EXHIBTI 2.1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated November 13, 2006, by and among
WEALTHCRAFT SYSTEMS INC., a Nevada corporation having its business address at
Room 1005, 10th Floor, Universal Trade Centre, 3 Xxxxxxxxx Road, Hong Kong, SAR
(the "Company") and SERENDIPITY VENTURES LIMITED, a Seychelles company having
its registered office at Xxxxxx Xxxxx Xxxxxx - 0xx Xxxxx, Xxxxxxxx, Xxxx,
Xxxxxxxxxx (the "Purchaser").
ARTICLE I
DEFINITIONS
1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Agreement" means this Stock Purchase Agreement as from time
to time amended and in effect between the parties, including all Exhibits
hereto.
"Board of Directors" or "Board" means the board of directors
of the Company as constituted from time to time.
"Claims Period" shall have the meaning assigned to that term
in Section 7.02.
"Closing" shall have the meaning assigned to that term in
Section 2.02.
"Commission" shall mean the United States Securities and
Exchange Commission or any other federal agency at the time administering the
Securities Act.
"Common Stock" includes (a) the Company's Common Stock, $0.001
par value, as authorized on the date of this Agreement, (b) any other capital
stock of any class or classes (however designated) of the Company authorized on
or after the date hereof, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to a preference, and the holders of which
shall ordinarily, in the absence of contingencies or in the absence of any
provision to the contrary in the Company's Certificate of Incorporation, be
entitled to vote for the election of a majority of directors of the Company
(even though the right so to vote has been suspended by the happening of such a
contingency or provision), and (c) any other securities into which or for which
any of the securities described in (a) or (b) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
"Damages" shall have the meaning assigned to that term in
Section 7.02.
"Equity Security" means any stock or similar security,
including, without limitation, securities containing equity features and
securities containing profit participation features, or any security convertible
into or exchangeable for, with or without consideration, any stock or similar
security, or any security carrying any warrant, right or option to subscribe for
or purchase any shares of capital stock, or any such warrant or right.
"Governmental Authority" means any federal, national, state,
provincial, municipal or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, commission, court, tribunal,
official, arbitrator or arbitral body, in each case whether U.S. or non-U.S.
"Law(s)" means, with respect to any Person, any United States
or non-United States federal, national, state, provincial, local, municipal,
international, multilateral or other law (including common law), constitution,
statute, code, ordinance, rule, regulation or treaty applicable to such Person.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind, including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof and the filing of or agreement to give any financing statement under the
U.S. Uniform Commercial Code or similar type Law of any jurisdiction and
including any Lien arising by Law.
"Material Adverse Effect" means, when used with respect to the
Company or any Subsidiary, as the case may be, any change, effect or
circumstance which, individually or in the aggregate, would reasonably be
expected to (a) have a material adverse effect on the business, assets,
financial condition or results of operations of the Company or its Subsidiaries,
as the case may be, in each case taken as a whole, or (b) materially impair the
ability of the Company or its Subsidiaries, as the case may be, to perform their
obligations under this Agreement, excluding any change, effect or circumstance
resulting from (i) the announcement, pendency or consummation of the
transactions contemplated by this Agreement, (ii) changes in the United States
securities markets generally, or (iii) changes in general economic, currency
exchange rate, political or regulatory conditions in industries in which the
Company or its Subsidiaries, as the case may be, operate.
"Order" means any award, decision, injunction, judgment,
order, ruling, subpoena, or verdict entered, issued, made, or rendered by any
Governmental Authority.
"Organizational Documents" means (a) the articles or
certificate of incorporation, memorandum and articles of association and/or the
by-laws or code of regulations of a corporation; (b) the partnership agreement
and any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) the articles or certificate of formation and operating
agreement of a limited liability company; (e) any other document performing a
similar function to the documents specified in clauses (a), (b), (c) and (d)
adopted or filed in connection with the creation, formation or organization of a
Person; and (f) any and all amendments to any of the foregoing.
"Person" or "person" means an individual, corporation,
partnership, joint venture, trust, university, or unincorporated organization,
or a government, or any agency or political subdivision thereof.
