EXHIBIT 1
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COMMON STOCK PURCHASE AGREEMENT
BY AND AMONG
CECS CORP.
(THE "ISSUER")
AND
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(THE "PURCHASERS")
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DATED AS OF MAY 2, 2002
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TABLE OF CONTENTS
Page
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Article I Certain Definitions.............................. 1
Article II Purchase of Common Stock......................... 3
Article III Representations and Warranties................... 4
Article IV Other Agreements of the Parties.................. 8
Article V Conditions Precedent to Closing.................. 10
Article VI Termination...................................... 12
Article VII Legal Fees....................................... 13
Article VIII Miscellaneous.................................... 14
Schedule 1 List of Purchasers
Schedule 2.1(c) Term Sheet
Schedule 3.1(a) Subsidiaries
Schedule 3.1(c) Capitalization
Schedule 3.1(f) Required Consents and Approvals
Schedule 3.1(g) Litigation
i
COMMON STOCK PURCHASE AGREEMENT, dated as of May 2, 2002 (this
"Agreement"), by and between CECS CORP., a Delaware corporation (the "Company"),
and the purchasers listed on Schedule 1 attached hereto (each individually, the
"Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company desires to issue and sell to the Purchaser and
the Purchaser desire to acquire certain of the Company's Common Stock, par value
$.01, (the "Common Stock").
IN CONSIDERATION of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
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Section 1.1. Certain Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities by contract or otherwise.
"Business Day" means any day except Saturday, Sunday and any day which
is a legal holiday or a day on which banking institutions in the state of New
York are authorized or required by law or other government actions to close,
between the hours of 9:30 a.m. and 6:00 p.m. New York Time.
"Closing" shall have the meaning set forth in Section 2.1(b).
"Closing Date" shall mean the date of Closing, as set forth in Section
2.1(b).
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $.01
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"Disclosure Documents" means the disclosure package, including but not
limited to the Company's audited financial statements dated December 31, 2000
delivered to the Purchaser in connection with the offering by the Company of the
Shares and the Schedules to this Agreement furnished by or on behalf of the
Company pursuant to Section 3.1.
"Escrow Agent" [RESERVED].
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"CECS" means CECS CORP., with its headquarters address at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Phone: ▇▇▇-▇▇▇-▇▇▇▇.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in or on such asset or the
revenues or income thereon or therefrom.
"Material" shall mean having a financial consequence in excess of
$50,000.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1(a).
"NASD" means the National Association of Securities Dealers, Inc.
"Per Share Consideration" shall have the meaning set forth in Section
2.1(a).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Purchase Price" shall have the meaning set forth in Section 2.1(a).
"Required Approvals" shall have the meaning set forth in Section
3.1(f).
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiaries" shall have the meaning set forth in Section 3.1(a).
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ARTICLE II
PURCHASE OF COMMON STOCK
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Section 2.1. Purchase of Common Stock; Closing
(a) Subject to the terms and conditions herein set forth, the Company
shall issue and sell to the Purchasers, and the Purchasers shall purchase from
the Company on the Closing Date the number of shares of Common Stock listed
opposite the Purchaser's name on Schedule 1 (the "Shares") at a price of $.001
per share hereinafter referred to as the "Purchase Price."
(b) The closing of the purchase and sale of the Shares (the "Closing")
shall take place at the offices of DYDX Group of Funds, LLC ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇, immediately following the execution hereof,
or at such other time and/or place as the Purchaser and the Company may agree,
provided, however, in no case shall the Closing take place later than the fifth
day after the last of the conditions listed in Article V is satisfied or waived
by the appropriate party. The date of the Closing is hereinafter referred to as
the "Closing Date".
(c) At the Closing, (i) the Company shall deliver to the Purchaser (A)
one or more stock certificates representing the shares of Common Stock purchased
hereunder, registered in the name of the Purchaser, (B) all documents,
instruments and writings required to have been delivered at or prior to Closing
by the Company pursuant to this Agreement, and (ii) the Purchaser shall deliver
to the Company (A) the Purchase Price as determined pursuant to this Article I
in United States dollars in immediately available funds by wire transfer to an
account designated in writing by the Company prior to the Closing and (B) all
documents, instruments and writings required to have been delivered at or prior
to Closing by the Purchaser pursuant to this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
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3.1. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) Organization and Qualification. The Company is a corporation, duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite corporate power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. The Company has no subsidiaries other than as set forth
in Schedule 3.1(a) (collectively, the "Subsidiaries"). Each of the Subsidiaries
is a corporation, duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with the full corporate power
and authority to own and use its properties and assets and to carry on its
business as currently conducted. Each of the Company and the Subsidiaries is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
(a) the results of operations, assets, prospects, or financial condition of the
Company and the Subsidiaries, or (b) the Purchaser's rights under this Agreement
and the Shares (a "Material Adverse Effect").
