Share Exchange Agreement
This
Share Exchange Agreement, dated as of December 23, 2007, is made by and among
KINGLAKE RESOURCES, INC., a Nevada corporation (“Acquiror Company”), Orient Come
Holdings Limited, a company incorporated in British Virgin Island (“Orient Come”
or "Acquired Company"), each of the Persons listed on Schedule I hereto
(“Orient Come Shareholders” or "Shareholders"), and Beijing K’s Media
Advertisement Ltd. Co., a company organized under the laws of The Peoples'
Republic of China (“K’s Media”) (Acquiror Company, Orient Come, Orient Come
Shareholders and K's Media are collectively referred to as “All
Parties”).
BACKGROUND
WHEREAS,
the Orient Come Shareholders have agreed to transfer to the Acquiror Company,
and the Acquiror Company has agreed to acquire from Orient Come Shareholders,
all of the shares of Orient Come, which shares constitute 100% of the issued
and
outstanding shares of Orient Come, in exchange for 13,000,000 shares of the
Acquiror's Common Stock to be issued on the Closing Date (the “Acquiror Company
Shares”), on the terms and conditions as set forth herein; and
WHEREAS,
simultaneously with the consummation of the transactions contemplated hereby,
Orient Come shall enter into a Business Cooperation Agreement with K’s Media
(the “Management Contract”).
NOW
THEREFORE in consideration
of the premises and the mutual covenants, agreements, representations and
warranties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION
I.
DEFINITIONS
Unless
the context otherwise requires, the terms defined in this Section 1 will
have
the meanings herein specified for all purposes of this Agreement, applicable
to
both the singular and plural forms of any of the terms herein defined.
1.1 “Accredited
Investor” has
the meaning set forth in Regulation D under the Securities Act and set forth
on
Exhibit
B.
1.2 “Acquired
Company” means
Orient Come.
1.3 “Acquiror
Company Balance
Sheet” means the Acquiror Company’s balance sheet at July 31, 2007.
1.4 “Acquiror
Company Board”
means the Board of Directors of the Acquiror Company.
1.5 “Acquiror
Company Common
Stock” means the Acquiror Company’s common stock, par value US $0.00001 per
share.
1.6 “Acquiror
Company Shares”
means the Acquiror Company Common Stock being issued to Orient Come Shareholders
and K’s Media pursuant hereto.
1.7 “Affiliate”
means
any
Person that directly or indirectly controls, is controlled by or is under
common
control with the indicated Person.
1.8 “Agreement”
means
this
Share Exchange Agreement, including all Schedules and Exhibits hereto, as
this
Share Exchange Agreement may be from time to time amended, modified or
supplemented.
1.9 “Closing
Acquiror Company
Shares” means the aggregate number of Acquiror Shares issuable to Orient Come
Shareholders and K’s Media at Closing, less the Escrow Shares.
1.10 “Closing
Date” has the
meaning set forth in Section 3.
1.11 “Code”
means
the Internal
Revenue Code of 1986, as amended.
1.12 “Commission”
means
the
Securities and Exchange Commission or any other federal agency then
administering the Securities Act.
1.13 “Environmental
Laws” means
any Law or other requirement relating to the environment, natural resources,
or
public or employee health and safety.
1.14 “Environmental
Permit”
means all licenses, permits, authorizations, approvals, franchises and rights
required under any applicable Environmental Law or Order.
1.15 “Equity
Security” means any
stock or similar security, including, without limitation, securities containing
equity features and securities containing profit participation features,
or any
security convertible into or exchangeable for, with or without consideration,
any stock or similar security, or any security carrying any warrant, right
or
option to subscribe to or purchase any shares of capital stock, or any such
warrant or right.
1.16 “ERISA”
means
the Employee
Retirement Income Security Act of 1974, as amended.
1.17 “Escrow
Share” has the
meaning set forth in Section 3.2.
1.18 “Exchange
Act” means the
Securities Exchange Act of 1934 or any similar federal statute, and the rules
and regulations of the Commission thereunder, all as the same will then be
in
effect.
1.19 “Exhibits”
means
the
several exhibits referred to and identified in this Agreement.
1.20 “Form
8-K” means a current
report on Form 8-K under the Exchange Act.
1.21 “GAAP”
means,
with respect
to any Person, United States generally accepted accounting principles applied
on
a consistent basis with such Person’s past practices.
1.22 “Governmental
Authority”
means any federal or national, state or provincial, municipal or local
government, governmental authority, regulatory or administrative agency,
governmental commission, department, board, bureau, agency or instrumentality,
political subdivision, commission, court, tribunal, official, arbitrator
or
arbitral body, in each case whether U.S. or non-U.S.
1.23 “Indebtedness”
means
any
obligation, contingent or otherwise. Any obligation secured by a Lien on,
or
payable out of the proceeds of, or production from, property of the relevant
party will be deemed to be Indebtedness.
1.24 “Intellectual
Property”
means all industrial and intellectual property, including, without limitation,
all U.S. and non-U.S. patents, patent applications, patent rights, trademarks,
trademark applications, common law trademarks, Internet domain names, trade
names, service marks, service xxxx applications, common law service marks,
and
the goodwill associated therewith, copyrights, in both published and unpublished
works, whether registered or unregistered, copyright applications, franchises,
licenses, know-how, trade secrets, technical data, designs, customer lists,
confidential and proprietary information, processes and formulae, all computer
software programs or applications, layouts, inventions, development tools
and
all documentation and media constituting, describing or relating to the above,
including manuals, memoranda, and records, whether such intellectual property
has been created, applied for or obtained anywhere throughout the world.
1.25 “Laws”
means,
with respect
to any Person, any U.S. or non-U.S. federal, national, state, provincial,
local,
municipal, international, multinational or other law (including common law),
constitution, statute, code, ordinance, rule, regulation or treaty applicable
to
such Person.
1.26 “Lien”
means
any mortgage,
pledge, security interest, encumbrance, lien or charge of any kind, including,
without limitation, any conditional sale or other title retention agreement,
any
lease in the nature thereof and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction and including
any lien or charge arising by Law.
1.27 “Material
Acquiror Company
Contract” means any and all agreements, contracts, arrangements, leases,
commitments or otherwise, of the Acquiror Company, of the type and nature
that
the Acquiror Company is required to file with the Commission.
1.28 “Material
Adverse Effect”
means, when used with respect to the Acquiror Company or the Acquired Company,
as the case may be, any change, effect or circumstance which, individually
or in
the aggregate, would reasonably be expected to (a) have a material adverse
effect on the business, assets, financial condition or results of operations
of
the Acquiror Company or the Acquired Company, as the case may be, in each
case
taken as a whole or (b) materially impair the ability of the Acquiror Company
or
the Acquired Company, as the case may be, to perform their obligations under
this Agreement, excluding any change, effect or circumstance resulting from
(i)
the announcement, pendency or consummation of the transactions contemplated
by
this Agreement, (ii) changes in the United States securities markets generally,
or (iii) changes in general economic, currency exchange rate, political or
regulatory conditions in industries in which the Acquiror Company or the
Acquired Company, as the case may be, operate or (c) result in litigation,
claims, disputes or property loss in excess of US$150,000 in the future,
and
that would prohibit or otherwise materially interfere with the ability of
any
party to this Agreement to perform any of its obligations under this Agreement
in any material respect.
1.29 “Order”
means
any award,
decision, injunction, judgment, order, ruling, subpoena, or verdict entered,
issued, made, or rendered by any Governmental Authority.
1.30 “Organizational
Documents”
means (a) the articles or certificate of incorporation and the by-laws or
code
of regulations of a corporation; (b) the partnership agreement and any statement
of partnership of a general partnership; (c) the limited partnership agreement
and the certificate of limited partnership of a limited partnership; (d)
the
articles or certificate of formation and operating agreement of a limited
liability company; (e) any other document performing a similar function to
the
documents specified in clauses (a), (b), (c) and (d) adopted or filed in
connection with the creation, formation or organization of a Person; and
(f) any
and all amendments to any of the foregoing.
1.31 “Permitted
Liens” means (a)
Liens for Taxes not yet payable or in respect of which the validity thereof
is
being contested in good faith by appropriate proceedings and for the payment
of
which the relevant party has made adequate reserves; (b) Liens in respect
of
pledges or deposits under workmen’s compensation laws or similar legislation,
carriers, warehousemen, mechanics, laborers and materialmen and similar Liens,
if the obligations secured by such Liens are not then delinquent or are being
contested in good faith by appropriate proceedings conducted and for the
payment
of which the relevant party has made adequate reserves; (c) statutory Liens
incidental to the conduct of the business of the relevant party which were
not
incurred in connection with the borrowing of money or the obtaining of advances
or credits and that do not in the aggregate materially detract from the value
of
its property or materially impair the use thereof in the operation of its
business; and (d) Liens that would not have a Material Adverse Effect.
1.32 “Person”
means
all natural
persons, corporations, business trusts, associations, companies, partnerships,
limited liability companies, joint ventures and other entities, governments,
agencies and political subdivisions.
1.33 “PRC”
means
the People’s
Republic of China, excluding Taiwan, Hong Kong and Macau.
1.34 “Proceeding”
means
any
action, arbitration, audit, hearing, investigation, litigation, or suit (whether
civil, criminal, administrative or investigative) commenced, brought, conducted,
or heard by or before, or otherwise involving, any Governmental
Authority.
1.35 “Rule
144” means Rule 144
under the Securities Act, as the same may be amended from time to time, or
any
successor statute.
1.36 “Schedule
14(f) Filing”
means an information statement filed by the Acquiror Company on Schedule
14f-1
under the Exchange Act.
1.37 “Schedules”
means
the
several schedules referred to and identified herein, setting forth certain
disclosures, exceptions and other information, data and documents referred
to at
various places throughout this Agreement.
1.38 “SEC
Documents” has the
meaning set forth in Section 6.26.
1.39 “Section
4(2)” means
Section 4(2) under the Securities Act, as the same may be amended from time
to
time, or any successor statute.
1.40 “Securities
Act” means the
Securities Act of 1933, as amended, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the same will
be in
effect at the time.
1.41 “Share
Escrow Agreement”
means the escrow agreement substantially in the form of Exhibit A hereto,
pursuant to which the Acquiror Company will deposit [10,500,000]of the Acquiror
Company Shares into an escrow account, which will be released to K’s Media
according to the achievement of performance thresholds following the Share
Exchange.
1.42 “Share
Exchange” has the
meaning set forth in Section 2.1.
1.43 “Shares”
means
the issued
and outstanding ordinary shares of Orient Come.
1.44 “Subsidiary”
means,
with
respect to any Person, any corporation, limited liability company, joint
venture
or partnership of which such Person (a) beneficially owns, either directly
or
indirectly, more than 50% of (i) the total combined voting power of all classes
of voting securities of such entity, (ii) the total combined equity interests,
or (iii) the capital or profit interests, in the case of a partnership or
limited liability company; or (b) otherwise has the power to vote or to direct
the voting of sufficient securities to elect a majority of the board of
directors or similar governing body.
1.45 “Survival
Period” has the
meaning set forth in Section 11.1.
1.46 “Taxes”
means
all foreign,
federal, state or local taxes, charges, fees, levies, imposts, duties and
other
assessments, as applicable, including, but not limited to, any income,
alternative minimum or add-on, estimated, gross income, gross receipts, sales,
use, transfer, transactions, intangibles, ad valorem, value-added, franchise,
registration, title, license, capital, paid-up capital, profits, withholding,
payroll, employment, unemployment, excise, severance, stamp, occupation,
premium, real property, recording, personal property, federal highway use,
commercial rent, environmental (including, but not limited to, taxes under
Section 59A of the Code) or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest, penalties or additions to tax with respect to
any of
the foregoing; and “Tax” means any of the foregoing Taxes.
1.47 “Tax
Group” means any
federal, state, local or foreign consolidated, affiliated, combined, unitary
or
other similar group of which the Acquiror Company is now or was formerly
a
member.
1.48 “Tax
Return” means any
return, declaration, report, claim for refund or credit, information return,
statement or other similar document filed with any Governmental Authority
with
respect to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
1.49 “Transaction
Documents”
means, collectively, all agreements, instruments and other documents to be
executed and delivered in connection with the transactions contemplated by
this
Agreement.
1.50 “U.S.”
means
the United
States of America.
1.51 “U.S.
Dollars” or “US $”
means the currency of the United States of America.
1.52 “U.S.
Person” has the
meaning set forth in Regulation S under the Securities Act and set forth
on
Exhibit C hereto.
SECTION
II.
EXCHANGE
OF SHARES AND SHARE CONSIDERATION
2.1 Share
Exchange. At
the Closing, the Orient Come Shareholders shall transfer 2 Shares, representing
all of the issued and outstanding shares of Orient Come, and, in consideration
therefor, subject to Section 2.2, Acquiror Company shall issue to Orient
Come
Shareholders and their assignees an aggregate of 13,000,000 fully paid and
nonassessable shares of Acquiror Company Common Stock (the “Share
Exchange”).
2.2 Withholding.
The
Acquiror Company shall be entitled to deduct and withhold from the Acquiror
Company Shares otherwise issuable pursuant to this Agreement to any Shareholder
such amounts as it is required to deduct and withhold with respect to the
making
of such payment under the Code or any provision of state, local, provincial
or
foreign tax Law. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid
to such Shareholder in respect of which such deduction and withholding was
made.
