EXHIBIT 10.1
Regulation S Stock Purchase Agreement, dated as of Apri129, 2003
between Reality Wireless Networks, Inc., a Nevada corporation having offices at
000 Xxxx Xxxxxxxx, Xxxxx X, Xxxxxxxx, Xxxxxxxxxx 00000 XXX (the "Company"), and
Ischian Holdings, Ltd. a British Virgin Islands, International business company,
the registered address of which is PO Box 961,30 Xx Xxxxxx Street, Road Town,
Tortola, British Virgin Islands ("the Purchaser").
ARTICLE I
PURCHAS, SALE AND TERMS OF SHARES
1.1 The Company agrees to issue and sell to the Purchaser in an
offshore transaction negotiated outside the U.S. and to be
consummated and closed outside the U.S. and. in consideration
of and in express reliance upon the representations,
warranties, covenants, terms and conditions of this Agreement,
the Purchaser agrees to purchase, subject to the conditions
hereinafter set forth, from the Company up to 10,000,000
shares (the "Shares") of the company at a per share purchase
price which shall be 25% of the bid price of the Company's
shares of Common Stock as quoted on the OTC Bulletin Board
(the "OTCBB") (or on such other United States stock exchange
or public trading market on which the shares of the Company
trade if, at the time of purchase, they ate not trading on the
OTCBB) for the five (5) consecutive trading days immediately
preceding the date (the "Call Date") the purchase order (the
"Purchase Notice") is received by the Company (the "Purchase
Price"). There will be no minimum floor price.
1.2 PRICE; CLOSING. The transaction will be closed in an offshore
transaction, and the Purchaser will pay the Purchase Price by
wire transfer of immediately available funds within 5 business
days upon receipt of the share certificate(s). Purchaser shall
initiate the closing process by sending a written purchase
notice to Seller at the address set forth below (the "Purchase
Notice"). The Purchase Notice shall set forth the number of
Shares to be purchased, the total consideration to be paid,
the price per share and the delivery address for the share
certificates (the "Closing").
1.3 DELIVERY OF PURCHASE NOTICE. Purchaser shall have 90 days form
the date of this Agreement to deliver one or more Purchase
Notices to Seller. A Purchase Notice may be for all or a part
of the shares set forth in Section 1.1 above. Purchaser may
deliver more than one Purchase Notice, provided however, that
number of shares purchased pursuant to all Purchase Notices
shall not exceed the number of Shares set forth in Section
1.1.
1.4 COVENANT OF BEST EFFORTS. The Purchaser agrees to use its best
efforts to purchase up to 10,000,000 shares between the date
hereof and October 31, 2003. Purchaser shall only be liable to
purchase the number of Shares set forth in each Purchase
Notice.
1.5 REPRESENTATIONS BY THE PURCHASER. The Purchaser makes the
following representations and warranties to the Company:
A. ACCESS TO INFORMATION. The Purchaser, in making the
decision to purchase the Shares, has relied upon the
representations and warranties contained in this
Agreement as well as independent investigations made
by it and/or its representatives, if any. The
Purchase and/or its representatives during the course
of this transaction, and prior to the purchase of any
Shares, has had the opportunity to ask questions of
and receive answers from the management of the
Company concerning the business of the Company and to
receive any additional information, documents,
records and books relationship to the business,
assets, financial condition, results of operations
and 1iabilities (contingent or otherwise) of the
Company.
B. SOPHISTICATION AND KNOWLEDGE. The Purchaser and/or
its representatives has such knowledge and experience
financial and business matters that it can represent
itself and is capable of evaluating the merits and
risks of the purchase of the Shares. The Purchaser is
not relying on the Company with respect to the tax
and other economic considerations of an investment in
the Shares, and the Purchaser has relied on the
advice of, or has consulted with, only the
Purchaser's own advisor(s). The Purchaser represents
that it has not been organized for the purpose of
acquiring the Shares.
C. LACK OF LIQUIDITY. The Purchaser acknowledges that
the purchase of the Shares involves a high degree of
risk and further acknowledges that it can bear
economic risk of the purchase of the Shares,
including loss of its investment, The Purchaser
acknowledges and understands that the Shares may not
be sold to a U.S. Person (as hereinafter defined) or
into the United States for a period of one (1) year
from the date of purchase and that at Purchaser has
no present need for liquidity in connection with its
purchase of the Shares.
D. NO PUBLIC SOLICITATION. The Purchaser is not
subscribing for the Shares as a result of or
subsequent to any advertisement, article, notice or
other communication published in any newspaper,
magazine or similar media or broadcast over
television or radio, or presented at any seminar or
meeting, or any solicitation of a subscription by a
person not previously known to the Purchaser in
connection with investments in securities generally.
Neither the Company nor the Purchaser has engaged in
any "Directed Selling Efforts in the U.S." as defined
in Regulation S promulgated by the Securities and
Exchange Commission ("SEC") pursuant to The
Securities Act of 1933 (the "Securities Act").
