Exhibit 10.1
ACQUISITION AGREEMENT
THIS AGREEMENT is made effective as of the 27th day of January, 2012
AMONGST:
WEB WIZARD, INC., a Nevada corporation, having an office at ▇▇. ▇,
▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ CunHuicheng, ▇▇▇ ▇▇▇, Jiang Men City, China.
(the "PURCHASER")
AND:
PFN HOLDINGS a Nevada corporation, having a registered office at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇-▇▇▇▇
(the "VENDOR")
AND:
YA ▇▇▇▇ ▇▇▇▇, an individual with an address of ▇▇. ▇, ▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇ CunHuicheng, ▇▇▇ ▇▇▇, Jiang Men City, China.
(the "SHAREHOLDER")
WHEREAS:
A. The Vendor owns certain assets pertaining to the provision of psychic
services under the trade name "Psychic Friends Network" ("PFN");
B. The Purchaser anticipates undertaking a ten for one forward split of its
stock and changing its name to Psychic Friends Network Inc.;
C. The Purchaser has agreed to issue 50,060,000 post-split shares of its common
stock as of the Closing Date, as defined herein, to the Vendor as consideration
for the acquisition by the Purchaser of PFN and all associated assets, upon the
terms and subject to the conditions set forth in this Agreement; and
D. The parties wish to enter into this Agreement;
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged), the parties covenant and agree as follows:
1. DEFINITIONS
1.1 Definitions. In this Agreement, the following terms shall have the following
meanings, unless the context indicates otherwise:
(a) "AGREEMENT" shall mean this Acquisition Agreement, and all schedules
and other documents attached to or referred to in this Agreement, and
all amendments and supplements, if any, to this Agreement;
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(b) "CLOSING" shall mean the completion of the Transaction, in accordance
with Section 0, at which the Closing Documents shall be exchanged by
the parties, except for those documents or other items specifically
required to be exchanged at a later time;
(c) "CLOSING DATE" shall mean a date mutually agreed upon by the parties
hereto in writing and in accordance with Section 0 following the
satisfaction or waiver by the Purchaser and the Vendor of the
conditions precedent set out in Sections 0 and 0 respectively;
(d) "CLOSING DOCUMENTS" shall mean the papers, instruments and documents
required to be executed and delivered at the Closing pursuant to this
Agreement;
(e) "EXCHANGE ACT" shall mean the United States Securities Exchange Act of
1934, as amended;
(f) "US GAAP" shall mean United States generally accepted accounting
principles applied in a manner consistent with prior periods;
(g) "LIABILITIES" shall include any direct or indirect indebtedness,
guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown,
asserted ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated, secured or
unsecured;
(h) "PFN ASSETS" shall mean all assets associated with the operations of
PFN held by the Vendor, including all items listed in Schedule 7
hereto;
(i) "PURCHASER SHARES" shall mean the 50,060,000 fully paid and
non-assessable post-split common shares of the Purchaser, to be issued
to the Vendor by the Purchaser on the Closing Date;
(j) "SEC" shall mean the United States Securities and Exchange Commission;
(k) "SECURITIES ACT" shall mean the United States Securities Act of 1933,
as amended;
(l) "TAXES" shall include international, federal, state, provincial and
local income taxes, capital gains tax, value-added taxes, franchise,
personal property and real property taxes, levies, assessments,
tariffs, duties (including any customs duty), business license or
other fees, sales, use and any other taxes relating to the assets of
the designated party or the business of the designated party for all
periods up to and including the Closing Date, together with any
related charge or amount, including interest, fines, penalties and
additions to tax, if any, arising out of tax assessments; and
(m) "TRANSACTION" shall mean the purchase of the PFN Assets by the
Purchaser from the Vendor in consideration for the issuance of the
Purchaser Shares.
1.2 Schedules. The following schedules are attached to and form part of this
Agreement:
Schedule 1 - Directors and officers of Purchaser
Schedule 2 - Directors and Officers of Vendor
Schedule 3 - PFN Leases, Subleases, Claims, Capital Expenditures, Taxes and
Other Property Interests
Schedule 4 - PFN Intellectual Property
Schedule 5 - PFN Material Contracts
Schedule 6 - PFN Employment Agreements and Arrangements
Schedule 7 - Listing of PFN Assets
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1.3 Currency. All references to currency in this Agreement are to United States
Dollars unless expressly stated otherwise.
2. THE OFFER, PURCHASE AND SALE OF ASSETS
2.1 Offer, Purchase and Sale of PFN Assets. Subject to the terms and conditions
of this Agreement, the Vendor hereby covenants and agrees to sell, assign and
transfer to the Purchaser and the Purchaser hereby covenants and agrees to
purchase from the Vendor the PFN Assets.
2.2 Consideration. As consideration for the sale of the PFN Assets by the Vendor
to the Purchaser, the Purchaser shall allot and issue the Purchaser Shares to
the Vendor. The Vendor acknowledges and agrees that the Purchaser Shares are
being issued pursuant to an exemption from the prospectus and registration
requirements of the Securities Act, and the Vendor agrees to abide by all
applicable resale restrictions and hold periods imposed by all applicable
securities legislation. All certificates representing the Purchaser Shares
issued on Closing will be endorsed with the following legend pursuant to the
Securities Act in order to reflect the fact that the Purchaser Shares will be
issued to the Vendor pursuant to an exemption from the registration requirements
of the Securities Act:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.".
2.3 Closing Date. The Closing will take place, subject to the terms and
conditions of this Agreement, on the Closing Date.
2.4 Restricted Shares. The Vendor acknowledges that the Purchaser Shares issued
pursuant to the terms and conditions set forth in this Agreement will have such
hold periods as are required under applicable securities laws and as a result
may not be sold, transferred or otherwise disposed, except pursuant to an
effective registration statement under the Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in each case only in accordance with all
applicable securities laws.
3. REPRESENTATIONS AND WARRANTIES OF THE VENDOR
As of the Closing, the Vendor represents and warrants to the Purchaser, and
acknowledges that the Purchaser is relying upon such representations and
warranties, in connection with the execution, delivery and performance of this
Agreement, notwithstanding any investigation made by or on behalf of the
Purchaser, as follows:
3.1 Organization and Good Standing. Vendor is a company duly organized, validly
existing and in good standing under the laws of the State of Nevada and has the
requisite corporate power and authority to own, lease and to carry on its
business as now being conducted. Vendor is duly qualified to do business and is
in good standing as a foreign corporation in each of the jurisdictions in which
Vendor owns property, leases property, does business, or is otherwise required
to do so, where the failure to be so qualified would have a material adverse
effect on the business of Vendor taken as a whole.
3.2 Authority. The Vendor has all requisite corporate power and authority to
execute and deliver this Agreement and any other document contemplated by this
Agreement (collectively, the "VENDOR DOCUMENTS") to be signed by the Vendor and
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of each of the Vendor Documents
by the Vendor and the consummation of the transactions contemplated hereby have
been duly authorized by the Vendor's board of directors. No other corporate or
shareholder proceeding on the part of the Vendor is necessary to authorize such
documents or to consummate the transactions contemplated hereby. This Agreement
has been, and the other Vendor Documents when executed and delivered by the
Vendor as contemplated by this Agreement will be, duly executed and delivered by
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the Vendor and this Agreement is, and the other Vendor Documents when executed
and delivered by the Vendor as contemplated hereby will be, valid and binding
obligations of the Vendor enforceable in accordance with their respective terms
except:
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement
of creditors' rights generally;
(b) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies; and
(c) as limited by public policy.
3.3 Title to Assets. Vendor possesses full and unrestricted ownership of the PFN
Assets to be transferred to the Purchaser. Vendor has full legal right, power
and authority to sell and transfer the PFN Assets free and clear from any and
all encumbrances to the Purchaser in accordance with the terms of this Agreement
and to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby and there exists no agreement to create any
encumbrance over any of the Assets.
