Execution Copy
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") has been made as of
October 1, 2007, by and among Xxxxx Productions, Inc., a Nevada corporation
("VLLA"), VLLA Merger Sub, Inc., a Nevada corporation and a wholly-owned
Subsidiary of VLLA ("Sub"), Guoxi Holding Limited, a British Virgin Islands
corporation ("GHL"), and the shareholders of GHL, each of whom is identified on
Schedule A to this Agreement (the "GHL Shareholders").
Whereas, the respective Boards of Directors of VLLA, Sub and GHL have
approved the merger, pursuant and subject to the terms and conditions of this
Agreement, of Sub with and into GHL (the "Merger"), whereby all of the issued
and outstanding shares of the Common Stock of GHL (the "GHL Common Stock") will
be converted into the right to receive a specified number of shares of the
Common Stock of VLLA (the "VLLA Common Stock"); and the parties each desire to
make certain representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
Now, Therefore, in consideration of the premises and the representations,
warranties and covenants herein contained, the parties agree to effect the
Merger on the terms and conditions herein provided and further agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Definitions.
In addition to the other definitions contained in this Agreement, the
following terms will, when used in this Agreement, have the following respective
meanings:
"Affiliate" means a Person that, directly or indirectly, controls, is
controlled by, or is under common control with, the referenced party.
"BVI" British Virgin Islands.
"Claim" means any contest, claim, demand, assessment, action, suit, cause
of action, complaint, litigation, proceeding, hearing, arbitration,
investigation or notice of any of the foregoing involving any Person.
"Closing" means the consummation of the Merger.
"Code" means the Internal Revenue Code of 1986, as amended, together with
all rules and regulations promulgated thereunder.
"Constituent Corporations" means GHL and Sub, as the constituent
corporations of the Merger.
"GAAP" means United States generally accepted accounting practices.
"GCL" means the Nevada General Corporation Law.
"Person" means and includes any individual, partnership, corporation,
trust, company, unincorporated organization, joint venture or other entity, and
any Governmental Entity.
"Record Holder" means a holder of record of GHL Common Stock as shown on
the regularly maintained stock transfer records of GHL.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, joint venture, trust or other entity of which such Person, directly
or indirectly through an Affiliate, owns an amount of voting securities, or
possesses other ownership interests, having the power, direct or indirect, to
elect a majority of the Board of Directors or other governing body thereof.
"Surviving Corporation" means GHL, as the surviving corporation of the
Merger.
"U.S." means the United States of America.
1.2 Interpretation.
In this Agreement, unless the express context otherwise requires:
(a) the words "herein," "hereof" and "hereunder and words of similar
import refer to this Agreement as a whole and not to any particular
provision of this Agreement;
(b) references to "Article" or "Section" are to the respective
Articles and Sections of this Agreement, and references to "Exhibit" or
"Schedule" are to the respective Exhibits and Schedules annexed hereto;
(c) references to a "party" means a party to this Agreement and
include references to such party's successors and permitted assigns;
(d) references to a "third party" means a Person that is neither a
Party to this Agreement nor an Affiliate thereof;
(e) the terms "dollars" and "$" means U.S. dollars;
(f) terms defined in the singular have a comparable meaning when
used in the plural, and vice versa;
(g) the masculine pronoun includes the feminine and the neuter, and
vice versa, as appropriate in the context; and
(h) wherever the word "include," "includes" or "including is used in
this Agreement, it will be deemed to be followed by the words "without
limitation."
ARTICLE 2. THE MERGER
2.1 Effective Time of the Merger.
Subject to the provisions of this Agreement, the Merger will be
consummated by the filing with the Secretary of State of the State of Nevada of
articles of merger, in such form as required by, and signed and attested in
accordance with, the relevant provisions of the GCL and by the filing with the
of the BVI of articles of merger, in such form as required by, and signed and
attested in accordance with, the relevant provisions of the (the time of the
filing of such instruments as occurs second or such later time and date as is
specified in such filings being the "Effective Time"). It is the intent of the
parties to cause such filings to be made no later than the Closing Date.
2
2.2 Closing.
The Closing will take place at 10:00 a.m., local time, on the earliest
date practicable after all of the conditions set forth in Articles 7 and 8 are
satisfied or waived by the appropriate party, but in no event later than the
applicable date referred to in Section 10.1(d) (the "Closing Date"), unless
another time, date or place is agreed to in writing by the parties.
2.3 Effects of the Merger.
By virtue of the Merger and without the necessity of any action by or on
behalf of the Constituent Corporations, or either of them:
(a) at the Effective Time, (i) the separate existence of Sub will
cease, and Sub will be merged with and into GHL, and (ii) the certificate
of incorporation and bylaws of GHL as in effect immediately prior to the
Effective Time will be the certificate of incorporation and bylaws of the
Surviving Corporation until thereafter amended; and
(b) at and after the Effective Time, the Surviving Corporation will
possess all the rights, privileges, powers and franchises of a public as
well as of a private nature, and be subject to all the restrictions,
disabilities and duties, of each of the Constituent Corporations; and all
property, real, personal and mixed, and all debts due to either of the
Constituent Corporations on whatever account, as well for stock
subscriptions as all other things in action or belonging to each of the
Constituent Corporations will be vested in the Surviving Corporation; and
all property, rights, privileges, powers and franchises, and all and every
other interest of each of the Constituent Corporations will be thereafter
as effectually be the property of the Surviving Corporation as they were
of the respective Constituent Corporations, and the title to any real
estate vested by deed or otherwise, in either of the Constituent
Corporations, will not revert or be in any way impaired; but all rights of
creditors and all liens upon any property of either of the Constituent
Corporations will be preserved unimpaired, and all debts, liabilities and
duties of the respective Constituent Corporations will thereafter attach
to the Surviving Corporation, and may be enforced against it to the same
extent as if such debts and liabilities had been incurred or contracted by
it.
