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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 11, 2000
Date of Report (Date of earliest event reported)
U.S. Technologies Inc.
(Exact name of Registrant as Specified in Charter)
Delaware 0-15960 73-1284747
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
2001 Pennsylvania Avenue, NW, Suite 675, Washington, DC 20006
(Address of principal executive offices including zip code)
(202) 466-3100
(Registrant's telephone number, including area code)
Not applicable
(Former name or address, if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 2.
Effective April 26, 2000, U.S. Technologies Inc., a Delaware corporation (the
"Registrant"), through its wholly-owned subsidiary, E2Enet, Inc. ("E2Enet"),
completed its acquisition of 20,700,005 shares of common stock, with a par value
of $0.00001 per share, of Buyline.net, Incorporated, a Delaware corporation
("Buyline"), pursuant to the terms of a Stock Purchase Agreement, dated as of
April 26, 2000 (the "Purchase Agreement"), entered into by and among the
Registrant, Buyline, E2Enet, Northwood Capital Partners LLC ("Northwood
Capital"), Northwood Ventures LLC ("Northwood Ventures", and together with
Northwood Capital, "Northwood"), and Jonathan J. Ledecky ("Ledecky") (if he
acquires Buyline shares). As a result of this acquisition, and related
transactions described below, E2Enet owns 51.7% of the outstanding common stock
of Buyline, and Buyline became a controlled indirect subsidiary of the
Registrant.
Buyline is a developer of B2B e-commerce applications, and is developing a
proprietary Internet software program designed to be a universal platform for
entry-level B2B e-commerce, linking buyers and sellers. Buyline's application
for RFP/RFQ technology (Request for Proposal/Request for Quotation) will be
used in a full range of on-line advertising, on Internet-based directories, and
in commercial web sites.
Pursuant to the Purchase Agreement, E2Enet, purchased 20,700,005 shares of
Buyline's common stock, for an aggregate purchase price consisting of: (i)
$645,838.89 in cash; (ii) the cancellation by E2Enet and the Registrant of all
outstanding indebtedness owed by Buyline to E2Enet and the Registrant; and (iii)
Buyline's acknowledgment of having received, as a capital contribution by E2Enet
to Buyline, certain in-kind services. Also, pursuant to the Purchase Agreement,
Northwood acquired 3,450,000 shares of Buyline common stock at an aggregate
purchase price of $500,000 and Ledecky has expressed an intention to acquire,
but may not acquire, 1,725,000 shares of Buyline common stock at an aggregate
purchase price of $250,000. Separately, Michael Deale, President and CEO of
Buyline, and certain other Buyline employees acquired shares of Buyline common
stock.
Effective April 26, 2000, the Registrant issued 23,008 shares of common stock,
with a par value of $0.02 per share, to Lawrence Silverman ("Silverman")in
exchange for Silverman's sale of 634,699 shares of Buyline's common stock to
E2Enet. This exchange was consummated pursuant to the terms of that certain
Stock Exchange Agreement, dated as of April 26, 2000 ("Exchange Agreement"),
entered into by and among the Registrant, E2Enet, and Silverman.
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In connection with the acquisition of the Buyline shares, E2Enet also pledged
all of its right, title, and interest in and to 4,485,000 shares of Buyline
common stock to Lightmedia Interactive Corporation ("Lightmedia"), a Delaware
corporation affiliated with Mr. Silverman, as security for a promissory note
Buyline made in favor of Lightmedia. The principal amount due under the note is
$650,000. The note bears interest at a rate equal to the prime rate as
published in the Wall Street Journal and requires monthly payments of $18,000.
The promissory note was made as consideration for the conditional (until the
note is fully paid) assignment of all Lightmedia's proprietary technology,
know-how and assets related to Buyline.
As a condition to entering the Purchase Agreement, E2Enet, along with the other
purchasers of Buyline shares, required Lawrence Silverman to execute a
noncompetition agreement to and for the benefit of Buyline. Under the terms of
the noncompetition agreement, Mr. Silverman agreed not to: 1) own or manage or
be connected with, in any manner, any entity engaged in developing or providing
systems and methods to improve the efficacy of on-line advertising, directories
and web sites and initiating electronic commerce on a one-to-one or one-to-many
basis; or 2) exercise control over or interfere with the management, operations
or conduct of Buyline unless requested to do so in writing. Buyline agreed to
pay Mr. Silverman $140,000, payable in twelve equal monthly installments of
$11,666.66, as consideration for his execution of the noncompetition agreement.
In connection with the Purchase Agreement, E2Enet entered into a Voting
Agreement, dated as of April 26, 2000 (the "Voting Agreement") with Northwood
Capital, Northwood Ventures and Ledecky (if he acquires Buyline shares). The
Voting Agreement provides that, subject to certain limitations, each Buyline
shareholder shall appoint E2Enet as its proxy and attorney-in-fact to vote any
voting shares of Buyline held by it for: a) the election of the nominees
designated by E2Enet to serve as directors on its board of directors; and, b) on
all other matters, to the extent necessary for E2Enet to have at least
twenty-five percent (25%) of the voting power on any matter submitted to a
shareholder vote or as E2Enet otherwise reasonably deems necessary for Buyline
to be considered a "controlled subsidiary" of E2Enet for purposes of the
Investment Company Act of 1940, as amended. Each party to the Voting Agreement
also agreed to vote all of its shares of Buyline common stock for the election
of either Lawrence Silverman or Ed Sager, as Mr. Silverman's designee, to the
board of directors until certain circumstances set forth in the Voting Agreement
are met.
By a side letter agreement, E2Enet agreed not exercise its right to vote any
Buyline shares held by Northwood or Ledecky (if he acquires Buyline shares)
following the fifth anniversary of the execution of the Voting Agreement. The
side letter agreement also provides that E2Enet, Northwood and Ledecky (if he
acquires Buyline shares) shall vote their respective Buyline shares to cause the
Buyline board of directors to be composed of seven members including: three
members designated by E2Enet; and one member
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designated by each of Northwood, Edward Hauk (Buyline's non- executive
Chairman), Ed Sager (Mr. Silverman's designee per the Voting Agreement), and
Michael Deale (Buyline's President and CEO), so long as he is such. The side
letter agreement also contains certain rights of first refusal and carry-along
rights with respect to sales by E2Enet, Northwood and Ledecky (if he acquires
Buyline shares) of their Buyline
shares.
A portion of the net proceeds from the Registrant's recently completed private
placement of $5,184,000 of its voting Series C mandatorily convertible
preferred shares were used to fund the cash portion of the Registrant's
purchase price of its Buyline shares.
In connection with the acquisition of the Buyline shares, E2Enet also entered
into a registration rights agreement. Pursuant to the registration rights
agreement, E2Enet and the other parties thereto are entitled to have their
respective Buyline shares registered, at the expense of Buyline, under certain
circumstances.
The foregoing summaries do not comport to be complete. The relevant agreements
are exhibits hereto and incorporated herein by reference. See Item 7(c).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
At the present time, it is impractical to provide the
financial information relative to the Buyline acquisition.
