TECHEDGE, INC.
SECURITIES PURCHASE AGREEMENT (this "Agreement") made as of this 26th day
of April, 2005 between Techedge, Inc., a Delaware corporation (the "Company"),
and Pacific Century Fund LLC, a Delaware limited liability company (the
"Investor").
WHEREAS, the Company desires to sell, and the Investor desires to
purchase, 95,000 shares of the Company's common stock (the "Shares") for the
consideration and on the terms set forth in this Agreement.
THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the Investor and the Company hereby agree as follows:
I. PURCHASE AND SALE OF STOCK; DELIVERY OF CERTIFICATES
1.1 Purchase Price. Subject to the terms and conditions hereof, the
Company will issue and sell to the Investor, and the Investor will purchase, (i)
the 95,000 Shares for an aggregate purchase price of $95,000 in cash, or a per
share purchase price of $1.00, and (ii) a warrant (the "Warrant") to purchase
95,000 shares of Common Stock (the "Warrant Shares" and together with the
Warrant and the Shares, the "Securities") at an exercise price of $1.50 per
share, which Warrant shall be issuable for no additional consideration and shall
be exercisable until two (2) years after Closing date.
1.2 Closing. The closing of the purchase and sale of the Shares and the
Warrant (the "Closing") shall occur on such date (not later than April 27, 2005)
and at such time and place as is mutually agreeable to the parties hereto. The
Purchase Price is payable at the Closing by wire transfer of funds in accordance
with instructions delivered by the Company to the Investor. Certificates
representing the Shares will be delivered at the Closing.
1.3 Further Assurances. The Company and the Investor hereby covenant and
agree without the necessity of any further consideration, to execute,
acknowledge and deliver any and all such other documents and take any such other
action as may be reasonably necessary to carry out the intent and purposes of
this Agreement.
II. REPRESENTATIONS BY AND COVENANTS OF INVESTOR
The Investor hereby makes the following representations, warranties and
covenants to the Company as follows:
2.1 No Government Recommendation or Approval. The Investor understands
that no United States federal or state agency or similar agency of any other
country, has passed upon or made any recommendation or endorsement of the
Company or the offering of the Securities.
2.2 Intent. The Investor is purchasing the Shares and the Warrant solely
for investment purposes, for the Investor's own account, not as nominee or
agent, and not with a view towards the resale, distribution or dissemination
thereof and the Investor has no present arrangement to sell the Securities to or
through any person or entity. The Investor understands that the Securities must
be held indefinitely unless such Securities are subsequently registered under
the United States Securities Act of 1933, as amended (the "Securities Act") or
an exemption from registration is available.
2.3 Accredited and Sophisticated Investor.
(a) The Investor is familiar with the term "accredited investor" as
defined in Regulation D promulgated under the Securities Act and is an
"accredited investor" within the meaning of such term in Regulation D. The
Investor has truthfully completed the Confidential Investor Questionnaire
attached as Appendix A hereto.
(b) The Investor is sophisticated in financial matters and is able
to evaluate the risks and benefits of the investment in the Securities.
(c) The Investor is able to bear the economic risk of his investment
in the Securities for an indefinite period of time because none of the
Securities have been registered under the Securities Act and therefore cannot be
sold unless subsequently registered under the Securities Act or an exemption
from such registration is available.
2.4 Independent Investigation. The Investor, in making the decision to
purchase the Shares and the Warrant, has relied upon its independent
investigation of the Company and has not relied upon any information or
representations made by any third parties or upon any oral or written
representations or assurances from the Company, its officers, directors or
employees or any other representatives or agents of the Company, other than as
set forth in this Agreement. The Investor is familiar with the business,
operations and financial condition of the Company and has had an opportunity to
ask questions of, and receive answers from, the Company's officers and directors
concerning the Company and the terms and conditions of the offering of the
Securities and has had full access to such other information concerning the
Company as the Investor has requested.
2.5 Restrictions on Transfer. The Investor understands that the Securities
are being offered in a transaction not involving a public offering in the United
States within the meaning of the Securities Act. The Securities have not been
and will not be registered under the Securities Act, and, if in the future the
Investor decides to offer, resell, pledge or otherwise transfer the Securities,
such Securities may be offered, resold, pledged or otherwise transferred only
(A) pursuant to an effective registration statement filed under the Securities
Act, (B) pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available) or (C) pursuant to any other
exemption from the registration requirements of the Securities Act, and in each
case in accordance with any applicable securities laws of any state of the
United States or any other jurisdiction. The Investor agrees that if any
transfer of the Securities or any interest therein is proposed to be made, as a
condition precedent to any such transfer, the transferor may be required to
deliver to the Company an opinion of counsel satisfactory to the Company.