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated hereby and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company. This
Agreement has been duly executed and delivered by the Company and constitutes
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
(c) Capitalization. The authorized, issued and outstanding capital
stock of the Company and each of the Subsidiaries is set forth in Schedule
3.1(c). No shares of Common Stock are entitled to preemptive or similar rights.
Except as specifically disclosed in the Disclosure Documents, there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or, except as a result of
the purchase and sale of the Common Stock hereunder, securities, rights or
obligations convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
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securities or rights convertible or exchangeable into shares of Common Stock.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate of incorporation, bylaws or other charter
documents.
(d) Issuance of Common Stock. The Shares have been duly and validly
authorized for issuance, offer and sale pursuant to this Agreement and, when
issued and delivered as provided hereunder against payment in accordance with
the terms hereof. The Company has an adequate reserve of shares of Common Stock
to enable it to perform its obligations under this Agreement. When issued in
accordance with the terms hereof, the Shares will be duly authorized, validly
issued, fully paid and nonassessable.
(e) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate
any provision of its certificate of incorporation or bylaws or (ii) subject to
obtaining the consents referred to in Section 3.1(f), conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party, or (iii) to the knowledge of the
Company result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company is subject (including Federal and state securities laws and
regulations), or by which any property or asset of the Company is bound or
affected, except in the case of each of clauses (ii) and (iii), such conflicts,
defaults, terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect.
The business of the Company is not being conducted in violation of any law,
ordinance or regulation of any governmental authority.
(f) Consents and Approvals. Except as specifically set forth in
Schedule 3.1(f), neither the Company nor any Subsidiary is required to obtain
any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of this Agreement, other than the making
of the applicable blue-sky filings under state securities laws, and other than,
in all cases, where the failure to obtain such consent, waiver, authorization or
order, or to give or make such notice or filing, would not materially impair or
delay the ability of the Company to effect the Closing and deliver to the
Purchaser the Shares free and clear of all Liens (collectively, the "Required
Approvals").
(g) Litigation; Proceedings. Except as specifically disclosed in
Schedule 3.1(g), there is no action, suit, notice of violation, proceeding or
investigation pending or, to the best knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries or any of their
respective properties before or by any court, governmental or administrative
agency or regulatory authority (Federal, State, county, local or foreign) which
(i) relates to or challenges the legality, validity or enforceability of this
Agreement (ii) could, individually or in the aggregate, have
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a Material Adverse Effect or (iii) could, individually or in the aggregate,
materially impair the ability of the Company to perform fully on a timely basis
its obligations under this Agreement.
(h) No Default or Violation. Neither the Company nor any Subsidiary
(i) is in default under or in violation of any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound, except such conflicts or defaults as
do not have a Material Adverse Effect, (ii) is in violation of any order of any
court, arbitrator or governmental body, except for such violations as do not
have a Material Adverse Effect, or (iii) is in violation of any statute, rule or
regulation of any governmental authority which could (individually or in the
aggregate) (x) adversely affect the legality, validity or enforceability of this
Agreement, (y) have a Material Adverse Effect or (z) adversely impair the
Company's ability or obligation to perform fully on a timely basis its
obligations under this Agreement.
(i) Certain Fees. No fees or commission will be payable by the Company
to any investment banker or bank with respect to the consummation of the
transactions contemplated hereby.
(j) Disclosure Documents. The Disclosure Documents do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(k) Non-Registered Offering. Neither the Company nor any Person acting
on its behalf has taken or will take any action (including, without limitation,
any offering of any securities of the Company under circumstances which would
require the integration of such offering with the offering of the Common Stock
under the Securities Act) which might subject the offering, issuance or sale of
the Shares to the registration requirements of Section 5 of the Securities Act.
Section 3.2. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
(a) Organization; Authority. The Purchaser is a corporation duly and
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. The Purchaser has the requisite power and authority to enter into
and to consummate the transactions contemplated hereby and otherwise to carry
out its obligations hereunder and thereunder. The purchase of the Common Stock
by the Purchaser hereunder has been duly authorized by all necessary action on
the part of the Purchaser. Each of this Agreement has been duly executed and
delivered by the Purchaser or on its behalf and constitutes the valid and
legally binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
of equity.
