SHAREHOLDER AGREEMENT
This Shareholder Agreement (the "AGREEMENT") is entered into as
of the 8th day of September, 2001 by and among TeleWrx, Inc., a
Florida corporation (the "COMPANY") and those parties as set forth
on Exhibit A hereto (the "FOUNDERS").
RECITALS
WHEREAS, the Company has issued 30,900,000 shares of its $.0001
par value common stock (the "COMMON STOCK") to the Founders; and
WHEREAS, in connection with the issuance of the Common Stock to
the Founders, the Founders have agreed and the Company and the
Founders have agreed to the matters set forth herein.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in
this Agreement, the parties mutually agree as follows:
1. DEFINITIONS. As used in this Agreement the following
terms shall have the following respective meanings:
(a) "AFFILIATE" means an affiliate as defined in Rule
12b-2 under the Exchange Act.
(b) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
(c) "FOUNDERS' SHARES" means (i) the Common Stock owned
by any of the Founders and (ii) any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in
replacement of, such Common Stock.
(d) "REGISTER," "REGISTERED," and "REGISTRATION" refer to
a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration
or ordering of effectiveness of such registration statement or
document.
(e) "REGISTRABLE SECURITIES" means (i) the Founder's
Shares and (ii) any Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which
is issued as) a dividend or other distribution with respect to, or
in exchange for or in replacement of, the Founders' Shares.
Notwithstanding the foregoing, Registrable Securities shall not
include any securities sold by a person to the public pursuant to a
registration statement or Rule 144 or sold in a private transaction
in which the registration rights under paragraph 2 of this Agreement
are not assigned.
(f) "REGISTRATION EXPENSES" shall mean all expenses
incurred by the Company in complying with paragraph 2.(b) hereof,
including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the
Company, fees and disbursements of counsel for the Founders, blue
sky fees and expenses, transfer agents' and registrar's fees and the
expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
(g) "SEC" or "COMMISSION" means the Securities and
Exchange Commission.
(h) "SECURITIES ACT" shall mean the Securities Act of
1933, as amended.
2. RESTRICTIONS; REGISTRATION; TAG-ALONG RIGHTS.
(a) RESTRICTIONS.
(1) Except as specifically provided herein, each
Founder agrees not to sell, assign, transfer, encumber or
hypothecate (collectively, a "DISPOSITION") all or any portion
of the Founders' Shares owned by such Founder, unless and until
eighteen (18) months after the date hereof.
(2) Each certificate representing Founders' Shares
shall, in addition to any legend required under applicable
state securities laws or any other applicable agreement, be
imprinted with legends substantially similar to the following:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES REPRESENTED BY THE CERTIFICATE ARE SUBJECT TO A
SHAREHOLDER AGREEMENT WHICH, AMONG OTHER THINGS, CONTAINS
RESTRICTION ON THE RIGHT TO TRANSFER SUCH SHARES AND
GRANTS CERTAIN OTHER SHAREHOLDERS TAG-ALONG RIGHTS UNDER
CERTAIN CIRCUMSTANCES IN CONNECTION WITH THE SALE OF SUCH
SHARES. A COPY OF THE SHAREHOLDER RIGHTS AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. THE COMPANY
WILL FURNISH TO ANY STOCKHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A FULL STATEMENT OF SUCH RESTRICTIONS.
(3) The Company shall issue stop-transfer
instructions to its transfer agent with respect to the
Founders' Shares in accordance with the terms of this Agreement.
(b) PIGGYBACK REGISTRATIONS. The Company shall notify (a
"PIGGYBACK NOTICE") all Founders in writing at least twenty (20)
days prior to the filing of any Registration statement under the
Securities Act for purposes of a public offering of the Common Stock
of the Company, including, but not limited to, registration
statements relating to secondary offerings of the Common Stock of
the Company, but excluding registration statements (collectively,
"Special Registration Statements") relating to employee benefit
plans or with respect to corporate reorganizations or other
transactions under Rule 145 of the Securities Act and will afford
each such Founder an opportunity to include in such Registration
statement such Founder's pro rata part (the "PERMITTED PART") of ten
per cent (10 %) of the number of shares of Common Stock being so
Registered by the Company. Each Founder desiring to include in any
such Registration statement all or any part of the Permitted Part
of the Founders' Shares held by such Founder shall, within fifteen
(15) days after the date of the Piggyback Notice, so notify (the
"PIGGYBACK RESPONSE NOTICE") the Company in writing. Such Piggyback
Response Notice shall state the intended method of disposition of
the Founders' Shares. If a Founder decides not to include all of its
Permitted Part of the Founders' Shares in any such Registration
statement, such or Founder shall nevertheless continue to have the
right to include the Permitted Part of such Founder's Founders'
Shares in any subsequent Registration statement or Registration
statements as may be filed by the Company with respect to offerings
of its Common Stock, all upon the terms and conditions set forth
herein.
