UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
HIGH SPEED NET SOLUTIONS, INC.
------------------------------
(Name of Issuer)
COMMON STOCK, $.001 PAR VALUE
-----------------------------
(Title of Class of Securities)
429793-10-2
-----------
(CUSIP Number)
Gerald F. Roach, Esq.
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.
2500 First Union Capitol Center
150 Fayetteville Street Mall
Raleigh, North Carolina 27601
(919) 821-1220
(Name, Address and Telephone Number
of Person Authorized to Receive Notices and Communications)
August 14, 2000
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
Page 1 of 9
<PAGE>
CUSIP No. 429793-10-2 Page 2 of 9
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1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only).
Summus, Ltd., Inc.
I.R.S. Employer Identification No.: 57-0942645
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS (See Instructions)
OO
--------------------------------------------------------------------------------
5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
[ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7) SOLE VOTING POWER
NUMBER OF 8,474,360
SHARES -----------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 1,279,667(1)
EACH -----------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 8,474,360
WITH: -----------------------------------------------------
10) SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,754,027(1)
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
[ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
44.8%(2)
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14) TYPE OF REPORTING PERSON (See Instructions)
CO
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(1) Includes 1,279,667 shares of Common Stock, par value $.001 per share
("Common Stock") of High Speed Net Solutions, Inc. (the "Issuer"), over which
Summus Ltd., Inc. ("Summus") believes it has the power to vote under voting
agreements with and/or proxies from 14 persons. Such agreements and/or proxies
are not in the possession or control of Summus at this time. Summus bases its
belief on the beneficial ownership reported for Summus by the Issuer in its
Registration Statement on Form S-1, File No. 333-41730, filed with the SEC on
July 19, 2000.
(2) Calculated based on 21,755,274 shares of Common Stock of the Issuer
outstanding on August 11, 2000, as reported in the Issuer's Quarterly Report on
Form 10-Q, for the quarter ended June 30, 2000, filed with the Securities and
Exchange Commission on August 15, 2000.
<PAGE>
CUSIP No. 429793-10-2 Page 3 of 9
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1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only).
Dr. Bjorn Jawerth
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS (See Instructions)
OO
--------------------------------------------------------------------------------
5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
[ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7) SOLE VOTING POWER
NUMBER OF -0-
SHARES -----------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 9,754,027(3)
EACH -----------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON -0-
WITH: -----------------------------------------------------
10) SHARED DISPOSITIVE POWER
9,754,027(3)
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,754,027(3)
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) [ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
44.8%(4)
--------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON (See Instructions)
IN
------------
(3) Includes 8,474,360 shares of the Issuer's Common Stock held by Summus and
1,279,667 shares of the Issuer's Common Stock for which Summus believes it has
voting power under voting agreements and/or proxies from 14 persons. Dr. Bjorn
Jawerth ("Dr. Jawerth") owns approximately 54.0 percent of the outstanding
shares of Summus on a non-diluted basis and is the President and Chairman of
Summus' Board of Directors. Dr. Jawerth exercises shared voting and investment
power with respect to those shares of the Issuer's Common Stock beneficially
owned by Summus.
(4) Calculated based on 21,755,274 shares of Common Stock of the Issuer
outstanding on August 11, 2000, as reported in the Issuer's Quarterly Report on
Form 10-Q, for the quarter ended June 30, 2000, filed with the Securities and
Exchange Commission on August 15, 2000.
<PAGE>
CUSIP No. 429793-10-2 Page 4 of 9
Item 1. Security and Issuer
This Schedule 13D relates to the Common Stock of the Issuer. The
principal executive offices of the Issuer are located at Two Hanover Square,
Suite 2120, 434 Fayetteville Street Mall, Raleigh, North Carolina 27601.
Item 2. Identity and Background
(a) The names of the persons filing this report are Summus, Ltd., Inc.
a Delaware corporation ("Summus") and Dr. Bjorn Jawerth ("Dr. Jawerth"), who is
President and Chairman of the Board of Directors of Summus, as well as the
holder of approximately 54 percent of Summus' capital stock.
(b) Summus' principal offices are located at Two Hanover Square, Suite
600, 434 Fayetteville Street Mall, Raleigh, North Carolina 27601, which is also
Dr. Jawerth's business address.
(c) Summus is in the business of developing and marketing media
compression software used to compress and decompress image, video and other
data. Dr. Jawerth is President and Chairman of the Board of Directors of Summus.
(d) During the last five years, neither Summus, Dr. Jawerth, nor any of
Summus' other executive officers or directors, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, neither Summus, Dr. Jawerth, nor any of
Summus' other executive officers or directors has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and,
as a result of such proceeding, was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Summus is a Delaware corporation. Dr. Jawerth is a citizen of the
United States.
Please see Schedule I for additional information pertaining to Summus'
executive officers and directors.