E. AUTHORITY. The Purchaser has full right and power to
enter into and perform pursuant to this Agreement and
make an investment in the Company and this Agreement
constitutes fees the Purchaser's valid and legal
binding ob1igation, enforceable in accordance with
its terms. The Purchaser is authorized and otherwise
duly qualified to purchase and hold the Shares and to
enter into this Agreement.
F. BROKERS OR FINDERS. No person has or will have, as a
result of the transactions contemplated by this
Agreement, any right, interest or valid claim against
or upon the Company for any commission, fee or other
compensation as a finder or broker because of any act
or omission by such Purchaser or its respective
agents.
G. REQUIREMENTS FOR TRANSFER.Purchaser agrees that it
will not transfer the Share, and the Company shall
not be required to transfer the shares unless the
transferee executes a representation letter
substantially in accordance with Exhibit A hereto.
H. COMPLIANCE WITH LOCAL LAWS. Any resale of the Shares
during the `distribution compliance period' as
defined in Rule 902(f) to Regulation S shall only be
made in compliance with exemptions from registration
afforded by Regulation S. Further, any such sale of
the Shares in any jurisdiction outside of the United
States will be made in compliance with the securities
laws or such jurisdiction. Purchaser will not offer
to sell the Shares in any jurisdiction unless the
Purchaser obtains all required consents, if any.
I. REGULATION S EXEMPTION. The Purchase (understands
that the, Shares are being offered and so1d to it in
reliance on an exemption from the registration
requirements of United States federal and state
securities laws under Regulation S promulgated under
the Securities Act and that the Company is relying
upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and
understanding of the Purchaser set forth herein in
order to determine the applicability of such
exemptions and the suitability of the Purchaser to
acquire the Shares. In this regard, the Purchaser
represents, warrants and agrees that:
a. The purchaser is not a U.S. Person (as
defined below) and is not an affiliate (as
defined in Rule 501(b) under the Securities
Act) of the company. A U.S. Person means any
one of the following:
i any natural person resident in the
United States of America;
ii any partnership or corporation
organized or incorporated under the
laws of the United States of
America;
iii any estate of which any executor or
administrator is a U.S. person;
iv any trust of which any trustee is 9
U.S. person:
v any agency or branch of a foreign
entity located in the United States
of America;
vi any non-discretionary account or
similar account (other than an
estate or trust) held by a dealer
or other fiduciary for the benefit
or account of a U.S. person;
vii any discretionary account or
similar account (other than an
estate or trust) held by a dealer
or other fiduciary organized,
incorporated or (if an individual)
resident in the United States of
America; and
viii any partnership or corporation if:
(1) organized or
incorporated under the
laws of any foreign
jurisdiction; and
(2) formed by a U.S.
person principally for
the purpose of
investing in
securities not
registered under the
Securities Act, unless
it is organized or
incorporated owned, by
accredited investors
(as defined in Rule
5Ol(a) under the
Securities Act) who
are not natural
persons, estates or
trusts.
b. At the time of the origination of contact concerning
this Agreement and the date of the execution and
delivery of this Agreement, the Purchaser was outside
of the United States.
c. The Purchaser will not during the period commencing
on the date of issuance of the Shares and ending on
the first anniversary or such date, or such shorter
period as may be permitted by Regulation S or other
applicable securities law (the "Restricted Period"),
offer, se1l, pledge or otherwise transfer the shares
in the United States, or to a U.S. Person for the
account or for the benefit of a U.S. Person, or
otherwise in a manner that is not in compliance with
Regulation S.
d. The Purchaser will, after expiration of the
Restricted Period, offer, sell, pledge or otherwise
transfer the Shares only pursuant to registration
under the Securities Act or an available exemption
therein and, in accordance with all applicable state
and foreign securities laws.
e. The Purchaser has not in the United States, engaged
in, and prior to the expiration of the Restricted
Period will not engage in, any short selling of or my
hedging transaction with respect to the Shares,
including without limitat1on. any put, call or other
option transaction, option writing or equity swap.
f. Neither the Purchaser nor or any person acting on its
behalf has engaged, nor will engage, in any directed
selling efforts to a U.S. Person with respect to the
Shares and the Purchaser and any person acting on its
behalf have complied and will comply with the
"offering restriction" requirements of Regulation S
under the Securities Act.
g. The transactions contemplated by this Agreement have
not been pre-arranged with a buyer located in the
United States or with a U.S. Person, and are not part
of a plan or scheme to evade the Securities
requirements of the Securities Act.
h. Neither the Purchaser nor any person acting on its
behalf has undertaken or carried out any activity for
the purpose of, or that could reasonably be expected
to have the effect of conditioning the market in the
United States, its territories or possessions, for
any of the Shares. The Purchaser agrees not to cause
any advertisement of the Shares to be published in
any newspaper or periodical or posted in any public
place and not to issue any circular relating to the
Shares except such advertisement that include the
statements required by Regulation S under the
Securities Act, and Only offshore and not in the U.S.
or its territories, and only in compliance with any
local applicable securities laws.
i. Each certificate representing the Shares shall be
endorsed with the following legends, in addition to
any other legend required to be placed thereon by
applicable federal or state securities laws:
(A) "THE SHARES ARE BEING OFFERED TO INVESTORS
WHO ARE NOT U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT OF
1933, AS AMENDED ("THE SECURITIES ACT")) AND
WITHOUT REGISTRATION WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT IN RELIANCE UPON REGULATION S
PROMULGATED UNDER THE SECURITIES ACT."