ARTICLE 3. EFFECT OF MERGER ON CAPITAL STOCK
3.1 Effect on Capital Stock.
As of the Effective Time, by virtue of the Merger and without any action
on the part of any holder of shares of GHL Common Stock or of shares of the
capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of the
capital stock of Sub will be converted into the right to receive one fully
paid and non-assessable share of the capital stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock. Shares of common stock of GHL
("Common Stock"), if any, that are held by GHL as treasury stock will be
cancelled and retired and will cease to exist, and no Merger Consideration
will be delivered in exchange therefor. Any shares of common stock of VLLA
("VLLA Common Stock"), if any, owned by GHL or the GHL Shareholders as of
the Effective Time will remain unaffected by the Merger.
3
(c) Exchanged Shares; Merger Consideration.
(i) "Exchanged Shares" means all shares of GHL Common Stock
issued and outstanding immediately prior to the Effective Time other
than shares of GHL Common Stock, if any, held by GHL as treasury
stock
(ii) The consideration payable to the GHL Shareholders in the
Merger will consist of an aggregate of 68,900,000 shares of VLLA
Common Stock (the "Stock Merger Consideration") and $14,334,500 to
be paid no later than the first anniversary of the Closing Date in
accordance with non-interest bearing notes of VLLA in the form
annexed hereto (the "Cash Merger Consideration," collectively with
the Stock Merger Consideration, the "Merger Considertion"), which
shall be distributed among the GHL Shareholders proportionately in
accordance with their shareholdings as set forth on Schedule A
hereto.
(d) Exchange of Exchanged Shares for Merger Consideration. As of the
Effective Time, by virtue of the Merger, each issued and outstanding
Exchanged Share will be converted into the right to receive the Merger
Consideration due in respect thereof, payable, to the Record Holders of
Exchanged Shares at the Effective Time. As of the Effective Time, all
shares of GHL Common Stock will no longer be outstanding and will
automatically be cancelled and retired and will cease to exist, and each
holder of a certificate representing any such shares will cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration therefor, without interest, upon the surrender of such
certificate in accordance with Section 3.2.
3.2 Exchange of Merger Consideration for Exchanged Shares.
(a) Exchange. On the Closing Date, the holders of all of the GHL
Common Stock shall deliver to VLLA certificates or other documents
evidencing all of the issued and outstanding GHL Common Stock, duly
endorsed in blank or with executed power attached thereto in transferable
form. In exchange for all of the GHL Common Stock tendered pursuant
hereto, VLLA shall issue to GHL Shareholders the Merger Consideration.
(b) No Further Ownership Rights in GHL Common Stock. All shares of
VLLA Common Stock issued upon the surrender for exchange of shares of GHL
Common Stock in accordance with the terms hereof will be deemed to have
been issued in full satisfaction of all rights pertaining to such shares
of GHL Common Stock, and there will be no further registration of
transfers of the shares of GHL Common Stock (other than shares held
directly or indirectly by VLLA) after the Effective Time. If, after the
Effective Time, certificates representing GHL Common Stock are presented
to the Surviving Corporation or its transfer agent for any reason, such
certificates will be cancelled and exchanged as provided by this Article
3.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF GHL
GHL and each of the GHL Shareholders jointly and severally represents and
warrants to VLLA and to Sub as follows, as of the date hereof and as of the
Closing Date:
4
4.1 Organization.
GHL is a corporation duly organized, validly existing and in good standing
under the laws of British Virgin Island and has the corporate power and is duly
authorized, qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
entity in the country or states in which the character and location of the
assets owned by it or the nature of the business transacted by it requires
qualification. Included in the attached Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation, bylaws and
amendments thereto as in effect on the date hereof. The execution and delivery
of this Agreement does not and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate any
provision of GHL's certificate of incorporation or bylaws. GHL has full power,
authority and legal right and has taken all action required by law, its articles
of incorporation, bylaws or otherwise to authorize the execution and delivery of
this Agreement.
4.2 Capitalization.
The authorized capitalization of GHL consists of 50,000 shares of common
stock, no par value and no preferred shares. As of the date hereof, there are
50,000 shares of common stock issued and outstanding. All issued and outstanding
common shares have been legally issued, fully paid, are nonassessable and not
issued in violation of the preemptive rights of any other person. GHL has no
other securities, warrants or options authorized or issued.
4.3 Subsidiaries.
GHL owns 100% of Jiangxi Xi Cheong Lacquer, Inc., a China corporation
(herein, "JXC").
4.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of GHL and JXC are
in all material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) Neither GHL nor JXC has any liabilities with respect to the
payment of any country, federal, state, county, local or other taxes
(including any deficiencies, interest or penalties).
(c) Each of GHL and JXC shall remain responsible for all debts
incurred by it prior to the closing.
4.5 Information.
The information concerning GHL and JXC as set forth in this Agreement and
in the attached Schedules is complete and accurate in all material respects and
does not contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
5
4.6 Title and Related Matters.
Each of GHL and JXC has good and marketable title to and is the sole and
exclusive owner of all of its properties, inventory, interests in properties and
assets, real and personal (collectively, the "Assets") free and clear of all
liens, pledges, charges or encumbrances. Except as set forth in the Schedules
attached hereto, each of GHL and JXC owns free and clear of any liens, claims,
encumbrances, royalty interests or other restrictions or limitations of any
nature whatsoever, any and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
its business. Except as set forth in the attached Schedules, no third party has
any right to, and neither GHL nor JXC has received any notice of infringement of
or conflict with asserted rights of others with respect to any product,
technology, data, trade secrets, know-how, proprietary techniques, trademarks,
service marks, trade names or copyrights which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
materially adverse affect on the business, operations, financial conditions or
income of GHL or JXC or any material portion of their properties, assets or
rights.
4.7 Litigation and Proceedings
There are no actions, suits or proceedings pending or threatened by or
against or affecting GHL or JXC, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before any
arbitrator of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business prospects of GHL
or JXC. Neither GHL nor JXC has any knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality.