Item 3. Source and Amount of Funds or Other Considerations
On August 24, 1999, Summus acquired 9,542,360 shares of Common Stock of
the Issuer from Mr. Bradford Richdale, who was a major shareholder of the
Issuer, Mrs. Debbie Richdale and various entities affiliated with Mr. Richdale
pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement"), in
exchange for 132,888 shares of common stock of Summus. The Stock Purchase
Agreement is filed as an exhibit to this Schedule 13D and is incorporated herein
by reference. The foregoing summary of this stock purchase transaction is not
intended to be complete and is qualified in its entirety by reference to such
exhibit. Summus also acquired 1,500,000 shares of Common Stock of the Issuer in
lieu of a $750,000 cash payment from the Issuer to fulfill obligations under a
Marketing License Agreement, dated February 1999, between Summus and the Issuer.
In addition, Summus believes it has acquired the voting rights
associated with 1,279,667 shares of Common Stock of the Issuer pursuant to
various voting agreements with and/or proxies from 14 persons. Summus acquired
these proxies in connection with Summus' sale or other disposition of shares of
Common Stock to certain purchasers in private placement transactions. Such
agreements and/or proxies are not in the possession or control of Summus
<PAGE>
CUSIP No. 429793-10-2 Page 5 of 9
at this time. Summus bases its belief on the beneficial ownership reported for
Summus by the Issuer in its Registration Statement on Form S-1, File No.
333-41730, filed with the SEC on July 19, 2000.
Item 4. Purpose of Transaction
Summus acquired the (i) 9,542,360 shares of Common Stock pursuant to
the Stock Purchase Agreement, (ii) 1,500,000 shares of Common Stock in
satisfaction of payments due under the Marketing License Agreement and (iii)
voting rights associated with 1,279,667 shares of Common Stock for investment
purposes only. Summus previously disposed of 2,568,000 shares of Common Stock in
private transactions. It is Summus' understanding that it does not own voting
control of the Issuer. Neither Summus nor its officers exercise control over the
Issuer, and the Issuer is managed and operated independently of Summus. In fact,
the Issuer, its management and certain shareholders of the Issuer attempt to
exercise control over Summus. Beginning on or about August 14, 2000 Summus began
actively reviewing its investment in the Issuer and considering (i) further
dispositions of Common Stock, (ii) taking actions to effect a change in the
directors and officers of the Issuer, (iii) entering into a possible merger,
stock purchase, asset purchase or other similar transaction with the Issuer that
would result in a change in control of the Issuer, or (iv) bringing legal action
against the Issuer and some of its officers, directors, employees and
shareholders with respect to matters under review. In addition, (i) Summus, the
Issuer and certain shareholders of the Issuer have engaged in preliminary
discussions regarding a potential transaction that would result in a merger of
Summus and the Issuer or in an acquisition of one party or its assets by the
other, (ii) Summus and the Issuer have exchanged threats of litigation, (iii)
Summus' Board of Directors has recently expanded from one to three members,
adding two outside directors, and has appointed a Special Committee of
independent directors (the "Special Committee") to evaluate and negotiate any
potential merger, stock purchase, asset purchase or other similar transaction
with the Issuer (a "Potential Transaction"), (iv) certain shareholders of the
Issuer have made proposals to the Special Committee related to such a Potential
Transaction, (v) negotiations between the Special Committee and the Issuer and
certain of its shareholders are ongoing and may continue or cease at any time,
and (vi) the Special Committee and the Issuer are considering financing
alternatives in connection with a Potential Transaction, as well as transactions
with third parties, either of which would effect a change of control of the
Issuer shares owned by Summus.
Summus and Dr. Jawerth acquired beneficial ownership of the shares of
the Issuer's Common Stock for the purpose of investment. Except as set forth
herein, Summus and Dr. Jawerth have no intention to influence or direct the
Issuer's affairs, modify its corporate structure or interfere with the business
decisions of its management. Except as may be set forth above, neither Summus,
Dr. Jawerth, nor to the best of their knowledge, any executive officer or
director of Summus, has any plans or proposals which relate to or would result
in: (a) the acquisition by any person of additional securities of the Issuer or
the disposition of securities of the Issuer; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Issuer; (c) a sale or transfer or a material amount of assets of the Issuer; (d)
any change in the present board of directors or management of the Issuer,
including any plans or proposals to change the number or term of directors or to
fill any existing vacancies on the board; (e) any material change in the present
capitalization or dividend policy of the Issuer; (f) any other material change
in the Issuer's business or corporate structure; (g) changes in the Issuer's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Issuer by any person; (h) a class of
securities of the Issuer being delisted from a national securities exchange or
to ceasing to be authorized to be quoted in an interdealer quotation system of a
registered national securities association; (i) a class of equity securities of
the Issuer becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934; or (j) any
<PAGE>
CUSIP No. 429793-10-2 Page 6 of 9
action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
Based on information contained in the most recent publicly available
filings of the Issuer with the Securities and Exchange Commission, Summus and
Dr. Jawerth are deemed to beneficially own the number of shares and the
percentage of outstanding shares of Issuer Common Stock listed on lines 11 and
13 of Pages 2 and 3 of this Schedule 13D, respectively. In addition, the number
of shares as to which Summus and Dr. Jawerth have sole or shared voting power
and sole or shared dispositive power, are listed on lines 7-10 of Pages 2 and 3
of this Schedule 13D, respectively. Summus has not disposed of any shares of
Common Stock in the 60 days preceding the date of this report.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
Summus believes it currently has the right to vote 1,279,667 shares of
Common Stock under voting agreements with and/or proxies from 14 people. Such
agreements and/or proxies are not in the possession or control of Summus at this
time. Summus bases its belief on the beneficial ownership reported for Summus by
the Issuer in its Registration Statement on Form S-1, File No. 333-41730, filed
with the SEC on July 19, 2000.