Pursuant to paragraph a4 and b2 of Item 7 of Current Report on
Form 8-K, the Registrant will file such financial information
under cover of a Form 8-K/A within sixty days of the date of
this report.
(c) Exhibits.
2.1 Stock Purchase Agreement, dated April 26, 2000, by and among
E2Enet, Inc., Northwood Ventures LLC, Northwood Capital
Partners LLC, Jonathan J. Ledecky (if he acquires Buyline
shares) and Buyline.net,
Incorporated.
2.2 Stock Exchange Agreement, dated April 26, 2000, entered into
by and between U.S. Technologies Inc., E2Enet, Inc. and
Lawrence Silverman.
2.3 Promissory Note, dated as of April 26, 2000, made by
Buyline.net, Incorporated in favor of LightMedia Interactive
Corporation.
2.4 Stock Pledge Agreement, dated as of April 26, 2000, by and
between LightMedia Interactive Corporation and E2Enet, Inc.
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10.1 Voting Agreement, dated April 26, 2000, among dated April 26,
2000, among E2Enet, Inc., Northwood Ventures LLC, Northwood
Capital Partners LLC, Jonathan J. Ledecky (if he acquires
Buyline shares), Silverman Trust
and Lawrence Silverman.
10.2 Side Letter Voting Agreement and Buyline Stock Transfer,
dated as of April 26, 2000, by and among E2Enet, Inc.,
Northwood Ventures LLC, Northwood Capital Partners LLC, and
Jonathan J. Ledecky (if he acquires Buyline shares).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
U.S. TECHNOLOGIES INC.
By: /s/ Gregory Earls
------------------------------
Gregory Earls
Co-Chairman and Co-Chief
Executive Officer
Dated: May 11, 2000
Washington, DC
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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
among
E2ENET, INC.,
NORTHWOOD CAPITAL PARTNERS LLC,
NORTHWOOD VENTURES LLC,
JONATHAN J. LEDECKY
and
BUYLINE.NET, INCORPORATED
Dated as of April 26, 2000
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TABLE OF CONTENTS
<TABLE>
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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
------------------------
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
5.1 Organization......................................................................................8
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5.2 Authority.........................................................................................8
---------
5.3 Consents and Approvals............................................................................8
----------------------
5.4 No Conflict or Violation..........................................................................8
------------------------
5.5 Litigation........................................................................................9
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5.6 Certain Fees......................................................................................9
------------
5.7 Investment Representation.........................................................................9
-------------------------
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY
6.1 Organization.....................................................................................10
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6.2 Authority........................................................................................10
---------
6.3 Capitalization of the Company and Status of Capital Stock........................................11
---------------------------------------------------------
6.4 Consents and Approvals...........................................................................11
----------------------
6.5 No Conflict or Violation.........................................................................11
------------------------
6.6 Taxes............................................................................................12
-----
6.7 Financial Statements.............................................................................13
--------------------
6.8 Litigation.......................................................................................13
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6.9 Legal Compliance.................................................................................13
----------------
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
----------------------------------
6.14 Business Plan....................................................................................15
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<TABLE>
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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
----------------------------
6.18 Related-Party Transactions and Certain Actions....................................................16
----------------------------------------------
6.19 Patents and Trademarks............................................................................17
----------------------
6.20 Proprietary Information and Inventions Agreements.................................................17
-------------------------------------------------
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
------------------------------------------
8.3 Entire Agreement; Amendments......................................................................19
----------------------------
8.4 Notices...........................................................................................19
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8.5 Waivers...........................................................................................21
-------
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
----------------------------
8.9 Counterparts......................................................................................22
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8.10 Governing Law.....................................................................................22
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8.11 Dispute Resolution................................................................................22
------------------
8.12 Drafting..........................................................................................23
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8.13 Waiver of Jury Trial..............................................................................23
--------------------
8.14 Expenses..........................................................................................23
--------
8.15 Further Assurances................................................................................23
------------------
8.16 Disclosure to Other Persons.......................................................................23
---------------------------
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<TABLE>
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SCHEDULES
<S> <C>
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
</TABLE>
<TABLE>
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EXHIBITS
<S> <C>
Exhibit A Form of Bill 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
</TABLE>
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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 BUYLINE.NET, 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 JONATHAN J. LEDECKY ("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 E2E, Northwood
Capital, Northwood Ventures and Ledecky, and each of E2E, Northwood Capital,
Northwood 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 Bill 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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<PAGE> 9
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 Fleischman and Walsh, 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 O'Neill, Bragg & Staffin, 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 Bill of Sale and Assignment
Agreement substantially in the form attached hereto as Exhibit A (the "Bill 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 USXX, E2E 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 BUYLINE.NET, 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
Michael Deale, 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),
18
<PAGE> 23
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
485 Underhill Boulevard, Suite 205
Syosset, NY 11791
Telephone: (516) 364-5544
Facsimile: (516) 364-0879
19
<PAGE> 24
If to Ledecky, to:
Mr. Jonathan J. Ledecky
1400 34th Street, N.W.
Washington, D.C. 20007
Telephone: (202) 965-2020
Facsimile: (202) 342-9090
If to E2E, to:
E2Enet, Inc.
c/o U.S. Viewing Corporation
2001 Pennsylvania Avenue, NW
Suite 675
Washington, DC 20006
Attn: Gregory C. Earls
Telephone: (202) 466-3100
Facsimile: (202) 466-4557
In the case of each Investor, with a copy to:
Fleischman and Walsh L.L.P.
1400 Sixteenth Street, N.W.
Washington, DC 20036
Attn: Stephen A. Bouchard
Telephone: (202) 939-7911
Facsimile: (202) 265-5706
If to the Company, to:
Buyline.net, Incorporated
c/o U.S. Viewing Corporation
2001 Pennsylvania Avenue, NW
Suite 675
Washington, DC 20006
Attn: Gregory C. Earls
Telephone: (202) 466-3100
Facsimile: (202) 466-4557
20
<PAGE> 25
with a copy to:
Fleischman and Walsh, L.L.P.
1400 Sixteenth Street, N.W.
Washington, D.C. 20036
Attn: Stephen Bouchard, Esq.
Telephone No.: (202) 939-7911
Facsimile No.: (202) 265-5706
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.
21
<PAGE> 26
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
22
<PAGE> 27
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.]
23
<PAGE> 28
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BUYLINE.NET, INCORPORATED
By: /s/ Lawrence Silverman
------------------------------
Name: Lawrence Silverman
Title: President and CEO
E2ENET, INC.
