the
Westmont Trust for the acquisition of PMC under the Merger Agreement was the
issuance by the Seller to the Westmont Trust of a Promissory Note, dated
October 1, 1999, in the principal amount of Three Million Dollars
($3,000,000.00), with the principal amount thereof being reduced in February
2000 to Two Million Nine Hundred Twelve Thousand Six Hundred Sixty-Two Dollars
and Nine Cents ($2,912,662.09) as a result of post-closing adjustments under
the terms of the Merger Agreement (the "Seller's Promissory Note");
WHEREAS, the Buyer will acquire prior to the closing under this
Agreement the Seller's Promissory Note from the Westmont Trust;
WHEREAS, the Seller desires to sell to the Buyer, and the Buyer desires
to purchase from the Seller, all of the outstanding capital stock of PMC in
consideration for the return to the Seller and the cancellation thereof by the
Seller of the Seller's Promissory Note, all as described in greater detail
herein.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties hereto intending to be legally bound
do hereby agree as follows.
1. Incorporation by Reference. The foregoing introductory paragraphs are
hereby incorporated into this Agreement as if fully set forth herein.
2. Purchase and Sale of PMC Shares.
(a) Basic Transaction. Subject to the terms and conditions of this
Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees
to sell to the Buyer, all of the issued and outstanding shares of capital
stock of PMC (the "PMC Shares") for the consideration specified below in this
Section 2.
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(b) Purchase Price. The Buyer agrees to pay to the Seller at the Closing
(as defined below) the amount of $2,912,662.09 (the "Purchase Price") solely
by the delivery by the Buyer to the Seller of the original Seller's Promissory
Note in the principal amount equal to the Purchase Price, which Seller's
Promissory Note shall be cancelled by the Seller immediately following the
Closing.
(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Seller at
20251 Century Boulevard, Germantown, Maryland 20874, on September 29, 2000,
assuming the satisfaction or waiver prior to that date of all conditions to
the obligations of the Parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the respective Parties
will take at the Closing itself) or such other date as the Buyer and the
Seller may mutually determine (the "Closing Date").
(d) Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the stock certificates representing all of the PMC
Shares, endorsed in blank or accompanied by duly executed assignment
documents; and (ii) the Buyer will deliver to the Seller the original Seller's
Promissory Note.
3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Seller. The Seller represents
and warrants to the Buyer that the statements contained in this Section 3(a)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 3(a)):
(i) Organization of the Seller. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) Authorization of Transaction. The Seller has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the Seller,
enforceable in accordance with its terms and conditions. The Seller need not
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(iii) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller is subject or any provision
of its charter or bylaws or (B) to the knowledge of the Seller, conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
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instrument, or other arrangement to which the Seller is a party or by which it
is bound or to which any of its assets is subject.
(iv) Brokers' Fees. The Seller has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(v) PMC Shares. Based upon the representations of the Westmont Trust
under the terms of the Merger Agreement and the reliance thereupon by the
Seller, the Seller represents that it holds of record and owns beneficially
all of the PMC Shares, free and clear of any restrictions on transfer (other
than restrictions under the Securities Act of 1933, as amended (the
"Securities Act"), and state securities laws), taxes, security interests,
commitments, claims, and demands. The Seller is not a party to any option,
warrant, purchase right, or other contract or commitment that could require
the Seller to sell, transfer, or otherwise dispose of any capital stock of PMC
(other than this Agreement). The Seller further represents that it has not
done any act since its acquisition of the PMC Shares from the Westmont Trust
under the terms of the Merger Agreement through to the Closing Date to change
the number of outstanding PMC Shares nor conferred any rights to acquire any
capital stock of PMC (other th this Agreement).
(b) Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller that the statements contained in this Section 3(b)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
3(b)):
(i) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the Buyer,
enforceable in accordance with its terms and conditions. The Buyer need not
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(iii) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision
of its charter or bylaws or (B) to the knowledge of the Buyer, conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
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instrument, or other arrangement to which the Buyer is a party or by which it
is bound or to which any of its assets is subject.