Except as described herein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 and between such persons and any person with respect to any securities of
the Issuer, including but not limited to transfer or voting of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantors of profit, division of profit or loss or the giving or withholding of
proxies.
<PAGE>
CUSIP No. 429793-10-2 Page 7 of 9
Item 7. Material to be Filed as Exhibits
Exhibit A Stock Purchase Agreement, dated July 30,1999, between Summus,
Ltd., Bradford Richdale, Debbie Richdale, Stoneleigh, Ltd., Ormond
Trust and Williston Enterprises.
Exhibit B Joint Filing Agreement, dated August 22, 2000, between Summus,
Ltd. and Dr. Bjorn Jawerth.
<PAGE>
CUSIP No. 429793-10-2 Page 8 of 9
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: August 22, 2000
SUMMUS, LTD.
By: /s/ Bjorn Jawerth
-----------------------------------
Name: Dr. Bjorn Jawerth
Title: President and Chairman of the
Board of Directors
/s/ Bjorn Jawerth
--------------------------------------
Dr. Bjorn Jawerth
<PAGE>
CUSIP No. 429793-10-2 Page 9 of 9
SCHEDULE I
Directors and Executive Officers of Summus, Ltd.
The name and principal occupation of each executive officer and
director of Summus, Ltd. are set forth below. Unless otherwise indicated, each
occupation set forth opposite an executive officer's name refers to employment
with Summus, Ltd. The business address of each person is c/o Summus, Ltd., Two
Hannover Square, Suite 600, 434 Fayetteville Street Mall, Raleigh, North
Carolina 27601. Each of the persons listed in Schedule I is a citizen of the
United States of America. Other than Dr. Jawerth, none of the executive officers
or directors beneficially own any shares of Common Stock.
Name Present Principal Occupation
---- ----------------------------
Dr. Bjorn Jawerth President and Chairman of the Board of Directors
W. Bradford Silvernail Chief Executive Officer
Gary Ban Chief Operating Officer
Robert Dixson Chief Financial Officer
Leonard Mygatt Executive Vice President and Secretary
Kenneth Marks Director
Stuart Diamond Director
<PAGE>
EXHIBIT A
STOCK PURCHASE AGREEMENT
BETWEEN
SUMMUS, LTD.
AND
BRADFORD RICHDALE, DEBBIE RICHDALE, STONELEIGH, LTD.,
WILLISTON ENTERPRISES AND ORMOND TRUST
July 30, 1999
<PAGE>
STOCK PURCHASE AGREEMENT
Agreement entered on as of _________________, 1999, by and between
SUMMUS, LTD., a ___________________________ (the "Buyer") and BRADFORD RICHDALE,
DEBBIE RICHDALE, STONELEIGH, LTD., ORMOND TRUST and WILLISTON ENTERPRISES (UBOT)
(collectively the "Sellers"). The Buyer and the Sellers are referred to
collectively herein as the "Parties."
The Sellers in the aggregate own 10,344,720 of the outstanding capital
stock (the "Target Shares") of High Speed Net Solutions, Inc., a Florida
corporation (the "Target").
This Agreement contemplates a transaction in which the Buyer will
purchase from the Sellers, and the Sellers will transfer to the Buyer, 9,542,360
of the outstanding capital stock of Target in consideration for 132,888 shares
of common stock of Summus Ltd., a Delaware corporation.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. Purchase and Sale of Target Shares.
(1) Basic Transaction. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to acquire from each of the
Sellers, and each of the Sellers agrees to transfer to the Buyer, all of his,
her or its Target Shares for the consideration specified below in this ss.1.
(2) Purchase Price. The Buyer agrees to deliver to the Sellers
at the Closing 132,888 shares of common stock of Summus, Ltd. (which amounts to
11.73% of the outstanding shares of Summus, Ltd., assuming completion of the
merger of Summus, Ltd., and Summus Ltd., Inc. (the "Purchase Price").