(B) "TRANSFER OF THESE SHARES IS PROHIBITED,
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S. PURSUANT TO REGISTRATION UNDER
THE SECURITIES ACT, OR PURSUANT TO AVAILABLE
EXEMPTION FROM REGISTRATION. HEDGING
TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT. "
j. The Purchaser consents to the Company making a
notation on its records or giving instructions to any
transfer agent of the Company in order to implement
the restrictions on transfer of the Shares set forth
in this Section 1.5.
k. The Purchaser and any transferees of the shares of
the Company's Common Stock purchased by the Purchaser
pursuant to this Agreement shall not be named or
identified on any lists of the Office of Foreign
Assets Control who are prohibited from purchasing
securities of U.S. domestic companies/ Further, this
transaction and any resale of shares by the Purchaser
to transferees shall not violate the anti-money
laundering and other provisions of the Bank Secrecy
Act, as amended by the U.S. Patriot Act.
l. Notwithstanding anything contained herein to the
contrary, the Company may refuse to register any
transfer of the shares of common stock of the Company
that are not made in accordance with Regulation S
pursuant to the registration under the Act or
pursuant to an available exemption from registration.
ARTICLE II
COVENANTS OF THE COMPANY
2.1 OPERATIONS. From and after the date hereof through the final
purchase of the shares, the Company will operate only in the
ordinary course of business.
2.2 INSPECTION. The Company shall permit authorized
representatives of the Purchaser to visit and inspect any of
the properties of the Company, including its books of account
(and to make copies: thereof and take extracts there from),
and to discuss its affairs, finances and accounts with its
officers, employees, independent accountants, consultants and
attorneys, all at such reasonable times and as often as may be
reasonably requested.
2.3 SHARE REGISTRY; REMOVAL OF LEGEND. The Company consents to
Purchaser reselling Shares and to requesting the issuance of
share certificates to third parties provided however that all
such sales are conducted in full compliance with Regulation S
and the Company and its transfer agent are advised of the
identity of ach subsequent purchaser. Shares for which the
Regulation S distribution compliance period has expired shall
be delivered free of any Regulation legend. The Company agrees
that it shall instruct its transfer agent to automatically
remove any legend required by Regulation S upon the expiration
of the distribution compliance period. Holder's of shares
bearing a Regulation S legend may have the legend removed by
submitting certificate(s) together with an affidavit as to
ownership and expiration of the distribution compliance
period. Neither the Company nor the stock transfer agent shall
be obligation to remove any other legend required by law
solely by reason of this Article 2.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser as follows, which
representations and warranties shall be true and correct in all material
respects on the date of each closing of the purchase of: the Shares:
3.1 ORGANIZATION AN STANDING .The Company has been duly
incorporated and is validly existing and in good standing
under the laws of the state of Nevada and has requisite
corporate power and authority necessary to own its properties
and
to conduct its business as presently conducted, to deliver this
Agreement and all other agreements required to be executed by
the Company in connection with performance under this
Agreement (collectively, the "Ancillary Agreements", and
collectively with this Agreement, the "Transaction
Documents"), to issue and sell the Shares and to carry out the
provisions of Transaction Documents. The Company is duly
qualified to transact business as a foreign corporation and is
in good standing in every jurisdiction in which the failure to
so qualify would have material adverse effect on the
operations or financial conditions of the Company.
3.2 AUTHORITY FOR AGREEMENT. The execution and delivery by the
Company of the Transaction Documents, and the performance by
the company of its obligations there under, have been duly and
validly authorized by all requisite corporate action on the
part of the Company. The Transaction Documents, when executed
and delivered, will be legally valid and binding obligations
of the company, enforceable against the Company in accordance
with their terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors'
rights, and general principles of equity that restrict the
availability of equitable remedies. To the Company's
knowledge, the execution and delivery of the Transaction
Documents by the Company of its obligations there under do
not, as of the date hereof, (i) conflict with or violate the
provisions of the Company's Restated Charter or Bylaws, (ii)
require on the part of the Company any filing with, or any
permit, authorization, consent or approval of, any Government
Entity, (iii) conflict with, result in a breach of, constitute
(with or without due notice or lapse of time or both) a
default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any contract,
lease, sublease, license; sublicense, franchise, permit,
indenture, agreement or mortgage for borrow money, instrument
of indebtedness, lien, encumbrance or other arrangement to
which the Company is a party or by which the Company is bound
or to which its assets are subject, (iv) result in the
imposition of any Security Interest upon any assets of the
Company or (v) vio1ate or contravene any United States
federal, Nevada corporate or applicable state statute, rule or
regulation applicable to the Company or any order, writ,
judgment, injunction, decree, determination or award.
