Exhibit 10.1
STOCK PURCHASE AGREEMENT
AND INVESTMENT REPRESENTATION LETTER
Board of Directors
Smart Games Interactive, Inc.
c/o Xxxxxxxx X. Xxxxx, Secretary
0000 00xx Xxxxxx
Xxxxxxxx Xxxxx, Xxxx 00000
Gentlemen,
The undersigned purchaser (the "Purchaser") has been advised that Smart
Games Interactive, Inc., an inactive and insolvent Delaware corporation (the
"Company"), is willing to sell 15,000,000 shares of its $0.001 par value common
stock ("Common Stock") to a suitable angel investor for an aggregate cash
consideration of $75,000. The undersigned has also been advised that the Common
Stock has not been registered under the Securities Act of 1933, as amended (the
"Act") but is being offered and sold in reliance upon the exemption from
registration set forth in Securities and Exchange Commission Regulation S.
Accordingly, the undersigned understands that such Common Stock may not be
offered or sold in the United States or to U.S. persons (other than
distributors) unless the Common Stock is subsequently registered under the Act,
or an exemption from the registration requirements of the Act is available.
1. Purchaser's Representations. In connection with its subscription,
the Purchaser represents and warrants to the Company that it:
a. has been advised that the Company is an inactive and insolvent
corporation that (i) has no material assets, (ii) has approximately
$150,000 in third-party creditors claims, and (iii) can offer no
assurances that its future business activities, if any, will ever
generate revenue from operations or that the amount of such revenues
will be sufficient to pay its costs of operations;
b. has been advised that there are presently 12,648,244 shares of common
stock issued and outstanding;
c. has been given the opportunity to review all of the files and business
records of the Company including the articles of incorporation,
by-laws, documents defining the rights of security holders, business
plans, financial projections and all other documents which it
considered to be material to its investment decision;
d. has been given the opportunity to ask questions of and receive answers
from the officers and directors of the Company with respect to the
Common Stock, the business of the Company and any other matters which
it considered to be material to its investment decision and all such
questions have been answered to its full satisfaction;
e. is purchasing the Common Stock without being furnished any offering
literature or prospectus other than the documents specified above;
f. has sufficient financial and other resources to provide for its
anticipated financial needs and has no need for liquidity with respect
to its investment in the Common Stock;
g. has total investments in illiquid investments that are reasonable in
relation to its net worth and can afford the total loss of its
investment in the Common Stock; and
h. understands and acknowledges that this investment will be long term
and is, by nature, highly speculative.
2. Offshore Transaction. In connection with the subscription evidenced hereby,
the Purchaser further represents and warrants as follows:
a. that it is not a "U.S. Person" as that term is defined in Rule 902 of
Securities and Exchange Commission Regulation S;
b. that at the time the buy order was originated, it was outside the
United States and is outside the United States as of the date of the
execution and delivery of this subscription agreement;
c. that all offering documents received by it include a statement to the
effect that the shares of Common Stock have not been registered under
the Act and may not be offered or sold in the United States or to U.S.
persons unless the shares of Common Stock are registered under the
Act, or an exemption from the registration requirements of the Act is
available;
d. that it is acquiring the Common Stock for investment purposes only,
has no agreement, arrangement or understanding with any person to
participate in the subsequent distribution of the Common Stock and is
not acquiring the Common Stock on behalf of any U.S. Person, or in
connection with a transaction or series of transactions that
contemplates the re-sale of such securities to a purchaser in the
United States;
e. that all subsequent offers and sales of the Common Stock by the
Purchaser shall only be made in compliance with the safe harbor
provisions of Securities and Exchange Commission Regulation S,
pursuant to an effective registration statement under the Act, or
pursuant to an exemption from registration, if such an exemption is
available;
f. neither the undersigned nor any of its affiliates, nor any person
acting on his behalf has engaged or will engage in any "directed
selling efforts" as such term is defined in Rule 902 of Securities and
Exchange Commission Regulation S;
g. that it understands that the Company will issue stop transfer
instructions to its transfer agent with respect to the Common Stock
and intends to place the following restrictive legend, or a legend
similar thereto, on each certificate representing such securities:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED PURSUANT TO A
TRANSACTION EFFECTED IN RELIANCE UPON AN EXEMPTION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND HAVE NOT BEEN THE SUBJECT TO A REGISTRATION
STATEMENT UNDER THE ACT OR ANY STATE SECURITIES ACT. THE SECURITIES MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR APPLICABLE
EXEMPTION THEREFROM UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES ACT.