(3) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the office of Schell Bray
Aycock Abel & Livingston P.L.L.C. in Greensboro, North Carolina, commencing at
9:00 a.m. local time on the second business day following the satisfaction or
waiver of all conditions to the obligations of the Parties to consummate the
transactions contemplated hereby (other than conditions with respect to actions
the respective Parties will take at the Closing itself) or such other date as
the Buyer and the Sellers may mutually determine (the "Closing Date").
(4) Deliveries at the Closing. At the Closing, (i) the Sellers
will deliver to the Buyer the various certificates, instruments, and documents
referred to in ss.6(a) below, (ii) the Buyer will deliver to the Sellers the
various certificates, instruments, and documents referred to in ss.6(b) below,
(iii) each of the Sellers will deliver to the Buyer stock certificates
representing all of its Target Shares, endorsed in blank or accompanied by duly
executed assignment documents
<PAGE>
with signatures guaranteed, and (iv) the Buyer will deliver to each of the
Sellers the consideration specified in ss.1(b) above.
2. Representations and Warranties Concerning the Transaction.
(1) Representations and Warranties of the Seller. Each of the
Sellers represents and warrants to the Buyer that the statements contained in
this ss.2(a) are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this ss.2(a)) with respect to himself or itself.
(1) Organization of Certain Sellers. If the Seller is
a corporation, the Seller is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
incorporation.
(2) Authorization of Transaction. The Seller has full
power and authority (including, if the Seller is a
corporation, full corporate power and authority) to execute
and deliver this Agreement and to perform his, her or its
obligation hereunder. This Agreement constitutes the valid and
legally binding obligations of the Seller, enforceable in
accordance with its terms and conditions. The Seller need not
give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions
contemplated by this Agreement.
(3) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Seller
or Target is subject or, if the Seller is a corporation or
trust, any provision of its charter, bylaws or instrument of
trust.
(4) Brokers' Fees. The Seller has no liability or
obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated
by this Agreement for which the Buyer could become liable or
obligated.
(5) Investment. The Seller (A) understands that the
shares of Summus, Ltd. stock ("Summus Shares") have not been,
and will not be, registered under the Securities Act, or under
any state securities laws, and are being offered and sold in
reliance upon federal and state exemptions for transactions
not involving any public offering, (B) is acquiring the Summus
Shares solely for his or its own account for investment
purposes, and not with a view to the distribution thereof, (C)
is a sophisticated investor with knowledge and experience in
business and financial matters, (D) has received certain
information concerning the Buyer and has had the opportunity
to obtain additional information as desired in order to
evaluate the merits and the risks inherent in holding the
Buyer Notes, (E) is able
2
<PAGE>
to bear the economic risk and lack of liquidity inherent in
holding the Buyer Notes, and (F) is an Accredited Investor as
such term is defined under the Securities Act of 1933, as
amended.
(6) Target Shares. The Seller holds of record and
owns beneficially the number of Target Shares set forth next
to his or its name in Exhibit 2(vi), free and clear of any
restrictions on transfer (other than restrictions under the
Securities Act of 1933, as amended (the "Securities Act") and
state securities laws), taxes, security interests, options,
warrants, purchase rights, contracts, commitments, equities,
claims and demands. The Seller is not a party to any voting
trust, proxy, or other agreement or understanding with respect
to the voting of any capital stock of Target.
(7) No Agreements. Except as expressly provided
herein, the Seller has no agreement, contract or other
understanding (written or oral) with Target or is otherwise
owed any funds by Target.
(8) Stock and Related Matters. The authorized capital
stock of Target consists solely of 50,000,000 shares of common
stock, par value, of which 18,710,510 shares (the "Outstanding
Shares") are issued and outstanding. The Outstanding Shares
constitute the only issued and outstanding capital stock of
Target. Except for the Outstanding Shares, no shares of any
class of capital stock have even been issued by Target. All of
the Outstanding Shares are duly authorized, validly issued,
fully paid, nonassessable and free of preemptive rights, with
no personal liability attaching to the ownership thereof. As
of the Closing Date and after giving effect to the sale of the
Target Shares to Buyer as contemplated hereby, 51% of the
issued and outstanding shares of capital stock of Target will
be owned by Buyer, free and clear of all restrictions on
transfer, mortgages, claims, liens, pledges, security
interests or other encumbrances.
(9) Options, Warrants, Rights. Target has no
outstanding securities convertible into or evidencing the
right to purchase or subscribe for any shares of capital stock
of Target. Target has no outstanding or authorized
subscriptions, options, warrants, calls, rights, commitments
or other agreements of any character obligating it to issue
any shares of its capital stock or any securities convertible
into or evidencing the right to purchase or subscribe for any
shares of such stock. Other than this Agreement, neither
Target nor any of the Sellers is a party to or bond by any
agreement or undertaking with respect to the voting, sale or
transfer of shares of capital stock of Target.