(iv) Brokers' Fees. The Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
(v) Investment. The PMC Shares to be received by the Buyer pursuant
hereto will be acquired for investment for the Buyer's own account, not as a
nominee or agent, and not with a view to the direct or indirect sale or
distribution of any part thereof, and the Buyer has no present intention of
selling, granting any participation in, or otherwise distributing the PMC
Shares. The Buyer has no contract, undertaking, agreement or arrangement with
any person to sell, transfer, or grant participation to such person or to any
third person, with respect to any of the PMC Shares.
The Buyer understands and acknowledges that the offering of the PMC
Shares pursuant to this Agreement will not be registered under the Securities
Act or under any state securities acts or laws on the grounds that the
offering and sale of securities contemplated by this Agreement are exempt from
registration pursuant to Section 4(2) of the Securities Act and any similar
provision of any applicable state securities act or law, and that the Seller's
reliance upon such exemptions is predicated upon the Buyer's representations
set forth in this Agreement.
The Buyer has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the Buyer's
prospective investment in the PMC Shares. The Buyer has the ability to bear
the economic risks of the Buyer's prospective investment in the PMC Shares.
The Buyer is able, without materially impairing its financial condition, to
hold the PMC Shares for an indefinite period of time and to suffer a complete
loss on its investment.
4. Representations and Warranties of the Seller Concerning PMC. Based
upon the representations of the Westmont Trust under the terms of the Merger
Agreement and the reliance thereupon by the Seller, the Seller represents and
warrants to the Buyer that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section
4).
(a) Organization, Qualification, and Corporate Power. PMC is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. PMC has full corporate power
and authority to carry on the businesses in which it is engaged and to own and
use the properties owned and used by it.
(b) Capitalization. The entire authorized capital stock of PMC consists
of 15,000 shares of common stock, of which 1,900 shares are issued and
outstanding and none are held in treasury. All of the issued and outstanding
PMC Shares have been duly authorized, are validly issued, fully paid, and
nonassessable, and are held of record by the Seller. There are no outstanding
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or authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that
could require PMC to issue, sell, or otherwise cause to become outstanding any
of its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to PMC. The Seller further represents that it has not done any act
since its acquisition of the PMC Shares from the Westmont Trust under the
terms of the Merger Agreement through to the Closing Date to change the number
of outstanding PMC Shares nor conferred any rights to acquire any capital
stock of PMC (other than this Agreement).
(c) Brokers' Fees. The Seller has not done any act which will result in
any liability or obligation by PMC to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement; provided, however, that the foregoing shall not be construed to
restrict the ability of the Buyer to obligate PMC to pay such fees or
commissions after the Closing so long as the Seller is not liable for any such
amounts.
5. Covenants. The Parties agree as follows:
(a) General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, all at the sole cost and expense of the requesting
Party.
(b) No Covenants Not to Compete. After the Closing, (i) the Seller and
its affiliates (as defined under Rule 12b-2 of the regulations promulgated
under the Securities Exchange Act of 1934, as amended) shall be free to
compete with PMC, the Buyer and their respective affiliates, it being the
intent of the Parties that neither the Seller nor its affiliates shall be
subject to any restriction on their ability to compete; and (ii) the Buyer,
PMC and their affiliates, including Kenneth Parker, Jennifer Parker and all
persons listed on Exhibit D hereto, shall be free to compete with any of the
Seller and its affiliates, it being the intent of the Parties that neither the
Buyer, PMC nor their affiliates, including Kenneth Parker, Jennifer Parker and
all persons listed on Exhibit D hereto, shall be subject to any restriction on
their ability to compete; provided, however, that all persons who executed a
Confidentiality and Non-Disclosure Agreement, dated as of August 29, 2000,
with the Seller shall continue to be bound by the terms of that agreement.