(b) Investment Intent. The Purchaser is acquiring the Shares for its
own account for investment purposes only and not with a view to or for
distributing or reselling such Common
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Stock or Shares or any part thereof or interest therein, without prejudice,
however, to the Purchaser's right, subject to the provisions of this Agreement,
at all times to sell or otherwise dispose of all or any part of such Shares in
compliance with applicable State securities laws and under an exemption from
registration under the Securities Act.
(c) Experience of Purchaser. The Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Common Stock, or has so evaluated the
merits and risks of such investment.
(d) Ability of Purchaser to Bear Risk of Investment. The Purchaser is
able to bear the economic risk of an investment in the Common Stock and, at the
present time, is able to afford a complete loss of such investment.
(e) Prohibited Transactions. The Common Stock to be purchased by the
Purchaser is not being acquired, directly or indirectly, with the assets of any
"employee benefit plan", within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.
(f) Access to Information. The Purchaser acknowledges receipt of the
Disclosure Documents and further acknowledges that it has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Common Stock and the merits and risks of investing in the
Shares; (ii) access to information about the Company and the Company's financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment in the Common Stock; and
(iii) the opportunity to obtain such additional information which the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the Common
Stock and to verify the accuracy and completeness of the information contained
in the Disclosure Documents.
(g) Reliance. The Purchaser understands and acknowledges that (i) the
Common Stock is being offered and sold, and the Shares are being offered, to it
without registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act and (ii) the
availability of such exemption, depends in part on, and that the Company will
rely upon the accuracy and truthfulness of, the foregoing representations and
the Purchaser hereby consents to such reliance.
The Company acknowledges and agrees that the Purchaser makes no
representation or warranty with respect to the transactions contemplated hereby
other than those specifically set forth in Article III herein.
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ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
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Section 4.1. Manner of Offering. The Common Stock is being issued pursuant
to Section 4 (2) of the Securities Act of 1933. The Shares will carry a
restrictive legend. The Company will use its best efforts to insure that no
actions are taken that would jeopardize the availability of the exemption from
registration for the Common Stock and the Shares.
Section 4.2. Furnishing of Information. As long as the Purchaser owns
Shares, the Company will promptly furnish to it all annual and quarterly reports
required by Section 13(a) or 15(d) of the Exchange Act.
Section 4.3. Notice of Certain Events. The Company shall (i) advise the
Purchaser promptly after obtaining knowledge thereof, and, if requested by the
Purchaser, confirm such advice in writing, of (A) the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of the Common Stock for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any state
securities commission or other regulatory authority, or (B) any event that makes
any statement of a material fact made in the Disclosure Documents untrue or that
requires the making of any additions to or changes in the Disclosure Documents
in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, (ii) use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption
from qualification of the Common Stock under any state securities or Blue Sky
laws, and (iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Common Stock under any such laws, use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
Section 4.4. Copies and Use of Disclosure Documents. The Company shall
furnish the Purchaser, without charge, as many copies of the Disclosure
Documents, and any amendments or supplements thereto, as the Purchaser may
reasonably request. The Company consents to the use of the Disclosure Documents,
and any amendments and supplements thereto, by the Purchaser in connection with
resale of the Shares other than pursuant to an effective registration statement.
Section 4.5. Modification to Disclosure Documents. If any event shall occur
as a result of which, in the reasonable judgment of the Company or the
Purchaser, it becomes necessary or advisable to amend or supplement the
Disclosure Documents in order to make the statements therein, in the light of
the circumstances at the time the Disclosure Documents were delivered to the
Purchaser, not misleading, or if it is necessary to amend or supplement the
Disclosure Documents to comply with applicable law, the Company shall promptly
prepare an appropriate amendment or supplement to the Disclosure Documents (in
form and substance reasonably satisfactory to both the Purchaser and Company) so
that (i) as so amended or supplemented the Disclosure Documents will not include
an untrue statement of material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to Purchaser, not misleading and (ii) the
Disclosure Documents will comply with applicable law.
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Section 4.6. Blue Sky Laws. The Company shall cooperate with the Purchaser
in connection with the qualification of the Shares under the securities or Blue
Sky laws of such jurisdictions as the Purchaser may request and to continue such
qualification at all times through the fifth anniversary of the Closing Date;
provided, however, that neither the Company nor its Subsidiaries shall be
required in connection therewith to qualify as a foreign corporation where they
are not now so qualified.