By: /s/ C. Gregory Earls
------------------------------
Name: C. Gregory Earls
Title: President
NORTHWOOD CAPITAL PARTNERS LLC
By: /s/ Henry T. Wilson
------------------------------
Name: Henry T. Wilson
Title: Managing Director
NORTHWOOD VENTURES LLC
By: /s/ Henry T. Wilson
------------------------------
Name: Henry T. Wilson
Title: Managing Director
JONATHAN J. LEDECKY
By:
------------------------------
Jonathan J. Ledecky
<PAGE> 1
EXHIBIT 2.2
STOCK EXCHANGE AGREEMENT
among
U.S. TECHNOLOGIES INC.,
E2ENET, INC.,
and
LAWRENCE SILVERMAN
Dated as of April 26, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I DEFINITIONS
1.1 Definitions............................................................................1
1.2 Interpretation.........................................................................3
ARTICLE II EXCHANGE OF SHARES
2.1 Exchange of Shares.....................................................................3
2.2 The Closing............................................................................4
ARTICLE III CONDITIONS PRECEDENT TO SILVERMAN'S OBLIGATION TO CLOSE
3.1 Documentation at Closing...............................................................4
3.2 Voting Agreement.......................................................................5
ARTICLE IV CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO
CLOSE
4.1 Documentation at Closing...............................................................5
4.2 Voting Agreement.......................................................................5
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SILVERMAN
5.1 Authority..............................................................................6
5.2 Status of Buyline Shares...............................................................6
5.3 Consents and Approvals.................................................................6
5.4 No Conflict or Violation...............................................................6
5.5 Certain Fees...........................................................................6
5.6 Investment Representation..............................................................7
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND E2E
6.1 Organization...........................................................................7
6.2 Corporate Action.......................................................................8
6.3 Capitalization of the Company and Status of Capital Stock..............................8
6.4 Governmental Approvals.................................................................8
6.5 No Conflict or Violation...............................................................8
6.6 Certain Fees...........................................................................9
ARTICLE VII MISCELLANEOUS
7.1 Severability...........................................................................9
7.2 Survival of Representations and Warranties.............................................9
7.3 Entire Agreement; Amendments...........................................................9
7.4 Notices...............................................................................10
7.5 Waivers...............................................................................11
7.6 Headings..............................................................................11
7.7 Successors and Assignees..............................................................11
7.8 No Third Party Beneficiaries..........................................................11
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
7.9 Counterparts..........................................................................11
7.10 Governing Law.........................................................................11
7.11 Dispute Resolution....................................................................11
7.12 Drafting..............................................................................12
7.13 WAIVER OF JURY TRIAL..................................................................12
7.14 Expenses..............................................................................13
7.15 Further Assurances....................................................................13
7.16 Disclosure to Other Persons...........................................................13
</TABLE>
<PAGE> 4
STOCK EXCHANGE AGREEMENT
This STOCK EXCHANGE AGREEMENT (the "Agreement") is made as of this 26th
day of April, 2000, by and among U.S. TECHNOLOGIES INC., a Delaware corporation
(the "Company"), E2ENET, INC., a Delaware Corporation ("E2E"), and LAWRENCE
SILVERMAN ("Silverman") (each of the foregoing parties, individually, a "Party"
and, collectively, the "Parties").
WITNESSETH:
WHEREAS, Silverman desires to sell to E2E, and E2E desires to purchase
from Silverman, 634,699 shares (the "Buyline Shares") of common stock of
Buyline.net, Incorporated, a Delaware corporation ("Buyline"), upon the terms
and conditions set forth herein; and
WHEREAS, in consideration for the Buyline Shares, the Company, which
owns all of the issued and outstanding shares of capital stock of E2E, will
issue Company Shares (as defined herein) to Silverman.
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 7.11(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 Exchange Agreement, as from time to time
amended and in effect between the Parties, including all exhibits hereto.
<PAGE> 5
"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.
"Buyline" has the meaning set forth in the preambles hereof.
"Buyline Shares" has the meaning set forth in the preambles hereof.
"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 $0.02 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.
"E2E" has the meaning set forth in the introduction hereof.
"Government Entity" means any court or tribunal or administrative,
governmental or regulatory body, agency, commission, division, department,
public body or other authority.
"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.
"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).
2
<PAGE> 6
"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.
"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.
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 without unreasonable delay or
condition; and (g) references to Sections refer to Sections of this Agreement.
ARTICLE II
EXCHANGE OF SHARES
2.1 Exchange of Shares. Subject to and in reliance upon the
representations, warranties, terms and conditions of this Agreement, Silverman
agrees to sell the Buyline Shares, free and clear of any and all Liens, to E2E.
In exchange for the sale of the Buyline Shares to E2E, the Company agrees to
issue and deliver to Silverman 23,008 duly authorized, validly issued, fully
paid, and non-assessable shares of the Company's Common Stock (the "Company
Shares").
2.2 The Closing. Subject to the terms and conditions of this
Agreement, such exchange described in Section 2.1 shall take place at a closing
("Closing") to be held at the offices of Fleischman and Walsh, L.L.P. at 10:00
a.m., local time, on the date hereof (the "Closing Date").
3
<PAGE> 7
At the Closing, (i) the Company will issue to Silverman a certificate evidencing
the Company Shares, registered in the name of Silverman and (ii) Silverman will
deliver to E2E certificate(s) representing the Buyline Shares, duly endorsed (or
accompanied by stock power(s) duly executed) in favor of E2E.
ARTICLE III
CONDITIONS PRECEDENT TO SILVERMAN'S OBLIGATION TO CLOSE
The obligations of Silverman to exchange the Buyline Shares hereunder
for the Company Shares at the Closing are subject to satisfaction of each of the
following conditions, all or any of which may be waived in writing by Silverman:
3.1 Documentation at Closing. Silverman 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 Company Shares.
(b) Such other documents relating to the transactions
contemplated hereby as Silverman or his special counsel may reasonably request.
3.2 Voting Agreement. Execution and delivery by the Investors (as
defined therein) of a voting agreement in the form set forth on Exhibit A (the
"Voting Agreement").
ARTICLE IV
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO CLOSE
The obligation of the Company to issue the Company Shares to Silverman
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) Certificates representing the Buyline Shares, which
shall be either duly endorsed or accompanied by stock powers duly executed in
favor of E2E.
(b) Such other documents referenced in or relating to the
transactions contemplated hereby as the Company or its special counsel may
reasonably request.
4
<PAGE> 8
4.2 Voting Agreement. Execution and delivery by the Shareholders
(as defined therein) of a voting agreement in the form set forth on Exhibit A
(the "Voting Agreement").
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SILVERMAN
Silverman hereby represents and warrants that:
5.1 Authority. He has the legal capacity to enter into this
Agreement and to carry out his obligations hereunder. This Agreement has been
duly and validly executed and delivered by Silverman and (assuming this
Agreement constitutes a valid and binding obligation of the Company and E2E)
constitutes a valid and binding agreement of Silverman, enforceable against him
in accordance with its 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.
5.2 Status of Buyline Shares. The Buyline Shares owned by
Silverman are duly authorized, validly issued, fully paid, nonassessable and
free and clear of all Liens.
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 other documents contemplated hereby.
5.4 No Conflict or Violation. The execution, delivery and
performance by Silverman of this Agreement, the consummation of the transactions
contemplated hereby, the fulfillment of the terms hereof, and the compliance
with any of the provisions hereof:
(a) 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 Silverman is a party
or by which he or any of his properties or assets may be bound or affected, or
result in the creation or imposition of any material Lien on any of his assets
or properties pursuant to (i) any Law to which he or any of his property is
subject, or (ii) any Order to which he is bound or any of his property is
subject;
(b) does not require the consent, approval or
authorization of, or registration or filing with, any Person; and
(c) will not violate any Order or Law applicable to him
or any of his properties or assets.
