Equity Acquisition Agreement
Exhibit
10.2
Equity Acquisition
Agreement
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Party
A: Shenzhen Angesi Technology Co., Ltd
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Hereinafter
referred to as: Party A
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Stock
holder: Li Xxxx Xx, Xxx Xxxxx
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Party
B: ANV Security Group (Asia) Co., Ltd
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Hereinafter
referred to as: Party B
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Background
Review
1. Party A and Party B
has signed Stock Purchase Agreement on Dec 24th, 2009,
signed Complementary Agreement of Stock Purchase Agreement on April, 2010.
At the same time, both Party A and Party B have signed Stock Purchase Agreement
which is notarized by the Shenzhen Municipal office.
2. Right now the stock holder of Shenzhen Angesi
Technology Co., Ltd has become Party B, the company name has change to ANV
Security Technology (China) Co., Ltd. Also there are changes with the
legal representative, registered capital, enterprise code certificate, tax
registration, foreign exchange registration, Impression of legal seal, company
logo .etc. but not for the
business transfer procedure, Party A still responsible for the
management.
3. According to the Equity Acquisition Agreement and
the Acquisition of Additional Equity Agreement, Party A should have Assets
Evaluation and financial audit from 2008 to May 2010. Party B hire a
accountant which is certified from U.S. listed company’s audit and assessment of
qualified American institute, the accountant start the audit work with Party A
from 5th June
2010 and complete at 15th July
2010.
Company’s
Target:
Shenzhen
Angesi Technology Co., Ltd is a private enterprise in China, mainly engaged in
R&D, Video surveillance devices production and sales. Li Xxxx Xx is a legal
representative and registered in Industrial and Commercial Bureau China. Also as
the stock holder, he owned 95% stocks, Xxx Xxxxx owned 5%. Till the end of May,
2010, the net asset of Angesi are not less than RMB 20,000,000. The forecast of
next year’s profit is over RMB10, 000,000 and net profit will be over
7%.
In view of:
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1.
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Party
A owns 100% of the company’s equity shares, also agent for Part A have the
100% authority
of stock handling right.
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2.
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Party B is listed on
OTCBB in United States as a U.S. Company. The total Equity is
51,080,071,
the stock exchange index is in between USD 0.5 - USD1.00 per
share.
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3.
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Party
B has completed its due diligence of Party A, financial audit and asset
evaluation and consultation
with party B.
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4. Party A agree to transfer
100% shares to Party B ( Including RMB 20,000,000 tangible and
intangible asset), Party B agree farm-in the mentioned shares and Change of
controlling shareholders in Shenzhen industrial and commercial
bureau.
Based on
above situation, both Party A and Party B are willing to cooperate with each
other, with the negotiation of each side stockholders, both sides agree to
terminate the previous Stock Purchase Agreement and Complementary Agreement of
Stock Purchase. Both sides shall bear their respective responsibilities
according to actual situations, and sign the new Stock Purchase Agreement, and
observe the following clause:
Subject to
Transfer
Definition
Net
tangible assets: means (capital assets and current assets) with reasonable
purchase price, steady quality assurance, technology is not backward, Storage
not longer with 6 months. Not depreciate while liquidate
1.1 This agreement is based on
Party A and Party B with target company of 100% shares, which includes tangible RMB 20,000,000 and others
intangible asset. (Party A can deal with the over part of
tangible RMB 20,000,000). Both Party A and Party B should obey the authority transfer agreement.
1.2 The clause of this
agreement is agreed by Party A, who will transfer its owed 100% shares and all
the authority (Not include the
over part of tangible RMB 20,000,000) to Party B. Party B agree with the
clause of this agreement too; farm-in the mentioned shares.
1.3 Regarding the equity
transfer price and payment terms and other related matters, the fourth
clause of
this agreement had arranged, both Party A and Party B cannot sign any other
agreement.
Trading
2.1 In order to have better
control of both side transaction cost and risk, with the negotiation of both
Part A and Party B, the transaction will be only once after the two parts signed
the agreement. 100% of the target company and in all the Equity interest, to
transfer one time, the formal handover date is 30th Sep
2010. In case of special circumstances if two parties are agreed can sign
supplement agreement
2.2 With the agreement of
Party A and Party B, based on the previous Stock Purchase Agreement and
Complementary Agreement of Stock Purchase which is processing, had already
change the name from Shenzhen Angesi Technology Co., Ltd to Shenzhen ANV
Security Technology (China) Co., Ltd . Registered capital is RMB 50,000,000.