3.4 Directors and Officers of Vendor. The duly appointed directors and officers
of Vendor are as set out in Schedule 1.
3.5 Corporate Records of Vendor. The corporate records of Vendor, as required to
be maintained by it pursuant to all applicable laws, are accurate, complete and
current in all material respects, and the minute book of Vendor is, in all
material respects, correct and contains all records required by all applicable
laws, as applicable, in regards to all proceedings, consents, actions and
meetings of the shareholders and the managers of Vendor.
3.6 Non-Contravention. Neither the execution, delivery and performance of this
Agreement, nor the consummation of the Transaction, will:
(a) conflict with, result in a violation of, cause a default under (with
or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in
the creation of any lien, security interest, charge or encumbrance
upon any of the material properties or assets of Vendor or any of its
subsidiaries under any term, condition or provision of any loan or
credit agreement, note, debenture, bond, mortgage, indenture, lease or
other agreement, instrument, permit, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Vendor or
any of its subsidiaries, or any of their respective material property
or assets;
(b) violate any provision of the Articles, Bylaws or any other constating
documents of the Vendor or Vendor, any of their respective
subsidiaries or any applicable laws; or
(c) violate any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory authority
applicable to the Vendor or Vendor, any of their respective
subsidiaries or any of their respective material property or assets.
3.7 Actions and Proceedings. To the best knowledge of the Vendor, there is no
basis for and there is no action, suit, judgment, claim, demand or proceeding
outstanding or pending, or threatened against or affecting Vendor or which
involves any of the business, or the properties or assets of PFN that, if
adversely resolved or determined, would have a material adverse effect on the
business, operations, assets, properties, prospects, or conditions of PFN taken
as a whole (a "PFN MATERIAL ADVERSE EFFECT"). There is no reasonable basis for
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any claim or action that, based upon the likelihood of its being asserted and
its success if asserted, would have such a PFN Material Adverse Effect.
3.8 Compliance. As of the date hereof:
(a) to the best knowledge of the Vendor, Vendor is in compliance with, is
not in default or violation in any material respect under, and has not
been charged with or received any notice at any time of any material
violation of any statute, law, ordinance, regulation, rule, decree or
other applicable regulation to the business or operations of Vendor;
(b) to the best knowledge of the Vendor, Vendor is not subject to any
judgment, order or decree entered in any lawsuit or proceeding
applicable to its business and operations that would constitute a PFN
Material Adverse Effect;
(c) Vendor has duly filed all reports and returns required to be filed by
it with governmental authorities and has obtained all governmental
permits and other governmental consents, except as may be required
after the execution of this Agreement. All of such permits and
consents are in full force and effect, and no proceedings for the
suspension or cancellation of any of them, and no investigation
relating to any of them, is pending or to the best knowledge of the
Vendor, threatened, and none of them will be adversely affected by the
consummation of the Transaction; and
(d) Vendor has operated in material compliance with all laws, rules,
statutes, ordinances, orders and regulations applicable to its
business. Vendor has not received any notice of any violation thereof,
nor is the Vendor aware of any valid basis therefore.
3.9 Filings, Consents and Approvals. No filing or registration with, no notice
to and no permit, authorization, consent, or approval of any public or
governmental body or authority or other person or entity is necessary for the
consummation by the Vendor of the Transaction contemplated by this Agreement or
to enable the Purchaser to continue to conduct Vendor's business after the
Closing Date in a manner which is consistent with that in which the business is
presently conducted.
3.10 Financial Representations. The audited balance sheets for PFN for the
fiscal year ended December 31, 2011 (the "PFN ACCOUNTING DATE"), together with
related statements of income, cash flows, and changes in shareholder's equity
for such fiscal years then ended (collectively, the "PFN FINANCIAL STATEMENTS")
to be supplied by the Vendor to the Purchaser on or before the Closing Date:
(a) are in accordance with the books and records of Vendor;
(b) present fairly the financial condition of PFN as of the respective
dates indicated and the results of operations for such periods; and
(c) have been prepared in accordance with US GAAP.
Vendor has not received any advice or notification from its independent
certified public accountants that Vendor has used any improper accounting
practice that would have the effect of not reflecting or incorrectly reflecting
in the PFN Financial Statements or the books and records of PFN, any properties,
assets, liabilities, revenues or expenses. The books, records, and accounts of
PFN accurately and fairly reflect, in reasonable detail, the assets and
liabilities of PFN. Vendor has not engaged in any transaction, maintained any
bank account, or used any funds of PFN, except for transactions, bank accounts
and funds which have been and are reflected in the normally maintained books and
records of PFN.
3.11 Absence of Undisclosed Liabilities. PFN does not have any material
Liabilities or obligations either direct or indirect, matured or unmatured,
absolute, contingent or otherwise, which:
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(a) are not set forth in the PFN Financial Statements or have not
heretofore been paid or discharged;
(b) did not arise in the regular and ordinary course of business under any
agreement, contract, commitment, lease or plan specifically disclosed
in writing to the Purchaser; or
(c) have not been incurred in amounts and pursuant to practices consistent
with past business practice, in or as a result of the regular and
ordinary course of its business since the date of the last PFN
Financial Statements.
3.12 Absence of Changes. Since the PFN Accounting Date, PFN has not:
(a) incurred any Liabilities, other than Liabilities incurred in the
ordinary course of business consistent with past practice, or
discharged or satisfied any lien or encumbrance, or paid any
Liabilities, other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge when due any
Liabilities of which the failure to pay or discharge has caused or
will cause any material damage or risk of material loss to it or any
of its assets or properties;
(b) sold, encumbered, assigned or transferred any material fixed assets or
properties except for ordinary course business transactions consistent
with past practice;
(c) created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or subjected any of the material
assets or properties of Vendor or its subsidiaries to any mortgage,
lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever;
(d) made or suffered any amendment or termination of any material
agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or cancelled, modified or waived any
substantial debts or claims held by it or waived any rights of
substantial value, other than in the ordinary course of business;
(e) declared, set aside or paid any dividend or made or agreed to make any
other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or acquire any of its capital shares or equity securities;
(f) suffered any damage, destruction or loss, whether or not covered by
insurance, that materially and adversely effects its business,
operations, assets, properties or prospects;
(g) suffered any material adverse change in its business, operations,
assets, properties, prospects or condition (financial or otherwise);
(h) received notice or had knowledge of any actual or threatened labour
trouble, termination, resignation, strike or other occurrence, event
or condition of any similar character which has had or might have an
adverse effect on its business, operations, assets, properties or
prospects;
(i) other than in the ordinary course of business, increased the salaries
or other compensation of, or made any advance (excluding advances for
ordinary and necessary business expenses) or loan to, any of its
employees or directors or made any increase in, or any addition to,
other benefits to which any of its employees or directors may be
entitled;
(j) entered into any transaction other than in the ordinary course of
business consistent with past practice; or
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(k) agreed, whether in writing or orally, to do any of the foregoing.
3.13 Absence of Certain Changes or Events. Since the PFN Accounting Date, there
has not been:
(a) a PFN Material Adverse Effect; or
(b) any material change by PFN in its accounting methods, principles or
practices.
3.14 Personal Property. Vendor possesses, and has good and marketable title of
all property necessary for the continued operation of the business of PFN as
presently conducted and as represented to the Purchaser. All such property is
used in the business of PFN. All such property is in reasonably good operating
condition (normal wear and tear excepted), and is reasonably fit for the
purposes for which such property is presently used. All material equipment,
furniture, fixtures and other tangible personal property and assets owned or
leased by Vendor and used by PFN is owned by Vendor free and clear of all liens,
security interests, charges, encumbrances and other adverse claims.