(1) Underwriting. If the Registration statement
under which the Company gives a Piggyback Notice under this
paragraph 2.(b) is for an underwritten offering, the Company
shall so advise the Founders. In such event, the right of any
such Founder to be included in a Registration pursuant to this
paragraph 2.(b) shall be conditioned upon such Founder's
participation in such underwriting and the inclusion of such
Founder's Permitted Part of the Founders' Shares in the
underwriting to the extent provided herein. All Founders
proposing to distribute their Permitted Part of the Founders'
Shares through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter
or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Agreement, if the
underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company; second,
to the Founders on a pro rata basis; and third, to any other
shareholder of the Company other than a Founder on a pro rata
basis. If any Founder disapproves of the terms of any such
underwriting, such Founder may elect to withdraw therefrom by
written notice to the Company and the underwriter, delivered at
least ten (10) business days prior to the effective date of the
Registration statement. Any Permitted Part of the Founders
Shares excluded or withdrawn from such underwriting shall be
excluded and withdrawn from the Registration.
(2) Right to Terminate Registration. The Company
shall have the right to terminate or withdraw any Registration
initiated by it under this paragraph 2.(b) prior to the
effectiveness of such Registration whether or not any Founder
has elected to include Founders' Shares securities in such
Registration. The Registration Expenses of such withdrawn
Registration shall be borne by the Company in accordance with
paragraph 2.(c) hereof.
(c) EXPENSES OF REGISTRATION. Except as specifically
provided herein, all Registration Expenses incurred in connection
with any Registration under paragraph 2.(b) herein shall be borne by
the Company. All underwriting discounts and selling commissions
(collectively, the "SELLING EXPENSES") incurred in connection with
any Registrations hereunder, shall be borne by the holders of the
securities so registered pro rata on the basis of the number of
shares so registered. If the Founders are required to pay the
Registration Expenses, such Registration Expenses shall be borne by
the holders of securities requesting such registration in proportion
to the number of shares for which registration was requested.
(d) OBLIGATIONS OF THE COMPANY. Whenever required to
effect the registration of any Founders' Shares, the Company shall,
as expeditiously as reasonably possible:
(1) Prepare and file with the SEC a Registration
statement with respect to such Permitted Part of the Founders'
Shares and use its best efforts to cause such Registration
statement to become effective, and, upon the request of a
majority of the Founders' Shares, keep such Registration
statement effective, in the case of a firm commitment
underwriting, until each underwriter has completed the
distribution of all securities purchased by it and, in all
other cases, until the earlier of the sale of all the
securities or 120 days after the effective date. The Company
shall not be required to file, cause to become effective or
maintain the effectiveness of any Registration statement that
contemplates a distribution of securities on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act.
(2) Prepare and file with the SEC such amendments
and supplements to such Registration statement and the
prospectus used in connection with such Registration statement
as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all
securities covered by such Registration statement for the
period set forth in paragraph 2.(d)(1) above.
(3) Furnish to the Founders such number of copies of
a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate
the disposition of the Founders' Shares owned by them.
(4) Use its best efforts to register and qualify the
securities covered by such Registration statement under such
other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Founders; provided that
the Company shall not be required in connection therewith or as
a condition thereto to qualify to do business, to file a
general consent to service of process or subject itself to
taxation in any such states or jurisdictions.
