EXHIBIT 10.1
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT ("AGREEMENT") is dated as of August
30, 2002, by and among BestNet Communications Corp., a Nevada corporation (the
"COMPANY"), and each person or entity who executes a counterpart signature page
to this Agreement and is listed as an investor on SCHEDULE I attached to this
Agreement (each individually an "INVESTOR" and collectively the "INVESTORS").
W I T N E S S E T H:
WHEREAS, the Company desires to sell and issue up to an aggregate of
$250,000 of common stock, par value $.001 per share (the "Shares").
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall
have the following respective meanings:
"Closing" and "Closing Date" shall have the meanings ascribed to such terms
in Section 1.3 herein.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" shall mean the common stock, par value $.001 per share, of
the Company.
"Holder" and "Holders" shall include an Investor or Investors,
respectively, and any transferee of the Shares which have been transferred in
compliance thereof.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities" shall mean the Shares or any security issued in exchange for
such Shares.
"Securities Act" or "Act" shall mean the Securities Act of 1933, as
amended.
ARTICLE I
PURCHASE AND SALE OF THE STOCK
Section 1.1 PURCHASE AND SALE.
(a) Upon the following terms and conditions, the Company shall issue and
sell to each Investor listed on SCHEDULE I severally, and each Investor listed
on SCHEDULE I severally shall purchase from the Company, the number of Shares
equal to the following: $250,000 divided by the Per Share Price (as defined
immediately below). No fractional shares shall be issued as a result of such
calculation.
Section 1.2 PURCHASE PRICE. The per share purchase price for the Shares
shall be equal to the product of 70% multiplied by the closing bid price of the
Company's common stock on August 28th, 2002 (the "Per Share Price').
Section 1.3 THE CLOSING.
(a) The closing of the purchase and sale of the Shares (the "CLOSING")
shall take place by mail of signature pages to each of the documents
contemplated by this Agreement, following acceptance by the Company of
subscriptions for Shares being offered hereby, which acceptance shall not occur
until the conditions set forth in Article IV hereof shall be fulfilled or waived
in accordance herewith. The date on which the Closing occurs is referred to
herein as the "CLOSING DATE."
(b) On the Closing Date, the Company shall deliver to the applicable
Investor the Shares purchased hereunder by such Investor registered in the name
of such Investor, and such Investor shall deliver to the Company the purchase
price for the Shares purchased by such Investor hereunder by wire transfer in
immediately available funds to an account designated in writing prior to the
Closing Date by the Company. Each party shall deliver all documents, instruments
and writings required to be delivered by such party pursuant to this Agreement
at or prior to the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to each of the
Investors from and as of the date hereof through the Closing Date:
(a) ORGANIZATION AND QUALIFICATION; MATERIAL ADVERSE EFFECT. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada. Except for the Company's subsidiaries disclosed in
its Form 10-KSB for the fiscal year ended August 31, 2001 or its subsequently
filed Form 10-QSBs (the "COMPANY SEC FILINGS"), there are no other corporations
or other entities (including partnerships, limited liability companies and joint
ventures) in which the Company directly or indirectly owns at least a majority
of the voting power represented by the outstanding capital stock or other voting
securities or interests having voting power under ordinary circumstances to
elect a majority of the directors or similar members of the governing body, or
otherwise to direct the management and policies, of such corporation or entity.
The Company has the requisite corporate power to own its properties and to carry
on its business as now being conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
2
qualification necessary other than those in which the failure so to qualify
would not, individually or in the aggregate, have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means any adverse effect on the business, operations,
properties, prospects, or financial condition of the entity with respect to
which such term is used and which is material to such entity and other entities
controlling or controlled by such entity, taken as a whole, and any material
adverse effect on the transactions contemplated under the Agreement or any other
agreement or document contemplated hereby.
(b) AUTHORIZATION; ENFORCEMENT. (i) The Company has the requisite corporate
power and authority to enter into and perform this Agreement and to issue the
Securities in accordance with the terms hereof, (ii) the execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including the issuance of the Shares in
accordance with the terms of this Agreement have been duly authorized by all
necessary action, and no further consent or authorization of the Company is
required, (iii) this Agreement has been duly executed and delivered by the
Company, and (iv) this Agreement constitutes the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to the enforcement of creditors' rights
generally and by general principles of equity.
