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Exhibit 10.34
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the _______ day of
September, 2000 (the "Effective Date"), by and between DIAL2G0, INC., a Delaware
corporation (the "Corporation"), and the individual or entity set forth on the
signature line hereto (the "Investor").
WITNESSETH:
WHEREAS, the Corporation desires to issue and the Investor desires to
acquire shares of stock of the Corporation as herein described, on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. Number of Shares and Price Per Share. For the consideration set
forth on Exhibit A hereto, the Corporation agrees to grant to the Investor such
number of shares of the Corporation's Common Stock (the "Stock") as are set
forth on Exhibit A hereto.
2. Right of First Refusal. Before any shares of Stock registered in the
name of the Investor may be sold or transferred (including transfer by operation
of law) other than as set forth in Section 2(e) below, such shares shall first
be offered to the Corporation, which will have the right to purchase all or any
part of the shares proposed to be transferred ("Right of First Refusal"), in the
following manner:
(a) The Investor or his legal representative shall first give
written notice (the "Transfer Notice") of any proposed
transfer to the Corporation. The Transfer Notice shall
describe the price and terms and conditions offered by the
bona fide prospective purchaser. The Corporation shall have
ten (10) days from the date of any such notice to exercise its
right of first refusal under this Section 2 for the price and
upon the terms specified in the Transfer Notice by giving
written notice to Investor and stating therein the quantity of
the Investor's shares proposed to be transferred to be
purchased by the Corporation.
(b) If the Corporation fails to exercise in full the Right of
First Refusal within ten (10) days from the date the Transfer
Notice is delivered to the Corporation, the Investor may, not
later than one hundred eighty (180) days following delivery to
the Corporation of the Transfer Notice, conclude a transfer of
the shares of Stock subject to the Transfer Notice which have
not been purchased by the Corporation pursuant to exercise of
the
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Right of First Refusal on the terms and conditions described
in the Transfer Notice. Any proposed transfer on terms and
conditions different from those described in the Transfer
Notice, as well as any subsequent proposed transfer by the
Investor, shall again be subject to the Right of First Refusal
and shall require compliance by the Investor with the
procedure described in this Section 2. If the Corporation
exercises the Right of First Refusal, the parties shall
consummate the sale of shares of Stock on the terms set forth
in the Transfer Notice by thirty (30) days after the delivery
of the Transfer Notice to the Corporation as provided in
Section 2(b) above); provided, however, in the event the
Transfer Notice provides for the payment for the shares of
Stock other than in cash, the Corporation shall have the
option of paying for the shares of Stock in cash equal to the
fair market value of the consideration described in the
Transfer Notice.
(c) Condition to Transfer. All transferees of shares of Stock or
any interest therein other than the Corporation shall be
required as a condition of such transfer to agree in writing
(in a form satisfactory to the Corporation) that they will
receive and hold such shares of Stock or interests subject to
the provisions of this Agreement, including the Right of First
Refusal.
(d) Termination of Rights. The Right of First Refusal shall
terminate upon the effectiveness of a registration statement
for the sale of the Corporation's shares of Common Stock in a
firm commitment underwritten public offering registered under
the Act in which the Corporation receives proceeds (net of
underwriting commissions and discounts) of at least
$10,000,000 (a "Qualified IPO").
(e) Limitation on Right. Notwithstanding the foregoing, the Right
of First Refusal set forth in Section 2 shall not apply to any
transfer to (i) a member of Investor's "Immediate Family"
(defined to include his parents, children, grandchildren,
spouse, siblings, the children of siblings, first cousins, and
his spouse's first cousins, nieces or nephews), (ii) a trust
established by the Investor for the benefit of himself or his
Immediate Family, or a corporation, partnership, limited
liability company or other entity controlled by any of the
foregoing, (iii) any shareholder, officer, member, manager,
director or employee of Investor and
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any shareholder, officer, director, employee, partner, member
of other owner of any of them, or (iv) any person who
controls, is controlled by or is under common control with
Investor or who is an affiliate of Investor (each of the
foregoing, a "Permitted Transferee"); provided that in any
case any such Permitted Transferee shall agree in writing (in
a form satisfactory to the Corporation) to take the shares of
Stock subject to all the terms of this Agreement, including
the Right of First Refusal.
3. "Market Stand-Off" Agreement. Investor hereby agrees that, during
the period of duration (not to exceed 180 days) specified by the Corporation and
an underwriter of common stock or other securities of the Corporation following
the effective date of a registration statement of the Corporation filed under
the Securities Act of 1933, as amended (the "Act"), he shall not, to the extent
requested by the Corporation and such underwriter, directly or indirectly sell,
offer to sell, contract to sell (including, without limitation, any short sale),
grant any option to purchase, pledge or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) the shares of Stock at any time
during such period except shares of Stock included in such registration;
provided, however, that such agreement shall not be required unless all officers
and directors and key employees of the Corporation enter into similar
agreements.