4.8 Contracts.
On the Closing Date:
(a) Except as set forth on Schedule, there are no material
contracts, agreements, franchises, license agreements, or other
commitments to which GHL or JXC is a party or by which it or any of its
properties are bound;
(b) Neither GHL nor JXC is party to any contract, agreement,
commitment or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree or award
which materially and adversely affects, or in the future may (as far as
GHL or JXC can now foresee) materially and adversely affect, the business,
operations, properties, assets or conditions of GHL or JXC; and
(c) Neither GHL nor JXC is party to any material oral or written:
(i) contract for the employment of any officer or employee; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay,
pension, benefit or retirement plan, agreement or arrangement covered by
Title IV of the Employee Retirement Income Security Act, as amended; (iii)
agreement, contract or indenture relating to the borrowing of money; (iv)
guaranty of any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties of
obligations, which, in the aggregate exceeds $1,000; (v) consulting or
other contract with an unexpired term of more than one year or providing
for payments in excess of $10,000 in the aggregate; (vi) collective
bargaining agreement; or (vii) contract, agreement, or other commitment
involving payments by it for more than $10,000 in the aggregate.
6
4.9 No Conflict With Other Instruments.
The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust or other material contract, agreement or instrument to
which GHL or JXC is party or to which any of its properties or operations are
subject.
4.10 Material Contract Defaults.
To the best knowledge and belief of GHL and JXC, neither GHL nor JXC is in
default in any material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the business,
operations, properties, assets or condition of GHL or JXC, and there is no event
of default in any material respect under any such contract, agreement, lease or
other commitment in respect of which GHL or JXC has not taken adequate steps to
prevent such a default from occurring.
4.11 Governmental Authorizations.
To the best knowledge of GHL and JXC, each of GHL and JXC has all
licenses, franchises, permits and other governmental authorizations that are
legally required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, no authorization, approval, consent or
order of, or registration, declaration or filing with, any court or other
governmental body is required in connection with the execution and delivery by
GHL and the GHL Sharerholders of the transactions contemplated hereby.
4.12 Compliance With Laws and Regulations.
To the best knowledge and belief of CGD and JXC, GHL and JXC has complied
with all applicable statutes and regulations of any federal, state or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets or condition of GHL or JXC or would not result in GHL's or JXC's
incurring any material liability.
4.13 Insurance.
All of the insurable properties of GHL and JXC are insured for GHL's
benefit under valid and enforceable policy or policies containing substantially
equivalent coverage and will be outstanding and in full force at the Closing
Date.
4.14 Approval of Agreement.
The directors of GHL have authorized the execution and delivery of the
Agreement and have approved the transactions contemplated hereby.
7
4.15 Material Transactions or Affiliations.
As of the Closing Date, there will exist no material contract, agreement
or arrangement between GHL or JXC and any person who was at the time of such
contract, agreement or arrangement an officer, director or person owning of
record, or known by GHL or JXC to own beneficially, ten percent (10%) or more of
the issued and outstanding Common Shares of GHL and which is to be performed in
whole or in part after the date hereof. Neither GHL nor JXC has any commitment,
whether written or oral, to lend any funds to, borrow any money from or enter
into any other material transactions with, any such affiliated person.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF VLLA
VLLA represents and warrants to GHL, as of the date hereof and as of the
Closing Date, as follows:
5.1 Organization.
VLLA is a corporation duly organized, validly existing, and in good
standing under the laws of Nevada and has the corporate power and is duly
authorized, qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in the jurisdiction in which the character and location of the
assets owned by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does not and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not violate any provision of VLLA's articles of
incorporation or bylaws. VLLA has full power, authority and legal right and has
taken all action required by law, its articles of incorporation, its bylaws or
otherwise to authorize the execution and delivery of this Agreement.
5.2 Capitalization.
The authorized capitalization of VLLA consists of 75,000,000 shares of
common stock, $0.001 par value per share. As of the date hereof, VLLA has
approximately 6,080,000 shares of common stock issued and outstanding. All
issued and outstanding shares are legally issued, fully paid and nonassessable
and are not issued in violation of the preemptive or other rights of any person.
5.3 Subsidiaries.
VLLA has no subsidiaries other than Sub.
5.4 Tax Matters: Books and Records.
(a) The books and records, financial and others, of VLLA are in all
material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) VLLA has no liabilities with respect to the payment of any
country, federal, state, county, or local taxes (including any
deficiencies, interest or penalties).
8
(c) VLLA shall remain responsible for all debts incurred by VLLA
prior to the date of closing.
5.5 Litigation and Proceedings.
There are no actions, suits, proceedings or investigations pending or
threatened by or against or affecting VLLA or its properties, at law or in
equity, before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that would have a
material adverse affect on the business, operations, financial condition or
income of VLLA. VLLA is not in default with respect to any judgment, order,
writ, injunction, decree, award, rule or regulation of any court, arbitrator or
governmental agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a default.
5.6 Material Contract Defaults.
VLLA is not in default in any material respect under the terms of any
outstanding contract, agreement, lease or other commitment which is material to
the business, operations, properties, assets or condition of VLLA, and there is
no event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which VLLA has not taken adequate steps
to prevent such a default from occurring.
5.7 Information.
The information concerning VLLA as set forth in this Agreement and in the
attached Schedules is complete and accurate in all material respects and does
not contain any untrue statement of a material fact or omit to state a material
fact required to make the statements made in light of the circumstances under
which they were made, not misleading.
