COMMON STOCK PURCHASE AGREEMENT
Exhibit
1
COMMON
STOCK PURCHASE AGREEMENT (the "Agreement"),
dated
June 23, 2008, by and between Syscan Imaging Limited, a corporation formed
under
the laws of the British Virgin Islands with a business address of Xxxx X,
00xx
Xxxxx,
0-00 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxx (the "Seller") and Xxxxxxx Xxxxx,
an
individual with a business address of Xxx Xxxx Xxxxx, 00xx
xxxxx,
Xxx Xxxx, XX 00000 (the "Purchaser").
RECITALS
WHEREAS,
the
Purchaser wishes to purchase and the Seller wishes to sell 5,000,000 shares
(the
“Shares”) of common stock, par value $.001 per share (the "Common Stock") (the
“Minimum Shares”) of Document Capture Technologies, Inc. (the "Company") at the
Closing (as hereinafter defined) on the terms and conditions set forth in this
Agreement; and
WHEREAS,
the
Seller shall grant an option to the Purchaser to purchase up to 3,173,514
additional Shares of the Company.
NOW,
THEREFORE,
in
consideration of the premises and of the agreements set forth below, the parties
hereby agree as follows:
i) Purchase
and Sale.
(1) Shares
to be Purchased and Sold.
At the
first Closing which shall occur on or before June 23, 2008 (for which $250,000
of the proceeds from such purchase shall be in the escrow account of Xxxxxxxxxx
& Xxxxx LLP on or before June 23, 2008) (the “First Closing”), the Seller
agrees to sell, transfer, convey, assign and deliver to the Purchaser, the
Shares free and clear of all liens, claims and encumbrances for the Purchase
Price hereinafter set forth, except that the remaining $2,250,000 of the
Purchase Price for the Shares shall be paid in two remaining payments as
follows: (i)
$1,750,000 on or around July 7, 2008 (the “Second Closing”), and (ii)
$500,000
on or before December 20, 2008 (the “Third Closing”).
(2) Purchase
Price.
Upon
the terms and subject to the conditions set forth in this Agreement, in exchange
for the Shares, Purchaser hereby agrees to pay and deliver to Seller at the
first Closing $250,000 in immediately available funds by check, wire transfer
or
such other form of payment as shall be mutually agreed upon by the Sellers
and
the Purchaser an aggregate of two million five hundred thousand dollars
($2,500,000) (the "Purchase
Price")
or
$0.50 per Share.
(3) Closing
Date.
The
Closings shall occur on or before the dates set forth above each of which shall
be referred to as a "Closing
Date"
at the
offices of the Company (the "Closings").
The
Closings will be subject to and conditional upon the receipt and review of
and
satisfaction with any due diligence materials and disclosure documentation
requested by Purchaser.
(4)
Delivery
of Share and Payment.
The
Seller shall deliver the Shares (which shall be endorsed in blank), and an
executed copy of the Escrow Agreement (defined below) to the Escrow Agent
(defined below) and the Purchaser shall deliver the Purchase Price and an
executed copy of the Escrow Agreement (defined below) to Xxxxxxxxxx & Xxxxx
LLP, acting as escrow agent (the “Escrow
Agent”).
Upon
receipt of the Shares, the executed copy of this Agreement and the Purchase
Price, the Escrow Agent at the direction of each of Seller and Purchaser shall
deliver the Shares to Purchaser and the Purchase Price to Seller in accordance
with the terms of the escrow agreement (“Escrow
Agreement”)
attached hereto as Exhibit B. Seller will be responsible for, and will pay
any
applicable sales taxes and transfer taxes arising in connection with the
transactions contemplated by this Agreement.
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ii) Representations
and Warranties of the Seller and the Company
The
Seller represents and warrants as follows:
(1) Organization,
Standing and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Delaware; the Company has all requisite corporate power and
authority and possesses all franchises, licenses, permits, authorizations and
approvals from all administrative agencies necessary to conduct its business
as
conducted; and it is duly qualified, licensed or domesticated and in good
standing as a foreign corporation authorized to do business in any State where
the nature of its business and the activities conducted by it or the character
of the properties and assets owned, leased or operated by it require such
qualification, licensing or domestication.
(2) Capitalization.
The
authorized capital stock of the Company consists of 50,000,000 shares of Common
Stock, of which 18,422,645 shares of Common Stock are presently outstanding,
30,000 shares of Series B Preferred Stock, of which 1.5 shares are presently
outstanding. Upon issuance, the Shares shall be duly authorized, validly issued,
fully paid and non-assessable, and no liability shall attach to the ownership
thereof. Upon issuance, the Shares shall not have been issued in violation
of,
nor be subject to, any preemptive or subscription rights.
(3) Due
Execution.
The
execution, delivery and performance by the Seller of this Agreement and the
Escrow Agreement are within the Seller’s powers have been authorized by all
appropriate corporate action and do not violate any contractual restriction
contained in any agreement which binds or affects or purports to bind or affect
the Seller or any provision of the Company's Certificate of
Incorporation.
(4) Binding
Effect.
This
Agreement and the Escrow Agreement when executed and delivered by Seller will
be
the legal, valid and binding obligation of the Seller enforceable against the
Seller in accordance with its terms.
iii) Representations
and Warranties by Purchaser.
Purchaser represents and warrants to the Seller as follows:
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(1) Execution,
Delivery, Authorization, Approval and Performance of
Agreement.
