EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
VOCALSCAPE NETWORKS, INC.
STOCK PURCHASE AGREEMENT (this "Agreement") made as of the date set forth
on the signature page hereof by and between Vocalscape Networks, Inc., a Nevada
corporation (the "Company"), and Xxxxxx Xxxx (the "Purchaser").
WITNESSETH:
WHEREAS, the Company is offering in a private placement (the "Offering")
up to Twenty Thousand (20,000) shares of its Series A Convertible Preferred
Stock, par value $0.001 per share (the "Shares"), for consideration of the
agreement of the Purchaser to cancel $5,000 of debt (the "Cancellation of Debt")
owed by the Company to the Purchaser pursuant to that certain Promissory Note
dated January 27, 2004 (the "Promissory Note");
WHEREAS, the obligations to pay the holder of the Promissory Note were
assumed by Vocalscape Networks, Inc. (then a wholly owned subsidiary of
Vocalscape, Inc.) and, in turn, assumed by the Company pursuant to that certain
merger on October 4, 2005, by and between the Company (then named "Dtomi, Inc.")
and Vocalscape Networks, Inc. (which merged into Dtomi, Inc.; after consummation
of the merger Dtomi, Inc. changed its name to "Vocalscape Networks, Inc."), with
such assumptions of the Promissory Note being consented to by the holder of the
Promissory Note;
WHEREAS, Bedford Investments, LLC, the original holder of the Promissory
Note, has assigned all rights, title and interest the Promissory Note to
Purchaser, with such assignment not requiring the consent of the maker of the
Promissory Note;
WHEREAS, Purchaser, being a duly elected and incumbent officer and
director of the Company, is an "accredited investor" as such terms is defined
under Rule 501(a) of the Securities Act of 1933, as amended (the "Act");
WHEREAS, the Company is offering the Shares pursuant to the exemption from
registration promulgated under Rule 506 of Regulation D of the Act;
WHEREAS, the Purchaser desires to purchase that number of Shares set forth
on the signature page hereof on the terms and conditions hereinafter set forth;
and
WHEREAS, the closing price for shares of common stock on the
Over-the-Counter Bulletin Board on January 9, 2006, was $.17 per share.
NOW, THEREFORE, in consideration of the premises and the mutual
representations and covenants hereinafter set forth, the parties hereto agree as
follows:
1. Subscription for Shares and Representations by Purchaser.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby irrevocably subscribes for and agrees to purchase from
the Company such Shares as is set forth upon the signature page hereof and
the Company agrees to sell such Shares to the Purchaser for the
Cancellation of Debt. A stock certificate representing the Shares will be
delivered by the Company to the Purchaser promptly following the execution
of this Agreement, pursuant to written instructions provided by Purchaser
to the Company.
1.2 The Purchaser recognizes that the purchase of Shares involves a
high degree of risk in that (i) the Company remains an early stage
business with a limited operating history and will require funds in
addition to the proceeds of the Offering, (ii) an investment in the
Company is highly speculative and only investors who can afford the loss
of their entire investment should consider investing in the Company, (iii)
the Purchaser may not be able to liquidate its investment, (iv)
transferability of the Shares is extremely limited, and (v) in the event
of a disposition, the Purchaser could sustain the loss of its entire
investment.
1.3 The Purchaser represents that the Purchaser is (i) an
"accredited investor" as such term is defined in Rule 501 of Regulation D
promulgated under the Act, (ii) a duly elected and incumbent officer and
director of the Company, and (iii) is able to bear the economic risk and
illiquidity of an investment in the Shares, and
1.4 The Purchaser hereby acknowledges and represents that (i) the
Purchaser has prior investment experience, including investment in
non-listed and unregistered securities, or that the Purchaser has employed
the services of an investment advisor, attorney and/or accountant to read
all of the documents furnished or made available by the Company both to
the Purchaser and to all other prospective investors to evaluate the
merits and risks of such an investment on the Purchaser's behalf, (ii) the
Purchaser recognizes the highly speculative nature of an investment in the
Shares, and (iii) the Purchaser is able to bear the economic risk and
illiquidity which the Purchaser assumes by investing in the Shares.