5.8 Title and Related Matters.
VLLA has good and marketable title to and is the sole and exclusive owner
of all of its properties, inventory, interest in properties and assets, real and
personal (collectively, the "Assets") free and clear of all liens, pledges,
charges or encumbrances. VLLA owns free and clear of any liens, claims,
encumbrances, royalty interests or other restrictions or limitations of any
nature whatsoever and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
VLLA's business. No third party has any right to, and VLLA has not received any
notice of infringement of or conflict with asserted rights of other with respect
to any product, technology, data, trade secrets, know-how, proprietary
techniques, trademarks, service marks, trade names or copyrights which, singly
on in the aggregate, if the subject of an unfavorable decision ruling or
finding, would have a materially adverse affect on the business, operations,
financial conditions or income of VLLA or any material portion of its
properties, assets or rights.
5.9 Contracts.
On the Closing Date:
9
(a) There are no material contracts, agreements franchises, license
agreements, or other commitments to which VLLA is a party or by which it
or any of its properties are bound;
(b) VLLA is not a party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree or award materially and
adversely affects, or in the future may (as far as VLLA can now foresee)
materially and adversely affect, the business, operations, properties,
assets or conditions of VLLA; and
(c) VLLA is not a party to any material oral or written: (i)
contract for the employment of any officer or employee; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay,
pension benefit or retirement plan, agreement or arrangement covered by
Title IV of the Employee Retirement Income Security Act, as amended; (iii)
agreement, contract or indenture relating to the borrowing of money; (iv)
guaranty of any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties, of
obligations, which, in the aggregate exceeds $1,000; (v) consulting or
other contract with an unexpired term of more than one year or providing
for payments in excess of $10,000 in the aggregate; (vi) collective
bargaining agreement; (vii) contract, agreement or other commitment
involving payments by it for more than $10,000 in the aggregate.
5.10 Compliance With Laws and Regulations.
To the best of VLLA's knowledge and belief, VLLA has complied with all
applicable statutes and regulations of any federal, state or other governmental
entity or agency thereof, except to the extent that noncompliance would not
materially and adversely affect the business, operations, properties, assets or
condition of VLLA or would not result in VLLA incurring material liability.
5.11 Insurance.
VLLA maintains no insurance policies.
5.12 Approval of Agreement.
The directors of VLLA have authorized the execution and delivery of the
Agreement by and have approved the transactions contemplated hereby.
5.13 Material Transactions or Affiliations.
There are no material contracts or agreements of arrangement between VLLA
and any person, who was at the time of such contract, agreement or arrangement
an officer, director or person owning of record, or known to beneficially own
ten percent (10%) or more of the VLLA Common Stock and which is to be performed
in whole or in part after the date hereof. Except as disclosed in the attached
Schedule, VLLA has no commitment, whether written or oral, to lend any funds to,
borrow any money from or enter into material transactions with any such
affiliated person.
10
5.14 No Conflict With Other Instruments.
The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust or other material contract, agreement or instrument to
which VLLA is a party or to which any of its properties or operations are
subject.
5.15 Governmental Authorizations.
VLLA has all licenses, franchises, permits or other governmental
authorizations legally required to enable it to conduct its business in all
material respects as conducted on the date hereof. Except for compliance with
federal and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by VLLA of this Agreement and the consummation of the
transactions contemplated hereby.
ARTICLE 6. SPECIAL COVENANTS
6.1 Access to Properties and Records.
Prior to closing, VLLA and GHL will each afford to the officers and
authorized representatives of the other full access to the properties, books and
records of each other, in order that each may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of the other
and each will furnish the other with such additional financial and operating
data and other information as to the business and properties of each other, as
the other shall from time to time reasonably request.
6.2 Availability of Rule 144.
Shareholders of VLLA and GHL Shareholders holding "restricted securities,
" as that term is defined in Rule 144 promulgated pursuant to the Securities Act
recognize that such shares will remain as "restricted securities". VLLA is under
no obligation to register such shares under the Securities Act, or otherwise.
6.3 The Stock Merger Consideration.
The consummation of this Agreement, including the issuance of the VLLA
Common Stock to the GHL Shareholders as contemplated hereby, constitutes the
offer and sale of securities under the Securities Act, and applicable state
statutes. Such transaction shall be consummated in reliance on exemptions from
the registration and prospectus delivery requirements of such statutes that
depend, inter alia, upon the circumstances under which the GHL Shareholders
acquire such securities.
6.4 Third Party Consents.
VLLA and GHL agree to cooperate with each other in order to obtain any
required third party consents to this Agreement and the transactions herein
contemplated.
11
6.5 Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing
Date, except as permitted or contemplated by this Agreement, VLLA and GHL
will each use its best efforts to:
(i) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty; and
(ii) perform in all material respects all of its obligations
under material contracts, leases and instruments relating to or
affecting its assets, properties and business.
(b) From and after the date of this Agreement until the Closing
Date, VLLA will not, without the prior consent of GHL:
(i) except as otherwise specifically set forth herein, make
any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding Common
Shares, except as may otherwise be required by law, or effect any
stock split or otherwise change its capitalization, except as
provided herein;
(iii) enter into or amend any employment, severance or
agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants, conversion
rights or other rights not existing on the date hereof to acquire
any Common Shares; or
(v) purchase or redeem any VLLA Common Stock.
(c) From and after the date of this Agreement until the Closing
Date, GHL will not, without the prior consent of VLLA:
(i) except as otherwise specifically set forth herein, make
any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding Common
Shares, except as may otherwise be required by law, or effect any
stock split or otherwise change its capitalization, except as
provided herein;
(iii) enter into or amend any employment, severance or
agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants, conversion
rights or other rights not existing on the date hereof to acquire
any Common Shares; or
(v) purchase or redeem any GHL Common Stock.