4. Legends. All certificates representing any shares of Stock subject
to the provisions of this Agreement shall have endorsed thereon the following
legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
FIRST REFUSAL IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET FORTH IN
AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR HIS
OR HER PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THIS CORPORATION."
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE
SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE
CORPORATION RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY
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TO THE CORPORATION, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."
5. Warranties and Representations. In connection with the proposed
purchase of the Stock, Investor hereby agrees, represents and warrants as
follows:
(a) Investor is purchasing the Stock solely for his own account
for investment and not with a view to, or for resale in
connection with, any distribution thereof within the meaning
of the Act. Investor further represents that he does not have
any present intention of selling, offering to sell or
otherwise disposing of or distributing the Stock or any
portion thereof, and that the entire legal and beneficial
interest of the Stock he is purchasing is being purchased for,
and will be held for the account of, the Investor only and
neither in whole nor in part for any other person.
(b) Investor is aware of the Corporation's business affairs and
financial condition and has acquired sufficient information
about the Corporation to reach an informed and knowledgeable
decision to acquire the Stock. Investor further represents and
warrants that he has discussed the Corporation and its plans,
operations and financial condition with its officers, has
received, to his knowledge all such information as he deems
necessary and appropriate to enable his to evaluate the
financial risk inherent in making an investment in the Stock
and, to his knowledge, has received satisfactory and complete
information concerning the business and financial condition of
the Corporation in response to all inquiries in respect
thereof.
(c) Investor realizes that his purchase of the Stock will be a
highly speculative investment, and he is able, without
impairing his financial condition, to hold the Stock for an
indefinite period of time and to suffer a complete loss on his
investment.
(d) The Corporation has disclosed to Investor that:
(i) The sale of the Stock has not been registered under
the Act, and the Stock must be held indefinitely
unless a transfer of it is subsequently registered
under the Act or an exemption
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from such registration is available, and that the
Corporation is under no obligation to register the
Stock;
(ii) The Corporation will make a notation in its records
of the aforementioned restrictions on transfer and
legends.
(e) Investor is aware of the provisions of Rule 144, promulgated
under the Act, which, in substance, permits limited public
resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof (or an affiliate of such
issuer), in a non-public offering subject to the satisfaction
of certain conditions. Investor represents that he understands
that in the event all of the requirements of Rule 144 are not
satisfied, registration under the Act or compliance with an
exemption from registration will be required, and that,
notwithstanding the fact that Rule 144 is not exclusive, the
staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144
will have a substantial burden of proof in establishing that
an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
(f) Without in any way limiting the Investor's representations and
warranties set forth above, Investor further agrees that he
shall in no event make any disposition of all or any portion
of the Stock which he is purchasing unless and until:
(i) There is then in effect a Registration Statement
under the Act covering such proposed disposition and
such disposition is made in accordance with said
Registration Statement; or
(ii) Investor shall have (1) notified the Corporation of
the proposed disposition and furnished the
Corporation with a detailed statement of the
circumstances surrounding the proposed disposition,
and (2) furnished the Corporation with an opinion of
his own counsel to the effect that such disposition
will not require registration of such shares under
the Act, and such opinion of his counsel shall have
been concurred in by counsel for the Corporation and
the Corporation shall have advised the Investor of
such concurrence.
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Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel
shall be required: (i) for any transfer of shares of the Stock
in compliance with SEC Rule 144(k), (ii) for any transfer of
shares of the Stock by Investor to a Permitted Transferee. It
is agreed that the Corporation will not require opinion of
counsel for transactions made pursuant to Rule 144 except in
unusual circumstances.
6. Transfers in Violation of Agreement. The Corporation shall not be
required (i) to transfer on its books any shares of Stock of the Corporation
which shall have been sold or transferred in violation of any of the provisions,
set forth in this Agreement or (ii) to treat as owner of such shares or to
accord the right to vote as such owner or to pay dividends to any transferee to
whom such shares shall have been so transferred.
7. Registration Rights. If at any time or times after the date hereof,
the Corporation shall grant to a subsequent purchaser or purchasers of the
Corporation's equity securities or securities convertible into equity securities
in a financing or series of financings in which the Corporation receives at
least $500,000 piggyback registration rights, the Corporation will grant the
piggyback registration rights to the Investor with respect to the Stock (and any
shares of the Corporation's equity securities issued to Investor in a stock
dividend, stock split or similar event or recapitalization, merger,
consolidations or other reorganizations) on the same terms and conditions
(including, but not limited to, priority as to cut-back rights) as granted to
the subsequent purchaser or purchasers.