1.5 To the extent necessary, the Purchaser has retained, at its own
expense, and relied upon the advice of appropriate professionals regarding
the investment, tax and legal merits and consequences of this Agreement
and its purchase of the Shares hereunder.
1.6 The Purchaser understands that none of the Shares have been
registered under the Act by reason of a claimed exemption under the
provisions of the Act which depends, in part, upon the Purchaser's
investment intention. In this connection, the Purchaser hereby represents
that the Purchaser is purchasing the Shares for the Purchaser's own
account for investment and not with a view toward the resale or
distribution thereof to others. The Purchaser, if an entity, was not
formed for the purpose of purchasing the Shares. The Purchaser understands
that Rule 144 promulgated under the Act requires, among other conditions,
a one-year holding period prior to the resale (in limited amounts) of
securities acquired in a non-public offering without having to satisfy the
registration requirements under the Act.
1.7 The Purchaser understands and hereby acknowledges that the
Company is under no obligation to register the Shares under the Act or any
state securities or "blue sky" laws. The Purchaser consents that the
Company may, if it desires, permit the transfer of the Shares out of the
Purchaser's name only when the Purchaser's request for transfer is
accompanied by an opinion of counsel reasonably satisfactory to the
Company that neither the sale nor the proposed transfer results in a
violation of the Act or any applicable state "blue sky" laws
(collectively, "Securities Laws").
1.8 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares indicating that such
Shares have not been registered under the Act or any state securities or
"blue sky" laws and setting forth or referring to the restrictions on
transferability and sale thereof contained in this Agreement. The
Purchaser is aware that the Company will make a notation in its
appropriate records and issue "stop transfer" instructions to its transfer
agent with respect to the restrictions on the transferability of such
Shares.
2. Representations by the Company.
The Company hereby represents and warrants to the Purchaser that:
2.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Nevada and has full corporate power and lawful authority to
conduct its business as presently conducted. The Company is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the nature of the business presently conducted by it
or the properties owned, leased or operated by it, makes such
qualification or licensing necessary and where the failure to be so
qualified or licensed would have a material adverse effect upon the
business, prospects or financial condition of the Company.
2.2 Capitalization and Voting Rights. The Company is authorized to
issue 100 million shares of common stock, $0.001 par value, of which
approximately 1,539,009 shares are issued and outstanding as of December
31, 2005, and 25 million shares of preferred stock, $0.001 par value, none
of which are issued and outstanding. All issued and outstanding shares of
capital stock of the Company are validly issued, fully paid and
nonassessable. Except as set forth in this Agreement or in the Company's
filings made with the Securities and Exchange Commission (the "SEC
Filings"), there are no outstanding options, warrants, agreements,
commitments, convertible securities, preemptive rights or other rights to
subscribe for or to purchase any shares of capital stock of the Company
nor are there any agreements, promises or commitments to issue any of the
foregoing. Except as set forth in the SEC Filings, in this Agreement and
as otherwise required by law, there are no restrictions upon the voting or
transfer of the Shares pursuant to the Company's Articles of
Incorporation, as amended, (the "Articles of Incorporation"), Bylaws or
other governing documents or any agreement or other instruments to which
the Company is a party or by which the Company is bound; provided,
however, that the Shares will be subject to restrictions on transfer and
Securities Laws as provided herein.
2.3 Authorization; Enforceability. The Company has all corporate
right, power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. All corporate action on the part of
the Company, its directors and stockholders necessary for the
authorization, execution, delivery and performance of this Agreement by
the Company, the authorization, sale, issuance and delivery of the Shares
and the performance of the Company's obligations hereunder has been taken.
This Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, and to limitations of
public policy. The Shares have been duly and validly authorized and, upon
the issuance and delivery thereof and payment therefor as contemplated by
this Agreement, will be free and clear of liens (other than any liens
created by or imposed on the holders thereof through no action of the
Company), duly and validly authorized and issued, fully paid and
nonassessable. The issuance and sale of the Shares contemplated hereby
will not give rise to any preemptive rights or rights of first refusal on
behalf of any person.
2.4 No Conflict; Governmental Consents.
(a) The execution and delivery by the Company of this Agreement, the
consummation of the transactions contemplated hereby and the offer and sale of
the Shares will not result in the violation of any law, statute, rule,
regulation, order, writ, injunction, judgment or decree of any court or
governmental authority to or by which the Company is bound that would have a
material adverse effect upon the business or financial condition of the Company,
or of any provision of the Articles of Incorporation or Bylaws of the Company,
and will not conflict with, or result in a breach or violation of, any of the
terms or provisions of, or constitute (with due notice or lapse of time or both)
a default under, any lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Company is a party or by
which it is bound or to which any of its properties or assets is subject, nor
result in the creation or imposition of any lien upon any of the properties or
assets of the Company that would have a material adverse effect upon the
business or financial condition of the Company.
(b) No consent, waiver, approval, authorization or other order of
any governmental authority or other third-party is required to be obtained by
the Company in connection with the authorization, execution and delivery of this
Agreement or with the authorization, issuance and sale of the Shares, except for
such consents, waivers, approvals, authorizations, orders or filings as may be
required to be obtained or made, and which shall have been obtained or made at
or prior to the required time and except for such consents, waivers, approvals,
authorizations, orders or filings that would not materially adversely affect the
business, property, financial condition or results of operations of the Company.
2.5 Licenses. The Company has all licenses, permits and other
governmental authorizations currently required for the conduct of its
business or ownership of properties and is in all material respects
complying therewith, except for any licenses, permits or other
governmental authorizations which would not materially adversely affect
the business, property, financial condition, or results of operations of
the Company.
2.6 Litigation. The Company knows of no pending or threatened legal
or governmental proceedings against the Company which could materially
adversely affect the business, property, financial condition or results of
operations of the Company.
2.7 Investment Company. The Company is not an "investment company"
within the meaning of such term under the Investment Company Act of 1940,
as amended, and the rules and regulations of the Securities and Exchange
Commission thereunder.
3. Conditions to Obligations of the Purchaser and the Company.
3.1 The Purchaser's obligation to purchase the Shares is subject to
the fulfillment of the following conditions, which conditions may be
waived at the option of each Purchaser to the extent permitted by law:
(a) Representations and Warranties. The representations and
warranties made by the Company in Section 2 hereof shall be true and correct in
all material respects when made, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of said date.
(b) Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to such purchase shall
have been performed or complied with in all material respects.
(c) No Legal Order Pending. There shall not then be in effect any
legal or other order enjoining or restraining the transactions contemplated by
this Agreement.
(d) No Law Prohibiting or Restricting Such Sale. There shall not be
in effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person to issue the Shares which
consent or approval shall not have been obtained (except as may otherwise be
provided in this Agreement).
3.2 The Company's obligation to sell the Shares at the Closing is
subject to the fulfillment on or prior to the Closing Date of the
following conditions, which conditions may be waived at the option of the
Company to the extent permitted by law:
(a) Acknowledgements, Representations and Warranties. The
acknowledgements, representations and warranties made by the Purchaser in
Section 1 hereof shall be true and correct in all respects when made, and shall
be true and correct in all material respects on the date that the transactions
contemplated in Section 1 are consummated with the same force and effect as if
they had been made on and as of said date; provided, however, that any
acknowledgement, representation or warranty made by the Purchaser that is not
true and correct and as a result the Purchaser is not an "accredited investor"
under Rule 501 under Regulation D of the Act or the Company is not able to rely
upon a private placement exemption under Rule 506 under Regulation D of the Act
for the issuance of the Shares will automatically be deemed to be material. If
any such representations, warranties or acknowledgements shall not be true and
accurate in any respect prior to the Closing, the undersigned shall give
immediate written notice of such fact to the Company, and to its
representatives, if any, specifying which representations, warranties or
acknowledgements are not true and accurate and the reason therefor.