Section 4.7. Integration. The Company shall not and shall use its best
efforts to ensure that no Affiliate shall sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the
Common Stock in a manner that would require the registration under the
Securities Act of the sale of the Shares to the Purchaser.
Section 4.8. Furnishing of Rule 144A Materials. The Company shall, for so
long as the Purchaser holds any of the Shares and during any period in which it
is not subject to Section 13 or 15(d) of the Exchange Act, make available to any
registered holder of Shares in connection with any sale thereof and any
prospective purchaser of such Shares from such Person, the following information
in accordance with Rule 144A(d)(4) under the Securities Act: a brief statement
of the nature of the business of the Company and the products and services it
offers and the Company's most recent audited balance sheet and profit and loss
and retained earnings statements, and similar audited financial statements for
such part of the two preceding fiscal years as the Company has been in
operation.
Section 4.9. Solicitation Materials. The Company shall not (i) distribute
any offering materials in connection with the offering and sale of the Shares
other than the Disclosure Documents and any amendments and supplements thereto
prepared in compliance herewith or (ii) solicit any offer to buy or sell the
Common Stock by means of any form of general solicitation or advertising.
Section 4.10. Subsequent Financial Statements. The Company shall furnish to
the Purchaser, promptly after they are filed with the Commission, a copy of all
financial statements for any period subsequent to the period covered by the
financial statements included in the Disclosure Documents.
Section 4.11. Prohibition on Certain Actions. From the date hereof through
the Closing Date, the Company shall not and shall cause the Subsidiaries not to,
without the consent of the Purchaser, (i) amend its Certificate of
Incorporation, bylaws or other charter documents so as to adversely affect any
rights of the Purchaser; (ii) split, combine or reclassify its outstanding
capital stock; (iii) declare, authorize, set aside or pay any dividend or other
distribution with respect to the Common Stock; (iv) redeem, repurchase or offer
to repurchase or otherwise acquire shares of its Common Stock; or (v) enter into
any agreement with respect to any of the foregoing.
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Section 4.12. Listing of Shares. The Company shall use its best efforts to
maintain the quote for its common stock on the NASD OTC Electronic Bulletin
Board (or listing on a national securities exchange or market on which the
Common Stock is listed) and shall provide to the Purchaser evidence of such
listing.
Section 4.13. [RESERVED]
Section 4.14. Registration of Underlying Shares. So long as any Shares
remain restricted and unregistered, the Company agrees not to file a
registration statement with the Commission, without first having registered the
Shares for resale with the SEC and for resale in such states of the United
States as the Holders thereof shall reasonably request. If the Company shall
propose to file with the SEC any registration statement, the Company agrees to
give written notification of such to the Holders of the Shares at least two
weeks prior to such filing or taking of the proposed action. If any Shares are
still held by Purchaser at the end of such notice period, the Company agrees to
file a registration statement on Form S-1 or SB-2, or such other form of
registration statement in which the Shares may be included, and to include in
such registration statement the Shares held by Purchaser so as to permit the
public resale thereof. All costs and expenses of registration shall be borne by
the Company.