(5) In the event of any underwritten public
offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the
managing underwriter(s) of such offering. Each Founder
participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(6) Notify each Founder owning securities covered by
such Registration statement at any time when a prospectus
relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of
which the prospectus included in such Registration statement,
as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(7) Use its best efforts to furnish, on the date
that such Founders' Shares are delivered to the underwriters
for sale, if such securities are being sold through
underwriters, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such
Registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to
the underwriters, if any, and (ii) a letter dated as of such
date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an
underwritten public offering addressed to the underwriters.
(8) Cause all Founders' Shares to be listed on each
securities exchange or National Association of Securities
Dealers, Inc. Automated Quotation System on which similar
securities of the Company are then listed.
(9) Notify the Founders promptly of any request by
the SEC for the amending or supplementing of such Registration
statement or prospectus or for additional information.
(10) Advise the Founders promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of
any stop order by the SEC suspending the effectiveness of any
Registration statement or the initiation or threatening of any
proceeding for that purpose and promptly use commercially
reasonable efforts to prevent the issuance of any stop order or
to obtain the withdrawal if such stop order should be issued.
(e) TERMINATION OF REGISTRATION RIGHTS. A Founder's
registration rights under this Agreement shall expire as such time
as such Founders' Shares held by any such Founder may be sold under
Rule 144 during any ninety (90) day period.
(f) FURNISHING INFORMATION. It shall be a condition
precedent to the obligations of the Company to take any action
pursuant to paragraph 2.(b) that the selling Founders shall furnish
to the Company such information regarding themselves, the Founders'
Shares held by them and the intended method of disposition of such
securities as shall be reasonably required to effect the
Registration of their Founders' Shares.
(g) INDEMNIFICATION. In the event any Founders' Shares
are included in a Registration statement under paragraph 2.(b):
(1) To the extent permitted by law, the Company will
indemnify and hold harmless each Founder, the partners,
shareholders, managers, officers and directors of each Founder,
any underwriter (as defined in the Securities Act) for such
Founder and each person, if any, who controls such Founder or
underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or
violations (collectively a "VIOLATION") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein
not misleading, or (iii) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such Registration
statement; and the Company will pay as incurred to each such
Founder or partner, member, manager, officer, director,
underwriter or controlling person of such Founder for any legal
or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage,
liability or action; provided however, that the indemnity
agreement contained in this paragraph 2.(g)(1) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Company, which consent shall not be unreasonably
withheld, nor shall the Company be liable in any such case for
any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation which occurs
in reliance upon and in conformity with written information
furnished expressly for use in connection with such
registration by such Founder or a partner, officer, director,
shareholder, manager, underwriter or controlling person of such
Founder; provided further, that this indemnity shall not be
deemed to relieve any underwriter of any of its due diligence
obligations; and provided further, that if any claim, action,
demand, loss, damage, liability, cost or expense arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission contained in any
preliminary prospectus which did not appear in the final
prospectus and if the Founder delivered a copy of the
preliminary prospectus to the person alleging damage and failed
to deliver a copy of the final prospectus to such persons, the
Company shall not be liable with respect to the claims of such
person; provided further, that in no event shall any indemnity
under this paragraph 2.(g)(1) exceed the net proceeds from the
offering received by such Founder.
(2) To the extent permitted by law, each Founder
will, if Founders' Shares held by such Founder are included in
the securities as to which such registration qualifications or
compliance is being effected, indemnify and hold harmless the
Company, each of its directors, its officers and each person,
if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, any underwriter and any
other Founder selling securities under such registration
statement or any of such other Founders' partners,
shareholders, managers, directors or officers or any person who
controls such Founder, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such
director, officer, controlling person, underwriter or other
such Founder, or partner, director, officer or controlling
person of such other Founder may become subject under the
Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity
with written information furnished by such Founder under an
instrument duly executed by such Founder and stated to be
specifically for use in connection with such Registration; and
each such Founder will pay as incurred any legal or other
expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or other
Founder, or partner, shareholder, manager, officer, director or
controlling person of such other Founder in connection with
investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there
was such a Violation; provided, however, that the indemnity
agreement contained in this paragraph 2.(g)(2) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Founder, which consent shall not be unreasonably
withheld; provided further, that in no event shall any
indemnity under this paragraph 2.(g)(2) exceed the net proceeds
from the offering received by such Founder.
