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EXHIBIT 2.1: SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT
dated as of November 27, 2000
ARTICLE I
SUBSCRIPTION
THIS SUBSCRIPTION AGREEMENT is dated as of November 27, 2000, between
Hardy Kung Chin Lok (the "Subscriber") and Supply Chain Services Inc., a
Delaware corporation (the "Company").
Section 1.01 Subscription. The Subscriber hereby subscribes to the
immediate acquisition of 1,250,000 shares (the "Shares") of Common Stock,
$0.0001 par value ("Common Stock") of the Company. Such shares of Common Stock
are referred to herein as the "Securities".
Promptly upon the execution hereof and receipt by the Company of US Dollars two
hundred fifty thousand (US$250,000), the Company shall deliver the Securities to
the undersigned at the address indicated below.
ARTICLE II
PRESENTATIONS AND WARRANTIES
Section 2.01 In connection with the purchase of the Securities,
the Subscriber acknowledges, warrants and represents to the Company as follows:
(a) He is acquiring the Securities for investment for his own
account and without the intention of participating, directly or indirectly, in a
distribution of the Securities, and not with a view to resale or any
distribution of the Securities, or any portion thereof.
(b) He has knowledge and experience in financial and business
matters and has consulted with his own professional representatives as he has
considered appropriate to assist in evaluating the merits and risks of this
investment. He has reviewed the Company's Registration Statement on Form 10SB12G
dated May 12, 1999, Form 10SB12G/A dated June 1, 1999, the Company's Current
Reports on Form 8K dated September 11, 2000 and on Form 8K/A on November 9,
2000, the Company's Annual Report on Form 10KSB for the year ended December 31,
1999, the Company's Quarterly Reports on Form 10QSB for the quarter ended June
30, 1999, September 30, 1999, December 31, 1999, March 31, 2000, June 30, 2000
and September 30, 2000. He has had access to and an opportunity to question the
officers of the Company, or persons acting on their behalf, with respect to
material information about the Company and, in connection with his evaluation of
this investment, has, to the best of his knowledge, received all information and
data with respect to the Company that he has requested. He is acquiring the
Securities based solely upon his independent examination and judgment as to the
prospects of the Company.
(c) The Securities were not offered to the Subscriber by means of
publicly disseminated advertisements or sales literature.
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(d) Subject to the provisions of Section 3.01, he acknowledges
that an investment in the Securities is speculative and he may have to continue
to bear the economic risk of the investment in the Securities for an indefinite
period. He acknowledges that the Securities are being sold to the undersigned
without registration under any state, or federal or Hong Kong law requiring the
registration of securities for sale, and accordingly will constitute "restricted
securities" as defined in Rule 144 of the U.S. Securities and Exchange
Commission. The transferability of the Securities is therefore restricted by
applicable United States Federal and state securities laws and may be restricted
under the laws of other jurisdictions.
(e) The Subscriber is an "accredited investor" as such term is
defined in Appendix A.
(f) In consideration of the acceptance of this subscription, the
Subscriber agrees that the Securities will not be offered for sale, sold or
transferred by the undersigned other than pursuant to (i) an effective
registration under the Securities Act of 1933, as amended (the "Act"), an
exemption available under the Act or a transaction that is otherwise in
compliance with the Act; and (ii) an effective registration under the securities
law of any state or other jurisdiction applicable to the transaction, an
exemption available under such laws, or a transaction that is otherwise in
compliance with such laws.
(g) He understands that no U.S. federal or state agency has passed
upon the offering of the Securities or has made any finding or determination as
to the fairness of any investment in the Securities.
Section 2.02 Representations and Warranties of the Company. As an
inducement to the Subscriber to enter into this Agreement and to consummate the
transactions contemplated herein, the Company hereby represents and warrants to
the Subscriber and agrees as follows:
(a) Organization; Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
has full power and authority to enter into this Agreement and to perform its
obligations hereunder. This Agreement constitutes, and any other agreements and
instruments required to be delivered by the Company hereunder, when duly
executed and delivered by the Company, will constitute, valid and binding
obligations of the Company and will be enforceable in accordance with their
respective terms. The Company has previously provided to the Subscriber true
copies of all resolutions of the Company's Board of Directors necessary to
authorize the transactions described herein, and all such resolutions are in
full force and effect and have not been revoked.
