Exhibit 10.1
REGULATION S STOCK PURCHASE AGREEMENT
Dated August 18, 2003
for
KID CASTLE EDUCATIONAL CORPORATION
COMMON STOCK
REGULATION S STOCK PURCHASE AGREEMENT
Regulation S Stock Purchase Agreement ("Agreement"), dated as of August
18, 2003 by and between Kid Castle Educational Corporation, a Florida
corporation having an address at 0xx Xxxxx, 000-0 Xxxx Xxxxxx Xxxx, Xxxxxx,
X.X.X., Xxxxxx (the "Seller" or the "Company"), and GLOBE WISDOM INVESTMENTS
LIMITED, a Samoa international business company, the registered address of which
is P.O. Box 217, Apia, Samoa (collectively the "Purchaser").
WHEREAS, Seller desires to sell to Purchaser 2,883,460 shares of the
Seller's common stock, no par value per share (the "Common Stock"), (the
"Shares") on the terms and conditions set forth in this Agreement; and
WHEREAS, Purchaser desires to buy the Shares on the terms and conditions
set forth herein;
NOW THEREFORE, in consideration of the agreements, covenants and
representations hereinafter set forth, the receipt and adequacy of which is
hereby acknowledged, the parties, intending to be bound, agree as follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF SHARES
1.1. The Shares. The Seller agrees to sell to the Purchaser in an
offshore transaction negotiated outside the U.S. and to be
consummated and closed outside the U.S. and, in consideration of and
in express reliance upon the representations, warranties, covenants,
terms and conditions of this Agreement, the Purchaser agrees to
purchase from the Seller, on a best efforts basis, subject to the
conditions hereinafter set forth, 2,883,460 Shares of the Seller at
$0.7 price per share (the "Purchase Price") or $2,018,422, in the
aggregate purchase price (the "Aggregate Purchase Price").
1.2. Price; Closing. At each Closing, the Company will deliver to the
Purchaser certificates for the number of Shares purchased at the
Purchase Price set forth in Section 1.1 and the Purchaser will
deliver a wire transfer of immediately available funds to the
account of the Company, in an amount equal to the Purchase Price for
the Shares purchased at each Closing; provided that, Purchaser shall
use its best efforts to deliver wire transfers in an aggregate
amount equal to the Aggregate Purchase Price. Share certificate(s)
shall not be released or delivered until Seller has received the
Purchase Price for such Shares.
1.3. [Intentionally left blank]
1.4. Representations by the Purchaser. The Purchaser makes the following
representations and warranties to the Seller:
A. Access to Information. The Purchaser, in making the decision
to purchase the Shares, has relied upon the representations
and warranties contained in this Agreement, the
representations and warranties of the Seller as well as
independent investigations made by it and/or its
representatives, if any. The Purchaser and/or its
representatives during the course of this transaction, and
prior to the purchase of any Shares, has had the opportunity
to ask questions of and receive answers from the management of
the Seller concerning the business of the Seller and to
receive any additional information, documents, records and
books relative to the business, assets, financial condition,
results of operations and liabilities (contingent or
otherwise) of the Seller.
B. Sophistication and Knowledge. The Purchaser and/or its
representatives has such knowledge and experience in financial
and business matters that it can represent itself and is
capable of evaluating the merits and risks of the purchase of
the Shares. The Purchaser is not relying on the Seller with
respect to the tax and other economic considerations of an
investment in the Shares, and the Purchaser has relied on the
advice of, or has consulted with, the Purchaser's own
advisor(s). The Purchaser represents that it has not been
organized for the purpose of acquiring the Shares.
C. Lack of Liquidity. The Purchaser acknowledges that the
purchase of the Shares involves a high degree of risk and
further acknowledges that it can bear the economic risk of the
purchase of the Shares, including the total loss of its
investment. The Purchaser represents and understands that the
Shares may not be sold to a U.S. Person (as hereinafter
defined) or into the United States for a period of one (1)
year from the date of purchase and that Purchaser has no
present need for liquidity in connection with its purchase of
the Shares.