2.3 Section
368
Reorganization. For U.S. federal income tax purposes, the Share Exchange
is intended to constitute a “reorganization” within the meaning of Section
368(a)(1)(B) of the Code. The parties to this Agreement hereby adopt this
Agreement as a “plan of reorganization” within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
Notwithstanding the foregoing or anything else to the contrary contained
in this
Agreement, the parties acknowledge and agree that no party is making any
representation or warranty as to the qualification of the Share Exchange
as a
reorganization under Section 368 of the Code or as to the effect, if any,
that
any transaction consummated prior to the Closing Date has or may have on
any
such reorganization status. The parties acknowledge and agree that each (i)
has
had the opportunity to obtain independent legal and tax advice with respect
to
the transaction contemplated by this Agreement, and (ii) is responsible for
paying its own Taxes, including without limitation, any adverse Tax consequences
that may result if the transaction contemplated by this Agreement is not
determined to qualify as a reorganization under Section 368 of the Code.
2.4 Directors
of Acquiror
Company at Closing Date. On the Closing Date, Xxxx Xxx, the current
President and a member of the Acquiror Company Board, shall nominate each
of Xxx
Xxxxxx, Xx Xxxx and Kun (Xxxxx) Wei as a member of the Acquiror Company Board,
Xx Xxxx will be nominated Chairman of the Acquiror Company Board, such
nominations to be effective on the tenth day after mailing the Schedule 14(f)
to
the stockholders of record of the Acquiror Company (the “Effective Time”). On
the Closing Date, Xxx Xxxx and Xxxxx Xxx, current directors of the Acquiror
Company Board, shall tender their resignation as a director of the Acquiror
Company to be effective at the Effective Time. Xxxx Xxx shall remain
a director of the Acquiror Company.
2.5 Officers
of Acquiror Company
at Closing Date. On the Closing Date, Xxxx Xxx and Xxxxx Xxx shall resign
from each officer position held at the Acquiror Company. The Acquiror
Company Board shall appoint Xxxx Xxx to serve as Chief Financial Officer,
Treasurer and Secretary and Xxx Xxxxxx to serve as President and Chief Executive
Officer.
SECTION
III.
CLOSING
DATE
3.1 Closing
Date. The
closing of the Share Exchange will occur on the date on which all of the
closing
conditions set forth in Sections 8 and 9 have been satisfied or waived (the
“Closing Date”), subject to extension by mutual agreement of All Parties, but in
no event later than December 31, 2007.
3.2 Escrow.
Notwithstanding any provision of this Agreement to the contrary, in lieu
of
delivering to Orient Come Shareholders certificates for the full number of
Acquiror Company Shares provided for in Section 2.1, the Acquiror Company
shall
deliver or cause to be delivered (A) to each Orient Come Shareholder, a
certificate registered in the name of such Shareholder, evidencing such number
of Closing Acquiror Company Shares as set forth in Exhibit A; and (B)
to
Xxxxxxxx & Xxxx LLP, as escrow agent (the “Escrow Agent”) for deposit into
escrow pursuant to the Escrow Agreement, a certificate(s) in the name of
K’s
Media shareholders, representing 10,500,000 Acquiror Company Shares (the
“Escrow
Shares”), together with stock powers endorsed in blank, which certificate will
be held in the escrow account and disposed of by the Escrow Agent in accordance
with the terms and provisions of the Share Escrow Agreement.
SECTION
IV.
REPRESENTATIONS
AND WARRANTIES OF ORIENT COME SHAREHOLDERS
4.1 Generally.
Each
Orient Come Shareholder, severally and jointly, hereby represents and warrants
to the Acquiror Company:
4.1.1 Authority.
Such
Shareholder has the right, power, authority and capacity to execute and deliver
this Agreement and each of the Transaction Documents to which such Shareholder
is a party, to consummate the transactions contemplated by this Agreement
and
each of the Transaction Documents to which such Shareholder is a party, and
to
perform such Shareholder’s obligations under this Agreement and each of the
Transaction Documents to which such Shareholder is a party. This Agreement
has
been, and each of the Transaction Documents to which such Shareholder is
a party
will be, duly and validly authorized and approved, executed and delivered
by
such Shareholder. Assuming this Agreement and the Transaction Documents have
been duly and validly authorized, executed and delivered by the parties thereto
other than such Shareholder, this Agreement is, and each of the Transaction
Documents to which such Shareholder is a party have been, duly authorized,
executed and delivered by such Shareholder and constitutes the legal, valid
and
binding obligation of such Shareholder, enforceable against such Shareholder
in
accordance with their respective terms, except as such enforcement is limited
by
general equitable principles, or by bankruptcy, insolvency and other similar
Laws affecting the enforcement of creditors rights generally.
4.1.2 No
Conflict. Neither
the execution or delivery by such Shareholder of this Agreement or any
Transaction Document to which such Shareholder is a party, nor the consummation
or performance by such Shareholder of the transactions contemplated hereby
or
thereby will, directly or indirectly, (a) contravene, conflict with, or result
in a violation of any provision of the Organizational Documents of such
Shareholder (if such Shareholder is not a natural person); (b) contravene,
conflict with, constitute a default (or an event or condition which, with
notice
or lapse of time or both, would constitute a default) under, or result in
the
termination or acceleration of, any agreement or instrument to which such
Shareholder is a party or by which the properties or assets of such Shareholder
are bound; or (c) contravene, conflict with, or result in a violation of,
any
Law or Order to which such Shareholder, or any of the properties or assets
of
such Shareholder, may be subject.
4.1.3 Ownership
of Shares.
Such Shareholder owns, of record and beneficially, and has good, valid and
indefeasible title to and the right to transfer to the Acquiror Company pursuant
to this Agreement, such Shareholder’s Shares free and clear of any and all
Liens. There are no options, rights, voting trusts, stockholder agreements
or
any other contracts or understandings to which such Shareholder is a party
or by
which such Shareholder or such Shareholder’s Shares are bound with respect to
the issuance, sale, transfer, voting or registration of such Shareholder’s
Shares. At the Closing Date, the Acquiror Company will acquire good, valid
and
marketable title to such Shareholder’s Shares free and clear of any and all
Liens.
4.1.4 Litigation.
There is
no pending Proceeding against such Shareholder that involves the Shares or
that
challenges, or may have the effect of preventing, delaying or making illegal,
or
otherwise interfering with, any of the transactions contemplated by this
Agreement and, to the knowledge of such Shareholder, no such Proceeding has
been
threatened, and no event or circumstance exists that is reasonably likely
to
give rise to or serve as a basis for the commencement of any such
Proceeding.
4.1.5 No
Brokers or
Finders. Except as disclosed in Schedule
4.1.5, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against such Shareholder for any commission, fee
or
other compensation as a finder or broker, or in any similar capacity, and
such
Shareholder will indemnify and hold the Acquiror Company harmless against
any
liability or expense arising out of, or in connection with, any such
claim.
4.2 Investment
Representations. Each Shareholder, severally and not jointly, hereby
represents and warrants to the Acquiror Company:
4.2.1 Acknowledgment.
Each
Shareholder understands and agrees that the Acquiror Company Shares to be
issued
pursuant to this Agreement and the Share Exchange have not been registered
under
the Securities Act or the securities laws of any state of the U.S. and that
the
issuance of the Acquiror Company Shares is being effected in reliance upon
an
exemption from registration afforded either under Section 4(2) of the Securities
Act for transactions by an issuer not involving a public offering or Regulation
S for offers and sales of securities outside the U.S.
4.2.2 Status.
By its
execution of this Agreement, each Shareholder, severally and not jointly,
represents and warrants to the Acquiror Company as indicated on its signature
page to this Agreement, either that:
(a) such
Shareholder is
an Accredited Investor; or
(b) such
Shareholder is
not a U.S. Person.
Each
Shareholder severally understands that the Acquiror Company Shares are being
offered and sold to such Shareholder in reliance upon the truth and accuracy
of
the representations, warranties, agreements, acknowledgments and understandings
of such Shareholder set forth in this Agreement, in order that the Acquiror
Company may determine the applicability and availability of the exemptions
from
registration of the Acquiror Company Shares on which the Acquiror Company
is
relying.
4.2.3 Additional
Representations
and Warranties of Accredited Investors. Each Shareholder indicating that
such Shareholder is an Accredited Investor on its signature page to this
Agreement, severally and not jointly, further makes the representations and
warranties to the Acquiror Company set forth on Exhibit D.
4.2.4 Additional
Representations
and Warranties of Non-U.S. Persons. Each Shareholder indicating that it
is not a U.S. person on its signature page to this Agreement, severally and
not
jointly, further makes the representations and warranties to the Acquiror
Company set forth on Exhibit E.
4.2.5 Stock
Legends. Each
Shareholder hereby agrees with the Acquiror Company as follows:
(a) Securities
Act Legend
Accredited Investors. The certificates evidencing the Acquiror Company
Shares issued to those Shareholders who are Accredited Investors, and each
certificate issued in transfer thereof, will bear the following legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY
BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT
TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO
AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND
APPLICABLE STATE SECURITIES LAWS.
(b) Securities
Act Legend -
Non-U.S. Persons. The certificates evidencing the Acquiror Company Shares
issued to those Shareholders who are not U.S. Persons, and each certificate
issued in transfer thereof, will bear the following legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY
BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES
ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF REGULATION
S HAVE
BEEN SATISFIED, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (3) PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND
APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO
SUCH
TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES
MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
(c) Other
Legends. The
certificates representing such Acquiror Company Shares, and each certificate
issued in transfer thereof, will also bear any other legend required under
any
applicable Law, including, without limitation, any U.S. state corporate and
state securities law, or contract.
(d) Opinion.
No
Shareholder will transfer any or all of the Acquiror Company Shares pursuant
to
Regulation S or absent an effective registration statement under the Securities
Act and applicable state securities law covering the disposition of such
Shareholder’s Acquiror Company Shares, without first providing the Acquiror
Company with an opinion of counsel (which counsel and opinion are reasonably
satisfactory to the Acquiror Company) to the effect that such transfer will
be
made in compliance with Regulation S or will be exempt from the registration
and
the prospectus delivery requirements of the Securities Act and the registration
or qualification requirements of any applicable U.S. state securities
laws.
(e) Consent.
Each
Shareholder understands and acknowledges that the Acquiror Company may refuse
to
transfer the Acquiror Company Shares, unless such Shareholder complies with
this
Section 4.2.5 and any other restrictions on transferability set forth in
Exhibits D and E.
Each Shareholder
consents to the Acquiror Company making a notation on its records or giving
instructions to any transfer agent of the Acquiror Company’s Common Stock in
order to implement the restrictions on transfer of the Acquiror Company
Shares.
SECTION
V.
REPRESENTATIONS
AND WARRANTIES OF ORIENT COME
Orient
Come hereby represents and warrants to the Acquiror Company:
5.1 Organization
and Qualification. Orient Come
is duly
incorporated and validly existing under the laws of the British Virgin Island,
and has all requisite authority and power (corporate and other), governmental
licenses, authorizations, consents and approvals to carry on its business
as
presently conducted and as contemplated to be conducted, to own, hold and
operate its properties and assets as now owned, held and operated by it,
to
enter into this Agreement, to carry out the provisions hereof except where
the
failure to be so organized, existing and in good standing or to have such
authority or power will not, in the aggregate, have a Material Adverse Effect.
Orient Come is duly qualified, licensed or domesticated as a foreign corporation
in good standing in each jurisdiction wherein the nature of its activities
or
its properties owned or leased makes such qualification, licensing or
domestication necessary, except where the failure to be so qualified, licensed
or domesticated will not have a Material Adverse Effect. Set forth on Schedule 5.1is a list
of those jurisdictions in which Orient Come presently conducts its business,
owns, holds and operates its properties and assets.
5.2 Subsidiaries.
Orient
Come does not directly or indirectly, own any equity or other ownership interest
in any corporation, partnership, joint venture or other entity or
enterprise.
5.3 Organizational
Documents. The copies of the Memorandum and Articles of
Association of Orient Come, and the documents which constitute all other
Organization Documents of Orient Come, that have been delivered to the Acquiror
Company prior to the execution of this Agreement are true and complete and
have
not been amended or repealed. Orient Come are not in violation or breach
of any
of the provisions of its Organizational Documents, except for such violations
or
breaches as, in the aggregate, will not have a Material Adverse Effect.
5.4 Authorization
and Validity
of this Agreement. Orient Come has all requisite authority and power
(corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents
to
which Orient Come is a party, to consummate the transactions contemplated
by
this Agreement and each of the Transaction Documents to which Orient Come
is a
party, to perform its obligations under this Agreement and each of the
Transaction Documents to which Orient Come is a party. Orient Come shall
record
the transfer of its Shares and the delivery of the new certificates representing
the Shares registered in the name of the Acquiror Company. The execution,
delivery and performance by Orient Come of this Agreement and each of the
Transaction Documents to which Orient Come is a party have been duly authorized
by all necessary corporate action and do not require from the Company Board
or
the Shareholders any consent or approval that has not been validly and lawfully
obtained. The execution, delivery and performance by Orient Come of this
Agreement and each of the Transaction Documents to which Orient Come is a
party
requires no authorization, consent, approval, license, exemption of or filing
or
registration with any Governmental Authority or other Person.
5.5 No
Violation. Neither
the execution nor the delivery by Orient Come of this Agreement or any
Transaction Document to which Orient Come is a party, nor the consummation
or
performance by Orient Come of the transactions contemplated hereby or thereby
will, directly or indirectly, (a) contravene, conflict with, or result in
a
violation of any provision of the Organizational Documents of Orient Come;
(b)
contravene, conflict with, constitute a default (or an event or condition
which,
with notice or lapse of time or both, would constitute a default) under,
or
result in the termination or acceleration of, or result in the imposition
or
creation of any Lien under, any agreement or instrument to which Orient Come
is
a party or by which the properties or assets of Orient Come are bound; (c)
contravene, conflict with, or result in a violation of, any Law or Order
to
which Orient Come, or any of the properties or assets owned or used by Orient
Come, may be subject; or (d) contravene, conflict with, or result in a violation
of, the terms or requirements of, or give any Governmental Authority the
right
to revoke, withdraw, suspend, cancel, terminate or modify, any licenses,
permits, authorizations, approvals, franchises or other rights held by Orient
Come or that otherwise relate to the business of, or any of the properties
or
assets owned or used by, Orient Come, except, in the case of clause (b),
(c), or
(d), for any such contraventions, conflicts, violations, or other occurrences
as
would not have a Material Adverse Effect.