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative or
investigative) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Authority.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the Commission
(or of any other federal agency then administering the Securities Act)
thereunder, or any successor statute all as the same shall be in effect at the
time.
"Survival Period" shall have the meaning assigned to that term
in Section 7.01.
"Transaction Documents" means, collectively, this Agreement,
the Notes and all agreements, instruments and other documents to be executed and
delivered in connection with the transactions contemplated by this Agreement.
"U.S." means the United States of America.
"U.S. Person" has the meaning set forth in Regulation S.
ARTICLE II
PURCHASE, SALE AND TERMS OF SHARES
2.01. THE SHARES. On the date hereof, the Purchaser agrees to purchase
an aggregate of 375,000 shares (the "Shares") of Common Stock of the Company for
the aggregate amount of $1,650,000, or $4.40 per share, of which $1,000,000
shall be payable at the Initial Closing (as hereinafter defined) and $650,000
shall be paid from time to time until the second anniversary of the Closing to
discharge invoices for legal, accounting and investor relations services
incurred by the Company (the "Funds"). The Company has authorized the issuance
and sale of 375,000 shares of its Common Stock (such shares being referred to as
the "Shares"), subject to the terms and conditions hereof.
2.02. CLOSINGS. The Company agrees to issue, and sell to the Purchaser
and, in consideration of and in express reliance upon the representations,
warranties, covenants, terms and conditions of this Agreement, the Purchaser
agrees the Shares. The initial closing of the purchase and sale of the Shares
shall occur at such time and place specified by the Purchaser, simultaneous with
the closing of that certain Share Exchange Agreement dated October 19, 2006 by
and among the Company, certain shareholders of the Company, WealthCraft Systems
Ltd., a private limited company organized under the laws of the Honk Kong
Special Administrative Region of the People's Republic of China ("WealthCraft"),
and the shareholders of WealthCraft, or at such time and date thereafter as the
Purchaser and the Company may agree (the "Initial Closing"). At the Initial
Closing, the Purchaser shall pay to the Company $1,000,000 against delivery of
stock certificate(s) to the Purchaser evidencing the Shares. Additional closings
("Subsequent Closings") shall be held from time to time (but not more frequently
than monthly) between the date hereof until the second anniversary of the
Initial Closing, within five business days after the Company presents to the
Purchaser invoices for legal, accounting and investor relations services
incurred by the Company. At the option of the Purchaser, such payments shall be
made directly in satisfaction of the invoices presented.
If at any time Purchaser fails to make the required payment at any Subsequent
Closing, then at the sole discretion the Purchaser (i) it shall pay the
remaining balance due under this Agreement or return to the Company such number
of shares as shall equal the unpaid balance of the purchaser price.
2.03. REPRESENTATIONS BY THE PURCHASER. The Purchaser makes the
following representations and warranties to the Company:
(i) The Purchaser is a corporation duly incorporated and
validly existing under the Laws of the Purchaser's jurisdiction of incorporation
and has all requisite corporate power and authority to conduct its business in
the manner in which it is presently being conducted. The Purchaser has all
requisite power and authority to execute, deliver and perform this Agreement and
the Transaction Documents to consummate the transactions contemplated hereby.
The execution delivery and performance of this Agreement and the Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by the Board of Directors of the Purchaser, if
applicable, and no other corporate proceedings are necessary to authorize the
execution, delivery and performance of this Agreement and the Transaction
Documents or the consummation of the transactions contemplated hereby and
thereby. Assuming the due authorization, execution and delivery of this
Agreement and the Transaction Documents by the Company, this Agreement and the
Transaction Documents constitute, the valid and legally binding obligations of
the Purchaser, enforceable against the Purchaser in accordance with their terms,
subject to the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar Law affecting the enforceability of creditors'
rights generally and to the effect of general principles of equity which may
limit the availability of remedies, whether in a proceeding at Law or in equity
(the "Bankruptcy Exception").
