SHARE EXCHANGE AGREEMENT by and among Jintai Mining Co. Limited (“Jintai HK“) and the Shareholders of Jintai HK, on the one hand; and Jintai Mining Group Inc. (“Jintai Delaware”), a Delaware corporation, and the Shareholders of Jintai Delaware, on the...
by
and among
Jintai
Mining Co. Limited (“Jintai HK“)
and
the
Shareholders of Jintai HK,
on the one
hand;
and
Jintai
Mining Group Inc. (“Jintai Delaware”),
a
Delaware corporation,
and
the
Shareholders of Jintai Delaware,
on
the other hand
July
__, 2010
This
Share Exchange Agreement, dated as of July __, 2010 (this “Agreement”), is made
and entered into by and among Jintai Mining Co. Limited, a company incorporated
in the Hong Kong Special Administration Region of People’s Republic of China
(“Jintai HK”),
and the shareholders of Jintai HK (“Jintai HK
Shareholders”) listed on the signature pages for Jintai HK Shareholders
attached hereto, on the one hand; and Jintai Mining Group, Inc., a Delaware
corporation (“Jintai
Delaware”), and the shareholders of Jintai Delaware listed on signature
pages for Jintai Delaware Shareholders attached hereto (the “Jintai Delaware
Shareholders”), on the other hand.
RECITALS
WHEREAS,
the Jintai Delaware Shareholders hold, collectively, 32,000,000 shares of Jintai
Delaware common stock, par value $.0001 (“Jintai Delaware Common
Stock”) which represents 100% of the issued and outstanding capital stock
of Jintai Delaware;
WHEREAS,
the Jintai HK Shareholders own all of the equity interest (in shares of capital
stock or otherwise) of Jintai HK (the “Jintai HK Equity
Interest”);
WHEREAS,
on July __, 2010, the Board of Directors of Jintai Delaware adopted resolutions
approving Jintai Delaware’s acquisition of the equity interests of Jintai HK
held by the Jintai HK Shareholders (the “Acquisition”) by
means of a share exchange with the Jintai HK Shareholders pursuant to the terms
and conditions hereinafter set forth in this Agreement;
WHEREAS,
the Jintai Delaware Shareholders will enter into this Agreement for the purpose
of making certain covenants, indemnifications and agreements;
WHEREAS,
upon consummation of the transactions contemplated by this Agreement, Jintai HK
will become a 100% wholly-owned subsidiary of Jintai Delaware; and
WHEREAS,
it is intended that the terms and conditions of this Agreement comply in all
respects with Section 368(a)(1)(B) and/or Section 351 of the Internal Revenue
Code of 1986, as amended (the “Code”) and the
regulations corresponding thereto, so that the Acquisition shall qualify as a
tax free reorganization under the Code, and that the share exchange transaction
contemplated in this Agreement shall qualify as a transaction in securities
exempt from registration or qualification under the Securities Act of 1933, as
amended and in effect on the date of this Agreement.
AGREEMENT
NOW,
THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE
1
THE
ACQUISITION
1.1 The Acquisition. Upon
the terms and subject to the conditions hereof, at the Closing (as hereinafter
defined) the parties shall do the following:
(a) The
Jintai HK Shareholders will each sell, convey, assign, transfer and deliver to
Jintai Delaware certificates representing the Jintai HK Equity Interest held by
each Jintai HK Shareholder as set forth in column II of Annex I hereto, which
in the aggregate shall constitute 100% of the issued and outstanding equity
interests of Jintai HK, accompanied by a properly executed and authenticated
stock power or instrument of like tenor.
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2
(b) As
consideration for the acquisition of the Jintai HK Equity Interests, Jintai
Delaware will issue to each Jintai HK Shareholder and/or its designee(s), in
exchange for such Jintai HK’s portion of the Jintai HK Equity Interests, the
number of shares of Jintai Delaware Common Stock set forth opposite such party’s
name in Column III on Annex I attached
hereto (collectively, the “Jintai Delaware
Shares”). The Jintai Delaware Shares issued shall equal to
32,000,000 or 100% of the outstanding shares of Jintai Delaware Common Stock at
the time of Closing.
1.2 Closing Date. The
closing of the Acquisition (the “Closing”) shall take
place on July __, 2010, or on such other date as may be mutually agreed upon by
the parties. Such date is referred to herein as the “Closing
Date.”
1.3 Taking of Necessary Action;
Further Action. If, at any time after the Closing, any further action is
necessary or desirable to carry out the purposes of this Agreement, the Jintai
HK Shareholders, Jintai HK, the Jintai Delaware Shareholders, and/or Jintai
Delaware (as applicable) shall take all such lawful and necessary
action.
1.4 Certain Definitions.
The following capitalized terms as used in this Agreement shall have the
respective definitions:
“Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.
“Contract” means any
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument.
“Knowledge” means the
actual knowledge of the officers, directors or advisors of the referenced
party.
“Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.
“Material Adverse
Effect” means a adverse effect on either referenced party or the combined
entity resulting from the consummation of the transaction contemplated by this
Agreement, or on the financial condition, results of operations or business,
before or after the consummation of the transaction contemplated in this
Agreement, which as a whole is or would be considered material to an investor in
the securities of Jintai Delaware.
“Non-U.S. Person”
means any person who is not a U.S. Person or is deemed not to be a U.S. Person
under Rule 902(k)(2) of the Securities Act.
“Person” means any
individual, corporation, partnership, joint venture, trust, business
association, organization, governmental authority or other entity.
“Restricted Period”
shall have the meaning set forth in Section 3.4(b)(vi).
“Securities Act” means
the Securities Act of 1933, as amended.
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3
“SEC” means the
Securities & Exchange Commission.
“Tax Returns” means
all federal, state, local and foreign returns, estimates, information statements
and reports relating to Taxes.
“Tax” or “Taxes” means any and
all applicable central, federal, provincial, state, local, municipal and foreign
taxes, including, without limitation, gross receipts, income, profits, sales,
use, occupation, value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, assessments,
governmental charges and duties together with all interest, penalties and
additions imposed with respect to any such amounts and any obligations under any
agreements or arrangements with any other person with respect to any such
amounts and including any liability of a predecessor entity for any such
amounts.
“Transaction” means
the transactions contemplated by this Agreement, including the share
exchange.
“United States” means
and includes the United States of America, its territories and possessions, any
State of the United States, and the District of Columbia.
“U.S. Person” as defined in
Regulation S of the Securities Act means: (i) a natural person resident in the
United States; (ii) any partnership or corporation organized or incorporated
under the laws of the United States; (iii) any estate of which any executor or
administrator is a U.S. Person; (iv) any trust of which any trustee is a U.S.
Person; (v) any agency or branch of a foreign entity located in the United
States; (vi) any nondiscretionary 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; (vii) any discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary organized, incorporated
and (if an individual) resident in the United States; and (viii) a corporation
or partnership organized under the laws of any foreign jurisdiction and 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,
owned, by accredited investors (as defined in Rule 501(a) under the Securities
Act) who are not natural persons, estates or trusts).
1.5 Tax
Consequences. It is intended that the terms and conditions of
this Agreement comply in all respects with Section 368(a)(1)(B) and/or Section
351 of the Code and the regulations corresponding thereto, so that the
Acquisition shall qualify as a tax-free reorganization under the
Code.
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ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF JINTAI HK
Except as
otherwise disclosed herein or in the Disclosure Schedule delivered by Jintai HK
to Jintai Delaware at the time of execution of this Agreement, Jintai HK hereby
represents and warrants to Jintai Delaware and the Jintai Delaware Shareholders
as of the date hereof and as of the Closing Date (unless otherwise indicated),
as follows:
2.1 Organization. Jintai
HK has been duly incorporated, validly exists as a private company limited by
shares, and is in good standing under the laws of its jurisdiction of
incorporation, and has the requisite power and authority to carry on its
business in the jurisdiction where it currently does business. Set
forth on Schedule 2.1 of the
Disclosure Schedule is a list of those jurisdictions in which Jintai HK
presently conducts its business, owns, holds and operates its properties and
assets.
2.2 Capitalization. The
authorized capital stock of Jintai HK consists of 10,000 ordinary shares,
HK$1.00 par value, of which at the Closing, 10,000 shares are issued and
outstanding all of which are owned by the Jintai HK Shareholders. All
of the issued and outstanding shares of capital stock of Jintai HK, as of the
Closing, are duly authorized, validly issued, fully paid, non-assessable and
free of preemptive rights. There are no voting trusts or any other
agreements or understandings with respect to the voting of Jintai HK’s capital
stock. Except as set forth in the preceding sentence, no other class
of capital stock or other security of Jintai HK is authorized, issued, reserved
for issuance or outstanding. There are no authorized or outstanding
options, warrants, equity securities, calls, rights, commitments or agreements
of any character by which Jintai HK or any of the Jintai HK Shareholders is
obligated to issue, deliver or sell, or cause to be issued, delivered or sold,
any shares of capital stock or other securities of Jintai HK. There
are no outstanding contractual obligations (contingent or otherwise) of Jintai
HK to retire, repurchase, redeem or otherwise acquire any outstanding shares of
capital stock of, or other ownership interests in, Jintai HK.
