Exhibit 10.2
US-SINO GATEWAY, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is entered into
by Solana Capital Partners, Inc., a California corporation (the "Purchaser") and
US-Sino Gateway, Inc., a California corporation (the "Company") as of the 31st
day of December 2002.
1. ISSUANCE AND SALE OF COMMON STOCK. Subject to the terms hereof, the
Company hereby issues and sells to the Purchaser and the Purchaser purchases
from the Company 15,539 shares of the Company's Common Stock for a total of
$180,250 (the "Purchase Price").
2. PAYMENT OF PURCHASE PRICE. The Company acknowledges receiving the
entire Purchase Price, a portion of which was paid directly to the Company and a
portion of which was paid by the Purchaser on behalf of the Company directly to
certain service providers. An accounting of the funds spent is attached to this
Agreement as Exhibit A and made a part of it. The Company will prepare a stock
certificate representing the Common Stock purchased by the Purchaser and
promptly transmit such stock certificate to the Purchaser at the address
specified below.
3. THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to the Purchaser as follows:
3.1 ORGANIZATION AND STANDING. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California and has all requisite corporate power and authority to carry
on its businesses as now conducted and as proposed to be conducted.
3.2 CORPORATE POWER. The Company has all requisite corporate
power necessary for the authorization, execution and delivery of this Agreement,
to sell and issue the Common Stock, and to carry out and perform all of its
obligations hereunder.
3.3 AUTHORIZATION. This Agreement, including the issuance of
the Common Stock, when executed and delivered by the Company will constitute a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies. The Company has duly
authorized the execution, delivery and performance of this Agreement, including
the issuance of the Common Stock by the Company.
3.4 NO CONSENT. No consent, approval or authorization of or
designation, declaration or filing with any governmental authority or other
outside third party on the part of the Company is required in connection with
the valid execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, other than any applicable
filings in connection with exemptions for purposes of federal and/or state
securities laws.
3.5 CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of the Company consists of 1,000,000 shares of Common
Stock, of which 100,000 shares of Common Stock are issued and outstanding. The
issued and outstanding shares of Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable, and have been issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.
3.6 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC.
The Company is not in violation of any term of its Articles of Incorporation or
Bylaws, as amended, or any mortgage, indenture, contract, agreement, instrument,
judgment, decree or order by which the Company is bound or to which its
properties are subject or, to its knowledge any statute, rule or regulation
applicable to the Company which would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects of
the Company. The execution, delivery and performance of and compliance with this
Agreement and the transactions contemplated hereby will not result in any such
violation and will not be in conflict with or constitute a default under any of
the foregoing and will not result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company
pursuant to any of the foregoing.
3.7 VALID ISSUANCE. The Common Stock, when issued in
compliance with the provisions of this Agreement, will be validly issued, fully
paid and nonassessable and will be free of any liens or encumbrances created by
or imposed upon the holders thereof through action of the Company except as set
forth in this Agreement; provided, however, that all such securities may be
subject to restrictions on transfer under state and/or federal securities laws.
Subject to the accuracy of the Purchaser's representations in Section 4 hereof,
the Common Stock will be issued in compliance with all applicable federal and
state securities laws.
4. Representations, Warranties of the Purchaser and Restrictions on
Transfer Imposed by the Securities Act of 1933 and the California Corporate
Securities Law of 1968. The Purchaser represents and warrants to the Company
with respect to this purchase as follows:
4.1 ACCREDITED INVESTOR. The Purchaser is an "accredited
investor" as that term is defined in Securities and Exchange Commission Rule 501
of Regulation D of the Securities Act of 1933, as amended, as presently in
effect and that the information provided as support of Purchaser's "accredited
investor" status is complete and accurate in all respects.
4.2 INVESTMENT EXPERIENCE. The Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that the Purchaser is capable
of evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. The Purchaser and its representatives, if
any, have been solely responsible for the Purchaser's own "due diligence"
investigation of the Company and its management and business, for its own
analysis of the merits and risks of this investment, and for its own analysis of
the fairness and desirability of the terms of the investment.
4.3 QUALIFIED INVESTOR. The Purchaser has a preexisting
personal or business relationship with an officer of the Company or any of its
directors or controlling persons, or by reason of the Purchaser's business or
financial experience or the business or financial experience of the Purchaser's
professional advisors who are unaffiliated with and who are not compensated by
the Company, directly or indirectly could be reasonably assumed to have the
capacity to evaluate the merits and risks of an investment in the Company and to
protect the Purchaser's own interests in connection with such an investment.