(b) Capitalization. As of October 30, 2000, the authorized share
capital of the Company consists of 100,000,000 common shares, par value
US$0.0001 per share, of which 33,333,333 are fully issued and remain
outstanding, and 20,000,000 preferred shares, par value US$0.0001 per share,
none of which are issued and outstanding. Except as set forth above, no other
shares or equity securities of the Company have been issued and remain
outstanding, and there are no outstanding options, warrants or other rights to
purchase or acquire any share capital of the Company, whether granted by the
Company or otherwise, and there are no existing contracts by which the Company
is or may become bound to issue any additional shares. The Company
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has never reduced, repaid, redeemed or purchased any of its share capital. The
Securities shall, upon issuance, shall be fully paid and non-assessable.
(c) No Consents. Neither the consummation of the transactions
contemplated hereby, nor compliance with nor fulfillment of the terms and
provisions hereof, will (i) require the consent of any governmental authority or
any person under any contract to which the Company is a party or to which the
Company is subject or (ii) give any party with rights under any material
contract to which the Company or any subsidiary of the Company is a party the
right to terminate, modify or otherwise change the material rights or
obligations of any party under such contract.
(d) Compliance with Laws. The Company is in compliance, and there
exists no alleged material noncompliance, with all applicable laws relating in
any material respect to the Company and the operation or conduct of its
business, except where the failure to so comply would not have a material
adverse effect on the Company. The Company has not received any notice of
alleged violation of any such applicable law.
ARTICLE III
MISCELLANEOUS
Section 3.01 Miscellaneous. If the Company at any time files a
Registration Statement under the Securities Act of 1933 with respect to its
Common Stock after the date hereof, the Company shall so notify the undersigned
and shall include such of the Securities as the Subscriber may request on such
Registration Statement.
Section 3.02 Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
Section 3.03 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, applicable
to contracts executed in and to be performed entirely within that state. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined in any Delaware state or federal court sitting in the State
of Delaware and, to the extent permitted by Law, the parties hereto expressly
consent to the jurisdiction of such courts, agree to venue in such courts and
hereby waive any defense or claim of forum non conveniens they may have with
respect to any such action or proceeding.
IN WITNESS WHEREOF, the Subscriber and the Company have executed this
Agreement or caused this Agreement to be executed as of the date first written
above.
SUBSCRIBER:
/s/ Hardy Kung Chin Lok
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Name: Hardy Kung Chin Lok
Address: C/O 8/F Guangdong Textile Centre,
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22 Minden Avenue, Tsimshatsui,
Kowloon, Hong Kong
COMPANY:
Supply Chain Services Inc.
By: /s/ Thomas Y.C. Chu
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Thomas Y.C. Chu, President
8/F Guangdong Textile Centre,
22 Minden Avenue, Tsimshatsui,
Kowloon, Hong Kong
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APPENDIX A
An "accredited Investor" within the meaning of Regulation D under the
Securities Act of 1933 includes the following:
Organizations
(1) A bank as defined in section 3(a)(2) of the Act, or any
savings and loan association or other institution as defined in section
3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to section 15 of the Securities Exchange
Act of 1934; insurance company as defined in section 2(13) of the Act; an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in section 2(a)(48) of that act; a Small
Business Investment Company licensed by the U.S. Small Business Administration
under section 301(c) or (d) of the Small Business Investment Act of 1958; an
employee benefit plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in section 3(21) of such act, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors.
(2) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
(3) A trust (i) with total assets in excess of $5,000,000, (ii)
not formed for the specific purpose of acquiring the Securities, (iii) whose
purchase is directed by a person who, either alone or with his Subscriber
representative, has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of the proposed
investment.
(4) A corporation, business trust, partnership, or an organization
described in section 501(c)(3) of the Internal Revenue Code, which was not
formed for the specific purpose of acquiring the Securities, and which has total
assets in excess of $5,000,000.
Individuals
(5) Individuals with income from all sources for each of the last
two full calendar years whose reasonably expected income for this calendar year
exceeds either of:
(i) $200,000 individual income; or
(ii) $300,000 joint income with spouse.
NOTE: Your "income" for a particular year may be calculated by adding to your
adjusted gross income as calculated for Federal income tax purposes any
deduction for long term capital gains, any deduction for depletion allowance,
any exclusion for tax exempt interest and any losses of a partnership allocated
to you as a partner.
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(6) Individuals with net worth as of the date hereof (individually
or jointly with your spouse), including the value of home, furnishings, and
automobiles, in excess of $1,000,000.
(7) Directors, executive officers or general partners of the
Issuer.
