STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT (this "Agreement"), made as of the date set forth
below between TELECOM COMMUNICATIONS, INC, an Indiana corporation (the
"Company"), and TAIKANG CAPITAL MANAGEMENTS CORPORATION, a British Virgin
Islands corporation (the "Buyer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, subject to the terms and conditions herein, the Company has agreed
to offer and sell to the Buyer in a private placement, 7,500,000 shares (the
"Shares") of the Company's common stock, $.001 par value per share (the "Common
Stock"), for an aggregate purchase price of One Million Five Hundred Dollars
($1,500,000) (the "Purchase Price");
WHEREAS, the Buyer desires to purchase the Shares from the Company, and the
Company desires to sell the Shares to the Buyer, on the terms and conditions set
forth below;
WHEREAS, in connection with the Company entering into that certain
Subscription Agreement dated June 6, 2004 between the Company and the Buyer, the
Company issued a five hundred thousand dollar convertible promissory note
($500,000) (the "Note");
WHEREAS, the Buyer desires to exercise its right to convert the Note into
2,500,000 shares of common stock, par value $.001 per share (the "Conversion
Shares"), as provided by the terms of the Note; and
WHEREAS, contemporaneous with the execution of this Agreement, (i) the
Buyer shall provide the Company with written notice of the conversion, in
substantially the form attached to the Note as Exhibit A; and (ii) the Company
shall convert the Note, subject to the terms of the Note, into fully paid
non-assessable shares of common stock.
NOW, THEREFORE, in consideration of the promises, mutual representations
and warranties hereinafter set forth, the parties hereto intending to be legally
bound hereby, do agree as follows:
I. PURCHASE AND SALE OF SHARES
1.1 Common Stock. Subject to the terms and conditions herein stated,
the Company hereby agrees to sell, issue and deliver to the Buyer, and the Buyer
agrees to purchase from the Company, the Shares at a price equal to $0.20 per
share of Common Stock.
1.2 Closing. The closing (the "Closing") of the transaction
contemplated hereby is taking place simultaneously with the execution and
delivery of this Agreement or such other place, date and time as may be mutually
agreed upon by the parties hereto (the "Closing Date"). At the Closing, the
parties shall make the following deliveries to each other:
(a) The Buyer shall pay the Purchase Price to the Company in
immediately available funds by wire transfer or certified check to an account
designated by the Company or otherwise in accordance with its written
instructions.
(b) The Company shall deliver to the Buyer a certificate registered in
the name of the Buyer, representing the Shares, receipt of which is acknowledged
by the Buyer;
II. REPRESENTATIONS BY THE BUYER
The Buyer represents and warrants to the Company as follows:
2.1 No Public Sale or Distribution. The Buyer is acquiring the Shares
for its own account and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered or exempted under the Securities Act of 1933, as amended (the "1933
Act); provided, however, that by making the representations herein, the Buyer
does not agree to hold any of the Shares for any minimum or other specific term
and reserves the right to dispose of the Shares at any time in accordance with
or pursuant to a registration statement or an exemption under the 1933 Act. The
Buyer is acquiring the Securities hereunder in the ordinary course of its
business. The Buyer presently does not have any agreement or understanding,
directly or indirectly, with any person to distribute any of the Shares.
2.2 Accredited Investor Status. The Buyer is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D.
2.3 Reliance on Exemptions. The Buyer understands that the Shares are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Shares.
2.4 Information. The Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Shares which
have been requested by the Buyer. The Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of the Company and its Officers.
Neither such inquiries nor any other due diligence investigations conducted by
the Buyer or its advisors, if any, or its representatives shall modify, amend or
affect the Buyer's right to rely on the Company's representations and warranties
contained herein.
2.5 No Governmental Review. The Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Shares or the
fairness or suitability of the investment in the Shares nor have such
authorities passed upon or endorsed the merits of the offering of the Shares.
2.6 Transfer or Resale. The Buyer understands that the Shares have not
been and are not being registered under the 1933 Act, or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (i)
2
subsequently registered thereunder, (ii) the Buyer shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to the effect
that such Shares to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (iii) the Buyer
shall have satisfied the requirements of Rule 144(k) promulgated under the 1933
Act, as amended (or a successor rule thereto). The Shares may be pledged in
connection with a bona fide margin account or other loan or financing
arrangement secured by the Shares and such pledge of Shares shall not be deemed
to be a transfer, sale or assignment of the Shares hereunder, and no Buyer
effecting a pledge of Shares shall be required to provide the Company with any
notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other agreements entered into by the parties hereto in
connection with the transaction contemplated by this agreement, including,
without limitation, this Section 2.6; provided, that in order to make any sale,
transfer or assignment of Shares, the Buyer and its pledgee makes such
disposition in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.
2.7 Legends. The Buyer consents to the placement of a legend on any
certificate or other document evidencing the Shares, stating that they have not
been registered under the Securities Act and setting forth or referring to the
restrictions on transferability and sale thereof. The Buyer is aware that the
Company may make a stop order notation in its appropriate records with respect
to the restrictions on the transferability of such Shares.
2.8 Organization. The Buyer is validly existing and in good standing
under the laws of the jurisdiction of its organization, and has the requisite
power and authorization to execute and deliver this Agreement and to consummate
the transactions contemplated hereby.
