Exhibit 10.22
AGREEMENT
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THIS AGREEMENT is made and entered into as of this 15th day of August
2000, by and among Xxxxxx Xxx ("Xxx"), Xxxx Xxxx ("Xxxx"), Xxxx Xxxx ("Xxxx,"
and together with Xxx and Chen, the "Founders") and Mcglen Internet Group, Inc.,
a Delaware corporation (the "Company").
WHEREAS, the Founders collectively own more than 63% of the issued and
outstanding shares of common stock of the Company; and
WHEREAS, the Founders have recruited to the Board of Directors a group
of persons who the Founders believe can provide significant strategic direction,
advice and guidance to the Company, and, as a result significantly increase the
value of the shares owned by the Founders; and
WHEREAS, the Company is in need of additional capital to fund its
operations, and the Founders have collectively agreed to make available to the
Company an aggregate of 10,000,000 shares of Common Stock of the Company (the
"Equity Pool") to be issued by the Company to provide incentives to specific
individuals and to assist the Company in raising capital, in each case without
diluting the currently outstanding Common Stock of the Company; and
WHEREAS, the Founders are making available to the Company the shares
included in the Equity Pool to assist in the development of the Company and
management's efforts to raise capital for the Company, and, thereby enhance the
value of the shares of Common Stock of the Company owned by the Founders which
are not being contributed to the Equity Pool;
NOW, THEREFORE, in consideration of the foregoing and the agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. CREATION OF EQUITY POOL. Each of the Founders agrees to, and hereby
does, make available to the Company the number of shares of Common Stock of the
Company set forth opposite each Founder's name below:
NAME NO. OF EQUITY POOL SHARES
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Xxxxxx Xxx 4,666,667
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Xxxx Xxxx 4,666,667
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Xxxx Xxxx 666,666
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Each Founder shall deliver to the Chairman of the Board of the Company
certificates representing the number of shares of Common Stock of the Company
which each Founder is contributing to the Equity Pool, together with stock
powers in blank, in sufficient form to transfer the Equity Pool shares on the
books of the Company.
2. USE OF EQUITY POOL. The shares included in the Equity Pool shall be
used by the Company to grant incentives to management and directors, to assist
in the development and growth of the Company or to assist the Company, directly
or indirectly, in raising capital to fund its operations and development
(collectively, "Permitted Uses"). Shares included in the Equity Pool may only be
used for Permitted Uses and in such amounts and for such purposes as have been
specifically authorized and approved by the Board of Directors of the Company.
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In the case of each such Permitted Use of the Equity Pool, the Company shall be
entitled to transfer from the Equity Pool the total number of shares to be
issued for such Permitted Use, with the shares to be transferred from the
accounts of each Founder as follows: (a) the first 8,000,000 shares of the
Equity Pool allocated for a Permitted Uses shall be deducted 50% from the
account of Xxxxxx Xxx and 50% from the account of Xxxx Xxxx in the Equity Pool;
and (b) the balance of the shares of the Equity Pool allocated for Permitted
Uses shall be deducted from the accounts of the 3 Founders on an equal basis.
3. FOUNDER'S COMPENSATION. McGlen agrees to pay the founders a 5%
consulting fee of any cash received by the firm through "permitted uses" of the
pool, immediately upon receipt of funds.
4. FORM OF EQUITY POOL AWARDS. Each Founder hereby acknowledges and
agrees that the Company shall be entitled to use the Equity Pool by direct
transfer of shares to members of management, directors or to third parties or by
the granting of options, warrants or other rights to acquire shares in the
Equity Pool. The Company shall also be entitled to use the shares in the Equity
Pool by contribution of such shares to the Company for cancellation in
connection with the original issuance by the Company of a corresponding number
of shares for a Permitted Use.
5. POWER OF ATTORNEY. Each Founder hereby appoints the Chief Financial
Officer of the Company (or his designee) as the attorney-in-fact for such
Founder, with full power and authority to transfer, use and deal with the shares
of such Founder included in the Equity Pool.
6. FURTHER ASSURANCES. Each Founder hereby agrees to execute and
deliver to the Company such further documents and instruments, including,
without limitation, stock powers, reasonably requested by the Company in
connection with the shares included in the Equity Pool, and the transfer and use
of such shares.
