EXHIBIT 10.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is entered into as of the ____
day of _________, 2004, by and among FastFunds Financial Corporation, a Nevada
corporation (the "Company"), and __________________________, a
________________________________________ (the "Purchaser").
INTRODUCTION
A. The Company is in need of additional financing and wishes to issue to
the Purchaser, and the Purchaser desires to purchase from the Company, an
unsecured convertible note in the form attached hereto as EXHIBIT A (the
"Note"), together with a warrant in the form attached hereto as EXHIBIT B (the
"Warrant") to purchase, subject to adjustment as provided therein, _________
shares of the Company's common stock, $.001 par value per share (the "Common
Stock"). The proceeds from the note will be used according to the use of
proceeds schedule attached hereto as EXHIBIT C.
B. The parties wish to enter into an agreement in connection with the
financing, in the form of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing facts and premises hereby
made a part of this Agreement, the mutual promises hereinafter set forth and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE 1
SALE AND PURCHASE OF SECURITIES
1.1 SALE AND PURCHASE. On the terms and conditions hereof, the Company
hereby issues and sells to the Purchaser, and the Purchaser hereby purchases
from the Company, the Note and the Warrant (collectively, the "Securities") for
an aggregate purchase price of $___________ (the "Purchase Price").
1.2 CLOSING. The closing of the transactions contemplated and effected
hereby (the "Closing") shall take place by the Company's and Purchaser's release
of Closing documents to the other, either by facsimile transmission followed by
original documentation delivered by overnight courier, or in such other manner
agreed upon by the parties. The date of the Closing is referred to herein as the
"Closing Date." At the Closing, the Company will issue, sell and deliver to the
Purchaser the Note and the Warrant, against payment of the Purchase Price by
certified check or wire transfer of immediately available funds, in either case
pursuant to instructions delivered by the Company to Purchaser at or prior to
the Closing.
ARTICLE 2
COMPANY REPRESENTATIONS AND WARRANTIES
The Company hereby makes the following representations and warranties
to the Purchaser as of the Closing Date.
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Note and the Warrant (together, the "Transaction
Documents"), to issue and sell the shares of Common Stock issuable upon
conversion of the Note, including shares of Common Stock issuable in lieu of
cash in satisfaction of interest payments under the Note (collectively, the
"Conversion Shares"), and shares of Common Stock issuable upon exercise of the
Warrant (the "Warrant Shares," and collectively referred to with the Conversion
Shares as the "Shares"), to carry out the provisions of the Transaction
Documents, and to carry on its business as presently conducted and as presently
proposed to be conducted. The Company is duly qualified and is authorized to do
business and is in good standing in each jurisdiction in which the nature of its
activities makes such qualification necessary, except for those jurisdictions in
which failure to be so qualified would not have a materially adverse effect on
the Company or its business, taken as a whole.
2.2 CAPITALIZATION. The Company is authorized to issue 250,000,000 shares
of capital stock, par value $.001 per share, of which 10,404,101 shares are
issued and outstanding. Except as set forth on Schedule 2.2 or in the Company's
quarterly, annual and periodic filings (the "SEC Reports") with the U.S.
Securities and Exchange Commission (the "Commission"), the Company has no
outstanding options, warrants or other rights to acquire any capital stock, or
securities convertible or exchangeable for capital stock or for securities
themselves convertible or exchangeable for capital stock (together, "Convertible
Securities"). Except as set forth on Schedule 2.2 or in the SEC Reports, the
Company has no agreement or commitment to sell or issue any shares of capital
stock or Convertible Securities. All issued and outstanding shares of the
Company's capital stock (i) have been duly authorized and validly issued, (ii)
are fully paid and nonassessable, and (iii) are free from any preemptive and
cumulative-voting rights. Except as set forth on Schedule 2.2, there are no
outstanding rights of first refusal, voting, proxy or shareholder agreements of
any kind relating to any of the Company's securities to which the Company or any
of its executive officers or directors is a party or as to which the Company
otherwise has knowledge of. When issued in compliance with the provisions of the
Note and the Warrant (and upon payment as provided by the Warrant), the Shares
will be validly issued, fully paid and nonassessable, and will be free of any
liens or encumbrances; PROVIDED, HOWEVER, that the Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is proposed.