(3) Promptly after receipt by an indemnified party
under paragraphs 2.(g)(1) or 2.(g)(2) of notice of the
commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is
to be made against any indemnifying party under paragraphs
2.(g)(1) or 2.(g)(2), deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due
to actual or potential differing interests between such
indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of
the commencement of any such action, if materially prejudicial
to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party
under paragraphs 2.(g)(1) or 2.(g)(2), but the omission so to
deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified
party otherwise than under paragraphs 2.(g)(1) or 2.(g)(2). No
indemnifying party shall be liable to an indemnified party for
any settlement of any action or claim made without the consent
of the indemnifying party; no indemnifying party may
unreasonably withhold its consent to any such settlement. No
indemnifying party will consent to entry of any judgment or
enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(4) If the indemnification provided for under
paragraphs 2.(g)(1) or 2.(g)(2) is held by a court of competent
jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred
to herein, the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall to the extent permitted by
applicable law contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the
Violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by a court of
law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission;
provided, that in no event shall any contribution by a Founder
hereunder exceed the net proceeds from the offering received by
such Founder.
(5) The obligations of the Company and the Founders
under this paragraph 2.(g) shall survive completion of any
offering of Founders' Shares in a Registration statement and
the termination of this Agreement. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with
the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(h) ASSIGNMENT OF REGISTRATION RIGHTS. The rights to
cause the Company to register the Founders' Shares pursuant to this
paragraph 2 may be assigned by a Founder to a Permitted Transferee
(as defined in paragraph 3.(c)) of the Founders' Shares, provided
that as a condition thereto such Permitted Transferee shall agree to
be subject to all restrictions set forth in this Agreement.
(i) AMENDMENT OF REGISTRATION RIGHTS. Any provision of
this paragraph 2 may be amended and the observance thereof may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and the holders of at least fifty percent (50%) of the
Founders' Shares then outstanding. Any amendment or waiver effected
in accordance with this paragraph 2.(i) shall be binding upon each
Founder and the Company.
(j) "MARKET STAND-OFF" AGREEMENT; AGREEMENT TO FURNISH
INFORMATION. Each Founder hereby agrees that such Founder shall not
sell, transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction with
the same economic effect as a sale, any Founders' Shares held by
such Founder (other than those included in the Registration) for a
period specified by the representative of the underwriter not to
exceed ninety (90) days following the effective date of a
Registration statement for any offering by the Company under the
Securities Act, or, in each case, such shorter period as agreed to
by the representative of the underwriter. Each Founder agrees to
execute and deliver such other agreements as may be reasonably
requested by the Company or the underwriter which are consistent
with the foregoing or which are necessary to give further effect
thereto. In addition, if requested by the Company or the
representative of the underwriter, each Founder shall provide,
within ten (10) days of such request, such information as may be
required by the Company or such representative in connection with
the completion of any public offering of the Company's securities
pursuant to a Registration statement filed under the Securities Act.
The obligations described in this paragraph 2.(j) shall not apply to
any Special Registration Statement. The Company may impose
stop-transfer instructions with respect to the Founders' Shares
subject to the foregoing restriction until the end of said one period.
(k) RULE 144 REPORTING. With a view to making available
to the Founders the benefits of certain rules and regulations of the
SEC which may permit the sale of the Founders' Shares to the public
without registration, the Company agrees to use its best efforts to:
(1) Make and keep public information available, as
those terms are understood and defined in SEC Rule 144 or any
similar or analogous rule promulgated under the Securities Act,
at all times;
(2) File with the SEC, in a timely manner, all
reports and other documents required of the Company under the
Exchange Act; and
(3) So long as a Founder owns any Founders' Shares,
furnish to such Founder forthwith upon request: (i) a written
statement by the Company as to its compliance with the
reporting requirements of said Rule 144 of the Securities Act,
and of the Exchange Act (at any time after it has become
subject to such reporting requirements); (ii) a copy of the
most recent annual or quarterly report of the Company; and
(iii) such other reports and documents as a Founder may
reasonably request in availing itself of any rule or regulation
of the SEC allowing it to sell any such Founders' Shares
without registration.