Also the project has approve by the government, now already have the
certificates, Business License, Tax Registration, Enterprise Code, Foreign
Exchange Registration, Customs Registration and other legal formalities,
corporate seal, financial seal and bank seal and Corporate Logo also have been
changed. After the Equity Acquisition Agreement will follow ANV
Security Technology (China) Co. the same legal entity
Transaction
Price
3.1 Target Company under this
Agreement, 100% of equity transfer price, determined through consultation by
both parties for the 50 million yuan (50,000,000)
3.2 In the following section
3.2.1,3.2.2 Party to ensure that the terms under the premise of the transactions
under this Agreement, the price for the 50 million yuan
(50,000,000)
3.2.1 As the target company to
31 August 2010 ended, the American Institute of Certified Audit and assessment
of the company's book value of net tangible assets of not less than healthy 20
million yuan, and all intangible assets.
3.2.2 As the target company to
31 August 2010 ended, the American Institute of Certified Audit and assessment
of the net assets of the positive indicators and inconsistent with Article 3.2.1
of this Agreement, that is less than the carrying amount of positive total net
assets 20 million yuan, the Party must Filled with cash to 20 million yuan of
assets or decreasing the corresponding number of shares (calculated with Clause
3.3). Party B shall have the option to terminate this Agreement or the
transactions under the right to continue to perform the
transaction.
3.3.3 If the target company as
of August 31, 2010 ended, the American Institute of Certified Audit and
assessment of benign after verification by the B index and the net assets of
Article
3.2.1 of this Agreement does
not match the Party does not choose the same time filled with cash to
20 Million yuan of assets, and B choose to continue to perform transactions
under this Agreement, the transactions under this Agreement, the final
transaction price is calculated as follows:
If the target company as of
August 31, 2010 ended, the American Institute of Certified audit and assessment
of the book net assets of benign (A) less than 20 million yuan in total, the
transactions under this agreement total turnover of P (unit:
RMB yuan) are:
P＝50million
RMB×（A/20millionRMB）
4.
Transaction price to pay
4.1 Both sides agreed: B according to the most
favorable price $ 0.50 per share, the new shares issued 1,500 shares of common
stock, which is equivalent to the total price of $ 7,500,000 (equivalent to 50 million yuan) will
be paid as a target of 100% share transfer gold stocks, the stock and B stock
held by the same restrictive conditions to have the same stock. Party
shareholders must comply with U.S. securities laws, the United States acting
in Anvil Group's shareholders
agreement, the United States Anvil Security Group Board of Directors resolutions
and the terms of this Agreement against the relevant provisions of blocking only
partial sale. Promised to pay to Party B as the target company's stock transfer payments
according to the U.S. stock market rules, OTCBB requires companies to switch
boards and groups and the resolution of the board can be shares or share
capital, but the shares held by each shareholder is not the real value of
change.
4.2 After the handover
procedures for both sides, and the completion of the Party A in the American
Institute of Certified 6,7,8 January 2010 financial audit and assessment, such
as the total positive net assets Party 20 million yuan, Party B shall, within 45
days after the audit report Notified the U.S. attorney and the U.S. stock
custodian will add 15 million shares issued by one Party A or Party A delivered
to the designated shareholders, shareholders need to provide proof of identity
and recognition of China is the Party A
shareholders proof.
5.
Financial Audit
5.1 The two sides signed the
share transfer agreement, Party B will appoint accountants and appraisers on the
U.S. target company's financial audit June ,July ,August to determine the
deadline to August 31, 2010 Party ended net assets. Party B shall appoint the
auditors and values to provide a variety of licenses, financial, asset,
contract, storage, and all original documents and documentation, and other
documents required by auditors, with audits
5.2 After the signing of
this Agreement, in the days before the official handover, the U.S. arranged by
Party B and assessor auditor of the target company completed a financial audit
and evaluation and assessment if the audited net assets of Party A benign than
20 million yuan , In conformity with implementation of the provisions of this
Section 3.2.2
5.2 The audit cost borne
by the Party
6.
Transfer of Legal procedure
6.1 Both parties shall
confirm, September 10, 2010 for the agreement signing date, September 30, 2010
the official transfer date for the company.