D. No Public Solicitation. The Purchaser is not purchasing the
Shares 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,
or any solicitation of a subscription by a person not
previously known to the Purchaser in connection with
investments in securities generally. Neither the Seller nor
the Purchaser has engaged in any "Directed Selling Efforts in
the U.S." as defined in Regulation S of the Securities Act of
1933, as amended (the "Securities Act") ("Regulation S").
E. Authority. The Purchaser has full right and power to enter
into and perform its obligations under this Agreement, and
this Agreement constitutes the Purchaser's valid and legally
binding obligation, enforceable in accordance with its terms.
The Purchaser is authorized and
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otherwise duly qualified to purchase and hold the Shares and
to enter into this Agreement.
F. Brokers or Finders. No person has or will have, as a result of
the transactions contemplated by this Agreement, any right,
interest or valid claim against or upon the Seller for any
commission, fee or other compensation as a finder or broker
because of any act or omission by the Purchaser or its
respective agents.
G. Compliance with Local Laws. Any resale of the Shares during
the `distribution compliance period' as defined in Rule 902(f)
to Regulation S shall only be made in compliance with
exemptions from registration afforded by Regulation S.
Further, any such sale of the Shares in any jurisdiction
outside of the United States will be made in compliance with
the securities laws of such jurisdiction. Purchaser will not
offer to sell or sell the Shares in any jurisdiction unless
the Purchaser obtains all required consents, if any.
H. Regulation S Exemption. The Purchaser understands that the
Shares are being offered and sold to it in reliance on an
exemption from the registration requirements of United States
federal and state securities laws under Regulation S
promulgated pursuant to the Securities Act and that the Seller
is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein in order to determine the
applicability of such exemptions and the suitability of the
Purchaser to acquire the Shares. In this regard, the Purchaser
represents, warrants and agrees that:
a. The Purchaser is not a U.S. Person (as defined below)
and is not an affiliate (as defined in Rule 501(b) under
the Securities Act) of the Seller. A "U.S. person" means
any one of the following:
i any natural person resident in the United States;
ii any partnership or corporation organized or
incorporated under the laws of the United States;
iii any estate of which any executor or administrator
is a U.S. person;
iv any trust of which any trustee is a U.S. person;
v any agency or branch of a foreign entity located
in the United States;
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vi any non-discretionary account or similar account
(other than an estate or trust) held by a dealer
or other fiduciary for the benefit or account of a
U.S. person;
vii any discretionary account or similar account
(other than an estate or trust) held by a dealer
or other fiduciary organized, incorporated or (if
an individual) resident in the United States; and
viii any partnership or corporation if:
(1) organized or incorporated under the laws of
any foreign jurisdiction; and
(2) formed by a U.S. person principally for the
purpose of investing in securities not
registered under the Securities Act, unless
it is organized or incorporated, and owned,
by accredited investors (as defined in Rule
501(a) under the Securities Act) who are not
natural persons, estates or trusts.
b. At the time of the origination of contact concerning
this Agreement and the date of the execution and
delivery of this Agreement, the Purchaser was outside of
the United States.
c. The Purchaser will not, during the period commencing on
the date of purchase of the Shares and ending on the
first anniversary of such date, or such shorter period
as may be permitted by Regulation S or other applicable
securities law (the "Restricted Period"), offer, sell,
pledge or otherwise transfer the shares in the United
States, or to a U.S. person or for the account or
benefit of a U.S. person, or otherwise in a manner that
is not in compliance with Regulation S.
d. The Purchaser will, after expiration of the Restricted
Period, offer, sell, pledge or otherwise transfer the
Shares only pursuant to registration under the
Securities Act or an available exemption therefrom and,
in accordance with all applicable state and foreign
securities laws.
e. The Purchaser has not engaged in and prior to the
expiration of the Restricted Period will not engage in,
any short selling of or any hedging transaction with
respect to the Shares within the United States,
including without limitation, any put, call or other
option transaction, option writing or equity swap.