(l) TAG-ALONG RIGHTS. If any Founder (the "SELLING
SHAREHOLDER"), at any time prior to the expiration of eighteen (18)
months from the date hereof, proposes to sell, individually or
together or in one transaction or a series of transactions, in the
aggregate, any Founders' Shares, other than in an exempt transfer
pursuant to hereto, then the Selling Shareholder shall provide
written notice to the Founders of the price and other terms of the
proposed sale (the "TAG ALONG NOTICE"). If the other Founders or the
Company has not exercised its refusal rights as provided in
paragraph 3 to purchase all the Founders' Shares subject to the Tag
Along Notice within the time periods so provided in paragraph 3,
then each of the Founders shall have the right to require the
proposed transferee to purchase from such Founder (each such Founder
exercising the right, a "TAG-ALONG SHAREHOLDER"), at the price and
on the terms and conditions in the Tag Along Notice, a number of
shares of Founders' Shares equal to the product of (i) the quotient
of (x) the number of Founders' Shares held by the Tag-Along
Shareholder (as computed on a fully diluted basis assuming the full
exercise, conversion, or exchange of all outstanding derivative
securities held by the Tag-Along Shareholder), divided by (y) the
aggregate number of Founders' Shares held by the Selling Shareholder
and the Tag-Along Shareholder (as computed on a fully diluted basis
assuming the full exercise, conversion, or exchange of all
outstanding derivative securities held by the Selling Shareholder
and the Tag-Along Shareholder), multiplied by (ii) the aggregate
number of shares to be sold in the proposed transfer. Such right
shall be exercisable by delivery of a Notice (the "TAG-ALONG
NOTICE") to the Selling Founder within 15 days after the expiration
of the Founders Refusal Period or the Company Refusal Period, as
applicable. The Tag-Along Notice from each Tag-Along Shareholder
shall state the maximum number of Founders' Shares the Tag-Along
Shareholder proposes to include in the sale to the proposed
transferee. If the proposed transferee notifies the Selling
Shareholder that it does not wish to purchase all the Founder Shares
proposed to be sold by the Selling Shareholder and the Tag-Along
Shareholders, then any purchase of less than all of the Founders'
Shares shall be made pro rata from the Selling Shareholder and the
Tag-Along Shareholders based upon the total number of Founder's
Shares then held by each of them. If the proposed transferee does
not purchase the Founders' Shares from the Tag-Along Shareholders as
herein required at the price and on the other terms and conditions
stated in the Tag Along Notice, then the Selling Shareholder may not
sell any Founder's Shares to the proposed transferee. If no Founder
timely exercises the tag-along rights, the Selling Shareholder may
sell such Founder's Shares to the proposed transferee in the Tag
Along Notice, at a price and time and on the terms and conditions
contained in the Tag Along Notice; provided that, if such sale does
not occur within at the time provided in the Tag Along Notice, the
Founders' Shares proposed to be sold pursuant thereto shall again
become subject to this paragraph 2.(l).
3. REFUSAL RIGHTS.
(a) RIGHT OF FIRST REFUSAL FOR FOUNDERS' SHARES.
Notwithstanding the provisions of paragraph 2 hereof, in the event
that a Founder (a "SELLING SHAREHOLDER") shall have received a bone
fide offer from an independent third party to purchase all (but not
less than all) of such Selling Shareholder's Founders' Shares (an
"OFFER") then:
(1) If the Selling Shareholder desires to accept
such Offer, the Selling Shareholder shall first give written
notice of the Offer (an "OFFER NOTICE") to each of the other
Founders (the "NON-SELLING SHAREHOLDERS") and to the Company.
The Offer Notice shall describe with reasonable particularity
all of the terms and conditions of the proposed sale or shall
attach a copy of the Offer.
(2) For thirty (30) days following receipt of such
Offer Notice (the "FOUNDERS' REFUSAL PERIOD"), the Non-Selling
Shareholders shall have the option to purchase all (but not
less than all) of the Founders' Shares specified in the Offer
Notice at the price and upon the terms set forth in such Offer
Notice. In the event the Non-Selling Shareholders elect to
acquire the all of the Founders' Shares as specified in the
Offer Notice, the Non-Selling Shareholders shall so notify (the
"FOUNDERS' ACCEPTANCE NOTICE") the Selling Shareholder and the
Company within the Founders' Refusal Period and settlement
thereof shall be made as provided in paragraph 3.(b)(1). The
Founders' Shares to be purchased by the Non-Selling
Shareholders shall be allocated among them in any manner they
agree upon or, in absence of an agreement, on a pro rata basis
in proportion to the respective Founders' Shares owned by each
Non-Selling Shareholder.