3.3 SECURITIES LAW FILINGS, ETC. The Company has previously
furnished to the Investors the Company's filings with the
Securities and Exchange Commission as on the attached schedule
3.3 (collectively the "SEC Filings".). The SEC Filings, as of
the date of the filing thereof with the SEC, complied in all
material respects with the provisions of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in each case
the rules and, regulations promulgated the thereunder, and
none of such filings contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein, in light of circumstances under which they were made,
not misleading.
3.4 CAPITALIZATION AND ISSUANCES OF STOCK. The Company has
authorized and outstanding capital stock as set forth in its
SEC Filings. All outstanding shares of capital stock of the
Company are duly authorized, validly issued and outstanding,
fully paid and nonassessable, Except as set forth in the SEC
Filings: (i) there are no outstanding options, stock
subscription agreements, warrants or other rights permitting
or requiring the Company or others to purchase or acquire any
shares of capital stock or other equity securities of the
Company; (ii) there are no securities issued or outstanding
which are convertible into or exchangeable for any of the
foregoing and there are no contracts, commitments or
understandings, whether or not in writing, to issue or grant
any such option, warrant, right or convertible or exchangeable
security; (iii) there are no shares of stock or other
securities of the company reserved for issuance for any
purpose; (iv) there are no voting trusts or other contracts,
commitments, understandings, arrangements or restrictions of
any kind with respect to the ownership, voting or transfer of
shares of stock or other securities of the Company to which
the Company or, to the best of the Company's knowledge, any
stock holder of the company is a party, including without
limitation, any preemptive rights, rights of first refusal,
proxies or similar rights and (v) there is not person who
holds a right to require the Company to register any
securities of the Company under the Securities Act or to
participate in any such registration. The issued and
outstanding shares of capital stock of the company conform to
all statements in relation thereto contained in the SEC
filings, and the SEC Filings describe all material terms and
condition thereof. All issuances by the Company of its
securities were exempt from registration under the Securities
Act and any applicable state securities laws or were issued
pursuant to a registration statement declared effective by the
SEC under the Securities Act and which registration statement
was available for the sole of the type of securities sold
thereunder.
3.5 SUBSIDIARIES. The Company has no subsidiaries.
3.6 ISSUANCE OF SECURITIES. The issuance, sale and delivery of the
Securities in accordance with this Agreement, have been, or
will be on or prior to the Closing, duly authorized, and the
Shares reserved for issuance by all necessary corporate action
on the part of the Company. The Securities, when so issued,
sold and delivered against payment therefore in accordance
with the provisions of this Agreement will be duty and validly
issued, fully paid and non-assessable, and wi1l be free of all
liens, charges, claims, encumbrances and restrictions on
transfer other than the restrictions on transfer under the
Transaction Documents and under applicable state and federal
securities laws.
3.7 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration qualification, designation,
declaration or filing, with, any governmental entity or
regulatory body (a "Governmental Entity") is required on the
part of the Company in connection with the execution and
delivery of the Transaction Documents, the offer, issue, sale
and delivery of the Securities or the other transactions to be
consummated as contemplated by this Agreement except
qualification or filings under the Securities Act and other
applicable state securities laws which qualifications or
filings, if required, will be obtained or made and will be
effective within the time periods required by law.
3.8 OFFERING EXEMPTION. Assuming the accuracy of the
representations and warranties made by the Purchaser, the
offer, sale and issuance of the Securities to the Purchaser
will be exempt from the registration requirements of the
Securities Act and will have been registered or qualified (or
are exempt from registration and qualification) under the
registration, permit or qualification requirements of all
applicable state securities laws. Neither the Company nor any
agent on its behalf has solicited or will solicit any offers
to sell or has offered to sell or will offer to sell all or
any part of the Securities to any person or persons so as to
bring the sale of such Securities by the Company within the
registration provisions of the Securities Act or any state
securities laws.
3.9 LITIGATION. There is no action, suite, proceeding or
investigation pending or, to the Company's knowledge, is
currently threatened, against the Company, except as described
on Schedule 3.9 to this Agreement The Company is not aware of
any basis for any of the foregoing or any intent on its part
to initiate on any of the foregoing.
3.10 FINANCIAL STATEMENTS. The financial statements set forth the
Company's SEC Filings (the "Financial Statements") are
complete and correct in all material respects, are in
accordance with the books and records of the Company as at the
dates and for the periods indicated, and have been prepared in
accordance with generally accepted accounting principles
consistently applied to companies domiciled in the United
States, except to the extent that the un-audited financial
statements may not contain all required footnotes and are
subject to normal yearend audit adjustments that in the
aggregate will not be material.
3.11 ABSENCE OF LIABILITIES.Except as set forth in the Financial
Statements, the Company has no material liabilities,
contingent or otherwise, other the (i) liabilities incurred in
the ordinary Course of business, that individual1y in the
aggregate are not material to the financial condition or
operating results of the Company, and (ii} obligations not
required under genera11y accepted accounting principles to be
reflected in the Financial Statements.
