Exhibit 10.19
PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is made as of August __, 2012 by and
between The X-Change Corporation, a Nevada corporation ("Buyer"), and 4C Tech
Holdings, Inc., an Alberta corporation ("Seller").
PRELIMINARY STATEMENT
Seller desires to sell, and Buyer desires to purchase, all of the
outstanding shares (the "Shares") of Guardian Telecom, Inc. (Guardian) a
Canadian corporation organized under the laws of Alberta Canada (the "Company"),
on the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement, the following terms and variations on
them have the meanings specified in this Article 1:
"Buyer" is defined in the first paragraph of this Agreement.
"Buyer Shares" means newly issued shares of Buyer common stock, par value
$.001 per share.
"Closing" means the consummation and completion of the purchase and sale of
the Shares.
"Closing Date" means the date on which the Closing actually takes place.
"Company" is defined in the Preliminary Statement.
"Company Contract" means any Contract (a) under which the Company has or
may acquire rights, (b) under which the Company is or may become subject to
Liability or (c) by which the Company or any of its assets is or may become
bound.
"Consent" means any approval, consent, ratification, waiver or other
authorization.
"Contemplated Transactions" means all of the transactions to be carried out
in accordance with this Agreement, including the purchase and sale of the
Shares, the performance by the parties of their other obligations under this
Agreement.
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"Contract" means any contract, agreement, commitment, understanding, lease,
license, franchise, warranty, guaranty, mortgage, note, bond or other instrument
or consensual obligation (whether written or oral and whether express or
implied) that is legally binding.
"Contravene" -- an act or omission would "Contravene" something if, as the
context requires:
(a) the act or omission would conflict with it, violate it, result in a
breach or violation of or failure to comply with it, or constitute a default
under it;
(b) the act or omission would give any Governmental Body or other Person
the right to challenge, revoke, withdraw, suspend, cancel, terminate or modify
it, to exercise any remedy or obtain any relief under it, or to declare a
default or accelerate the maturity of any obligation under it; or
(c) the act or omission would result in the creation of an Encumbrance on
the stock or assets of the Company.
"Encumbrance" means any charge, claim, mortgage, servitude, easement, right
of way, community or other marital property interest, covenant, equitable
interest, license, lease or other possessory interest, lien, option, pledge,
security interest, preference, priority, right of first refusal or similar
restriction.
"Financial Statements" is defined in Section 3.4.
"GAAP" means generally accepted accounting principles for financial
reporting in the United States.
"Governing Document" means any charter, articles, bylaws, certificate,
statement, statutes or similar document adopted, filed or registered in
connection with the creation, formation or organization of an entity, and any
Contract among all equityholders, partners or members of an entity.
"Governmental Authorization" means any Consent, license, permit or
registration issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Law.
"Governmental Body" means any (a) nation, region, state, county, city,
town, village, district or other jurisdiction, (b) federal, state, local,
municipal, foreign or other government, (c) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department
or other entity and any court or other tribunal), (d) multinational
organization, (e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature, or (f) official of any of the foregoing.
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"Knowledge" means, with respect to Seller, the actual knowledge after
reasonable investigation of Seller or of the Company's directors, officers or
senior managerial employees.
"Law" means any constitution, law, statute, treaty, rule, regulation,
ordinance, code, binding case law, principle of common law or notice of any
Governmental Body.
"Liabilities" includes liabilities or obligations of any nature, whether
known or unknown, whether absolute, accrued, contingent, choate, inchoate or
otherwise, whether due or to become due, and whether or not required to be
reflected on a financial statement prepared in accordance with GAAP.
"Order" means any order, injunction, judgment, decree, ruling, assessment
or arbitration award of any Governmental Body or arbitrator and any Contract
with any Governmental Body pertaining to compliance with Law.
"Ordinary Course of Business" refers to actions taken in the Company's
normal operation, consistent with its past practice and having no material
adverse effect on the financial or other condition, results of operations,
assets, Liabilities, equity, business or prospects of the Company.
"Person" refers to an individual or an entity, including a corporation,
share company, limited liability company, partnership, trust, association,
Governmental Body or any other body with legal personality separate from its
equityholders or members.
"Proceeding" means any action, arbitration, audit, examination,
investigation, hearing, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal, and
whether public or private) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Body or arbitrator.
"Purchase Price" is defined in Section 2.2.
"Securities Act" means the Securities Act of 1933.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
"Seller Release" is defined in Section 2.4(a)(ii).