The
execution and delivery by Purchaser of this Agreement and the Escrow Agreement
and its performance hereunder and thereunder does not and will not conflict
with
or constitute a default, breach or violation under any provision of applicable
law or regulation or of any agreement, judgment, injunction, order, decree
or
other instrument binding upon Purchaser or to which his properties is subject.
This Agreement and the Escrow Agreement when executed and delivered by Purchaser
will constitute the legal, valid and binding agreement of Purchaser and is
enforceable in accordance with its terms.
(2) Investment
Representation:
(i) Purchaser
represents that it is acquiring the Shares for its own account for investment
only and not with a view towards distribution or resale, and agrees not to
sell,
transfer, pledge, hypothecate or otherwise dispose of, or offer to dispose
of,
the Shares, unless the Shares have been registered under the Securities Act
of
1933, as amended (the "Act") and applicable state securities laws or such
registration is not required in the opinion of counsel for such Purchaser
reasonably acceptable to the Company. Purchaser understands that any routine
sale of the Shares made in reliance upon Rule 144 promulgated under the Act
can
be made only in accordance with the terms and conditions of said Rule and
further, that in case such Rule is not applicable to any sale of the Shares,
resale thereof may require compliance with some other exemption under the Act
prior to resale. Purchaser understands that certificates for the Shares issued
pursuant to this Agreement shall bear the following legend:
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"THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH
SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE, TRANSFERRED, HYPOTHECATED
OR OTHERWISE ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT THERETO UNDER SUCH ACT OR AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION
FOR SUCH SALE, OFFER, TRANSFER, HYPOTHECATION OR OTHER ASSIGNMENT
IS
AVAILABLE UNDER SUCH ACT."
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(ii) Purchaser
represents that (i) it is subscribing for the Shares after having made adequate
investigation of the business, finances and prospects of the Company, (ii)
it
has been furnished any information and materials relating to the business,
finances and operation of the Company and any information and materials relating
to the offer and sale of the Shares which it has requested and (iii) it has
been
given an opportunity to make any further inquiries desired of the management
and
any other personnel of the Company and has received satisfactory responses
to
such inquiries.
(iii) Purchaser
represents that it possesses such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Shares and of making an informed investment decision. In
addition, the Purchaser represents that it is financially capable of sustaining
an entire loss of his investment in the Shares.
iv) Option
to Purchase Additional Shares.
Seller
hereby grants Purchaser an option (the “Option”) to purchase an additional
3,173,514 shares of common stock (the “Option Shares”) of the Company, all of
which are currently held by Seller, at a purchase price of $0.50 per share,
for
a period of 12 months from the date hereof. Seller hereby represents to the
Purchaser that it shall not sell, transfer, assign, or otherwise encumber the
Option Shares until after the expiration of the Option on June 23, 2009,
provided such Option has not previously been exercised.
v) Miscellaneous.
(1) Amendments,
Etc.
No
amendment of any provision of this Agreement shall in any event be effective
unless the amendment shall be in writing and signed by the Seller and Purchaser,
and no waiver nor consent to any departure by any party therefrom shall in
any
event be effective unless such waiver or consent shall be in writing and signed
by the party waiving or consenting to such provision, and then such waiver
or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
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(2)
Notices,
Etc.
All
notices and other communications provided for hereunder shall be in writing
(including telegraphic, facsimile, telex or cable communication) and mailed,
telegraphed, telecopied, telexed, cabled or delivered:
(a)
if to
the Seller,
Syscan
Imaging Limited
Xxxx
X,
00xx
Xxxxx,
0-00 Xxxxx Xxxxxx
Xxxxx
Xxxxx, Xxxx Xxxx
Fax
Number:
and
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(b)
|
if
to the Purchaser,
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Xxxxxxx
Xxxxx
Xxx
Xxxx
Xxxxx, 00xx
xxxxx
Xxx
Xxxx,
XX 00000
Fax
Number: (000) 000-0000
or,
as to
any such party, at such other address as shall be designated by such party
in a
written notice to the other parties.
(3) No
Waiver; Remedies.
No
failure on the part of Purchaser or the Seller to exercise, and no delay in
exercising, any right under this Agreement shall operate as a waiver thereof;
nor shall any single or partial exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
(4) Severability
of Provisions.
Any
provision of this Agreement which is prohibited or unenforce-able in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforce-ability without invalidating the remaining
provisions hereof or thereof or affecting the validity or enforceability of
such
provision in any other jurisdiction.
(5) Integration.
This
Agreement sets forth the entire understanding of the parties hereto with respect
to all matters contemplated hereby and thereby supersede any previous agreements
and under-standings among them concerning such matters. No statements or
agreements, oral or written, made prior to or at the signing hereof, shall
vary,
waive or modify the written terms hereof.
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(6) Binding
Effect.
This
Agree-ment shall be binding upon and inure to the benefit of the Seller and
the
Purchaser and their respective successors and assigns, except that neither
the
Seller nor the Purchaser may assign this Agreement, or the rights or obligations
hereunder, without the prior written consent of the other parties to this
Agreement.
(7) Governing
Law; Jurisdiction; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
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(8)
Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and all of which when taken together
shall constitute but one and the same agreement.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the
parties have duly executed this Agreement on the date first written
above.
| XXXXXXX
XXXXX
[PURCHASER]
|
SYSCAN IMAGING LIMITED
[SELLER]
|
| By:
/s/ Xxxxxxx Xxxxx
Name:
Title:
|
By: /s/
Xxxxxx Xxx
Name:
Title:
|
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