12
6.6 Indemnification.
(a) VLLA hereby agrees to indemnify GHL, each of the officers,
agents and directors and current shareholders of GHL as of the Closing
Date against any loss, liability, claim, damage or expense (including, but
not limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened or any claim whatsoever), to which it or they may become
subject to or rising out of or based on any material inaccuracy appearing
in or misrepresentation made in this Agreement by VLLA. The
indemnification provided for in this paragraph shall survive the Closing
and consummation of the transactions contemplated hereby and termination
of this Agreement for a period of two years; and
(b) GHL and each GHL Shareholder, jointly and severally, agrees to
indemnify VLLA, each of the officers, agents, directors and current
shareholders of VLLA as of the Closing Date against any loss, liability,
claim, damage or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject arising out of or
based on any inaccuracy appearing in or misrepresentation made in this
Agreement by GHL or a GHL Shareholder. The indemnification provided for in
this paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
6.7 GHL Shareholder Representations. Each of the GHL Shareholders
represents and warrants as follows:
(a) as of the date of this Agreement each of the GHL Shareholders
was, and at the Closing Date it is, an "accredited investor" as defined in
Rule 501(a) under the Securities Act. Such GHL Shareholder has not been
formed solely for the purpose of acquiring the VLLA Common Stock. Each GHL
Shareholder is not a registered broker-dealer under Section 15 of the
Exchange Act.
(b) each of the GHL Shareholders are knowledgeable and experienced
in finance and business matters and thus they are able to evaluate the
risks and merits of acquiring the shares of Common Stock of VLLA;
(c) each of the GHL Shareholders are able to bear the economic risk
of purchasing the VLLA common stock;
(d) VLLA has provided the GHL Shareholders with access to the type
of information normally provided in a prospectus;
(e) VLLA did not use any form of public solicitation or general
advertising in connection with the issuance of the shares;
(f) as to the following GHL Shareholders (Hua-Cai Song, Fu-Lan Xxxx,
Xxx-Xxxx Xxxx, Xxxxx-Xxxx Xxx, Xxx-Xxxx Xxxxx, Xxxx-Xxx Xxx, Shenzhen Hua
Yin Guaranty & Investment Company Limited, Top Good International Limited,
Total Giant Group Limited, Total Shine Group Limited, Sure Believe
Enterprises Limited, Think Big Trading Limited, Huge Step Enterprises
Limited, and Billion Hero Investments Limited, collectively the "Offshore
GHL Shareholders") the offer of such securities was not made to a person
13
in the United States and either (A) at the time the buy order was
originated, each of the Offshore GHL Shareholders was outside the United
States (in China), or VLLA and any person acting on its behalf reasonably
believed that each Offshore GHL Shareholders was outside the United
States, or (B) the transaction was not executed on or through the
facilities of the Over the Counter Bulletin Board and neither VLLA nor any
person acting on its behalf knows that the transaction has been
prearranged with a person in the United States;
(g) the transactions contemplated hereby are bona fide and not for
the purpose of "washing off' the resale restrictions imposed because the
securities are "restricted securities" (as that term is defined in Rule
144(a)(3) under the 0000 Xxx);
(h) each of the GHL Shareholders understands and acknowledges that
none of the VLLA Common Stock has been registered under the Securities
Act. Each GHL Shareholder is acquiring the VLLA Common Stock as principal
for its own account and not with a view to or for distributing or
reselling such securities or any part thereof, without prejudice, however,
to such GHL Shareholder's right, subject to the provisions of this
Agreement, at all times to sell or otherwise dispose of all or any part of
such securities pursuant to an effective registration statement under the
Securities Act or under an exemption from such registration and in
compliance with applicable federal and state securities laws. Nothing
contained herein shall be deemed a representation or warranty by such GHL
Shareholder to hold the securities for any period of time. Such GHL
Shareholder is acquiring the VLLA Common Stock hereunder in the ordinary
course of its business. Such GHL Shareholders does not have any agreement
or understanding, directly or indirectly, with any Person to distribute
any of the VLLA Common Stock.
(i) Each GHL Shareholder has good, valid and marketable title to the
GHL Shares set forth opposite his or its name on Schedulke A, free and
clear of any covenant, condition, restriction, voting arrangement, charge,
security interest, option or adverse claim, other than restrictions on
transfer under federal and applicable state securities laws. Upon delivery
of certificates representing the GHL Shares and payment of the Merger
Consiideration pursuant hereto, VLLA will acquire good and marketable
title to the SGHL hares, free and clear of any security interest,
restrictions or claims
(j) Each GHL Shareholder possesses the legal right and capacity to
execute, deliver and perform this Agreement, without obtaining any
approval, authorization, consent or waiver or giving any notice. The GHL
Shareholders have taken all shareholder action required by applicable law,
the GHL's Articles of Incorporation, By-laws or otherwise, required to be
taken to authorize the exec ution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement and
all other documents to which a GHL Shareholder is a party have been, or
will be, duly executed and delivered by the GHL Shareholders and
constitute the legal, valid and binding obligations of the GHL Shareholder
which is a party thereto, enforceable against such Shareholder in
accordance with their respective terms, except to the extent such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, fraudulent conveyance or similar laws affecting
or relating to the enforcement of creditors' rights generally, and by
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(k) No notice to, consent, authorization or approval of, or
exemption by, any governmental or public body or authority is required in
connection with the execution, delivery and performance by the GHL
Shareholders of this Agreement or any other documents to be delivered in
connection herewith ("Transaction Documents") to which a GHL Shareholder
14
is a party, or the taking of any action herein contemplated; and no notice
to, consent, authorization or approval of, any Person under any agreement,
arrangement or commitment of any nature to which a GHL Shareholder is
party to, or by which the GHL Common Shares or the assets of GHL or JXC
are bound by or subject to, or from which the GHL or JXC receives or is
entitled to receive a benefit, is required in connection with the
execution, delivery and performance by the GHL Shareholders of this
Agreement or any other Transaction Documents to which a GHL Shareholder is
a party, or the taking of any action herein contemplated.
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF VLLA AND SUB
The obligations of VLLA and Sub under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
7.1 Accuracy of Representations.
7.2 The representations and warranties made by GHL and the GHL
Shareholders in this Agreement were true when made and shall be true at the
Closing Date with the same force and effect as if such representations and
warranties were made at the Closing Date (except for changes therein permitted
by this Agreement), and GHL and the GHL Shareholders shall have performed or
complied with all covenants and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.