"Seller" is defined in the first paragraph of this Agreement.
"Seller's Disclosure Schedule" means the disclosure schedule delivered
pursuant to Article 3 by Seller to Buyer concurrently with the execution of the
Agreement.
"Shares" is defined in the Preliminary Statement.
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ARTICLE 2
SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES
Upon the terms and subject to the conditions set forth in this Agreement,
at the Closing, Seller will sell and transfer the Shares to Buyer, and Buyer
will purchase and acquire the Shares from Seller.
2.2 PURCHASE PRICE
The purchase price for the Shares (the "Purchase Price") will be paid by
delivery of the $250,000.00 Thirty (30) Day Promissory Note (attached as Exhibit
A), a $750,000.00 90 day Promissory Note (attached as Exhibit B) of the Purchase
Price to Seller at the Closing and the issuance of a One year Promissory note in
the amount of Two Million ($2,000,000.00) US Dollar and a $500,000.00 Sixteen
Month Promissory Note. All amounts are in US Dollars and the issuance of One
Million (1,000,000) shares of Buyer's common stock.
2.3 CLOSING
The Closing will take place at the offices of Seller, at 10:00 a.m. (local
time) on the date that is two business days following the satisfaction or waiver
of each of the conditions set forth in Articles 5 and 6, and the Buyers audit of
Guardian unless Buyer and Seller agree otherwise.
CLOSING DELIVERIES
At the Closing:
(a) Seller will deliver to Buyer:
(i) certificates representing the Shares, duly endorsed in blank (or
accompanied by duly executed stock powers in blank);
(ii) a release in the form of Exhibit 2.4(a)(ii) executed by Seller (the
"Seller Release");
(iii) a certificate executed by Seller as to the accuracy of Seller's
representations and warranties as of the date of this Agreement and as of the
Closing in accordance with Section 6.1 and as to their compliance with and
performance of its covenants and obligations to be performed or complied on or
before the Closing Date in accordance with Section 6.2.
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(b) Buyer will deliver:
(i) One Million ($1,000,000.00) US Dollar Promissory note due 90 days after
the closing paid to 4C Technologies, Dubai UAE and one Promissory Note in the
amount of Two Million ($2,000,000.00) US Dollars bearing interest at 4% for a
Three year term and a certificate for One Million (1,000,000) shares of Buyer's
Common Stock.
(ii) a certificate executed by the President of Buyer as to the accuracy of
Buyer's representations and warranties as of the date of this Agreement and as
of the Closing in accordance with Section 7.1 and as to its compliance with and
performance of its covenants and obligations to be performed or complied with on
or before the Closing Date in accordance with Section 7.2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
3.1 ORGANIZATION AND GOOD STANDING
The Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, with full corporate
power and authority to conduct its business as presently conducted, to own or
use the properties and assets that it purports to own or use, and to perform all
its obligations under all its Company Contracts.
3.2 ENFORCEABILITY; NO CONFLICT
(a) Seller and the Company have the absolute and unrestricted right, power,
authority and capacity to execute and deliver this Agreement and to perform
their obligations under this Agreement. Assuming due authorization, execution
and delivery of this Agreement by Buyer, this Agreement constitutes the legal,
valid and binding obligation of Seller and the Company, enforceable against
Seller and the Company in accordance with its terms.
(b) Seller and the Company are not and will not be required to give any
notice to any Person or obtain any Consent or Governmental Authorization in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will
directly or indirectly (with or without notice or lapse of time) (i) Contravene
any provision of the Governing Documents of the Company, (ii) Contravene any
Company Contract, Governmental Authorization, Law or Order to which Company or
Seller, or any of the assets owned or used by the Company, may be subject, or
(iii) result in the imposition or creation of any Encumbrance upon or with
respect to any of the assets owned or used by the Company.
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3.3 CAPITALIZATION AND OWNERSHIP
The authorized equity securities of the Company consist of _______ shares
of common stock, par value $________ per share, of which _________ shares are
issued and outstanding. The Shares represent all of the issued and outstanding
shares in the Company. Seller is and will be on the Closing Date the record
holders and beneficial owners of the Shares, free and clear of all Encumbrances.
All of the outstanding equity securities of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. There are no
Contracts relating to the issuance, sale or transfer of any equity securities or
other securities of the Company.