4.4 ACCESS TO DATA. The Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with its
management. The Purchaser also has had an opportunity to ask questions of
officers of the Company, which questions were answered to its satisfaction. The
Purchaser understands that such discussions, as well as any written information
issued by the Company, were intended to describe certain aspects of the
Company's business and prospects but were not necessarily a thorough or
exhaustive description. The Purchaser and its representatives and legal counsel
have been afforded full and free access to corporate books, financial
statements, records, contracts, documents, and other information concerning the
Company and to its offices and facilities, have been afforded an opportunity to
ask such questions of the Company's officers, employees, agents, accountants and
representatives concerning the Company's business, operations, financial
condition, assets, liabilities and other relevant matters as they have deemed
necessary or desirable, and have been given all such information as has been
requested. The Purchaser's decision to enter into the transactions contemplated
hereby is based on its own evaluation of the risks and merits of the purchase
and the Company's proposed business activities.
4.5 INVESTMENT INTENT. The Purchaser is acquiring the Common
Stock for investment for its own account, not as a nominee or agent, and not
with the view to, or for resale in connection with, any distribution thereof.
The Purchaser understands that the Common Stock to be purchased has not been
registered under the Securities Act of 1933, as amended (the "Securities Act")
by reason of a specific exemption from the registration provisions of the
Securities Act, the availability of which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Purchaser's
representations as expressed herein.
4.6 RULE 144. The Purchaser acknowledges that the Common Stock
must be held indefinitely unless subsequently registered under the Securities
Act or unless an exemption from such registration is available. The Purchaser is
aware of the provisions of Rule 144 promulgated under the Securities Act which
permit limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, the existence
of a public market for the shares, the availability of certain current public
information about the Company, the resale occurring not less than one year after
a party has purchased and paid for the security to be sold, the sale being
effected through a "broker's transaction" or in transactions directly with a
"market maker" and the number of shares being sold during any three month period
not exceeding specified limitations.
4.7 NO PUBLIC MARKET. The Purchaser understands that no public
market now exists for any of the securities issued by the Company and that the
Company has made no assurances that a public market will ever exist for any of
the securities issued by the Company.
4.8 AUTHORIZATION. This Agreement, when executed and delivered
by the Purchaser, will constitute a valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies.
4.9 NO CONSENT. No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of Purchaser is required in connection with the valid execution and delivery of
this Agreement.
4.10 TAX LIABILITY. The Purchaser has reviewed with its own
tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. With respect to
such tax consequences, the Purchaser relies solely on such advisors and not on
any statements or representations of the Company or any of its agents. The
Purchaser understands and agrees that it (and not the Company) shall be
responsible for any tax consequence to it that may arise as a result of this
investment or the transactions contemplated by this Agreement.
4.11 HIGH RISK. The Purchaser realizes that an investment in
the Common Stock involves a high degree of risk. The Purchaser is able to bear
the risk of the investment, to hold the Common Stock for an indefinite period of
time and to suffer a complete loss of the Purchaser's investment.
4.12 LEGENDS. Each certificate or instrument representing the
Common Stock will be endorsed with the following legends:
(a) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT FOR
DISTRIBUTION, AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
(b) Any other legends required by California law or
other applicable state blue sky laws.
The Company need not register a transfer of any Common Stock, and may also
instruct its transfer agent not to register the transfer of such Common Stock,
unless the conditions specified in this Agreement are satisfied.
4.13 REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend
endorsed on a certificate pursuant to this Agreement and any stop transfer
instructions applicable to such certificate regarding the restrictions set forth
in such legend will be removed and the Company will issue a certificate without
such legend to the holder thereof if such shares are registered under the
Securities Act and a prospectus meeting the requirements of Section 10 of the
Securities Act is available, if such legend may be properly removed under the
terms of Rule 144 promulgated under the Securities Act, or if such holder
provides the Company with an opinion of counsel for such holder which counsel is
reasonably satisfactory to legal counsel for the Company, to the effect that a
public sale, transfer or assignment of such shares may be made without
registration.
4.14 NOTICE OF PROPOSED TRANSFERS. The Purchaser agrees that
prior to any proposed transfer of the securities purchased hereunder, unless
there is in effect a registration statement under the Securities Act covering
the proposed transfer, the Purchaser will give written notice to the Company of
such intention to affect such transfer. Such notice will describe the manner and
circumstances of the proposed transfer in a manner satisfactory to the Company.
Unless in the opinion of counsel to the Company the transaction is in compliance
with Rule 144 or otherwise exempt from registration, such required notice will
be accompanied by either (i) a written opinion of legal counsel addressed to the
Company and reasonably satisfactory in form and content to the Company's counsel
to the effect that the proposed transfer may be effected without registration
under the Securities Act, or (ii) a "no action" letter from the Securities and
Exchange Commission (the "Commission") to the effect that the distribution of
such securities without registration will not result in a recommendation by the
staff of the Commission that action be taken with respect thereto, or (iii) a
separate certificate executed by an officer of, or other person duly authorized
by, the Company to the effect that the securities have been sold in accordance
with the Securities Act.
5. MISCELLANEOUS.
5.1 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California without regard to the conflict
of laws provisions. The parties hereto agree to submit to the exclusive
jurisdiction of the federal and state courts of the State of California with
respect to the interpretation of this Agreement or for the purposes of any
action arising out of or relating to this Agreement.
5.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Purchaser and
the Closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto or in connection with any of the
transactions contemplated hereby shall be deemed to be representations and
warranties of the Company hereunder solely as of the date of such certificate or
instrument.
5.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of and be binding upon
the successors, assigns, heirs, executors and administrators of the parties
hereto; PROVIDED, HOWEVER, that the rights of the Purchaser to purchase the
Common Stock shall not be assignable without the prior written consent of the
Company.
5.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement, including any
agreements contemplated hereunder, constitutes the full and entire understanding
and agreement between the parties with regard to the subject matter hereof, and
no party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought. This Agreement supersedes
and replaces that certain Line of Credit Agreement entered into by the parties
on December 8, 2002, which the parties agree has no further force and effect.
5.5 NOTICES, ETC. All notices and other communications
required or permitted hereunder shall be in writing and shall be mailed by
registered or certified mail, postage prepaid, or otherwise delivered by hand or
by messenger, addressed (a) if to the Purchaser, at the address as set forth at
the signature page of this Agreement or at other such address as Purchaser shall
have properly furnished in writing to the Company, attention of the President or
(b) if to the Company, at US-Sino Gateway, Inc., 0000 Xxxx Xxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxx, Xxxxxxxxxx 00000, Attn: President, or at other such address as
the Company shall have properly furnished to the Purchaser in writing. Such
notices shall be deemed effective upon (i) personal delivery to the party to be
notified; (ii) upon the next business day if sent by confirmed telex or
facsimile; (iii) one business day after deposit with a nationally recognized
overnight carrier, specifying next day delivery; or (iv) five business days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid.
5.6 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION, IS UNLAWFUL UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM SUCH QUALIFICATION BY APPLICABLE PROVISIONS OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION BEING
AVAILABLE.
5.7 EXPENSES. Each of the Company and the Purchaser shall bear
its own expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby.
5.8 RULES OF CONSTRUCTION. The parties hereto agree that they
have been adequately represented by counsel during the negotiation and execution
of this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
5.9 SEVERABILITY. In the event that any provision of this
Agreement or the application thereof becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as to
reasonably affect the intent of the parties hereto. To the extent possible, the
parties further agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve the economic,
business and other purposes of such void or unenforceable provision as closely
as possible.
5.10 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
PURCHASER:
SOLANA CAPITAL PARTNERS, INC.
a California corporation
By:
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Xxxxx Xxxxxxxx
COMPANY:
US-SINO GATEWAY, INC.
a California corporation
By:
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Xx. Xxxxxxx Xxxx, President
EXHIBIT A
FUNDS DISBURSED TO OR ON BEHALF OF US SINO GATEWAY, INC.
AS OF DECEMBER 31, 2002
RECIPIENT AMOUNT OF FUNDS
US Sino Gateway, Inc. $ 60,250
Xxxxxx, Xxxxxxxxxx & Xxxxx $ 30,000
Plesser Associates $ 57,500
Xxxx Xxxx $ 25,000
Jehu Hand $ 5,000
Xxxx Xxxxxx $ 2,500
TOTAL $ 180,250