2.3 Subsidiaries. As of
the Closing, Jintai HK has no direct or indirect subsidiaries, except as
disclosed in Schedule
2.3 of the Disclosure Schedule hereto (collectively the “Jintai HK
Subsidiaries,” and each a “Jintai HK
Subsidiary”). Each Jintai HK Subsidiary is an entity duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of formation and has the requisite corporate power and
authority to own, lease and to carry on its business as now being
conducted. Except as disclosed in Schedule 2.3, Jintai
HK owns all of the shares of each Jintai HK Subsidiary, and there are no
outstanding options, warrants, subscriptions, conversion rights or other rights,
agreements or commitments obligating any Jintai HK Subsidiary to issue any
additional shares of common stock or ordinary stock, as the case may be, of such
subsidiary, or any other securities convertible into, exchangeable for or
evidence the right to subscribe for or acquire from any Jintai HK Subsidiary any
shares of such subsidiary.
2.4 Certain Corporate
Matters. Jintai HK is duly qualified to do business as a corporation and
is in good standing under the laws of the Hong Kong SAR, and in each other
jurisdiction in which the ownership of its property or the conduct of its
business requires it to be so qualified, except where the failure to be so
qualified would not have a Material Adverse Effect on Jintai HK’s financial
condition, results of operations or business. Jintai HK has full
corporate power and authority and all authorizations, licenses and permits
necessary to carry on the business in which it is engaged and to own and use the
properties owned and used by it.
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2.5 Authority Relative to this
Agreement. Jintai HK has the requisite power and authority to
enter into this Agreement and to carry out its respective obligations
hereunder. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby by Jintai HK have
been duly authorized by Jintai HK’s Board of Directors and no other actions on
the part of Jintai HK are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Jintai HK and constitutes a valid and binding
agreement, enforceable against Jintai HK in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors’ rights generally or by general
principles of equity.
2.6 Consents and Approvals; No
Violations. No filing with, and no permit, authorization, consent or
approval of, any third party, public body or authority is necessary for the
consummation by Jintai HK of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by Jintai HK nor the
consummation by Jintai HK of the transactions contemplated hereby, nor
compliance by them with any of the provisions hereof, will (a) conflict with or
result in any breach of any provisions of the charter or bylaws (or operating
agreement) of Jintai HK or any Jintai HK Subsidiary, (b) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, Contract, agreement or other instrument or
obligation to which Jintai HK or any Jintai HK Subsidiary is a party or by which
any of their respective properties or assets may be bound, or (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Jintai HK or any Jintai HK Subsidiary, or any of its properties or assets,
except in the case of clauses (b) and (c) for violations, breaches or defaults
which are not in the aggregate material to Jintai HK taken as a
whole.
2.7 Books and Records.
The books and records of Jintai HK delivered to Jintai Delaware prior to the
Closing fully and fairly reflect the transactions to which Jintai HK is a party
or by which it or its properties are bound, and there shall be no material
difference between the unaudited combined financial statements of Jintai HK
given to Jintai Delaware and the Jintai Delaware Shareholders and the actual
reviewed US GAAP results of Jintai HK for the period from date of inception
through June 30, 2010.
2.8 Non
Contravention. The execution, delivery and
performance by Jintai HK of its obligations hereunder and the consummation of
the transactions contemplated herein, do not (a)
violate, conflict with or result in the breach of any provision of
the certificate of incorporation or
by-laws of Jintai HK, (b) result in the violation by Jintai HK of any
laws applicable to Jintai HK or any of its assets or
properties, or (c) result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a
default under, or require Jintai HK to obtain any consent, approval
or action of, make any filing with or give any notice to,
or result in or give to any person or entity any right of payment or
reimbursement, termination, cancellation, modification or
acceleration of, or result in the creation or imposition of any lien
upon any of the assets or properties of Jintai
HK, under any of the terms, conditions or provisions of
any instruments to which Jintai HK is a party or by which Jintai HK
or any of its assets or properties are bound.
2.9 Litigation. Except as
disclosed in Schedule
2.9 of the disclosure schedules hereto, there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the
Knowledge of Jintai HK, threatened against or affecting Jintai HK or any of its
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of this
Agreement or the Jintai Delaware Shares or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither Jintai HK nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the Knowledge of Jintai
HK, there is not pending or contemplated, any investigation by the SEC involving
Jintai HK or any current or former director or officer of Jintai
HK.
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2.10 Legal Compliance. To
the best Knowledge of Jintai HK, after due investigation, no claim has been
filed against Jintai HK or any of the Jintai HK Subsidiaries alleging a
violation of any applicable laws and regulations of foreign, federal, state and
local governments and all agencies thereof. Jintai HK and each of the Jintai HK
Subsidiaries holds all of the material permits, licenses, certificates or other
authorizations of foreign, federal, state or local governmental agencies
required for the conduct of their respective businesses as presently
conducted.
2.11 Contracts. Except as
disclosed in Schedule
2.11 of the disclosure schedules hereto, there are no Contracts that are
material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the Jintai
HK. Jintai HK is not in violation of or in default under (nor does
there exist any condition which upon the passage of time or the giving of notice
would cause such a violation of or default under) any Contract to which they are
a party or by which they or any of their properties or assets are bound, except
for violations or defaults that would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
2.12 Material Changes.
Since June 30, 2010, except as disclosed in Schedule 2.12 of the
Disclosures Schedule hereto: (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) Neither Jintai HK nor Jintai HK Subsidiary have
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice, and (B) liabilities not required to be reflected in Jintai HK or
Jintai HK Subsidiary’s financial statements pursuant to GAAP, (iii) neither
Jintai HK nor Jintai HK Subsidiaries have altered its method of accounting, (iv)
neither Jintai HK nor Jintai HK Subsidiaries have declared or made any dividend
or distribution of cash or other property to its Shareholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) neither Jintai HK nor Jintai HK Subsidiaries have issued any
equity securities to any officer, director or Affiliate.
2.13 Labor
Relations. No labor dispute exists or, to the Knowledge of
Jintai HK, is imminent with respect to any of the employees of Jintai HK or a
Jintai HK Subsidiary which could reasonably be expected to result in a Material
Adverse Effect. None of Jintai HK’s or Jintai HK Subsidiaries’
employees is a member of a union that relates to such employee’s relationship
with Jintai HK or such Jintai HK Subsidiary, and neither Jintai HK nor any of
the Jintai HK Subsidiaries is a party to a collective bargaining agreement, and
Jintai HK and the Jintai HK Subsidiaries believe that their relationships with
their employees are good. No executive officer, to the Knowledge of
Jintai HK, is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject Jintai HK or any of
the Jintai HK Subsidiaries to any liability with respect to any of the foregoing
matters. Jintai HK and the Jintai HK Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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2.14 Title to
Assets. Jintai HK and the Jintai HK Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of Jintai HK and the Jintai HK Subsidiaries, in each case free and
clear of all Liens, except for Liens that do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by Jintai HK and the Jintai HK Subsidiaries and Liens
for the payment of Taxes, the payment of which is neither delinquent nor subject
to penalties. Any real property and facilities held under lease by
Jintai HK and the Jintai HK Subsidiaries are held by them under valid,
subsisting and enforceable leases with which Jintai HK and the Jintai HK
Subsidiaries are in compliance.
2.15 Transactions with Affiliates
and Employees. Except as disclosed in Schedule 2.15 of the
disclosure schedules hereto, none of the officers or directors of Jintai HK and,
to the Knowledge of Jintai HK, none of the employees of Jintai HK or a Jintai HK
Subsidiary is presently a party to any transaction with Jintai HK or any Jintai
HK Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the Knowledge of Jintai HK, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner, in each case in excess of $120,000, other
than for: (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of Jintai HK or a Jintai HK
Subsidiary and (iii) other employee benefits.
2.17 Certain
Fees. Except as disclosed in Schedule 2.17 of the
Disclosure Schedule hereto, no brokerage or finder’s fees or commissions are or
will be payable by Jintai HK to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement.
2.18 Registration
Rights. Except as disclosed in Schedule 2.18 of the
disclosure schedules hereto, no Person has any right to cause (or any successor)
to effect the registration under the Securities Act of any securities of Jintai
HK (or any successor).
2.19 Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, Jintai HK and each Jintai HK Subsidiary has timely filed all necessary
Tax Returns and has paid or accrued all Taxes shown as due thereon, and Jintai
HK has no Knowledge of a tax deficiency which has been asserted or threatened
against Jintai HK or any Jintai HK Subsidiary.
2.20 No General
Solicitation. Neither Jintai HK nor any person acting on
behalf of Jintai HK has offered or sold securities in connection herewith by any
form of general solicitation or general advertising.
2.21 Foreign Corrupt
Practices. Neither Jintai HK, nor to the Knowledge of Jintai
HK, any agent or other person acting on behalf of Jintai HK , has: (i) directly
or indirectly, used any funds for unlawful contributions, gifts, entertainment
or other unlawful expenses related to foreign or domestic political activity,
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by Jintai
HK (or made by any person acting on its behalf of which Jintai HK is aware)
which is in violation of law or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended (“FCPA”).
2.22 Obligations of
Management. Each officer and key employee of Jintai HK and Jintai HK
Subsidiaries is currently devoting substantially all of his or her business time
to the conduct of business of Jintai HK and Jintai HK
Subsidiaries. Neither Jintai HK nor any of the Jintai HK Subsidiaries
is aware that any officer or key employee of Jintai HK or any Jintai HK
Subsidiary is planning to work less than full time at Jintai HK or any Jintai HK
Subsidiary, as applicable, in the future. No officer or key employee
is currently working or, to Jintai HK’s Knowledge, plans to work for a
competitive enterprise, whether or not such officer or key employee is or will
be compensated by such enterprise.
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2.23 Minute Books. The
minute books of Jintai HK and the Jintai HK Subsidiaries made available to
Jintai Delaware contain a complete summary of all meetings and written consents
in lieu of meetings of directors and Shareholders since the time of
incorporation.
2.24 Money Laundering
Laws. The operations of Jintai HK are and have been conducted
at all times in compliance with applicable financial record-keeping and
reporting requirements of 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 body (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving Jintai HK
with respect to the Money Laundering Laws is pending or, to the knowledge of
Jintai HK, threatened.
2.25 Disclosure. The
representations and warranties and statements of fact made by Jintai HK in this
Agreement are, as applicable, accurate, correct and complete and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained herein not
false or misleading.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE JINTAI HK SHAREHOLDERS
Except as
otherwise disclosed herein or in the Disclosure Schedule delivered by the Jintai
HK Shareholders to Jintai Delaware at the time of execution of this Agreement,
the Jintai HK Shareholders each hereby represent and warrant to Jintai Delaware
as of the date hereof and as of the Closing Date (unless otherwise indicated),
as follows:
3.1 Ownership of the Jintai HK
Equity Interest. Each Jintai HK Shareholder owns, beneficially
and of record, good and marketable title to the amount of the Jintai HK Equity
Interest set forth opposite such Jintai HK Shareholder’s name in Column II of
Annex I hereto,
free and clear of all security interests, liens, adverse claims, encumbrances,
equities, proxies, options or voting agreements. Jintai HK
Shareholders represent that they each have no right or claims whatsoever to any
equity interests of Jintai HK, other than the Jintai HK Equity Interest and do
not have any options, warrants or any other instruments entitling any of them to
exercise or purchase or convert into additional equity interests of Jintai HK.
At the Closing, the Jintai HK Shareholders will convey to Jintai Delaware good
and marketable title to the Jintai HK Equity Interests, free and clear of any
security interests, liens, adverse claims, encumbrances, equities, proxies,
options, shareholders’ agreements or restrictions.
3.2 Authority Relative to this
Agreement. This Agreement has been duly and validly executed and
delivered by the Jintai HK Shareholders and constitutes a valid and binding
agreement of such person, enforceable against such person in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity.
SHARE
EXCHANGE AGREEMENT
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3.3 Purchase of Restricted
Securities for Investment. The Jintai HK Shareholders each acknowledge
that the Jintai Delaware Shares will not be registered pursuant to the
Securities Act or any applicable state securities laws, that the Jintai Delaware
Shares will be characterized as “restricted securities” under federal securities
laws, and that under such laws and applicable regulations the Jintai Delaware
Shares cannot be sold or otherwise disposed of without registration under the
Securities Act or an exemption therefrom. In this regard, each Jintai
HK Shareholder is familiar with Rule 144 promulgated under the Securities Act,
as currently in effect, and understands the resale limitations imposed thereby
and by the Securities Act. Further, each Jintai HK Shareholder
acknowledges and agrees that:
(a) Each
Jintai HK Shareholder is acquiring the Jintai Delaware Shares for investment,
for such Jintai HK Shareholder’s own account and not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and each
Jintai HK Shareholder has no present intention of selling, granting any
participation in, or otherwise distributing the same. Each Jintai HK
Shareholder further represents that he, she or it does not have any Contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Jintai Delaware Shares.
(b) Each
Jintai HK Shareholder understands that the Jintai Delaware Shares are not
registered under the Securities Act on the ground that the sale and the issuance
of securities hereunder is exempt from registration under the Securities Act
pursuant to Section 4(2) thereof, and that Jintai Delaware’s reliance on such
exemption is predicated on the each Shareholder’s representations set forth
herein.
3.4 Status of
Shareholder. Each of the Jintai HK Shareholders hereby makes the
representations and warranties in either paragraph (a) or (b) of this Section 3.4, as
indicated on the Signature Page of Jintai HK Shareholders which is attached and
part of this Agreement:
(a) Accredited Investor Under
Regulation D. The Jintai HK Shareholders is an “Accredited Investor” as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act, an excerpt of which is included in the attached Annex III, and such
Jintai HK Shareholder is not acquiring its portion of the Jintai Delaware Shares
as a result of any advertisement, article, notice or other communication
regarding the Jintai Delaware Shares published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
(b) Non-U.S. Person Under
Regulation S. Each Jintai HK Shareholder represents
that:
(i) he/she
is not a “U.S. person” as defined by Rule 902 of Regulation S promulgated under
the Securities Act, was not organized under the laws of any U.S. jurisdiction,
and was not formed for the purpose of investing in securities not registered
under the Securities Act;
(ii)
at the time of Closing, the Jintai HK Shareholder was located
outside the United States;
(iii) no
offer of the Jintai Delaware Shares was made to the Jintai HK Shareholder within
the United States;
(iv)
the Jintai HK Shareholder is either (a) acquiring
the Jintai Delaware Shares for its own account for investment purposes and not
with a view towards distribution, or (b) acting as agent for a principal that
has signed this Agreement or has delivered representations and warranties
substantially similar to this Section
3.4(b);
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(v) all
subsequent offers and sales of the Jintai Delaware Shares by the Jintai HK
Shareholder will be made outside the United States in compliance with Rule 903
of Rule 904 of Regulation S, pursuant to registration of the Shares under the
Securities Act, or pursuant to an exemption from such registration; the Jintai
HK Shareholder understands the conditions of the exemption from registration
afforded by section 4(l) of the Securities Act and acknowledges that there can
be no assurance that it will be able to rely on such exemption.
(vi) the
Jintai HK Shareholder will not resell the Jintai Delaware Shares to U.S. Persons
or within the United States until after the end of the one (1) year period
commencing on the date of Closing (the “Restricted
Period”);
(vii) the
Jintai HK Shareholder shall not and hereby agrees not to enter into any short
sales with respect to Jintai Delaware Common Stock at any time after the
execution of this Agreement by the Jintai HK Shareholder and prior to
the expiration of the Restricted Period;
(viii) in
the event of resale of the Jintai Delaware Shares to non-U.S. Persons outside of
the U.S. during the Restricted Period, the Jintai HK Shareholder shall provide a
written confirmation or other written notice to any distributor, dealer, or
person receiving a selling concession, fee, or other remuneration in respect of
the Shares stating that such purchaser is subject to the same restrictions on
offers and sales that apply to the undersigned, and shall require that any such
purchase shall provide such written confirmation or other notice upon resale
during the Restricted Period;
(ix) the
Jintai HK Shareholder has not engaged, nor is it aware that any party has
engaged, and it will not engage or cause any third party to engage in any
“directed selling” efforts (as such term is defined in Regulation S) in the
United States with respect to the Jintai Delaware Shares;
(x) the
Jintai HK Shareholder is not a “distributor” as such term is defined in
Regulation S, and it is not a “dealer” as such term is defined in the Securities
Act;
(xi) the
Jintai HK Shareholder has not taken any action that would cause any of the
parties to this Agreement to be subject to any claim for commission or other or
remuneration by any broker, finder, or other person; and
(xii) the
Jintai HK Shareholder hereby represents that it has satisfied fully observed of
the laws of the jurisdiction in which it is located or domiciled, in connection
with the acquisition of the Jintai Delaware Shares or this Agreement, including
(i) the legal requirements of the Jintai HK Shareholder’s jurisdiction for the
purchase and acquisition of the Jintai Delaware Shares, (ii) any foreign
exchange restrictions applicable to such purchase and acquisition, (iii) any
governmental or other consents that may need to be obtained, and (iv) the income
tax and other tax consequences, if any, which may be relevant to the purchase,
holding, redemption, sale, or transfer of the Jintai Delaware Shares; and
further, the Jintai HK Shareholder agrees to continue to comply with such laws
as long as it shall hold the Jintai Delaware Shares.
(c) The
Jintai HK Shareholder understands that the Jintai Delaware Shares are being
offered and sold to it in reliance on specific provisions of federal and state
securities laws and that the parties to this Agreement are relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understanding of the Jintai HK Shareholder set forth herein
in order to determine the applicability of such
provisions. Accordingly, the Jintai HK Shareholder agrees to notify
Jintai Delaware of any events which would cause the representations and
warranties of the Jintai HK Shareholder to be untrue or breached at any time
after the execution of this Agreement by such Jintai HK Shareholder and prior to
the expiration of the Restricted Period.
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3.5
Investment
Risk. The Jintai HK Shareholder is able to bear the economic risk of
acquiring the Jintai Delaware Shares pursuant to the terms of this Agreement,
including a complete loss of such the Jintai HK Shareholder’s investment in the
Jintai Delaware Shares.
3.6
Restrictive
Legends. The Jintai HK Shareholder acknowledges that the certificate(s)
representing the Jintai HK Shareholder’s pro rata portion of the Jintai Delaware
Shares shall each conspicuously set forth on the face or back thereof a legend
in substantially the following form, corresponding to the Shareholder’s status
as set forth in Section 3.4 and the
signature pages hereto:
REGULATION D
LEGEND:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”
REGULATION S
LEGEND:
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION;
HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
3.7 Disclosure. The
representations and warranties and statements of fact made by Jintai HK
Shareholders in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
3.8 Foreign Corrupt
Practices. Neither Jintai HK, Jintai HK Subsidiaries, nor to
the Knowledge of Jintai HK Shareholders, any agent or other person acting on
behalf of Jintai HK or Jintai HK Subsidiaries, has: (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made
any unlawful payment to foreign or domestic government officials or employees or
to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by Jintai HK or Jintai HK
Subsidiaries (or made by any person acting on its behalf of which Jintai HK or
Jintai HK Subsidiaries is aware) which is in violation of law or (iv) violated
in any material respect any provision of the Foreign Corrupt Practices Act of
1977, as amended (“FCPA”).
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ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF JINTAI DELAWARE AND THE JINTAI
DELAWARE
SHAREHOLDERS
Except as
otherwise disclosed herein or in the Disclosure Schedule delivered by Jintai
Delaware and the Jintai Delaware Shareholders to Jintai HK at the time of
execution of this Agreement, Jintai Delaware and the Jintai Delaware
Shareholders hereby, jointly and severally, represent and warrant to Jintai HK
and the Jintai HK Shareholders as of the date hereof and as of the Closing Date
(unless otherwise indicated), as follows:
4.1 Organization and
Qualification. Jintai Delaware is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its
business as currently conducted. Jintai Delaware is not, to its
Knowledge, in violation nor default of any of the provisions of its certificate
or articles of incorporation, bylaws or other organizational or charter
documents (collectively the “Charter
Documents”). Jintai Delaware is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not have or
reasonably be expected to result in a Material Adverse Effect, and no proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or
qualification.
4.2 Authorization;
Enforcement. Jintai Delaware has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations
hereunder. The execution and delivery of this Agreement by Jintai
Delaware and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of Jintai Delaware and
no further action is required by Jintai Delaware, the Board of Directors or
Jintai Delaware’s Shareholders in connection therewith other than in connection
with the Required Approvals, as defined in Section
4.4. This Agreement has been (or upon delivery will have been)
duly executed by Jintai Delaware and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of Jintai
Delaware enforceable against Jintai Delaware in accordance with its terms,
except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
4.3 No
Conflicts. The execution, delivery and performance by Jintai
Delaware of this Agreement and the consummation by Jintai Delaware of the other
transactions to which it is a party and as contemplated hereby do not and will
not: (i) conflict with or violate any provision of Jintai Delaware’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of Jintai Delaware, or
give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Jintai Delaware debt or
otherwise) or other understanding to which Jintai Delaware is a party or by
which any property or asset of Jintai Delaware is bound or affected, or (iii)
subject to the Required Approvals, as defined by Section 4.4, conflict
with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which Jintai Delaware is subject (including federal and state securities laws
and regulations), or by which any property or asset of Jintai Delaware is bound
or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse
Effect.
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4.4 Filings, Consents and
Approvals. Jintai Delaware is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by Jintai Delaware of this Agreement (collectively, the
“Required
Approvals”).
4.5 Issuance of the Jintai
Delaware Shares. The Jintai Delaware Shares are duly
authorized and, when issued and paid for in accordance with this Agreement, will
be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed on or by Jintai Delaware other than restrictions on transfer
provided for in this Agreement.
4.6 Capitalization. The
capitalization of Jintai Delaware is as set forth on Schedule 4.6, which
Schedule 4.6
shall also include the number of shares of Jintai Delaware Common Stock owned
beneficially, and of record, by Affiliates of Jintai Delaware as of the date
hereof, if any. Other than as set forth in Schedule 4.6, Jintai
Delaware has not issued any capital stock since its inception. No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by this
Agreement. There are no outstanding options, warrants, scrip rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire any
shares of Jintai Delaware Common Stock, or Contracts, commitments,
understandings or arrangements by which Jintai Delaware or any subsidiary of
Jintai Delaware is or may become bound to issue additional shares of Jintai
Delaware Common Stock or Common Stock Equivalents. The issuance of
the Jintai Delaware Shares will not obligate Jintai Delaware to issue shares of
Jintai Delaware Common Stock or other securities to any Person (other than to
the Jintai HK Shareholders) and will not result in a right of any holder of
Jintai Delaware securities to adjust the exercise, conversion, exchange or reset
price under any of such securities. All of the outstanding shares of
capital stock of Jintai Delaware are validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any Shareholder
or Jintai Delaware’s board of directors is required for the issuance of the
Jintai Delaware Shares. There are no Shareholders agreements, voting
agreements or other similar agreements with respect to Jintai Delaware’s capital
stock to which Jintai Delaware is a party or, to the Knowledge of Jintai
Delaware, between or among any of Jintai Delaware’s Shareholders. “Common Stock
Equivalents” means any securities of Jintai Delaware or of any subsidiary
of Jintai Delaware which would entitle the holder thereof to acquire at any time
Jintai Delaware Common Stock, including, without limitation, any debt, preferred
stock, rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive Jintai Delaware Common Stock.
4.7 Newly Incorporated
Company. Jintai Delaware is a newly incorporated company and
has not conducted any substantial business operations since its
inception.
4.8 Regulatory
Permits. Jintai Delaware possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its business, except where
the failure to possess such permits could not reasonably be expected to result
in a Material Adverse Effect (“Material Permits”),
and Jintai Delaware has not received any notice of proceedings relating to the
revocation or modification of any Material Permit.
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4.9 Transactions with Affiliates
and Employees. None of the officers or directors of Jintai
Delaware and, to the Knowledge of Jintai Delaware and the Jintai Delaware
Shareholders, none of the employees of Jintai Delaware is presently a party to
any transaction with Jintai Delaware (other than for services as employees,
officers and directors), including any Contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the Knowledge of Jintai Delaware, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $120,000, other than for: (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of Jintai
Delaware and (iii) other employee benefits.
4.10 Non
Contravention. The execution, delivery and
performance by Jintai Delaware of its obligations hereunder and the consummation
of the transactions contemplated herein, do not (a)
violate, conflict with or result in the breach of any provision of
the certificate of incorporations or
by-laws of Jintai Delaware, or (b) result in the violation by Jintai Delaware of
any laws applicable to Jintai Delaware or any of its assets or
properties, or (c) result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a
default under, or require Jintai Delaware to obtain any
consent, approval or action of, make any
filing with or give any notice to, or result in or give to any person
or entity any right of payment or reimbursement, termination,
cancellation, modification or acceleration of, or result in the
creation or imposition of any lien upon any of the assets
or properties of Jintai Delaware, under any of
the terms, conditions or provisions of any instruments to
which Jintai Delaware is party or by which Jintai Delaware or any of its assets
or properties are bound.
4.11 Certain
Fees. No brokerage or finder’s fees or commissions are or will
be payable by Jintai Delaware to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement.
4.12 Issuance of Jintai Delaware
Shares. Assuming the accuracy of the Jintai HK Shareholders’
representations and warranties set forth in Section 3, no
registration under the Securities Act is required for the offer and issuance of
the Jintai Delaware Shares by Jintai Delaware to the Jintai HK Shareholders as
contemplated hereby.
4.13 Investment Company.
Jintai Delaware is not, and is not an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.
4.14 Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, Jintai Delaware has filed all necessary Tax Returns and has paid or
accrued all Taxes shown as due thereon, and Jintai Delaware has no knowledge of
a tax deficiency which has been asserted or threatened against Jintai
Delaware.
4.15 No General
Solicitation. Neither Jintai Delaware nor any person acting on
behalf of Jintai Delaware has offered or sold any of the Jintai Delaware Shares
by any form of general solicitation or general advertising.
4.16 Foreign Corrupt
Practices. Neither Jintai Delaware, nor to the Knowledge of
Jintai Delaware and the Jintai Delaware Shareholders, any agent or other person
acting on behalf of Jintai Delaware, has: (i) directly or indirectly, used any
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by Jintai Delaware (or made
by any person acting on its behalf of which Jintai Delaware is aware) which is
in violation of law or (iv) violated in any material respect any provision of
the FCPA.
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4.17 Minute Books. The
minute books of Jintai Delaware made available to Jintai HK and the Jintai HK
Shareholders contain a complete summary of all meetings and written consents in
lieu of meetings of directors and Shareholders since the time of
incorporation.
4.18 Business Records and Due
Diligence. Prior to the Closing, Jintai Delaware delivered to
Jintai HK all records and documents relating to Jintai Delaware, which Jintai
Delaware and possesses, including, without limitation, books, records,
government filings, Tax Returns, Charter Documents, corporate records, stock
records, consent decrees, orders, and correspondence, director and Shareholder
minutes, resolutions and written consents, stock ownership records, financial
information and records, and other documents used in or associated with Jintai
Delaware and Jintai Delaware’s subsidiaries, if any.
4.19 Transfer
Agent. Jintai Delaware’s transfer agent is listed on Schedule 4.37 with
its name, address, telephone number, fax number, contact person and email
address. Such transfer agent is eligible to transfer securities via
Depository Trust Company (“DTC”) and Deposit Withdrawal Agent Commission
(“DWAC”).
ARTICLE
5
INDEMNIFICATION;
SURVIVAL OF REPRESENTATIONS
5.1 Indemnification.
(a) Subject
to the provisions of this Article 5, and
irrespective of any due diligence investigation conducted by Jintai HK with
regard to the transactions contemplated hereby, the Jintai Delaware Shareholders
agree to indemnify fully in respect of, hold harmless and defend Jintai HK, the
Jintai HK Subsidiaries and the Jintai HK Shareholders, and each of the officers,
agents and directors of Jintai HK, the Jintai HK Subsidiaries or the Jintai HK
Shareholders, against any damages, liabilities, costs, claims, proceedings,
investigations, penalties, judgments, deficiencies, including taxes, expenses
(including, but not limited to, any and all interest, penalties and expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever) and losses
(each, a “Claim” and
collectively “Claims”) to which it
or they may become subject arising out of or based on either (i) any breach of
or inaccuracy in any of the representations and warranties or covenants or
conditions made by Jintai Delaware and/or the Jintai Delaware Shareholders
herein in this Agreement; or (ii) any and all liabilities arising out of or in
connection with: (A) any of the assets of Jintai Delaware prior to the Closing;
or (B) the operations of Jintai Delaware prior to the Closing.
(b) Subject
to the provisions of this Article 5, Jintai HK
agrees to indemnify fully in respect of, hold harmless and defend the Jintai
Delaware Shareholders and each of the officers, agents and directors of the
Jintai Delaware Shareholders against any Claims to which it or they may become
subject arising out of or based on (i) any breach of or inaccuracy in any of the
representations and warranties or covenants or conditions made by Jintai HK
and/or the Jintai HK Shareholders herein in this Agreement; or (ii) any and all
liabilities arising out of or in connection with: (A) any of the assets of
Jintai HK subsequent to the Closing; or (B) the operations of Jintai HK
subsequent to the Closing.
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5.2 Survival of Representations
and Warranties. Notwithstanding provision in this Agreement to
the contrary, the representations and warranties given or made by Jintai
Delaware, the Jintai Delaware Shareholders, Jintai HK and the Jintai HK
Shareholders under this Agreement shall survive the date hereof for a period of
twenty four (24) months from and after the Closing Date (the last day of such
period is herein referred to as the “Expiration Date”),
except that any written claim for breach thereof made and delivered prior to the
Expiration Date to the party against whom such indemnification is sought shall
survive thereafter and, as to any such claim, such applicable expiration will
not effect the rights to indemnification of the party making such claim; provided, however, that any
representations and warranties that were fraudulently made shall not expire on
the Expiration Date and shall survive indefinitely, and claims with respect to
fraud by Jintai Delaware, the Jintai Delaware Shareholders, Jintai HK or the
Jintai HK Shareholders may be made at any time.
5.3 Method of Asserting Claims,
Etc. The party claiming indemnification is hereinafter
referred to as the “Indemnified Party”
and the party against whom such claims are asserted hereunder is hereinafter
referred to as the “Indemnifying Party.”
All Claims for indemnification by any Indemnified Party under this Article 5 shall be
asserted as follows:
(a) In
the event that any Claim or demand for which an Indemnifying Party would be
liable to an Indemnified Party hereunder is asserted against or sought to be
collected from such Indemnified Party by a third party, said Indemnified Party
shall, within ten (10) business days from the date upon which the Indemnified
Party has Knowledge of such Claim, notify the Indemnifying Party of such claim
or demand, specifying the nature of and specific basis for such claim or demand
and the amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such Claim or
demand) (the “Claim
Notice”). The Indemnified Party’s failure to so notify the
Indemnifying Party in accordance with the provisions of this Agreement shall not
relieve the Indemnifying Party of liability hereunder unless such failure
materially prejudices the Indemnifying Party’s ability to defend against the
claim or demand. The Indemnifying Party shall have 30 days from the
giving of the Claim Notice (the “Notice Period”) to
notify the Indemnified Party: (i) whether or not the Indemnifying
Party disputes the liability of the Indemnifying Party to the Indemnified Party
hereunder with respect to such Claim or demand, and (ii) whether or not the
Indemnifying Party desires, at the sole cost and expense of the Indemnifying
Party, to defend the Indemnified Party against such Claims or demand; provided,
however, that any Indemnified Party is hereby authorized prior to and during the
Notice Period to file any motion, answer or other pleading which he shall deem
necessary or appropriate to protect his interests or those of the Indemnifying
Party and not prejudicial to the Indemnifying Party. In the event
that the Indemnifying Party notifies the Indemnified Party within the Notice
Period that he does not dispute liability for indemnification under this Article 5 and that he
desires to defend the Indemnified Party against such claim or demand and except
as hereinafter provided, the Indemnifying Party shall have the right to defend
by all appropriate proceedings, which proceedings shall be promptly settled or
prosecuted by him to a final conclusion. The Indemnified Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party except to the extent that the employment
thereof has been specifically authorized by the Indemnifying Party in writing,
the Indemnifying Party has failed after a reasonable period of time to assume
such defense and to employ counsel or in such action there is, in the reasonable
opinion of such separate counsel, a material conflict on any material issue
between the position of the Indemnifying Party and the position of such
Indemnified Party (a “Material
Conflict”). If requested by the Indemnifying Party and there
is no Material Conflict, the Indemnified Party agrees to cooperate with the
Indemnifying Party and his counsel in contesting any Claim or demand which the
Indemnifying Party elects to contest or, if appropriate and related to the Claim
in question, in making any Counterclaim against the person asserting the third
party Claim or demand, or any cross-complaint against any person. No
Claim for which indemnity is sought hereunder and for which the Indemnifying
Party has acknowledged liability for indemnification under this Article 5 may be
settled without the consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed.
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(b) In
the event any Indemnified Party should have a Claim against any Indemnifying
Party hereunder which does not involve a Claim or demand being asserted against
or sought to be collected from him by a third party, the Indemnified Party shall
give a Claim Notice with respect to such Claim to the Indemnifying
Party. If, after receipt of a Claim Notice, the Indemnifying Party
does not notify the Indemnified Party within the Notice Period that he disputes
such Claim, then the Indemnifying Party shall be deemed to have admitted
liability for such Claim in the amount set forth in the Claim
Notice.
ARTICLE
6
COVENANTS
OF THE PARTIES
6.1 Corporate Examinations and
Investigations. Prior to the Closing, each party shall be entitled,
through its employees and representatives, to make such investigations and
examinations of the books, records and financial condition of Jintai HK and
Jintai Delaware as each party may request. In order that each party may have the
full opportunity to do so, Jintai HK and Jintai Delaware, the Jintai HK
Shareholders and the Jintai Delaware Shareholders shall furnish each party and
its representatives during such period with all such information concerning the
affairs of Jintai HK or Jintai Delaware as each party or its representatives may
reasonably request and cause Jintai HK or Jintai Delaware and their respective
officers, employees, consultants, agents, accountants and attorneys to cooperate
fully with each party’s representatives in connection with such review and
examination and to make full disclosure of all information and documents
requested by each party and/or its representatives. Any such investigations and
examinations shall be conducted at reasonable times and under reasonable
circumstances, it being agreed that any examination of original documents will
be at each party’s premises, with copies thereof to be provided to each party
and/or its representatives upon request.
6.2 Cooperation;
Consents. Prior to the Closing, each party shall cooperate with the other
parties to the end that the parties shall (i) in a timely manner make all
necessary filings with, and conduct negotiations with, all authorities and other
persons the consent or approval of which, or the license or permit from which is
required for the consummation of the Acquisition and (ii) provide to each other
party such information as the other party may reasonably request in order to
enable it to prepare such filings and to conduct such negotiations.
6.3 Conduct of Business.
Subject to the provisions hereof, from the date hereof through the Closing, each
party hereto shall (i) conduct its business in the ordinary course and in such a
manner so that the representations and warranties contained herein shall
continue to be true and correct in all material respects as of the Closing as if
made at and as of the Closing and (ii) not enter into any material transactions
or incur any material liability not required or specifically contemplated
hereby, without first obtaining the written consent of Jintai HK and the Jintai
HK Shareholders on the one hand and Jintai Delaware and the Jintai Delaware
Shareholders on the other hand. Without the prior written consent of Jintai HK,
the Jintai HK Shareholders, Jintai Delaware or the Jintai Delaware Shareholders,
except as required or specifically contemplated hereby, each party shall not
undertake or fail to undertake any action if such action or failure would render
any of said warranties and representations untrue in any material respect as of
the Closing.
6.4 Litigation. From the
date hereof through the Closing, each party hereto shall promptly notify the
representative of the other parties of any lawsuits, claims, proceedings or
investigations which after the date hereof are threatened or commenced against
such party or any of its affiliates or any officer, director, employee,
consultant, agent or shareholder thereof, in their capacities as such, which, if
decided adversely, could reasonably be expected to have a Material Adverse
Effect on Jintai Delaware.
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6.5 Notice of Default.
From the date hereof through the Closing, each party hereto shall give to the
representative of the other parties prompt written notice of the occurrence or
existence of any event, condition or circumstance occurring which would
constitute a violation or breach of this Agreement by such party or which would
render inaccurate in any material respect any of such party’s representations or
warranties herein.
6.6 Bylaws. If necessary,
Jintai Delaware shall amend its bylaws to permit the election and/or appointment
of additional new directors to Jintai Delaware’s Board of Directors as set forth
in Section
7.1(a) below.
6.7 Confidentiality; Access to
Information.
(a) Confidentiality. Any
confidentiality agreement or letter of intent previously executed by the parties
shall be superseded in its entirety by the provisions of this Agreement. Each
party agrees to maintain in confidence any non-public information received from
the other party, and to use such non-public information only for purposes of
consummating the transactions contemplated by this Agreement. Such
confidentiality obligations will not apply to (i) information which was known to
the one party or their respective agents prior to receipt from the other party;
(ii) information which is or becomes generally known; (iii) information acquired
by a party or their respective agents from a third party who was not bound to an
obligation of confidentiality; and (iv) disclosure required by law. In the event
this Agreement is terminated as provided in Article 8 hereof,
each party will return or cause to be returned to the other all documents and
other material obtained from the other in connection with the Transaction
contemplated hereby.
(b) Access to
Information.
(i) Jintai
HK will afford Jintai Delaware and its financial advisors, accountants, counsel
and other representatives reasonable access during normal business hours, upon
reasonable notice, to the properties, books, records and personnel of Jintai HK
during the period prior to the Closing to obtain all information concerning the
business, including the status of product development efforts, properties,
results of operations and personnel of Jintai HK, as Jintai Delaware may
reasonably request. No information or Knowledge obtained by Jintai Delaware in
any investigation pursuant to this Section 6.7(b) will
affect or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the parties to consummate the
Transaction.
(ii) Jintai
Delaware will afford Jintai HK and its financial advisors, underwriters,
accountants, counsel and other representatives reasonable access during normal
business hours, upon reasonable notice, to the properties, books, records and
personnel of Jintai Delaware during the period prior to the Closing to obtain
all information concerning the business, including the status of product
development efforts, properties, results of operations and personnel of Jintai
Delaware, as Jintai HK may reasonably request. No information or knowledge
obtained by Jintai HK in any investigation pursuant to this Section 6.7(b) will
affect or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the parties to consummate the
Transaction.
6.8 Public Disclosure.
Except to the extent previously disclosed or to the extent the parties believe
that they are required by applicable law or regulation to make disclosure, prior
to Closing, no party shall issue any statement or communication to the public
regarding the transaction contemplated herein without the consent of the other
party, which consent shall not be unreasonably withheld. To the extent a party
hereto believes it is required by law or regulation to make disclosure regarding
the Transaction, it shall, if possible, immediately notify the other party prior
to such disclosure.
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ARTICLE
7
CONDITIONS
TO CLOSING
7.1 Conditions to Obligations of
Jintai HK and the Jintai HK Shareholders. The obligations of Jintai HK
and the Jintai HK Shareholders under this Agreement shall be subject to each of
the following conditions:
(a) Closing Deliveries.
At the Closing, Jintai Delaware and the Jintai Delaware Shareholders shall have
delivered or caused to be delivered to Jintai HK and the Jintai HK Shareholders
the following:
(i) this
Agreement duly executed by Jintai Delaware and the Jintai Delaware
Shareholders;
(ii) resolutions
duly adopted by the Board of Directors of Jintai Delaware approving the
following events or actions, as applicable:
|
|
a.
|
the
execution, delivery and performance of this
Agreement;
|
|
|
b.
|
the
Acquisition and the terms thereof;
|
|
|
c.
|
adoption
of bylaws in the form agreed by the
parties;
|
|
|
d.
|
fixing
the number of authorized directors on the board of directors at [ six
(6) ];
|
|
|
e.
|
the
appointment of Kuizhong Cai as Chairman of the board of directors, and the
appointment of Xxxxxxx Xxxxx, Yuan Xxx, Xxxxx T.N. Ho, Xxxxxx Xx, and
Bradnson Cha Xxx Xxxxx, as additional directors, to serve on the Jintai
Delaware board of directors, effective on the Closing Date;
and
|
|
|
f.
|
the
appointment of the following persons as officers of Jintai Delaware,
effective on the Closing Date, with the titles set forth opposite his name
(the “Jintai HK
Officers”):
|
|
|
Xxxx
Xxx
|
Chief
Executive Officer,
|
|
|
Kuizhong
cai
|
President
and Chairman of the Board
|
|
|
Xxxxx
T.N. Ho
|
Chief
Operating Officer
|
|
Xxxxxxxx
Xx
|
Chief
Financial Officer
|
(iii) a
certificate of good standing for Jintai Delaware from its jurisdiction of
incorporation;
(iv)
a shareholder list of Jintai Delaware as certified by the Jintai
Delaware’s Secretary;
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(v) a
certificate of the Secretary of the Jintai Delaware, dated as of the Closing
Date, certifying as to (i) the incumbency of officers of the Jintai Delaware
executing this Agreement and all exhibits and schedules hereto and all other
documents, instruments and writings required pursuant to this Agreement (the
“Transaction
Documents”), (ii) a copy of the Certificate of Incorporation and By-Laws
of the Jintai Delaware, as in effect on and as of the Closing Date, and (iii) a
copy of the resolutions of the Board of Directors of the Jintai Delaware
authorizing and approving the Jintai Delaware’s execution, delivery and
performance of the Transaction Documents, all matters in connection with the
Transaction Documents, and the transactions contemplated thereby;
(ix) an
opinion from Xxxxxxx Xxxxxx LLP, counsel to Jintai Delaware, with respect to the
matters set forth in Exhibit A
attached hereto, addressed to Jintai HK and the Jintai HK Shareholders and dated
as of the Closing Date;
(x) all
corporate records, board minutes and resolutions, tax and financial records,
agreements, seals and any other information or documents reasonably requested by
Jintai HK’s representatives with respect to Jintai Delaware; and
(xi) such
other documents as Jintai HK and/or the Jintai HK Shareholders may reasonably
request in connection with the transactions contemplated hereby.
(b) Representations and
Warranties to be True. The representations and warranties of Jintai
Delaware and the Jintai Delaware Shareholders herein contained shall be true in
all material respects at the Closing with the same effect as though made at such
time. Jintai Delaware and the Jintai Delaware Shareholders shall have performed
in all material respects all obligations and complied in all material respects
with all covenants and conditions required by this Agreement to be performed or
complied with by them at or prior to the Closing.
(c) No Assets and
Liabilities. At the Closing, Jintai Delaware shall have no liabilities,
debts or payables (contingent or otherwise) other than those liabilities listed
in Schedule
4.34 of the disclosure schedules hereto, no tax obligations, no material
assets, and except as contemplated in this Agreement, no material changes to its
business or financial condition shall have occurred since the date of this
Agreement.
(d) Outstanding Capital
Stock. Jintai Delaware shall have 100,000,000 shares of Jintai Delaware
Common Stock authorized of which [32,000,000] shares shall be issued and
outstanding in the aggregate at the Closing. Jintai Delaware shall have at least
1,000,000 shares of its preferred stock authorized of which no share shall be
issued and outstanding in the aggregate at the Closing.
(e) No Adverse
Effect. The business and operations of Jintai Delaware will
not have suffered any Material Adverse Effect.
7.2 Conditions to Obligations of
Jintai Delaware and the Jintai Delaware Shareholders. The obligations of
Jintai Delaware and the Jintai Delaware Shareholders under this Agreement shall
be subject to each of the following conditions:
(a) Closing Deliveries.
On the Closing Date, Jintai HK and/or the Jintai HK Shareholders shall have
delivered to Jintai Delaware the following:
(i) this
Agreement duly executed by Jintai HK and the Jintai HK
Shareholders;
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(ii) resolutions
duly adopted by the Board of Directors of Jintai HK authorizing and approving
the execution, delivery and performance of this Agreement;
(iii)
certificates representing the Jintai HK Equity Interests
to be delivered pursuant to this Agreement duly endorsed or accompanied by duly
executed stock powers or instruments of like tenor; and
(iv)
such other documents as Jintai Delaware may reasonably request in
connection with the transactions contemplated hereby.
(b) Representations and
Warranties True and Correct. The representations and warranties of Jintai
HK and the Jintai HK Shareholders herein contained shall be true in all material
respects at the Closing with the same effect as though made at such time. Jintai
HK and the Jintai HK Shareholders shall have performed in all material respects
all obligations and complied in all material respects with all covenants and
conditions required by this Agreement to be performed or complied with by them
at or prior to the Closing.
(c) No Adverse
Effect. The business and operations of Jintai HK will not have
suffered any Material Adverse Effect.
ARTICLE
8
TERMINATION
8.1 This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written agreement of Jintai Delaware and Jintai HK
Shareholders;
(b) by
either Jintai Delaware or the Jintai HK Shareholders if the Transaction shall
not have been consummated for any reason by August 31, 2010; provided, however,
that the right to terminate this Agreement under this Section 8.1(b) shall
not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Transaction to occur on or
before such date and such action or failure to act constitutes a breach of this
Agreement;
(c) by
either Jintai Delaware or the Jintai HK Shareholders if a governmental entity
shall have issued an order, decree or ruling or taken any other action, in any
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Transaction, which order, decree, ruling or other action is
final and non-appealable;
(d) by
the Jintai HK Shareholders, upon a material breach of any representation,
warranty, covenant or agreement on the part of Jintai Delaware or the Jintai
Delaware Shareholders set forth in this Agreement, or if any representation or
warranty of Jintai Delaware shall have become materially untrue, in either case
such that the conditions set forth in Section 7.1 would not
be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided, that if such inaccuracy in the
representations and warranties by Jintai Delaware or the Jintai Delaware
Shareholders or breach by Jintai Delaware or the Jintai Delaware Shareholders is
curable by Jintai Delaware or the Jintai Delaware Shareholders prior to the
Closing Date, then the Jintai HK Shareholders may not terminate this Agreement
under this Section
8.1(d) for thirty (30) days after delivery of written notice from the
Jintai HK Shareholders to Jintai Delaware and the Jintai Delaware Shareholders
of such breach, provided Jintai Delaware and the Jintai Delaware Shareholders
continue to exercise commercially reasonable efforts to cure such breach (it
being understood that the Jintai HK Shareholders may not terminate this
Agreement pursuant to this Section 8.1(d) if
they shall have materially breached this Agreement or if such breach by Jintai
Delaware or the Jintai Delaware Shareholders is cured during such thirty (30)
day period); or
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(e) by
Jintai Delaware, upon a material breach of any representation, warranty,
covenant or agreement on the part of Jintai HK or the Jintai HK Shareholders set
forth in this Agreement, or if any representation or warranty of Jintai HK or
the Jintai HK Shareholders shall have become materially untrue, in either case
such that the conditions set forth in Section 7.2 would not
be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided, that if such inaccuracy in the
representations and warranties by Jintai HK or the Jintai HK Shareholders or
breach by Jintai HK or the Jintai HK Shareholders is curable by Jintai HK or the
Jintai HK Shareholders prior to the Closing Date, then Jintai Delaware may not
terminate this Agreement under this Section 8.1(e) for
thirty (30) days after delivery of written notice from Jintai Delaware to Jintai
HK and the Jintai HK Shareholders of such breach, provided Jintai HK and the
Jintai HK Shareholders continue to exercise commercially reasonable efforts to
cure such breach (it being understood that Jintai Delaware may not terminate
this Agreement pursuant to this Section 8.1(e) if it
shall have materially breached this Agreement or if such breach by Jintai HK or
the Jintai HK Shareholders is cured during such thirty (30) day
period).
8.2 Notice of Termination;
Effect of Termination. Any termination of this Agreement under Section 8.1 above
will be effective immediately upon (or, if the termination is pursuant to Section 8.1(d) or
Section 8.1(e)
and the proviso therein is applicable, thirty (30) days after) the delivery of
written notice of the terminating party to the other parties hereto. In the
event of the termination of this Agreement as provided in Section 8.1, this
Agreement shall be of no further force or effect and the Transaction shall be
abandoned, except as set forth in Section 8.1, Section 8.2 and Article 9 (General
Provisions), each of which shall survive the termination of this
Agreement.
ARTICLE
9
GENERAL
PROVISIONS
9.1 Notices. Any and all
notices and other communications hereunder shall be in writing and shall be
deemed duly given to the party to whom the same is so delivered, sent or mailed
at addresses and contact information set forth on the signature pages hereof (or
at such other address for a party as shall be specified by like notice) Any and
all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of: (a) on the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (Eastern Standard Time)
on a business day, (b) on the next business day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
business day or later than 5:30 p.m. (Eastern Standard Time) on any business
day, (c) on the second business day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service or (d) upon actual receipt
by the party to whom such notice is required to be given.
9.2 Interpretation. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
References to Sections and Articles refer to sections and articles of this
Agreement unless otherwise stated.
9.3 Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated and the parties shall negotiate in good faith to modify this
Agreement to preserve each party’s anticipated benefits under this
Agreement.
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9.4 Miscellaneous. This
Agreement (together with all other documents and instruments referred to
herein): (a) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof; (b) except as expressly set forth herein,
is not intended to confer upon any other person any rights or remedies hereunder
and (c) shall not be assigned by operation of law or otherwise, except as may be
mutually agreed upon by the parties hereto.
9.6 Governing Law. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New
York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
County of New York for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the Agreement), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or is
an inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law. If either party shall commence an action or
proceeding to enforce any provisions of the Agreement, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.
9.7 Counterparts and Facsimile
Signatures. This Agreement may be executed in two or more counterparts,
which together shall constitute a single agreement. This Agreement and any
documents relating to it may be executed and transmitted to any other party by
facsimile, which facsimile shall be deemed to be, and utilized in all respects
as, an original, wet-inked manually executed document.
9.8 Amendment. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties upon approval by the party, if such party is an
individual, and upon approval of the Boards of Directors of each of the parties
that are corporate entities.
9.9 Parties In Interest.
Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto.
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9.10 Waiver. No waiver by
any party of any default or breach by another party of any representation,
warranty, covenant or condition contained in this Agreement shall be deemed to
be a waiver of any subsequent default or breach by such party of the same or any
other representation, warranty, covenant or condition. No act, delay, omission
or course of dealing on the part of any party in exercising any right, power or
remedy under this Agreement or at law or in equity shall operate as a waiver
thereof or otherwise prejudice any of such party’s rights, powers and remedies.
All remedies, whether at law or in equity, shall be cumulative and the election
of any one or more shall not constitute a waiver of the right to pursue other
available remedies.
9.11 Expenses. At or prior
to the Closing, the parties hereto shall pay all of their own expenses relating
to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
9.12 Counterparts. This
Agreement may be executed simultaneously in two or more counterparts, any one of
which need not contain the signatures of more than one party, but all such
counterparts taken together will constitute one and the same
Agreement. This Agreement, to the extent delivered by means of a
facsimile machine or electronic mail (any such delivery, an “Electronic
Delivery”), shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in
person. At the request of any party hereto, each other party hereto
shall re-execute original forms hereof and deliver them in person to all other
parties. No party hereto shall raise the use of Electronic Delivery
to deliver a signature or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of Electronic Delivery as a
defense to the formation of a contract, and each such party forever waives any
such defense, except to the extent such defense related to lack of
authenticity.
[Remainder of Page Left Blank
Intentionally]
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IN
WITNESS WHEREOF, the parties have executed this Share Exchange Agreement as of
the date first written above.
JINTAI
MINING GROUP,INC,:
a
Delaware corporation
|
By:
|
|
|
Kuizhong
Cai
|
|
|
Chairman
of the Board of
Directors
|
|
Address
for Notices: 000 X. Xxxxxx Xxxxxxx, Xxxxx,
Xxxxxxxx
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SIGNATURE PAGE OF JINTAI
MINING GROUP, INC. SHAREHOLDERS
JINTAI
MINING GROUP, INC. SHAREHOLDERS:
|
Name
|
Address, Telephone, and Facsimile Number
for Notice:
|
Signature:
|
|||
|
Kuizhong
Cai
|
Address:
|
||||
|
Tel:
|
|||||
|
Fax:
|
|||||
|
Xxxxxxx
Xxxxx
|
Address:
|
||||
|
Tel:
|
|||||
|
Fax:
|
|||||
|
Xxxxxxx
Xxx
|
Address:
|
||||
|
Tel:
|
|||||
|
Fax:
|
|||||
|
Xxxx
Xxx
|
Address:
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||||
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Tel:
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|||||
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Fax:
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|||||
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SIGNATURE PAGE OF
JINTAI MINING
CO. LIMITED.
JINTAI
MINING CO. LIMITED.
|
By:
|
|
|
Name:
|
Kuizhong
Cai
|
|
Title:
|
Chairman
of the Board and
President
|
|
Address
for Notices:
|
|
|
Address:
|
Room
0000X0 Xxx Xxxx Xxxxx
|
|
Xxx
Xxxxx Xxxx
|
|
|
Xxxxxxx
|
|
|
Xxxx
Xxxx
|
|
|
Tel:
|
|
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Fax:
|
|
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SIGNATURE PAGES OF JINTAI
MINING CO. LIMITED SHAREHOLDERS
JINTAI
MINING CO. LIMITED SHAREHOLDERS:
|
By:
Name: Kuizhong
Cai
Address: Room
0000X0 Xxx Xxxx Xxxxx
Xxx Xxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Tel:
Fax:
|
Please Check
One:
The
Jintai HK Shareholder hereby certifies that he is:
¨ an
“Accredited Investor” under Regulation D of the Securities Act (see
Section
3.4 and Annex
III of this
Agreement); or
x a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section
3.4(b) of this
Agreement are true and correct as to such Jintai HK Shareholder, and
hereby accepts and agrees to comply with the covenants in Section
3.4(b).
|
|
By:
Name: Xxxxxxx
Xxxxx
Address: Room
0000X0 Xxx Xxxx Xxxxx
Xxx Xxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Tel:
Fax:
|
Please Check
One:
The
Jintai HK Shareholder hereby certifies that he is:
¨
an “Accredited Investor” under Regulation D of the Securities Act (see
Section
3.4 and Annex
III of this
Agreement); or
x a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section
3.4(b) of this
Agreement are true and correct as to such Jintai HK Shareholder, and
hereby accepts and agrees to comply with the covenants in Section
3.4(b).
|
|
By:
Name: Xxxxxxx
Xxx
Address: Room
0000X0 Xxx Xxxx Xxxxx
Xxx Xxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Tel:
Fax:
|
Please Check
One:
The
Jintai HK Shareholder hereby certifies that he is:
¨ an
“Accredited Investor” under Regulation D of the Securities Act (see
Section
3.4 and Annex
III of this
Agreement); or
¨ a Non-U.S.
Person, that hereby confirms that the representations and warranties in
Section
3.4(b) of this
Agreement are true and correct as to such Jintai HK Shareholder, and
hereby accepts and agrees to comply with the covenants in Section
3.4(b).
|
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|
By:
Name: Xxxx
Xxx
Address: Room
0000X0 Xxx Xxxx Xxxxx
Xxx Xxxxx Xxxx
Xxxxxxx
Xxxx Xxxx
Tel:
Fax:
|
Please Check
One:
The
Jintai HK Shareholder hereby certifies that he is:
¨
an “Accredited Investor” under Regulation D of the Securities Act (see
Section
3.4 and Annex
III of this
Agreement); or
x
a Non-U.S. Person, that hereby confirms that the representations and
warranties in Section
3.4(b) of this
Agreement are true and correct as to such Jintai HK Shareholder, and
hereby accepts and agrees to comply with the covenants in Section
3.4(b).
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ANNEX
I
|
||||||
|
(I)
|
(II)
|
(III)
|
||||
|
Name of
Jintai HK Shareholders
|
Jintai HK Equity
Interests Transferred to
Jintai Delaware
|
Jintai Delaware
Shares
Issued to
Jintai HK Shareholders (or
Designees)
|
||||
|
Kuizhong Cai
|
7,500
|
24,000,000
|
||||
|
Xxxxxxx
Xxxxx
|
1,000
|
3,200,000
|
||||
|
Xxxxxxx
Xxx
|
1,000
|
3,200,000
|
||||
|
Xxxx
Xxx
|
500
|
1,600,000
|
SHARE
EXCHANGE AGREEMENT
Page
31
|
ANNEX
II
|
||||||
|
(I)
|
(II)
|
(III)
|
||||
|
Name of Jintai
Delaware
Shareholder
|
Shares of Jintai
Delaware Common
Stock Owned
Immediately Prior to
Transaction
|
Percentage of
Outstanding Jintai
Delaware Common
Stock Post-
Transaction
|
||||
|
Kuizhong Cai
|
24,000,000 | 75 | % | |||
|
Xxxxxxx
Xxxxx
|
3,200,000 | 10 | % | |||
|
Xxxxxxx
Xxx
|
3,200,000 | 10 | % | |||
|
Xxxx
Xxx
|
1,600,000 | 5 | % |
SHARE
EXCHANGE AGREEMENT
Page
32
ANNEX
III
ACCREDITED
INVESTOR DEFINITION
|
Category
A
|
The
undersigned is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000, excluding the value (if any) of such individual's
primary residence.
|
|
|
Category
B
|
The
undersigned is an individual (not a partnership, corporation, etc.) who
had an income in excess of $200,000 in each of the two most recent years,
or joint income with his or her spouse in excess of $300,000 in each of
those years (in each case including foreign income, tax exempt income and
full amount of capital gains and losses but excluding any income of other
family members and any unrealized capital appreciation) and has a
reasonable expectation of reaching the same income level in the current
year.
|
|
|
Category
C
|
The
undersigned is a director or executive officer of Jintai Delaware which is
issuing and selling the securities.
|
|
|
Category
D
|
The
undersigned is a bank; a savings and loan association; insurance company;
registered investment company; registered business development company;
licensed small business investment company (“SBIC”); or employee benefit
plan within the meaning of Title 1 of ERISA and (a) the investment
decision is made by a plan fiduciary which is either a bank, savings and
loan association, insurance company or registered investment advisor, or
(b) the plan has total assets in excess of $5,000,000 or (c) is a self
directed plan with investment decisions made solely by persons that are
accredited investors.
|
|
|
Category
E
|
The
undersigned is a private business development company as defined in
section 202(a)(22) of the Investment Advisors Act of
1940.
|
|
|
Category
F
|
The
undersigned is either a corporation, partnership, Massachusetts business
trust, or non-profit organization within the meaning of Section 501(c)(3)
of the Internal Revenue Code, in each case not formed for the specific
purpose of acquiring the Securities and with total assets in excess of
$5,000,000.
|
|
|
Category
G
|
The
undersigned is a trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities, where the
purchase is directed by a “sophisticated investor“ as defined in
Regulation 506(b)(2)(ii) under the Act.
|
|
|
Category
H
|
The
undersigned is an entity (other than a trust) in which all of the equity
owners are “accredited investors” within one or more of the above
categories. If relying upon this Category alone, each equity owner must
complete a separate copy of this
Agreement.
|
SHARE
EXCHANGE AGREEMENT
Page 33
DISCLOSURE
SCHEDULES
TO
SHARE
EXCHANGE AGREEMENT
SCHEDULE
2.1
(List of
Business Jurisdictions)
Hong Kong
Special Administration Region of People’s Republic of China
People’s
Republic of China
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-1
SCHEDULE
2.3
(Subsidiaries)
Guangzhou
Xiangguang Corporate Management Limited, a company organized in the People’s
Republic of China, is wholly-owned by Jintai HK
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-2
SCHEDULE
2.9
(Litigation)
None
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-3
SCHEDULE
2.11
(Contracts)
None
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-4
SCHEDULE
2.12
(Material
Changes)
None
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-5
SCHEDULE
2.15
(Related
Transaction)
None
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-6
SCHEDULE
2.17
(Certain
Fees)
None
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-7
SCHEDULE
2.18
(Registration
Rights)
None
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-8
SCHEDULE
4.6
(Capitalization
and Jintai Delaware Stock Issuances)
Jintai Delaware’s authorized capital
stock is comprised of 100,000,000 shares of common stock, par value $.0001, of
which 25,000,000 shares are issued and outstanding immediately prior to the
consummation of the Acquisition, and 1,000,000 shares of preferred stock, par
value $.0001, of which no shares are issued and outstanding immediately prior to
the consummation of the Acquisition.
Other than the issuances of Jintai
Delaware’s restricted common stock to the Jintai HK Shareholders at the Closing
in connection with this Share Exchange Agreement, there has been no issuance of
stock of Jintai Delaware as of the time of the Transaction since its
inception.
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-9