8. Rights of First Refusal
(a) Certain Definitions. As used in this Section 8:
(i) The term "New Securities" shall mean any capital
stock of the Corporation, whether now authorized or
not, and rights, options or warrants to purchase
capital stock, and securities of any type whatsoever
that are, or may become, convertible into capital
stock; provided that the term "New Securities" does
not include: (i) the Stock; (ii) securities issued
pursuant to the acquisition of another corporation or
business entity by the Corporation or one or more of
its wholly owned subsidiaries by merger,
consolidation, share exchange, purchase of
substantially all the assets or other reorganization
whereby the shareholders of the Corporation
immediately prior to the transaction own in the
aggregate more than 50% of the voting power of the
Corporation or other surviving entity after the
transaction; (iii) shares of Common Stock, and
options, warrants or rights convertible
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into such Common Stock, issued to employees,
consultants or directors of the Corporation pursuant
to any equity compensation plan approved by the Board
of Directors and shareholders of the Corporation; or
(v) securities issued pursuant to any stock dividend,
stock split, combination or other reclassification by
the Corporation of any of its capital stock.
(ii) The term "Pro Rata Share" means the ratio (A) the
numerator of which is the number of shares of Common
Stock held by the Investor, on the date of the
Corporation's written notice pursuant to Section 8(d)
hereof, and (B) the denominator of which is the
number of shares of Common Stock outstanding,
assuming for this purpose conversion of exercise of
all securities convertible into or exercisable for
Common Stock of the Corporation.
(b) Investor's Right of First Refusal. The Corporation
hereby grants to Investor, subject to the terms and
conditions specified in this Section 8, the right of
first refusal to purchase, on the terms and
conditions set forth in the Corporation's notice
pursuant to Section 8(c) hereof, up to its Pro Rata
Share of all New Securities that the Corporation may,
from time to time, propose to sell and issue.
(c) Required Notices. In the event the Corporation
proposes to undertake an issuance of New Securities,
it shall give Investor written notice of its
intention, describing the type of New Securities, the
price and other material terms upon which the
Corporation proposes to issue the same. Investor
shall have 10 days from the date of any such notice
to exercise its right of first refusal under Section
8(b) hereof for the price and upon the terms
specified in the notice by giving written notice to
the Corporation and stating therein the quantity of
New Securities to be purchased.
(d) Corporation's Right to Sell. The Corporation shall
have 180 days after the 10-day period described in
Section 8(c) hereof to sell all such New Securities
respecting which the Investor's rights of first
refusal hereunder were not exercised, at a price and
upon terms no more favorable in any material respect
to the purchasers thereof than specified in the
Corporation's notice. In
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the event the Corporation has not sold all such New
Securities within such 180-day period, the
Corporation shall not thereafter issue or sell any
New Securities without first notifying the Investor
in the manner provided herein.
(e) Expiration of Right. The rights of first refusal
granted under this Section 8 shall not apply to, and
shall expire upon a Qualified IPO.
9. Receipt of Business Plan. By its execution of this Agreement,
Investor acknowledges receipt of a copy of the Corporation's Business Plan
attached hereto as Exhibit B.
10. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
11. Notice. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid or by recognized overnight courier addressed to the
other party hereto at the address hereinafter shown below his signature or at
such other address as such party may designate by ten (10) days' advance written
notice to the other party hereto.
12. Successors and Assigns. This Agreement shall inure to the benefit
of the successors and assigns of the Corporation and, subject to the
restrictions on transfer herein set forth, be binding upon Investor, his heirs,
executors, administrators, successors and assigns.
13. Entire Agreement; Amendments. This Agreement shall be construed
under the laws of the State of Delaware and constitutes the entire agreement of
the parties with respect to the subject matter hereof superseding all prior
written or oral agreements, and no amendment or addition hereto shall be deemed
effective unless agreed to in writing by the parties hereto.
14. Right to Specific Performance. Investor agrees that the Corporation
shall be entitled to a decree of specific performance of the terms hereof or an
injunction restraining violation of this Agreement, said right to be in addition
to any other remedies available to the Corporation.
15. Separability. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or
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invalidated in any way and shall be construed in accordance with the
purposes and tenor and effect of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"INVESTOR" "CORPORATION"
HIGH SPEED NETWORK SOLUTIONS, INC. DIAL2G0, INC.
By: /s/ Xxxx Xxx By: /s/ Xxxx X. Xxx
_________________________________ _________________________________
Xxxx X. Xxx, President
Address: 000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