Notwithstanding the foregoing, the Parties hereby agree that during the
one-year period immediately following the Closing, (i) the Seller shall give
the Buyer and PMC the right of first refusal to perform Oracle enterprise
resource planning ("ERP")/Oracle application work (i.e., Oracle financials,
human resources, etc...) and/or "man-man" work for which the Seller has
received a contract to perform such work, so long as the Buyer's and PMC's
price to perform such work is comparable to other competitive prices which the
Seller has obtained from other providers of such services, and (ii) the Buyer
and PMC shall give the Seller the right of first refusal to perform any
Internet or web-based business for which the Buyer and/or PMC have received a
contract to perform such work, so long as the Seller's price to perform such
work is comparable to other competitive prices which the Buyer and/or PMC have
obtained from other providers of such services. The Seller, the Buyer and PMC
shall each receive payment directly from the customer for whom work is
performed on any such contract through the direct assignment of payment or
other similar arrangements. The Parties agree that a finder's fee equal to
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five percent (5%) of the revenues to be received by a Party under a contract
awarded to such Party after the Closing Date will be due and payable from the
Party that receives such contract revenues to the Party for whom the sales
personnel are employed that are responsible for such contract award, with such
finder's fee to be paid by the responsible Party in proportion to the revenues
actually received by such Party under such contract.
(c) Tax Returns and Tax Liability. The Seller will include the income of
PMC on the Seller's consolidated federal income tax returns for all periods
through the Closing Date and pay any federal and other income taxes
attributable to such income. The Parties shall cooperate in the exchange of
information relating to PMC which may be necessary for the inclusion of PMC in
the Seller's income tax return filings on behalf of the Seller and/or PMC for
the periods prior to the Closing Date. The income of PMC will be apportioned
to the period up to and including the Closing Date and the period after the
Closing Date by closing the books of PMC as of the end of the Closing Date.
From and after the Closing Date, the Buyer will be solely liable for all
income tax returns and income tax payments attributable to income earned by
PMC subsequent to the Closing Date. The Seller and the Buyer agree to provide
evidence to each other as promptly as practicable after such evidence becomes
available that the tax returns for PMC covering the periods immediately prior
to and subsequent to the Closing Date have been filed by the appropriate party
together with the payment of any taxes due to the appropriate taxing
authorities. Any tax refund(s) which are subsequently received by the Seller,
the Buyer and/or PMC or their affiliates which is attributable in whole or in
part to the business of PMC up to September 30, 2000 shall be the sole
property of the Seller. Any tax refund(s) which are subsequently received by
the Seller, the Buyer and/or PMC or their affiliates which is attributable in
whole or in part to the business of PMC from and after October 1, 2000 shall
be the sole property of PMC and the Buyer.
(d) PMC Financial Status as of the Closing. At the Closing, the Seller
shall transfer the PMC Shares to the Buyer, with PMC having a balance sheet
(together with back-up data) as set forth on Exhibit A hereto, which balance
sheet shall include (i) an amount of cash in a PMC bank account equal to One
Hundred Thousand Dollars ($100,000.00) (subject to the prerequisite duty of
the Buyer to deliver to the Escrow Agents (as hereinafter defined) at the
Closing hereunder a certified check for an amount in cash equal to the escrow
amount set forth in Paragraph 5(g) hereof), (ii) no accounts receivable, (iii)
no accounts payable, (iii) no penalties under any retirement plan(s),
including full reimbursement to all persons listed on Exhibit D hereto for
penalties (exclusive of interest) incurred on their 401(k) plan accounts, (iv)
all deposits and liabilities relating to assets, contracts and business of PMC
which is being transferred hereunder, including the continuing obligation by
PMC for all accrued vacation time, sick time and holiday time relating to the
persons listed on Exhibit D hereto which exists as of the Closing Date as
shown on Exhibit D hereto together with all obligations therefor from and
after the Closing Date, and (v) lease liabilities only relating to the offices
located in Houston, Texas and Laurel, Maryland. The Buyer and PMC agree to
indemnify the Seller from any liability relating to any of the liabilities
and/or obligations being transferred to PMC or as part of PMC under the terms
of this Agreement, including the obligation by PMC for all accrued vacation
time, sick time and holiday time relating to the persons listed on Exhibit D
hereto which exists as of the Closing Date as shown on Exhibit D hereto
together with all obligations therefor from and after the Closing Date.