3.15 Intellectual Property
(a) Intellectual Property Assets. Vendor owns or holds an interest in all
intellectual property assets necessary for the operation of the
business of PFN as it is currently conducted (collectively, the
"INTELLECTUAL PROPERTY ASSETS"), including:
(i) all functional business names, trading names, registered and
unregistered trademarks, service marks and applications
(collectively, the "MARKS");
(ii) all patents, patent applications, and inventions, methods,
processes and discoveries that may be patentable (collectively,
the "PATENTS");
(iii)all copyrights in both published works and unpublished works
(collectively, the "COPYRIGHTS"); and
(iv) all know-how, trade secrets, confidential information, customer
lists, software, technical information, data, process technology,
plans, drawings, and blue prints owned, used or licensed by PFN
as licensee or licensor (collectively, the "TRADE SECRETS").
(b) Agreements. Schedule 4 contains a complete and accurate list and
summary description, including any royalties paid or received by PFN,
of all contracts and agreements relating to the Intellectual Property
Assets to which PFN is a party or by which PFN is bound, except for
any license implied by the sale of a product and perpetual, paid-up
licenses for commonly available software programs with a value of less
than $500 under which PFN is the licensee. To the best knowledge of
PFN, there are no outstanding or threatened disputes or disagreements
with respect to any such agreement.
(c) Intellectual Property and Know-How Necessary for the Business. Except
as set forth in Schedule 4, PFN is the owner of all right, title, and
interest in and to each of the Intellectual Property Assets, free and
clear of all liens, security interests, charges, encumbrances, and
other adverse claims, and has the right to use without payment to a
third party of all the Intellectual Property Assets. Except as set
forth in Schedule 4, all former and current employees and contractors
of PFN have executed written contracts, agreements or other
undertakings with PFN that assign all rights to any inventions,
improvements, discoveries, or information relating to the business of
PFN. No employee, director, officer or shareholder of PFN owns
directly or indirectly in whole or in part, any Intellectual Property
Asset which PFN is presently using or which is necessary for the
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conduct of its business. To the best knowledge of PFN, no employee or
contractor of PFN has entered into any contract or agreement that
restricts or limits in any way the scope or type of work in which the
employee may be engaged or requires the employee to transfer, assign,
or disclose information concerning his work to anyone other than PFN
(d) Patents. Except as set out in Schedule 4, PFN does not hold any right,
title or interest in and to any Patent and PFN has not filed any
patent application with any third party. To the best knowledge of PFN,
none of the products manufactured and sold, nor any process or
know-how used, by PFN infringes or is alleged to infringe any patent
or other proprietary night of any other person or entity.
(e) Trademarks. Except as set out in Schedule 4, PFN does not hold any
right, title or interest in and to any ▇▇▇▇ and PFN has not registered
or filed any application to register any ▇▇▇▇ with any third party. To
the best knowledge of PFN, none of the Marks, if any, used by PFN
infringes or is alleged to infringe any trade name, trademark, or
service ▇▇▇▇ of any third party.
(f) Copyrights. Schedule 4 contains a complete and accurate list and
summary description of all Copyrights. PFN is the owner of all right,
title, and interest in and to each of the Copyrights, free and clear
of all liens, security interests, charges, encumbrances, and other
adverse claims. If applicable, all registered Copyrights are currently
in compliance with formal legal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes or
actions falling due within ninety days after the Closing Date. To the
best knowledge of PFN, no Copyright is infringed or has been
challenged or threatened in any way and none of the subject matter of
any of the Copyrights infringes or is alleged to infringe any
copyright of any third party or is a derivative work based on the work
of a third party. All works encompassed by the Copyrights have been
marked with the proper copyright notice.
(g) Trade Secrets. PFN and Vendor have taken all reasonable precautions to
protect the secrecy, confidentiality and value of PFN's Trade Secrets.
Vendor has good title and an absolute right to use the Trade Secrets.
The Trade Secrets are not part of the public knowledge or literature,
and to the best knowledge of the Vendor, have not been used, divulged
or appropriated either for the benefit of any person or entity or to
the detriment of Vendor. No Trade Secret is subject to any adverse
claim or has been challenged or threatened in any way.
3.16 Employees and Consultants. All employees and consultants of Vendor have
been paid all salaries, wages, income and any other sum due and owing to them by
Vendor, as at the end of the most recent completed pay period. Vendor is not
aware of any labour conflict with any employees that might reasonably be
expected to have a PFN Material Adverse Effect. To the best knowledge of the
Vendor, no employee of Vendor is in violation of any term of any employment
contract, non-disclosure agreement, non-competition agreement or any other
contract or agreement relating to the relationship of such employee with Vendor
or any other nature of the business conducted or to be conducted by Vendor.
3.17 Real Property. PFN does not own any real property. Each of the leases,
subleases, claims or other real property interests (collectively, the "LEASES")
to which PFN is a party or is bound, as set out in Schedule 3, is legal, valid,
binding, enforceable and in full force and effect in all material respects. All
rental and other payments required to be paid by PFN pursuant to any such Leases
have been duly paid and no event has occurred which, upon the passing of time,
the giving of notice, or both, would constitute a breach or default by any party
under any of the Leases. The Leases will continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms following the
Closing Date. PFN has not assigned, transferred, conveyed, mortgaged, deeded in
trust, or encumbered any interest in the Leases or the leasehold property
pursuant thereto.
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3.18 Material Contracts and Transactions. Schedule 5 attached hereto lists each
material contract, agreement, license, permit, arrangement, commitment,
instrument or contract to which PFN is a party (each, a "CONTRACT"). Each
Contract is in full force and effect, and there exists no material breach or
violation of or default by PFN under any Contract, or any event that with notice
or the lapse of time, or both, will create a material breach or violation
thereof or default under any Contract by PFN. The continuation, validity, and
effectiveness of each Contract will in no way be affected by the consummation of
the Transaction contemplated by this Agreement. There exists no actual or
threatened termination, cancellation, or limitation of, or any amendment,
modification, or change to any Contract.
3.19 Certain Transactions. Neither PFN nor Vendor is a guarantor or indemnitor
of any indebtedness of any third party, including any person, firm or
corporation.
3.20 No Brokers. Vendor has not incurred any independent obligation or liability
to any party for any brokerage fees, agent's commissions, or finder's fees in
connection with the Transaction contemplated by this Agreement.
3.21 Completeness of Disclosure. No representation or warranty by the Vendor in
this Agreement nor any certificate, schedule, statement, document or instrument
furnished or to be furnished to the Purchaser pursuant hereto contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated herein or therein or necessary to make any
statement herein or therein not materially misleading.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As of the Closing, the Purchaser represents and warrants to the Vendor and
acknowledges that the Vendor is relying upon such representations and warranties
in connection with the execution, delivery and performance of this Agreement,
notwithstanding any investigation made by or on behalf of the Vendor, as
follows:
4.1 Organization and Good Standing. The Purchaser is duly incorporated,
organized, validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to own, lease and to
carry on its business as now being conducted. The Purchaser is qualified to do
business and is in good standing as a foreign corporation in each of the
jurisdictions in which it owns property, leases property, does business, or is
otherwise required to do so, where the failure to be so qualified would have a
material adverse effect on the businesses, operations, or financial condition of
the Purchaser.
4.2 Authority. The Purchaser has all requisite corporate power and authority to
execute and deliver this Agreement and any other document contemplated by this
Agreement (collectively, the "PURCHASER DOCUMENTS") to be signed by the
Purchaser and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of each of the
Purchaser Documents by the Purchaser and the consummation by the Purchaser of
the transactions contemplated hereby have been duly authorized by its board of
directors and no other corporate or shareholder proceedings on the part of the
Purchaser is necessary to authorize such documents or to consummate the
transactions contemplated hereby. This Agreement has been, and the other
Purchaser Documents when executed and delivered by the Purchaser as contemplated
by this Agreement will be, duly executed and delivered by the Purchaser and this
Agreement is, and the other Purchaser Documents when executed and delivered by
the Purchaser as contemplated hereby will be, valid and binding obligations of
the Purchaser enforceable in accordance with their respective terms, except:
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement
of creditors' rights generally;
(b) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies; and
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(c) as limited by public policy.
