ZST DIGITAL NETWORKS, INC. COMMON STOCK PURCHASE AGREEMENT
THIS COMMON
STOCK PURCHASE AGREEMENT(the “Agreement”) is made
as of the 14th day of
January 2009, by and between ZST Digital Networks, Inc., a Delaware corporation
(the “Company”), and
[__________] (“Purchaser”).
Whereas,
the Company desires to issue, and Purchaser desires to acquire, stock of the
Company as herein described, on the terms and conditions hereinafter set
forth;
Now,
Therefore, It Is Agreed between the parties as follows:
1. Purchase
and Sale of Stock. Purchaser hereby agrees to acquire from the
Company, and the Company hereby agrees to sell to Purchaser, an aggregate of
[_________] ([_____]) shares of the Common Stock of the Company, par value
$0.001 per share (the “Securities”), in
consideration for $0.2806 per share.
2. The
closing hereunder, including payment for and delivery of the Securities shall
occur at the offices of the Company immediately following the execution of this
Agreement, or at such other time and place as the parties may mutually agree,
such monies to be released subject to that certain Escrow Agreement dated
January 9, 2009.
3. Restrictive
Legends. All certificates representing the Securities shall
have endorsed thereon legends in substantially the following forms (in addition
to any other legend which may be required by other agreements between the
parties hereto):
(a) “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”
(b) Any
legend required by appropriate blue sky officials.
4. Investment
Representations. In connection with the purchase of the
Securities, Purchaser represents to the Company the following:
(a) Purchaser
has such knowledge and experience in financial and business matters that
Purchaser is capable of evaluating the merits and risks of the acquisition of
the Securities and, by reason of Purchaser’s financial and business experience
(either alone or together with any Purchaser representative), Purchaser has the
capacity to protect Purchaser’s interest in connection with the acquisition of
the Securities. Purchaser is financially able to bear the economic
risk of the investment, including the total loss thereof. If
Purchaser is a corporation, partnership, trust or other entity, Purchaser was
not organized for the specific purpose of acquiring the Securities.
(b) Purchaser
has (i) a preexisting personal or business relationship with the Company or
one or more of its officers, directors, or control persons or (ii) by
reason of Purchaser’s business or financial experience, or by reason of the
business or financial experience of Purchaser’s financial advisor who is
unaffiliated with and who is not compensated, directly or indirectly, by the
Company of any affiliate or selling agent of the Company, Purchaser is capable
of evaluating the risks and merits of this investment and of protecting
Purchaser’s own interests in connection with this investment
(c) Purchaser
has received and reviewed all information Purchaser considers necessary or
appropriate for deciding whether to purchase the
Securities. Purchaser further represents that Purchaser has had an
opportunity to ask questions and receive answers from the Company and its
officers and employees regarding the terms and conditions of purchase of the
Securities and regarding the business, financial affairs and other aspects of
the Company and has further had the opportunity to obtain any information (to
the extent the Company possesses or can acquire such information without
unreasonable effort or expense) which Purchaser deems necessary to evaluate the
investment and to verify the accuracy of information otherwise provided to
Purchaser.
(d) Purchaser
acknowledges that the Securities have not been registered under the Securities
Act of 1933, as amended (the “Act”), or qualified
under any applicable blue sky laws in reliance, in part, on the representations
and warranties herein. Such Securities are being acquired by
Purchaser for investment purposes for Purchaser’s own account only and not for
sale or with a view to distribution of all or any part of such
Securities. No other person will have any direct or indirect
beneficial interest in the Securities.
(e) Purchaser
understands that the Securities are “restricted securities” under the federal
securities laws in that such securities will be acquired in a transaction not
involving a public offering, and that under such laws and applicable regulations
such securities may be resold without registration under the Act only in certain
limited circumstances and that otherwise such securities must be held
indefinitely. In this connection, Purchaser represents that Purchaser
understands the resale limitations imposed by the Act and is familiar with SEC
Rule 144, as presently in effect, and the conditions which must be met in order
for that Rule to be available for resale of “restricted securities,” including
the requirement that the securities must be held for at least one year after
Purchaser acquires the securities from the Company prior to resale and the
condition that there be available to the public current information about the
Company under certain circumstances. Purchaser understands that the
Company has not made such information available to the public and has no present
plans to do so.