(10) Full Disclosure. All Exhibits, Schedules and
Closing documents and other paper delivered by or on behalf of
Target and the Sellers at the Closing in connection with this
Agreement and the transactions contemplated hereby are true,
correct and complete. No representation or warranty of the
Sellers contained in this Agreement contains an untrue
statement of a material fact or omits to state
3
<PAGE>
a material fact required to be stated therein or necessary to
make the statements made, in the context in which made, not
materially false or misleading.
(2) Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Sellers that the statements contained in this ss.
2(b) are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss. 2(b)).
(1) Organization of the Buyer. The Buyer is a
corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its
incorporation. Buyer has full corporate power and authority to
carry on the businesses in which it is engaged and to own and
use the properties owned and used by it.
(2) Authorization of Transaction. The Buyer has full
power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of the Buyer,
unenforceable in accordance with its terms and conditions. The
Buyer need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(3) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer
is subject or any provision of its charter or bylaws or (B)
conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party
or by which it is bound or to which any of its assets is
subject.
(4) Brokers' Fees. The Buyer has no liability or
obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated
by this Agreement for which any Seller could become liable or
obligated.
(5) Investment. The Buyer is not acquiring the Target
Shares with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act.
(6) Capitalization. The entire authorized capital
stock of the Buyer consists of 10,000,000 shares of common
stock and 1,000,000 shares of preferred
4
<PAGE>
stock, of which 1,000,000 shares of common stock are issued
and outstanding. All of the issued and outstanding shares have
been duly authorized, are validly issued, fully paid, and
nonassessable, and the Summus Shares, when issued in
accordance with the terms hereof will be validly issued, fully
paid and nonassessable, free and clear of any restrictions on
transfer (other than restrictions imposed under the Securities
Act and states securities laws), taxes, security interest,
options, warrants, purchase rights, contracts, commitments,
equities, claims and demands. As a result of the transactions
contemplated hereby, such Summus Shares will not cause any
Seller to be a party to any voting trust, proxy or other
agreement or understanding with respect to the voting of any
capital stock of Summus. Except for 100,000 shares of common
stock reserved for stock options, there are no outstanding or
authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts
or commitments that could require the Buyer to issue, sell, or
otherwise cause to become outstanding any of its capital
stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar
rights with respect to the Buyer.
(7) Samsung Non-Circumvention Agreement. The Buyer
acknowledges that it and Target are parties to that certain
Samsung Non-Circumvention Agreement dated April 15, 1999
relating to a possible business relationship.
3. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(1) General. Each of the Parties will use his, her or its
reasonable best effort to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth herein).
(2) Notice of Developments. Each Party will give prompt
written notice to the others of any material adverse development causing a
breach of any of his, her or its own representations and warranties in ss. 2
above. No disclosure by any Party pursuant to this ss. 3(b), however, shall be
deemed to amend or supplement any exhibit or to prevent or cure any
misrepresentation or breach of warranty.
(3) Exclusivity. None of the Sellers will solicit, initiate,
or encourage the submission of any proposal or offer from any person relating to
the acquisition of all or substantially all of the Target Shares.
4. Covenants of Target. Sellers will use its best efforts to cause
Target to permit representatives of the Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of Target to all premises, properties, personnel, books,
records (including tax records), contracts, and documents of or pertaining to
each of Target and its subsidiaries. The Buyer will treat and hold as such any
confidential information it
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receives from any of the Sellers, Target, and its subsidiaries in the course of
the reviews contemplated by this Agreement, will not use any of the confidential
information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, will return to Target, all tangible
embodiments (and all copies) of the confidential information which are in its
possession.
5. Condition of Target as of the Closing Date. The Sellers will
represent at the Closing that the following representations will be true and
complete as of the Closing Date. If the representations are not true and are
disclosed to Buyer not to be true on or before the Closing Date, Buyer's sole
remedy will be termination of this agreement.
(1) Due Incorporation, Good Standing and Authority. Target is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida and has all requisite corporate power and authority
to own, lease and operate its properties and assets and to carry on its business
as presently conducted. Target has heretofore delivered to Buyer true, correct
and complete copies of its Articles of Incorporation and Bylaws, and such
Articles of Incorporation and Bylaws have not been amended and are in full force
and effect as of the date hereof.
(2) Financial Statements. Buyer shall have received audited
financial statements of Target as of and for the year ended December 31, 1999,
which financial statements shall be true and correct and present fairly the
financial condition of Target as of such date and the results of operations for
the year indicated, reflect liabilities and reasonably anticipated losses, if
any, of Target as determined by GAAP, and reflect a financial condition and
results of operations of Target that are reasonably satisfactory to the Buyer.