(c) CAPITALIZATION. SCHEDULE 2.1(C) sets forth the outstanding capital
stock of the Company. The issued and outstanding shares of capital stock of the
Company have been validly issued and are fully paid and non-assessable. Except
as set forth on SCHEDULE 2.1(C), there are no outstanding options, warrants,
rights to subscribe for, calls or commitments of any character whatsoever
relating to, or securities or rights exchangeable or convertible into, any
ownership interest in the Company.
(d) ISSUANCE OF SHARES. The Shares are duly authorized and will be, when
issued and paid for in accordance with the terms hereof, validly issued, fully
paid and non-assessable, free and clear of any and all liens, claims and
encumbrances, except for liens, claims and encumbrances placed upon such
Securities by an Investor.
(e) NO CONFLICTS. The execution, delivery and performance of this Agreement
and the consummation by the Company of the transactions contemplated hereby do
not and will not (i) result in a violation of the organizational documents, as
amended, of the Company or (ii) conflict with, or constitute a default (or an
event which 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, any agreement, indenture, patent, patent license or instrument
to which the Company is a party, or result in a violation of any Federal, state,
local or foreign law, rule, regulation, order, judgment or decree (including
Federal and state securities laws and regulations) applicable to the Company or
by which any property or asset of the Company is bound (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect); provided, that, for purposes of such representation as to
Federal, state, local or foreign law, rule or regulation, no representation is
made herein with respect to any of the same applicable solely to the Investors
and not to the Company. The business of the Company has not been, is not now
being conducted in violation of any law, ordinance or regulation of any
governmental entity, except for violations which either singly or in the
aggregate do not and will not have a Material Adverse Effect. The Company is not
required under Federal, state, local or foreign law, rule or regulation to
obtain any consent, authorization or order of, or to make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement, or issue and
3
sell the Shares in accordance with the terms hereof, provided that, for purposes
of the representation made in this sentence, the Company is assuming and relying
upon the accuracy of the relevant representations and agreements of the
Investors herein.
(f) NO MATERIAL ADVERSE CHANGE. Since May 31, 2002, the date through which
the most recent unaudited financial statements (the "FINANCIAL STATEMENTS") of
the Company have been prepared, no event which, individually or in the
aggregate, when considered with any other event, had or is likely to have a
Material Adverse Effect has occurred or exists with respect to the Company,
except as otherwise disclosed or reflected in Financial Statements, and as
otherwise provided to the Investors prior to the date hereof.
(g) NO UNDISCLOSED LIABILITIES. Except as set forth in the SEC Filings, the
Company does not have any liabilities or obligations not disclosed in the
Financial Statements, other than those liabilities incurred in the ordinary
course of its respective business since May 31, 2002, or liabilities or
obligations, individually or in the aggregate, which do not or would not have a
Material Adverse Effect on the Company.
(h) NO GENERAL SOLICITATION. Neither the Company nor, to the Company's
knowledge, any of its affiliates or any person acting on its or their behalf has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Securities.
(i) INTELLECTUAL PROPERTY. Except as set forth in the SEC Filings, the
Company owns, or has legal and valid rights by license, lease, or other
agreement to use, all trademarks, trade names, service marks, Internet domain
names, logos, assumed names, copyrights, patents, trade secrets, software,
databases and names, likenesses and other information concerning real persons,
and all registrations and applications therefor (collectively, the "INTELLECTUAL
PROPERTY RIGHTS") which are used or are needed to conduct its business as it is
now being conducted or as proposed to be conducted. The Company has no reason to
believe that the Intellectual Property Rights owned or used by the Company are
invalid or unenforceable or that the use of such Intellectual Property Rights by
the Company infringes upon or conflicts with any right of any third party, and
the Company has no knowledge of a basis for such claim or has received notice of
any such infringement or conflict. The Company has no knowledge of any
infringement or other violation of the Company's Intellectual Property Rights by
any third party. All registrations and applications for material Intellectual
Property Rights owned by the Company are valid and subsisting, and standing in
the record ownership of the Company. There are no settlements, consents,
agreements to forebear or other similar agreements or arrangements to which the
Company is bound which materially affects its rights to own, use or enforce any
Intellectual Property Rights.