Section 4.15. Escrow. [RESERVED]
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
Section 5.1. Conditions Precedent to Obligations of the Purchaser. The
obligation of the Purchaser to purchase the Shares is subject to the
satisfaction or waiver by the Purchaser, at or prior to the Closing, of each of
the following conditions:
(a) Legal Opinion. The Purchaser shall have received the legal
opinion, addressed to it and dated the Closing Date of the Counsel for the
Company. Such legal opinion shall address the Company's authority to enter into
this Agreement and the availability of an exemption from Section 5 of the
Securities Act for the offer and sale of the Common Stock;
(b) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company contained herein shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except that representations and warranties
that are made as of a specific date need be true in all material respects only
as of such date);
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(c) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing;
(d) No Material Adverse Effect. Since the date of the financial
statements included in the Company's Disclosure Documents, no event that had a
Material Adverse Effect shall have occurred this is not disclosed in the
Disclosure Documents;
(e) No Prohibitions. The purchase of and payment for the Shares
hereunder (i) shall not be prohibited or enjoined (temporarily or permanently)
by any applicable law or governmental regulation and (ii) shall not subject the
Purchaser to any penalty, or in its reasonable judgment, other onerous condition
under or pursuant to any applicable law or governmental regulation that would
materially reduce the benefits to the Purchaser of the purchase of the Shares
(provided, however, that such regulation, law or onerous condition was not in
effect in such form at the date of this Agreement);
(f) Company Certificates. The Purchaser shall have received a
certificate, dated the Closing Date, signed by the Secretary or an Assistant
Secretary of the Company and certifying (i) that attached thereto is a true,
correct and complete copy of (A) the Company's Certificate of Incorporation, as
amended to the date thereof, (B) the Company's By-Laws, as amended to the date
thereof, (C) resolutions duly adopted by the Board of Directors of the Company
authorizing the execution and delivery of this Agreement, the issuance and sale
of the Common Stock, and (D) a certificate of good standing from the Secretary
of State of Nevada and (ii) the incumbency of officers executing this Agreement;
(g) No Suspensions of Trading in Common Stock. Trading in the Common
Stock shall not have been suspended by the Commission or the NASD or other
exchange or market on which the Common Stock is listed or quoted (except for any
suspension of trading of limited duration solely to permit dissemination of
material information regarding the Company);
(h) Required Approvals. All Required Approvals shall have been
obtained;
(i) Delivery of Certificates. The Company shall have delivered to the
Escrow Agent the certificate(s) representing the Shares , registered in the name
of the Purchaser, each in form satisfactory to the Purchaser; and
Section 5.2. Conditions Precedent to Obligations of the Company. The
obligation of the Company to issue and sell the Shares hereunder is subject to
the satisfaction or waiver by the Company, at or to the Closing, of each of the
following conditions:
(a) Accuracy of the Purchaser's Representations and Warranties. The
representations and warranties of the Purchaser shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except that representations and warranties that are made as
of a specific date need be true in all material respects only as of such date);
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(b) Performance by the Purchaser. The Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by it at or prior to the Closing; and
(c) No Prohibitions. The sale of the Common Stock hereunder (i) shall
not be prohibited or enjoined (temporarily or permanently) by any applicable law
or governmental regulation and (ii) shall not subject the Company to any
penalty, or in its reasonable judgment, any other onerous condition under or
pursuant to any applicable law or governmental regulation that would materially
reduce the benefits to the Company of the sale of Common Stock to the Purchaser
(provided, however, that such regulation, law or onerous condition was not in
effect in such form at the date of this Agreement).
ARTICLE VI
TERMINATION
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Section 6.1. Termination by Mutual Consent. This Agreement may be
terminated at any time prior to Closing by the mutual consent of the Company and
the Purchaser.
Section 6.2. Termination by the Company or the Purchaser. This Agreement
may be terminated prior to Closing by either the Company or the Purchaser, by
giving written notice of such termination to the other party, if:
(a) the Closing shall not have occurred by June 15, 2002; provided
that the terminating party is not then in material breach of its obligations
under this Agreement in any manner that shall have caused the failure referred
to in this paragraph (a);
(b) there shall be in effect any statute, rule, law or regulation that
prohibits the consummation of the Closing or if the consummation of the Closing
would violate any non-appealable final judgment, order, decree, ruling or
injunction of any court of or governmental authority having competent
jurisdiction; or
(c) there shall have been an amendment to the Securities Act or an
interpretive release promulgated or issued thereunder, which, in the reasonable
judgment of the terminating party, would materially adversely affect the
transactions contemplated hereby.
Section 6.3. Termination by the Company. This Agreement may be terminated
prior to Closing by the Company, by giving written notice of such termination to
the Purchaser, if the Purchaser has materially breached any representation,
warranty, covenant or agreement contained in this Agreement and such breach is
not cured within five business days following receipt by the Purchaser of notice
of such breach.
Page 12
Section 6.4. Termination by the Purchaser. This Agreement may be terminated
prior to Closing by the Purchaser, by giving written notice of such termination
to the Company, if:
(a) the Company has breached any representation, warranty, covenant or
agreement contained in this Agreement and such breach is not cured within five
business days following receipt by the Company of notice of such breach;
(b) there has occurred an event since the date of the financial
statements included in the Company's disclosure documents which could reasonably
be expected to have a Material Adverse Effect and which is not disclosed in the
Disclosure Documents; or
(c) trading in the Common Stock has been suspended by the Commission
or the NASD or other exchange or market on which the Common Stock is listed or
quoted (except for any suspension of trading of limited duration solely to
permit dissemination of material information regarding the Company).