(3) No Undisclosed Liabilities. Except as and to the extent
(i) reflected in the Financial Statements, or (ii) incurred since the most
recent Balance Sheet contained in the Financial Statements in the ordinary
course of business and consistent with past practice, Target has no liabilities
or obligations of any kind or nature, whether secured or unsecured, whether
absolute, accrued, contingent or otherwise, whether due or to become due,
including without limitation any tax liabilities due or to become due, or
whether incurred in respect of or measured by the assets of Target for any
period.
(4) Tax Matters. The Buyer shall have received a list of all
the states and localities with respect to which Target is required to file any
corporate, income, and/or franchise tax returns, and, with respect to Target:
(1) all federal, state and local tax returns, reports
and statements (including without limitation all income tax,
unemployment compensation, social security, payroll, sales and
use, excise, privilege, ad valorem, franchise, license, school
and any other tax imposed by the United States or any state or
municipal or political subdivision thereof) required to be
filed by Target, prior to the Closing Date (the "Tax Returns")
shall have been filed on a timely basis with the appropriate
governmental agencies in all jurisdictions in which such
returns, reports and
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statements are required to be filed, and all such returns,
reports and statements reflect accurately the tax liabilities
of Target for the periods, properties or events covered
thereby;
(2) all federal, state and local taxes, assessments,
interest, penalties, deficiencies, fees and other governmental
charges or impositions for periods ending on or prior to the
Closing Date, including those enumerated above in respect of
the Tax Returns, which are called for by the Tax Returns or
claimed to be due and payable by any taxing authority from
Target or upon or measured by properties, assets or income of
Target (the "Taxes"), shall have been paid;
(3) neither Target nor the Sellers shall have
received any notice of any assessments or proposed assessment
from the IRS or any other taxing authority in connection with
any Tax Returns, and there are no pending tax examinations of
or tax claims being asserted against Target, or any of its
assets or properties;
(4) there is no examination by the IRS or any other
taxing authority of Target presently pending or threatened as
of the Closing Date;
(5) all payroll, sales and any other Taxes that
Target is required by law to withhold or collect shall have
been withheld or collected and shall have been paid over to
the proper governmental authorities or are properly held by
Target for such payment; and
(6) no waivers of statutes or limitations with
respect to any Tax Returns of Target, nor extensions of time
for the filing of any Tax Returns or assessments of any Tax,
have been requested or given.
(5) Actions and Proceedings.
(1) As of the Closing Date, there will be no
outstanding orders, judgments, injunctions, awards or decrees
of any court, arbitrator or governmental or regulatory body
against Target. As of the Closing Date, there will be no
actions, suits, investigations, claims or proceedings,
including arbitration proceedings, whether or not the defense
thereof or liabilities in respect thereof are covered by
insurance, pending or, to the best of the Sellers' knowledge,
threatened against or involving Target, or any of its
properties or assets, and there will be no reasonable basis
for any such action or proceeding.
(2) As of the Closing Date, there will be no actions,
suits, investigations, claims, or proceedings, including
arbitration proceedings, whether or not the defense thereof or
liabilities in respect thereof are covered by insurance,
pending or threatened against or involving the Sellers that
could have an adverse effect on the Target Shares, Target
and/or its business operations or the ability, capacity, or
authority of the Sellers to enter into this Agreement or to
perform the obligations hereunder.
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(6) Contracts and Other Agreements. The Seller will furnish to
Buyer prior to Closing a correct and complete list and brief description as of
the Closing Date of the following:
(1) All leases of, and other agreements setting forth
rights to, real or personal property to which Target is a
party;
(2) All employment and consulting agreements to which
Target is a party;
(3) All loan, factoring and credit agreements and
other contracts and agreements of Target relating to
indebtedness of Target for borrowed money or credit
arrangements or to guarantees by Target of the obligations of
any other Person;
(4) All contracts, purchase orders or supply
agreements for goods, materials or services in dollar value
exceeding $5,000;
(5) All contracts or other agreements containing
covenants or agreements of Target not to compete in any line
of business or with any Person in any geographical area or
covenants or agreements of any other Person not to compete
with Target in any line of business or in any geographical
area;
(6) The amounts and terms of all loans or advances to
directors, officers and employees of Target; and
(7) All contracts, agreements, mortgages, deeds of
trust, indentures, arrangements, commitments, instruments,
understandings or obligations, oral and written, the
individual dollar amount of which exceeds $2,000, to which
Target is a party or to which any of its properties or assets
are subject.
The Sellers shall have provided to Buyer true and complete copies of
all such contracts and other agreements. All of such contracts and other
agreements shall be valid and binding upon Target and the other parties thereto,
and neither Target, nor any other party, shall be in default thereunder. The
list to be furnished pursuant to this ss. 5(e) will also include all contracts
and other agreements currently in negotiation or proposed by Target that, if in
effect, would be required to be listed by this ss. 5(e). The Seller shall have
provided to Buyer true and correct drafts or summaries of all such contracts and
other agreements in negotiation or proposed and true and complete copies of all
documents in the custody or control of Target relating thereto. Except as set
forth on the list, none of the rights of Target under any of the contracts and
agreements set forth on the list will be adversely affected by consummation of
the transactions provided for in this Agreement.