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f. Neither the Purchaser nor or any person acting on its
behalf has engaged, nor will, during the Restricted
Period, engage in any directed selling efforts to any
U.S. person with respect to the Shares and the Purchaser
and any person acting on its behalf have complied and
will comply with the "offering restrictions"
requirements of Regulation S under the Securities Act.
g. The transactions contemplated by this Agreement have not
been pre-arranged with a buyer located in the United
States or with a U.S. person, and are not part of a plan
or scheme to evade the registration requirements of the
Securities Act.
h. Neither the Purchaser nor any person acting on its
behalf has undertaken or carried out any activity for
the purpose of, or that could reasonably be expected to
have the effect of, conditioning the market in the
United States, its territories or possessions, for any
of the Shares. The Purchaser agrees not to cause any
advertisement of the Shares to be published in any
newspaper or periodical or posted in any public place
and not to issue any circular relating to the Shares,
except such advertisements that include the statements
required by Regulation S under the Securities Act, and
only offshore and not in the United States or its
territories, and only in compliance with any local
applicable securities laws.
i. Each certificate representing the Shares shall be
endorsed with the following legends, in addition to any
other legend required to be placed thereon by applicable
federal or state securities laws:
(A) "THE SHARES ARE BEING OFFERED TO
INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE SECURITIES ACT")) AND WITHOUT
REGISTRATION WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN
RELIANCE UPON REGULATION S PROMULGATED UNDER THE
SECURITIES ACT."
(B) "TRANSFER OF THESE SHARES IS PROHIBITED,
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION
FROM REGISTRATION. HEDGING TRANSACTIONS MAY
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NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT."
j. The Purchaser consents to the Seller making a notation
on its records or giving instructions to any transfer
agent of the Seller in order to implement the
restrictions on transfer of the Shares set forth in this
Article 1.4.
k. Purchaser agrees that it will not transfer the Shares,
and the Seller shall not be required to transfer the
shares unless the transferee executes a representation
letter substantially in accordance with Exhibit A
hereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
2.1. Organization and Standing of the Seller. Seller has been organized
and is validly existing and in good standing under the laws of
Florida. The Seller has the requisite corporate power and authority
necessary to deliver this Agreement and to sell the Shares and to
carry out the provisions of the Agreement.
2.2. Authority of the Seller. The execution and delivery by the Seller of
the Agreement and the performance by the Seller of its obligations
hereunder, have been duly and validly authorized by all requisite
corporate action on the part of the Seller. The Agreement, when
executed and delivered, will be legally valid and binding
obligations of the Seller, enforceable against the Seller 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 general principles of equity that restrict
the availability of equitable remedies. To the Seller's knowledge,
the execution and delivery of the Agreement by the Seller and the
performance by the Seller of its obligations hereunder do not, and
will not at any time Purchaser delivers a Purchase Notice, (i)
conflict with or violate the provisions of the Seller's Charter or
Bylaws, (ii) require on the part of the Seller any filing with, or
any permit, authorization, consent or approval of, any Governmental
Entity, (iii) conflict with, result in a breach of, constitute (with
or without due notice or lapse of time or both) a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice,
consent or waiver under, any contract, lease, sublease, license,
sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, lien, encumbrance or
other arrangement to which the Seller is a party or by which Seller
is bound or to which the Seller's assets are subject, (iv) result in
the imposition of any security interest upon any assets of the
Seller or (v)
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violate or contravene any United States federal or state statute,
rule or regulation or any order, writ, judgment, injunction, decree,
determination or award.
2.3. Governmental Consents; Offering Exemption.
A. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or
filing with, any governmental entity or regulatory body (a
"Governmental Entity") is required on the part of the Seller
in connection with the execution and delivery of the
Agreement, the offer, issue, sale and delivery of the Shares
or the other transactions to be consummated as contemplated by
this Agreement except qualifications or filings under the
Securities Act and other applicable state securities laws
which qualifications or filings, if required, will be obtained
or made and will be effective within the time periods required
by law.
2.4. Litigation. To the best of the Seller's knowledge and belief, there
is no action, suit, proceeding or investigation of a material
nature, pending or is currently threatened, against the Seller. The
Seller is not aware of any basis for any of the foregoing or any
intent on its part to initiate any of the foregoing.