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(e) Asset Assignment. At the Closing, the Seller shall assign all of its
right, title and interest in and to the assets (both owned and leased) of PMC
as listed on Exhibit B hereto, which assigned assets include certain leased
equipment and any related security deposits, but which assigned assets shall
not include the Oracle Enterprise Resource Planning software (as to which PMC
hereby transfers to the Seller all of the rights, title and interests of PMC
in such software, including PMC's liability for maintenance fees and costs
related thereto), and such other items as identified in Exhibit B hereto.
(f) Contract Novation/Assignment. From and after the date of this
Agreement, the Seller shall use its best efforts to effectuate the novation or
assignment of the contracts of the Seller as listed on Exhibit C hereto (the
"Assigned Contracts") to PMC and prior to the novations or assignments of such
Assigned Contracts, the Parties agree that PMC shall assume the Seller's
rights and obligations thereunder. In furtherance of the foregoing, the
parties hereby agree as follows: (i) the beneficial interest of the Seller in
and to the Assigned Contracts and all related rights and assets shall pass on
the Closing Date to PMC; (ii) from and after the Closing, the Seller shall
hold all Assigned Contracts in trust for the benefit of PMC, its successors
and assigns for which a novation or assignment has not been obtained prior to
the Closing Date, but with the Seller continuing to use its best efforts to
effectuate the novation or assignment of such Assigned Contracts to PMC as
promptly as practicable; and (iii) the Seller shall promptly remit to PMC any
payments and consideration which the Seller receives from the Assigned
Contracts held in trust under the preceding clause. At the Closing, the Seller
shall provide PMC and the Buyer with whatever evidence the Seller has obtained
which reflects the novation or assignment of the Assigned Contracts. The
Parties further agree and confirm that certain contracts (the "Retained
Contracts") are now, and after the Closing shall continue to be, held in the
name of PMC, with such Retained Contracts being listed on Exhibit C hereto.
The Parties agree to cooperate in obtaining all necessary documentation to
effectuate the foregoing provisions of this Paragraph 5(f).
(g) Employee Leasing. At the Closing, the Buyer shall deliver to Chris
Allen, Esq. and Thomas L. James, Esq., as joint escrow agents (the "Escrow
Agents"), the amount of Seventy-Five Thousand Dollars ($75,000.00) (the
"Escrow Amount") in the form of a certified check reasonably acceptable to the
Seller, with the Escrow Agents then promptly depositing and holding the Escrow
Amount in an interest-bearing escrow account (the "Escrow Account"), all
pursuant to the terms of the Escrow Agreement attached as Exhibit E hereto.
The Escrow Account shall serve as security for the obligations of the Buyer
and PMC under this Section 5(g) to reimburse the Seller as provided herein.
Subject to the foregoing, the Seller agrees that from the Closing Date through
December 31, 2000, unless sooner terminated as herein provided, the Seller
agrees to lease to PMC the employees of the Seller who are listed on Exhibit D
hereto (the "Leased Employees") in consideration for the Buyer and PMC
agreeing to reimburse the Seller for the lease rate as set forth on Exhibit D
hereto applicable to each Leased Employee for each day of service performed by
each Leased Employee for the Buyer (collectively, the "Lease Amount") until
such time as either the Leased Employee is terminated at the direction of PMC
as hereinafter provided or December 31, 2000 or the failure by the Buyer or
PMC to reimburse the Seller in a timely manner for any Lease Amount. The Buyer
and PMC agree to pay to the Seller the Lease Amounts shown on Exhibit D hereto
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on the reimbursement dates shown on Exhibit D hereto by wire transfer of
same-day funds into the Seller's bank account as shown on Exhibit D hereto. In
the event the Buyer or PMC fails to so reimburse the Seller for the Lease
Amounts shown on Exhibit D hereto on the reimbursement dates shown on Exhibit
D hereto, then in such event (i) the Seller shall give written notice thereof
to the Escrow Agents who shall promptly remit the Escrow Amount to the Seller
via wire transfer from the Escrow Account and (ii) the Seller shall
immediately terminate all Leased Employees. From and after the Closing Date,