2.6 Authority. This Agreement has been validly authorized, executed and
delivered by the Investor and is a valid and binding agreement enforceable in
accordance with its terms, subject to the general principles of equity and to
bankruptcy or other laws affecting the enforcement of creditors' rights
generally. The execution, delivery and performance of this Agreement by the
Investor does not and will not conflict with, violate or cause a breach of any
agreement, contract or instrument to which the Investor is a party.
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2.7 No Legal Advice from Company. The Investor acknowledges that it has
had the opportunity to review this Agreement and the transactions contemplated
by this Agreement and the other agreements entered into between the parties
hereto with the Investor's own legal counsel and investment and tax advisors.
Except for any statements or representations of the Company made in this
Agreement and the other agreements entered into between the parties hereto, the
Investor is relying solely on such counsel and advisors and not on any
statements or representations of the Company or any of its representatives or
agents for legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.
2.8 Reliance on Representations and Warranties. The Investor understands
that the Securities are being offered and sold to the Investor in reliance on
specific provisions of United States federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Investor set
forth in this Agreement in order to determine the applicability of such
provisions.
2.9 No Advertisements. The Investor is not purchasing the Securities as a
result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.
2.10 Brokers or Finders. The Investor has incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement
2.11 Legends.
(a) It is understood that the certificate(s) evidencing the Shares
and the Warrant Shares may bear legends required by applicable federal and state
securities laws and shall bear the following or substantially similar legends:
(i) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. THE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT, (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (C) PURSUANT TO ANY OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER OF THIS CERTIFICATE AGREES THAT IF ANY TRANSFER OF THE
SECURITIES REPRESENTED HEREBY OR ANY INTEREST THEREIN IS PROPOSED TO
BE MADE, AS A CONDITION PRECEDENT TO ANY SUCH TRANSFER, THE COMPANY
MAY REQUIRE THE HOLDER TO DELIVER TO THE COMPANY AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER THE
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED TO EFFECT SUCH TRANSFER.
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(ii) Any legend required by the laws of the State of Delaware, or any
other applicable jurisdiction.
(b) It is understood that the Warrant may bear legends required by
applicable federal and state securities laws and shall bear the following
legends:
(i) NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE SECURITIES ACT, (B) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (C) PURSUANT TO ANY OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER OF THIS CERTIFICATE AGREES THAT IF ANY TRANSFER OF THIS
WARRANT, THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT OR ANY INTEREST THEREIN IS PROPOSED TO BE MADE, AS A
CONDITION PRECEDENT TO ANY SUCH TRANSFER, THE COMPANY MAY REQUIRE
THE HOLDER TO DELIVER TO THE COMPANY AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER THE SECURITIES
ACT OR ANY APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED TO
EFFECT SUCH TRANSFER.
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(ii) Any legend required by the laws of the State of Delaware, or any
other applicable jurisdiction.
III. REPRESENTATIONS BY THE COMPANY
3.1 Organization and Qualifications. The Company is a corporation duly
organized, validly existing and in good standing under the laws of State of
Delaware and is duly licensed or qualified to transact business as a foreign
corporation and is in good standing as such in each jurisdiction in which the
nature of the business transacted by it or the character of the properties owned
or leased by it requires such licensing or qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, financial condition, operations or property of the Company.
3.2 Authorization. This Agreement has been duly executed and delivered by
the Company and constitutes a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms (except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors rights).
3.3 Validity of Shares; etc. The Shares, the Warrants and the Warrant
Shares have been duly authorized, and the Shares and the Warrant Shares, when
issued and sold in accordance with this Agreement and the Warrant, respectively,
will be validly issued, fully paid and non-assessable, with no personal
liability attaching to the ownership thereof, and will be free and clear of all
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company except as set forth in the Company's certificate of incorporation and
restrictions on transfer pursuant to applicable securities laws, this Agreement
and the Warrant, as applicable.
3.4 Legal Proceedings. The Company knows of no pending or threatened legal
or governmental proceedings to which the Company is a party which could
adversely affect the business, property, financial condition or operations of
the Company.