2.5. Brokers or Finders. The Seller has not agreed to incur, directly or
indirectly, any liability for brokerage or finders' fees, agents'
commissions or other similar charges from Purchaser in connection
with the Documents or any of the transactions contemplated hereby or
thereby.
2.6. Disclosures. The Seller has provided the Purchaser with all
information requested by the Purchaser in connection with its
decision to purchase the Shares. Neither this Agreement, any Exhibit
hereto, nor any report, certificate or instrument furnished to the
Purchaser or its agents in connection with the transactions
contemplated by this Agreement, when read together, contains or will
contain any material misstatement of fact or omits to state a
material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE III
REGISTRATION RIGHTS
3.1. Piggy-Back and Demand Registrations.
A. If at any time following the of purchase of the Shares, the
Seller shall determine to register for its own account or the
account of others under the Securities Act (including pursuant
to a demand for registration of any stockholder of the Seller)
any of its equity securities, other than on Form S-4 or Form
S-8 or their then equivalents relating to shares of Common
Stock to be issued solely in connection with any acquisition
of any entity or business or shares of Common Stock issuable
in connection with stock
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option or other employee benefit plans, it shall send to the
Purchaser written notice of such determination and, if within
fifteen (15) days after receipt of such notice, the Purchaser
shall so request in writing, the Seller shall use its best
efforts to include in such registration statement all or any
part of the Registrable Shares the Purchaser requests to be
registered, except that if, in connection with the initial
public offering of the Seller, the managing underwriter shall
impose a limitation on the number of shares of such Common
Stock which may be included in the registration statement
because, in its judgment, such limitation is necessary to
effect an orderly public distribution, then the Seller shall
be obligated to include in such registration statement only
such limited portion of the Registrable Shares with respect to
which the Purchaser has requested inclusion hereunder on a pro
rata basis. For purposes of this Agreement, "Registrable
Shares" shall mean such number of Shares purchased under this
Agreement, provided, however, that shares of common Stock
which are Registrable Shares shall cease to be Registrable
Shares upon the consummation of any sale pursuant to a
registration statement or Rule 144 under the Securities Act.
B. If at any time after the purchase of the Shares, the holders
of Registrable Shares who are entitled to registration rights
under this Section 3.1B shall notify the Company in writing
that it or they intend to offer or cause to be offered for
public sale Registrable Shares held by such holders which
shares constitute at least [twenty percent (20%)] of the
Registrable Shares, if no such public trading market exists at
such time, then the Company will so notify all holders of
Registrable Shares, including all holders who have a right to
acquire Registrable Shares. Upon written request of any holder
given within fifteen (15) days after the receipt by such
holder from the Company of such notification, the Company will
use its best efforts to cause such of the Registrable Shares
as may be requested by any holder thereof (including the
holder or holders giving the initial notice of intent to
offer) to be registered under the Securities Act as
expeditiously as possible. The Company shall not be required
to file a registration statement with the Commission pursuant
to this Section 3.1B at any time while another registration
statement (other than on Form S-3 or S-8) of the Company has
been filed with the Commission and is not yet effective or
within six months after the effective date of another
registration statement (other than on Form S-3 or S-8) filed
by the Company with the Commission. The Company shall not be
required to effect more than one registration during any
twelve (12) month period pursuant to this Section 3.1B and two
such registrations in the aggregate. In connection with any
request by any holder of Registrable Securities for
registration thereof pursuant to this Section, the Company
shall have the right to defer the filing of a registration
statement with the Commission for up to 30 days
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after such filing would otherwise be required hereunder if the
Company shall furnish to the holders requesting such
registration a certificate approved by the Board of Directors
stating that, in the good faith judgment of the Company, it
would be detrimental to the interests of the Company for such
registration statement to be filed at such time.