(j) NO LITIGATION. Except as set forth in the SEC Filings, no litigation or
claim (including those for unpaid taxes) against the Company is pending or, to
the Company's knowledge, threatened, and no other event has occurred, which if
determined adversely would have a Material Adverse Effect on the Company, or
would materially adversely effect the transactions contemplated hereby.
(k) BROKERS. None have been used to complete this transaction and therefore
no fees or commissions are due for the monies involved.
4
Section 2.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each of the
Investors, severally and not jointly, hereby makes the following representations
and warranties to the Company as of the date hereof and on the Closing Date:
(a) AUTHORIZATION; ENFORCEMENT. (i) Such Investor has the requisite power
and authority, or the legal capacity, as the case may be, to enter into and
perform this Agreement and to purchase the Securities being sold to such
Investor hereunder, (ii) the execution and delivery of this Agreement by such
Investor and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate or partnership action, as
required, and (iii) this Agreement constitutes the valid and binding obligation
of such Investor enforceable against such Investor in accordance its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application.
(b) NO CONFLICTS. The execution, delivery and performance of this Agreement
and the consummation by such Investor of the transactions contemplated hereby do
not and will not (i) result in a violation of such Investor's organizational
documents, or (ii) conflict with any agreement, indenture, or instrument to
which such Investor is a party, or (iii) result in a violation of any law, rule,
or regulation or any order, judgment or decree of any court or governmental
agency applicable to such Investor. Such Investor is not required to obtain any
consent or authorization of any governmental agency in order for it to perform
its obligations under this Agreement.
(c) INVESTMENT REPRESENTATION. Such Investor is purchasing the securities
purchased hereunder for its own account and not with a view to distribution in
violation of any securities laws. With respect to the purchase of the securities
pursuant to this Agreement, Investor is not acting as an "underwriter" within
the meaning of Section 2(a)(11) of the Securities Act. Such Investor has no
present intention to sell the securities purchased hereunder and such Investor
has no present arrangement (whether or not legally binding) to sell the
Securities purchased hereunder to or through any person or entity; provided,
however, that by the representations herein, such Investor does not agree to
hold any of the Securities for any minimum or other specific term and reserves
the right to dispose of any of the Securities at any time in accordance with
Federal and state securities laws applicable to such disposition.
(d) ACCREDITED INVESTOR. Such Investor is an "ACCREDITED INVESTOR" as
defined in Rule 501 promulgated under the Securities Act. The Investor has such
knowledge and experience in financial and business matters in general and
investments in particular, so that such Investor is able to evaluate the merits
and risks of an investment in the Securities purchased hereunder and to protect
its own interests in connection with such investment. In addition (but without
limiting the effect of the Company's representations and warranties contained
herein), such Investor has reviewed the Company's SEC Filings and received such
information as it considers necessary or appropriate for deciding whether to
purchase the Securities purchased hereunder. Notwithstanding the foregoing, the
Investor has not been provided and is not otherwise in possession of material
nonpublic information pertaining to the Company.
(e) RULE 144. Such Investor understands that Shares must be held
indefinitely until such securities are registered under the Securities Act or an
exemption from registration is available. Such Investor has been advised or is
aware of the provisions of Rule 144 promulgated under the Act.
5
(f) BROKERS. Investor has taken no action, which would give rise to any
claim by any person for brokerage commissions, finder's fees or similar payments
by the Company relating to this Agreement or the transactions contemplated
hereby.
(g) RELIANCE BY THE COMPANY. Such Investor understands that the Shares are
being offered and sold in reliance on a transactional exemption from the
registration requirements of Federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such Investor set
forth herein in order to determine the applicability of such exemptions and the
suitability of such Investor to acquire the Securities.
ARTICLE III
COVENANTS
Section 3.1 REPLACEMENT CERTIFICATES. The certificate(s) representing the
Shares held by any Investor (or then holder) may be exchanged by such Investor
(or such holder) at any time and from time to time for certificates with
different denominations representing an equal amount of Shares, as the case may
be, as reasonably requested by such Investor (or such holder) upon surrendering
the same. No service charge will be made for such registration, transfer or
exchange.