the Leased Employees shall be managed, directed and overseen solely by PMC and
the Leased Employees shall be instructed by the Seller to adhere to the lawful
orders and directions of PMC. Except as otherwise provided in this Section
5(g) with respect to the advance by the Seller for the benefit of the Buyer of
the compensation of the Leased Employees, PMC shall be solely responsible for
all employment-related activities of the Leased Employees from and after the
Closing Date. The Parties agree that from and after the Closing Date the
Leased Employees shall be represented to all third-parties as being the
employees of PMC. The Parties agree that from and after the Closing, the
Seller shall not be liable whatsoever for any work related acts or omissions
of the Leased Employees; provided, however, that the Seller shall continue to
carry each Leased Employee under the Seller's errors and omissions insurance
coverage from the Closing Date until the earlier of either December 31, 2000
or the sooner termination of such Leased Employee. The Parties further agree
that PMC may cause the termination of any of the Leased Employees at any time
by providing written notice to the Seller of the desire by PMC to terminate
such Leased Employee, with the Seller agreeing to effect such termination of
the subject Leased Employee no later than the next business day following the
Seller's receipt of such written notice from PMC, unless a later termination
date is specified by PMC in its notice to the Seller. Notwithstanding anything
contained herein to the contrary, the Parties acknowledge and agree that the
Seller shall immediately terminate any and all Leased Employees at any time in
the event the Buyer and/or PMC do not pay all Lease Amounts due to the Seller
hereunder in a timely manner as hereinabove provided.
(h) Final Interest Payment under the Seller's Promissory Note. At the
Closing, the Seller shall pay to the Buyer the interest payment currently due
under the Seller's Promissory Note in the amount of Forty-Two Thousand Eight
Hundred Seventeen Dollars ($42,817.00) immediately prior to the effective time
of the transfer of the Seller's Promissory Note to the Seller at the Closing.
(i) Conduct of Business. From the date hereof to the Closing Date and
subject to the cooperation of the Parkers who are involved in the business and
operations of PMC, the Seller will, except as required in connection with the
transactions contemplated hereby or as otherwise consented to by the Buyer,
(A) use its best efforts to carry on the business of PMC in the ordinary
course of business consistent with past practices of the Seller and (B) not
cause or permit PMC to incur any liability, other than in the ordinary course
of business consistent with past practices of the Seller, in excess of Five
Hundred Dollars ($500.00).
(j) Litigation. None of the Parties have any knowledge of any actual or
threatened litigation involving PMC, except only (i) the litigation involving
PMC, Oracle and Pharmaceutical Formulations Inc., which relates to activities
of PMC prior to its acquisition from the Westmont Trust by the Seller under
the Merger Agreement and as to which litigation the Westmont Trust has
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indemnified the Seller pursuant to the terms of the Merger Agreement, and (ii)
the claim to be filed by the Seller on behalf of PMC against KSI, which claim
the Seller will pay all costs and attorneys fees to pursue, as to which claim
the Seller agrees to indemnify and hold PMC harmless against any counterclaims
or third-party claims filed by KSI or any other parties joined in the
litigation, and with the Seller to retain the proceeds or loss write-off which
results from its pursuit of such claim against KSI. Subject to the foregoing
provisions of this Paragraph 5(j), PMC agrees to cooperate in the Seller's
prosecution and pursuit of KSI as provided hereinabove; provided that the
Seller shall pay for any expenses actually incurred by PMC in connection with
such cooperation.
(k) PMC Business Leads, Etc. Received by the Seller After the Closing.
For the twelve (12) month period immediately following the Closing, the Seller
agrees that any current or future business leads, pipeline, e-mails or phone
messages directed to any of the persons listed on Exhibit D hereto or Jennifer
Parker, together with all inquiries relating to PMC, Oracle ERP/Oracle
application work (as described in Paragraph 5(b) hereof) and/or "man-man"
services received by any office of the Seller shall be promptly forwarded to
PMC for follow-up by PMC in its discretion.