7. RESTRICTED SALE OF SHARES.
7.1 Until the 18 months of the date of this Agreement, Xxxx Xxxx and
Xxxxxx Xxx agree not to sell, transfer or otherwise alienate, directly or
indirectly, any shares of Common Stock of the Company owned, directly or
indirectly, by such Founder except (a) shares transferred to the Equity Pool and
allocated and used for Permitted Uses; and (b) with respect to the remaining
shares of Common Stock of the Company owned, directly or indirectly, by such
Founder (the "Remaining Shares"), to sell, transfer or alienate not more than
(i) one percent of the Remaining Shares of such Founder in any one calendar
month period and (ii) ten percent of the Remaining Shares of such Founder in any
consecutive 12 calendar month period.
7.2 Until the 18 months of the date of this Agreement, Xxxx Xxxx agrees
not to sell, transfer or otherwise alienate, directly or indirectly, any shares
of Common Stock of the Company owned, directly or indirectly, by Xxxx Xxxx
except (a) shares transferred to the Equity Pool and allocated and used for
Permitted Uses; and (b) with respect to the remaining shares of Common Stock of
the Company owned, directly or indirectly, by Xxxx Xxxx (the "Remaining
Shares"), to sell, transfer or alienate not more than (i) 2% of the Remaining
Shares of such Founder in any one calendar month period and (iii) twenty percent
of the Remaining Shares of Xxxx Xxxx in any consecutive 12 calendar month
period.
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8. FOUNDER REPRESENTATIONS AND COVENANTS. Each Founder hereby
represents and warrants to the Company that such Founder has the power and
authority to enter into this Agreement, and to deliver the shares of Common
Stock of the Company being delivered by such Founder to the Equity Pool, free of
any pledges, liens, claims or encumbrances (including, without limitation, any
rights of first refusal, preemptive rights or other charges as to such shares)
(collectively, an "Encumbrance"). Each Founder covenants and agrees not to take
any action (or permit any action to be taken), whether voluntary or by operation
of law, that would cause or permit the shares of such Founder included in the
Equity Pool to be subject to any Encumbrance or to otherwise take any action to
transfer or alienate any interest in the shares transferred to the Equity Pool.
9. TERMINATION OF EQUITY POOL. To the extent that shares of Common
Stock of the Company remain in the Equity Pool, which shares have not been
allocated or used for a Permitted Use on or prior to the 18-month anniversary of
the date of this Agreement, then any shares so remaining shall be released from
this Agreement, and certificates representing the shares not so issued or
allocated shall be returned to such Founder in proportion to such Founder's
proportionate interest in such shares.
10. INDEMNIFICATION OF FOUNDERS. The Company will use reasonable
efforts to structure the transactions in which the shares included in the Equity
Pool are used by the Company to not cause the Founders to recognize gain (for
federal or state income tax purposes) on the contribution of the shares to the
Equity Pool or in connection with the use by the Company of any of the Equity
Pool shares. To the extent that the Founders, or any of them, are required to
recognize gain for federal or state income tax purposes with respect to the
shares included in, or used from, the Equity Pool, the Company agrees to
indemnify and hold such Founder harmless with respect to any such tax liability.
11. AMENDMENT AND MODIFICATIONS. This Agreement may be amended,
modified and supplemented only by written agreement among the parties which
states that it is intended to be a modification of this Agreement.
12. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, certified or registered mail
with postage prepaid:
(a) if to the Company, to:
0000 Xxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chairman of the Board
or to such other person or address as the Company shall furnish to the Founders
in writing;
(b) if to the Founders to:
0000 Xxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (714)
or to such other person or address as a Founder shall furnish to the Company in
writing.
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13. ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties.
14. GOVERNING LAW. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws of
the State of California, as applied to contracts entered into and to be wholly
performed within the State of California.
15. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
16. HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
17. Entire Agreement. This Agreement and the other documents and
certificates delivered pursuant to the terms hereof, set forth the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and supersede all prior agreements, promises,
covenants, arrangements, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of any party hereto.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first set forth above.
/S/ XXXXXX XXX
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Xxxxxx Xxx
/S/ XXXX XXXX
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Xxxx Xxxx
/S/ XXXX XXXX
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Xxxx Xxxx
Mcglen Internet Group, Inc.
By: /S/ XXXXX XXXXXXX
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Name: XXXXX XXXXXXX
Title: CFO
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