3.5 Brokers or Finders. Company has incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement
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IV. REGISTRATION RIGHTS
4.1 "Piggy-back" Rights. If the Company shall determine to proceed
with the actual preparation and filing of a registration statement under the
Securities Act in connection with the proposed offer and sale of any of its
securities by it or any of its security holders (other than a registration
statement on Form X-0, X-0 or other limited purpose form), the Company will give
written notice of its determination to the Investor. Upon the written request
from the Investor within ten (10) days after receipt of any such notice from the
Company, the Company will, except as herein provided, cause all the Shares and
Warrant Shares to be included in such registration statement. Nothing herein
shall prevent the Company from, at any time, abandoning or delaying any
registration in its sole discretion. If any registration pursuant to this
Section 4.1 shall be underwritten in whole or in part, the Company may require
that the Shares and Warrant Shares requested for inclusion pursuant to this
Section 4.1 be included in the underwriting on the same terms and conditions as
the securities otherwise being sold through the underwriters. In such event, the
Investor shall, if requested by the underwriters, execute an underwriting
agreement containing customary representations and warranties by selling
stockholders and a lock-up on shares not being sold. If in the good faith
judgment of the managing underwriter of such public offering the inclusion of
all of the Shares and Warrant Shares originally covered by a request for
registration (the "Requested Stock") would reduce the number of shares to be
offered by the Company or interfere with the successful marketing of the shares
of stock offered by the Company, the number of shares of Requested Stock
otherwise to be included in the underwritten public offering may be reduced pro
rata (by number of shares) among the holders thereof requesting such
registration or excluded in their entirety if so required by the underwriter. To
the extent only a portion of the Requested Stock is included in the underwritten
public offering, those shares of Requested Stock which are thus excluded from
the underwritten public offering shall be withheld from the market by the
holders thereof for a period, not to exceed 120 days, which the managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering. The obligation of the Company under this Section
4.1 shall not apply to Shares and Warrant Shares that at such time are eligible
for immediate resale pursuant to Rule 144(k) under the Securities Act.
4.2 Registration Procedures. The Company will, pursuant to the provisions
of Section 4.1 and subject to the limitations of the third sentence of such
section:
(a) prepare and file with the Securities and Exchange Commission
(the "SEC") a registration statement with respect to such securities, and use
its best efforts to cause such registration statement to become and remain
effective for at least 120 days;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for at least 120
days;
(c) furnish to the Investor copies of the final prospectus in order
to facilitate the public offering of the Shares and the Warrant Shares;
(d) advise the Investor, promptly after the Company shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its reasonable
efforts to prevent the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued.
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The Investor shall cooperate with the Company in providing the information
necessary to effect the registration of the Shares and the Warrant Shares,
including completion of customary questionnaires.
4.3 Expenses.
(a) With respect to any registration required pursuant to Section
4.1 hereof, all fees, costs and expenses of and incidental to such registration,
inclusion and public offering (as specified in paragraph (b) below) in
connection therewith shall be borne by the Company, provided, however, that the
Investor shall bear its pro rata share of any underwriting discount and
commissions and transfer taxes and the cost of its own counsel.
(b) The fees, costs and expenses of registration to be borne by the
Company as provided in paragraph (a) above shall include, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, and all legal fees and disbursements
and other expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered and
qualified (except as provided in 4.3(a) above). Fees and disbursements of
counsel and accountants for the Investor and any other expenses incurred by the
Investor not expressly included above shall be borne by the Investor.
V. MISCELLANEOUS
5.1 Notices. Unless otherwise specified herein, all such notices,
requests, consents, approvals and demands given or ------- made in connection
with the terms and provisions of this Agreement shall be deemed to have been
given or made when personally delivered, or, if mailed, upon the earlier of
actual receipt by the addressee or three days after being sent by registered or
certified mail, postage prepaid, or, in the case of overnight courier service
(which may be utilized hereunder), when delivered by the overnight courier
company to the respective address specified below, or, in the case of facsimile
transmission (which may be utilized hereunder), after receipt by the respective
addressee in each case to the appropriate addresses and telecopier numbers as
follows or to such other addresses and telecopier numbers as a party may
designate by notice to the other parties: (i) if to the Company: Techedge, Inc.,
00 Xxxx Xxxxxx Xxxxx, 0X, Xxxxxx, XX 00000, Telephone No.: 000-000-0000,
Facsimile No.: 000-000-0000 and (ii) if to the Investor: to the address
reflected on the Company's shareholder records.