(l) Resignation of Current Officers and Directors of PMC. Seller shall
cause each officer and director of PMC to terminate his position effective as
of the Closing.
(m) Voiding of Employment, Consulting and Non-Competition Agreements of
Kenneth Parker, Jennifer Parker and Westmont Trust. Immediately following the
Closing, the Employment Agreements, Consulting Agreements and Non-Competition
Agreements which exist between the Seller and each of Kenneth Parker, Jennifer
Parker and the Westmont Trust shall be deemed to be void and of no further
force or effect. For purposes only of their concurrence and agreement with the
provisions of this Paragraph 5(m), each of Kenneth Parker, Jennifer Parker and
the Westmont Trust have signed this Agreement on the signature page hereof.
Notwithstanding anything contained herein to the contrary or anything to the
contrary contained in the Merger Agreement, the Seller's Promissory Note as
issued to the Westmont Trust, the Employment Agreements, Consulting Agreements
and Non-Competition Agreements which exist between the Seller and each of
Kenneth Parker, Jennifer Parker and the Westmont Trust, nothing undertaken or
entered into pursuant to this Agreement shall be construed to cause any
penalty, acceleration or other obligation whatsoever under the Seller's
Promissory Note to the Westmont Trust (including but not limited to the
$1,000,000 penalty for early termination of either Kenneth Parker or Jennifer
Parker).
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) all representations and warranties of the Seller as set forth
herein shall be true and correct in all material respects at and as of the
Closing Date;
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(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement; and
(iv) the Seller shall have delivered to the Buyer a certificate to
the effect that each of the conditions specified above in Section
6(a)(i)-(iii) is satisfied in all respects.
The Buyer may waive any condition specified in Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the Seller
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) all representations and warranties of the Buyer and the Parkers
as set forth herein shall be true and correct in all material respects at and
as of the Closing Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement; and
(iv) the Buyer and the Parkers shall have delivered to the Seller a
certificate to the effect that each of the conditions specified above in
Section 6(b)(i)-(iii) is satisfied in all respects;
The Seller may waive any condition specified in this Section 6(b) if it
executes a writing so stating at or prior to the Closing.
7. Survival of Representations, Warranties and Covenants.
(a) Survival of Representations, Warranties and Covenants. All of the
representations and warranties of the Parties under Paragraphs 3 and 4 hereof
which are made as of the date of this Agreement and as of the Closing shall
expire as of the Closing. All of the covenants of the Parties under Paragraph
5 of this Agreement, together with all other representations and warranties of
the Parties hereunder except as provided under Paragraphs 3 and 4 hereof shall
survive the Closing hereunder.
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8. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing (A) in the event the Seller has
breached any material representation, warranty or covenant contained in this
Agreement in any material respect, the Buyer has notified the Seller of the
breach, and the breach has continued without cure for a period of ten (10)
days after the notice of breach or (B) if the Closing shall not have occurred
on or before September 29, 2000, by reason of the failure of any condition
precedent under this Agreement (unless the failure results primarily from the
Buyer itself breaching any representation, warranty or covenant contained in
this Agreement); and
(iii) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event the
Buyer has breached any material representation, warranty or covenant contained
in this Agreement in any material respect, the Seller has notified the Buyer
of the breach, and the breach has continued without cure for a period of ten
(10) days after the notice of breach or (B) if the Closing shall not have
occurred on or before September 29, 2000, by reason of the failure of any
condition precedent under this Agreement (unless the failure results primarily
from the Seller breaching any representation, warranty, or covenant contained
in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 8(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other
Party (except for any liability of any Party then in breach).
9. Miscellaneous.
(a) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter
of this Agreement without the prior written approval of the other Parties,
which approval shall not be unreasonably withheld, unless such press release
or public announcement is required by law, judicial order or the rules or
regulations of the Securities Exchange Commission or the National Association
of Securities Dealers Automatic Quotation System ("NASDAQ"). Subject to the
foregoing, the Parties agree on behalf of themselves and their respective
affiliates that they will not make adverse statements about each other to
third parties.
(b) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person or entity other than the Parties and their
respective successors and permitted assigns.