After the
signing of this agreement, before the handover in the future, the two sides into
the audit and transfer procedures (handover method for separately). Since the
official handover date within seven working days, Party B will be the equivalent
of 15 million yuan of dollars into ANV Security Technology (China) Co., Ltd
foreign capital verification account after the date of the transfer of all
powers vested in ANV Security Technology (China) Limited Board of
Directors.
6.2 Handover process and
content, including, the transfer of Party A to Party B and Party B, all
of the following information and the transfer of work for the
common good:
6.2.1 Target company
administration, personnel and financial management (including the various
management documents, the company full list), and true and complete list of
assets, financial statements and international account.
6.2.2 Product design (
including software documentation and source code, design drawing, etc), product
specification, production process, and all other technical information and other
data have to be true, accurate and complete.
6.2.3 Sales channel,
customer information and the running sales contract and the right from the
contract.
6.2.4 Raw material supplier
and manufacture information in details ( including price)
6.2.5 Raw material and
product list and stock
6.2.6 Brand, Proprietary
Technology, patent
6.2.7 Not only the information
mentioned in above items 6.2.1— 6.2.6
6.3 Since the date of transfer
Party B will appoint new management team and associated staff to run the
relevant business the original management team remains
unchanged.
6.4 According to the
Chinese law, in the procedure of transferring the shares the cost incurred
should be paid by the New Company.
6.5 Either party fails to
perform relevant obligations as agreed are deemed to breach of agreement,
according to the provisions of article VIII of this agreement be liable for
default.
7. Two parties commitment
7.1
Legal Status
7.1.1 The Party A
must assure the target company was established legally and valid to run the
business complying with the Chinese law; also assure that this company is able
to provide all valid official documents, certificates and permits with the
business license for legitimate operation.
7.1.2 The Party A must assure
that the Party A is the lawful owner for the shares reassign to the party,
according to the first term of this agreement, or has lawful disposition with
full authorization on these shares.
7.1.3 Both parties have
authority to establish and complete this agreement, and also ensure this is a
legally binding contractual agreement for both parties. Both parties have
already had all necessary authority to sign and complete this agreement. The
representatives from each party have already had the authority to sign on this
agreement with legally binding.
7.2
Financial transactions
7.2.1 All financial data and
accounting statements of the company that the Party A has had reported to the
Party B are comprehensive，real and accurate;
also the Party A must assure that the corporate assets and liabilities status in
this agreement are real and integrated without any misleading
statement.
7.2.2 The Party A never ever
reports any unreal or misleading statement about the corporate assets status,
and the current and prospective operation situation to the Party B.
7.3
Corporate Assets
7.3.1 Ensure that no Party
involved in any pending, and may occur to one side or the Party A and its
financial. Party may carry out its
obligations
under this Agreement to have a material adverse impact of litigation,
arbitration, administrative place, Penalty or other legal
proceedings.
7.3.2 In the addition Party A
has to ensure the company, there are no rights to any third company for the
company assets. There are no rights of controversy disputes, nor is any
administrative, Judiciary, acquisitions of these assets, seizure, requisition,
development proposals, notices, orders, decisions, judgments and so
on.
7.3.3 Party A promised to
complete the share transfer, transfer procedures, or before the target company's
liabilities, overdue wages and benefits assume full responsibility for behavior,
and personal assets (Party target company assets) as collateral.
7.4.
Contract
7.4.1 Party A in a statement
prior to the signing of this agreement and have presented all the party B told
the company is fulfilling and will to fulfill the contract.
7.4.2 In addition to the
preceding paragraph of the contract, the company that there are no other
obligations of, or abnormal, non-normal trading contracts and
agreements.
7.5 Party A commitment to the
original shareholders of the target company and the senior management team, the
completion of share transfer and delivery of assets within 5 years after the
procedure is no longer directly or indirectly engaged in ANV Security Technology
( China) Co., Ltd, all business in competition.
7.6 Party A promised, handing
over control of the target company will actively cooperate with Party B to Party
B's work to ensure the smooth transition of the target company and in accordance
with Party B needs to maintain the stability of the backbone of technology and
business.
7.7 Party A make sure that in
the days after the signing ceremony to handover, the target company is no longer
any investment, debt, external security, asset trading behavior.
7.8 Party A make sure that in
the transfer of the target company before the date of production and management
comply with relevant state laws and regulations.