4.3 Capitalization of the Purchaser. The entire authorized capital stock and
other equity securities of the Purchaser consist of 75,000,000 shares of common
stock with a par value of $0.001 (the "PURCHASER COMMON STOCK"). As of the date
of this Agreement, there are 8,225,000 shares of Purchaser Common Stock issued
and outstanding. As part of the Transaction contemplated hereby the Purchaser
will undertake a 10 for 1 forward split of all of its issued, outstanding and
authorized capital. All of the issued and outstanding shares of Purchaser Common
Stock have been duly authorized, are validly issued, were not issued in
violation of any pre-emptive rights and are fully paid and non-assessable, are
not subject to pre-emptive rights and were issued in full compliance with all
federal, state, and local laws, rules and regulations. There are no outstanding
options, warrants, subscriptions, phantom shares, conversion rights or other
rights, agreements or commitments obligating the Purchaser to issue any
additional shares of Purchaser Common Stock, or any other securities convertible
into, exchangeable for, or evidencing the right to subscribe for or acquire from
the Purchaser any shares of Purchaser Common Stock as of the date of this
Agreement. There are no agreements purporting to restrict the transfer of the
Purchaser Common Stock, no voting agreements, voting trusts or other
arrangements restricting or affecting the voting of the Purchaser Common Stock.
4.4 Directors and Officers of the Purchaser. The duly elected or appointed
directors and the duly appointed officers of the Purchaser are as listed in
Schedule 2.
4.5 Corporate Records of the Purchaser. The corporate records of the Purchaser,
as required to be maintained by it pursuant to the laws of the State of Nevada,
are accurate, complete and current in all material respects, and the minute book
of the Purchaser is, in all material respects, correct and contains all material
records required by the law of the State of Nevada in regards to all
proceedings, consents, actions and meetings of the shareholders and the board of
directors of the Purchaser.
4.6 Non-Contravention. Neither the execution, delivery and performance of this
Agreement, nor the consummation of the Transaction, will:
(a) conflict with, result in a violation of, cause a default under (with
or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in
the creation of any lien, security interest, charge or encumbrance
upon any of the material properties or assets of the Purchaser under
any term, condition or provision of any loan or credit agreement,
note, debenture, bond, mortgage, indenture, lease or other agreement,
instrument, permit, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Purchaser or any of
its material property or assets;
(b) violate any provision of the applicable incorporation or charter
documents of the Purchaser; or
(c) violate any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory authority
applicable to the Purchaser or any of its material property or assets.
4.7 Validity of Purchaser Common Stock Issuable upon the Transaction. The
Purchaser Shares to be issued to the Vendor upon consummation of the Transaction
in accordance with this Agreement will, upon issuance, have been duly and
validly authorized and, when so issued in accordance with the terms of this
Agreement, will be duly and validly issued, fully paid and non-assessable.
4.8 Actions and Proceedings. To the best knowledge of the Purchaser, there is no
claim, charge, arbitration, grievance, action, suit, investigation or proceeding
by or before any court, arbiter, administrative agency or other governmental
authority now pending or, to the best knowledge of the Purchaser, threatened
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against the Purchaser which involves any of the business, or the properties or
assets of the Purchaser that, if adversely resolved or determined, would have a
material adverse effect on the business, operations, assets, properties,
prospects or conditions of the Purchaser taken as a whole (a "PURCHASER MATERIAL
ADVERSE EFFECT"). There is no reasonable basis for any claim or action that,
based upon the likelihood of its being asserted and its success if asserted,
would have such a Purchaser Material Adverse Effect.
4.9 Compliance
(a) To the best knowledge of the Purchaser, the Purchaser is in compliance
with, is not in default or violation in any material respect under,
and has not been charged with or received any notice at any time of
any material violation of any statute, law, ordinance, regulation,
rule, decree or other applicable regulation to the business or
operations of the Purchaser;
(b) To the best knowledge of the Purchaser, the Purchaser is not subject
to any judgment, order or decree entered in any lawsuit or proceeding
applicable to its business and operations that would constitute a
Purchaser Material Adverse Effect; and
(c) The Purchaser has operated in material compliance with all laws,
rules, statutes, ordinances, orders and regulations applicable to its
business. The Purchaser has not received any notice of any violation
thereof, nor is the Purchaser aware of any valid basis therefore.
4.10 Filings, Consents and Approvals. No filing or registration with, no notice
to and no permit, authorization, consent, or approval of any public or
governmental body or authority or other person or entity is necessary for the
consummation by the Purchaser of the Transaction contemplated by this Agreement
to continue to conduct its business after the Closing Date in a manner which is
consistent with that in which it is presently conducted.
4.11 SEC Filings. The Purchaser has furnished or made available the Vendor a
true and complete copy of each report, schedule, registration statement and
proxy statement filed by the Purchaser with the SEC (collectively, and as such
documents have since the time of their filing been amended, the "PURCHASER SEC
DOCUMENTS"). As of their respective dates, the Purchaser SEC Documents complied
in all material respects with the requirements of the Securities Act, or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Purchaser SEC Documents. The Purchaser SEC
Documents constitute all of the documents and reports that the Purchaser was
required to file with the SEC pursuant to the Exchange Act and the rules and
regulations promulgated thereunder by the SEC.
4.12 Financial Representations. Included with the Purchaser SEC Documents are
true, correct, and complete copies of audited balance sheets for the Purchaser
dated as of September 30, 2011 (the "PURCHASER ACCOUNTING DATE"), together with
related statements of income, cash flows, and changes in shareholder's equity
(collectively, the "PURCHASER FINANCIAL STATEMENTS").
The Purchaser Financial Statements:
(a) are in accordance with the books and records of the Purchaser;
(b) present fairly the financial condition of the Purchaser as of the
respective dates indicated and the results of operations for such
periods; and
(c) have been prepared in accordance with US GAAP.
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The Purchaser has not received any advice or notification from its independent
certified public accountants that the Purchaser has used any improper accounting
practice that would have the effect of not reflecting or incorrectly reflecting
in the Purchaser Financial Statements or the books and records of the Purchaser,
any properties, assets, Liabilities, revenues or expenses. The books, records
and accounts of the Purchaser accurately and fairly reflect, in reasonable
detail, the assets and Liabilities of the Purchaser. The Purchaser has not
engaged in any transaction, maintained any bank account or used any funds of the
Purchaser, except for transactions, bank accounts and funds which have been and
are reflected in the normally maintained books and records of the Purchaser.
4.13 Absence of Undisclosed Liabilities. The Purchaser has no material
Liabilities or obligations either direct or indirect, matured or unmatured,
absolute, contingent or otherwise, which:
(a) are not set forth in the Purchaser Financial Statements or have not
heretofore been paid or discharged;
(b) did not arise in the regular and ordinary course of business under any
agreement, contract, commitment, lease or plan specifically disclosed
in writing to the Vendor; or
(c) have not been incurred in amounts and pursuant to practices consistent
with past business practice, in or as a result of the regular and
ordinary course of its business since the date of the last Purchaser
Financial Statements.