(ii) Neither the execution, nor delivery by the Purchaser of
this Agreement or any Transaction Document to which the Purchaser is a party,
nor the consummation or performance by the Purchaser of the transactions
contemplated hereby or thereby will, directly or indirectly, (a) contravene,
conflict with, or result in a violation of any provision of the Organizational
Documents of the Purchaser; (b) contravene, conflict with, constitute a default
(or an event or condition which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or acceleration of,
any agreement or instrument to which the Purchaser is a party or by which the
properties or assets of the Purchaser are bound; or (c) contravene, conflict
with, or result in a violation of, any Law or Order to which the Purchaser, or
any of the properties or assets of the Purchaser, may be subject.
(iii) The Purchaser has been supplied with or has had
sufficient access to all information, including financial statements and other
financial information of the Company, and has been afforded with an opportunity
to ask questions of and receive answers concerning information to which a
reasonable investor would attach significance in making investment decisions, so
that as reasonable investors the Purchaser has been able to make the decision to
purchase the Shares.
(iv) The Purchaser, in making the decision to purchase the
Shares, has relied upon independent investigations of the Company made by it.
The Purchaser has such knowledge and experience in financial, tax and business
matters so as to enable the Purchaser to utilize the information made available
to the Purchaser in connection with the offering of the Shares to evaluate the
merits and risks of an investment in the Shares and to make an informed
investment decision with respect thereto.
(v) The Purchaser understands that the Shares are being and
will be sold in reliance on an exemption from the registration requirements of
U.S. and foreign securities Laws, and that the Company 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
purchase the Shares. The representations, warranties and agreements contained
herein are true and correct as of the date hereof and may be relied upon by the
Company, and the Purchaser will notify the Company immediately of any adverse
change in any such representations and warranties which may occur prior to the
Closing.
(vi) All offers and sales of the Shares prior to the
registration of the Shares under the Securities Act or pursuant to an exemption
from registration under the Securities Act shall be made only pursuant to such a
registration or such exemption from registration.
(vii) The Purchaser is acquiring the Shares for investment
purposes.
(viii) The Purchaser is not a U.S. Person and further makes
the representations and warranties to the Company set forth on Schedule 2.3.
(ix) The Purchaser agrees that the certificates representing
the Shares shall contain a legend to the following effect.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS
AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN
WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN
OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE SECURITIES ACT.
(x) OPINION. The Purchaser will not transfer any or all of the
Shares absent an effective registration statement under the Securities Act and
applicable state securities Law covering the disposition of the Shares, without
first providing the Company with an opinion of counsel (which counsel and
opinion are reasonably satisfactory to the Company) to the effect that such
transfer will be exempt from the registration and the prospectus delivery
requirements of the Securities Act and the registration or qualification
requirements of any applicable U.S. state securities Laws.
(xi) 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 Company 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.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser as follows:
3.01. AUTHORIZATION. The Company has all requisite authority and power
(corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents to
which the Company is a party, to consummate the transactions contemplated by
this Agreement and each of the Transaction Documents to which the Company is a
party and to perform its obligations under this Agreement and each of the
Transaction Documents to which the Company is a party. The execution, delivery
and performance by the Company of this Agreement and each of the Transaction
Documents to which the Company is a party have been duly authorized by all
necessary corporate action and do not require from the Board of Directors or the
stockholders of the Company any consent or approval that has not been validly
and lawfully obtained. The execution, delivery and performance by the Company of
this Agreement and each of the Transaction Documents to which the Company is a
party requires no authorization, consent, approval, license, exemption of or
filing or registration with any Governmental Authority or other Person.
3.02. NO VIOLATION. Neither the execution nor the delivery by the
Company of this Agreement or any Transaction Document to which the Company is a
party, nor the consummation or performance by the Company of the transactions
contemplated hereby or thereby will, directly or indirectly, (a) contravene,
conflict with, or result in a violation of any provision of the Organizational
Documents of the Company; (b) contravene, conflict with, constitute a default
(or an event or condition which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or acceleration of, or
result in the imposition or creation of any Lien under, any agreement or
instrument to which the Company is a party or by which the properties or assets
of the Company are bound; (c) contravene, conflict with, or result in a
violation of, any Law or Order to which the Company, or any of the properties or
assets owned or used by the Company, may be subject; or (d) contravene, conflict
with, or result in a violation of, the terms or requirements of, or give any
Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate
or modify, any licenses, permits, authorizations, approvals, franchises or other
rights held by the Company or that otherwise relate to the business of, or any
of the properties or assets owned or used by, the Company, except, in the case
of clause (b), (c), or (d) above, for any such contraventions, conflicts,
violations, or other occurrences as would not have a Material Adverse Effect.
