EXHIBIT 10.11
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of June 14, 1996
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(the "Agreement"), between Xxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxxx and Xxxxxxx X.
Xxxxxxxxx (collectively "Sellers" or individually "Xxxxxxx", "X. Xxxxxxxxx" and
"X. Xxxxxxxxx"), the holders of Two Thousand (2,000) shares of common stock of
Cyber America Corporation, a Pennsylvania corporation ("Cyber America") which
represents 100% of the issued and outstanding stock of Cyber America
Corporation, and Digital Data Networks, Inc. ("Buyer" or "DDN").
WHEREAS Sellers desire to sell and Buyer desires to purchase from
Sellers Two Thousand (2,000) shares of common stock of Cyber America Corporation
(the "Purchased Stock"), which represents 100% of the issued and outstanding
stock of Cyber America Corporation, on the terms and subject to the conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and intending to be legally bound hereby, the parties agree as
follows:
1. The Transaction
1.1 Sale and Purchase of Stock. On the terms and subject to the
conditions set forth in this Agreement, at the Closing referred to in Section
1.3 below (the "Closing"), the Sellers shall sell the Purchased Stock to the
Buyer and the Buyer shall purchase the Purchased Stock from the Sellers.
1.2 Stock Transaction. DDN shall issue shares of common stock in
DDN to the Sellers in the following amounts: Xxxxx X. Xxxxxxx, 23,750 shares,
Xxxxxx Xxxxxxxxx, 23,750 shares and Xxxxxxx X. Xxxxxxxxx, 2,500 shares. In
exchange, Sellers shall surrender 100% of the issued and outstanding stock of
Cyber America to DDN.
1.2(a) As an inducement for Sellers to enter into this
Agreement and to sell their stock, DDN covenants as follows:
1.2(i) DDN will provide up to $100,000 in working
capital to finance operating losses of Cyber America during year one of
operations. Of this amount, $50,000 will be made available beginning on June 15,
1996 with the remaining to be disbursed as needed;
1.2(ii) DDN will authorize the repayment of
outstanding loans made by X. Xxxxxxxxx to Cyber America up to a maximum of
$10,000 from the initial disbursement of $50,000 working capital; and
1.2(iii) DDN will enter into employment contracts
with Xxxxx Xxxxxxx and Xxxxxx Xxxxxxxxx substantially in the form attached
hereto which will include terms for employee compensation as well as
non-competition, confidentiality and assignment of future developments during
the term of the employment agreement plus an additional two years.
Stock Purchase Agreement - Page 1
1.3 Seller's Consideration. As added incentive for Buyer to enter into
this Agreement, Xxxxxxx agrees to assign exclusive rights to his network design
"invention" to DDN and its Cyber America division.
1.4 Closing. The closing (the "Closing") under this Agreement shall
take place on June 14, 1996, or at such other time and place as shall be
mutually agreed upon.
2. Representation and Warranties of the Buyer
2.1 Authorization and Enforceability. Buyer has all requisite power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by Buyer and constitutes the valid and
binding obligation, fully enforceable in accordance with its terms.
2.2 No Finder. Buyer has not taken any action which would give to any
firm, corporation, agency or other person a right to a consultant's or finder's
fee or any type of brokerage commission in relation to or connection with the
transactions contemplated by this Agreement.
3. Representation and Warranties of Sellers
Sellers individually and collectively represent and warrant to Buyer
that, except as otherwise set forth herein, or otherwise specifically disclosed:
3.1 All Authorized Capitalization, Outstanding Shares, Title. Each
Seller is the record and beneficial owner of and has legal and valid title to
his shares of stock, free and clear of all liens, pledges, charges, claims and
other encumbrances, actual or alleged. Delivery of the shares to Buyer at the
Closing of this Agreement will transfer to Buyer legal and valid title to the
shares sold hereunder, free and clear of any liens, pledges, charges, claims and
other encumbrances.
3.2 Authorizations and Enforceability. Each Seller has all requisite
power and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. This Agreement constitutes the
valid and binding obligation of each of the Sellers and is fully enforceable in
accordance with its terms.
3.3 Effective Agreement. To the best of each Seller's knowledge, the
execution, delivery, and performance of this Agreement by Sellers and the
consummation of the sale contemplated hereby will not, with or without the
giving of notice of lapse of time or both, result in the breach of or conflict
with any terms, covenant, condition or provision of, result in the modification
or termination of, constitute a default under it, or result in the creation or
imposition of, any lien, security interest, charge, or encumbrance upon any of
the properties or assets of the Seller or Cyber America pursuant to any charter,
bylaw, commitment, contract or other agreement or instrument, to which he/it is
a party or by which any of his/its assets or properties is or may be bound or
affected or from which Cyber America derives a benefit which violation would
have a material adverse affect on the value of the shares being purchased.
Stock Purchase Agreement - Page 2
3.4 Restrictions, Burdensome Agreements. None of the Sellers is a party
to any contract, commitment or agreement, and none of the Sellers is subject to
or bound or affected by any charter, bylaw or other corporate restriction, or
any order, judgment, decree, law, statute, ordinance, rule, regulation or other
restriction of any kind or character, which would prevent Seller from entering
into this Agreement or from consummating the sale contemplated hereby.