Section 3.2 NOTICES. The Company agrees to provide all holders of Shares
with copies of all notices and information, including, without limitation,
notices and proxy statements in connection with any meetings, contemporaneously
with the delivery of such notices or information to such existing members.
Section 3.3 NO IMPAIRMENT. The Company will not, by amendment of its
organizational documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it under this Agreement, but will at
all times in good faith assist in the carrying out of all the provisions of such
agreements and instruments.
ARTICLE IV
CONDITIONS
Section 4.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE
AND SELL THE SHARES. The obligation hereunder of the Company to issue and sell
the Shares to the Investors is subject to the satisfaction, at or before the
Closing Date, of each of the conditions set forth below. These conditions are
for the Company's sole benefit and may be waived by the Company at any time in
its sole discretion.
(a) ACCURACY OF THE INVESTORS' REPRESENTATIONS AND WARRANTIES. The
representations and warranties of each Investor shall be true and correct in all
6
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
particular date, which shall be true and correct in all material respects as of
such other date).
(b) PERFORMANCE BY THE INVESTORS. Each Investor shall have performed all
agreements and satisfied all conditions required hereby to be performed or
satisfied by such Investor at or prior to the Closing Date.
(c) NO INJUNCTION. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
(d) APPROVALS. The Company shall have obtained the requisite
consents/approvals with respect to the transactions contemplated by this
Agreement in accordance with the Company's organizational documents, including,
without limitation, receipt of approval of the Company's board of directors.
Section 4.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTORS TO
PURCHASE THE SHARES. The obligation hereunder of each Investor to acquire and
pay for the Shares is subject to the satisfaction, at or before the Closing
Date, of each of the conditions set forth below. These conditions are for each
Investor's sole benefit and may be waived by each Investor at any time in its
sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The
representation and warranties of the Company shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
particular date which shall be true and correct in all material respects as of
such other date), and except that all representations and warranties that by
their terms are qualified by reference to "materiality" or to a "Material
Adverse Effect" shall be, or have been, true and correct in all respects.
(b) PERFORMANCE BY THE COMPANY. The Company shall have performed all
agreements and satisfied all conditions required to be performed or satisfied by
the Company at or prior to the Closing Date.
(c) NO INJUNCTION. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority or competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
(d) OFFICER'S CERTIFICATE. The Company shall have delivered to the
Investors a certificate in form and substance reasonably satisfactory to the
Investors, executed by the Secretary or an Assistant Secretary of the Company on
behalf of the Company, certifying as to the satisfaction of all closing
conditions, incumbency of signing officers, charter, Bylaws, good standing and
authorizing resolutions of the Company.
7
p ARTICLE V
LEGEND AND STOCK; REGISTRATION RIGHTS
Section 5.1 LEGEND AND STOCK. Each certificate representing the Shares
shall be stamped or otherwise imprinted with a legend substantially in the
following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (I) PURSUANT TO A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT
WITH RESPECT TO THESE SECURITIES OR (II) PURSUANT TO A SPECIFIC EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY UPON A HOLDER HEREOF FIRST
HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
ISSUER THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE
PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR
SECURITIES LAW.
Section 5.2 REGISTRATION RIGHTS. The Shares shall be entitled to `standard
piggyback registration rights" based on future registrations undertaken by the
company.
ARTICLE VI
TERMINATION
Section 6.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
at any time prior to the Closing Date by the mutual written consent of the
Company and the Investors.
Section 6.2 OTHER TERMINATION. This Agreement may be terminated by the
Company or by any of the Investors at any time if the Closing Date shall not
have occurred by the fifth business day following the date of this Agreement;
provided, however, that the right to terminate this Agreement under this Section
6.2 shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Closing Date to have occurred on or prior to such date.
ARTICLE VII
MISCELLANEOUS
Section 7.1 STAMP TAXES; AGENT FEES. The Company shall pay all stamp and
other taxes and duties levied in connection with the issuance of the Shares
pursuant hereto.
Section 7.2 SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION.