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(f) Without
in any way limiting the representations set forth above, Purchaser further
agrees not to make any disposition of all or any portion of the Securities
purchased hereunder 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 such registration
statement and any applicable requirements of state securities laws;
or
(ii) (A) Purchaser
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a detailed statement of the circumstances surrounding
the proposed disposition and (B) if reasonably requested by the Company,
Purchaser shall have furnished Company with a written opinion of counsel,
reasonably satisfactory to the Company, that such disposition will not require
registration of any securities under the Act or the consent of or a permit from
appropriate authorities under any applicable state securities
law. Purchaser understands that the Company will not require opinions
of counsel for transactions made pursuant to SEC Rule 144, provided it is
provided with all certificates and other information it may reasonably request
to permit it to determine that the subject disposition is, in fact, exempt from
the registration requirements of the Act pursuant to SEC
Rule 144.
(g) In
the case of any disposition of any of the Securities pursuant to SEC Rule 144,
in addition to the matters set forth in paragraph (f) above, Purchaser
shall promptly forward to the Company a copy of any Form 144 filed with the
SEC with respect to such disposition and a letter from the executing broker
satisfactory to the Company evidencing compliance with SEC
Rule 144. If SEC Rule 144 is amended or if the SEC’s
interpretation thereof in effect at the time of any such disposition by
Purchaser have changed from its present interpretations thereof, Purchaser shall
provide the Company with such additional documents as it may reasonably
require.
(h) Purchaser
has received all requisite approvals from the competent authorities in the
People's Republic of China, and all required registrations, certifications and
approvals for the purchase of the Securities under the laws of the People's
Republic of China have been received by the Purchaser.
5. Refusal to
Transfer. The Company shall not be required (a) to transfer on its books
any shares of Securities of the Company which shall have been transferred in
violation of any of the provisions set forth in this Agreement or (b) 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.
6. No
Employment Rights. This Agreement is not an employment contract and
nothing in this Agreement shall affect in any manner whatsoever the right or
power of the Company (or a parent or subsidiary of the Company) to terminate
Purchaser’s employment for any reason at any time, with or without cause and
with or without notice.
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7. Miscellaneous.
(a) Notices. Any notice
required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery or sent by telegram or fax or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to the other party hereto at his address
hereinafter shown below its signature or at such other address as such party may
designate by ten (10) days’ advance written notice to the other party
hereto.
(b) Successors and Assigns. This
Agreement shall inure to the benefit of the successors and assigns of the
Company and, subject to the restrictions on transfer herein set forth, be
binding upon Purchaser, Purchaser’s successors, and assigns.
(c) Attorneys’ Fees; Specific
Performance. Purchaser
shall reimburse the Company for all costs incurred by the Company in enforcing
the performance of, or protecting its rights under, any part of this Agreement,
including reasonable costs of investigation and attorneys’ fees.
(d) Governing Law;
Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware. The parties agree
that any action brought by either party to interpret or enforce any provision of
this Agreement shall be brought in, and each party agrees to, and does hereby,
submit to the jurisdiction and venue of, the appropriate state or federal court
for the district encompassing the Company’s principal place of
business.
(e) Further
Execution. The parties agree to take all such further action
(s) as may reasonably be necessary to carry out and consummate this Agreement as
soon as practicable, and to take whatever steps may be necessary to obtain any
governmental approval in connection with or otherwise qualify the issuance of
the securities that are the subject of this Agreement.
(f) Independent
Counsel. Purchaser acknowledges that this Agreement has been
prepared on behalf of the Company by K&L Gates LLP, counsel to the Company
and that K&L Gates LLP does not represent, and is not acting on behalf of,
Purchaser. Purchaser has been provided with an opportunity to consult
with Purchaser’s own counsel with respect to this Agreement.
(g) Entire Agreement;
Amendment. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes and
merges all prior agreements or understandings, whether written or
oral. This Agreement may not be amended, modified or revoked, in
whole or in part, except by an agreement in writing signed by each of the
parties hereto.
(h) Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its
terms.
(i) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one
instrument.
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In Witness
Whereof, the parties hereto have executed this Agreement as of the day
and year first above written.
| ZST Digital Networks Inc. | |||
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By:
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| Name: Xxxxx Xx | |||
| Title: Chief Executive Officer | |||
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Address: Xxxxxxxx 00, Xxxxx Xxxx, Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxx, People’s Republic of China
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| [Purchaser] | |||
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By:
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| Address: [____________________] | |||
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