(7) Compliance with Laws. Target will be in compliance with
all applicable federal, state, local and foreign laws, ordinances, regulations,
orders, judgments and decrees, and Target will not have received notice that
violation of any such law, ordinance, regulation, order judgment or decree is
being alleged.
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(8) Employment Benefit Plans. Target shall maintain no benefit
plans for its employees.
6. Conditions to Obligation to Close.
(1) Conditions to Obligation of the Buyer. The obligation of
the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(1) the representations and warranties set forth
in ss.2(a) and ss.2(b) above shall be true and correct in all
material respects at and as of the Closing Date;
(2) the Sellers shall have performed and complied
with all of their covenants hereunder in all material respects
through the Closing;
(3) there shall not be any injunction, judgment,
order, decree, ruling, or charge in effect preventing
consummation of any of the transactions contemplated by this
Agreement;
(4) the Sellers or a duly authorized representative
thereof shall have delivered to the Buyer a certificate to the
effect that each of the conditions specified above in ss.
6(a)(i)-(iii) is satisfied in all respects;
(5) the Sellers shall have released Target from any
and all claims they may have against Target;
(6) Target shall have appointed Andrew Fox as
Executive Vice President;
(7) The conditions of Target as of the Closing Date
shall be as set forth in ss.5.
(8) all actions to be taken by the Sellers in
connection with the consummation of the transactions
contemplated hereby and all certificates, instruments and
other document required to effect the transactions
contemplated hereby will be reasonably satisfactory in form of
substance to the Buyer.
The Buyer may waive any condition specified in this ss. 6(a) if it executes a
writing so stating at or prior to the Closing.
(2) Conditions to Obligation of the Sellers. The obligation of
the Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
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(1) the representations and warranties set forth
in ss.2 (b) above shall be true and correct in all material
respects at and as of the Closing Date;
(2) the Buyer shall have performed and complied with
all of its covenants hereunder in all material respects
through the Closing;
(3) there shall not be any injunction, judgment,
order, decree, ruling, or charge in effect preventing
consummation of any of the transactions contemplated by this
Agreement;
(4) the Buyer shall have delivered to the Sellers a
certificate to the effect that each of the conditions
specified above in ss. 6(b)(i)-(iii) is satisfied in all
respects;
(5) Target shall have appointed Andrew Fox as
Executive Vice President; and
(6) all actions to be taken by the Buyer in
connection with consummation of the transactions contemplated
hereby and all certificates, instruments, and other documents
required to effect the transactions contemplated hereby will
be [reasonably] satisfactory in form and substance to the
Requisite Sellers.
The Sellers may waive any condition specified in this ss. 6(b) if they execute a
writing so stating at or prior to the Closing.
7. Remedies for Breaches of This Agreement.
(1) Survival of Representations and Warranties. All of the
representations and warranties, covenants and agreements of the Parties herein
shall survive the Closing and continue in full force and effect forever
thereafter (subject to any applicable statutes of limitations).
8. Termination.
(1) Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
(1) the Buyer and the Sellers may terminate this
Agreement by mutual written consent at any time prior to the
Closing;
(2) the Buyer may terminate this Agreement by giving
written notice to the Sellers at any time prior to the Closing
(A) in the event any of the Sellers has breached any
representation, warranty, or covenant contained in this
Agreement in any material respect, the Buyer has notified the
Requisite Sellers of the breach, and the breach has continued
without cure for a period of ten days
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after the notice of breach, (B) the condition contained in ss.
6(a)(xi) shall not have been met, or (C) if the Closing shall
not have occurred on or before August 31, 1999, by reason of
the failure of any condition precedent under ss. 6(a) hereof
(unless the failure results primarily from the Buyer itself
breaching any representation, warranty, or covenant contained
in this Agreement); and
(3) the Sellers may terminate this Agreement by
giving written notice to the Buyer at any time prior to the
Closing (A) in the event the Buyer has breached any material
representation, warranty, or covenant contained in this
Agreement in any material respect, any of the Sellers has
notified the Buyer of the breach, and the breach has continued
without cure for a period of ten days after the notice of
breach or (B) if the Closing shall not have occurred on or
before August 31, 1999, by reason of the failure of any
condition precedent under ss. 6(b) hereof (unless the failure
results primarily from any of the Sellers themselves breaching
any representation, warranty, or covenant contained in this
Agreement).
(2) Effect of Termination. If any Party terminates this
Agreement pursuant to ss. 6(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach).
9. Miscellaneous.
(1) Nature of Certain Obligations. The covenants of each of
the Sellers in ss. 1(a) above concerning the sale of his or its Target Shares to
the Buyer and the representations and warranties of each of the Sellers in ss.
2(a) above concerning the transaction are several obligations.