4.14 Absence of Changes. Since the Purchaser Accounting Date, except as
disclosed in the Purchaser SEC Documents and except as contemplated in this
Agreement, the Purchaser has not:
(a) incurred any Liabilities, other than Liabilities incurred in the
ordinary course of business consistent with past practice, or
discharged or satisfied any lien or encumbrance, or paid any
Liabilities, other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge when due any
Liabilities of which the failure to pay or discharge has caused or
will cause any material damage or risk of material loss to it or any
of its assets or properties;
(b) sold, encumbered, assigned or transferred any material fixed assets or
properties;
(c) created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or subjected any of the material
assets or properties of the Purchaser to any mortgage, lien, pledge,
security interest, conditional sales contract or other encumbrance of
any nature whatsoever;
(d) made or suffered any amendment or termination of any material
agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or cancelled, modified or waived any
substantial debts or claims held by it or waived any rights of
substantial value, other than in the ordinary course of business;
(e) declared, set aside or paid any dividend or made or agreed to make any
other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or acquire any of its capital shares or equity securities;
(f) suffered any damage, destruction or loss, whether or not covered by
insurance, that materially and adversely effects its business,
operations, assets, properties or prospects;
(g) suffered any material adverse change in its business, operations,
assets, properties, prospects or condition (financial or otherwise);
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(h) received notice or had knowledge of any actual or threatened labour
trouble, termination, resignation, strike or other occurrence, event
or condition of any similar character which has had or might have an
adverse effect on its business, operations, assets, properties or
prospects;
(i) made commitments or agreements for capital expenditures or capital
additions or betterments exceeding in the aggregate $500;
(j) other than in the ordinary course of business, increased the salaries
or other compensation of, or made any advance (excluding advances for
ordinary and necessary business expenses) or loan to, any of its
employees or directors or made any increase in, or any addition to,
other benefits to which any of its employees or directors may be
entitled;
(k) entered into any transaction other than in the ordinary course of
business consistent with past practice; or
(l) agreed, whether in writing or orally, to do any of the foregoing.
4.15 Absence of Certain Changes or Events. Since the Purchaser Accounting Date,
except as and to the extent disclosed in the Purchaser SEC Documents, there has
not been:
(a) a Purchaser Material Adverse Effect; or
(b) any material change by the Purchaser in its accounting methods,
principles or practices.
4.16 Subsidiaries. The Purchaser does not have any subsidiaries or agreements of
any nature to acquire any subsidiary or to acquire or lease any other business
operations, except as disclosed in the Purchaser SEC Documents.
4.17 Personal Property. There are no material equipment, furniture, fixtures and
other tangible personal property and assets owned or leased by the Purchaser,
except as disclosed in the Purchaser SEC Documents.
4.18 Employees and Consultants. The Purchaser does not have any employees or
consultants, except as disclosed in the Purchaser SEC Documents.
4.19 Material Contracts and Transactions. Other than as expressly contemplated
by this Agreement, there are no material contracts, agreements, licenses,
permits, arrangements, commitments, instruments, understandings or contracts,
whether written or oral, express or implied, contingent, fixed or otherwise, to
which the Purchaser is a party except as disclosed in writing to the Vendor or
as disclosed in the Purchaser SEC Documents.
4.20 No Brokers. The Purchaser has not incurred any obligation or liability to
any party for any brokerage fees, agent's commissions or finder's fees in
connection with the Transaction contemplated by this Agreement.
4.21 Internal Accounting Controls. The Purchaser maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with US GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Purchaser's certifying officers have evaluated the effectiveness of the
Purchaser's controls and procedures as of end of the filing period prior to the
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filing date of the Purchaser's Form 10-K for the year ended September 30, 2011
(such date, the "EVALUATION DATE"). The Purchaser presented in its most recently
filed Form 10-K the conclusions of the Purchaser's certifying officers about the
effectiveness of the Purchaser's disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in the Purchaser's internal controls (as such
term is defined in Item 308 of Regulation S-K under the Exchange Act) or, to the
Purchaser's knowledge, in other factors that could significantly affect the
Purchaser's internal controls.
4.22 Listing and Maintenance Requirements. The Purchaser Common Stock is
currently quoted on the OTC Bulletin Board and the Purchaser has not, in the 12
months preceding the date hereof, received any notice from the OTC Bulletin
Board or the FINRA or any trading market on which the Purchaser Common Stock is
or has been listed or quoted to the effect that the Purchaser is not in
compliance with the quoting, listing or maintenance requirements of the OTC
Bulletin Board or such other trading market.
4.23 Application of Takeover Protections. The Purchaser and its board of
directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Purchaser's Articles of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchaser as a result of the transactions under
this Agreement or the exercise of any rights pursuant to this Agreement.
4.24 No SEC or FINRA Inquiries. Neither the Purchaser nor any of its past or
present officers or directors is the subject of any formal or informal inquiry
or investigation by the SEC or the FINRA. The Purchaser currently does not have
any outstanding comment letters or other correspondences from the SEC or the
FINRA.
4.25 No Liabilities. Upon Closing, the Purchaser shall have no direct, indirect
or contingent Liabilities outstanding that exceed $1,000.
4.26 Completeness of Disclosure. No representation or warranty by the Purchaser
in this Agreement nor any certificate, schedule, statement, document or
instrument furnished or to be furnished to the Vendor pursuant hereto contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact required to be stated herein or therein or necessary to
make any statement herein or therein not materially misleading.
5. CLOSING CONDITIONS
5.1 Conditions Precedent to Closing by the Purchaser. The obligation of the
Purchaser to consummate the Transaction is subject to the satisfaction or
written waiver of the conditions set forth below by a date mutually agreed upon
by the parties hereto in writing and in accordance with Section 0. The Closing
of the Transaction contemplated by this Agreement will be deemed to mean a
waiver of all conditions to Closing. These conditions precedent are for the
benefit of the Purchaser and may be waived by the Purchaser in its sole
discretion.
(a) Representations and Warranties. The representations and warranties of
the Vendor set forth in this Agreement will be true, correct and
complete in all respects as of the Closing Date, as though made on and
as of the Closing Date.
(b) Performance. All of the covenants and obligations the Vendor is
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing must have been performed and complied with in all
material respects.
(c) Transaction Documents. This Agreement, the Vendor Documents, the PFN
Financial Statements and all other documents necessary or reasonably
required to consummate the Transaction, all in form and substance
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reasonably satisfactory to the Purchaser, will have been executed and
delivered to the Purchaser.
(d) Directors' Resolutions - Vendor. The Purchaser will have received
copies of resolutions duly adopted by the board of directors of the
Vendor approving the execution and delivery of this Agreement and the
consummation of the transactions contemplated herein.
(e) No Material Adverse Change. No PFN Material Adverse Effect will have
occurred since the date of this Agreement.
(f) No Action. No suit, action, or proceeding will be pending or
threatened which would:
(i) prevent the consummation of any of the transactions contemplated
by this Agreement; or
(ii) cause the Transaction to be rescinded following consummation.
(g) Corporate Actions. Purchaser will have completed, and received FINRA
approval for, a forward split of its issued, outstanding and
authorized common stock on a 10 for 1 basis, as well as a change of
name to Psychic Friends Network Inc.
(h) Delivery of Financial Statements. The Vendor will have delivered to
the Purchaser the PFN Financial Statements, which financial statements
will include audited financial statements for PFN from its inception
to a date no more than 35 days before the Closing Date, prepared in
accordance with US GAAP and audited by an independent auditor
registered with the Public Company Accounting Oversight Board in the
United States.
(i) Due Diligence Review of Financial Statements. The Purchaser and its
accountants will be reasonably satisfied with their due diligence
investigation and review of the PFN Financial Statements.
(j) Due Diligence Generally. The Purchaser and its solicitors will be
reasonably satisfied with their due diligence investigation of PFN
that is reasonable and customary in a transaction of a similar nature
to that contemplated by the Transaction, including:
(i) materials, documents and information in the possession and
control of PFN and the Vendor which are reasonably germane to the
Transaction;
(ii) a physical inspection of the assets of PFN by the Purchaser or
its representatives; and
(iii) title to the material assets of PFN.
5.2 Conditions Precedent to Closing by the Vendor. The obligation the Vendor to
consummate the Transaction is subject to the satisfaction or written waiver of
the conditions set forth below by a date mutually agreed upon by the parties
hereto in writing and in accordance with Section 0. The Closing of the
Transaction will be deemed to mean a waiver of all conditions to Closing. These
conditions precedent are for the benefit of the Vendor and may be waived by the
Vendor in its sole discretion.
