AGREEMENT
This Agreement, dated and effective August 13, 1999, between and among
High Speed Net Solutions, Inc., a Florida corporation (the "Company"), and
Xxxxxxx X. Xxxxxxxx, an individual residing in Weston, Florida.
W I T N E S S E T H:
WHEREAS, Xxxxxxxx owns 250,000 shares of common stock of Summus
Technologies, Inc., a Florida corporation (the "Summus Stock"); and
WHEREAS, Summus Technologies, Inc. is a privately held corporation,
there is no registration statement in effect with respect to the sale of the
Summus Stock, and no right to register the Summus Stock for sale is expressly or
impliedly promised by or anticipated by any of the parties to this Agreement
pursuant to or as a result of this Agreement; and
WHEREAS, the Company is desirous of purchasing the Summus Stock and
Xxxxxxxx is desirous of selling the Summus Stock to the Company in exchange for
the consideration described in Section 2(b) herein;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following respective meanings:
a. Applicable Law: The Securities Act, the Exchange Act (to the extent
applicable to offers or sales of securities) and any applicable state securities
law, and the rules and regulations thereunder.
b. Common Stock: Stock of the Company of the class or classes having
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of the Company (irrespective of whether or not at the
time stock of any other class or classes shall have or might have voting power
by reason of the happening of any contingency).
c. Exchange Act: The Securities Exchange Act of 1934, as now or
hereafter amended, and the rules and regulations thereunder which shall be in
effect at the time.
d. Nasdaq: The Nasdaq Stock Market.
e. Registrable Securities: (i) The shares of Common Stock to be covered
by this Agreement, which, as of the date hereof, are not covered by an effective
registration statement under the Securities Act, and (ii) any securities issued
or issuable with respect to any such shares (A) by way of stock dividend or
stock split or (B) in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. The number of Registrable Shares
that are to be covered by this Agreement shall never be less than the number of
Registrable Shares computed as of the date of the execution of this Agreement,
without respect to any later reverse splits or other corporate acts designed to
reduce the number of shares issued or outstanding at any time, and shall be
computed as follows:
i. Upon the execution of this Agreement, 350,000 shares;
ii. If the registration statement for the sale of the Registrable
Shares does not become effective within 120 days of the execution of this
Agreement, an additional 25,000 shares per month for each 30-day period (or
portion thereof if more than 15 days) after 120 days from the date of execution
of this Agreement.
f. Securities Act: The Securities Act of 1933, as now or hereafter
amended, and the rules and regulations thereunder which shall be in effect at
the time.
g. SEC: The United States Securities and Exchange Commission, or any
successor agency responsible for administering the Securities Act;
2
h. Summus Stock: 250,000 shares of common stock of Summus Technologies,
Inc. a Florida corporation;
2. EXCHANGE OF SHARES.
x. Xxxxxxxx agrees to sell and the Company agrees to purchase the
Summus Stock, now owned by him, the consideration for which purchase and sale
shall be as set forth in Section 2(b), and which purchase and sale shall be
contingent on the full completion of the Company's responsibilities under this
Agreement.
b. In exchange for Xxxxxxxx'x Summus Stock, the Company agrees as
follows:
i. Simultaneously with the execution of this Agreement by all
of the parties hereto, the Company shall deliver to Xxxxxxxx (a)
$100,000 in cash, and (b) duly-authorized certificates for 350,000
shares of Registrable Securities, bearing a legend referring to the
Registration Rights conferred hereby.
ii. If a Registration Statement filed with the SEC with
respect to the Registrable Shares pursuant to Section 3 hereof has not
become effective for any reason on or before 120 days from the date of
the execution of this Agreement, then, 135 days from the date of
execution of this Agreement, duly-authorized certificates for 25,000
shares of Registrable Securities, bearing a legend referring to the
Registration Rights conferred hereby; and each 30 days thereafter at
which point a Registration Statement filed with the SEC with respect to
the Registrable Shares pursuant to Section 3 hereof has not become
effective for any reason, an additional 25,000 shares of Registrable
Securities.