7.9 Party A promised in the
next 1 year 1st October
2010 to September 30, 2011, their turned over complete Net income (N) 10 million
yuan or more; to ensure the net book value of assets (A) total 20 million yuan
or more (does not include new or a new injection of liquidity into the asset);
net profit margin (R) remained at 7% above; if it is not the above conditions,
Party A shall be unconditional in accordance with the following formula
shareholders to re-calculate the target value of the company and this
calculation results in accordance with the corresponding back its holdings of B
shares, but no longer pay the agreed upon Article 8.2 of this Agreement for
breach of contract.
Target
Corporation September 30, 2011 the real value of P (Unit: XXX Xxxxxxx
Xxxx)
Xx00X-X0-X0-X0
Among
Not
meet the net profit should be paid to reducing value P1=50M×【1-(N/10M）】
For failing to ensure that
the carrying value of net assets should be reduced;
P2=50M×【 1-(A/20M）】
Failed to meet profit
targets for the 7% decline in value, P3 ≤ 300M;
6 /
8 P3=50M ×【1-(R/7%)】
Explanation:
A. Whenever
N/10M or A/20M or R/7% ≥1, We should calculate according to 1. When the
market company has profit, but the net profit P3 can not catch the index, P3
will cut no more than 3 million stock from Party A.
7.10 The Party B promises
that, it is the legal listed company of America.
7.11 The
Party B promise that , after finish the hand over, the Party A can
send 1 administrator to the board of directors in
ANV Security Technology (USA) and ANV Security Technology (China), and take part
in the decision for important issues, and employee the party A as
the top administrator for target company.
7.12 The Party B promises that
after the America lawyer approval examine and verified the party B net property
and both side hand over all the formalities, the party B should provide over six
million RMB as circulating fund to party A (under the condition of Capital
preservation, and accretion) in seven working days to the party A according to
the needs of development, and the condition of the completion of 3 index
promised by Party A. The investment of 6 million circulating fund
will carry out according to the Financial budget and after the improvement by
the Group and the board.
7.13 The Party B promise that,
after the handling of all the procedure, party B will expend the overseas market
activity, and bring new orders and business chances for the
enterprise.
7.14 The party B promises
that, after handling all the procedure, party B will establish effective team
with party A, after complete the index for sales and profit of 2010-2011, and
try their best to achieve the plan of change the board in NASDAQ in America
before 30th,June,
2012.
8. Liability for breach
of contract: After both side sign the <the agreement of
assignment for stock ownership>
8.1 Any party made the pledge
and the guarantee in this agreement is not in accordance with the facts or one
party violates the duty which this agreement stipulated , notify by
the opposite party, still does not take the effective reminder in ten(10) days ,
the violation party should act according to this agreement 8.2
agreements.
8.2 Any party violates
this agreement is supposed to pay the penalty payment eight million RMB to the
other party who abide by in this agreement.
9. Legal
solution for disputes
9.1 This agreement is
suitable for the Chinese law with the fulfillment, and based on Chinese law
explanation.
9.2 Any dispute or
related dispute between the parties in this agreement, should firstly
solved through the friendly consultative way. If the dispute can not
solved by negotiation in 60 days, any party will be authorized to proposed the
law to Shenzhen Intermediate Court
10.
Others
10.1 Before the
disclosure of the stockholder rights transfer and the property settlement
according to related stipulation, any person participate in both
party having the duty to keep security, any consequence caused by
disclosure by any related participate stuff will undertake all the
responsibilities.
10.2 if in this agreement any
or many stipulations in any aspect in is suitable in the law to regard as
invalid, illegal or cannot carry out, then in this agreement other stipulation
validity, the validity and the perform ability will not effected nor
weakened its potency.
10.3 this agreement principal
edition in four copy, both party have two copy, each principal edition has the
same level legal effect. Any uncompleted matters should solved by both
Parties.
Both
parties signature:
Party A:
Shenzhen Angesi Technology Co., Ltd
/s/
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(Shareholder)
Li Xxxx Xx, Xxxxx Xxx
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(Signature)
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Party
B: ANV Security Group (Asia) Co., Ltd
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(
Seal )
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Legal
Representative
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/s/
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Xxxxxxx
Xxxx
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(Signature)
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Date
of Signature: 10th
Sep 2010
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Shenzhen, China
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