5
<PAGE> 9
5.5 Certain Fees. Silverman has not entered into, nor will he
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
or E2E to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby.
5.6 Investment Representation.
(a) Silverman acknowledges that the Company Shares are
not registered under the securities laws of any jurisdiction and that he is
acquiring the Company Shares for his own account, and not as nominee or agent.
(b) The Company Shares are being and will be acquired 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 his property at all times be within his control.
(c) Silverman 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:
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 U.S. TECHNOLOGIES INC. 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) Silverman represents and warrants to the Company that
(i) at the time he was offered the Company Shares, he was, and (ii) at the date
hereof, he is an "accredited investor" as defined in Regulation D under the
Securities Act.
The acquisition at Closing by Silverman of the Company Shares shall
constitute a confirmation by him of each of the foregoing representations and
warranties.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND E2E
Each of the Company and E2E represents and warrants that:
6
<PAGE> 10
6.1 Organization. Each of the Company and E2E is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Delaware.
6.2 Corporate Action. Each of the Company and E2E has all
necessary corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. Each of the Company and E2E has duly
executed and delivered this Agreement, and this Agreement is a legal, valid and
binding obligation of the Company and E2E, enforceable against them in
accordance with its 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)
The Company Shares, when issued and exchanged for the Buyline Shares at the
Closing, will be duly authorized, validly issued, fully paid, nonassessable and
free and clear of all Liens other than Liens created by Silverman. The Company
has a total authorized capitalization consisting of 40,000,000 shares of Common
Stock, of which 29,444,278 shares are issued and outstanding as of March 20,
2000 and 10,000,000 shares of Preferred Stock, of which 625,000 shares of Series
A Convertible Preferred Stock, 112,000 shares of Series B Mandatorily
Convertible Preferred Stock and 5,184 shares of Series C Mandatorily Convertible
Preferred Stock are issued and outstanding as of the date hereof.
(b) Except as disclosed in the Company's reports filed
with the SEC, as of the Closing there will be no options, warrants or 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 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.
6.4 Governmental Approvals. No authorization, consent, approval,
License, exemption of or filing or registration with any court or Government
Entity is or will be necessary for, or in connection with, the performance by
the Company or E2E of their respective obligations under this Agreement.
6.5 No Conflict or Violation. The execution, delivery and
performance of this Agreement, the consummation of the transactions contemplated
hereby, the fulfillment of the terms hereof, and the compliance with any of the
provisions hereof will not:
(a) conflict with or result in a breach or violation of
the Organizational Documents of the Company or E2E;
7
<PAGE> 11
(b) conflict with, result in a violation or breach of,
constitute (with or without due notice or the 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 the Company or E2E is
a party or by which the Company, E2E or any of their 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 the Company or E2E pursuant
to (i) any Law to which the Company or E2E or any of their respective properties
is subject, or (ii) any Order to which the Company or E2E is bound or any of
their respective properties are subject; or
(c) violate any Order or Law applicable to the Company or
E2E or any of their respective properties or assets.
6.6 Certain Fees. None of the Company, E2E or any of their
respective officers, directors or employees, has entered into, or will enter
into, during the term of this Agreement, any agreement, arrangement or
understanding with any Person to pay any finder's fee, brokerage commission or
similar payment in connection with the transactions contemplated hereby.
ARTICLE VII
MISCELLANEOUS
7.1 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.
7.2 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 transaction contemplated by this
Agreement, regardless of any investigation made by any Party or on its behalf.
Notwithstanding the foregoing, neither the Company nor E2E shall have any
liability to Silverman hereunder, except to the extent that such liability
relates to or arises in connection with a misrepresentation or omission in the
Company's filings with the Securities and Exchange Commission.
7.3 Entire Agreement; Amendments. This Agreement (including the
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 and understandings, both
written and oral, among the Parties or any of them, with respect to the
8
<PAGE> 12
subject matter hereof. This Agreement may be amended only by an instrument in
writing executed by the Parties.
7.4 Notices. Any notices or communications required or permitted
hereunder shall be in writing and addressed as follows:
If to Silverman, to his address as set forth on the
signature pages hereto.
With a copy to:
O'Neill, Bragg & Staffin, P.C.
531 Plymouth Road, Suite 500
Plymouth Road, Suite 500
Plymouth Meeting, PA 19462
Attention: Gary L. Bragg, Esq.
Facsimile: (610) 941-1060
Telephone: (610) 941-5300
If to the Company or E2E:
c/o U.S. Viewing Corporation
2001 Pennsylvania Avenue, NW
Suite 675
Washington, DC 20006
Attn: Gregory C. Earls
Telephone: 202-466-3100
Facsimile: 202-466-4557
with a copy to:
Fleischman and Walsh L.L.P.
1400 Sixteenth Street, N.W.
Washington, DC 20036
Attn: Stephen A. Bouchard
Telephone: 202-939-7945
Facsimile: 202-265-5706
Any Party may, on fifteen (15) days' notice given in accordance with
this Section 7.4 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
9
<PAGE> 13
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).
7.5 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.
7.6 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.
7.7 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.
7.8 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.
7.9 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.
7.10 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.
7.11 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.
10
<PAGE> 14
(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 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.
7.12 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.
11
<PAGE> 15
7.13 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 OF OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
7.14 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.
7.15 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.
7.16 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.
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12
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
U.S. TECHNOLOGIES INC.
By: /s/ C. Gregory Earls
---------------------------------------------
Name: C. Gregory Earls
Title: Co-Chairman and Co-CEO
E2ENET, INC.
By: /s/ C. Gregory Earls
---------------------------------------------
Name: C. Gregory Earls
Title: President
LAWRENCE SILVERMAN
By: /s/ Lawrence Silverman
---------------------------------------------
Address: 713 Elqui Road
----------------------------------------
Newton Square, PA
----------------------------------------
Phone: 610-734-1245
------------------------------------------
Fax: 610-734-1263
--------------------------------------------
<PAGE> 1
EXHIBIT 2.3
BUYLINE.NET, INCORPORATED
PROMISSORY NOTE
$650,000 April 26, 2000
Buyline.net, Incorporated, a Delaware corporation (the "Company"), for
value received, promises to pay to the order of LightMedia Interactive
Corporation, a Delaware corporation (the "Holder"), the principal amount of Six
Hundred Fifty Thousand Dollars ($650,000), together with interest from the date
hereof on the principal amount of this Note payable at the rate and on the dates
provided for in this Note.
This Promissory Note is being issued pursuant to the Bill of Sale and
Assignment Agreement, of even date herewith (the "Bill of Sale"), by Lawrence
Silverman and Holder in favor of the Company. The terms of the Bill of Sale are
specifically incorporated herein.
Section 1. INTEREST.