3.2. Provisions Applicable to Registration. The following provisions
shall apply, as applicable, in connection with the Registrable
Shares to be included in the registration statement pursuant to this
Article 3:
A. The Purchaser, if reasonably requested by the Seller or by the
underwriter with respect to any public offering, shall agree
not to sell, make any short sale of, loan, grant any options
for the purchase of, or otherwise dispose of any Registrable
Shares (other than those included in the registration) without
the prior written consent of the Seller or such underwriters,
as the case may be, for such period of time (not to exceed one
hundred eighty (180) days), from the effective date of such
registration statement, or the commencement of the offering,
as applicable, as may be requested by the underwriters,
provided that all other holders of the class of securities
being registered shall make the same agreements as those
required to be made by the Purchaser under this Article 3.2A.
B. The Purchaser shall promptly provide the Seller with such
non-confidential and non-proprietary information as it shall
reasonably request and that is available to the Purchaser in
order to prepare the registration statement.
C. All reasonable and necessary expenses in connection with the
preparation of the registration statement, including, without
limitation, any and all legal, accounting and filing fees, but
not including fees and disbursements of experts and counsel
retained by the Purchaser or underwriting discounts and
commissions to be paid by the Purchaser, shall be borne by the
Seller.
D. The Seller shall use its best efforts to effect such
registration permitting the sale of such Registrable Shares in
accordance with the intended method or methods of distribution
thereof, and pursuant thereto, the Seller shall as
expeditiously as possible:
a. prepare and file with the SEC a registration statement
relating to the applicable registration on any
appropriate form under the Securities Act, which form
shall be available for the sale of the Registrable
Shares in accordance with the intended method or methods
of distribution thereof and use its best efforts to
cause such registration statement to become effective
and keep such registration statement effective in
accordance with this Article 3.2;
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b. prepare and file with the SEC such amendments and
post-effective amendments to the registration statement
as may be necessary to keep the registration effective
until all such Registrable Shares are sold; cause the
prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Securities Act; and comply with
the provisions of the Securities Act with respect to the
disposition of all securities covered by such
registration statement during the applicable period in
accordance with the intended method or methods of
distribution by the sellers thereof as set forth in such
registration statement or supplement to the prospectus;
provided, however that the Seller may, from time to
time, request that the Purchaser immediately discontinue
the disposition of the Registrable Shares if the Seller
determines, in the good faith exercise of its reasonable
business judgment, that the offering and disposition of
the Registrable Shares could materially interfere with
bona fide financing, acquisition or other material
business plans of the Seller or would require disclosure
of non-public information, the premature disclosure of
which could materially adversely affect the Seller (it
being acknowledged that the Seller is not required to
disclose in such request any such transaction, plan or
non-public information), so long as the Seller promptly
after the disclosure of such transaction, plan or
non-public information complies with this Article
3.2D(b);
c. notify the Purchaser and the underwriter, if any,
promptly, and (if requested by any such person) confirm
such advice in writing, (A) when the prospectus or any
prospectus supplement or post-effective amendment has
been filed, and, with respect to the registration
statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the
SEC for amendments or supplements to the registration
statement or the prospectus or for additional
information, (C) of the issuance by the SEC of any stop
order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that
purpose, (D) of the receipt by the Seller of any
notification with respect to the suspension of the
qualification of the Registrable Shares for sale in any
jurisdiction or the initiation of any proceedings for
such purpose and (E) subject to the proviso below, of
the happening of any event as a result of which the
prospectus included in such registration statement, as
then in effect, includes an untrue statement of a
material fact or omits to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances
then
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existing and, subject to Article 3.2D(b) above, at the
request of any such person, prepare and furnish to such
person a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of
such shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
the statements therein not misleading in light of the
circumstances then existing; provided, however, the
Seller need not disclose the event if it otherwise has
not disclosed such event to the public;
d. if requested by the underwriter or the Purchaser,
promptly incorporate in a prospectus supplement or
post-effective amendment such information as the
underwriter and the Purchaser agree should be included
therein relating to the plan of distribution with
respect to such Registrable Shares, including, without
limitation, the purchase price being paid therefor by
such underwriters and with respect to any other terms of
the underwritten offering of the Registrable Shares to
be sold in such offering; and make all required filings
of such prospectus supplements or post-effective