(a) Representations and Warranties. The representations and warranties of
the Purchaser set forth in this Agreement will be true, correct and
complete in all respects as of the Closing Date, as though made on and
as of the Closing Date and the Purchaser will have delivered to the
Vendor a certificate dated the Closing Date, to the effect that the
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representations and warranties made by the Purchaser in this Agreement
are true and correct.
(b) Performance. All of the covenants and obligations that the Purchaser
is required to perform or to comply with pursuant to this Agreement at
or prior to the Closing must have been performed and complied with in
all material respects. The Purchaser must have delivered each of the
documents required to be delivered by it pursuant to this Agreement.
(c) Transaction Documents. This Agreement, the Purchaser Documents and all
other documents necessary or reasonably required to consummate the
Transaction, all in form and substance reasonably satisfactory to the
Vendor, will have been executed and delivered by the Purchaser.
(d) Directors' Resolutions - Purchaser. The Vendor will have received
copies of resolutions duly adopted by the board of directors of the
Purchaser approving the execution and delivery of this Agreement and
the consummation of the transactions contemplated herein.
(e) No Material Adverse Change. No Purchaser Material Adverse Effect will
have occurred since the date of this Agreement.
(f) No Liabilities. All of the Purchaser's liabilities in excess of $1,000
shall have been satisfied as of the Closing.
(g) Share Cancellation. Ya ▇▇▇▇ ▇▇▇▇, the Purchaser's director and officer
shall cancel 50,000,000 post-split shares of the Purchaser's common
stock owned by her.
(h) Loan. The Vendor shall have received a loan in the amount of at least
$5,000, convertible into shares of the Purchaser at $0.75 per share.
(i) Private Placement. The Purchaser shall have secured financing in the
aggregate amount of $750,000 at a minimum price of $0.75 per common
share, with $250,000, including the loan described in 5.2(h), to be
closed by the Closing Date, $250,000 to be closed within thirty-one
days of the Closing Date, and $250,000 to be closed within ninety (90)
days of the Closing Date.
(j) No Action. No suit, action, or proceeding will be pending or
threatened before any governmental or regulatory authority wherein an
unfavorable judgment, order, decree, stipulation, injunction or charge
would result in and/or:
(i) prevent the consummation of any of the transactions contemplated
by this Agreement; or
(ii) cause the Transaction to be rescinded following consummation.
(k) Outstanding Shares. On the Closing Date the Purchaser will have no
more than 82,683,334 shares of Purchaser Common Stock issued and
outstanding, after giving effect to issuance of the Purchaser Shares,
the conversion of the Loan, the initial $250,000 financing and the
share cancellation contemplated by subsection (g) herein.
(l) Public Market. On the Closing Date, the shares of Purchaser Common
Stock will be quoted on the OTC Bulletin Board.
-17-
(m) Due Diligence Review of Financial Statements. The Vendor and its
accountants will be reasonably satisfied with their due diligence
investigation and review of the Purchaser Financial Statements, the
Purchaser SEC Documents, and the contents thereof, prepared in
accordance with US GAAP.
(n) Due Diligence Generally. The Vendor and its solicitors will be
reasonably satisfied with their due diligence investigation of the
Purchaser that is reasonable and customary in a transaction of a
similar nature to that contemplated by the Transaction.
6. ADDITIONAL COVENANTS OF THE PARTIES
6.1 Notification of Financial Liabilities. The Vendor will immediately notify
the Purchaser in accordance with Section 0 hereof, if PFN receives any advice or
notification from its independent certified public accounts that PFN has used
any improper accounting practice that would have the effect of not reflecting or
incorrectly reflecting in the books, records, and accounts of PFN, any
properties, assets, Liabilities, revenues, or expenses. Notwithstanding any
statement to the contrary in this Agreement, this covenant will survive Closing
and continue in full force and effect.
6.2 Access and Investigation. Between the date of this Agreement and the Closing
Date, the Vendor, on the one hand, and the Purchaser, on the other hand, will,
and will cause each of their respective representatives to:
(a) afford the other and its representatives full and free access to its
personnel, properties, assets, contracts, books and records, and other
documents and data;
(b) furnish the other and its representatives with copies of all such
contracts, books and records, and other existing documents and data as
required by this Agreement and as the other may otherwise reasonably
request; and
(c) furnish the other and its representatives with such additional
financial, operating, and other data and information as the other may
reasonably request.
All of such access, investigation and communication by a party and its
representatives will be conducted during normal business hours and in a manner
designed not to interfere unduly with the normal business operations of the
other party. Each party will instruct its auditors to co-operate with the other
party and its representatives in connection with such investigations.
6.3 Confidentiality. All information regarding the business of PFN including,
without limitation, financial information that the Vendor provides to the
Purchaser during the Purchaser's due diligence investigation of PFN will be kept
in strict confidence by the Purchaser and will not be used (except in connection
with due diligence), dealt with, exploited or commercialized by the Purchaser or
disclosed to any third party (other than the Purchaser's professional accounting
and legal advisors) without the prior written consent of PFN. If the Transaction
contemplated by this Agreement does not proceed for any reason, then upon
receipt of a written request from the Vendor, the Purchaser will immediately
return to the Vendor (or as directed by the Vendor) any information received
regarding PFN's business. Likewise, all information regarding the business of
the Purchaser including, without limitation, financial information that the
Purchaser provides to the Vendor during its due diligence investigation of the
Purchaser will be kept in strict confidence by the Vendor and will not be used
(except in connection with due diligence), dealt with, exploited or
commercialized by the Vendor or disclosed to any third party (other than the
Vendor's professional accounting and legal advisors) without the Purchaser's
prior written consent. If the Transaction contemplated by this Agreement does
not proceed for any reason, then upon receipt of a written request from the
Purchaser, the Vendor will immediately return to the Purchaser (or as directed
by the Purchaser) any information received regarding the Purchaser's business.
-18-
6.4 Notification. Between the date of this Agreement and the Closing Date, each
party to this Agreement will promptly notify the other party in writing if it
becomes aware of any fact or condition that causes or constitutes a material
breach of any of its representations and warranties as of the date of this
Agreement, if it becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would cause or constitute a material
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in any schedule
to this Agreement relating to such party, such party will promptly deliver to
the other party a supplement to such schedule specifying such change. During the
same period, each party will promptly notify the other party of the occurrence
of any material breach of any of its covenants in this Agreement or of the
occurrence of any event that may make the satisfaction of such conditions
impossible or unlikely.
6.5 Exclusivity. Until such time, if any, as this Agreement is terminated, the
Vendor and the Purchaser will not, directly or indirectly, solicit, initiate,
entertain or accept any inquiries or proposals from, discuss or negotiate with,
provide any non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any person or entity relating to any transaction
involving the sale of the business or assets (other than in the ordinary course
of business), or any of the capital stock of PFN or the Purchaser, as
applicable, or any merger, consolidation, business combination, or similar
transaction other than as contemplated by this Agreement.
6.6 Conduct of the Vendor and the Purchaser Prior to Closing. From the date of
this Agreement to the Closing Date, and except to the extent that the Purchaser
otherwise consents in writing, the Vendor will ensure that PFN operates its
business substantially as presently operated and only in the ordinary course and
in compliance with all applicable laws, and use its best efforts to preserve
intact its good reputation and present business organization and to preserve its
relationships with persons having business dealings with it. Likewise, from the
date of this Agreement to the Closing Date, and except to the extent that the
Vendor otherwise consents in writing, the Purchaser will operate its business
substantially as presently operated and only in the ordinary course and in
compliance with all applicable laws, and use its best efforts to preserve intact
its good reputation and present business organization and to preserve its
relationships with persons having business dealings with it.