3
3. DEMAND REGISTRATION.
a. As expeditiously as possible, but in no event later than 60 days
after the date hereof, the Company shall file a registration statement with the
SEC on Form S-1, or such other form as the Commission may prescribe for the sale
of the Registrable Securities, so as to permit the sale or other disposition of
the Registrable Shares promptly upon the effectiveness of such registration. The
registration statement shall cover that number of Registrable Shares to which,
at the time of the effectiveness of the registration statement, Xxxxxxxx shall
be entitled pursuant to this Agreement. The registration process with respect to
Registrable Securities pursuant to this Section 3 shall be referred to herein as
"Demand Registration".
b. The Company shall thereafter diligently, conscientiously and
actively pursue the processing of such registration statement through the
Commission's Division of Corporation Finance, and shall use its best efforts to
have the registration declared effective by the Company as soon as practicable.
c. The Company shall maintain the effectiveness of such registration
statement and, if necessary, amend the registration statement and supplement the
prospectus included therein for a period of no less than two (2) years from the
effective date of such registration statement, or such sooner time as counsel
for the Company shall render his written unqualified legal opinion, in a form
reasonably satisfactory to Xxxxxxxx and the Company's Transfer Agent, that
Xxxxxxxx is legally permitted to sell all such Registrable Securities held by
Xxxxxxxx without volume restrictions under Rule 144 promulgated under the
Securities Act.
4. EXPENSES OF REGISTRATION. The Company shall be responsible for and
shall pay all expenses (including, without limitation, registration fees, filing
fees, qualification fees, Blue Sky fees and expenses, Company legal fees and
4
expenses, printing expenses and costs of special audits or "cold comfort"
letters, underwriting discounts and commissions incident to the Demand
Registration.
5. INDEMNIFICATION. In connection with any registration, qualification,
notification, or exemption of Registrable Securities hereunder, the Company and
each of its undersigned officers and directors shall indemnify Xxxxxxxx against
all losses, claims, damages and liabilities caused by any untrue, or alleged
untrue, statement of a material fact contained in any registration statement or
prospectus or notification or offering circular (and as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
any preliminary prospectus or caused by any omission, or alleged omission, to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or alleged untrue
statement or omission based upon information furnished in writing to the Company
by Xxxxxxxx, and the Company, the underwriter for the Company and each person
who controls the Company within the meaning of Section 15 of the Securities Act
shall be indemnified by Xxxxxxxx for all such losses, claims, damages and
liabilities caused by any untrue, or alleged untrue, statement or any omission
or alleged omission, based upon information furnished in writing to the Company
by Xxxxxxxx for any such use.
6. REGISTRATION PROCEDURES AND COVENANTS. The Company shall
periodically keep Xxxxxxxx advised, in writing, as to the initiation progress
and effective date of the Demand Registration, and, at the expense of the
Company, the Company shall:
5
a. unless the Registrable Securities are exempt by law from the blue
sky laws of any jurisdiction, use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as Xxxxxxxx reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such Holder (provided that the Company will not be required to: (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section hereof; (ii) subject
itself to taxation in any such jurisdiction; or (iii) consent to general service
of process in any such jurisdiction);
b. cause to be filed any and all notifications to any governmental
authority under any federal or state securities law to be sent and any and all
listings with any securities exchange or Nasdaq to be obtained, as may be
reasonably necessary or advisable to enable Xxxxxxxx to consummate the
disposition of their Registrable Securities pursuant to the registration;
c. notify Xxxxxxxx at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the occurrence of any event
as a result of which the prospectus included in such registration statement
contained an untrue statement, and
d. notify Xxxxxxxx of a material fact or omission to state any fact
necessary to make the statements therein not misleading, and promptly prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus shall not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;
e. provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement.