(3) In the event that the Non-Selling Shareholders
do no elect to acquire all of the Founders' Shares specified in
the Offer Notice, the Company or its assigns shall have the
option, exercisable within thirty (30) days after the
expiration of Founders' Refusal Period (the "COMPANY REFUSAL
PERIOD"), to purchase all (but not less than all) of the
Founders' Shares specified in the Offer Notice at the price and
upon the terms set forth in the Offer Notice, with settlement
as provided in paragraph 3.(b)(1).
(b) PURCHASE PROVISIONS. The following provisions shall
apply to any purchase pursuant to paragraph 3.(a):
(1) In the event the Company and/or its assignee(s),
or the Non-Selling Stockholders, as the case may be, elects to
acquire Founders' Shares subject to the Offer Notice,
settlement thereof shall be made in cash within thirty (30)
days from the expiration of the Founders' Refusal Period or the
Company Refusal Period, as applicable; provided that if the
terms of payment set forth in the Offer were other than cash
against delivery, the Company or the Non-Selling Stockholders,
as the case may be, shall pay for said Founders' Shares on the
same terms and conditions set forth in the Offer Notice.
(2) In the event the Company or the Non-Selling
Stockholders do not elect to acquire all of the Founders'
Shares specified in the Offer Notice, the Selling Stockholder
may, within the thirty (30) days following the Founders'
Refusal Period or the Company Refusal Period, as applicable,
transfer the Founders' Shares specified in the Offer Notice for
the price and other terms specified in such Offer Notice. All
Founders' Shares so sold by said Selling Stockholder shall
continue to be subject to the provisions of this Agreement in
the same manner as before said transfer.
(c) EXEMPT TRANSFERS. Anything to the contrary contained
herein notwithstanding, the following transactions shall be exempt
from the provisions of this paragraph 3, provided that in case of
any such transfer, the transferee, assignee, or other recipient
(collectively, a "PERMITTED TRANSFEREE") shall receive and hold such
Founders' Shares subject to the provisions of this Agreement, and
there shall be no further transfer of such Founders' Shares except
in accordance with this Agreement:
(1) A Founder's transfer of any or all of the
Founders' Shares either during such Founder's lifetime, or on
death by will or intestacy, to such Founder's Immediate Family
(as hereinafter defined) or to any custodian or trustee for the
account of such Founder or such Founder's Immediate Family or
to any limited partnership of which the Founder, members of
such Founder's Immediate Family or any trust for the account of
such Founder or such Founder's Immediate Family will be the
general or limited partner(s) of such partnership. "IMMEDIATE
FAMILY" as used herein shall mean spouse, lineal descendant,
father, mother, brother, or sister of the Founder making such
transfer.
(2) A Founder's bona fide pledge or mortgage of any
Founders' Shares with a commercial lending institution,
provided that any subsequent transfer of said Founders' Shares
as a result of a bone fide default by the Founder under the
terms of any documents evidencing such pledge or mortgage by
said institution shall be conducted in the manner set forth in
this Agreement.
(3) A Founder's transfer of any or all of such
Founder's Founders' Shares to the Company or to any other
Founder of the Company.
(4) A Founder's transfer of any or all of such
Founders' Shares to a person who, at the time of such transfer,
is an officer or director of the Company.
(5) A corporate Founder's bone fide transfer of any
or all of its Founders' Shares pursuant to and in accordance
with the terms of any merger, consolidation, reclassification
of shares or capital reorganization of the corporate Founder,
or pursuant to a bone fide sale of all or substantially all of
the stock or assets of a corporate Founder, provided such
transfer is not for the sole purpose of circumventing the
provisions of this paragraph 3.
(6) A corporate Founder's transfer of any or all of
its Founder Shares to any or all of its stockholders.
(7) A transfer by a Founder that is a limited or
general partnership to any or all of its partners.