6.7 Certain Acts Prohibited - the Vendor. Except as expressly contemplated by
this Agreement or for purposes in furtherance of this Agreement, between the
date of this Agreement and the Closing Date, the Vendor will not, without the
prior written consent of the Purchaser:
(a) incur any liability or obligation other than in the ordinary course of
business or encumber or permit the encumbrance of any properties or
assets of PFN except in the ordinary course of business;
(b) dispose of or contract to dispose of any property or assets of PFN,
including the Intellectual Property Assets, except in the ordinary
course of business consistent with past practice;
(c) not materially increase the benefits or compensation expenses of PFN,
other than as contemplated by the terms of any employment agreement in
existence on the date of this Agreement, increase the cash
compensation of any director, executive officer or other key employee
or pay any benefit or amount not required by a plan or arrangement as
in effect on the date of this Agreement to any such person.
6.8 Certain Acts Prohibited - the Purchaser. Except as expressly contemplated by
this Agreement, between the date of this Agreement and the Closing Date, the
Purchaser will not, without the prior consent of the Vendor:
(a) incur any liability or obligation or encumber or permit the
encumbrance of any properties or assets of the Purchaser except in the
ordinary course of business consistent with past practice;
-19-
(b) dispose of or contract to dispose of any property or assets of the
Purchaser except in the ordinary course of business consistent with
past practice;
(c) declare, set aside or pay any dividends on, or make any other
distributions in respect of the Purchaser Common Stock; or
(d) materially increase benefits or compensation expenses of the
Purchaser, increase the cash compensation of any director, executive
officer or other key employee or pay any benefit or amount to any such
person.
6.9 Employment Agreements. Between the date of this Agreement and the Closing
Date, the Vendor will cause PFN to make necessary arrangements to employ all of
the hourly and salaried employees of PFN reasonably necessary to operate such
business substantially as presently operated.
6.10 Purchaser Officers. The current director of the Purchaser will appoint
certain officers from PFN as officers of the Purchaser prior to the Closing
Date, and the Purchaser will accept the resignation of ▇▇ ▇▇▇▇ ▇▇▇▇ as an
officer of the Purchaser.
6.11 Corporate Changes. The Purchaser will not undertake any reverse split of
its common stock for a period of 12 months after Closing.
6.12 Restrictions on Further Financing. The Purchaser will not undertake any
financing structured as a pre-registered equity line of credit for a period of
12 months after Closing.
6.13 Inability to Raise Funds. If, due to no fault of the Vendor or the Vendor's
principles acting as principles of the Purchaser after the Closing, the Vendor
is not able to raise the full amount of $750,000 as contemplated by Section
5.2(i) of this Agreement, the Vendor shall be issued additional shares of the
Purchaser's common stock. If the Purchaser is not able to raise
(a) the first $250,000 of the post-closing funds required under the
financing commitment in Section 5.2(i) within forty days after
Closing, the Vendor shall receive an additional 30,000,000 shares of
the Purchaser's common stock; and
(b) the second $250,000 of the post-closing funds required under the
financing commitment in Section 5.2(i) within ninety (90) days after
Closing, the Vendor shall receive an additional 40,000,000 shares of
the Purchaser's common stock.
Additionally, if the Purchaser is not able to raise any of the post-closing
funds required under the financing commitment in Section 5.2(i), the
restrictions on corporate changes in Section 6.11 shall be null and void.
7. CLOSING
7.1 Closing. The Closing shall take place on the Closing Date at the offices of
the solicitors for the Purchaser or at such other location as agreed to by the
parties. Notwithstanding the location of the Closing, each party agrees that the
Closing may be completed by the exchange of undertakings between the respective
legal counsel for the Vendor and the Purchaser, provided such undertakings are
satisfactory to each party's respective legal counsel.
7.2 Closing Deliveries of the Vendor. At Closing, the Vendor will deliver or
cause to be delivered the following, fully executed and in the form and
substance reasonably satisfactory to the Purchaser:
(a) copies of all resolutions and/or consent actions adopted by or on
behalf of the board of directors of the Vendor evidencing approval of
this Agreement and the Transaction;
-20-
(b) the Vendor Documents, the PFN Financial Statements and any other
necessary documents, each duly executed by the Vendor, as required to
give effect to the Transaction.
7.3 Closing Deliveries of the Purchaser. At Closing, the Purchaser will deliver
or cause to be delivered the following, fully executed and in the form and
substance reasonably satisfactory to the Vendor:
(a) copies of all resolutions and/or consent actions adopted by or on
behalf of the board of directors of the Purchaser evidencing approval
of this Agreement and the Transaction;
(b) documents evidencing the satisfaction of Purchaser's liabilities as of
the date of the Closing;
(c) share certificates, duly endorsed in blank, and all other
documentation necessary for the cancellation of 50,000,000 shares of
the Purchaser's post-split common stock held by Ya ▇▇▇▇ ▇▇▇▇;
(d) $245,000 private placement set to complete on the closing of this
Agreement;
(e) the Purchaser Documents and any other necessary documents, each duly
executed by the Purchaser, as required to give effect to the
Transaction;
(f) a shareholder list of the Purchaser dated within 5 business days of
the Closing; and
(g) the resolutions required to effect the changes contemplated in
Sections ERROR! REFERENCE SOURCE NOT FOUND..
8. TERMINATION
8.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date by:
(a) mutual agreement of the Purchaser and the Vendor;
(b) the Purchaser, if there has been a material breach by the Vendor of
any material representation, warranty, covenant or agreement set forth
in this Agreement on the part of the Vendor that is not cured, to the
reasonable satisfaction of the Purchaser, within ten business days
after notice of such breach is given by the Purchaser (except that no
cure period will be provided for a breach by the Vendor that by its
nature cannot be cured);
(c) the Vendor, if there has been a material breach by the Purchaser of
any material representation, warranty, covenant or agreement set forth
in this Agreement on the part of the Purchaser that is not cured by
the breaching party, to the reasonable satisfaction of the Vendor,
within ten business days after notice of such breach is given by the
Vendor (except that no cure period will be provided for a breach by
the Purchaser that by its nature cannot be cured);
(d) the Purchaser if the Transaction is not closed within 30 days of the
delivery of the PFN Financial Statements; or
(e) the Purchaser or the Vendor if any permanent injunction or other order
of a governmental entity of competent authority preventing the
consummation of the Transaction contemplated by this Agreement has
become final and non-appealable.
-21-
8.2 Effect of Termination. In the event of the termination of this Agreement as
provided in Section 0, this Agreement will be of no further force or effect,
provided, however, that no termination of this Agreement will relieve any party
of liability for any breaches of this Agreement that are based on a wrongful
refusal or failure to perform any obligations.
9. INDEMNIFICATION, REMEDIES, SURVIVAL
9.1 Certain Definitions. For the purposes of this Article 0 the terms "LOSS" and
"LOSSES" mean any and all demands, claims, actions or causes of action,
assessments, losses, damages, Liabilities, costs and expenses, including without
limitation, interest, penalties, fines and reasonable attorneys, accountants and
other professional fees and expenses, but excluding any indirect, consequential
or punitive damages suffered by the Purchaser or the Vendor including damages
for lost profits or lost business opportunities.
9.2 Agreement of the Vendor to Indemnify. The Vendor will indemnify, defend, and
hold harmless, to the full extent of the law, the Purchaser and its shareholders
from, against, and in respect of any and all Losses asserted against, relating
to, imposed upon, or incurred by the Purchaser and its shareholders by reason
of, resulting from, based upon or arising out of:
(a) the breach by the Vendor of any representation or warranty of Vendor
contained in or made pursuant to this Agreement, any PFN Document or
any certificate or other instrument delivered pursuant to this
Agreement; or
(b) the breach or partial breach by the Vendor of any covenant or
agreement of the Vendor made in or pursuant to this Agreement, any PFN
Document or any certificate or other instrument delivered pursuant to
this Agreement.