7.3 Director Approval.
The Board of Directors of VLLA shall have approved this Agreement and the
transactions contemplated herein.
7.4 Officer's Certificate.
VLLA shall have been furnished with a certificate dated the Closing Date
and signed by a duly authorized officer of GHL to the effect that: (a) the
representations and warranties of GHL and the GHL Shareholders set forth in the
Agreement and in all exhibits, schedules and other documents furnished in
connection herewith are in all material respects true and correct as if made on
the Effective Date; (b) GHL and the GHL Shareholders have performed all
covenants, satisfied all conditions, and complied with all other terms and
provisions of this Agreement to be performed, satisfied or complied with by them
as of the Effective Date; (c) since such date and other than as previously
disclosed to VLLA, neither GHL nor JXC has entered into any material transaction
other than transactions which are usual and in the ordinary course if its
business; and (d) no litigation, proceeding, investigation or inquiry is pending
or, to the best knowledge of GHL or JXC, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or, to the extent not disclosed in the GHL Schedules, by or
against GHL or JXC which might result in any material adverse change in any of
the assets, properties, business or operations of GHL or JXC.
7.5 No Material Adverse Change.
Prior to the Closing Date, there shall not have occurred any material
adverse change in the financial condition, business or operations of nor shall
any event have occurred which, with the lapse of time or the giving of notice,
may cause or create any material adverse change in the financial condition,
business or operations of GHL or JXC.
15
7.6 Other Items.
VLLA shall have received such further documents, certificates or
instruments relating to the transactions contemplated hereby as VLLA may
reasonably request.
ARTICLE 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF GHL AND THE GHL SHAREHOLDERS
The obligations of GHL and the GHL Shareholders under this Agreement are
subject to the satisfaction, at or before the Closing date (unless otherwise
indicated herein), of the following conditions:
8.1 Accuracy of Representations.
The representations and warranties made by VLLA in this Agreement were
true when made and shall be true as of the Closing Date (except for changes
therein permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date, and VLLA
shall have performed and complied with all covenants and conditions required by
this Agreement to be performed or complied with by VLLA prior to or at the
Closing. GHL shall have been furnished with a certificate, signed by a duly
authorized executive officer of VLLA and dated the Closing Date, to the
foregoing effect.
8.2 No Material Adverse Change.
Prior to the Closing Date, there shall not have occurred any material
adverse change in the financial condition, business or operations of nor shall
any event have occurred which, with the lapse of time or the giving of notice,
may cause or create any material adverse change in the financial condition,
business or operations of VLLA
ARTICLE 9. TERMINATION
9.1 Termination Rights.
(a) This Agreement may be terminated by the board of directors of
either VLLA or GHL, respectively, at any time prior to the Closing Date
if:
(i) there shall be any action or proceeding before any court
or any governmental body which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement and
which, in the judgment of such board of directors, made in good
faith and based on the advice of its legal counsel, makes it
inadvisable to proceed with the exchange contemplated by this
Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required
to consummate such transactions.
16
In the event of termination pursuant to this paragraph (a), no obligation,
right, or liability shall arise hereunder and each party shall bear all of the
expenses incurred by it in connection with the negotiation, drafting and
execution of this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of VLLA if GHL or any GHL
Shareholder shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of GHL or the GHL Shareholders contained
herein shall be inaccurate in any material respect, which noncompliance or
inaccuracy is not cured after 20 days written notice thereof is given to
GHL. If this Agreement is terminated pursuant to this paragraph (b), this
Agreement shall be of no further force or effect and no obligation, right
or liability shall arise hereunder.
(c) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of GHL if VLLA shall fail
to comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or warranties
of VLLA contained herein shall be inaccurate in any material respect,
which noncompliance or inaccuracy is not cured after 20 days written
notice thereof is given to VLLA If this Agreement is terminated pursuant
to this paragraph (d), this Agreement shall be of no further force or
effect and no obligation, right or liability shall arise hereunder.
(d) In the event of termination pursuant to paragraph (b) and (c)
hereof, the breaching party shall bear all of the expenses incurred by the
other party in connection with the negotiation, drafting and execution of
this Agreement and the transactions herein contemplated.
ARTICLE 10. MISCELLANEOUS
10.1 Brokers and Finders.
Each party hereto hereby represents and warrants that it is under no
obligation, express or implied, to pay certain finders in connection with the
bringing of the parties together in the negotiation, execution, or consummation
of this Agreement. The parties each agree to indemnify the other against any
claim by any third person for any commission, brokerage or finder's fee or other
payment with respect to this Agreement or the transactions contemplated hereby
based on any alleged agreement or understanding between the indemnifying party
and such third person, whether express or implied from the actions of the
indemnifying party.
10.2 Law, Forum and Jurisdiction.
This Agreement shall be construed and interpreted in accordance with the
laws of the State of New York, United States of America, except for applicable
provisions of the Nevada General Corporation Law, which shall control to the
extent applicable.
10.3 Notices.
Any notices or other communications required or permitted hereunder shall
be sufficiently given if personally delivered to it or sent by registered mail
or certified mail, postage prepaid, or by prepaid telegram addressed as follows:
17
If to VLLA: X.X. Xxx 000-000, Xxxxxxx Xxxxx Xxxx, Xxxxxxxx Xxxx, X.X.
Xxxxx 000000.
If to GHL: Xx. 00 Xxx Xx Xxxxx Xxxx, Xxxxxxx District, Jiangxi Province,
P.R. China
or such other addresses as shall be furnished in writing by any party in
the manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed or
telegraphed.