3.12 TAXES. The Company has paid al1 taxes due as of the date
hereof. The Company has timely filed or has obtained presently
effective extensions with respect to all Federal, state,
county, local and foreign tax returns (collectively, "Tax
Returns") that the Company are required to file. The Tax
Returns are true and correct and all taxes shown thereon to be
due have been timely paid, with any exceptions pem1itted by
any taxing authority not having a materially adverse effect on
the Company. No penalties or other shares are or will become
due with respect to any such Tax Returns as the result of the
late filing thereof. The Company has either paid or
established in the Financial Statements adequate for the
payment of all such taxes due or claimed to be due by any
taxing authority in connection with any such Tax Returns. None
of the Company's federal income tax returns have been audited
by the Internal Revenue Service, and no controversy with
respect to taxes of any type is pending or, to the knowledge
of the Company, threatened. The Company has withheld or
collected from each payment made to its employees the amount
of all taxes required to be withheld or collected therefrom
and has paid all such amounts to the appropriate taxing
authorities when due. Neither the Company nor any of its
stockholders has ever filed (i) an election pursuant to
Section 1362 of the Internal Revenue Code of 1986, as amended
(the "Code"), that the Company be taxed as an S corporation,
or (ii) a consent pursuant to Section 341(f) of the Code
relating to collapsible corporations.
3.13 PROPERTY AND ASSETS. The Company has good title to, or a valid
leasehold interest in, all of its material properties and
assets, including all properties and assets reflected in the
Balance Sheet. None of such properties or assets is subject to
any mortgage, pledge, lien, security interest, lease, charge
or encumbrance other than those the material terms of which
are described in the Balance Sheet or in SCHEDULE 3.13. The
Company does not own any real estate. All personal property of
the Company is in good operating condition and repair
(ordinary wear and tear and routinely scheduled maintenance
excepted) and is suitable and adequate for the uses for which
it is intended or is being used.
3.14 INTELLECTUAL PROPERTY. To the best of the Company's knowledge
the Company owns, or has the right to use, free and clear of
all liens, charges, claims and restrictions, all patents,
patent applications trademarks, service marks, trademark and
service trademark applications, trade names, copyright & and
licenses presently owned or held by the Company or employed or
proposed to be employed by it in its business s now conducted
or proposed to be conducted, as well as any agreement under
which the Company has access to any confidential information
used by the Company in its business (the "Intellectual
Property Rights"). Except as set forth on SCHEDULE 3.14 the
Company has not received any communications alleging that the
Company has violated any Third Party Intellectual Property
Rights. The Company is not aware of any violation by any third
party of any Intellectual Property Rights of the Company or of
any defects therein or in the title thereto. The Company is
not aware that any employee is obligated under any contract
(including any license, covenant or commitment of any nature)
or other agreement, or subject to any judgment, decree or
order of any court or administrative agency, that would
conflict or interfere with: (i) the performance of such
employee's duties as an officer, employee or director of the
Company; (ii) the use of such employee's best efforts to
promote the interests of the Company; or (iii) the Company's
business as conducted.
3.15 COMPLIANCE. The company has, in all material respects,
complied with all laws, regulations and orders applicable to
their business and have all material permits and license
required thereby. There is no term or provision of any
material mortgage, indenture, contract, agreement or
instrument to which the Company is a party or by which it is
bound, or, to the best of the Company's knowledge, of any
state or Federal judgment, decree, order, statute, rule or
regulation applicable to or binding upon the company that
materially adversely affects the business, prospects,
condition, affairs or operations of the Company or any of its
properties or assets. To the Company's knowledge, no employee
of the Company is in violation of any contract or convenant
(either with the Company or with another entity) relating to
employment, patent, other proprietary information disclosure,
non-competition, or non-solicitation.
3.16 EMPLOYEES. All employees of the Company who have success to
confidential or proprietary information of the Company have
executed and delivered nondisclosure agreements and all of
such agreements are in full force and effect. The Company is
not aware that any employee of the Company has plans to
terminate his or her employment relationship with the Company.
The Company bas complied in all material respects with BIJ
applicable laws relating to wages, hours, equal opportunity,
collective bargaining workers' compensation insurance and the
payment of social security and other taxes. None of the
employees of the Company is represented by any labor union and
there is no labor strike or other labor trouble (including,
without limitation. any organizational drive) pending or, to
the knowledge of the Company, threatened with respect to the
Company.
3.17 ENVIRONMENTAL AND SAFETY MATTERS. To the Company's knowledge,
the Company is not in material violation of any applicab1e
environmental law and to its knowledge, no material
expenditures are or will be required in order to comply with
any such environmental law.
3.18 BOOKS AND RECORDS. The books of account, ledgers, order boob,
records and documents of the Company accurately and completely
reflect all material information relating to the business of
the Company the location and collection of its assets and the
nature of all transactions giving rise to the obligations or
accounts receivable of the Company.
3.19 BROKERS OR FINDERS. The Company has not agreed to incur,
directly or indirectly, any liability for brokerage or
finders' fees, agents' commissions or other similar charges in
connection with the Transaction Documents or any of the
transactions contemplate hereby or thereby.