9.3 Agreement of the Purchaser to Indemnify. The Purchaser will indemnify,
defend, and hold harmless, to the full extent of the law, the Vendor and PFN
from, against, for, and in respect of any and all Losses asserted against,
relating to, imposed upon, or incurred by the Vendor and PFN by reason of,
resulting from, based upon or arising out of:
(a) the breach by the Purchaser of any representation or warranty of the
Purchaser contained in or made pursuant to this Agreement, any
Purchaser Document or any certificate or other instrument delivered
pursuant to this Agreement; or
(b) the breach or partial breach by the Purchaser of any covenant or
agreement of the Purchaser made in or pursuant to this Agreement, any
Purchaser Document or any certificate or other instrument delivered
pursuant to this Agreement.
10. MISCELLANEOUS PROVISIONS
10.1 Effectiveness of Representations; Survival. Each party is entitled to rely
on the representations, warranties and agreements of each of the other parties
and all such representations, warranties and agreements will be effective
regardless of any investigation that any party has undertaken or failed to
undertake. Unless otherwise stated in this Agreement, and except for instances
of fraud, the representations, warranties and agreements will survive the
Closing Date and continue in full force and effect until one year after the
Closing Date.
10.2 Further Assurances. Each of the parties will co-operate with the others and
execute and deliver to the other parties such other instruments and documents
and take such other actions as may be reasonably requested from time to time by
any other party as necessary to carry out, evidence, and confirm the intended
purposes of this Agreement.
-22-
10.3 Amendment. This Agreement may not be amended except by an instrument in
writing signed by each of the parties.
10.4 Expenses. The Purchaser will bear all of its own costs incurred in
connection with the preparation of Transaction contemplated herein.
Additionally, the Purchaser will bear all costs associated with the auditing of
PFN and the review of all documents pertaining to the Transaction by the
Vendor's counsel.
10.5 Entire Agreement. This Agreement, the schedules attached hereto and the
other documents in connection with the Transaction contain the entire agreement
between the parties with respect to the subject matter hereof and supersede all
prior arrangements and understandings, both written and oral, expressed or
implied, with respect thereto. Any preceding correspondence or offers are
expressly superseded and terminated by this Agreement.
10.6 Notices. All notices and other communications required or permitted under
this Agreement must be in writing and will be deemed given if sent by personal
delivery, faxed with electronic confirmation of delivery,
internationally-recognized express courier or registered or certified mail
(return receipt requested).
All such notices and other communications will be deemed to have been received:
(a) in the case of personal delivery, on the date of such delivery;
(b) in the case of a fax, when the party sending such fax has received
electronic confirmation of its delivery;
(c) in the case of delivery by internationally-recognized express courier,
on the business day following dispatch; and
(d) in the case of mailing, on the fifth business day following mailing.
10.7 Headings. The headings contained in this Agreement are for convenience
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.
10.8 Benefits. This Agreement is and will only be construed as for the benefit
of or enforceable by those persons party to this Agreement.
10.9 Assignment. This Agreement may not be assigned (except by operation of law)
by any party without the consent of the other parties.
10.10 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada applicable to contracts made and
to be performed therein.
10.11 Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against any party.
10.12 Gender. All references to any party will be read with such changes in
number and gender as the context or reference requires.
10.13 Business Days. If the last or appointed day for the taking of any action
required or the expiration of any rights granted herein shall be a Saturday,
Sunday or a legal holiday in the State of Nevada, then such action may be taken
or right may be exercised on the next succeeding day which is not a Saturday,
Sunday or such a legal holiday.
-23-
10.14 Counterparts. This Agreement may be executed in one or more counterparts,
all of which will be considered one and the same agreement and will become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
10.15 Fax Execution. This Agreement may be executed by delivery of executed
signature pages by fax and such fax execution will be effective for all
purposes.
10.16 Schedules. The schedules are attached to this Agreement and incorporated
herein.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
WEB WIZARD, INC.
Per: /s/ Ya ▇▇▇▇ ▇▇▇▇
--------------------------------
Authorized Signatory
Name: Ya ▇▇▇▇ ▇▇▇▇
Title: President
PFN HOLDINGS
Per: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Authorized Signatory
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President
YA ▇▇▇▇ ▇▇▇▇
/s/ Ya ▇▇▇▇ ▇▇▇▇
------------------------------------
SCHEDULE 1
TO THE ACQUISITION AGREEMENT BETWEEN WEB WIZARD, INC. (THE "PURCHASER"),
PFN HOLDINGS (THE "VENDOR") AND YA ▇▇▇▇ ▇▇▇▇ (THE "SHAREHOLDER")
DIRECTORS AND OFFICERS OF PFN HOLDINGS.
Sole Director and Officer: ▇▇▇▇ ▇▇▇▇▇
SCHEDULE 2
TO THE ACQUISITION AGREEMENT BETWEEN WEB WIZARD, INC. (THE "PURCHASER"),
PFN HOLDINGS (THE "VENDOR") AND YA ▇▇▇▇ ▇▇▇▇ (THE "SHAREHOLDER")
DIRECTORS AND OFFICERS OF WEB WIZARD, INC.
Ya ▇▇▇▇ ▇▇▇▇ - Sole Director and Officer
SCHEDULE 3
TO THE ACQUISITION AGREEMENT BETWEEN WEB WIZARD, INC. (THE "PURCHASER"),
PFN HOLDINGS (THE "VENDOR") AND YA ▇▇▇▇ ▇▇▇▇ (THE "SHAREHOLDER")
PFN LEASES, SUBLEASES, CLAIMS, CAPITAL EXPENDITURES, TAXES AND
OTHER PROPERTY ASSETS
None.
SCHEDULE 4
TO THE ACQUISITION AGREEMENT BETWEEN WEB WIZARD, INC. (THE "PURCHASER"),
PFN HOLDINGS (THE "VENDOR") AND YA ▇▇▇▇ ▇▇▇▇ (THE "SHAREHOLDER")
PFN INTELLECTUAL PROPERTY
1. Trademark for Psychic Friends Network.
USPTO Serial # 78583100 and Registration # 3063407
SCHEDULE 5
TO THE ACQUISITION AGREEMENT BETWEEN WEB WIZARD, INC. (THE "PURCHASER"),
PFN HOLDINGS (THE "VENDOR") AND YA ▇▇▇▇ ▇▇▇▇ (THE "SHAREHOLDER")
PFN MATERIAL CONTRACTS
None.
SCHEDULE 6
TO THE ACQUISITION AGREEMENT BETWEEN WEB WIZARD, INC. (THE "PURCHASER"),
PFN HOLDINGS (THE "VENDOR") AND YA ▇▇▇▇ ▇▇▇▇ (THE "SHAREHOLDER")
PFN EMPLOYMENT AGREEMENTS AND ARRANGEMENTS
None.
SCHEDULE 7
TO THE ACQUISITION AGREEMENT BETWEEN WEB WIZARD, INC. (THE "PURCHASER"),
PFN HOLDINGS (THE "VENDOR") AND YA ▇▇▇▇ ▇▇▇▇ (THE "SHAREHOLDER")
LISTING OF PFN ASSETS
1. Trademark for Psychic Friends Network.
USPTO Serial # 78583100 and Registration # 3063407
2. Domain names
Domain Name Expires
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▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ 5/23/2013
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▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇ 5/6/2013
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ 5/23/2013
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ 10/31/2012
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▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇ 11/1/2012
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇ 1 0/31/2012
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▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ 5/23/2013
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ 12/29/2012
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ 10/10/2017
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇ 5/6/2013
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ 5/16/2013
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▇▇▇▇▇▇▇.▇▇▇ 5/23/2013
3. the physical website at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/
4. existing productions
5. In-house Production of all Infomercials and direct response commercials
6. merchant account