3.03. BINDING OBLIGATIONS. Assuming this Agreement and the Transaction
Documents have been duly and validly authorized, executed and delivered by the
parties thereto other than the Company, this Agreement and each of the
Transaction Documents to which the Company is a party are duly authorized,
executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to the Bankruptcy Exception.
3.04. SECURITIES LAWS. Assuming the accuracy of the representations and
warranties of the Purchaser contained in Section 2.03, the issuance of the
Shares pursuant to this Agreement is (a) exempt from the registration and
prospectus delivery requirements of the Securities Act, (b) have been registered
or qualified (or are exempt from registration and qualification) under the
registration permit or qualification requirements of all applicable U.S.
securities Laws, and (c) accomplished in conformity with all other applicable
U.S. federal and state securities Laws.
3.05. CAPITALIZATION AND RELATED MATTERS.
(a) CAPITALIZATION. The authorized capital stock of the
Company consists of 25,000,000 shares of the Company's Common Stock, of which,
after giving effect to the transactions contemplated by the Exchange Agreement
and before the issuance of the Shares, 9,625,000 shares will be issued and
outstanding. All issued and outstanding shares of the Company's Common Stock are
duly authorized, validly issued, fully paid and nonassessable, and have not been
issued in violation of any preemptive or similar rights. There are no
outstanding options, warrants, purchase agreements, participation agreements,
subscription rights, conversion rights, exchange rights or other securities or
contracts that could require the Company to issue, sell or otherwise cause to
become outstanding any of its authorized but unissued Equity Securities or any
securities convertible into, exchangeable for or carrying a right or option to
purchase Equity Securities or to create, authorize, issue, sell or otherwise
cause to become outstanding any new class of Equity Securities. Except as
provided for herein, there are no outstanding stockholders' agreements, voting
trusts or arrangements, registration rights agreements, rights of first refusal
or other contracts pertaining to the Equity Securities of the Company. The
issuance of all of the shares of Company's Common Stock described in this
Section 3.05 have been in compliance with U.S. federal and state securities
Laws.
(b) NO REDEMPTION REQUIREMENTS. There are no outstanding
contractual obligations (contingent or otherwise) of the Company to retire,
repurchase, redeem or otherwise acquire any outstanding Equity Securities of, or
other ownership interests in, the Company or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
other Person.
(c) DULY AUTHORIZED. The issuance of the Shares has been duly
authorized and, upon delivery to the Purchaser of the certificate therefor in
accordance with the terms of this Agreement, the Shares will have been validly
issued and fully paid, and will be nonassessable, have the rights, preferences
and privileges specified, will be free of preemptive rights and will be free and
clear of all Liens and restrictions, other than Liens created by the Purchaser
and restrictions on transfer imposed by this Agreement and the Securities Act.
3.06. CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against the Company and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated by this Agreement. To the knowledge of the Company, no
such Proceeding has been threatened.
3.07. DISCLOSURE. Neither the Transaction Documents nor any other
agreement, document, certificate, statement, whether oral or written, furnished
to the Purchaser or its counsel by or on behalf of the Company in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances in which
made, not misleading. There is no fact within the knowledge of the Company's
executive officers which has not been disclosed herein or in writing by them to
the Purchaser and which materially adversely affects, or in the future in their
opinion may, insofar as they can now foresee, materially adversely affect the
business, operations, properties, assets or condition, financial or other, of
the Company or its Subsidiaries. Without limiting the foregoing, the Company has
no knowledge that there exists, or there is pending or planned, any patent,
invention, device, application or principle or any statute, rule, Law,
regulation, standard or code which would materially adversely affect the
business, operations, affairs or financial condition of the Company or any
Subsidiary of the Company.