2.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the part of
the Company, its officers, directors and shareholders necessary for the
authorization of the Transaction Documents, the performance of all obligations
of the Company hereunder, including the authorization, sale, issuance and
delivery of the Conversion Shares pursuant to the Note, and the Warrant Shares
upon exercise of the Warrant, has been taken. The Transaction Documents, when
executed and delivered, will be valid and binding obligations of the Company
enforceable in accordance with their respective terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights and according to
general principles of equity that restrict the availability of equitable
remedies.
2.4 OFFERING VALID. Assuming the accuracy of the representations and
warranties of the Purchaser contained in Article 3, the offer, sale and issuance
of the Note and the Warrant (and the Shares issuable under the Note and upon
exercise of the Warrant) will be exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and will have
been registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of the State of
Illinois.
2.5 NON-CONTRAVENTION. The Company's execution and delivery of the
Transaction Documents, the issuance of the Securities and the Shares pursuant
thereto, and the consummation by the Company of the other transactions
contemplated hereby and thereby, do not, and compliance with the provisions of
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this Agreement and other Transaction Documents will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
the creation of any lien or encumbrance upon any of the Company's properties or
assets, or result in the termination of, or require that any consent be obtained
or any notice be given with respect to, (i) the Company's articles of
incorporation or bylaws, or (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease, contract or other agreement, instrument or permit
applicable to the Company.
2.6 COMPLIANCE WITH LAWS. Except as disclosed in the SEC Reports, the
Company is not in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties that would materially and adversely affect the business, assets,
liabilities, financial condition, operations or prospects of the Company. No
governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to be
filed in connection with the execution and delivery of, and the performance of
the transactions contemplated by, the Transaction Documents, or the issuance of
the Conversion Shares under the Note or the Warrant Shares upon exercise of the
Warrant. The Company has all franchises, permits, licenses and any similar
authority necessary for the conduct of its business as now being conducted by
it, the lack of which could materially and adversely affect the business,
properties, prospects or financial condition of the Company.
2.7 ABSENCE OF DEFAULTS. No "Event of Default" (as defined in any
particular agreement or instrument to which the Company is a party) and no event
which, with notice, lapse of time or both, would constitute an Event of Default
as so defined, has occurred and is continuing.
2.8 ABSENCE OF UNDISCLOSED LIABILITIES. The Company's financial statements
filed with the Commission have been prepared in accordance with accounting
principles generally accepted in the United States (subject, in the case of the
interim financial statements, to normal year-end adjustments and the absence of
footnotes), and fairly present the financial position, results of operations and
cash flows of the Company as at the dates and for the periods therein indicated.
The Company has no indebtedness, obligations or liabilities of any kind (whether
accrued, absolute, contingent or otherwise, and whether due or to become due),
which was not fully reflected in, reserved against or otherwise described in the
Company's most recent unaudited balance sheet (or notes thereto, if any) or
incurred in the ordinary course of business consistent with the Company's past
practices since the date of such balance sheet.
2.9 NASDAQ COMPLIANCE. The Company's Common Stock is registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and is listed on the Over-the-Counter Bulletin Board administered by The
Nasdaq Stock Market, Inc. (the "OTCBB"). The Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or causing the delisting of the Common
Stock from the OTCBB. The Company has not received any notification that the
Commission, the National Association of Securities Dealers, Inc., or any other
self-regulatory organizational body is contemplating terminating such
registration or listing.