10.4 Attorneys' Fees.
In the event that any party institutes any action or suit to enforce this
Agreement or to secure relief from any default hereunder or breach hereof, the
breaching party or parties shall reimburse the non-breaching party or parties
for all costs, including reasonable attorneys' fees, incurred in connection
therewith and in enforcing or collecting any judgment rendered therein.
10.5 Confidentiality.
Each party hereto agrees with the other party that, unless and until the
transactions contemplated by this Agreement have been consummated, they and
their representatives will hold in strict confidence all data and information
obtained with respect to another party or any subsidiary thereof from any
representative, officer, director or employee, or from any books or records or
from personal inspection, of such other party, and shall not use such data or
information or disclose the same to others, except: (i) to the extent such data
is a matter of public knowledge or is required by law to be published; and (ii)
to the extent that such data or information must be used or disclosed in order
to consummate the transactions contemplated by this Agreement.
10.6 Schedules; Knowledge.
Each party is presumed to have full knowledge of all information set forth
in the other party's schedules delivered pursuant to this Agreement.
10.7 Third Party Beneficiaries.
This contract is solely among the parties hereto and except as
specifically provided, no director, officer, stockholder, employee, agent,
independent contractor or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.
10.8 Entire Agreement.
This Agreement represents the entire agreement between the parties
relating to the subject matter hereof. This Agreement alone fully and completely
expresses the agreement of the parties relating to the subject matter hereof.
There are no other courses of dealing, understanding, agreements,
representations or warranties, written or oral, except as set forth herein. This
Agreement may not be amended or modified, except by a written agreement signed
by all parties hereto.
18
10.9 Survival; Termination.
The representations, warranties and covenants of the respective parties
shall survive the Closing Date and the consummation of the transactions herein
contemplated for 18 months.
10.10 Counterparts.
This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original and all of which taken together shall be but a
single instrument.
10.11 Amendment or Waiver.
Every right and remedy provided herein shall be cumulative with every
other right and remedy, whether conferred herein, at law, or in equity, and may
be enforced concurrently herewith, and no waiver by any party of the performance
of any obligation by the other shall be construed as a waiver of the same or any
other default then, theretofore, or thereafter occurring or existing. At any
time prior to the Closing Date, this Agreement may be amended by a by all
parties hereto, with respect to any of the terms contained herein, and any term
or condition of this Agreement may be waived or the time for performance hereof
may be extended by the party or parties for whose benefit the provision is
intended.
10.12 Expenses.
Each party herein shall bear all of their respective cost s and expenses
incurred in connection with the negotiation of this Agreement and in the
consummation of the transactions provided for herein and the preparation
thereof.
10.13 Headings; Context.
The headings of the sections and paragraphs contained in this Agreement
are for convenience of reference only and do not form a part hereof and in no
way modify, interpret or construe the meaning of this Agreement.
10.14 Benefit.
This Agreement shall be binding upon and shall inure only to the benefit
of the parties hereto, and their permitted assigns hereunder. This Agreement
shall not be assigned by any party without the prior written consent of the
other party.
10.15 Public Announcements.
Except as may be required by law, neither party shall make any public
announcement or filing with respect to the transactions provided for herein
without the prior consent of the other party hereto.
10.16 Severability.
In the event that any particular provision or provisions of this Agreement
or the other agreements contained herein shall for any reason hereafter be
determined to be unenforceable, or in violation of any law, governmental order
or regulation, such unenforceability or violation shall not affect the remaining
provisions of such agreements, which shall continue in full force and effect and
be binding upon the respective parties hereto.
19
10.17 Failure of Conditions; Termination.
In the event of any of the conditions specified in this Agreement shall
not be fulfilled on or before the Closing Date, either of the parties have the
right either to proceed or, upon prompt written notice to the other, to
terminate and rescind this Agreement. In such event, the party that has failed
to fulfill the conditions specified in this Agreement will liable for the other
parties legal fees. The election to proceed shall not affect the right of such
electing party reasonably to require the other party to continue to use its
efforts to fulfill the unmet conditions.
10.18 No Strict Construction.
The language of this Agreement shall be construed as a whole, according to
its fair meaning and intendment, and not strictly for or against either party
hereto, regardless of who drafted or was principally responsible for drafting
the Agreement or terms or conditions hereof.
10.19 Execution Knowing and Voluntary.
In executing this Agreement, the parties severally acknowledge and
represent that each: (a) has fully and carefully read and considered this
Agreement; (b) has been or has had the opportunity to be fully apprized by its
attorneys of the legal effect and meaning of this document and all terms and
conditions hereof; (c) is executing this Agreement voluntarily, free from any
influence, coercion or duress of any kind.
[Signature page follows]
20
In Witness Whereof, VLLA, Sub and GHL, each pursuant to the approval and
authority duly given, as well as the GHL Shareholders, have caused this
Agreement and Plan of Merger to be executed as of the date first above written.
VLLA
By: /s/ Hui Xxxx Xxxxx
-----------------------------------
Hui Xxxx Xxxxx
Its Chairman of the Board and Chief
Executive Officer
VLLA Merger Sub, Inc.