ARTICLE VII
LEGAL FEES
----------
In the event any Party commences a legal action to enforce its rights under
this Agreement, the non-prevailing party shall pay all reasonable costs and
expenses (including reasonable attorney's fees) incurred in enforcing such
rights.
[THIS SPACE INTENTIONALLY LEFT BLANK]
Page 13
ARTICLE VIII
MISCELLANEOUS
-------------
Section 8.1. Fees and Expenses. Except as set forth above, each party shall
pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay the fees of the Escrow Agent and all stamp and other taxes
and duties levied in connection with the issuance of the Common Stock pursuant
hereto. The Purchaser shall be responsible for its own tax liability that may
arise as a result of the investment hereunder or the transactions contemplated
by this Agreement. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company shall pay
(i) all costs, expenses, fees and all taxes incident to and in connection with:
(A) the preparation, printing and distribution of the Disclosure Documents and
all amendments and supplements thereto (including, without limitation, financial
statements and exhibits), and all preliminary and final Blue Sky memoranda and
all other agreements, memoranda, correspondence and other documents prepared and
delivered in connection herewith (B) the issuance and delivery of the Shares,
(C) the qualification of the Shares for offer and sale under the securities or
Blue Sky laws of the several states (including, without limitation, the fees and
disbursements of the Purchasers' counsel relating to such registration or
qualification), (D) furnishing such copies of the Disclosure Documents and all
amendments and supplements thereto, as may reasonably be requested for use in
connection, with resale of the Shares, and (E) the preparation of certificates
for the Shares (including, without limitation, printing and engraving thereof),
(ii) all fees and expenses of the counsel and accountants of the Company and
(iii) all expenses and listing fees on Securities Exchanges, if any.
Section 8.2. Entire Agreement; Amendments. This Agreement, together with
the Exhibits, Annexes and Schedules hereto, contain the entire understanding of
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters.
Section 8.3. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been made upon facsimile (with transmission confirmation report) at the number
designated below (if delivered on a Business Day during normal business hours
where such notice is to be received), or the first Business Day following such
delivery (if delivered other than on a Business Day during normal business hours
where such notice is to be received) whichever shall first occur. The addresses
for such communications shall be:
If to the Company: ▇▇▇▇▇ ▇. ▇▇▇▇▇
CECS CORP.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Page 14
If to the Purchasers:
See Schedule 1 - Schedule of Purchasers (attached hereto)
With copies to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ Tel:
310-788-7577
or such other address as may be designated in writing hereafter, in the same
manner, by such person.
Section 8.4. Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by both the Company and the Purchaser, or, in the case of a waiver,
by the party against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
Section 8.5. Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
Section 8.6. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. Neither the Company nor the Purchaser may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other.
The assignment by a party of this Agreement or any rights hereunder shall not
affect the obligations of such party under this Agreement.
Section 8.7. No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
Section 8.8. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Washington without regard to the principles of conflicts of law thereof. Any
action to enforce the terms of this Agreement or any of its exhibits shall be
exclusively brought in the state and/or federal courts in the King County of the
state of Washington.
Section 8.9. Survival. The representations and warranties of the Company
and the Purchaser contained in Article III and the agreements and covenants of
the parties contained in Article IV and this Article VIII shall survive the
Closing (or any earlier termination of this Agreement).
Page 15
Section 8.10. Counterpart Signatures. This Agreement may be executed in two
or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
Section 8.11. Publicity. The Company and the Purchaser shall consult with
each other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and neither party shall
issue any such press release or otherwise make any such public statement without
the prior written consent of the other, which consent shall not be unreasonably
withheld or delayed.
Section 8.12. Severability. In case any one or more of the provisions of
this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
Section 8.13. Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, the
Purchaser will be entitled to specific performance of the obligations of the
Company under this Agreement and the Company will be entitled to specific
performance of the obligations of the Purchaser hereunder. Each of the Company
and the Purchaser agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of any breach of its obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
[SIGNATURE PAGE FOLLOWS]
[THIS SPACE INTENTIONALLY LEFT BLANK]
Page 16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
Company:
CECS CORP.
By: _____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Purchasers:
_________________________________
By: _____________________________
Title: __________________________
_________________________________
By: _____________________________
Title: _________________________
[THIS SPACE INTENTIONALLY LEFT BLANK]
Page 17
SCHEDULE 1
PURCHASER FULL AMOUNT OF NUMBER OF SHARES
NAME & ADDRESS PURCHASE PRICE PURCHASED
-------------- -------------- ---------
________________________________________________________________________________
Page 18