amendments as soon as notified of the matters to be
incorporated in such prospectus supplements or
post-effective amendments;
e. deliver to the Purchaser and the underwriters, if any,
without charge, as many copies of the prospectus
(including each preliminary prospectus) in conformity
with the requirement of the Securities Act and any
amendments or supplements thereto as such persons may
reasonably request and such other documents as they may
reasonably request to facilitate the prior sale or other
disposition of such Registrable Shares;
f. prior to any public offering of Registrable Shares,
register or qualify or cooperate with the Purchaser, or
the underwriters, if any, in connection with the
registration or qualification of such Registrable Shares
for offer and sale under the securities or state
securities laws of such jurisdictions as the Purchaser
or underwriters, if any, reasonably requests in writing
and do any and all other acts or things necessary or
advisable to enable the disposition in such
jurisdictions of the Registrable Shares covered by the
registration statement; provided, however, that the
Seller shall not be required to qualify to do business
in any jurisdiction where it is not then so qualified or
to take any action that would subject it to general
service of process in any such jurisdiction
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where it is not then so subject or would subject the
Seller to any tax in any such jurisdiction where it is
not then so subject; and
E. Notwithstanding the provisions of this Article 3 to the
contrary, the Seller:
a. may require the Purchaser to furnish to the Seller such
information regarding the distribution of such
securities as the Seller may from time to time
reasonably request in writing, and the Seller may limit
such registration rights to situations where a proposed
distribution of Registrable Shares is to be effected
forthwith upon the effectiveness of the registration
statement; and
b. The undersigned will covenant that the Purchaser has not
taken, and will not take, directly, or indirectly, any
action designed, or which might reasonably be expected,
to cause or result in, under the Securities Exchange Act
or otherwise, or which has caused or resulted in,
stabilization or manipulation of the price of any
security of the Seller to facilitate the sale or resale
of the Registrable Shares.
F. Indemnification.
a. In the event of a registration or qualification of any
Registrable Shares under the Securities Act pursuant to
the provisions of this Article 3, the Seller shall
indemnify and hold harmless the Purchaser, the officers
and directors of the Purchaser and each director or
officer of any person or entity who controls the
Purchaser, each underwriter of such Registrable Shares
and each other person or entity who controls the
Purchaser or such underwriter within the meaning of the
Securities Act (collectively, the "Indemnitees"), from
and against any and all losses, claims, damages or
liabilities, joint or several, to which any of the
Indemnitees, joint or several, may become subject under
the Securities Act or the applicable securities laws or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of
or are based upon:
(1) (x) any untrue statement or alleged untrue
statement of any material fact contained in any
registration statement under which such
Registrable Shares were registered or qualified
under the Securities Act, or any amendment or
supplement thereto, any preliminary prospectus or
final prospectus contained therein, or any
supplement thereto, or any document prepared
and/or furnished
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to the Purchaser incident to the registration or
qualification on any Registrable Shares, or
(y) the omission or alleged omission to state in
any registration statement a material fact
required to be stated therein or necessary to make
the statements therein not misleading or, with
respect to any prospectus, necessary to make the
statements therein, in light of the circumstances
under which they were made, not misleading, or
(z) any violation by the Seller of the Securities
Act or state securities or "blue sky" laws
applicable to the Seller and relating to action or
inaction required of the Seller, in connection
with such registration or qualification under such
state securities or "blue sky" laws, and in each
case shall reimburse the Indemnitees for any legal
or other expenses reasonably incurred by such
Indemnitees in connection with investigating or
defending any such loss, claim, damage or
liability (or action in respect thereof);
provided, however, that the Seller shall not be
liable in any such case to the extent that any
such loss, claim, damage or liability (or action
in respect thereof) arises out of or is based upon
an untrue statement or alleged untrue statement or
omission or alleged omission made in such
registration statement in reliance upon and in
conformity with information furnished to the
Seller through an instrument duly executed by such
Indemnitees; and provided further, that the Seller
shall not be liable in any such case to the extent
that any such loss, claim, damage or liability
(or action in respect thereof) arises out of or is
based upon an untrue statement or alleged untrue
statement or omission or alleged omission in such
registration statement, which untrue statement or
alleged untrue statement or omission or alleged
omission is completely corrected in an amendment
or supplement to the registration statement and
such the Indemnitee thereafter fails to deliver or
cause to be delivered such registration statement
as so amended or supplemented prior to or
concurrently with the sale of the Registrable
Shares to the person asserting
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such loss, claim, damage or liability (or actions
in respect thereof) or expense after the Seller
has furnished the Purchaser with the same.
b. In the event of the registration or qualification of any
Registrable Shares under the Securities Act pursuant to
the provisions of this Article 3, the Purchaser shall
indemnify and hold harmless the Seller, each person who
controls the Seller within the meaning of the Securities
Act, each officer and director of the Seller and any
other selling holder from and against any losses,
claims, damages or liabilities to which the Seller, such
controlling person, any such officer or director or any
other selling holder may become subject under the
Securities Act or the applicable securities laws or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of
or are based upon (x) any untrue statement or alleged
untrue statement of any material fact contained in any
registration statement under which such Registrable
Shares were registered or qualified under the Securities
Act, or any amendment or supplement thereto, or (y) the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading, which untrue
statement or alleged untrue statement or omission or
alleged omission was made therein in reliance upon and
in conformity with written information furnished to the
Seller through an instrument duly executed by the
Purchaser specifically for use in preparation thereof,
and in each case shall reimburse the Seller, such
controlling person, each such officer or director and
any other selling holder for any legal or other expenses
reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage
or liability (or action in respect thereof).
c. Promptly after receipt by a person entitled to
indemnification under this Article 3.2F (an "Indemnified
Party") of notice of the commencement of any action or
claim relating to any registration statement filed under
the provisions of this Article 3 or as to which
indemnity may be sought hereunder, such Indemnified
Party shall, if a claim for indemnification hereunder in
respect thereof is to be made against any other party
hereto (an "Indemnifying Party"), give written notice to
such Indemnifying Party of the commencement of such
action or claim, but the omission so to notify the
Indemnifying Party will not relieve such person from any
liability that such person may have to any Indemnified
Party otherwise than pursuant to the provisions of this
Article 3.2F and shall also not relieve the Indemnifying
Party of such party's
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obligations under this Article 3.2F, except to the
extent that the omission so to notify results in the
Indemnifying Party being damaged solely as a result of
the failure to give timely notice. In case any such
action is brought against an Indemnified Party, and such
party notifies an Indemnifying Party of the commencement
thereof, the Indemnifying Party shall be entitled (at
such party's own expense) to participate in and, to the
extent that the Indemnifying Party may wish, jointly
with any other Indemnifying Party similarly notified, to
assume the defense, with counsel satisfactory to such
Indemnified Party, of such action and/or to settle such
action and, after notice from the Indemnifying Party to
such Indemnified Party of its election so to assume the
defense thereof, the Indemnifying Party shall not be
liable to such Indemnified Party for any legal or other
expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof, other than the
reasonable cost of investigation; provided, however,
that no Indemnifying Party and no Indemnified Party
shall enter into any settlement agreement that would
impose any liability on such other party or parties
without the prior written consent of such other party or
parties, unless such other party or parties are fully
indemnified to such party's satisfaction, as the case
may be, against any such liability.
d. If for any reason the indemnification provided for in
this Article 3 is unavailable to an Indemnified Party or
is insufficient to hold it harmless as contemplated by
this Article 3, then the Indemnifying Party shall
contribute to the amount paid or payable by the
Indemnified Party as a result of such loss, claim,
damage, liability or action in such proportion as is
appropriate to reflect to only the relative benefits
received by the Indemnified Party and the Indemnifying
Party, but also the relative fault of the Indemnified
Party and the Indemnifying Party, as well as any other
relevant equitable considerations. No person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of
such fraudulent misrepresentation.