(b) Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchaser on or prior to such purchase
shall have been performed or complied with in all material respects.
(c) No Legal Order Pending. There shall not then be in effect any
legal or other order enjoining or restraining the transactions contemplated by
this Agreement.
(d) No Law Prohibiting or Restricting Such Sale. There shall not be
in effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person to issue the Shares which
consent or approval shall not have been obtained (except as may otherwise be
provided in this Agreement).
4. Miscellaneous.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient in writing and sent by (a) telecopy or facsimile at the
address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received); or (b)
registered or certified mail, return receipt requested, or delivered by
hand against written receipt therefor, addressed to Vocalscape Networks,
Inc., 305 - 1847 West Broadway, Vancouver, British Columbia, Canada V6J
1Y6, Attention: President. Notices shall be deemed to have been given or
delivered on the date of mailing, except notices of change of address,
which shall be deemed to have been given or delivered when received.
4.2 Except as set forth in Section 4.9, this Agreement shall not be
changed, modified or amended except by a writing signed by the parties to
be charged, and this Agreement may not be discharged except by performance
in accordance with its terms or by a writing signed by the party to be
charged.
4.3 Upon the execution and delivery of this Agreement by the
Purchaser, this Agreement shall become a binding obligation of the
Purchaser with respect to the purchase of Shares as herein provided,
subject to acceptance by the Company; subject, however, to the right
hereby reserved to the Company to enter into the same agreements with
other purchasers and to add and/or delete other persons as purchasers.
4.4 Notwithstanding the place where this Agreement may be executed
by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and
governed by the laws of the State of Washington, United States of America,
without regard to principles of conflicts of law.
4.5 The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any
other provision of this Agreement, which shall remain in full force and
effect. If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being
enforced in whole or in part, such provision shall be interpreted so as to
remain enforceable to the maximum extent permissible consistent with
applicable law and the remaining conditions and provisions or portions
thereof shall nevertheless remain in full force and effect and enforceable
to the extent they are valid, legal and enforceable, and no provisions
shall be deemed dependent upon any other covenant or provision unless so
expressed herein.
4.6 It is agreed that a waiver by either party of a breach of any
provision of this Agreement shall not operate, or be construed, as a
waiver of any subsequent breach by that same party.
4.7 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and
intent of this Agreement.
4.8 This Agreement may be executed in two or more counterparts each
of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
4.9 The Purchaser agrees not to issue any public statement with
respect to the Purchaser's investment or proposed investment in the
Company or the terms of any agreement or covenant between them and the
Company without the Company's prior written consent, except such
disclosures as may be required under applicable law or under any
applicable order, rule or regulation.
4.10 Nothing in this Agreement shall create or be deemed to create
any rights in any person or entity not a party to this Agreement.
4.11 Any pronoun herein shall include all genders and/or the plural
or singular as appropriate from the context.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
[signature page follows]
Number of Shares Subscribed: 20,000 shares of Series A Convertible
Preferred Stock
Multiplied by Debt Cancelled: $.25 cancellation of debt per share purchased
Equals Subscription Amount of
Debt Cancelled: $5,000 of cancellation of debt under the
Promissory Note
Name in which securities should
be issued: Xxxxxx Xxxx
PURCHASER:
By: ________________________________ Date: January ___, 2006
Name: Xxxxxx Xxxx
Address: ___________________________
Telephone: _________________________
Facsimile: _________________________
Tax ID or Social Security Number: ____________________________
This Subscription Agreement is agreed to and accepted as of January ___, 2006.
VOCALSCAPE NETWORKS, INC.
By: ________________________________
Name: Xxx XxXxxxxx
Title: President