5.6 Binding
Obligations.
Assuming this Agreement and the Transaction Documents have been duly and
validly
authorized, executed and delivered by the parties thereto other than Orient
Come, this Agreement and each of the Transaction Documents to which Orient
Come
is a party are duly authorized, executed and delivered by Orient Come and
constitute the legal, valid and binding obligations of Orient Come, enforceable
against Orient Come in accordance with their respective terms, except as
such
enforcement is limited by general equitable principles, or by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors
rights
generally.
5.7 Capitalization
and Related
Matters.
5.7.1 Capitalization
of Orient
Come. The authorized capital stock of Orient Come consists of 50,000
shares of Common Stock, of which 2 shares of Common Stock are issued and
outstanding. There are no outstanding or authorized options,
warrants, calls, purchase agreements, participation agreements, subscription
rights, conversion rights, exchange rights or other securities or contracts
that
could require Orient Come to issue, sell or otherwise cause to become
outstanding any of its authorized but unissued shares of capital stock or
any
securities convertible into, exchangeable for or carrying a right or option
to
purchase shares of capital stock or to create, authorize, issue, sell or
otherwise cause to become outstanding any new class of capital stock. There
are
no outstanding stockholders’ agreements, voting trusts or arrangements,
registration rights agreements, rights of first refusal or other contracts
pertaining to the capital stock of Orient Come. The issuance of all of the
shares of Orient Come’s Common Stock described in this Section 5.7.1 have been
in compliance with the laws of British Virgin Island. All issued and outstanding
shares of Orient Come ’s capital stock are duly authorized, validly issued,
fully paid and nonassessable and have not been issued in violation of any
preemptive or similar rights.
5.7.2 No
Redemption
Requirements. There are no outstanding contractual obligations
(contingent or otherwise) of Orient Come to retire, repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of, or other ownership
interests in, Orient Come or to provide funds to or make any investment (in
the
form of a loan, capital contribution or otherwise) in any other Person.
5.8 Shareholders.
Exhibit
A-1contains a
true and complete list of the names and addresses of the record and beneficial
holders of all of the outstanding capital stock of Orient Come. Except as
expressly provided in this Agreement, no holder of Shares or any other security
of Orient Come or any other Person is entitled to any preemptive right, right
of
first refusal or similar right as a result of the issuance of the shares
or
otherwise. There is no voting trust, agreement or arrangement among any of
the
Shareholders of any capital stock of Orient Come affecting the exercise of
the
voting rights of any such capital stock.
5.9 Compliance
with Laws and
Other Instruments. Except as would not have a Material Adverse Effect,
the business and operations of Orient Come have been and are being conducted
in
accordance with all applicable Laws and Orders. Except as would not have
a
Material Adverse Effect, Orient Come has not received notice of any violation
(or any Proceeding involving an allegation of any violation) of any applicable
Law or Order by or affecting Orient Come and, to the knowledge of Orient
Come,
no Proceeding involving an allegation of violation of any applicable Law
or
Order is threatened or contemplated. Except as would not have a Material
Adverse
Effect, Orient Come is not alleged to be, in violation of, or (with or without
notice or lapse of time or both) in default under, or in breach of, any term
or
provision of its Organizational Documents or of any indenture, loan or credit
agreement, note, deed of trust, mortgage, security agreement or other material
agreement, lease, license or other instrument, commitment, obligation or
arrangement to which Orient Come is a party or by which any of Orient Come’s
properties, assets or rights are bound or affected. To the knowledge of Orient
Come, no other party to any material contract, agreement, lease, license,
commitment, instrument or other obligation to which Orient Come is a party
is
(with or without notice or lapse of time or both) in default there under
or in
breach of any term thereof. Orient Come is not subject to any obligation
or
restriction of any kind or character, nor is there, to the knowledge of Orient
Come, any event or circumstance relating to Orient Come, that materially
and
adversely affects in any way its business, properties, assets or prospects
or
that prohibits Orient Come from entering into this Agreement or would prevent
or
make burdensome its performance of or compliance with all or any part of
this
Agreement or the consummation of the transactions contemplated hereby or
thereby.
5.10 Certain
Proceedings.
There is no pending Proceeding that has been commenced against Orient Come
and
that challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the transactions contemplated in this
Agreement. To Orient Come's knowledge, no such Proceeding has been
threatened.
5.11 No
Brokers or
Finders. Except as disclosed in Schedule
5.11, no
person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against Orient Come for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, and Orient
Come
will indemnify and hold the Acquiror Company harmless against any liability
or
expense arising out of, or in connection with, any such claim.
5.12 Title
to and Condition of
Properties. Except as would not have a Material Adverse Effect,
Orient Come owns (with good and marketable title in the case of real property)
or holds under valid leases or other rights to use all real property, plants,
machinery and equipment necessary for the conduct of the business of Orient
Come
as presently conducted, free and clear of all Liens, except Permitted Liens.
The
material buildings, plants, machinery and equipment necessary for the conduct
of
the business of Orient Come as presently conducted are structurally sound,
are
in good operating condition and repair and are adequate for the uses to which
they are being put, in each case, taken as a whole, and none of such buildings,
plants, machinery or equipment is in need of maintenance or repairs, except
for
ordinary, routine maintenance and repairs that are not material in nature
or
cost.
5.13 No
Changes. Since
October 31, 2007, Orient Come has not experienced or suffered any Material
Adverse Effect.
5.14 No
Undisclosed
Events. Except as disclosed herein, since October 31, 2007, no material
event exists with respect to Orient Come or their respective businesses,
properties, operations or financial condition, which has not been disclosed
to
the Acquiror Company in writing as of the date of this Agreement.
5.15 Board
Recommendation.
Orient Come Board has, by unanimous written consent, determined that this
Agreement and the transactions contemplated by this Agreement, are advisable
and
in the best interests of Orient Come and its Shareholders.
SECTION
VI.
REPRESENTATIONS
AND WARRANTIES OF K’S MEDIA
K's
Media
hereby represents and warrants to the Acquiror Company:
6.1 Organization
and Qualification. K's Media is
duly
incorporated and validly existing under the laws of the PRC, and has all
requisite authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to carry on its business as presently
conducted and as contemplated to be conducted, to own, hold and operate its
properties and assets as now owned, held and operated by it, to enter into
this
Agreement, to carry out the provisions hereof except where the failure to
be so
organized, existing and in good standing or to have such authority or power
will
not, in the aggregate, have a Material Adverse Effect. K's Media is duly
qualified, licensed or domesticated as a foreign corporation in good standing
in
each jurisdiction wherein the nature of its activities or its properties
owned
or leased makes such qualification, licensing or domestication necessary,
except
where the failure to be so qualified, licensed or domesticated will not have
a
Material Adverse Effect. Set forth on Schedule 6.1is a list
of those jurisdictions in which K's Media presently conducts its business,
owns,
holds and operates its properties and assets. All registered capital
and other capital contributions shall have been duly paid up in accordance
with
the relevant PRC regulations and requirements and all necessary capital
verification reports have been duly issued and not revoked.
6.2 Subsidiaries.
K's
Media does not directly or indirectly, own any equity or other ownership
interest in any corporation, partnership, joint venture or other entity or
enterprise.
6.3 Organizational
Documents.
6.3.1 The
copies of the
Memorandum and Articles of Association of K's Media, and the documents which
constitute all other Organization Documents of K's Media, that have been
delivered to the Acquiror Company prior to the execution of this Agreement
are
true and complete and have not been amended or repealed. K's Media are not
in
violation or breach of any of the provisions of its Organizational Documents,
except for such violations or breaches as, in the aggregate, will not have
a
Material Adverse Effect.
6.3.2 True,
correct and complete
certified translated copies of the organizational documents of each of K's
Media
have been delivered to the Acquiror Company prior to the execution of this
Agreement, and no action has been taken to amend or repeal such organizational
documents. K’s Media will not in violation or breach of any of the provisions of
its organizational documents, except for such violations or breaches as would
not have a Material Adverse Effect.
6.4 Authorization
and Validity
of this Agreement. K's Media has all requisite authority and power
(corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents
to
which K's Media is a party, to consummate the transactions contemplated by
this
Agreement and each of the Transaction Documents to which K's Media is a party,
to perform its obligations under this Agreement and each of the Transaction
Documents to which K's Media is a party. K's Media shall record the transfer
of
its Shares and the delivery of the new certificates representing the Shares
registered in the name of the Acquiror Company. The execution, delivery and
performance by K's Media of this Agreement and each of the Transaction Documents
to which K's Media is a party have been duly authorized by all necessary
corporate action and do not require from the Company Board or the Shareholders
any consent or approval that has not been validly and lawfully obtained.
The
execution, delivery and performance by K's Media of this Agreement and each
of
the Transaction Documents to which K's Media is a party requires no
authorization, consent, approval, license, exemption of or filing or
registration with any Governmental Authority or other Person.
6.5 No
Violation. Neither
the execution nor the delivery by K's Media of this Agreement or any Transaction
Document to which K's Media is a party, nor the consummation or performance
by
K's Media of the transactions contemplated hereby or thereby will, directly
or
indirectly, (a) contravene, conflict with, or result in a violation of any
provision of the Organizational Documents of K's Media; (b) contravene, conflict
with, constitute a default (or an event or condition which, with notice or
lapse
of time or both, would constitute a default) under, or result in the termination
or acceleration of, or result in the imposition or creation of any Lien under,
any agreement or instrument to which K's Media is a party or by which the
properties or assets of K's Media are bound; (c) contravene, conflict with,
or
result in a violation of, any Law or Order to which K's Media, or any of
the
properties or assets owned or used by K's Media, may be subject; or (d)
contravene, conflict with, or result in a violation of, the terms or
requirements of, or give any Governmental Authority the right to revoke,
withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by K's Media or
that
otherwise relate to the business of, or any of the properties or assets owned
or
used by, K's Media, except, in the case of clause (b), (c), or (d), for any
such
contraventions, conflicts, violations, or other occurrences as would not
have a
Material Adverse Effect.
6.6 Binding
Obligations.
Assuming this Agreement and the Transaction Documents have been duly and
validly
authorized, executed and delivered by the parties thereto other than K's
Media,
this Agreement and each of the Transaction Documents to which K's Media is
a
party are duly authorized, executed and delivered by K's Media and constitute
the legal, valid and binding obligations of K's Media, enforceable against
K's
Media in accordance with their respective terms, except as such enforcement
is
limited by general equitable principles, or by bankruptcy, insolvency and
other
similar laws affecting the enforcement of creditors rights generally.
6.7 Capitalization
and Related
Matters.
6.7.1 Capitalization
of K's
Media. There are two shareholders of K’s Media. There are no
outstanding or authorized options, warrants, calls, purchase agreements,
participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require K's
Media to issue, sell or otherwise cause to become outstanding any of
its authorized but unissued shares of capital stock or any securities
convertible into, exchangeable for or carrying a right or option to purchase
shares of capital stock or to create, authorize, issue, sell or otherwise
cause
to become outstanding any new class of capital stock. There are no outstanding
stockholders’ agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the
capital
stock of K's Media . The ownership of K's Media’s described in this Section
6.7.1 is in compliance with the laws of the PRC.
6.7.2 No
Redemption
Requirements. There are no outstanding contractual obligations
(contingent or otherwise) of K's Media to retire, repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of, or other ownership
interests in, K's Media or to provide funds to or make any investment (in
the
form of a loan, capital contribution or otherwise) in any other Person.
6.8 Shareholders.
Exhibit
A-1contains a
true and complete list of the names and addresses of the record and beneficial
owners of K's Media. There is no voting trust, agreement or arrangement among
any of the Shareholders of any capital stock of K's Media affecting the exercise
of the voting rights of any such capital stock.
6.9 Compliance
with Laws and
Other Instruments. Except as would not have a Material Adverse Effect,
the business and operations of K's Media have been and are being conducted
in
accordance with all applicable Laws and Orders. Except as would not have
a
Material Adverse Effect, the K's Media has not received notice of any violation
(or any Proceeding involving an allegation of any violation) of any applicable
Law or Order by or affecting K's Media and, to the knowledge of K's Media,
no
Proceeding involving an allegation of violation of any applicable Law or
Order
is threatened or contemplated. Except as would not have a Material Adverse
Effect, K's Media is not alleged to be, in violation of, or (with or without
notice or lapse of time or both) in default under, or in breach of, any term
or
provision of its Organizational Documents or of any indenture, loan or credit
agreement, note, deed of trust, mortgage, security agreement or other material
agreement, lease, license or other instrument, commitment, obligation or
arrangement to which K's Media is a party or by which any of K's Media’s
properties, assets or rights are bound or affected. To the knowledge of K's
Media, no other party to any material contract, agreement, lease, license,
commitment, instrument or other obligation to which K's Media is a party
is
(with or without notice or lapse of time or both) in default there under
or in
breach of any term thereof. K's Media is not subject to any obligation or
restriction of any kind or character, nor is there, to the knowledge of K's
Media, any event or circumstance relating to K's Media, that materially and
adversely affects in any way its business, properties, assets or prospects
or
that prohibits K's Media from entering into this Agreement or would prevent
or
make burdensome its performance of or compliance with all or any part of
this
Agreement or the consummation of the transactions contemplated hereby or
thereby.
6.10 Certain
Proceedings.
There is no pending Proceeding that has been commenced against K's Media
and
that challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the transactions contemplated in this
Agreement. To K's Media's knowledge, no such Proceeding has been
threatened.