3.4 FINANCIAL STATEMENTS
Seller has furnished to Buyer financial statements as of July 31, 2009,
July 31, 2010 and July, 2011 (collectively, the "Financial Statements"), which
is in the form of a listing of assets and liabilities. The Financial Statements
were prepared in accordance with the books and records of the Company. The
Financial Statements and notes thereto are complete and fairly present the
assets, liabilities and financial condition of the Company as of the date
thereof. There will be no liabilities owed to Seller or Seller's family.
3.5 NO UNDISCLOSED LIABILITIES
The Company has no Liabilities except for Liabilities reflected or reserved
against in the Financial Statements, and current Liabilities incurred in the
Ordinary Course of Business since the respective dates thereof.
3.6 CONTRACTS; NO DEFAULTS
(a) Section 3.6 of Seller's Disclosure Schedule contains an accurate and
complete list of:
(i) each Company Contract that involves performance of services or delivery
of goods or materials by the Company of an amount or value in excess of $10,000;
(ii) each Company Contract that involves performance of services for or
delivery of goods or materials to the Company of an amount or value in excess of
$10,000; and
(iii) each Company Contract that was not entered into in the Ordinary
Course of Business and that involves the expenditure or receipt by the Company
of an amount or value in excess of $10,000.
3.7 LEGAL PROCEEDINGS; ORDERS
(a) There exists no pending Proceedings (i) by or against the Company or
that otherwise relate to or may affect the business of, or any of the assets
owned or used by, the Company or (ii) that challenge, or that may have the
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effect of preventing, delaying, making illegal or otherwise interfering with,
any of the Contemplated Transactions. To Seller's Knowledge, no other such
Proceeding has been threatened, and no event has occurred or circumstance exists
that may give rise to or serve as a basis for the commencement of any such
Proceeding.
(b) There exists no pending Order to which the Company, or any of the
assets owned or used by the Company, is or has been subject.
3.8 SECURITIES LAW MATTERS
NONE
3.9 BROKERS OR FINDERS
Seller has not incurred any Liability for brokerage or finders' fees or
agents' commissions or other similar payment in connection with the Contemplated
Transactions.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
4.1 ORGANIZATION
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization.
4.2 ENFORCEABILITY; NO CONFLICT
(a) Buyer has the absolute and unrestricted right, power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement, which actions have been duly authorized and approved by all necessary
corporate action of Buyer. Assuming the execution and delivery of this Agreement
by Seller, this Agreement constitutes the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms.
(b) Buyer is not and will not be required to obtain any Consent or
Governmental Authorization in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
(c) Neither the execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the Contemplated Transactions by Buyer
will give any Person the right to prevent, delay or otherwise interfere with any
of the Contemplated Transactions pursuant to (i) any provision of Buyer's
Governing Documents, (ii) any resolution adopted by the board of directors or
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the stockholders of Buyer, (iii) any Law, Order or Governmental Authorization to
which Buyer may be subject or (iv) any Contract to which Buyer is a party or by
which Buyer may be bound.
4.3 BROKERS OR FINDERS
Buyer has not incurred any Liability for brokerage or finders' fees or
agents' commissions or other similar payment in connection with the Contemplated
Transactions.
ARTICLE 5
COVENANTS OF THE PARTIES BEFORE CLOSING
5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date and upon reasonable
advance notice from Buyer, Seller will, and will cause the Company to, (a)
afford Buyer full and free access to Company's personnel, properties, Contracts,
books and records, and other documents and data, (b) furnish such Persons with
copies of all such Contracts, books and records, and other documents and data as
Buyer may reasonably request, and (c) furnish such Persons with such additional
financial, operating and other data and information as Buyer may reasonably
request.
5.2 OPERATION OF THE BUSINESS OF THE COMPANY
Between the date of this Agreement and the Closing Date, Seller will, and
will cause the Company to, (a) conduct its business only in the Ordinary Course
of Business, (b) use their Best Efforts to preserve intact the current business
organization of the Company, keep available the services of the current
officers, employees and agents of the Company, and maintain relations and
goodwill with suppliers, customers, landlords, creditors, employees, agents and
others having business relationships with the Company, (c) confer with Buyer
concerning operational matters of a material nature and (d) otherwise report
periodically to Buyer concerning the status of the business, operations and
finances of the Company.