(a) The Company and the Investors acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
8
injunction or injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
(b) The Company and each of the Investors (i) hereby irrevocably submits to
the exclusive jurisdiction of the United States District Court for the District
of Arizona, the Arizona State courts and other courts of the United States
sitting in Maricopa County, Arizona for the purposes of any suit, action or
proceeding arising out of or relating to this Agreement and (ii) hereby waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. The Company and each of the
Investors consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
paragraph shall affect or limit any right to serve process in any other manner
permitted by law.
Section 7.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement together with the
agreements and documents executed in connection herewith, contains the entire
understanding of the parties with respect to the matters covered hereby and,
except as specifically set forth herein, neither the Company nor any Investor
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by a
written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought.
Section 7.4 NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
to the Company: BestNet Communications Corp.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx X
Xxxxx Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx
9
with copies to: Squire, Xxxxxxx & Xxxxxxx L.L.P.
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attn: Xxxxxxx X. Xxxx, Esq.
to the Investors: To each Investor with a copy to its counsel at the
addresses set forth on SCHEDULE I of this Agreement.
Any party hereto may from time to time change its address for notices by giving
at least five (5) days written notice of such changed address to the other
parties hereto. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above.
Section 7.5 INDEMNITY. Each party shall indemnify, defend and hold harmless
each other party against any loss, cost or damages (including reasonable
attorney's fees) incurred as a result of such parties' breach of any
representation, warranty, covenant or agreement in this Agreement.
Section 7.6 WAIVERS. No waiver by any party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future 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.
Section 7.7 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.
Section 7.8 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The parties hereto may amend this
Agreement without notice to or the consent of any third party. The Company may
not assign this Agreement or any rights or obligations hereunder without the
prior written consent of such Investors holding a majority in principal amount
of the Shares (which consent may be withheld for any reason in their sole
discretion), except that the Company may assign this Agreement in connection
with a merger, consolidation, business combination or the sale of all or
substantially all of its assets provided that the Company is not released from
any of its obligations hereunder, such successor in interest or assignee assumes
all obligations of the Company hereunder, and appropriate adjustment of the
provisions contained in this Agreement is made, in form and substance
satisfactory to the Investors, to place the Investors in substantially the same
position as they would have been but for such assignment. No Investor may assign
10
this Agreement (in whole or in part) or any rights or obligations hereunder
without the Company's prior written consent (which consent may be withheld for
any reason in their sole discretion).
Section 7.9 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.
Section 7.10 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Arizona without regard to such State's principles of conflict of laws, except
for such matters that relate to the Company's corporate governance, which shall
be governed by the internal laws of the State of Nevada without regard to such
State's principles of conflict of laws.
Section 7.11 SURVIVAL. The representations and warranties and the
agreements and covenants of the Company and each Investor contained herein shall
survive the Closing.
Section 7.12 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
Section 7.13 PUBLICITY. The Company agrees that it will not include in any
public announcement the name of any Investor without its consent, unless and
until such disclosure is required by law or applicable regulation, and then only
to the extent of such requirement.
Section 7.14 SEVERABILITY. The parties acknowledge and agree that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
Section 7.15 LIKE TREATMENT OF HOLDERS. Neither the Company nor any of its
affiliates shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee, payment for the redemption or
exchange of Securities, or otherwise, to any holder of Securities, for or as an
inducement to, or in connection with the solicitation of, any consent, waiver or
amendment of any terms or provisions of the Securities or this Agreement, unless
such consideration is required to be paid to all holders of Securities bound by
such consent, waiver or amendment whether or not such holders so consent, waive
or agree to amend and whether or not such holders tender their Securities for
redemption or exchange. The Company shall not, directly or indirectly, redeem
any Securities unless such offer of redemption is made pro rata to all holders
of Securities on identical terms.
Section 7.16 EXPENSES. Each party shall pay its own expenses incident to
the preparation and performance of this Agreement and the documents provided for
herein.
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BESTNET COMMUNICATIONS CORP.,
a Nevada corporation
By:
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
INVESTOR:
By:
------------------------------------
Name: Xx. Xxxxxxx Xxxxxxxxx
Title:
---------------------------------
12