2.10 REPORTING STATUS. The information contained in the SEC Reports filed
by the Company, as of the date of their respective filings, did not contain an
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
2.11 FULL DISCLOSURE. Neither this Agreement, the Note, the Warrant nor the
SEC Reports contain any untrue statement of a material fact nor, to the
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Company's knowledge and belief, omit to state a material fact necessary in order
to make the statements contained herein or therein not misleading. There are no
facts that (individually or in the aggregate) materially adversely affect the
business, assets, liabilities, financial condition or operations of the Company
that have not been set forth in the Agreement, the Note, the Warrant, the SEC
Reports or in other documents delivered to the Purchaser or its attorneys or
agents in connection herewith.
ARTICLE 3
PURCHASER'S REPRESENTATIONS AND WARRANTIES
The Purchaser hereby represents and warrants to the Company, as of the
Closing Date, as follows:
3.1 INVESTMENT REPRESENTATIONS. The Purchaser understands that neither the
offer or the sale of the Securities, nor offer or sale of the Shares, have been
registered under the Securities Act. The Purchaser also understands that the
Securities are being offered and sold pursuant to an exemption from registration
contained in the Securities Act based in material part upon the Purchaser's
representations contained in the Agreement. In this regard, the Purchaser
additionally represents and warrants as follows:
(a) The Purchaser has substantial experience in evaluating and
investing in private placement transactions of securities in companies
similar to the Company so that it is capable of evaluating the merits and
risks of its investment in the Company. The Purchaser must bear the
economic risk of this investment indefinitely unless the Shares are
registered for resale pursuant to the Securities Act, or an exemption from
registration is available. The Purchaser has no present intention of
selling or otherwise transferring the Securities or the Shares, or any
interest therein. The Purchaser also understands that there is no assurance
that any exemption from registration under the Securities Act will be
available and that, even if available, such exemption may not allow the
Purchaser to transfer all or any portion of the Note, the Warrant or the
Shares under the circumstances, in the amounts or at the times the
Purchaser might wish. Purchaser represents and agrees that if, contrary to
the foregoing representations and warranties, Purchaser should later desire
to dispose of or transfer all or any portion of the Shares or Securities in
any manner, Purchaser shall not do so without complying with applicable
securities laws.
(b) The Purchaser is acquiring the Securities and the Shares for the
Purchaser's own account, for investment only, and not with a view towards
their public distribution. Purchaser is not aware of any occurrence, event
or circumstance upon the happening of which Purchaser intends to transfer
or sell the Securities or the Shares. Purchaser has been informed that, in
the view of the certain state securities commissions, a purchase of
Securities and/or Shares with a current intent to resell, by reason of any
foreseeable specific contingency or anticipated change in market values,
any change in the condition of the Company or the investment market as a
whole, or in connection with a contemplated liquidation or settlement of
any loan obtained for the acquisition of the Securities or Shares, would
represent a purchase with an intent inconsistent with the representations
set forth above, and that certain state securities commissions might regard
such sale or disposition as a deferred sale with regard to which an
exemption from registration is not available.
(c) The Purchaser represents that by reason of its (or its
management's) business or financial experience, the Purchaser has the
capacity to protect its own interests in connection with the transactions
contemplated in this Agreement, the Securities and the Shares. Further, the
Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in the Agreement. (d) The Purchaser
represents that it is an accredited investor within the meaning of
Regulation D under the Securities Act.
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(e) Purchaser represents and warrants that (i) it was not organized
for the specific purpose of acquiring the Securities or the Shares, (ii)
this Agreement has been duly authorized by all necessary action on the part
of Purchaser, duly executed by an authorized officer or representative of
Purchaser, and is a legal, valid and binding obligation of Purchaser
enforceable in accordance with its terms, and (iii) it is incorporated,
organized and in good standing under the laws of the State of Illinois and
that its principal office is located in the State of Illinois.