6.11 No
Brokers or
Finders. Except as disclosed in Schedule
6.11, no
person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against K's Media for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, and K's Media
will indemnify and hold the Acquiror Company harmless against any liability
or
expense arising out of, or in connection with, any such claim.
6.12 Title
to and Condition of
Properties. Except as would not have a Material Adverse Effect, K's
Media owns (with good and marketable title in the case of real property)
or
holds under valid leases or other rights to use all real property, plants,
machinery and equipment necessary for the conduct of the business of K's
Media
as presently conducted, free and clear of all Liens, except Permitted Liens.
The
material buildings, plants, machinery and equipment necessary for the conduct
of
the business of K's Media as presently conducted are structurally sound,
are in
good operating condition and repair and are adequate for the uses to which
they
are being put, in each case, taken as a whole, and none of such buildings,
plants, machinery or equipment is in need of maintenance or repairs, except
for
ordinary, routine maintenance and repairs that are not material in nature
or
cost.
6.13 No
Changes. Since
October 31, 2007, K's Media has not experienced or suffered any Material
Adverse
Effect.
6.14 No
Undisclosed
Events. Except as disclosed here, since October 31, 2007, no
material event exists with respect to K's Media or their respective businesses,
properties, operations or financial condition, which has not been disclosed
to
the Acquiror Company in writing as of the date of this Agreement.
6.15 Board
Recommendation.
K's Media Board has, by unanimous written consent, determined that this
Agreement and the transactions contemplated by this Agreement, are advisable
and
in the best interests of K's Media and its Shareholders.
SECTION
VII.
REPRESENTATIONS
AND WARRANTIES OF THE ACQUIROR COMPANY
The
Acquiror Company represents and warrants to Orient Come’s Shareholders, Orient
Come and K’s Media as follows:
7.1 Disclosure
Schedules.
The disclosure schedules attached hereto as Schedule 7.1through
Schedule
7.30_(the “Acquiror Company Disclosure Schedules”) are divided into
sections that correspond to the sections of this Section VII. The Acquiror
Company Disclosure Schedule comprises a list of all exceptions to the truth
and
accuracy in all material respects of, and of all disclosures or descriptions
required by, the representations and warranties set forth in the remaining
sections of this Section VII. For purposes of this Section VII, any statement,
facts, representations, or admissions contained in the public filings made
by
the Acquiror Company with the United States Securities and Exchange Commissions,
are deemed to be included in the Acquiror Company Disclosure Schedules and
all
such information is deemed to be fully disclosed to Orient Come’s Shareholders,
Orient Come and K’s Media. Notwithstanding anything contained herein to the
contrary in this Agreement, any representation, warranty or covenant made
by the
Acquiror Company shall be deemed to have been made to the best of its knowledge.
For purposes of this Agreement, "to the best of our knowledge" or similar
phrase
shall mean that such person shall have current actual knowledge of a condition
or event, or have received notice that would give rise to current actual
knowledge of such condition or event.
7.2 Organization
and
Qualification. The Acquiror Company is duly organized, validly existing
and in good standing under the laws of Nevada, has all requisite corporate
authority and power, governmental licenses, authorizations, consents and
approvals to carry on its business as presently conducted and to own, hold
and
operate its properties and assets as now owned, held and operated by it.
The
Acquiror Company is duly qualified, licensed or domesticated as a foreign
corporation in good standing in each jurisdiction wherein the nature of its
activities or its properties owned, held or operated makes such qualification,
licensing or domestication necessary, except where the failure to be so duly
qualified, licensed or domesticated and in good standing would not have a
Material Adverse Effect. Schedule 7.2sets
forth a true, correct and complete list of the Acquiror Company’s jurisdiction
of organization and each other jurisdiction in which the Acquiror Company
presently conducts its business or owns, holds and operates its properties
and
assets.
7.3 Subsidiaries.
the
Acquiror Company does not own, directly or indirectly, any equity or other
ownership interest in any corporation, partnership, joint venture or other
entity or enterprise.
7.4 Organizational
Documents. True, correct and complete copies of the Organizational
Documents of the Acquiror Company have been delivered to Orient Come’s
Shareholders, Orient Come and K’s Media prior to the execution of this
Agreement, and no action has been taken to amend or repeal such Organizational
Documents since such date of delivery except as disclosed in Schedule 7.4. The
Acquiror Company is not in violation or breach of any of the provisions of
its
Organizational Documents, except for such violations or breaches as would
not
have a Material Adverse Effect.
7.5 Authorization.
The
Acquiror Company has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to enter into
this
Agreement and each of the Transaction Documents to which the Acquiror Company
is
a party, to consummate the transactions contemplated by this Agreement and
each
of the Transaction Documents to which the Acquiror Company is a party and
to
perform its obligations under this Agreement and each of the Transaction
Documents to which the Acquiror Company is a party. The execution, delivery
and
performance by the Acquiror Company of this Agreement and each of the
Transaction Documents to which the Acquiror Company is a party have been
duly
authorized by all necessary corporate action and do not require from the
Acquiror Company Board any consent or approval that has not been validly
and
lawfully obtained except for approval by the Acquiror Company stockholders.
The
execution, delivery and performance by the Acquiror Company of this Agreement
and each of the Transaction Documents to which the Acquiror Company is a
party
requires no authorization, consent, approval, license, exemption of or filing
or
registration with any Governmental Authority or other Person other than (a)
the
Schedule 14(f) Filing, and (b) such other customary filings with the Commission
for transactions of the type contemplated by this Agreement and the Transaction
Documents.
7.6 No
Violation. Neither
the execution nor the delivery by the Acquiror Company of this Agreement
or any
Transaction Document to which the Acquiror Company is a party, nor the
consummation or performance by the Acquiror Company of the transactions
contemplated hereby or thereby will, directly or indirectly, (a) contravene,
conflict with, or result in a violation of any provision of the Organizational
Documents of the Acquiror Company (b) contravene, conflict with, constitute
a
default (or an event or condition which, with notice or lapse of time or
both,
would constitute a default) under, or result in the termination or acceleration
of, or result in the imposition or creation of any Lien under, any agreement
or
instrument to which the Acquiror Company is a party or by which the properties
or assets of the Acquiror Company is bound; (c) contravene, conflict with,
or
result in a violation of, any Law or Order to which the Acquiror Company,
or any
of the properties or assets owned or used by the Acquiror Company, may be
subject; or (d) contravene, conflict with, or result in a violation of, the
terms or requirements of, or give any Governmental Authority the right to
revoke, withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by the Acquiror
Company or that otherwise relate to the business of, or any of the properties
or
assets owned or used by, the Acquiror Company, except, in the case of clause
(b), (c), or (d), for any such contraventions, conflicts, violations, or
other
occurrences as would not have a Material Adverse Effect.
7.7 Binding
Obligations.
Assuming this Agreement and the Transaction Documents have been duly and
validly
authorized, executed and delivered by the parties thereto other than the
Acquiror Company, this Agreement and each of the Transaction Documents to
which
the Acquiror Company is a party are duly authorized, executed and delivered
by
the Acquiror Company and constitutes the legal, valid and binding obligations
of
the Acquiror Company, enforceable against the Acquiror Company in accordance
with their respective terms, except as such enforcement is limited by general
equitable principles, or by bankruptcy, insolvency and other similar Laws
affecting the enforcement of creditors rights generally.
7.8 Securities
Laws.
Assuming the accuracy of the representations and warranties of Orient Come’s
Shareholders, contained in Section 4 and Exhibits D and E, the issuance of
the
Acquiror Company Shares pursuant to this Agreement will be when issued and
paid
for in accordance with the terms of this Agreement issued in accordance with
exemptions from the registration and prospectus delivery requirements of
the
Securities Act and the registration permit or qualification requirements
of all
applicable state securities laws.
7.9 Capitalization
and Related
Matters.
7.9.1 Capitalization.
The
authorized capital stock of the Acquiror Company consists of 100,000,000
shares
of the Acquiror Company’s Common Stock, at $0.00001 par value per share, of
which 6,087,000 shares are issued and outstanding; 100,000,000 shares of
the
Acquiror Company’s Preferred Stock are authorized, none Preferred Stock is
issued and outstanding. At the Closing Date, the Acquiror Company will have
sufficient authorized and unissued Acquiror Company’s Common Stock to consummate
the transactions contemplated hereby. There are no outstanding options,
warrants, purchase agreements, participation agreements, subscription rights,
conversion rights, exchange rights or other securities or contracts that
could
require the Acquiror Company to issue, sell or otherwise cause to become
outstanding any of its authorized but unissued shares of capital stock or
any
securities convertible into, exchangeable for or carrying a right or option
to
purchase shares of capital stock or to create, authorize, issue, sell or
otherwise cause to become outstanding any new class of capital stock. There
are
no outstanding stockholders’ agreements, voting trusts or arrangements,
registration rights agreements, rights of first refusal or other contracts
pertaining to the capital stock of the Acquiror Company. The issuance of
all of
the shares of Acquiror Company’s Common Stock described in this Section 7.9.1
have been in compliance with U.S. federal and state securities laws.
7.9.2 No
Redemption
Requirements. There are no outstanding contractual obligations
(contingent or otherwise) of the Acquiror Company to retire, repurchase,
redeem
or otherwise acquire any outstanding shares of capital stock of, or other
ownership interests in, the Acquiror Company or to provide funds to or make
any
investment (in the form of a loan, capital contribution or otherwise) in
any
other Person.
7.9.3 Duly
Authorized. The
issuance of the Acquiror Company Shares has been duly authorized and, upon
delivery to the Shareholders of certificates therefor in accordance with
the
terms of this Agreement, the Acquiror Company Shares will have been validly
issued and fully paid, and will be nonassessable, have the rights, preferences
and privileges specified, will be free of preemptive rights and will be free
and
clear of all Liens and restrictions, other than Liens created by the
Shareholders and restrictions on transfer imposed by this Agreement and the
Securities Act.
7.10 Compliance
with Laws.
Since inception of the Acquiror Company and, to the best of the Acquiror
Company’s knowledge, for all periods after thereto, (i) the business and
operations of the Acquiror Company have been and are being conducted in
accordance with all applicable Laws and Orders; and (ii) the Acquiror Company
has not received notice of any violation (or any Proceeding involving an
allegation of any violation) of any applicable Law or Order by or affecting
the
Acquiror Company and no Proceeding involving an allegation of violation of
any
applicable Law or Order is threatened or contemplated. The Acquiror Company
is
not subject to any obligation or restriction of any kind or character, nor
is
there, to the knowledge of the Acquiror Company, any event or circumstance
relating to the Acquiror Company that materially and adversely affects in
any
way its business, properties, assets or prospects or that prohibits the Acquiror
Company from entering into this Agreement or would prevent or make burdensome
its performance of or compliance with all or any part of this Agreement or
the
consummation of the transactions contemplated hereby.
7.11 Certain
Proceedings.
There is no pending Proceeding that has been commenced against the Acquiror
Company and that challenges, or may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement. To the knowledge of the Acquiror Company,
no
such Proceeding has been threatened.
7.12 No
Brokers or
Finders. Except as disclosed in Schedule
7.12, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against the Acquiror Company for any commission,
fee or
other compensation as a finder or broker, or in any similar capacity.
7.13 Absence
of Undisclosed
Liabilities. Except as set forth on Schedule
7.13or in
the SEC Documents, the Acquiror Company has no debt, obligation or liability
(whether accrued, absolute, contingent, liquidated or otherwise, whether
due or
to become due) arising out of any transaction entered into at or prior to
the
Closing Date or any act or omission at or prior to the Closing Date, except
to
the extent set forth on or reserved against on the Acquiror Company Balance
Sheet. Any and all debts, obligations or liabilities with respect to directors
and officers of the Acquiror Company will be cancelled prior to the Closing.
Except as set forth on Schedule 6.13, the Acquiror Company has not incurred
liabilities, obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured, absolute, accrued, contingent or otherwise) under
agreements entered into, other than in the usual and ordinary course of business
since July 31, 2007.
7.14 Changes.
Except as
set forth in the SEC Documents or in Schedule 7.14, since
July 31, 2007 and, to the best of the Acquiror Company’s knowledge, for all
periods prior thereto, the Acquiror Company has, conducted its business in
the
usual and ordinary course of business consistent with past practice and has
not:
7.14.1 Ordinary
Course of
Business. Entered into any transaction other than in the usual and
ordinary course of business, except for this Agreement and each of the
Transaction Documents.
7.14.2 Adverse
Changes.
Suffered or experienced any change in, or affecting, its condition (financial
or
otherwise), properties, assets, liabilities, business, operations, results
of
operations or prospects other than changes, events or conditions in the usual
and ordinary course of its business, none of which would have a Material
Adverse
Effect;
7.14.3 Loans.
Made any loans
or advances to any Person other than travel advances and reimbursement of
expenses made to employees, officers and directors in the ordinary course
of
business;
7.14.4 Liens.
Created or
permitted to exist any Lien on any material property or asset of the Acquiror
Company, other than Permitted Liens;
7.14.5 Capital
Stock.