5.3 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, Buyer and
Seller will, and Seller will cause the Company to, make all filings that they
are required by Law to make to consummate the Contemplated Transactions. Between
the date of this Agreement and the Closing Date, Buyer and Seller will, and
Seller will cause the Company to, (a) cooperate with the other Party with
respect to all filings that such Party elects to make or that such Party is
required by Law to make in connection with the Contemplated Transactions, and
(b) cooperate with Buyer in obtaining any Governmental Authorizations.
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5.4 [SHAREHOLDER APPROVAL
BUYER DOES NOT REQUIRE SHAREHOLDER APPROVAL
ARTICLE 6
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by Buyer, in whole or in part):
6.1 ACCURACY OF REPRESENTATIONS
All of Seller's representations and warranties in this Agreement
(considered both collectively and individually) must have been accurate in all
material respects as of the date of this Agreement, and must be accurate in all
material respects as of the Closing Date as if then made.
6.2 SELLERS' AND COMPANY'S PERFORMANCE
All of the covenants and obligations that Seller and Company is required to
perform or to comply with under this Agreement on or before the Closing Date
(considered both collectively and individually) must have been duly performed
and complied with in all material respects.
6.3 STOCKHOLDER APPROVAL
The Buyer's stockholders if required by the Bylaws of Buyer shall have
approved the Contemplated Transactions.
ARTICLE 7
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by Seller, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement (considered
both collectively and individually) must have been accurate in all material
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respects as of the date of this Agreement and must be accurate in all material
respects as of the Closing Date as if then made.
7.2 BUYER'S PERFORMANCE
All of the covenants and obligations that Buyer is required to perform or
to comply with under this Agreement on or before the Closing Date (considered
both collectively and individually) must have been performed and complied with
in all material respects.
ARTICLE 8
TERMINATION
8.1 TERMINATION EVENTS
Subject to Section 8.2, this Agreement may, by notice given before or at
the Closing, be terminated:
(a) by mutual consent of Buyer and Seller;
(b) by Buyer if the satisfaction of any condition in Article 6 is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such condition;
(c) by Seller if the satisfaction of any condition in Article 7 is or
becomes impossible (other than through the failure of Seller to comply with its
obligations under this Agreement) and Seller has not waived such condition; and
(d) by either Buyer or Seller if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or before August 31, 2012,
or such later date as Buyer and Seller may agree upon.
8.2 EFFECT OF TERMINATION
Each party's right of termination under Section 8.1 is in addition to any
other rights it may have under this Agreement or otherwise, and the exercise of
such right of termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 8.1, all obligations of the parties under this
Agreement will terminate; provided, however, that if this Agreement is
terminated by a party because of the breach of the Agreement by another party or
because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of any other party's failure
to comply with its obligations under this Agreement, the terminating party's
right to pursue all legal remedies will survive such termination unimpaired.
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ARTICLE 9
INDEMNIFICATION; REMEDIES
9.1 SURVIVAL
All representations, warranties, covenants and obligations in this
Agreement, and any other certificate or document delivered pursuant to this
Agreement will survive the Closing and the consummation of the Contemplated
Transactions.
ARTICLE 10
GENERAL PROVISIONS
10.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of its Representatives.
10.2 FURTHER ACTIONS
Upon the request of any party to this Agreement, the other parties will (a)
furnish to the requesting party any additional information, (b) execute and
deliver, at their own expense, any other documents and (c) take any other
actions as the requesting party may reasonably require to more effectively carry
out the intent of this Agreement and the Contemplated Transactions.
10.3 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the parties with
respect to its subject matter a complete and exclusive statement of the terms of
the agreement between the parties with respect to its subject matter. This
Agreement may not be amended, supplemented or otherwise modified except in a
written document executed by the party against whose interest the modification
will operate.
10.4 SEVERABILITY
If a court of competent jurisdiction holds any provision of this Agreement
invalid or unenforceable, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
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10.5 GOVERNING LAW
This Agreement will be governed by and construed under the laws of
California without regard to conflicts of laws principles that would require the
application of any other law.
10.6 COUNTERPARTS
This Agreement may be executed in two or more counterparts.
The parties have executed and delivered this Agreement as of the date
indicated in the first sentence of this Agreement.
The X-Change Corporation 4C Tech Holdings, Inc.
By /s/ R. Wayne Duke By /s/ Kamran Bashir
--------------------------------- ---------------------------------
R. Wayne Duke Kamran Bashir
President Chairman of the Board
Guardian Telecom, Inc.
By /s/ Kamran Bashir
---------------------------------
Kamran Bashir
Chairman of the Board
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