Interest shall accrue on the principal amount of this Note at a rate
per annum from and including the date of issuance with respect to this Note
equal to the interest rate published in The Wall Street Journal from time to
time as the "prime rate" (the "Prime Rate"). In the event of a change in the
Prime Rate, interest on the outstanding principal balance hereof will be
adjusted, it being the intent hereof that the rate of said interest shall
increase or decrease simultaneously with an increase or decrease in the Prime
Rate. Interest shall be calculated on the basis of a 360-day year comprised of
twelve thirty-day months, and charged for the actual number of days elapsed.
Section 2. MATURITY DATE; PAYMENTS.
(a) The entire principal amount outstanding, and all accrued and unpaid
interest, under this Note shall be due and payable in full upon the earlier of:
(i) the date of the first registered public offering of the
Company's common stock by the Company under the Securities Act with net proceeds
to the Company of at least $20 million;
(ii) the date of a private placement of at least $15 million
in equity securities or debt securities convertible into equity securities by
the Company to a single purchaser or group of purchasers in one purchase or a
series of related purchases subsequent to the date hereof;
(iii) February 28, 2003; or
(iv) the occurrence of any Event of Default.
<PAGE> 2
- 2 -
(b) Cash payments of $18,000 shall be made beginning on the date hereof
and continuing on the first business day of each month thereafter, by wire
transfer in immediately available funds to the account maintained in the United
States specified by the Holder to the Company for such purpose or in such manner
and at such other place as the Holder shall designate in writing to the Company,
in lawful money of the United States of America. Each payment shall be applied
first to accrued but unpaid interest, and the remainder to outstanding
principal.
(c) This Note may be prepaid at any time without premium or penalty.
Upon payment or prepayment of the entire amount of the principal amount of this
Note, and accrued interest thereon, this Note shall be surrendered to the
Company for cancellation.
Section 3. WAIVERS. The Company waives presentment, demand for payment, notice
of dishonor, notice of protest and all other notices or demands in connection
with the delivery, acceptance, performance or default of this Note.
Section 4. COLLECTION COSTS. In the event of any action at law or suit in
equity with respect to this Note, the Company, in addition to all other sums
which it may be required to pay hereunder, will pay a reasonable sum for
attorneys' fees incurred by the Holder in connection with such action or suit
and all other costs of collection.
Section 5. SECURITY. Payment of this Note and all obligations of the Company
hereunder to Holder are secured by a valid, existing Stock Pledge Agreement of
even date herewith between E2Enet, Inc. and Holder (the "Stock Pledge
Agreement"), and the terms of said Stock Pledge Agreement, and any subsequent
modifications thereto, are by this reference incorporated herein.
Section 6. NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Holder, any right, remedy, power or privilege under this Note, or provided by
law and no course of dealing between any such person or entity and the Company,
shall imply or otherwise operate as a waiver of any such right, remedy, power or
privilege; nor shall any single or partial exercise of any right, remedy, power
or privilege under this Note preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges under this Note are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
Section 7. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) if the Company fails to render payment under Section
2(b) of this Note when said payment is due and payable if such default shall
continue unremedied for ten (10) days;
<PAGE> 3
(ii) the Company shall (w) apply for or consent to the
appointment of a receiver, trustee or liquidator for itself or a substantial
part of its properties or assets, (x) admit in writing its inability to pay its
debts as they mature, (y) make a general assignment for the benefit of its
creditors, or (z) commence a voluntary case for relief as a debtor under the
United States Bankruptcy Code or file a petition seeking reorganization,
insolvency, readjustment of debts, dissolution or liquidation; or
(iii) an involuntary case under the United States Bankruptcy
Code shall be commenced against the Company or a petition shall be filed against
the Company seeking similar relief under any other applicable law and such case
or petition shall remain undismissed for sixty (60) days after the entry
thereof.
Section 8. MISCELLANEOUS PROVISIONS.
8.1 Governing Law. This Note shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to principles
of conflict of laws or choice of law.
8.2 Binding Effect; Assignability. This Note and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns and executors, administrators
and heirs; provided that, neither this Note nor any of the rights, interests or
obligations hereunder shall be assigned by the Company without the prior written
consent of the Holder.
8.3 Amendments and Waivers. Modifications and waivers of this Note may
be made solely with the approval in writing of each of the Holder and the
Company.
IN WITNESS WHEREOF, the Company has executed and delivered this Note as
of the date hereinabove first written.
BUYLINE.NET, INCORPORATED
By: /s/ Lawrence Silverman
------------------------
Name: Lawrence Silverman
Title: President and CEO
<PAGE> 1
EXHIBIT 2.4
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Pledge Agreement") is entered into as of
April 26, 2000, between LIGHTMEDIA INTERACTIVE CORPORATION, a Delaware
corporation ("Pledgee"), and E2ENET, INC., a Delaware corporation ("Pledgor").
1. Pledgee has entered into the Bill of Sale and Assignment Agreement
of even date herewith (the "Assignment Agreement") with Buyline.net,
Incorporated ("Buyline"), pursuant to which Pledgee assigned to Buyline all of
its proprietary technology and know-how and related assets, and as consideration
for such assignment, Buyline has agreed to pay Pledgee $650,000, the payment of
which is evidenced by that certain Promissory Note executed on the date hereof
by Buyline in favor of Pledgee (the "Note"). As collateral security for the
Note, Pledgor hereby pledges to Pledgee all of its right, title and interest in
and to all shares of common stock of Buyline listed in Schedule A hereto, which
number of Shares pledged shall be reduced from time to time in proportion to the
reduction in the amount of principal under the Note from time to time
outstanding compared to the amount of principal outstanding on the date hereof
(Pledgor's "Shares" or the "Collateral"). The terms of the Assignment Agreement
and the Note are specifically incorporated herein.
2. The Pledgor represents and warrants: (i) that it is the owner of the
Shares; (ii) that the Shares are free and clear of all pledges, charges, liens
or other encumbrances whatsoever, except the pledge created hereby, and (iii)
that this pledge does not violate any other agreement or undertaking of Pledgor.
3. Pledgee's interest in the Collateral shall be as security for the
payment of all principal and interest due on the Note.
4. The stock certificate representing the Shares has been duly endorsed
in blank and has been delivered to Pledgee. In executing this Stock Pledge
Agreement, Pledgee acknowledges receipt of the Shares.
5. Following the delivery of the Collateral to Pledgee as provided in
Section 4 hereof, unless and until there shall be a breach of any of the
obligations specified in Section 3:
a. The Pledgor shall be entitled to exercise all voting and
consensual powers pertaining to the Shares for all purposes not inconsistent
with the terms of this Stock Pledge Agreement;
b. The Pledgor shall be entitled to receive directly and retain all
dividends or interest on the Shares unless otherwise restricted; and
c. In order to permit Pledgor to exercise such voting powers and to
receive such dividends or interest, Pledgee shall from time to time, upon
the written request of Pledgor, execute and deliver to Pledgor appropriate
proxy, dividend and reinvestment orders.