Issued, sold, disposed of or encumbered, or authorized the issuance, sale,
disposition or encumbrance of, or granted or issued any option to acquire
any
shares of its capital stock or any other of its securities or any Equity
Security, or altered the term of any of its outstanding securities or made
any
change in its outstanding shares of capital stock or its capitalization,
whether
by reason of reclassification, recapitalization, stock split, combination,
exchange or readjustment of shares, stock dividend or otherwise;
7.14.6 Dividends.
Declared,
set aside, made or paid any dividend or other distribution to any of its
stockholders;
7.14.7 Material
Acquiror Company
Contracts. Terminated or modified any Material Acquiror Company Contract,
except for termination upon expiration in accordance with the terms
thereof;
7.14.8 Claims.
Released,
waived or cancelled any claims or rights relating to or affecting the Acquiror
Company in excess of US $10,000 in the aggregate or instituted or settled
any
Proceeding involving in excess of US $10,000 in the aggregate;
7.14.9 Discharged
Liabilities. Paid, discharged or satisfied any claim, obligation or
liability in excess of US $10,000 in the aggregate, except for liabilities
incurred prior to the date of this Agreement in the ordinary course of
business;
7.14.10 Indebtedness.
Created, incurred, assumed or otherwise become liable for any Indebtedness
in
excess of US $10,000 in the aggregate, other than professional fees;
7.14.11 Guarantees.
Guaranteed or endorsed any obligation or net worth of any Person exceeding
$10,000 in the aggregate;
7.14.12 Acquisitions.
Acquired the capital stock or other securities or any ownership interest
in, or
substantially all of the assets of, any other Person;
7.14.13 Accounting.
Changed
its method of accounting or the accounting principles or practices utilized
in
the preparation of its financial statements, other than as required by
GAAP;
7.14.14 Agreements.
Entered
into any agreement, or otherwise obligated itself, to do any of the
foregoing.
7.15 Material
Acquiror Company
Contracts. The Acquiror Company has provided to the Company, prior to the
date of this Agreement, true, correct and complete copies of each written
Material Acquiror Company Contract, including each amendment, supplement
and
modification thereto.
7.15.1 No
Defaults. Each
Material Acquiror Company Contract is a valid and binding agreement of the
Acquiror Company, and is in full force and effect. The Acquiror Company is
not
in breach or default of any Material Acquiror Company Contract to which it
is a
party and, to the knowledge of the Acquiror Company, no other party to any
Material Acquiror Company Contract is in breach or default thereof. No event
has
occurred or circumstance exists that (with or without notice or lapse of
time)
would (a) contravene, conflict with or result in a violation or breach of,
or
become a default or event of default under, any provision of any Material
Acquiror Company Contract or (b) permit the Acquiror Company or any other
Person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate or modify any Material
Acquiror Company Contract. The Acquiror Company has not received notice of
the
pending or threatened cancellation, revocation or termination of any Material
Acquiror Company Contract to which it is a party. There are no renegotiations
of, or attempts to renegotiate, or outstanding rights to renegotiate any
material terms of any Material Acquiror Company Contract.
7.16 Employees.
7.16.1 The
Acquiror Company has no
employees, independent contractors or other Persons providing research or
other
services to them. Except as would not have a Material Adverse Effect, the
Acquiror Company is in full compliance with all Laws regarding employment,
wages, hours, benefits, equal opportunity, collective bargaining, the payment
of
Social Security and other taxes, and occupational safety and health. The
Acquiror Company is not liable for the payment of any compensation, damages,
taxes, fines, penalties or other amounts, however designated, for failure
to
comply with any of the foregoing Laws.
7.16.2 Other
than Xxxx Xxx, Xxx
Xxxx and Xxxxx Xxx, the Acquiror Company does not have any officers, directors
or employees. No director, officer or employee of the Acquiror Company is
a
party to, or is otherwise bound by, any contract (including any confidentiality,
non-competition or proprietary rights agreement) with any other Person that
in
any way adversely affects or will materially affect (a) the performance of
his
or her duties as a director, officer or employee of the Acquiror Company
or (b)
the ability of the Acquiror Company to conduct its business. Except as set
forth
on Schedule
7.16.2, each employee of the Acquiror Company is employed on an at-will
basis and the Acquiror Company does not have any contract with any of its
employees which would interfere with its ability to discharge its
employees.
7.17 Tax
Returns and
Audits.
7.17.1 Tax
Returns. Since
July 31, 2007 and, to the best of the Acquiror Company’s knowledge, for all
periods prior thereto, the Acquiror Company has filed all material Tax Returns
required to be filed (if any) by or on behalf of the Acquiror Company and
has
paid all material Taxes of the Acquiror Company required to have been paid
(whether or not reflected on any Tax Return). Except as set forth on Schedule 7.17.1, (a)
no Governmental Authority in any jurisdiction has made a claim, assertion
or
threat to the Acquiror Company that the Acquiror Company is or may be subject
to
taxation by such jurisdiction; (b) there are no Liens with respect to Taxes
on
the Acquiror Company’s property or assets other than Permitted Liens; and (c)
there are no Tax rulings, requests for rulings, or closing agreements relating
to the Acquiror Company for any period (or portion of a period) that would
affect any period after the date hereof.
7.17.2 No
Adjustments,
Changes. Neither the Acquiror Company nor any other Person on behalf of
the Acquiror Company (a) has executed or entered into a closing agreement
pursuant to Section 7121 of the Code or any predecessor provision thereof
or any
similar provision of state, local or foreign law; or (b) has agreed to or
is
required to make any adjustments pursuant to Section 481(a) of the Code or
any
similar provision of state, local or foreign law.
7.17.3 No
Disputes. The
Acquiror Company has delivered to Orient Come, Orient Come’s Shareholders and
K’s Media true, correct and complete copies of all Tax Returns and examination
reports and statements of deficiencies assessed or asserted against or agreed
to
by the Acquiror Company, if any, for each of the last two years and any and
all
correspondence with respect to the foregoing. There is no pending audit,
examination, investigation, dispute, proceeding or claim with respect to
any
Taxes of the Acquiror Company, nor is any such claim or dispute pending or
contemplated. The Acquiror Company has not receive notice of any such audit,
examination, investigation, dispute, proceeding or claim with respect to
any
Taxes with respect to any periods prior to January 1, 2005.
7.17.4 Not
a U.S. Real Property
Holding Corporation. The Acquiror Company is not and has not been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code at any time during the applicable period specified
in
Section 897(c)(1)(A)(ii) of the Code.
7.17.5 No
Tax Allocation,
Sharing. The Acquiror Company is not and has not been a party to any Tax
allocation or sharing agreement.
7.17.6 No
Other
Arrangements. The Acquiror Company is not a party to any agreement,
contract or arrangement for services that would result, individually or in
the
aggregate, in the payment of any amount that would not be deductible by reason
of Section 162(m), 280G or 404 of the Code. The Acquiror Company is not a
“consenting corporation” within the meaning of Section 341(f) of the Code. The
Acquiror Company does not have any “tax-exempt bond financed property” or
“tax-exempt use property” within the meaning of Section 168(g) or (h),
respectively of the Code. The Acquiror Company does not have any outstanding
closing agreement, ruling request, request for consent to change a method
of
accounting, subpoena or request for information to or from a Governmental
Authority in connection with any Tax matter. During the last two years, the
Acquiror Company has not engaged in any exchange with a related party (within
the meaning of Section 1031(f) of the Code) under which gain realized was
not
recognized by reason of Section 1031 of the Code. The Company is not a party
to
any reportable transaction within the meaning of Treasury Regulation Section
1.6011-4.
7.18 Material
Assets. The
financial statements of the Acquiror Company set forth in the SEC Documents
reflect the material properties and assets (real and personal) owned or leased
by the Acquiror Company.
7.19 Litigation;
Orders.
There is no Proceeding (whether federal, state, local or foreign) pending
or, to
the knowledge of the Acquiror Company, threatened against or affecting the
Acquiror Company or any of Acquiror Company’s properties, assets, business or
employees. To the knowledge of the Acquiror Company, there is no fact that
might
result in or form the basis for any such Proceeding. The Acquiror Company
is not
subject to any Orders.
7.20 Licenses.
The
Acquiror Company possesses from the appropriate Governmental Authority all
licenses, permits, authorizations, approvals, franchises and rights that
are
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties
and
assets in the manner in which it currently owns and uses such properties
and
assets (collectively, “Acquiror Company Permits”). The Acquiror Company has not
received notice from any Governmental Authority or other Person that there
is
lacking any license, permit, authorization, approval, franchise or right
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties
and
assets in the manner in which it currently owns and uses such properties
and
assets. The Acquiror Company Permits are valid and in full force and effect.
No
event has occurred or circumstance exists that may (with or without notice
or
lapse of time): (a) constitute or result, directly or indirectly, in a violation
of or a failure to comply with any Acquiror Company Permit; or (b) result,
directly or indirectly, in the revocation, withdrawal, suspension, cancellation
or termination of, or any modification to, any Acquiror Company Permit. The
Acquiror Company has not received notice from any Governmental Authority
or any
other Person regarding: (a) any actual, alleged, possible or potential
contravention of any Acquiror Company Permit; or (b) any actual, proposed,
possible or potential revocation, withdrawal, suspension, cancellation,
termination of, or modification to, any Acquiror Company Permit. All
applications required to have been filed for the renewal of such Acquiror
Company Permits have been duly filed on a timely basis with the appropriate
Persons, and all other filings required to have been made with respect to
such
Acquiror Company Permits have been duly made on a timely basis with the
appropriate Persons. All Acquiror Company Permits are renewable by their
terms
or in the ordinary course of business without the need to comply with any
special qualification procedures or to pay any amounts other than routine
fees
or similar charges, all of which have, to the extent due, been duly paid.
7.21 Interested
Party
Transactions. Except as disclosed in Schedule
7.21, since
July 31, 2007 and, to the best of the Acquiror Company’s knowledge, for all
periods prior thereto, no officer, director or principal stockholder of the
Acquiror Company or any Affiliate or “associate” (as such term is defined in
Rule 405 of the Commission under the Securities Act) of any such Person,
has or
has had, either directly or indirectly, (1) an interest in any Person which
(a)
furnishes or sells services or products which are furnished or sold or are
proposed to be furnished or sold by the Acquiror Company, or (b) purchases
from
or sells or furnishes to, or proposes to purchase from, sell to or furnish
the
Acquiror Company any goods or services; or (2) a beneficial interest in any
contract or agreement to which the Acquiror Company is a party or by which
it
may be bound or affected.
7.22 Governmental
Inquiries. Since July 31, 2007 and, to the best of the Acquiror Company’s
knowledge, for all periods prior thereto, the Acquiror Company has provided
to
the Company a copy of each material written inspection report, questionnaire,
inquiry, demand or request for information received by the Acquiror Company
from
any Governmental Authority, and the Acquiror Company’s response thereto, and
each material written statement, report or other document filed by the Acquiror
Company with any Governmental Authority.
7.23 Bank
Accounts and Safe
Deposit Boxes. Schedule
7.23discloses the title and number of each bank or other deposit or
financial account, and each lock box and safety deposit box used by the Acquiror
Company since the inception of the Acquiror Company, the financial institution
at which that account or box is maintained and the names of the persons
authorized to draw against the account or otherwise have access to the account
or box, as the case may be. To the best of the Acquiror Company’s knowledge,
other than the bank accounts and safe deposit boxes referenced above and
included in Schedule 7.23, no other bank accounts or safe deposit boxes
exist.
7.24 Intellectual
Property. The Acquiror Company does not own, use or license any
Intellectual Property in its business as presently conducted.
7.25 Title
to and Condition of
Properties. The Acquiror Company owns (with good and marketable title in
the case of real property) or holds under valid leases the rights to use
all
real property, plants, machinery, equipment and other personal property
necessary for the conduct of its business as presently conducted, free and
clear
of all Liens, except Permitted Liens. The material buildings, plants, machinery
and equipment necessary for the conduct of the business of the Acquiror Company
as presently conducted are structurally sound, are in good operating condition
and repair and are adequate for the uses to which they are being put, and
none
of such buildings, plants, machinery or equipment is in need of maintenance
or
repairs, except for ordinary, routine maintenance and repairs that are not
material in nature or cost.
7.26 SEC
Documents; Financial
Statements. Except as set forth on Schedule
7.26, since
July 1, 2007 and, to the best of the Acquiror Company’s knowledge, for all
periods prior thereto, the Acquiror Company has filed all reports required
to be
filed by it under the Exchange Act, including pursuant to Section 13(a) or
15(d)
thereof, for the five (5) years preceding the date hereof (or such shorter
period as the Acquiror Company was required by law to file such material)
(the
foregoing materials being collectively referred to herein as the “SEC
Documents”). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder,
and
none of the SEC Documents, when filed, contained any untrue statement of
a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statement therein, in light of the
circumstances under which they were made, not misleading. All Material Acquiror
Company Contracts to which the Acquiror Company is a party or to which the
property or assets of the Acquiror Company are subject have been appropriately
filed as exhibits to the SEC Documents as and to the extent required under
the
Exchange Act. The financial statements of the Acquiror Company included in
the
SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing, were prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except as
may be
indicated in the notes thereto, or, in the case of unaudited statements as
permitted by Form 10-QSB of the Commission), and fairly present in all material
respects (subject in the case of unaudited statements, to normal, recurring
audit adjustments) the financial position of the Acquiror Company as at the
dates thereof and the results of its operations and cash flows for the periods
then ended.
7.27 Stock
Option Plans; Employee
Benefits: There is no Stock Option Plans, Employee Benefits of the
Acquiror Company as the date of Closing.
7.27.1 The
Acquiror Company has no
stock option plans providing for the grant by the Acquiror Company of stock
options to directors, officers or employees.
7.27.2 The
Acquiror Company has no
employee benefit plans or arrangements covering their present and former
employees or providing benefits to such persons in respect of services provided
the Acquiror Company.
7.27.3 Neither
the consummation of
the transactions contemplated hereby alone, nor in combination with another
event, with respect to each director, officer, employee and consultant of
the
Acquiror Company, will result in (a) any payment (including, without limitation,
severance, unemployment compensation or bonus payments) becoming due from
the
Acquiror Company, (b) any increase in the amount of compensation or benefits
payable to any such individual or (c) any acceleration of the vesting or
timing
of payment of compensation payable to any such individual. No agreement,
arrangement or other contract of the Acquiror Company provides benefits or
payments contingent upon, triggered by, or increased as a result of a change
in
the ownership or effective control of the Acquiror Company.
7.28 Environmental
and Safety
Matters. Except as set forth on Schedule 7.28:
7.28.1 The
Acquiror Company has at
all time been and is in compliance with all Environmental Laws applicable
to the
Acquiror Company.
7.28.2 There
are no Proceedings
pending or threatened against the Acquiror Company alleging the violation
of any
Environmental Law or Environmental Permit applicable to the Acquiror Company
or
alleging that the Acquiror Company is a potentially responsible party for
any
environmental site contamination.
7.28.3 Neither
this Agreement nor
the consummation of the transactions contemplated by this Agreement shall
impose
any obligations to notify or obtain the consent of any Governmental Authority
or
third Persons under any Environmental Laws applicable to the Acquiror
Company.
7.29 Money
Laundering
Laws. The operations of the Acquiror Company is and has been conducted
at
all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as
amended, the money laundering statutes of all U.S. and non-U.S. jurisdictions,
the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any Governmental
Authority (collectively, the “Money Laundering Laws”) and no Proceeding
involving the Acquiror Company with respect to the Money Laundering Laws
is
pending or, to the knowledge of the Acquiror Company, threatened.
7.30 No
Undisclosed Events or
Circumstances. No event or circumstance has occurred or exists with
respect to the Company or its subsidiaries or their respective businesses,
properties, prospects, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed
since
October 31, 2007.
7.31 Adverse
Interest.
Except as set forth on Schedule 7.31, no
current officer, director, affiliate or person known to the Acquiror Company
to
be the record or beneficial owner in excess of 5% of Acquiror Company Common
Stock or any person known to be an associate of any of the foregoing is a
party
adverse to Acquiror Company or has a material interest adverse to Acquiror
Company in any material pending legal proceeding.
7.32 Investment
Acquisition. Acquiror Company is acquiring Orient Come’s Shares to be
transferred to it under this Agreement for investment and not with a view
to the
sale or distribution thereof. There are no other agreements purporting to
restrict the issuance or transfer of the Acquiror Company Shares nor any
voting
agreements, voting trusts or other arrangements restricting or affecting
the
voting of the Acquiror Company Shares.
7.33 Untrue
Statements.
Neither this Agreement nor the Schedules hereto nor any other documents,
certificates or instruments furnished to Orient Come, or Orient Come’s
Shareholder or K’s Media, by or on behalf of Acquiror Company in connection with
the transactions contemplated by this Agreement contain any untrue statement
of
a material fact or omit to state a material fact necessary in order to make
the
statements made herein or therein, in the light of the circumstances under
which
they were made herein or therein, not misleading.
7.34 Trading
Activity.
Acquiror Company has not been the subject of any enforcement or other actions
which have questioned its compliance with applicable rules (including without
limitation Commission rules and regulations) and the applicable trading rules
since the inception of its trading on the Over the Counter Bulletin Board
in the
U.S. (“OTCBB”). To the best of Acquiror Company’s knowledge, its shares are
eligible for trading publicly on the OTCBB as of the date of this Agreement.
Acquiror Company has received no notice that its common stock is not eligible
for quotation and is unaware of any legal encumbrance and contrived encumbrance
to suspend, stop or terminate the trading in its shares which could negatively
affect its application for being transferred to the Nasdaq National Market
in
the U.S., provided all substantive listing criteria are otherwise also met
by
the Company’s business.
7.35 Board
Recommendation.
The Acquiror Company Board, by unanimous written consent, has determined
that
this Agreement and the transactions contemplated by this Agreement are advisable
and in the best interests of the Acquiror Company’s stockholders and has duly
authorized this Agreement and the transactions contemplated by this
Agreement.
SECTION
VIII.
COVENANTS
OF THE ACQUIROR COMPANY
8.1 Rule
144 Reporting.
With a view to making available to those stockholders of the Acquiror Company
who were not officers, directors, promoters or otherwise Affiliates prior
to and
after the Closing, the benefit of certain rules and regulations of the
Commission which may permit the sale of the Acquiror Company Common Stock
to the
public without registration, from and after the Closing Date, the Acquiror
Company agrees to:
8.1.1 Make
and keep public
information available, as those terms are understood and defined in Rule
144;
and
8.1.2 File
with the Commission,
in a timely manner, all reports and other documents required of the Acquiror
Company under the Exchange Act.
8.2 SEC
Documents. From
and after the Closing Date, in the event the Commission notifies the Acquiror
Company of its intent to review any SEC Document filed prior to the Closing
Date
or the Acquiror Company receives any oral or written comments from the
Commission with respect to any SEC Document filed prior to the Closing Date,
the
Acquiror Company shall promptly notify the Acquiror Company Principal
Shareholders and the Acquiror Company Principal Shareholders shall fully
cooperate with the Acquiror Company.
8.3 Schedule
14(f). At
least ten (10) days prior to the Closing Date, the Acquiror Company shall
file
the Schedule 14(f) Filing and mail the same to each Acquiror Company
shareholder.
8.4 Form
8-K. Within four
(4) business days of the Closing Date, the Acquiror Company shall file the
Form
8-K.
SECTION
IX.
CONDITIONS
PRECEDENT OF THE ACQUIROR COMPANY
The
Acquiror Company's obligation to acquire Orient Come’s Shares and to take the
other actions required to be taken by the Acquiror Company at the Closing
Date
is subject to the satisfaction, at or prior to the Closing Date, of each
of the
following conditions (any of which may be waived by the Acquiror Company,
in
whole or in part):
9.1 Accuracy
of
Representations. The representations and warranties of Orient Come,
Orient Come’s Shareholder and K’s Media set forth in this Agreement or in any
Schedule or certificate delivered pursuant hereto shall be true and correct
in
all material respects as of the date of this Agreement except to the extent
a
representation or warranty is expressly limited by its terms to another date
and
without giving effect to any supplemental Schedule.
9.2 Performance
by
Orient
Come, Orient Come's Shareholders and K's Media.
9.2.1 All
of the covenants and
obligations that Orient Come, Orient Come's Shareholders and K's Media are
required to perform or to comply with pursuant to this Agreement (considered
collectively), and each of these covenants and obligations (considered
individually), must have been duly performed and complied with in all material
respects.
9.2.2 Each
document required to
be delivered by Orient Come, Orient Come's Shareholder and K's Media pursuant
to
this Agreement must have been delivered.
9.2.3 Receipt
of executed
signature pages to the Management Contract signed between Orient Come and
K's
Media.
9.3 No
Force Majeure
Event. There shall not have been any delay, error, failure or
interruption in the conduct of the business of the Company, or any loss,
injury,
delay, damage, distress, or other casualty, due to force majeure including
but
not limited to (a) acts of God; (b) fire or explosion; (c) war, acts of
terrorism or other civil unrest; or (d) national emergency.
9.4 Certificate
of
Officer. Orient Come and K’s Media will have delivered to the Acquiror
Company a certificate executed by an officer of the Company, certifying the
satisfaction of the conditions specified in Sections 9.1, 9.2, and 9.3 relating
to the Company.
9.5 Certificate
of
Shareholders. Each Orient Come’s Shareholder will have delivered to the
Acquiror Company a certificate executed by such Shareholder, if a natural
person, or an authorized officer of the Shareholder, if an entity, certifying
the satisfaction of the conditions specified in Sections 9.1 and 9.2 relating
to
such Shareholder.
9.6 Consents.
9.6.1 All
material consents,
waivers, approvals, authorizations or orders required to be obtained, and
all
filings required to be made, by Orient Come, Orient Come’s Shareholder and K’s
Media for the authorization, execution and delivery of this Agreement and
the
consummation by them of the transactions contemplated by this Agreement,
shall
have been obtained and made Orient Come, Orient Come’s Shareholder and K’s
Media, as the case may be, except where the failure to receive such consents,
waivers, approvals, authorizations or orders or to make such filings would
not
have a Material Adverse Effect on Orient Come or K’s Media or the Acquiror
Company.
9.6.2 Without
limiting the
foregoing, the Schedule 14(f) Filing shall have been prepared to be filed
with
the Commission by the Acquiror Company after the Closing Date.
9.7 Documents.
The
Company and the Shareholders must deliver to the Acquiror Company at the
Closing:
9.7.1 share
certificates
evidencing the number of Shares held by each Orient Come’s Shareholder (as set
forth in Exhibit
A), along with executed share transfer forms transferring such Shares
to
the Acquiror Company together with a certified copy of a board resolution
of
Orient Come approving the registration of the transfer of such shares to
Acquiror Company (subject to Closing and payment of stamp duty);
9.7.2 each
of the Transaction
Documents to which Orient Come, Orient Come’s Shareholder and K’s Media is a
party, duly executed;
9.7.3 such
other documents as the
Acquiror Company may reasonably request for the purpose of (A) evidencing
the
accuracy of any of the representations and warranties of Orient Come, Orient
Come’s Shareholder and K’s Media pursuant to Section 9.1, (B) evidencing the
performance of, or compliance by Orient Come, Orient Come’s Shareholder and K’s
Media with, any covenant or obligation required to be performed or complied
with
by the Company or the Shareholders, as the case may be, (C) evidencing the
satisfaction of any condition referred to in this Section 9, or (D) otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement.
9.8 No
Proceedings. There
must not have been commenced or threatened against the Acquiror Company,
Orient
Come, Orient Come’s Shareholder and K’s Media, or against any Affiliate thereof,
any Proceeding (which Proceeding remains unresolved as of the Closing Date)
(a)
involving any challenge to, or seeking damages or other relief in connection
with, any of the transactions contemplated by this Agreement, or (b) that
may
have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated by this Agreement.
9.9 No
Claim Regarding Stock
Ownership or Consideration. There must not have been made or threatened
by any Person, other than persons listed on Schedule Ihereto,
any
claim asserting that such Person (a) is the holder of, or has the right to
acquire or to obtain beneficial ownership of Orient Come’s Shares or any other
stock, voting, equity, or ownership interest in, Orient Come, or (b) is entitled
to all or any portion of the Acquiror Company Shares.
SECTION
X.
CONDITIONS
PRECEDENT OF ORIENT COME,
ORIENT
COME SHAREHOLDERS AND K’S MEDIA
The
Shareholders’ obligation to transfer the Shares and the obligations of the
Company to take the other actions required to be taken by the Company in
advance
of or at the Closing Date are subject to the satisfaction, at or prior to
the
Closing Date, of each of the following conditions (any of which may be waived
by
the Company and the Shareholders jointly, in whole or in part):
10.1 Accuracy
of
Representations. The representations and warranties of the Acquiror
Company set forth in this Agreement or in any Schedule or certificate delivered
pursuant hereto shall be true and correct in all material respects as of
the
date of this Agreement except to the extent a representation or warranty
is
expressly limited by its terms to another date.
10.2 Performance
by the Acquiror
Company.
10.2.1 All
of the covenants and
obligations that the Acquiror Company are required to perform or to comply
with
pursuant to this Agreement (considered collectively), and each of these
covenants and obligations (considered individually), must have been performed
and complied with in all respects.
10.2.2 Each
document required to
be delivered by the Acquiror Company pursuant to this Agreement must have
been
delivered.
10.3 No
Force Majeure
Event. There shall not have been any delay, error, failure or
interruption in the conduct of the business of the Acquiror Company, or any
loss, injury, delay, damage, distress, or other casualty, due to force majeure
including but not limited to (a) acts of God; (b) fire or explosion; (c)
war,
acts of terrorism or other civil unrest; or (d) national emergency.
10.4 Certificate
of
Officer. The Acquiror Company will have delivered to the Company a
certificate, dated the Closing Date, executed by an officer of the Acquiror
Company, certifying the satisfaction of the conditions specified in Sections
10.1, 10.2, and 10.3 relating to the Acquiror Company.
10.5 Consents.
10.5.1 All
material consents,
waivers, approvals, authorizations or orders required to be obtained, and
all
filings required to be made, by the Acquiror Company for the authorization,
execution and delivery of this Agreement and the consummation by it of the
transactions contemplated by this Agreement, shall have been obtained and
made
by the Acquiror Company, except where the failure to receive such consents,
waivers, approvals, authorizations or orders or to make such filings would
not
have a Material Adverse Effect on the Company or the Acquiror Company.
10.5.2 The
Schedule 14(f) Filing
shall have been prepared to be filed with the Commission by the Acquiror
Company
and the Acquiror Company shareholders at least ten (10) days prior to the
Closing Date.
10.6 Documents.
The
Acquiror Company must have caused the following documents to be delivered
to the
Company and/or the Shareholders:
10.6.1 share
certificates
evidencing each Shareholder’s pro rata share of the Closing Acquiror Company
Shares (as set forth in Exhibit A);
10.6.2 a
Secretary’s Certificate,
dated the Closing Date, certifying attached copies of (a) the Organizational
Documents of the Acquiror Company, (b) the resolutions of the Acquiror Company
Board approving this Agreement and the transactions contemplated hereby;
and (c)
the incumbency of each authorized officer of the Acquiror Company signing
this
Agreement and any other agreement or instrument contemplated hereby to which
the
Acquiror Company is a party;
10.6.3 a
Certificate of Good
Standing of the Acquiror Company;
10.6.4 each
of the Transaction
Documents to which the Acquiror Company is a party, duly executed;
10.6.5 the
resignation of each of
Xxxx Xxx and Xxxxx Xxx as officers of the Acquiror Company on the Closing
Date;
10.6.6 Acquiror
Company Board
resolutions (i) appointing Xxxx Xxx to serve as Chief Financial Officer,
Treasurer and Secretary of the Acquiror Company and Xxx Xxxxxx to serve
President and Chief Executive Officer of the Acquiror Company, and (ii)
nominating Xx Xxxx to serve as Chairman of the Acquiror Company Board and
Xxxxx
Xxx and Xxx Xxxxxx to serve as members of the Acquiror Company Board, with
such
appointment to be effective on the Effective Date;
10.6.7 the
resignations of Xxx
Xxxx and Xxxxx Xxx as directors of the Acquiror Company, such resignations
to be
effective on the Effective Date;
10.6.8 a
statement from the
Acquiror Company’s transfer agent regarding the number of issued and outstanding
shares of common stock immediately before and after the Closing; and,
10.6.9 such
other documents as
Orient Come may reasonably request for the purpose of (i) evidencing the
accuracy of any representation or warranty of the Acquiror Company pursuant
to
Section 10.1, (ii) evidencing the performance by the Acquiror Company of,
or the
compliance by the Acquiror Company with, any covenant or obligation required
to
be performed or complied with by the Acquiror Company, (iii) evidencing the
satisfaction of any condition referred to in this Section 10, or (iv) otherwise
facilitating the consummation of any of the transactions contemplated by
this
Agreement.