ARTICLE IV
COVENANTS OF THE COMPANY
4.01. OPERATIONS. From and after the date hereof, the Company will
operate only in the ordinary course of business and in addition thereto, and not
in limitation thereof; will not: (i) voluntarily incur any capital expenditures
in excess of a $100,000 obligation; (ii) declare, authorize or become obligated
to make (or express any intention to make) any distribution or dividend to
shareholders or to any other Person; or (iii) enter into a binding contract or
arrangement that is outside the ordinary course of the Company's business.
ARTICLE V
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to purchase and pay for the Shares at
the Closing, is subject to the following conditions:
5.01. REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company set forth in Article III hereof shall be true,
accurate and correct on the date hereof.
5.02. DOCUMENTATION AT CLOSING. The Purchaser shall have received,
prior to or at the Closing, all of the following materials, each in form and
substance satisfactory to the Purchaser and its counsel, if any, and each of the
following events shall have occurred, or each of the following documents shall
have been delivered or otherwise have been made available, prior to or
simultaneous with the Closing:
(a) Copies of (1) the Articles of Incorporation of the
Company, as amended or restated to date, together with such evidence as may be
available of the filing thereof; (2) the resolutions of the Board of Directors
providing for the approval of this Agreement, the issuance of the Shares, and
all other agreements or matters contemplated hereby or executed in connection
herewith; and (3) the By-laws of the Company, all of which shall have been
certified by the Secretary of the Company, as of the date of the Closing, to be
true, complete and correct; and certified copies of all documents evidencing
other necessary corporate or other action and governmental approvals, if any,
required to be obtained at or prior to the Closing with respect to this
Agreement and the issuance of the Shares.
(b) The Exchange Agreement shall be consummated in accordance
with its terms without amendment or other change and all conditions thereto have
been satisfied and not waived.
(c) The Company shall have delivered the other documents,
instruments or certificates to be delivered pursuant to this Agreement by the
Company or any of its officers, the incumbency of such officers, and the true
specimen signatures of such officers.
(d) A certificate of the President of the Company, dated the
date of the Closing, stating that the representations and warranties of the
Company contained in Article II hereof and otherwise made by the Company in
writing in connection with the transactions contemplated hereby are true and
correct as of the time of the Closing and that all obligations and covenants in
this Agreement required to be performed prior to or on the date of the Closing
have been performed as of the time of the Closing.
(e) The Company shall have obtained all consents or waivers
necessary to be obtained at or prior to the Closing to execute and deliver this
Agreement and the agreements and instruments executed and delivered by the
Company in connection herewith, to issue the Shares and to carry out the
transactions contemplated hereby and thereby, and such consents and waivers
shall be in full force and effect at the Closing. All corporate and other action
and governmental filings necessary to effectuate the terms of this Agreement and
the other agreements and instruments executed and delivered by the Company in
connection herewith and the issuance of the Shares shall have been made or
taken.
ARTICLE VI
RIGHT OF FIRST REFUSAL
6.01. RIGHT OF FIRST REFUSAL. Before the Company shall issue, sell or
exchange, agree or obligate itself to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange , any (i) shares of Common Stock, (ii) any
other Equity Security of the Company, including without limitation, shares of
any series of the Company's class of preferred stock (iii) any convertible debt
security of the Company, including without limitation, any debt security which
by its terms is convertible into or exchangeable for any Equity Security of the
Company, or (iv) any security of the Company that is a combination of debt and
equity (the "Offered Securities"), the Company shall, in each case, first offer
to sell such Offered Securities to the Purchaser at a price and on such other
terms as shall have been specified by the Company in writing delivered to the
Purchaser (in each case, the "Offer") (which price and terms shall, unless
otherwise consented to by the Purchaser in writing, be a price and on terms of a
bona fide third party offer (the "Third Party Offer") obtained by the Company),
which Offer by its terms shall remain open and irrevocable for a period of
twenty (20) days from the transmission of the Offer by the Company.
6.02. NOTICE OF ACCEPTANCE. Notice of each Purchaser's intention to
accept, in whole or in part, any Offer made pursuant to Section 6.01 shall be
evidenced by a writing, signed by the Purchaser and delivered to the Company
prior to the end of the 20-day period of such Offer, setting forth the amount of
such Securities that the Purchaser elects to purchase (the "Notice of
Acceptance").