7. RULE 144 REPORTING AND SALES. With a view to making available to
Xxxxxxxx the benefits of certain regulations of the SEC which may permit the
6
sale of the Registrable Securities to the public without registration, the
Company agrees that, so long as Xxxxxxxx owns any Registrable Securities, the
Company shall:
a. make and keep available "public information," as that term is
defined in SEC Rule 144 or its successor, and as may be applicable to the
Company at the time;
b. timely file with the SEC all reports and other documents required to
be filed under the Securities Act and the Exchange Act, if during such time, the
Company shall be required to do so;
c. comply with all rules and regulations of the SEC applicable in
connection with the use of Rule 144; and
d. take such other actions and furnish Xxxxxxxx with such other
information as he may reasonably request in order to avail him of the benefits
of any rule or regulation of the SEC allowing him to sell any Registrable
Securities without registration. The Company also agrees to furnish to Xxxxxxxx
promptly upon request a written statement by the Company as to its compliance
for a period of at least ninety (90) days prior to the date of the certificate
with the reporting requirements of the Securities Act and the Exchange Act and a
copy of the most recent annual or quarterly report of the Company.
e. Nothing in this Section 7 or elsewhere in this Agreement shall be
construed to limit the Company's obligations with respect to the registration of
the Registrable Securities. Xxxxxxxx'x rights under Rule 144 shall be
supplementary to and independent of his rights with respect to the registration
of the Registrable Securities, and he may choose, in his sole option and
discretion, to avail himself of the benefits under Rule 144.
8. SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns. In addition, and
7
whether or not any express assignment shall have been made, the provisions of
this Registration Rights Agreement which are for the benefit of Xxxxxxxx shall
also be for the benefit of and enforceable by any subsequent Holder of any
Registrable Securities, subject to the provisions and obligations hereof.
9. ENTIRE AGREEMENT AND MODIFICATIONS. This Agreement constitutes the
entire understanding between the parties and supersedes all other agreements,
whether written or oral, with respect to the transactions contemplated by this
Agreement. The Agreement may not be amended or modified by either party unless
such amendment or modification is memorialized in a writing signed by each of
the parties hereto. Any such amendment or modification of this Agreement shall
be binding upon and inure to the benefit of all Holders of Registrable
Securities.
10. WAIVER. Any waiver by either party of any breach of any term or
condition in this Agreement shall not operate as a waiver of any other breach of
such term or condition or of any other term or condition, nor shall any failure
to enforce any provision hereof operate as a waiver of such provision or of any
other provision hereof or constitute or be deemed a waiver or release of any
other rights, in law or in equity.
11. GOVERNING LAW. All issues concerning this Agreement will be
governed by and construed in accordance with the laws of the State of Florida,
without giving effect to any choice of law or conflict of law provision or rule
whether of the State of Florida or any other jurisdiction) that would cause the
application of the law of any other jurisdiction. The parties hereto agree that
any action to enforce this Agreement may be properly brought in any court within
the State of Florida.
12. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
8
(jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
13. ADDITIONAL STEPS AND PROCEDURES. From time to time after the
execution of this Agreement, each of the parties hereto hereby agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper and advisable under applicable laws,
rules and regulations to consummate and make effective the transactions
contemplated by this Agreement, including using its best efforts to obtain all
necessary waivers, consents and approvals. In case at any time after the
execution of this Agreement further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and directors of each of
the parties shall take all such necessary action.
14. NOTICES. All notices and other communications which are required or
may be given under this Agreement shall be in writing and shall be deemed to
have been given if delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid:
To the Company:
High Speed Network Solutions, Inc.
0000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
To Xxxxxxxx:
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
9
with a copy to:
Xxxxxxx X. Xxxxxxx, P.A.
Xxxxx 000, 00 XX Xxxxxx
Xxxxx, Xxxxxxx 00000
or to such other place as either party shall have specified by notice in writing
to the other.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
or caused this Agreement to be executed on its behalf as of the date indicated
below:
HIGH SPEED NETWORK SOLUTIONS, INC.
ATTEST:
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Its: Xxxxxxx X. Xxxxxx, Chairman
__________________________ PRINT NAME: ________________________
Secretary DATED:______________________________
XXXXXXX X. XXXXXXXX:
ATTEST:
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
/s/ (illegible signature) DATED: Aug. 13th, 1999
-------------------------- ------------------------
RALLIB01:537559.01
10