10.7 No
Proceedings. Since
the date of this Agreement, there must not have been commenced or threatened
against the Acquiror Company, the Company or any Shareholder, or against
any
Affiliate thereof, any Proceeding (which Proceeding remains unresolved as
of the
date of this Agreement) (a) involving any challenge to, or seeking damages
or
other relief in connection with, any of the transactions contemplated hereby,
or
(b) that may have the effect of preventing, delaying, making illegal, or
otherwise interfering with any of the transactions contemplated hereby.
10.8 No
Claim Regarding Stock
Ownership or Consideration. There must not have been made or threatened
by any Person, hereto, any claim asserting that such Person (a) is the holder
of, or has the right to acquire or to obtain beneficial ownership of the
Acquiror Company Common Stock or any other stock, voting, equity, or ownership
interest in, the Acquiror Company or (b) is entitled to all or any portion
of
the Acquiror Company Shares.
SECTION
XI.
INDEMNIFICATION;
REMEDIES
11.1 Survival.
All
representations, warranties, covenants, and obligations in this Agreement
shall
expire on the first day of the nineteenth-month anniversary of the date this
Agreement is executed (the “Survival Period”). The right to indemnification,
payment of damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being acquired)
at any
time, whether before or after the execution and delivery of this Agreement,
with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right
to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.
11.2 Indemnification
Obligations
in favor of the Executive Officers, Directors, Employees of the Acquiror
Company. From and after the Closing Date until the expiration of the
Survival Period, Orient Come, Orient Come’s Shareholders and K’s Media shall
reimburse and hold harmless the Acquiror Company’s executive officers,
directors, employees in office immediately prior to the Closing (each such
person and his heirs, executors, administrators, agents, successors and assigns
is referred to herein as an “Acquiror Company Indemnified Party” ) against and
in respect of:
11.2.1 Any
and all damages,
losses, settlement payments, in respect of deficiencies, liabilities, costs,
expenses and claims suffered, sustained, incurred or required to be paid
by any
Acquiror Company Indemnified Party, and any and all actions, suits, claims,
or
legal, administrative, arbitration, governmental or other procedures or
investigation against any Acquiror Company Indemnified Party, which arises
or
results from a third-party claim brought against an Acquiror Company Indemnified
Person to the extent based on (i) a breach of the representations and warranties
with respect to the business, operations or assets of the Company of any,
or
(ii) the actions or omissions of any officer, director, shareholder, employee,
or agent of the Company after the Closing; provided, however, that in the
event
of a third-party claim brought against an Acquired Company Indemnified Person
based upon subsection 11.2.1(ii), the Survival Period shall be extended for
an
additional 12 months.
11.2.2 Orient
Come, Orient Come’s
Shareholders and K’s Media shall have no obligation to indemnify or hold
harmless an Acquiror Company Indemnified Party for any settlement entered
into
by such Acquiror Company Indemnified Party without Orient Come, Orient Come’s
Shareholders and K’s Media’s prior written consent after the Closing of this
Agreement. In addition, Orient Come, Orient Come’s Shareholders and K’s Media
shall have no obligation to indemnify or hold harmless any Acquiror Company
Indemnified Person for any damages, claims, losses or the like based on the
diminution in value of the Acquiror Company Indemnified Person’s common
shares.
11.3 Breach
by the
Shareholders. Nothing in this Section 11 shall limit the Acquiror
Company’s right to pursue any appropriate legal or equitable remedy against any
Shareholder with respect to any damages occurring prior to the Closing Date
arising, directly or indirectly, from or in connection with: (a) any breach
by
such Shareholder of any representation or warranty made by such Shareholder
in
this Agreement or in any certificate delivered by such Shareholder pursuant
to
this Agreement or (b) any breach by such Shareholder of its covenants or
obligations in this Agreement. All claims of the Acquiror Company pursuant
to
this Section 11.3 shall be brought by the Acquiror Company on behalf of the
Acquiror Company and those Persons who were stockholders of the Acquiror
Company
immediately prior to the Closing Date.
SECTION
XII.
GENERAL
PROVISIONS
12.1 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 transactions contemplated
by this Agreement, including all fees and expenses of agents, representatives,
counsel, and accountants. In the event of termination of this Agreement,
the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
12.2 Public
Announcements.
The Acquiror Company shall promptly, but no later than three (3) days following
the effective date of this Agreement, issue a press release disclosing the
transactions contemplated hereby. The Acquiror Company shall also
file with the Commission a Form 8-K describing the material terms of the
transactions contemplated (and attaching as exhibits thereto this Agreement
and
the Press Release) as soon as practicable following the Closing Date but
in no
event more than four (4) business days following the Closing Date. Prior
to the
Closing Date, All Parties shall consult with each other in issuing the Form
8-K,
the press release and any other press releases or otherwise making public
statements or filings and other communications with the Commission or any
regulatory agency or stock market or trading facility with respect to the
transactions contemplated hereby and neither party shall issue any such press
release or otherwise make any such public statement, filings or other
communications without the prior written consent of the other, which consent
shall not be unreasonably withheld or delayed, except that no prior consent
shall be required if such disclosure is required by law, in which case the
disclosing party shall provide the other party with prior notice, of no less
than three (3) calendar days, of such public statement, filing or other
communication and shall incorporate into such public statement, filing or
other
communication the reasonable comments of the other party.
12.3 Confidentiality.
12.3.1 All
Parties will maintain
in confidence, and will cause their respective directors, officers, employees,
agents, and advisors to maintain in confidence, any written, oral, or other
information obtained in confidence from another party in connection with
this
Agreement or the transactions contemplated by this Agreement, unless (a)
such
information is already known to such party or to others not bound by a duty
of
confidentiality or such information becomes publicly available through no
fault
of such party, (b) the use of such information is necessary or appropriate
in
making any required filing with the Commission, or obtaining any consent
or
approval required for the consummation of the transactions contemplated by
this
Agreement, or (c) the furnishing or use of such information is required by
or
necessary or appropriate in connection with legal proceedings.
12.3.2 In
the event that any party
is required to disclose any information of another party pursuant to clause
(b)
or (c) of Section 12.3.1, the party requested or required to make the disclosure
(the “disclosing party”) shall provide the party that provided such information
(the “providing party”) with prompt notice of any such requirement so that the
providing party may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Section 12.3. If, in the absence
of
a protective order or other remedy or the receipt of a waiver by the providing
party, the disclosing party is nonetheless, in the opinion of counsel, legally
compelled to disclose the information of the providing party, the disclosing
party may, without liability hereunder, disclose only that portion of the
providing party’s information which such counsel advises is legally required to
be disclosed, provided that the disclosing party exercises its reasonable
efforts to preserve the confidentiality of the providing party’s information,
including, without limitation, by cooperating with the providing party to
obtain
an appropriate protective order or other relief assurance that confidential
treatment will be accorded the providing party’s information.
12.3.3 If
the transactions
contemplated by this Agreement are not consummated, each party will return
or
destroy as much of such written information as the other party may reasonably
request.
12.4 Notices.
All notices,
demands, consents, requests, instructions and other communications to be
given
or delivered or permitted under or by reason of the provisions of this Agreement
or in connection with the transactions contemplated hereby shall be in writing
and shall be deemed to be delivered and received by the intended recipient
as
follows: (i) if personally delivered, on the business day of such delivery
(as
evidenced by the receipt of the personal delivery service), (ii) if mailed
certified or registered mail return receipt requested, two (2) business days
after being mailed, (iii) if delivered by overnight courier (with all charges
having been prepaid), on the business day of such delivery (as evidenced
by the
receipt of the overnight courier service of recognized standing), or (iv)
if
delivered by facsimile transmission, on the business day of such delivery
if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that
time,
on the next succeeding business day (as evidenced by the printed confirmation
of
delivery generated by the sending party’s telecopier machine). If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed address of which no notice was given (in accordance
with
this Section 4), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second business day the notice is sent (as evidenced by a sworn affidavit
of the
sender). All such notices, demands, consents, requests, instructions and
other
communications will be sent to the following addresses or facsimile numbers
as
applicable
|
If
to Acquiror Company:
Kinglake
Resources, Inc.
Xxxxx
000-000 Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX, X0X 0X0, Xxxxxx
|
With
copy to:
Xxxxxxxx
& Xxxx, LLP
000
Xxxx Xxx Xxxx Xxxx., Xxxxx 0000
Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
|
|
If
to Orient Come:
Orient
Come Holdings Limited
Xxxx
000, Xxxxx X0
Xxxxxxxx
Xxxxx, Xx. 0 Xxxxx Xx Xxxxxx
Xxxxxxx,
Xxxxx 000000
|
With
copy to:
|
|
If
to Orient Come’s Shareholder:
Orient
Come Holdings Limited
Xxxx
000, Xxxxx X0
Xxxxxxxx
Xxxxx, Xx. 0 Xxxxx Xx Xxxxxx
Xxxxxxx,
Xxxxx 000000
|
With
copy to:
|
|
If
to K’s Media:
Beijing
K's Media Advertising Ltd. Co.
Xxxx
000, Xx. 00
Xxx
Xx Xxxxxx, Xxx Xi Economic Xxxx
Xxxx
Xxx Xxxxxxxx, Xxxxxxx, Xxxxx
|
With
copy to:
|
12.5 Arbitration.
Any
dispute or controversy under this Agreement shall be settled exclusively
by
arbitration in the City of Fort Lauderdale, County of Broward in accordance
with
the rules of the American Arbitration Association then in effect. Judgment
may
be entered on the arbitration award in any court having jurisdiction.
12.6 Further
Assurances.
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents,
and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and
the
documents referred to in this Agreement.
12.7 Waiver.
The rights
and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising
any
right, power, or privilege under this Agreement or the documents referred
to in
this Agreement will operate as a waiver of such right, power, or privilege,
and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege
or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless
it
is in writing signed by the other party; (b) no waiver that may be given
by a
party will be applicable except in the specific instance for which it is
given;
and (c) no notice to or demand on one party will be deemed to be a waiver
of any
obligation of such party or of the right of the party giving such notice
or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
12.8 Entire
Agreement and
Modification. This Agreement supersedes all prior agreements between the
parties with respect to its subject matter and constitutes (along with the
documents referred to in this Agreement) 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 except by a written agreement executed
by the party against whom the enforcement of such amendment is sought.
12.9 Assignments,
Successors, and
No Third-Party Rights. No party may assign any of its rights under this
Agreement without the prior consent of the other parties. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of and be enforceable by the respective
successors and permitted assigns of the parties. Except as set forth in Section
11.2 and 11.3, nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement any
legal
or equitable right, remedy, or claim under or with respect to this Agreement
or
any provision of this Agreement. This Agreement and all of its provisions
and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.
12.10 Severability.
If any
provision of this Agreement is held invalid or unenforceable by any court
of
competent jurisdiction, 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.
12.11 Section
Headings,
Construction. The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation.
All
references to “Section” or “Sections” refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word “including” does not limit the preceding words or
terms.
12.12 Governing
Law. This
Agreement will be governed by the laws of the State of Nevada without regard
to
conflicts of laws principles.
12.13 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will
be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
COUNTERPART
SIGNATURE PAGE
IN
WITNESS WHEREOF, the parties have executed and delivered this Share Exchange
Agreement as of the date first written above.
|
Acquiror Company:
Kinglake
Resources, Inc.
Signed:
/s/ XXXX XXX
[Missing
Graphic Reference]
Printed
name: Xxxx Xxx
Title:
President
|
Beijing
K’s Media Advertisement Ltd. Co.