2.9 Authorization; Validity; Enforcement. This Agreement has been duly
and validly authorized, executed and delivered on behalf of the Buyer and
constitutes the legal, valid and binding obligations of the Buyer enforceable
against the Buyer in accordance with its respective terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application referring to or affecting enforcement of creditors' rights
and general principles of equity.
2.10 Placement Agent. No broker's, finder's or placement agent fees or
commission will be payable to any Person retained by, or on behalf of, the
Buyers with respect to the transactions contemplated herein.
2.11 No Other Representations. Except as set forth herein, no
representations (oral or written) have been made to the Buyer, or any
representative, by the Company or by any of its officers, directors, agents or
employees, nor anyone else on their behalf, concerning among others, the future
profitability of the Company, the future performance of the Common Stock or the
Buyer's investment in the Company.
III. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to the Buyer as follows:
3.1 Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Indiana and has the
corporate power to conduct its current business and the business which it
proposes to conduct.
3
3.2 Execution. The execution, delivery and performance of this
Agreement by the Company has been duly approved by the Board of Directors of the
Company and all other actions required to authorize and effect the offer, sale
and issuance of the Shares have been taken.
3.3 Binding Obligations. This Agreement constitutes a valid and
binding obligation of the Company, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application referring to or affecting
enforcement of creditors' rights and general principles of equity.
3.4 Capitalization. The authorized capital stock of the Company
consists of 80,000,000 shares of Common Stock and 20,000,000 million shares of
preferred stock, $.001 par value (the "Preferred Stock"). As of July 1, 2004,
50,188,000 shares of the Company's Common Stock and no shares of the Company's
Preferred Stock were issued and outstanding. In addition, at that date, there
were 10,000,000 warrants and no options outstanding for the purchase of shares
of Common Stock.
3.5 Issuance of Shares. The Shares are duly authorized and, upon
issuance in accordance with the terms hereof, shall be validly issued, free from
all taxes, liens and charges with respect to the issue thereof. Assuming the
accuracy of each of the representations and warranties of the Buyer contained in
Section 2, the issuance by the Company of the Securities is exempt from
registration under the 1933 Act.
3.6 Non-Contravention. Neither the execution and delivery of this
Agreement nor the issuance of the Shares by the Company shall, result in a
material violation of, or constitute a material default under its Certificate of
Incorporation or By-Laws, in the performance or observance of any material
obligations, agreements, covenants or conditions contained in any debenture,
note or other evidence of indebtedness or in any material contract, indenture,
mortgage, loan agreement, lease, joint venture or other agreement or instrument
to which the Company is a party or by which its properties may be bound or in
violation of any material order, rule, regulation, writ, injunction, or decree
of any domestic government, governmental instrumentality or court.
IV. MISCELLANEOUS
4.1 Survival. The representations and warranties made in Articles II
and III herein shall survive the Closing for a period of one (1) year.
4.2 Amendment. This Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged, and this
Agreement may not be discharged except by performance in accordance with its
terms or by a writing signed by the party to be charged. This Agreement and the
documents delivered in connection herewith sets forth the entire agreement and
understanding between the parties as to the subject matter thereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature between them.
4.3 Binding. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns.
4
4.4 Governing Law; Jurisdiction. Notwithstanding the place where this
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed in accordance
with and governed by the laws of the State of New York, without giving effect to
any choice of law or conflicts of law provision.
4.5 Severability. The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and
effect.
4.6 Waiver. It is agreed that a waiver by either party of a breach of
any provision of this Agreement shall not operate, or be construed, as a waiver
of any subsequent breach by that same party.
4.7 Further Assurances. The parties agree to execute and deliver all
such further documents, agreements and instruments and take such other and
further action as may be necessary or appropriate to carry out the purposes and
intent of this Agreement.
4.8 Notice. Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by recognized overnight courier or
registered or certified mail, return receipt requested, or delivered by hand
against written receipt therefor, addressed to the address set forth below (or
to such other address as the party shall have furnished in accordance with the
provisions of this Section):
If to the Company:
Telecom Communications, Inc.
00 Xxxxxx Xxxx
Xxxxx Xxxxxxxxx
XX000000, Xxxxx
Telephone: (8620) 0000 0000
Facsimile: (0000) 00000000
Attention: Xxxxxx Xxxx, Chief Executive Officer
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxx & Priest LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (212) 829- 2262
Attn: Xxxxxx X. Xxxxxx, Esq.
If to the Buyer:
Taikang Capital Managements Corporation
#000, 0xx/X.,Xxxxxx Xxxx Xxxxxx Xxxx, Xxxxx Xxxxxxxx,
Xxxxxxxxx, XXXXX
Telephone: 00 00 00000000
5
Facsimile: 86 20 84801376
Attention: Xxxx Xxx, Chief Financial Officer
Notices shall be deemed to have been given on the date of mailing, except for
notices of change of address, which shall be deemed to have been given when
received.
4.9 Counterparts. This Agreement may be executed in one or more
counterparts, including by facsimile, each of which shall be deemed an original,
but all of which shall together constitute one and the same instrument.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
6
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth below.
Dated: July 22, 2004.
TAIKANG CAPITAL MANAGEMENTS
CORPORATION
By: /s/ Xxxx Xxx
------------------------------
Name: Xxxx Xxx
Title: Chief Financial Officer
TELECOM COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxxxx Xxxx
------------------------------
Name: Xxxx Xxxxxxx Xxxx
Title: Chief Executive Officer