3.20 DISCLOSURES. The Company has provided the Purchaser with all
information requested by the Purchaser in connection with
their decision to purchase the Securities. Neither this
Agreement any Exhibit hereto nor the Transaction Documents, or
any report, certificate or instrument furnished to the
Purchaser or its agents in connection with the transactions
contemplated by this Agreement, when read together, contains
or will contain any material misstatement of fact or omits to
state a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE IV
REGISTRATION RIGHTS
4.1 PIGGY-BACK REGISTRATIONS. If at any time after the first
anniversary of the purchase of the Shares, the Company shall
determine to registers for its own account or the account of
others under the Securities Act (including pursuant a demand
for registration of any stockholder of the Company) any of its
equity securities, other than on Form S-4 or Form S-8 or their
then equivalents relating to shares of Common Stock to be
issued solely in connection with any acquisition of any entity
or business or shares of Common Stock issuable in connection
with stock option or other employee benefit plans, it shall
send to each holder of Registrable Shares who is entitled to
registration rights under this Section 4.1 written notice of
such determination and, if within fifteen (15) days after
receipt of such notice, such holder shall so request in
writing, the Company shall use its best efforts to include in
such registration statement all or any part of the Registrable
Shares such holder request to be registered, except that if;
in connection with a public offering of the Company the
managing underwriter shall be included in the registration
statement because, in its judgment, such limitation is
necessary to effect an orderly public distribution, then the
Company shall be obligated to include in such registration
statement only such limited portion of the Registrable Shares
with respect to which such holder has requested inclusion
hereunder on a pro rata basis.
"Registrable Shares" shall mean and include the Shares
PROVIDED, however that shares of Common Stock which are
Registrable Shares shall cease to be Registrable shares upon
the consummation of any sale pursuant to a registration
statement or Rule 144 under the Securities Act.
4.2 EFFECTIVENESS. The Company will use its best efforts to
maintain the effectiveness for up to 90 days (or such shorter
period of time as the underwriters need to complete the
distribution of the registered offering) of any registration
statement pursuant to which any of the Registrable Shares are
being offered, and from time to time will amend or supplement
such registration statement and the prospectus contained
therein to the extent necessary to comply with the Securities
Act and any applicable state securities statute or regulation.
The Company will also provide each holder of Registrable
Shares with as many copies of the prospectus contained in any
such registration statement as it may reasonably request.
4.3 INDEMNIFICATION BY THE COMPANY. (a) In the event that the
Company registers any of the Registrable Shares under the
Securities Act, the Company will indemnify and hold harmless
each holder and each underwriter of the Registrable Shares
(including their officers, directors, affiliates and partners)
so registered (including any broker or dealer through whom
such shares may be sold) and each person, if any, who controls
such holder or any such underwriter with in the meaning of
Section 15 of the Securities Act from and against any and all
losses, claims, damages, expenses, 1iabilities, joint or
several, to which they or any of them become subject under the
Securities Act, applicable state securities laws or under any
other statute or at common law or otherwise, as incurred, and,
except as hereinafter provided, will reimburse each such
holder, each such underwriter and each such controlling
person, if any, for any legal or other expenses reasonably
incurred by them or nay of them in connection with
investigating or defending any actions whether or not
resulting in any liability, as incurred, insofar as such
losses claims, damages, expenses, 1iabilities or actions arise
out of or are based upon my untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, in any preliminary or amended preliminary
prospectus or in the fina1 prospectus (or the registration
statement or prospectus as from time to time amended or
supplemented by the Company) or arise out of or are based up n
the omission or alleged omission to state therein a material
fact required to b stated therein or necessary in order to
make the statements therein not misleading, or any violation
by the Company of My rule or regulation promulgated under the
Securities Act or any state securities laws applicable the
Company and relating to action or inaction required of the
Company in connection with such registration, UNLESS (i) such
untrue statement or alleged untrue statement or omission or
alleged omission was made in such registration statement,
preliminary or amended preliminary prospectus or final
prospectus in reliance upon and in conformity with information
furnished in writing to the Company in connection therewith by
any such holder of Registrable Shares (in the case of
indemnification of such holder), any such underwriter (in the
case indemnification of such underwriter) or any such
controlling person {in the case of indemnification of such
controlling person) expressly for use therein, or unless (ii)
in the case of a sale directly by such holder of Registrable
Shares (including a sale of such Registrable Shares to engage
in a distribution solely on behalf of such holder of
Registrable Shares), such untrue statement or alleged untrue
statement or omission or alleged omission was contained in a
preliminary prospectus and corrected in a final or amended
prospectus copies of which were delivered to such holder of
Registrable Shares or such underwriter on a timely basis, and
such holder of Registrable Shares failed to deliver a copy of
the final or amended prospectus at or prior to the
confirmation for the sale of the Registrable Shares to the
person asserting any such loss, claim, damage or liability in
any case where such delivery is required by the Securities
Act.
(b) Promptly after receipt by any holder of Registrable Shares,
any underwriter or any controlling person of notice of the
commencement of any action in respect of which indemnity may
be sough against the Company, such holder of Registrable
Shares, or such underwriter or such controlling person, as the
case may be, will notify the Company in writing of the
commencement thereof (provided, that failure by any such
person to so notify the Company shall not relieve the Company
from any liability it may have hereunder to any other person
entitled to claim indemnity or contribution hereunder) and,
subject to the provisions hereinafter stated, the Company
shall be entitled to assume the defense of such action
(including the employment of counsel reasonably satisfactory
to such holder of Registrable Shares, such underwriter or such
controlling person, as the case may be), and the payment of
expenses insofar as such action shall relate to any alleged
liability in respect of which indemnity may be sought against
the Company.
(c) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which
any holder of Registrable Share exercising rights under this
Article V or any controlling person of any such holder, make a
claim for indemnification pursuant to this Section 4.3 but it
is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 4.3 provides for
indemnification such case, then, the Company and such holders
will contribute to the aggregate losses claims, damages or
liabilities to which they may be subject (after contribution
from others) in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and of the
holder of Registrable Shares on the other connection with the
statements or omissions which resulted in such losses, claims,
damages, liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one
hand and of the holder of Registrable Shares on the other
shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand
or by the holder of Registrable Shares on the other, and each
party's relative intent, knowledge, access to information and
opportunity to collect or prevent such statement or omission;
PROVIDED, HOWEVER, that, in any such case, (A) no such holder
will be required to contribute any amount in excess of the
public offering price of all such Registrable Shares offered
by it pursuant to such registration statement, net of any
underwriting discounts or commissions paid by such holder; and
(B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.
4.4. INDEMNIFICATION BY HOLDERS OF REGISTRABLE SHARES. (a) In the
event that the Company registers any of the Registrable Shares
under the Securities Act, each holder of the Registrable
Shares so registered will, as a condition to registration of
the Registrable Shares, agree to indemnify and hold harmless
the Company, each of its directors, each of its officers who
have signed or otherwise participated in the preparation of
the registration statement, each underwriter of the
Registrable Shares so registered (including any broker or
dealer through whom such of the shares may be sold) and each
person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act from and against any and all
losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them may become subject under
the Securities Act, applicable state securities laws or under
any other statue or at common law or otherwise, and, except as
hereinafter provided, will reimburse the Company each such
director, officer, underwriter or controlling person for any
legal or other expenses reasonably incurred by them or any of
them in connection with investigating or defending any actions
whether or not resulting in any liability, insofar as such
losses, claims, damages, expense, liabilities or actions arise
out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the
registration statement, in any preliminary or amended
preliminary prospectus or in the final prospectus (or in the
registration statement or prospectus as from time to time
amended or supplemented) or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make
the statements therein not misleading, but only insofar as any
such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the
Company in connection therewith by such holder of Registrable
Shares expressly for use therein; PROVIDED, HOWEVER, that such
holder's obligation hereunder shall be limited to an amount
equal to the aggregate public offering price of the
Registrable Shares sold by such holder in such registration,
not of any underwriting discounts or commissions paid by such
holder.
(b) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which
the Company or another person entitled to indemnification
pursuant to this Section 4.4 makes a claim for indemnification
pursuant to this Section 4.4, but it is judicially determined
(by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or
the denial of the last right of appeal) that such
indemnification may not be enforced in such case
notwithstanding that this Section 4.4 provided for
indemnification, in such case, then the Company and such
holder will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after
contribution from others) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand
and of the holder of Registrable Shares on the other in
connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of
the Company on the one hand and of the holder of Registrable
Shares on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement
of a material fact relates to information supplied by the
Company on the on the one hand or by the holder of Registrable
Shares on the other, and each party's relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission, PROVIDED, HOWEVER, that,
in any such case, (A) no such holder will be required to
contribute any amount in excess of the public offering price
of all such Registrable Shares offered by it pursuant to such
registration statement, net of any underwriting discounts or
commissions paid by such holder; and (B) no person or entity
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
4.5 EXCHANGE ACT REPORTS. The Company will use its best efforts to
timely file with the Commission such information the
Commission may require under the Exchange Act and shall use
its best efforts to take all action as may be required as a
condition to the availability of Rule 144 or Rule 144A under
the Securities Act (or any successor exemptive rule hereafter
in effect) with respect to such Common Stock. The Company
shall furnish to any holder of Registrable Shares forthwith
upon request (i) a written statement by the Company as to its
compliance with the reporting requirement of Rule 144, (ii) a
copy of the most recent annual or quarterly report of the
Company as filed with the Commission, and (iii) such other
reports and documents as a holder may reasonably request in
availing itself of any rule or regulation of the Commission
allowing a holder to sell any Registrable Securities without
registration. The Company agrees to use its best efforts to
facilitate and expedite transfers of the Shares pursuant to
Rule 144 under the Securities Act, which efforts shall include
timely notice to its transfer agent to expedite such transfers
of Shares.
4.6 EXPENSES. In the case of each registration effected under
Section 4.1., the Company shall bear all reasonable costs and
expenses of each such registration behalf of the selling
holders of Registrable Shares including, but not limited to,
the Company's printing, legal and accounting fees and expense,
Commission and NASD filing fees and "Blue Sky" fees; PROVIDED,
HOWEVER, that the Company shall have no obligation to pay or
otherwise bear any portion of the underwriters' commission or
discounts attributable to the Registrable Shares being offered
and sold by the holders of the Registrable Shares, or the fees
and expenses of counsel for the selling holders of Registrable
Shares in connection with the registration of the Registrable
Shares.
4.7 TRANSFERABILITY. (a) For all purposes of Article IV of this
Agreement, a Purchase or assignee thereof who agrees to be
bound by the provisions of this Article IV shall be deemed at
any particular time to be the holder of all Registrable
Securities of which such person shall at such time be the
"beneficial owner," determine in accordance with Rule 13d-3
under the Exchange Act.
ARTICLE V
MISCELLANEOUS
5.1 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of any party of this Agreement in exercising any right,
power or remedy hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right,
power or remedy precluded any other or further exercise
thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
5.2 AMENDMENTS, WAIVERS AND CONSENTS. Any provision in the
Agreement to the contrary notwithstanding, and except as
hereinafter provided, changes in, termination or amendments of
or additions to this Agreement may be made, and compliance
with any covenant or provision set forth herein may be omitted
or waived, if the Company shall obtain consent thereto in
writing from the Purchaser. Any waiver or consent may be given
subject to satisfaction of conditions stated therein any
waiver or consent shall be effective only in the specific
instance and for the specific purpose of which given.
5.3 ADDRESSES FOR NOTICES. All notices, request, demands and other
communications provided for hereunder shall be in writing
(including telegraphic communication) and mailed, telegraphed
or delivered to each applicable party at the address set forth
on Schedule 5.3 hereto or at such other address as to which
such party may inform the other parties in writing in
compliance with the terms of this Section. All such notices,
requests, demands and other communications shall be considered
to be effective when delivered.
5.4 COSTS, EXPENSE AND TAXES. All parties to bear their own
expenses.
5.5 EFFECTIVENESS; BINDING EFFECT; ASSIGNMENT. This Agreement
shall be binding upon and inure to the benefit of the Company,
the Purchaser and the respective successors and assigns;
PROVIDED, that, the Company may not assign any of its rights
or obligations under this Agreement without the prior written
consent of the Purchase. The Purchase may assign all or any
part of its rights and obligations hereunder to any person who
acquires any Shares or Warrants owned by the Purchaser subject
to the conditions of this Agreement.
5.6 PRIOR AGREEMENTS. The Transaction Documents executed and
delivered in connection herewith constitute the entire
agreement between the parties and supersede any prior
understandings or agreements concerning the subject matter
hereof.
5.7 SEVERABILITY. The provisions of the Transaction Documents are
severable and, in the event that any court of competent
jurisdiction shall determine that any one or more of the
provisions or part of a provision contained therein shall, for
any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions or part of a provision
of such Transaction Document and the terms of the Shares shall
be reformed and construed as if such invalid or illegal or
unenforceable provision, or part of a provision, had never
been contained herein, and such provisions or part reformed so
that would be valid, legal and enforceable to the maximum
extent possible.
5.8 GOVERNING LAW; VENUE.
A. This Agreement shall be enforced, governed and
construed in accordance with the laws the State of
New York or federal securities law where applicable
without giving effect to choice of laws principles or
conflict of laws provisions. Any suite, action or
proceeding pertaining to this Agreement or any
transaction relative hereto shall be brought to the
courts sitting Xxx Xxxx Xxxx, Xxx Xxxx, Xxxxxx Xxxxxx
of America, and the undersigned hereby irrevocably
consents and submits to the jurisdiction of such
courts for the purpose of any such suits, action, or
proceeding. Purchaser acknowledges and agrees that
venue hereunder shall lie exclusively in New York,
United States of America.
B. Purchaser hereby waives, and agrees not to assert
against the Company, or any successor assignee
thereof, by way of motion, as a defense or otherwise,
in any such suit, action or proceeding. (i) any claim
that the Purchaser is not personally subject to the
jurisdiction of the above-named courts, and (ii) to
the extent permitted by applicable law, any claim
that such suit, action or proceeding is brought in an
inconvenient forum or that that venue of such suit,
action or proceeding is improper or that this
Agreement may not be enforced in or by such courts.
5.9 HEADINGS. Article, section and subsection headings in this
Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any
other purpose.
5.10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in the Transaction
Documents, the Shares, or any other instrument or document
delved in connection herewith or therewith, shall survive the
execution and delivery hereof or thereof.
5.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart.
5.12 FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of the Purchaser or the Company, the Company
and the Purchase shall execute and deliver such instruments,
documents and other writing as may be reasonable necessary or
desirable to confirm and carry out and to effectuate fully the
intent and pursue of the Transaction Documents and the Shares.
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement tot be executed as of the date first above written.
REALITY WIRELESS NETWORKS, INC.
BY:
-----------------------------
NAME: XXXX XXXXXXX
TITLE: VICE PRESIDENT OF
FINANCE
PURCHASER
BY:
-----------------------------
XXXXXXX XXX
ISCHIAN HOLDINGS LTD
00 XX XXXXXX XXXXXX
PO BOX 961
ROAD TOWN, TORTOLA
B.V.I