By: /s/ Hui Xxxx Xxxxx
-----------------------------------
Hui Xxxx Xxxxx
Its Chairman of the Board and Chief
Executive Officer
Guoxi Holding Limited
By: /s/ Hua-Cai Song
-----------------------------------
President/ Director - Hua-Cai Song
GHL Shareholders
/s/ Hua-Cai Song
------------------
Hua-Cai Song
/s/ Fu-Xxx Xxxx
------------------
Fu-Xxx Xxxx
/s/ Xxx-Xxxx Xxxx
------------------
Xxx-Xxxx Xxxx
/s/ Cheng-Xxxx Xxx
------------------
Cheng-Xxxx Xxx
/s/ Xxx-Xxxx Xxxxx
------------------
Xxx-Xxxx Xxxxx
/s/ Song-Mao Cai
------------------
Song-Mao Cai
21
Top Good International Limited Shenzhen Hua Yin Guaranty &
Investment Company Limited
By: /s/ Xxxx Xxxx By: /s/ Xx Xxxxxxx
--------------------------------- ---------------------------------
Name: Xxxx Xxxx Name: Xx Xxxxxxx
Title: Sole Director Title: Sole Director
Total Giant Group Limited Sure Believe Enterprises Limited
By: /s/ Xxxxxxx Xxx By: /s/ Xxxx Xxxxx
--------------------------------- ---------------------------------
Name: Xxxxxxx Xxx Name: Xxxx Xxxxx
Title: Sole Director Title: Sole Director
Total Shine Group Limited Billion Hero Investments Limited
By: /s/ Xxxx Xxxxx By: /s/ Li Lidong
--------------------------------- ---------------------------------
Name: Xxxx Xxxxx Name: Li Lidong
Title: Sole Director Title: Sole Director
Think Big Trading Limited Huge Step Enterprises Limited
By: /s/ Hanzhi Mao By: /s/ Xxxx Xxx
--------------------------------- ---------------------------------
Name: Hanzhi Mao Name: Xxxx Xxx
Title: Sole Director Title: Sole Director
22
SCHEDULE A
GHL SHAREHOLDERS
------------------------------------ --------------------- ------------------------ ------------------------------------------------
GHL Common Stock
Name of GHL Shareholder Ownership % Shares of GHL Shares of VLLA Common Stock /cash payable
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Hua-Cai Song 30% 15,000 20,670,000/ USD 4,300,350
Fu-Xxx Xxxx 13.2% 6,600 9,094,800/ USD 1,892,154
Xxx-Xxxx Xxxx 8.0% 4,000 5,512,000/ USD 1,146,760
Cheng-Xxxx Xxx 4.0% 2,000 2,756,000/ USD 573,380
Xxx-Xxxx Xxxxx 4.0% 2,000 2,756,000/ USD 573,380
Song-Mao Cai 4.0% 2,000 2,756,000/ USD 573,380
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Top Good International Limited 4.3% 2,150 2,962,700/ USD 616,383.50
Total Giant Group Limited 4.0% 2,000 2,756,000/ USD 573,380
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Shenzhen Huayin Guaranty & 6.3% 3,150 4,340,700/ USD 903,073.50
Investment Company Limited
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Total Shine Group Limited 3.6% 1,800 2,480,400/ USD 516,042
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Billion Hero Investments 4.9% 2,450 3,376,100/ USD 702,390.50
Limited
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Sure Believe Enterprises Limited 4.5% 2,250 3,100,500/ USD 645,052.50
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Think Big Trading Limited 4.6% 2,300 3,169,400/ USD 659,387
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Huge Step Enterprises Limited 4.6% 2,300 3,169,400/ USD 659,387
------------------------------------ --------------------- ------------------------ ------------------------------------------------
Total 100% 50,000 68,900,000/ USD 14,334,500
------------------------------------ --------------------- ------------------------ ------------------------------------------------
23
EXHIBIT
XXXXX PRODUCTIONS, INC.
PROMISSORY NOTE
PN No. $
FOR VALUE RECEIVED, the undersigned, XXXXX PRODUCTIONS, INC., a Nevada
corporation (the "Maker"), hereby promises to pay to the order of _________ (the
"Payee"), the principal amount of $_______, all in accordance with the
provisions of this promissory note.
1. Payment of Principal. The full amount of the principal of this
promissory note shall be due and payable on ______________ (the "Maturity
Date").
2. No Interest. Under no circumstances shall interest accrue or be charged
on the unpaid principal balance of this promissory note.
3. Method of Payment. Payments hereunder shall be in lawful money of the
United States and shall be made to Payee at the following address or at such
other place as Payee may designate to Maker in writing: c/o
________________________________________________.
4. Prepayment. This promissory note may be prepaid in whole or in part at
any time without penalty or premium by payment of all or any part of the
outstanding principal amount.
5. Unconditional Payment Obligation. No provision of this promissory note
shall alter or impair the obligation of the Maker, which is absolute and
unconditional, to pay the principal of this promissory note at the time and
place and in the currency herein prescribed.
6. Events of Default. If any of the following events ("Events of Default")
shall occur, Payee may, by notice to Maker, declare this promissory note and all
amounts payable hereunder to be due and payable, whereupon the same shall become
immediately due and payable:
(a) Maker shall become insolvent or admit in writing its inability to pay
its debts as they become due, or shall make a general assignment for the benefit
of creditors;
(b) Any proceedings shall be instituted by or against Maker seeking either
(i) an order for relief with respect to, or reorganization, arrangement,
adjustment or composition of, its debts under the United States Bankruptcy Code
or under any other law relating to bankruptcy, insolvency, reorganization, or
relief of debtors, or (ii) appointment of a trustee, receiver or similar
official for Maker or for any substantial part of its property;
(c) Maker's failure to conduct business in the ordinary course,
dissolution or termination of existence; or
(d) Maker's failure after the Maturity Date to repay the amounts due
hereunder within ten (10) days of receiving written notice from Payee that such
amounts are due and payable.
7. Waiver of Notice. Maker hereby waives presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this promissory note, and assents to
extension of the time of payment or forbearance or other indulgence without
notice.
8. Governing Law. This promissory note shall be construed in accordance
with the laws of the State of New York, without regard to its conflicts of laws
rules.
9. Notices. All notices, requests, demands and other communications with
respect to this promissory note shall be given in person or forwarded by first
class United States mail, postage prepaid, registered or certified mail, with
return receipt requested, addressed to the party's address. Any notice, request,
demand or communication shall be deemed validly given and received upon delivery
if given in person, and on the 5th business day after deposit in the United
States mail if given by mail as provided for in the preceding sentence.
IN WITNESS WHEREOF, the Maker has executed and delivered this Note
effective as of ______________.
XXXXX PRODUCTIONS, INC.
------------------------------------------
Chairman of the Board and
Chief Executive Officer