<PAGE> 2
-2-
6. Following the delivery of the Collateral to Pledgee as provided in
Section 4 hereof, if any breach by the Pledgor of its obligations specified in
Section 3 shall have occurred and be continuing:
a. Pledgee may, after twenty (20) days written notice to Pledgor,
cause any or all of the Collateral to be transferred into Pledgee's name as
record owner hereunder;
b. All dividends and other distributions thereafter made upon or in
respect to the Collateral, or any part thereof, shall be paid directly to and
shall be retained by Pledgee; or
c. Pledgee may liquidate or sell all or a part of the Collateral at
a public or private sale upon terms and conditions satisfactory to it in its
discretion, subject as hereinafter provided to Title 28, Section 9-504 of the
Commercial Code of the State of Delaware. Pledgee shall then deduct from the
proceeds of such sale all amounts then due and owing to it under the Note and
the Assignment Agreement and shall remit any remaining balance of the proceeds
to Pledgor. Anything contained herein to the contrary notwithstanding, Pledgor
and Pledgee agree that the Collateral shall be disposed of in accordance with
Title 28, Section 9-504 of the Commercial Code of the State of Delaware.
7. If the principal of and interest on the Note are paid in accordance
with the terms thereof, this Stock Pledge Agreement shall thereupon terminate,
and Pledgee shall deliver to Pledgor the Collateral and any dividends held
thereon by Pledgee.
8. This Pledge Agreement shall in all respects be construed in
accordance with and governed by the laws of the State of Delaware and no defense
given or allowed by the laws of any other country or state shall be interposed
in any action hereon unless such defense is also given or allowed by the laws of
the State of Delaware.
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<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals.
PLEDGOR: PLEDGEE:
E2ENET, INC. LIGHTMEDIA INTERACTIVE CORPORATION
By: /s/ C. Gregory Earls By: /s/ Lawrence Silverman
--------------------------------- -------------------------------
Name: C. Gregory Earls Name: Lawrence Silverman
Title: President Title:
<PAGE> 4
-4-
SCHEDULE A
COLLATERAL
Common Stock
<TABLE>
<CAPTION>
Certificate Number
Pledgor Number of Shares
- ------- ----------- ---------
<S> <C> <C>
E2Enet, Inc. 4,485,000
</TABLE>
<PAGE> 1
EXHIBIT 10.1
VOTING AGREEMENT
This Voting Agreement ("Agreement"), dated as of April 26, 2000, is
made by and among 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"),
Jonathan J. Ledecky, individually ("Ledecky"), and each of the other
shareholders of Buyline.net, Incorporated, a Delaware corporation ("Buyline"),
listed on the signature pages hereto (each, a "Shareholder" and, collectively,
the "Shareholders").
PRELIMINARY STATEMENTS
Concurrently with the execution of this Agreement, E2E, Northwood,
Ledecky (collectively, the "Investors") and Buyline entered into a Stock
Purchase Agreement (the "Purchase Agreement"), pursuant to which the Investors
acquired shares of common stock, par value $0.00001 per share ("Common Stock"),
of Buyline.
The Shareholders, Ledecky and Northwood own the number of shares of
Common Stock set forth opposite their respective names on Exhibit A hereto (such
shares set forth on Exhibit A being referred to as the "Shares"), which Shares
represent 86.9% of the issued and outstanding Common Stock. Also set forth on
Exhibit A for the Shareholders, Ledecky and Northwood is a description of all
present options, warrants and other rights to acquire shares of Common Stock.
To induce the Investors to enter into the Purchase Agreement, the
Shareholders have agreed, upon the terms and subject to the conditions set forth
herein, to appoint E2E as their true and lawful proxy, to vote the Shares owned
by them in favor of the election of any person nominated by E2E to be on the
Board of Directors (the "Board") of Buyline (except as set forth in Section 3
below), and to vote on all other matters to the extent necessary for E2E to have
at least twenty-five percent (25%) of the voting power on any matter submitted
to a shareholder vote.
To further induce E2E to enter into the Purchase Agreement, Ledecky and
Northwood have agreed, upon the terms and subject to the conditions set forth
herein, to appoint E2E as their true and lawful proxy, to vote the Shares owned
by them in favor of the election of any person nominated by E2E to be on the
Board of Buyline (except as set forth in Section 3 below), and to vote on all
other matters to the extent necessary for E2E to have at least twenty-five
percent (25%) of the voting power on any matter submitted to a shareholder vote.
<PAGE> 2
For good and valuable consideration, the receipt, sufficiency, and
adequacy of which are hereby acknowledged, the parties to this Agreement agree
as follows:
1. Representations and Warranties of the Shareholders, Ledecky
and Northwood. Each Shareholder and each of Ledecky and Northwood, as to itself
and to its Shares only, represents and warrants that:
(a) It owns, or is otherwise able to direct the voting of, the
Shares set forth next to its name on Exhibit A hereto, free and clear of any
restrictions on voting, and has the right to vote the same free of any such
encumbrance (other than any general fiduciary obligation imposed by law).
(b) The execution, delivery and performance of this Agreement by it
does not (i) conflict with or violate any trust or other agreement or instrument
to which or by which it is a party or is bound, (ii) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to it or by
which its Shares are bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of its Shares pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which it is a party or by which it or its Shares is
or are bound or affected.
(c) The execution, delivery and performance of this Agreement by it
does not and will not require any consent, approval, authorization or permit of
any foreign, federal, state, or local regulatory body.
2. Agreements with Respect to the Shares.
(a) Voting. Subject to subsection (b) of this Section 2, each
Shareholder and each of Ledecky and Northwood agrees during the term of this
Agreement to appoint E2E as its true and lawful proxy and attorney-in-fact with
full power of substitution, to vote those Shares owned and eligible to vote and
any other shares of Common Stock of which at the time of such vote it is able to
direct the voting (and any other voting securities of Buyline issued or
exchanged with respect to all such shares upon any reclassification,
recapitalization, reorganization, stock split, stock dividend or any other
change in Buyline's capital structure) for:
i) the election (or removal) of the nominees designated
by E2E to serve as directors on the Board and, in the event
of a vacancy on the Board created by the death, resignation
or removal of such director, to vote for the election of
nominees designated by E2E; and,
-2-
<PAGE> 3
ii) on all other matters, to the extent necessary for E2E to
have at least twenty-five percent (25%) of the voting power
on any matter submitted to a shareholder vote or as E2E
otherwise reasonably deems necessary for Buyline to be
considered a "controlled subsidiary" of E2E for purposes
of the Investment Company Act of 1940, as amended, and as
in effect from time to time.
(b) Limitations. The proxy granted in subsection (a) above may be
exercised by E2E upon five (5) days' prior written notice to the Shareholders,
Ledecky and Northwood of its intent to exercise such voting rights. The
Shareholders' proxy granted in subsection (a) above may be exercised only if
Buyline is current in all payments due under that certain Noncompetition
Agreement of even date hereof between Lawrence Silverman and Buyline and under
that certain Promissory Note of even date hereof by Buyline in favor of
LightMedia Interactive Corporation ("LightMedia"). E2E may exercise the
Shareholder's proxy as it relates to Section 2(a)(ii) above only to the extent
necessary after E2E exercises its proxy to vote shares held by Northwood and
Ledecky.