(2) Press Releases and Public Announcements. No Party nor
Target shall issue any press release or make any public announcement relating to
the subject matter of this Agreement without the prior written approval of the
Buyer and the Sellers and Target; provided, however, that any Party or Target
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
[reasonable] best efforts to advise the other Parties prior to making the
disclosure).
(3) No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(4) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they have related in any way to the
subject matter hereof.
(5) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted
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assigns. No Party may assign either this Agreement or any of his or its rights,
interests, or obligations hereunder without the prior written approval of the
Buyer and the Sellers.
(6) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(7) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(8) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Sellers:
c/o Bradford Richdale
36 Caribbean Way
Pence Inlet, FL
Copy to:
Europlan Trust Company
35 The Parade, Listerhouse
Jersey
If to the Buyer:
Summus Ltd.
2000 Center Point Road, #2200
Columbia, South Carolina 29210
Attention: Alan Kleinmaier
Copy to:
Schell Bray Aycock Abel & Livingston P.L.L.C.
230 North Elm Street, Suite 1500
P.O. Box 21947 (27420)
Greensboro, North Carolina 27401
Attention: Doris R. Bray
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service;
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address
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to which notices, requests, demands, claims, and other communications hereunder
are to be delivered by giving the other Parties notice in the manner herein set
forth.
(9) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Florida without
giving effect to any choice or conflict of law provision or rule.
(10) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the Buyer and the Requisite Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(11) Severability. Any term or provision of this Agreement
that is invalid, or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(12) Expenses. Each Party will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(13) Construction. [The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.] Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(14) Incorporation of Exhibits, Annexes, and Schedules. The
Exhibits, Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
* * * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
STONELEIGH, LTD. SUMMUS, LTD.
By: /s/ By: /s/ Bjorn Jawerth
-------------------------------- -------------------------------------
Title: Director Title: President
----------------------------- ----------------------------------
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ORMOND TRUST
By: /s/ /s/ Brad Richdale
-------------------------------- -------------------------------------
BRAD RICHDALE, Individually
Title: Trustee /s/ Deborah Richdale
----------------------------- -------------------------------------
DEBORAH RICHDALE, Individually
WILLISTON ENTERPRISES (UBOT)
By: /s/ Deborah Richdale
--------------------------------
Title:
------------------------------
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Bradford Richdale
36 Caribbean Way
Pence Inlet, Florida
August 25, 1999
Summus, Ltd.
2000 Center Point Drive #2200
Columbia, SC 29210
Attention: Alan Kleinmaier
Gentlemen:
Reference is made to Stock Purchase Agreement between Summus, Ltd. and
Bradford Richdale, Debbie Richdale, Stoneleigh, Ltd., Williston Enterprises and
Ormond Trust dated July 30, 1999 (the "Agreement").
Pursuant to the Agreement, the Sellers (as defined therein), including
the undersigned, are obligated to transfer to Summus, Ltd. an aggregate of
9,542,360 shares of outstanding capital stock of High Speed Net Solutions, Inc.,
a Florida corporation ("HSNS"). Simultaneously, the undersigned is acquiring
from Summus, Ltd. 750,000 shares of common stock of HSNS for a purchase price of
$1,012,500.00.
You are hereby instructed to retain the 750,000 shares of HSNS being
purchased by me and to apply it to the 9,542,360 shares deliverable by me and
others under the Agreement, such that the remaining shares to be delivered under
the Agreement are 8,792,360 shares.
If you concur in this letter, please sign a copy of the letter and
return it to me.
/s/ Bradford Richdale
-------------------------------
Bradford Richdale
Read and agreed to this 25th day of
August, 1999
SUMMUS, LTD.
By: /s/ Alan Kleinmaier
-------------------------------
Vice President
<PAGE>
EXHIBIT B
JOINT FILING AGREEMENT
Each of the undersigned hereby agrees and consents that the Schedule
13D filed herewith (the "Schedule 13D") by Summus, Ltd. ("Summus") is filed on
behalf of each of them pursuant to the authorization of the undersigned to
Summus to make such filing and that such Schedule 13D is filed jointly on behalf
of each of them, pursuant to Sections 13(d) and 13(g) of the U.S. Securities
Exchange Act of 1934, as amended, and the rules promulgated thereunder. Each of
the undersigned hereby agrees that such Schedule 13D is, and any further
amendments to the Schedule 13D will be, filed on behalf of each of the
undersigned. Each of the persons is not responsible for the completeness or
accuracy of the information concerning the other persons making this filing
unless such person knows or has reason to believe that such information is
inaccurate. This agreement may be signed in counterparts. This agreement is
effective this 22nd day of August, 2000.
SUMMUS, LTD.
By: /s/ Bjorn Jawerth
----------------------------
Name: Bjorn Jawerth
--------------------------
Title: President
-------------------------
/s/ Bjorn Jawerth
-------------------------------
DR. BJORN JAWERTH