5.2 Amendments. 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.
5.3 Successors and Assigns. 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. This Agreement 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 among them.
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5.4 Governing Law: Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Any action or
proceeding seeking to enforce any provision of, or based on any right arising
out of, this Agreement may be brought against any of the parties in the courts
of the State of New Jersey or the State of New York, as the party instituting
such suit may elect.
5.5 Counterparts. This Agreement may be executed in a number of identical
counterparts, each of which, for all purposes, is to be deemed an original, and
all of which collectively constitute one agreement, but in making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart. A facsimile or photocopy of an executed counterpart of this
Agreement shall be sufficient to bind the party or parties whose signature(s)
appear thereon.
5.6 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.
5.7 Termination; Survival. The provisions of this Agreement, including
without limitation the representations, warranties and covenants of the parties,
shall survive the Closing.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
TECHEDGE, INC.
By: /s/ Xxxxx Xxxx
------------------------------------
Name: Xxxxx Xxxx
Title: CEO
PACIFIC CENTURY FUND LLC
By: /s/ JianJun JI
------------------------------------
Name: JianJun JI
Title: Managing Member
IRS Employer I.D. Number:
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Appendix A
Investor Questionnaire
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TECHEDGE, INC.
INVESTOR QUESTIONNAIRE
The information contained in this questionnaire is being furnished in
order to determine whether the undersigned Investor subscription to purchase the
Securities can be accepted. The undersigned Investor represents that (a) the
information contained in this questionnaire is complete and accurate and (b) the
Investor will contact the Company immediately if any material change in any of
this information occurs before the Closing. Capitalized terms used in this
questionnaire, but not otherwise defined herein, shall have the meanings
ascribed thereto in the stock purchase agreement to which this questionnaire is
attached.
Please initial those representations applicable to you:
A. FOR INDIVIDUAL INVESTORS:
_____1. Investor represents that he or she has an individual net worth, or
together with his or her spouse a combined net worth, in excess of
$1,000,000. For purposes of this representation, "net worth" means
the excess of total assets at fair market value, including, home,
home furnishings and automobiles, over total liabilities.
_____2. Investor represents that he or she had an individual income of more
than $200,000 in each of the last two calendar years or joint income
with his or her spouse in excess of $300,000 in each of those years
and reasonably expects to reach the same income level in the current
calendar year.
B. FOR CORPORATIONS, PARTNERSHIPS OR LIMITED LIABILITY COMPANIES:
__X__3. Investor represents that it is a corporation, partnership or limited
liability company not formed for the specific purpose of acquiring
the Securities with total assets in excess of $5,000,000.
_____4. Investor represents that all of its equity owners meet the standard
set out in either Statement A(1) or Statement (A)(2) above. Please
list below the names of all equity owners of Investor. EACH SUCH
EQUITY OWNER MUST COMPLETE AN INVESTOR SUITABILITY QUESTIONNAIRE.
Name(s) of all Equity Owners (if applicable):
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C. FOR TRUSTS OTHER THAN EMPLOYEE BENEFIT TRUSTS:
______5. Investor represents that it has total assets in excess of
$5,000,000, was not formed for the specific purpose of acquiring the
Securities and that the investment is being directed by a
sophisticated person as defined below. For purposes of this
representation, a "sophisticated person" means a person who has such
knowledge and experience in financial and business matters that he
or she is capable of evaluating the merits and risks of the
prospective investment.
______6. Investor represents that it is (a) a bank as defined in Section
3(a)(2) of the Act, (b) acting in its fiduciary capacity as trustee,
and (c) subscribing for the purchase of the Securities being offered
on behalf of a trust.
______7. Investor represents that it is a revocable trust that may be amended
or revoked at any time by its grantors and that all of its grantors
meet the standard set out in either Statement (A)(1) or Statement
(A)(2) above. Please list below the names of all grantors. EACH SUCH
GRANTOR MUST COMPLETE AN INVESTOR SUITABILITY QUESTIONNAIRE.
Name(s) of Grantors (if applicable):
The undersigned has executed this questionnaire as of the 26th day of
April, 2005.
JianJun Ji
----------------------------------------
Name (Please Type or Print)
/s/ JianJun Ji
----------------------------------------
Signature
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