ARTICLE IV
MISCELLANEOUS
4.1. No Waiver; Cumulative Remedies. No failure or delay on the part of
any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of
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any other right, power or remedy hereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided
by law.
4.2. Amendments, Waivers and Consents. Any provision in the Agreement to
the contrary notwithstanding, and except as hereinafter provided,
changes in, termination or amendments of or additions to this
Agreement may be made, and compliance with any covenant or provision
set forth herein may be omitted or waived, if the Seller shall
obtain consent thereto in writing from the Purchaser. Any waiver or
consent may be given subject to satisfaction of conditions stated
therein and any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
4.3. Addresses for Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including
telegraphic communication) and mailed, telegraphed or delivered to
each applicable party at the address set forth herein or at such
other address as to which such party may inform the other parties in
writing in compliance with the terms of this Article. All such
notices, requests, demands and other communications shall be
considered to be effective when delivered.
4.4. Costs, Expenses and Taxes. The Seller shall pay any and all stamp,
or other similar taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement , the
issuance of any securities and the other instruments and documents
to be delivered hereunder or thereunder (other than taxes on the
Purchaser's income), and agrees to save the Purchaser harmless from
and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
4.5. Effectiveness; Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the Seller and the
Purchaser and their respective successors and assigns; provided,
that, the Seller may not assign any of its rights or obligations
under this Agreement without the prior written consent of the
Purchaser. The Purchaser may assign all or any part of its rights
and obligations hereunder to any person who acquires any Shares
owned by the Seller subject to the conditions of this Agreement and
the assumption by the assignee of any obligations relating to the
rights assigned.
4.6. Prior Agreements. This Agreement and other documents executed and
delivered in connection herewith constitute the entire agreement
between the parties and supersede any prior understandings or
agreements concerning the subject matter hereof.
4.7. Severability. The provisions of this Agreement are severable and, in
the event that any court of competent jurisdiction shall determine
that any one or more of the provisions or part of a provision
contained herein shall, for any reason, be held
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to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of the Agreement and the
terms of the Shares shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of a
provision, had never been contained herein, and such provisions or
part reformed so that it would be valid, legal and enforceable to
the maximum extent possible.
4.8. Governing Law; Venue.
A. This Agreement shall be enforced, governed and construed in
accordance with the laws of New York without giving effect to
choice of laws principles or conflict of laws provisions. Any
suit, action or proceeding pertaining to this Agreement or any
transaction relating hereto shall be brought to the courts of
New York in New York, United States of America, and the
undersigned hereby irrevocably consents and submits to the
jurisdiction of such courts for the purpose of any such suit,
action, or proceeding. The parties acknowledges and agrees
that venue hereunder shall lie exclusively in New York, United
States of America.
B. Seller hereby waives, and agrees not to assert against the
Purchaser, or any successor assignee thereof, by way of
motion, as a defense, or otherwise, in any such suit, action
or proceeding, (i) any claim that the Seller is not personally
subject to the jurisdiction of the above-named courts, and
(ii) to the extent permitted by applicable law, any claim that
such suit, action or proceeding is brought in an inconvenient
forum or that the venue of any such suit, action or proceeding
is improper or that this Agreement may not be enforced in or
by such courts.
4.9. Headings. Article, section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
4.10. Survival of Representations and Warranties. All representations and
warranties made in the Agreement, the Shares, or any other
instrument or document delivered in connection herewith or
therewith, shall survive the execution and delivery hereof or
thereof.
4.11. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart.
4.12. Further Assurances. From and after the date of this Agreement, upon
the request of the Seller or the Purchaser, the Seller and the
Purchaser shall execute and deliver such instruments, documents and
other writings as may be reasonably
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necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of the Agreement and the Shares.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed as of the date first above written.
KID CASTLE EDUCATIONAL CORPORATION
By: Xxxx Xxx An
--------------------------------
Name: Xxxx Xxx An
Title: Director
GLOBE WISDOM INVESTMENTS LIMITED
By: Xx Xxxxx-xxxxx
--------------------------------
Name: Xx Xxxxx-xxxxx
Title: Director
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