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(c) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes
any prior understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they have related in any way to the
subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his or its rights, interests, or obligations hereunder without the
prior written approval of the Buyer and the Seller.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if it is
personally delivered, or sent by registered or certified mail, return receipt
requested, postage prepaid, or sent by national overnight delivery service
(e.g., Federal Express), and addressed to the intended recipient as set forth
below:
If to the Seller:
WidePoint Corporation
20251 Century Boulevard
Germantown, Maryland 20874
Attention: Michael C. Higgins, President
Telephone No.: (301) 353-9500
Facsimile No.: (301) 353-9505
with a copy to
Thomas L. James, Esq.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Suite 825
Washington, D.C. 20036-5366
Telephone No.: (202) 457-5100
Facsimile No.: (202) 457-5151
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If to the Buyer or the Parkers:
E-Holdings, Inc
6319 Woodchase Court
Ellicott City, Maryland 21043
Attention: Kenneth Parker, President
Telephone No.: (410) 796-6778
Facsimile No.: (410) 379-0716
Copy to:
Christopher L. Allen, Esq.
Allen & Blackford
4 Professional Drive, Suite 140
Gaithersburg, Maryland 20879
Telephone No.: (301) 670-0300
Facsimile No.: (301) 670-0300
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(h) Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware
without giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than the
State of Delaware. Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this agreement shall be brought
against any of the parties hereto in the appropriate federal court located in
the state of Maryland, with each party hereto agreeing to subject matter
jurisdiction, personal jurisdiction and venue in such court. Each of the
parties hereto consents to this jurisdiction provision in any such action or
proceeding and waives any objection to venue laid therein. Process in any
action or proceeding referred to in the preceding sentence may be served on
any party hereto anywhere in the world.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer, the Seller and the Parkers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
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(k) Expenses. Each of the Parties will bear their own respective costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.
(l) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(m) Cooperation during Transition. The Parties agree to use their best
efforts to cooperate from the date of this Agreement through to the Closing
Date in (i) the moving by PMC at its sole cost of the assets of PMC as listed
on Exhibit B hereto from the Seller's office in Germantown, Maryland to the
office of PMC in Laurel, Maryland, (ii) the joint notification of employees
and customers of each of the Seller and PMC in a manner and time to be
mutually agreed upon by the Seller and PMC, and (iii) the exchange by the
Seller and PMC of mutually agreeable financial information relating to PMC as
may be necessary to carry out the intent of this Agreement and the provisions
hereof.
[signatures appear on the following page]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed and delivered by their duly authorized representatives, all as of the
date first above written.
ATTEST: WIDEPOINT CORPORATION
/s/JAMES T. MCCUBBIN /s/MICHAEL C. HIGGINS
---------------------------- By:---------------------------[SEAL]
James T. McCubbin, Secretary Michael C. Higgins, President
ATTEST: E-HOLDINGS, INC.
/s/JENNIFER L. PARKER /s/KENNETH W. PARKER
----------------------------- By:----------------------------[SEAL]
Jennifer L. Parker, Secretary Kenneth W. Parker, President
ATTEST/WITNESS: PARKER MANAGEMENT
CONSULTANTS, LTD.
/s/JAMES T. MCCUBBIN /s/MICHAEL C. HIGGINS
----------------------------- By:-----------------------------[SEAL]
James T. McCubbin, Secretary Michael C. Higgins, President
For purposes only of their concurrence and agreement with the provisions of
Paragraph 5(m) of this Agreement, each of Kenneth Parker, Jennifer Parker and
the Westmont Trust have signed this Agreement below
/s/KENNETH W. PARKER
---------------------------- By:-----------------------------[SEAL]
Name: Kenneth W. Parker, Individually
Witness
/s/JENNIFER L. PARKER
---------------------------- -------------------------------
Name: Jennifer L. Parker Individually
Witness
WESTMONT NON-GRANTOR TRUST
/s/PHYLLIS NINGARD
--------------------------- --------------------------------
Name: Phyllis Ningard, Trustee
Witness
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