(8) A transfer by a Founder that is a limited
liability company to any or all of its members.
4. MISCELLANEOUS.
(a) AMENDMENT. Except as otherwise expressly provided,
this Agreement may be amended or modified only upon the written
consent of the Company and the Founders holding a majority of the
Founders Shares then outstanding.
(b) ATTORNEYS' FEES. In the event that any suit or
action is instituted to enforce any provision in this Agreement, the
prevailing party in such dispute shall be entitled to recover from
the losing party all fees, costs and expenses of enforcing any right
of such prevailing party under or with respect to this Agreement,
including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.
(c) COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all
of which together shall constitute one instrument.
(d) DELAYS OR OMISSIONS. It is agreed that no delay or
omission to exercise any right, power, or remedy accruing to any
Founder, upon any breach, default or noncompliance of the Company
under this Agreement shall impair any such right, power, or remedy,
nor shall it be construed to be a waiver of any such breach, default
or noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent, or approval of any
kind or character on any Founder's part of any breach, default or
noncompliance under the Agreement or any waiver on such Founder's
part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement,
by law, or otherwise afforded to Founders, shall be cumulative and
not alternative.
(e) ENTIRE AGREEMENT. This Agreement, the exhibits and
schedules hereto and the other documents delivered pursuant thereto
constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof and no party shall be
liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set
forth herein and therein.
(f) GOVERNING LAW. This Agreement shall be governed by
and construed under the laws of the State of Florida as applied to
agreements among Florida residents entered into and to be performed
entirely within the State of Florida.
(g) NOTICES. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified; (ii) when sent by
confirmed telex or facsimile if sent during normal business hours of
the recipient; if not, then on the next business day; (iii) five (5)
days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All
communications shall be sent to the party to be notified at the
address as set forth on Exhibit A hereto or at such other address
as such party may designate by ten (10) days advance written notice
to the other parties hereto.
(h) SEVERABILITY. In the event one or more of the
provisions of this Agreement should, 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 of this Agreement, and this Agreement shall be construed
as if such invalid, illegal or unenforceable provision had never
been contained herein.
(i) SUCCESSORS AND ASSIGNS. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the permitted successors, assigns,
heirs, executors, and administrators of the parties hereto and shall
inure to the benefit of and be enforceable by the Founders and each
person who shall be a holder of Founders' Shares from time to time.
(j) SURVIVAL. The representations, warranties,
covenants, and agreements made herein shall survive any
investigation made by any Founder. All statements as to factual
matters contained in any certificate or other instrument delivered
by or on behalf of the Company pursuant hereto in connection with
the matters described herein shall be deemed to be representations
and warranties by the Company hereunder solely as of the date of
such certificate or instrument.
(k) TITLES AND SUBTITLES. The titles of the paragraphs
and subparagraphs of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.
(Signatures Appear Next Page)
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth in the first paragraph hereof.
COMPANY:
TELEWRX, INC.
By: /s/ Michael P. Brown
Michael P. Brown, President
FOUNDERS:
(Insert Name): ______________
(Signature)__________________
(Print Name): _______________
Exhibit A
SCHEDULE OF FOUNDERS EXECUTING SHAREHOLDER AGREEMENT
Founder Address Founder
Shares
Michael P. Brown 17252 Balboa Point Way 8,200,000
Boca Raton, FL 33487
Robert Brown 5350 N.W. 26th Circle 8,200,000
Boca Raton, FL 33496
LKL Family 10900 Wilshire Boulevard, #310 5,500,000
Partnership II Los Angeles, CA 90024
Don Smiley 1200 Weston Road, Penthouse 1,500,000
Weston, FL 33326
Izzy Matos 673 Clocks Boulevard 750,000
Massapequa, NY 11758
Brandon Siemion 1916 Placid Ravine Street 750,000
Las Vegas, NV 89117
Ray Wong 5901 N.W. 4th Avenue 750,000
Boca Raton, FL 33487
John Matteis 3864 N.W. 4th Avenue 750,000
Boca Raton, FL 33431
Elle Baptist 18153 181st Circle South 25,000
Boca Raton, FL 33498
T-Wrx Marketing 10454 Edinburgh Drive 1,000,000
Services, LLC. Highland, Utah 84003