3. Representations of the Company. In connection with the subscription
evidenced hereby, the Purchaser has been informed of the following express
representations and warranties of the Company:
a. The Company is a corporation duly organized, validly existing, and in
good standing under the, laws of Delaware with full corporate power
and authority to own its properties and conduct its business, and is
duly qualified to conduct the business in which it is engaged in all
jurisdictions where the conduct of its business requires
qualification, except those jurisdictions where the failure to be
qualified would not have a material adverse effect on the business or
financial condition of the Company;
b. All documents that have been previously provided to the undersigned
are true, correct and complete copies of the original documents
previously filed by the Company with the Secretary of State of the
State of Delaware.
c. All issued and outstanding shares of Common Stock have been issued and
sold by the Company in compliance with all applicable state and
federal securities laws and regulations.
d. The issuance and sale of the Common Stock has been duly and validly
authorized by all required corporate action of the Company and will
not result in a breach or violation of any of the terms or provisions
of, or constitute a default under, (i) any indenture, mortgage, deed
of trust, loan agreement, bond, debenture, note agreement, or other
evidence of indebtedness, lease, contract, or other agreement or
instrument to which the Company is a party or by which the property of
the Company is bound, (ii) the Company's certificate of incorporation
or bylaws, or (iii) any statute or any order, rule, or regulation of
any court or governmental agency or body having jurisdiction over the
Company or its properties;
e. Upon delivery to the Purchaser, the Common Stock will be validly
issued, fully paid, nonassessable, and free of preemptive rights.
4. Subscription to Purchase Shares of Common Stock. In reliance upon the
express representations of the Company set forth in Section 3 above, the
undersigned agrees to purchase 15,000,000 shares of Company's Common Stock
for an aggregate consideration of $75,000, which has been delivered to the
Company concurrently herewith.
5. Arbitration of Disputes. In the event a dispute between the parties hereto
arises out of, in connection with, or with respect to this Stock Purchase
Agreement and Investment Representation Letter, or any breach thereof, such
dispute shall, on the written request of one party delivered to the other
party, be submitted to and settled by arbitration in Clearwater, Florida in
accordance with the rules of the American Arbitration Association then in
effect. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
6. Notices. All notices or other communications which are, or may be, required
or permitted to be given or made hereunder shall be in writing and shall be
delivered or mailed by registered or certified mail, return receipt
requested, postage prepaid, to the parties at their respective addresses
set forth below.
7. Governing Law. The offer and other transactions contemplated under this
Stock Purchase Agreement and Investment Representation Letter shall be
construed in accordance with and governed by the laws of the State of
Florida.
IN WITNESS WHEREOF, the Purchaser has executed this Stock Purchase
Agreement and Investment Representation Letter in the City of Georgetown, Cayman
Islands on this 28th day of March, 2000.
TOBEM INVESTMENTS LIMITED
a Cayman Islands Corporation
Genesis Building
P.O. Box 2097
Georgetown, Grand Cayman, BWI
/s/
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(authorized representative)
Acceptance by Smart Games Interactive, Inc.
In reliance upon the representations of the Purchaser set forth in
paragraphs (1) and (2) above, Smart Games Interactive, Inc., a Delaware
corporation, hereby confirms the representations and warranties set forth in
paragraph (3) above and accepts the subscription set forth in paragraph (4)
above.
DATED this 28th day of March, 2000.
Smart Games Interactive, Inc.
/s/
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Xxxxxxxx X. Xxxxx, Director