Signed:
/s/ KUN (XXXXX) WEI
[Missing
Graphic Reference]
Printed
name: Kun (Xxxxx) Wei
[Missing
Graphic Reference]
Title: Director
and Officer
[Missing
Graphic Reference]
|
|
|
Orient
Come Holdings
Limited
Signed:
/s/ XX XXXX
[Missing
Graphic Reference]
Printed
name: Xx Xxxx
[Missing
Graphic Reference]
Title: Director
and Officer
[Missing
Graphic Reference]
|
Orient
Come’s Shareholders
Signed:
/s/ XX XXXX
[Missing
Graphic Reference]
Printed
name: Xx Xxxx
Signed:
/s/ KUN (XXXXX) WEI
[Missing
Graphic Reference]
Printed
name: Kun (Xxxxx) Wei
|
SCHEDULES
|
Schedule
4.1.5
|
Shareholder
Brokers or Finders
|
|
|
Schedule
5.1
|
Orient
Come Organization and Qualification
|
|
|
Schedule
5.11
|
Orient
Come Brokers or Finders
|
|
|
Schedule
6.1
|
K's
Media Organization and Qualification
|
|
|
Schedule
6.7.2
|
Capitalization
of K's Media
|
|
|
Schedule
6.11
|
K's
Media Brokers or Finders
|
|
|
Schedule
7.1
|
Acquiror
CompanyDisclosure Schedules
|
|
|
Schedule
7.2
|
Acquiror
Company Organization and Qualification
|
|
|
Schedule
7.4
|
Acquiror
Company Organizational Documents
|
|
|
Schedule
7.12
|
Acquiror
Company Brokers or Finders
|
|
|
Schedule
7.13
|
Acquiror
Company Absence of Undisclosed Liabilities
|
|
|
Schedule
7.14
|
Acquiror
Company Changes
|
|
|
Schedule
7.16.2
|
Acquiror
Company Employees
|
|
|
Schedule
7.17.1
|
Acquiror
Company Tax Returns and Audits
|
|
|
Schedule
7.21
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Acquiror
Company Interested Party Transactions
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Schedule
7.23
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Acquiror
Company Bank Accounts and Safe Deposit Boxes
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Schedule
7.26
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Acquiror
Company SEC Documents; Financial Statements
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Schedule
7.28
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Acquiror
Company Environmental and Safety Matters
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Schedule
7.31
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Acquiror
Company Adverse Interest
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EXHIBIT
A
SHARES
AND ACQUIROR COMPANY SHARES TO BE EXCHANGED
EXHIBIT
B
Definition
of “Accredited Investor”
The
term
“accredited investor” means:
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(1)
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A
bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and
loan association or other institution as defined in Section 3(a)(5)(A)
of
the Securities 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; an insurance company as defined
in
Section 2(13) of the Securities Act; an investment company registered
under the Investment Company Act of 1940 (the “Investment Company Act”) or
a business development company as defined in Section 2(a)(48) of
the
Investment Company 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; a plan established and maintained
by a state, its political subdivisions or any agency or instrumentality
of
a state or its political subdivisions for the benefit of its employees,
if
such plan has total assets in excess of US $5,000,000; an employee
benefit
plan within the meaning of the Employee Retirement Income Security
Act of
1974 (“ERISA”), if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank, savings
and
loan association, insurance company, or registered investment advisor,
or
if the employee benefit plan has total assets in excess of US $5,000,000
or, if a self-directed plan, with investment decisions made solely
by
persons that are accredited investors.
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(2)
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A
private business development company as defined in Section 202(a)(22)
of
the Investment Advisers Act of 1940.
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(3)
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An
organization described in Section 501(c)(3) of the Internal Revenue
Code,
corporation, Massachusetts or similar business trust, or partnership,
not
formed for the specific purpose of acquiring the securities offered,
with
total assets in excess of US $5,000,000.
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(4)
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A
director or executive officer of the Acquiror Company.
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(5)
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A
natural person whose individual net worth, or joint net worth with
that
person’s spouse, at the time of his or her purchase exceeds US
$1,000,000.
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(6)
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A
natural person who had an individual income in excess of US $200,000
in
each of the two most recent years or joint income with that person’s
spouse in excess of US $300,000 in each of those years and has
a
reasonable expectation of reaching the same income level in the
current
year.
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(7)
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A
trust, with total assets in excess of US $5,000,000, not formed
for the
specific purpose of acquiring the securities offered, whose purchase
is
directed by a sophisticated person as described in Rule 506(b)(2)(ii)
(i.e., a person who has such knowledge and experience in financial
and
business matters that he is capable of evaluating the merits and
risks of
the prospective investment).
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(8)
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An
entity in which all of the equity owners are accredited investors.
(If
this alternative is checked, the Shareholder must identify each
equity
owner and provide statements signed by each demonstrating how each
is
qualified as an accredited investor.)
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EXHIBIT
C
Definition
of “U.S. Person”
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(1)
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“U.S.
person” (as defined in Regulation S) means:
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(i)
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Any
natural person resident in the United States;
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(ii)
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Any
partnership or corporation organized or incorporated under the
laws of the
United States;
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(iii)
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Any
estate of which any executor or administrator is a U.S. person;
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(iv)
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Any
trust of which any trustee is a U.S. person;
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(v)
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Any
agency or branch of a foreign entity located in the United States;
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(vi)
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Any
non-discretionary account or similar account (other than an estate
or
trust) held by a dealer or other fiduciary for the benefit or account
of a
U.S. person;
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(vii)
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Any
discretionary account or similar account (other than an estate
or trust)
held by a dealer or other fiduciary organized, incorporated, or
(if an
individual) resident in the United States; and
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(viii)
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Any
partnership or corporation if: (A) organized or incorporated under
the
laws of any foreign jurisdiction; and (B) formed by a U.S. person
principally for the purpose of investing in securities not registered
under the Securities Act, unless it is organized or incorporated,
and
owned, by accredited investors (as defined in Rule 501(a)) who
are not
natural persons, estates or trusts.
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(2)
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Notwithstanding
paragraph (1) above, any discretionary account or similar account
(other
than an estate or trust) held for the benefit or account of a non-U.S.
person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States
shall
not be deemed a “U.S. person.”
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(3)
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Notwithstanding
paragraph (1), any estate of which any professional fiduciary acting
as
executor or administrator is a U.S. person shall not be deemed
a U.S.
person if:
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(i)
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An
executor or administrator of the estate who is not a U.S. person
has sole
or shared investment discretion with respect to the assets of the
estate;
and
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(ii)
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The
estate is governed by foreign law.
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(4)
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Notwithstanding
paragraph (1), any trust of which any professional fiduciary acting
as
trustee is a U.S. person shall not be deemed a U.S. person if a
trustee
who is not a U.S. person has sole or shared investment discretion
with
respect to the trust assets, and no beneficiary of the trust (and
no
settler if the trust is revocable) is a U.S. person.
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(5)
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Notwithstanding
paragraph (1), an employee benefit plan established and administered
in
accordance with the law of a country other than the United States
and
customary practices and documentation of such country shall not
be deemed
a U.S. person.
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(6)
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Notwithstanding
paragraph (1), any agency or branch of a U.S. person located outside
the
United States shall not be deemed a “U.S. person” if:
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(i)
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The
agency or branch operates for valid business reasons; and
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(ii)
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The
agency or branch is engaged in the business of insurance or banking
and is
subject to substantive insurance or banking regulation, respectively,
in
the jurisdiction where located.
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(7)
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The
International Monetary Fund, the International Bank for Reconstruction
and
Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and pension
plans
shall not be deemed “U.S. persons.”
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EXHIBIT
D
ACCREDITED
INVESTOR REPRESENTATIONS
Each
of
the Shareholders indicating that it is an Accredited Investor, severally
and not
jointly, further represents and warrants to the Acquiror Company as
follows:
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1.
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Such
person or entity qualifies as an Accredited Investor on the basis
set
forth on its signature page to this Agreement.
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2.
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Such
person or entity has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to
protect
such Shareholder’s interests in connection with the transactions
contemplated by this Agreement.
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3.
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Such
person or entity has consulted, to the extent that it has deemed
necessary, with its tax, legal, accounting and financial advisors
concerning its investment in the Acquiror Company Shares.
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4.
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Such
person or entity understands the various risks of an investment
in the
Acquiror Company Shares and can afford to bear such risks for an
indefinite period of time, including, without limitation, the risk
of
losing its entire investment in the Acquiror Company Shares.
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5.
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Such
person or entity has had access to the Acquiror Company’s publicly filed
reports with the SEC.
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6.
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Such
person or entity has been furnished during the course of the transactions
contemplated by this Agreement with all other public information
regarding
the Acquiror Company that such person or entity has requested and
all such
public information is sufficient for such person or entity to evaluate
the
risks of investing in the Acquiror Company Shares.
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7.
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Such
person or entity has been afforded the opportunity to ask questions
of and
receive answers concerning the Acquiror Company and the terms and
conditions of the issuance of the Acquiror Company Shares.
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8.
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Such
person or entity is not relying on any representations and warranties
concerning the Acquiror Company made by the Acquiror Company or
any
officer, employee or agent of the Acquiror Company, other than
those
contained in this Agreement.
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9.
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Such
person or entity is acquiring the Acquiror Company Shares for such
person’s or entity’s, as the case may be, own account, for investment and
not for distribution or resale to others.
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10.
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Such
person or entity will not sell or otherwise transfer the Acquiror
Company
Shares, unless either (a) the transfer of such securities is registered
under the Securities Act or (b) an exemption from registration
of such
securities is available.
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11.
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Such
person or entity understands and acknowledges that the Acquiror
Company is
under no obligation to register the Acquiror Company Shares for
sale under
the Securities Act.
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12.
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Such
person or entity consents to the placement of a legend on any certificate
or other document evidencing the Acquiror Company Shares substantially
in
the form set forth in Section 4.2.5(a).
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13.
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Such
person or entity represents that the address furnished on its signature
page to this Agreement and in Exhibit A is the principal residence
if he
is an individual or its principal business address if it is a corporation
or other entity.
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14.
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Such
person or entity understands and acknowledges that the Acquiror
Company
Shares have not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing authorities
have
not confirmed the accuracy or determined the adequacy of any information
concerning the Acquiror Company that has been supplied to such
person or
entity and that any representation to the contrary is a criminal
offense.
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15.
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Such
person or entity acknowledges that the representations, warranties
and
agreements made by such person or entity herein shall survive the
execution and delivery of this Agreement and the purchase of the
Acquiror
Company Shares.
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EXHIBIT
E
NON
U.S. PERSON REPRESENTATIONS
Each
Shareholder indicating that it is not a U.S. person, severally and not jointly,
further represents and warrants to the Acquiror Company as follows:
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1.
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At
the time of (a) the offer by the Acquiror Company and (b) the acceptance
of the offer by such person or entity, of the Acquiror Company
Shares,
such person or entity was outside the United States.
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2.
|
No
offer to acquire the Acquiror Company Shares or otherwise to participate
in the transactions contemplated by this Agreement was made to
such person
or entity or its representatives inside the United States.
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3.
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Such
person or entity is not purchasing the Acquiror Company Shares
for the
account or benefit of any U.S. person, or with a view towards distribution
to any U.S. person, in violation of the registration requirements
of the
Securities Act.
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4.
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Such
person or entity will make all subsequent offers and sales of the
Acquiror
Company Shares either (x) outside of the United States in compliance
with
Regulation S; (y) pursuant to a registration under the Securities
Act; or
(z) pursuant to an available exemption from registration under
the
Securities Act. Specifically, such person or entity will not resell
the
Acquiror Company Shares to any U.S. person or within the United
States
prior to the expiration of a period commencing on the Closing Date
and
ending on the date that is one year thereafter (the “Distribution
Compliance Period”), except pursuant to registration under the Securities
Act or an exemption from registration under the Securities Act.
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|
5.
|
Such
person or entity is acquiring the Acquiror Company Shares for such
Shareholder’s own account, for investment and not for distribution or
resale to others.
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6.
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Such
person or entity has no present plan or intention to sell the Acquiror
Company Shares in the United States or to a U.S. person at any
predetermined time, has made no predetermined arrangements to sell
the
Acquiror Company Shares and is not acting as a Distributor of such
securities.
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7.
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Neither
such person or entity, its Affiliates nor any Person acting on
behalf of
such person or entity, has entered into, has the intention of entering
into, or will enter into any put option, short position or other
similar
instrument or position in the U.S. with respect to the Acquiror
Company
Shares at any time after the Closing Date through the Distribution
Compliance Period except in compliance with the Securities Act.
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8.
|
Such
person or entity consents to the placement of a legend on any certificate
or other document evidencing the Acquiror Company Shares substantially
in
the form set forth in Section 4.2.5(b).
|
|
9.
|
Such
person or entity is not acquiring the Acquiror Company Shares in
a
transaction (or an element of a series of transactions) that is
part of
any plan or scheme to evade the registration provisions of the
Securities
Act.
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10.
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Such
person or entity has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to
protect
such person’s or entity’s interests in connection with the transactions
contemplated by this Agreement.
|
|
11.
|
Such
person or entity has consulted, to the extent that it has deemed
necessary, with its tax, legal, accounting and financial advisors
concerning its investment in the Acquiror Company Shares.
|
|
12.
|
Such
person or entity understands the various risks of an investment
in the
Acquiror Company Shares and can afford to bear such risks for an
indefinite period of time, including, without limitation, the risk
of
losing its entire investment in the Acquiror Company Shares.
|
|
13.
|
Such
person or entity has had access to the Acquiror Company’s publicly filed
reports with the SEC.
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14.
|
Such
person or entity has been furnished during the course of the transactions
contemplated by this Agreement with all other public information
regarding
the Acquiror Company that such person or entity has requested and
all such
public information is sufficient for such person or entity to evaluate
the
risks of investing in the Acquiror Company Shares.
|
|
15.
|
Such
person or entity has been afforded the opportunity to ask questions
of and
receive answers concerning the Acquiror Company and the terms and
conditions of the issuance of the Acquiror Company Shares.
|
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16.
|
Such
person or entity is not relying on any representations and warranties
concerning the Acquiror Company made by the Acquiror Company or
any
officer, employee or agent of the Acquiror Company, other than
those
contained in this Agreement.
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17.
|
Such
person or entity will not sell or otherwise transfer the Acquiror
Company
Shares, unless either (A) the transfer of such securities is registered
under the Securities Act or (B) an exemption from registration
of such
securities is available.
|
|
18.
|
Such
person or entity understands and acknowledges that the Acquiror
Company is
under no obligation to register the Acquiror Company Shares for
sale under
the Securities Act.
|
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19.
|
Such
person or entity represents that the address furnished on its signature
page to this Agreement and in Exhibit A is the principal residence
if he
is an individual or its principal business address if it is a corporation
or other entity.
|
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20.
|
Such
person or entity understands and acknowledges that the Acquiror
Company
Shares have not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing authorities
have
not confirmed the accuracy or determined the adequacy of any information
concerning the Acquiror Company that has been supplied to such
person or
entity and that any representation to the contrary is a criminal
offense.
|
|
21.
|
Such
person or entity acknowledges that the representations, warranties
and
agreements made by such person or entity herein shall survive the
execution and delivery of this Agreement and the purchase of the
Acquiror
Company Shares.
|