(f) The Purchaser acknowledges and agrees that the Securities, and, if
issued, the Shares, must be held indefinitely unless they are subsequently
registered for resale under the Securities Act or an exemption from such
registration is available. The Purchaser has been advised or is aware of
the provisions of Rule 144 promulgated under the Securities Act, which
permits limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other things:
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 through an unsolicited
"broker's transaction" or in transactions directly with a market maker (as
such term is defined under the Exchange Act) and the number of shares being
sold during any three-month period not exceeding specified limitations.
3.2 TRANSFER RESTRICTIONS. The Purchaser acknowledges and agrees that the
Securities and, if issued, the Shares, are subject to restrictions on transfer
and will bear restrictive legends substantially similar to those contained in
the attached forms of Note and Warrant.
3.3 HIGH RISK. The Securities offered hereby (and Shares issuable upon
conversion or exercise thereof) are highly speculative in nature and an
investment therein involves a high degree of risk, including but not limited to
the risk of losing the entire investment in such Securities and/or Shares.
3.4 NO GOVERNMENTAL APPROVAL. No federal or state agency, including the
Commission or the securities commission or authority of any state, has approved
or disapproved the Securities or Shares, passed upon or endorsed the merits of
the issuance of Securities or Shares or the accuracy or adequacy of any
information provided by the Company, or made any finding or determination as to
the fairness or fitness of the Securities or Shares for sale.
3.5 NO RELIANCE. Purchaser has been encouraged to rely upon the advice of
its legal counsel, accountants or other financial advisors with respect to tax
and other considerations relating to the purchase of the Securities and Shares
pursuant hereto. Purchaser is not relying upon the Company with respect to the
economic considerations involved in determining to make an investment in the
Securities, including the Shares.
3.6 ACCESS TO INFORMATION. Purchaser has been given access to full and
complete information regarding the Company and has utilized such access to
Purchaser's satisfaction for the purpose of obtaining information respecting the
Company. Particularly, Purchaser has been given reasonable opportunity to meet
with and/or contact Company representatives for the purpose of asking questions
of, and receiving answers from, such representatives concerning the terms and
conditions of the issuance of the Securities and Shares and to obtain any
additional information, to the extent reasonably available, necessary to verify
the accuracy of information about the Company already obtained.
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3.7 PURCHASER FILINGS. Purchaser hereby acknowledges and understands that
due to the significant amount of Shares issuable pursuant to the Note and
Warrant, Purchaser may be required under applicable federal securities laws,
specifically including the Exchange Act, to prepare and file certain reports
with respect to its beneficial ownership of the Common Stock; that any such
filings will be the sole and exclusive responsibility of Purchaser; that
Purchaser's failure to so prepare and file required reports would likely be
publicly disclosed by the Company; and that the costs and expense of any such
preparation and filing shall be borne solely by Purchaser.
ARTICLE 4
GENERAL PROVISIONS
4.1 ENTIRE AGREEMENT. The Transaction Documents and the other documents
delivered pursuant hereto 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.
4.2 GOVERNING LAW; VENUE. This Agreement shall be governed by the laws of
the State of Nevada without regard to its conflicts-of-law principles. The
parties expressly acknowledge and agree that any judicial action to enforce any
right of any party under this Agreement, the Note or the Warrant may be brought
and maintained in Minnesota state or federal courts. Accordingly, the parties
hereby submit to the process, jurisdiction and venue of any such court. Each
party hereby waives, and agrees not to assert, any claim that it is not
personally subject to the jurisdiction of the foregoing courts in the State of
Minnesota or that any action or other proceeding brought in compliance with this
Section is brought in an inconvenient forum.
4.3 FEES AND EXPENSES. Purchaser understands that Company shall reimburse
MBC Global, LLC, an Illinois limited liability company, for its reasonable legal
fees and other reasonable expenses incurred in connection with the Transaction
Documents and the transactions contemplated thereby, up to a maximum of $5,000.
In addition, Company shall pay finders' fees to MBC Global not exceeding eight
percent (8%) from the proceeds received from the purchase and sale of the Note
in full and complete satisfaction of Company's obligations.
4.4 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive the Closing.