6.03. CONDITIONS TO ACCEPTANCES AND PURCHASE.
(a) PERMITTED SALES OF REFUSED SECURITIES. In the event that a
Notice of Acceptance is not given in respect of all the Offered Securities, the
Company shall have one hundred thirty five (135) days from the end of said
20-day period to sell any such Offered Securities as to which a Notice of
Acceptance has not been given by the Purchaser (the "Refused Securities") to the
Person or Persons specified in the Third Party Offer, but only for an amount and
kind (or the cash equivalent thereof) of consideration and otherwise in all
respects upon the terms and conditions, including, without limitation, price and
interest rates, which are no more favorable, in the aggregate, to such other
Person or Persons or less favorable to the Company (as determined in good faith
by the Board of Directors) than those set forth in the Third Party Offer.
(b) REDUCTION IN AMOUNT OF OFFERED SECURITIES. In the event
the Company shall propose to sell less than all of the Refused Securities (any
such sale to be in the manner and on the terms specified in Section 6.03(a)
above), then the Purchaser may reduce the number of Offered Securities specified
in its Notices of Acceptance accordingly. In the event that the Purchaser so
elects to reduce the number or amount of Offered Securities specified in its
Notice of Acceptance, the Company may not sell or otherwise dispose of more than
the reduced amount of the Offered Securities until such securities have again
been offered to the Purchaser in accordance with Section 6.01.
(c) CLOSING. At the closing of the sale to such other Person
or Persons of all or less than all of the Refused Securities, which closing
shall include payment of the purchase price therefor as set forth in the Offer,
the Purchaser shall purchase from the Company, and the Company shall sell to the
Purchaser, the number of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 6.03(b) if the Purchaser have so
elected, upon the terms and conditions specified in the Offer, including,
without limitation, payment in full for such Offered Securities. The purchase by
the Purchaser of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Purchaser of a
purchase agreement relating to such Offered Securities in form and substance as
offered to the purchaser or proposed purchaser of the Offered Securities who are
not the Purchaser.
6.04. FURTHER SALE. In each case, any Offered Securities not purchased
by the Purchaser or other Person or Persons in accordance with Section 6.03 may
not be sold or otherwise disposed of until they are again offered to the
Purchaser under the procedures specified in Section 6.01, 6.02 and 6.03.
6.05. EXCEPTIONS. The rights of the Purchaser under this Article VI
shall not apply to:
(a) A reservation or issuance of shares pursuant to a Company stock
option plan;
(b) The issuance of shares in connection with the purchase by the
Company of the stock or assets of, or the merger or consolidation with, another
Person not otherwise formed for the purpose of evading the provisions of Section
6.01);
(c) Common Stock issued as a stock dividend to holders of Common Stock
or upon any subdivision or combination of shares of Common Stock; or
(d) the Shares or the shares of Common Stock to be issued pursuant to
the Exchange Agreement.
ARTICLE VII
INDEMNIFICATION; REMEDIES
7.01. SURVIVAL. All representations, warranties, including those
incorporated by reference, together with the Schedules thereto, and covenants,
and obligations in this Agreement shall survive the Closing and expire one year
from the date hereof (the "Survival Period").
7.02. INDEMNIFICATION BY THE COMPANY. From and after the Closing until
(1) the expiration of the Survival Period, or (2) with respect to a specific
claim made by the Purchaser against the Company prior to the expiration of the
Survival Period, until a court of competent jurisdiction renders a final
nonappealable decision (or appeals of a decision are not taken within the time
period permitted for filing same) (the "Claims Period"), the Company shall
indemnify and hold harmless the Purchaser from and against any liabilities,
loss, claims, damages (excluding consequential, punitive and other similar
damages), fines, penalties, expenses (including costs of investigation and
defense and reasonable attorneys' fees) or diminution of value (collectively,
"Damages") arising, directly or indirectly, from or in connection with:
(i) any misrepresentation or breach of any warranty made by the
Company in this Agreement or in any certificate delivered by the Company
pursuant to this Agreement; or
(ii) any breach by the Company of any covenant or obligation of
the Company in this Agreement required to be performed by the Company on or
prior to the Closing.
7.03. LIMITATIONS ON AMOUNT. Notwithstanding anything to the contrary
contained herein, the maximum amount which the Purchaser may recover from the
Company for a breach of any representation, warranty, covenant or obligation
under this Agreement required to be performed by the Company on or prior to
Closing shall not exceed $1,000,000 in the aggregate.
7.04. REMEDIES UPON FAILURE TO PAY. Notwithstanding anything to the
contrary contained herein, in the event that the Purchaser shall fail to make
any payment required at any Subsequent Closing, at the sole discretion of the
Purchaser (i) the entire balance of purchase price shall immediately become due
and payable, together with reasonable attorneys' fees if the collection hereof
is placed in the hands of an attorney to obtain or enforce payment hereof; or
(ii) the Purchaser shall return to the Company such number of Shares as shall be
determined by dividing such portion of the subscription price that has not been
paid for in full by $4.40.
ARTICLE VIII
MISCELLANEOUS
8.01. 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 any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by Law.
8.02. 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 Company (i) shall obtain consent thereto in writing from the
holder or holders of at least a majority in interest of the Shares and (ii)
shall deliver copies of such consent in writing to any holders who did not
execute such consent; provided that no consents shall be effective to reduce the
percentage in interest of the Shares the consent of the holders of which is
required under this Section 8.02. 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.
8.03. NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), or (c) when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by written notice to the other parties):
If to the Company: with a copy to:
______________________________________________ Xxxxxx Xxxxxx Xxxxxxxx LLP
WealthCraft Systems Limited 000 Xxxxxxx Xxxxxx
Xxxx 0000, 00/X Xxxxxxxxx Xxxxx Xxxxxx Xxx Xxxx, XX 00000
0 Xxxxxxxxx Xxxx, Xxxxxxx Xxxxxx Xxxxxx of America
Honk Kong
Attention: Xxxxx X. Xxxxxx, Chief Executive Attention: Xxxx X. Xxxxxxx, Esq.
Officer Telephone No.: 000-000-0000
Telephone: x000-0000-0000 Facsimile No.: 000-000-0000
Facsimile No.: x000-0000-0000
If to the Purchaser, to the address set forth in the first paragraph of this
Agreement.
8.04. EXPENSES. Each party to this Agreement will bear its respective
expenses incurred in connection with the preparation, execution and performance
of this Agreement and the transactions contemplated by this Agreement, including
all fees and expenses of agents, representatives, counsel and accountants.
8.05. EFFECTIVENESS: BINDING EFFECT: ASSIGNMENT. This Agreement shall
be binding upon and inure to the benefit of the Company, the Purchaser and the
respective successors and assigns; provided, that, the Company may not assign
any of its rights or obligations under this Agreement without the prior written
consent of Purchaser holding a majority in interest of the Shares. The Purchaser
may assign all or any part of its rights and obligations hereunder to any Person
who acquires any Shares owned by the Purchaser. Any such assignment shall
operate to release the Purchaser from its liabilities and obligations under this
Agreement with respect to the Shares, as applicable, so sold or assigned. A
person to whom all or a part of the Purchaser's rights are so assigned, whether
by the Purchaser or by a subsequent person, may, if so agreed to by the
Purchaser, become a party to this Agreement, entitled to those rights and
benefits set forth herein applicable to the Purchaser or such Shares and shall
acquire the Shares subject to the representations and warranties of the
Purchaser set forth in Section 2.04, and subject to any restrictions on transfer
of Shares under applicable securities Laws. The foregoing is in addition to, and
not in limitation of; all other rights, powers and privileges of the Purchaser.
8.06. PRIOR AGREEMENTS. The Transaction Documents executed and
delivered in connection herewith constitute the entire agreement among the
parties hereto and supersede any prior understandings or agreements concerning
the subject matter hereof.
8.07. SEVERABILITY. The provisions of the Transaction Documents 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 therein shall, for any reason, be held 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 such Transaction
Document 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.
8.08. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal Laws of the State of New York, and without
giving effect to choice of laws provisions.
8.09. JURISDICTION; SERVICE; WAIVERS. ANY ACTION OR PROCEEDING IN
CONNECTION WITH THIS AGREEMENT MAY BE BROUGHT IN A COURT OF RECORD OF THE STATE
OF NEW YORK IN THE COUNTY OF NEW YORK. THE PARTIES TO THIS AGREEMENT HEREBY
CONSENT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS OF THE STATE OF NEW YORK,
AND SERVICE OF PROCESS MAY BE MADE UPON THE PARTIES TO THIS AGREEMENT BY MAILING
A COPY OF THE SUMMONS AND ANY COMPLAINT TO SUCH PERSON, BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS TO BE USED FOR THE
GIVING OF NOTICES UNDER THIS AGREEMENT. BY ACCEPTANCE HEREOF, THE PARTIES HERETO
EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION, INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OR
MAINTAINING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTION.
8.10. 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.
8.11. 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.
8.12. FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of the Purchaser or the Company, the Company and the Purchaser
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of the Transaction Documents and the Shares.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.
WEALTHCRAFT SYSTEMS INC.
By: /s/ XXXXX XXXXXX
____________________________
Xxxxx Xxxxxx
President
SERENDIPITY VENTURES LIMITED
By: /s/ XXXXX XXXX
____________________________
Xxxxx Xxxx
Authorized Signatory
Schedule 2.03
NON US PERSON REPRESENTATIONS
1. At the time of (a) the offer by the Company and (b) the acceptance
of the offer by the Purchaser of the Shares, the Purchaser was outside the
United States.
2. No offer to acquire the Shares or otherwise to participate in the
transactions contemplated by this Agreement was made to the Purchaser or its
representatives inside the United States.
3. Such Purchaser is not purchasing the Shares for the account or
benefit of any U.S. Person, or with a view towards distribution to any U.S.
Person, in violation of the registration requirements of the Securities Act.
4. The Purchaser will make all subsequent offers and sales of the
Shares either (x) outside of the United States in compliance with Regulation S;
(y) pursuant to a registration under the Securities Act; or (z) pursuant to an
available exemption from registration under the Securities Act. Specifically,
the Purchaser will not resell the Shares to any U.S. Person or within the United
States prior to the expiration of a period commencing on the Closing Date and
ending on the date that is one year thereafter (the "DISTRIBUTION COMPLIANCE
PERIOD"), except pursuant to registration under the Securities Act or an
exemption from registration under the Securities Act.
5. The Purchaser is acquiring the Shares for the Purchaser's own
account, for investment and not for distribution or resale to others.
6. The Purchaser has no present plan or intention to sell the Shares in
the United States or to a U.S. Person at any predetermined time, has made no
predetermined arrangements to sell the Shares and is not acting as a Distributor
of such securities.
7. Neither the Purchaser, its affiliates nor any Person acting on the
Purchaser's behalf, has entered into, has the intention of entering into, or
will enter into any put option, short position or other similar instrument or
position in the United States with respect to the Shares at any time after the
Closing Date through the Distribution Compliance Period except in compliance
with the Securities Act.
8. The Purchaser is not acquiring the Shares in a transaction (or an
element of a series of transactions) that is part of any plan or scheme to evade
the registration provisions of the Securities Act.
9. The Purchaser understands the various risks of an investment in the
Shares and can afford to bear such risks for an indefinite period of time,
including, without limitation, the risk of losing its entire investment in the
Shares.
10. The Purchaser has had access to the Company's publicly filed
reports with the SEC.
11. The Purchaser has been furnished during the course of the
transactions contemplated by this Agreement with all other public information
regarding the Company that the Purchaser has requested and all such public
information is sufficient for the Purchaser to evaluate the risks of investing
in the Shares.
12. The Purchaser is not relying on any representations and warranties
concerning the Company made by the Company or any officer, employee or agent of
the Company, other than those contained in this Agreement.
13. The Purchaser understands and acknowledges that the Company is
under no obligation to register the Shares for sale under the Securities Act.
14. The Purchaser represents that the address furnished by the
Purchaser in this Agreement is the Purchaser's principal business address.
15. The Purchaser understands and acknowledges that the Shares have not
been recommended by any federal or state securities commission or regulatory
authority, that the foregoing authorities have not confirmed the accuracy or
determined the adequacy of any information concerning the Company that has been
supplied to the Purchaser and that any representation to the contrary is a
criminal offense.