3.5 Representation and Warranty of Sellers; No Finder. Sellers have not
taken any action which would give to any firm, corporation, agency or other
person a right to a consultant's or finder's fee or any type of brokerage
commission in relation to or in connection with the transactions contemplated by
this Agreement.
4. Exemption from Registration-Disclosure-Access to Information
4.1 Information Available to Buyer. A partial inducement to the Sellers
to enter into this Agreement is the representation by Buyer that it has a high
degree of business and financial sophistication concerning the industry and the
business operations and prospects of Cyber America. Buyer has available all
business and financial data of Cyber America. Although Sellers have made such
information available based on their knowledge of relevant operating data, the
scope and examination by and on behalf of Buyer has been determined by Buyer,
based on its own sophistication and experience. Buyer has received all of the
information regarding Cyber America and its business which has been requested.
5. Access to Information
Buyer represents that its access to information has been as set forth
above. Without limiting the general nature of the representation, Buyer
acknowledges and represents that it has had access to certain specific matters
and the opportunity to consider in detail the business and investment
ramifications of information obtained.
6. Issuance of Certificates
Sellers agree to cause Cyber America to issue the stock certificate in
the name of Digital Data Networks, Inc.
7. Conditions to Closing and Termination
7.1 Conditions Precedent to Obligations of the Buyer. The obligations
of Buyer to proceed with the Closing under this Agreement are subject to the
fulfillment prior to or at the Closing of the following conditions:
Stock Purchase Agreement - Page 3
7.1.1 Performance and Compliance. Sellers shall have performed
all of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by them on or before the Closing.
7.1.2 Satisfactory Documents. Sellers shall have delivered to
Buyer such instruments and documents as are required to be executed by Sellers
hereunder or as are reasonably necessary to consummate and effectuate the
transaction contemplated hereby.
7.2 Conditions Precedent to Obligations of Sellers. The
obligations of Sellers to proceed with the Closing under this Agreement are
subject to the fulfillment or prior to or at the Closing of the following
conditions:
7.2.1 Satisfactory Instruments. All instruments and documents
required on the part of Buyer to effectuate and consummate the transactions
contemplated hereby shall be delivered to Sellers and shall be in form and
substance reasonably satisfactory to Sellers and their counsel.
7.3 Termination.
7.3.1 When Agreement May be Terminated. This Agreement may be
terminated at any time prior to the Closing by mutual consent of Buyer and
Sellers.
7.3.2 Effect of Termination. In the event of termination of
this Agreement by either Sellers or Buyer as provided above, this Agreement
shall forthwith terminate and there shall be no liability on the part of either
Sellers or Buyer except for liabilities arising from a breach of this Agreement
prior to such termination.
8. Other Provisions
8.1 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered or, if mailed, three days after mailed by United States
first-class, certified or registered mail, postage prepaid, to the other party
at the following addresses (or at such other address as shall be given in
writing by any party to the other):
8.1.1 If to Buyer, then to:
Xx. Xxxxxx Xxxxx
Digital Data Networks, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx, 00000
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8.1.2 If to Sellers, then to:
Xxxxx Xxxxxxx and Xxxxxx Xxxxxxxxx
X.X. Xxx 000
Xxxxxxxxx Xxxx, XX 00000
8.2 Successors and Assigns. This Agreement, and all rights and powers
granted hereby, shall bind and inure to the benefit of the parties and their
respective successors and assigns.
8.3 Governing Law. This Agreement has been made, executed and delivered
in and is to be governed and construed in accordance with the laws of the State
of Texas.
8.4 Captions. The captions in this Agreement are inserted solely for
convenience of reference and do not constitute a part of this Agreement, nor
shall they affect its meaning, construction or effect.
8.5 Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
8.6 Amendment and Waiver. The parties may by mutual agreement amend
this Agreement in any respect, and any party, but only as to such party, may (a)
extend the time for the performance of any of the obligations of any other
party; (b) waive any inaccuracies in representations by any other party; (c)
waive compliance by any other party with any of its agreements contained herein
and the performance of any obligations by such other party; and (d) waive the
fulfillment of any condition that is precedent to the performance by such party
of any of its obligations under this Agreement. To be effective, all such
amendments or waivers must be in writing and be signed by the party against whom
enforcement of the amendment or waiver is sought.
8.7 Entire Agreement. This Agreement and the schedules and exhibits
hereto, each of which is hereby incorporated herein, sets forth all of the
promises, covenants, agreements, conditions and undertakings between the parties
hereto with respect to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings, and inducements or conditions, if
any, expressed or implied, and whether oral or written.
Stock Purchase Agreement - Page 5
IN WITNESS WHEREOF, each of the parties has executed this Stock
Purchase Agreement as of the date first above written.
DATED this 14th day of June, 1996.
SELLERS:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
BUYER:
DIGITAL DATA NETWORKS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Its: President
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