3. Board of Buyline. Notwithstanding the foregoing, by execution
hereof, each Shareholder and Investor agrees to vote all of its shares of Common
Stock for the election of Lawrence Silverman to the Board (or instead, upon the
request of E2E, Ed Sager), until the earlier of (x) the date that the
Shareholders, in one or more transactions, whether or not related, have sold or
transferred more than 50% of the shares of Common Stock collectively owned by
them as of the date hereof, (y) the date that the shares of Common Stock held by
the Shareholders collectively represent less than 20% of the aggregate number of
shares of Buyline issued and outstanding or (z) the termination of this
Agreement.
4. No Voting Trusts. Each Shareholder and each of Ledecky and Northwood
hereby revokes any and all proxies and voting instructions with respect to the
Shares previously given by it or him, and agrees that it or he will not, nor
will he or it permit any entity under its or his control to, deposit any of its
or his Shares in a voting trust or subject any of its or his Shares to any
arrangement with respect to the voting of such Shares inconsistent with this
Agreement.
5. Limitation on Sales. During the term of this Agreement, each
Shareholder and each of Ledecky and Northwood agrees not to sell, assign,
transfer, lend, tender, pledge, hypothecate, exchange, encumber or otherwise
dispose of or impair its or his Shares unless, in connection therewith, it or he
retains voting rights with respect to its or his Shares or the person or entity
which obtains such voting rights becomes a party to, or agrees to be subject to
the terms of, this Agreement.
6. Specific Performance. Each Shareholder and each of Ledecky and
Northwood acknowledges that it will be impossible to measure in money the damage
to E2E if it or he
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<PAGE> 4
fails to comply with the obligations imposed by this Agreement, and that, in the
event of any such failure, E2E will not have an adequate remedy at law or in
damages. Accordingly, each Shareholder and each of Ledecky and Northwood agrees
that injunctive relief or any other equitable remedy, in addition to any
remedies at law or damages, is the appropriate remedy for any such failure and
will not oppose the granting of any such remedy on the basis that E2E has an
adequate remedy at law. Each Shareholder and each of Ledecky and Northwood
agrees not to seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with E2E's seeking or obtaining such equitable
relief.
7. Term of Agreement; Termination. The term of this Agreement shall
commence on the date hereof and shall terminate by the mutual, written agreement
of the parties or on the ten (10) year anniversary of the date hereof. Upon such
termination, no party shall have any further obligations or liabilities
hereunder; provided, however, that, such termination shall not relieve any party
from liability for any uncured breach of this Agreement occurring prior to such
termination.
8. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter of this Agreement
and supersedes all prior written and oral and all contemporaneous oral
agreements and understandings with respect to the subject matter of this
Agreement.
(b) Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the others shall be in writing and shall be
deemed to have been duly given on the next business day after the same is sent,
if delivered personally or sent by telecopy or overnight delivery, or five
calendar days after the same is sent, if sent by registered or certified mail,
return receipt requested, postage prepaid, as set forth below, or to such other
persons or addresses as may be designated in writing in accordance with the
terms hereof by the party to receive such notice.
If to E2E, to:
E2Enet, Inc.
c/o U.S. Viewing Corporation
2001 Pennsylvania Avenue, NW
Suite 675
Washington, DC 20006
Attn: Gregory C. Earls
Telephone: (202) 466-3100
Facsimile: (202) 466-4557
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<PAGE> 5
with a copy to:
Fleischman and Walsh, L.L.P.
1400 Sixteenth Street, N.W.
Washington, D.C. 20036
Attn: Stephen Bouchard, Esq.
Telephone No.: (202) 939-7911
Facsimile No.: (202) 265-5706
If to Northwood, to:
Northwood Ventures LLC
485 Underhill Boulevard, Suite 205
Syosset, NY 11791
Telephone: (516) 364-5544
Facsimile: (516) 364-0879
If to Ledecky, to:
Mr. Jonathan J. Ledecky
1400 34th Street, N.W.
Washington, D.C. 20007
Telephone: (202) 965-2020
Facsimile: (202) 342-9090
If to a Shareholder, to:
Such Shareholder at the address or facsimile number
set forth for such Shareholder on Exhibit A attached
hereto.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without giving effect to
the principles of conflict of laws thereof.
(d) Jurisdiction; Venue; Jury Trial. Each party hereby submits to
the jurisdiction of the federal courts of the District of Columbia and agrees
to be served with legal process from any of such courts. Each party hereby
irrevocably waives, to the fullest extent permitted by law, any objection that
it may have, whether now or in the future, to the laying of venue in, or to the
jurisdiction of, any and each of such courts for the purpose of any such suit,
action, proceeding or judgment and further waives any claim that any such suit,
action, proceeding or judgment has been brought in an inconvenient forum. Each
party, to the extent
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<PAGE> 6
permitted by law, further waives any right to have a jury participate in any
suit filed by another party hereto with respect to any dispute relating hereto.
(e) Rules of Construction. The descriptive headings in this
Agreement are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement. Words
used in this Agreement, regardless of the gender and number specifically used,
shall be deemed and construed to include any other gender, masculine or
feminine, or neuter, and any other number, singular or plural, as the context
requires. As used in this Agreement, the word "including" is not limiting, and
the word "or" is not exclusive.
(f) Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of the parties to this Agreement and their legal
successors-in-interest, transferees or assignees and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, and each of such counterparts shall for all purposes be deemed to
be an original, but all such counterparts together shall constitute but one
instrument.
(h) Assignment. No party hereto shall assign its rights and
obligations under this Agreement or any part thereof, nor shall any party assign
or delegate any of its rights or duties hereunder without the prior written
consent of the other parties, and any assignment made without such consent shall
be void; provided, that the rights and obligations of E2E hereunder may be
assigned to and assumed by any affiliate of E2E, including, without limitation,
U.S. Technologies Inc. Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(i) Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.
(j) Extension; Waiver. Any party to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of any of
the other parties to this Agreement, (b) waive any inaccuracies in the
representations and warranties of any other party contained herein or in any
document, certificate, or writing delivered pursuant to this Agreement by any
other party, or (c) waive compliance by any other party with any of the
agreements or conditions contained herein or any breach thereof. Any agreement
on the part of any party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
-6-
<PAGE> 7
(k) Legal Fees; Costs. If any party to this Agreement institutes any
action or proceeding, whether before a court or arbitrator, to enforce any
provision of this Agreement, the prevailing party therein shall be entitled to
receive from the losing party reasonable attorneys' fees and costs incurred in
such action or proceeding, whether or not such action or proceeding is
prosecuted to judgment.
(l) Severability. The provisions of this Agreement are severable
and, if any provision of this Agreement is determined to be invalid or
unenforceable by any court of competent jurisdiction, such provision (in any
other jurisdiction) and the other provisions hereof (in any jurisdiction) shall
not be rendered otherwise invalid or unenforceable and such provision shall be
deemed to be modified to the extent necessary to render it legal, valid and
enforceable, and if no such modification shall render it legal, valid and
enforceable, then this Agreement shall be construed as if not containing the
provision held to be invalid, and the rights and obligations of the parties
shall be construed and enforced accordingly.
(m) Fiduciary Duty as Director. Each of the parties hereto
acknowledges and agrees that none of the provisions herein set forth shall be
deemed to restrict or limit any fiduciary duty that any of the undersigned may
have as a member of the Board or as an executive officer of Buyline; provided
that, no such duty shall excuse the undersigned from performing any obligations
as herein provided and otherwise complying with the terms and conditions of this
Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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<PAGE> 8
IN WITNESS WHEREOF, the parties have executed and delivered this Voting
Agreement as of the date first written above.
E2ENET, INC.
By: /s/ C. Gregory Earls
----------------------------------------
Name: C. Gregory Earls
Title: President
NORTHWOOD CAPITAL PARTNERS LLC
By: /s/ Henry T. Wilson
----------------------------------------
Name: Henry T. Wilson
Title: Managing Director
NORTHWOOD VENTURES LLC
By: /s/ Henry T. Wilson
----------------------------------------
Name: Henry T. Wilson
Title: Managing Director
JONATHAN J. LEDECKY
By:
----------------------------------------
Jonathan J. Ledecky
SILVERMAN TRUST
By: /s/ Lawrence Silverman
----------------------------------------
Name:
LAWRENCE SILVERMAN
/s/ Lawrence Silverman
-------------------------------------------
- 8 -
<PAGE> 9
EXHIBIT A
HOLDINGS OF BUYLINE SECURITIES AS OF THE DATE HEREOF
<TABLE>
<S> <C>
Northwood Capital Partners LLC
485 Underhill Boulevard, Suite 205
Syosset, NY 11791
Telephone: (516) 364-5544
Facsimile: (516) 364-0879
Number of Shares of Common Stock: 345,000
Northwood Ventures LLC
485 Underhill Boulevard, Suite 205
Syosset, NY 11791
Telephone: (516) 364-5544
Facsimile: (516) 364-0879
Number of Shares of Common Stock: 3,105,000
Mr. Jonathan J. Ledecky
1400 34th Street, N.W.
Washington, D.C. 20007
Telephone: (202) 965-2020
Facsimile: (202) 342-9090
Number of Shares of Common Stock: 1,725,000
E2Enet, Inc.
c/o U.S. Viewing Corporation
2001 Pennsylvania Avenue, NW
Suite 675
Washington, DC 20006
Attn: Gregory C. Earls
Telephone: (202) 466-3100
Facsimile: (202) 466-4557
Number of Shares of Common Stock: 21,334,704
Mr. Lawrence Silverman
7016 Terminal Square
Upper Darby, PA 19082
Facsimile: (610) 734-1263
Telephone: (610) 734-1245
Number of Shares of Common Stock: 25,000
Silverman Trust
c/o Mr. Lawrence Silverman
7016 Terminal Square
Upper Darby, PA 19082
Facsimile: (610) 734-1263
Telephone: (610) 734-1245
Number of Shares of Common Stock: 8,736,850
</TABLE>
- 9 -
<PAGE> 1
EXHIBIT 10.2
April 26, 2000
Northwood Ventures LLC
Northwood Capital Partners LLC
485 Underhill Boulevard, Suite 205
Syosset, NY 11791
Attn: Henry T. Wilson
Jonathan J. Ledecky
1400 34th Street, N.W.
Washington, D.C. 20007
Re: Voting Agreement re Buyline.net, Incorporated
Gentlemen:
Reference is made to that certain Voting Agreement, dated as of April
26, 2000 (the "Agreement"), by and among 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"), Jonathan J. Ledecky ("Ledecky"), and each of the other
shareholders of Buyline.net, Incorporated ("Buyline") listed on the signature
pages to the Agreement. Capitalized terms used but not defined herein shall have
the meanings given to such terms in the Agreement.
Notwithstanding any other provision of the Agreement, effective as of
the fifth (5th) anniversary of the execution of the Agreement, E2E irrevocably
waives Northwood's and Ledecky's obligations under Section 2 of the Agreement
and agrees not to exercise its right to vote any Shares held by Northwood and
Ledecky except as otherwise directed by Northwood and/or Ledecky. In the event
that the Shares held by E2E, Northwood, Ledecky and the Shareholders
collectively represent less than 25% of the Common Stock, and counsel to E2E and
U.S. Technologies Inc. determines that Northwood and Ledecky's obligations under
Section 2 of the Agreement are not reasonably necessary for Buyline to be
considered a "controlled subsidiary" of E2E for purposes of the Investment
Company Act of 1940, as amended, and as in effect from time to time, E2E agrees
to waive such obligations. E2E agrees that any future waivers under the
Agreement shall apply pro rata to Northwood and Ledecky.
Each of E2E, Northwood and Ledecky agrees to vote its or his respective
Shares to cause the Buyline Board of Directors (the "Board") to be composed of
seven (7) members, including three members nominated by E2E, one member
nominated by Northwood, Edward
<PAGE> 2
-2-
Hauk, Ed Sager and Michael Deale. Northwood's initial representative shall be
Henry T. Wilson.
At any time from and after the date that is (30) thirty months after
the date of the Agreement, if Northwood and/or Ledecky enter into an agreement
to sell any of their respective Shares pursuant to a bona fide offer by a
non-affiliated third party, E2E agrees, at its option, either (i) to waive
irrevocably its rights to vote any of such Shares being sold by Northwood and/or
Ledecky or (ii) to purchase such Shares being sold by Northwood and/or Ledecky
on the same terms and conditions as those contained in such offer.
With respect to any sale or disposition by E2E to a third party of any
Shares held by it, Northwood and Ledecky shall have the right to sell to such
third party, on the same terms and conditions as E2E is proposing to sell or
dispose of its Shares, the same proportion of their respective Shares as is
being sold by E2E. E2E shall provide Northwood and Ledecky with prior written
notice of any such sale or disposition, which notice shall include all of the
material terms and conditions of the proposed transfer and copies of each
agreement or other document pursuant to which the transfer will be effected.
Within ten (10) days of receipt of such notice, Northwood and Ledecky shall have
the right, to be exercised by written notice to E2E, to require E2E to cause the
purchaser of E2E's shares to include Northwood or Ledecky's shares as part of
the proposed sale or disposition transaction in accordance with the provisions
of this paragraph.
Except as expressly modified hereby, all other terms and conditions of
the Agreement remain in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 3
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Please acknowledge your understanding of and agreement with the
foregoing by signing this letter agreement as indicated below.
Sincerely,
E2ENET, INC.
By: /s/ C. Gregory Earls
----------------------------------
Name: C. Gregory Earls
Title: President
ACKNOWLEDGED AND AGREED TO BY:
NORTHWOOD CAPITAL PARTNERS LLC
By: /s/ Henry T. Wilson
--------------------------------------
Name: Henry T. Wilson
Title: Managing Director
NORTHWOOD VENTURES LLC
By: /s/ Henry T. Wilson
--------------------------------------
Name: Henry T. Wilson
Title: Managing Director
JONATHAN J. LEDECKY
- -----------------------------------------