4.5 SUCCESSORS AND ASSIGNS. Except as otherwise expressly 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
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of the Securities or the Shares from time to time.
4.6 SEVERABILITY. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
4.7 AMENDMENT AND WAIVER. This Agreement may be amended or modified, and
any provision hereunder may be waived, only upon the written consent of the
Company and the Purchaser.
4.8 NOTICES. All notices, requests, consents, and other communications
hereunder shall be in writing and shall be deemed effectively given and received
when delivered in person or by national overnight courier service or by
certified or registered mail, return-receipt requested, or by telecopier,
addressed as follows:
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(a) if to the Company, at
FastFunds Financial Corp.
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxx, Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to the Purchaser, in care of:
MBC Global, LLC
000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
4.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement binding
on the parties. Facsimile and electronically transmitted signatures shall be
valid and binding to the same extent as original signatures. Each party shall
become bound by this Agreement immediately upon signing and delivering any
counterpart, independently of the signature of any other party. Nevertheless, in
making proof of this Agreement, it will be necessary to produce only one copy
signed by the party to be charged.
4.10 DISPUTE RESOLUTION. In the event of any dispute relating to the
Transaction Documents, the parties will, to the greatest extent possible,
endeavor to resolve such dispute through amicable negotiations. Failing an
amicable settlement, any controversy, claim or dispute arising under or relating
to such agreements, including the existence, validity, interpretation,
performance, termination or breach hereof or thereof, will finally be settled by
binding arbitration before a single arbitrator (the "Arbitration Tribunal")
which will be jointly appointed by the parties. The Arbitration Tribunal shall
self-administer the arbitration proceedings utilizing the Commercial Rules of
the American Arbitration Association ("AAA"); PROVIDED, HOWEVER, the AAA shall
not be involved in administration of the arbitration. The arbitrator must be a
retired judge of a state or federal court of the United States or a licensed
lawyer with at least five years of corporate or commercial law experience and
have at least an AV rating by Martindale Xxxxxxx. If the parties cannot agree on
an arbitrator, either party may request the AAA to appoint an arbitrator which
appointment will be final.
The arbitration will be held in Minneapolis, Minnesota. Each party will
have discovery rights as provided by the Federal Rules of Civil Procedure within
the limits imposed by the arbitrator; provided, however, that all such discovery
will be commenced and concluded within 60 days of the selection of the
arbitrator. It is the intent of the parties that any arbitration will be
concluded as quickly as reasonably practicable. Once commenced, the hearing on
the disputed matters will be held four days a week until concluded, with each
hearing date to begin at 9:00 a.m. and to conclude at 5:00 p.m. The arbitrator
will use all reasonable efforts to issue the final written report containing
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award or awards within a period of five business days after closure of the
proceedings. Failure of the arbitrator to meet the time limits of this Section
4.10 will not be a basis for challenging the award. The Arbitration Tribunal
will not have the authority to award punitive damages to either party. Each
party will bear its own expenses, but the parties will share equally the
expenses of the Arbitration Tribunal. The Arbitration Tribunal shall award
attorneys' fees and other related costs payable by the losing party to the
successful party as it deems equitable. This Agreement and the other Transaction
Documents will be enforceable, and any arbitration award will be final and
non-appealable, and judgment thereon may be entered in any court of competent
jurisdiction. Notwithstanding the foregoing, claims for injunctive relief
relating to the Transaction Documents may be brought in a state or federal court
in the State of Minnesota.
4.11 FURTHER ASSURANCES. Each party hereby agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as may
be necessary or appropriate to effectuate, carry out and perform all of the
terms, provisions and conditions of this Agreement and the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have set their hands to this
Purchase Agreement to be effective as of the date first set forth above.
COMPANY: PURCHASER:
FASTFUNDS FINANCIAL CORPORATION
----------------------------------- -------------------------------------
XXXX XXXXX, CHIEF FINANCIAL OFFICER Print Name:
