SHARE EXCHANGE AGREEMENT BY AND AMONG SILVER PEARL ENTERPRISES, INC. DENISE SMITH KEYUAN INTERNATIONAL GROUP LIMITED AND DELIGHT REWARD LIMITED, SOLE STOCKHOLDER OF KEYUAN INTERNATIONAL GROUP LIMITED DATED: APRIL 22, 2010
Exhibit
2.1
BY AND
AMONG
XXXXXX
XXXXX
KEYUAN
INTERNATIONAL GROUP LIMITED
AND
DELIGHT
REWARD LIMITED,
SOLE
STOCKHOLDER OF KEYUAN INTERNATIONAL GROUP LIMITED
DATED:
APRIL 22, 2010
TABLE OF
CONTENTS
Page | ||
SECTION
I
|
DEFINITIONS
|
2
|
SECTION
II
|
EXCHANGE
OF SHARES AND SHARE CONSIDERATION
|
7
|
SECTION
III
|
CLOSING
DATE
|
8
|
SECTION
IV
|
REPRESENTATIONS
AND WARRANTIES OF SHAREHOLDERS
|
8
|
SECTION
V
|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
|
12
|
SECTION
VI
|
REPRESENTATIONS
AND WARRANTIES OF THE ACQUIROR COMPANY AND THE ACQUIROR COMPANY PRINCIPAL
SHAREHOLDER
|
17
|
SECTION
VII
|
COVENANTS
OF THE ACQUIROR COMPANY
|
27
|
SECTION
VIII
|
COVENANTS
OF THE PARTIES
|
27
|
SECTION
IX
|
CONDITIONS
PRECEDENT OF THE ACQUIROR COMPANY
|
29
|
SECTION
X
|
CONDITIONS
PRECEDENT OF THE COMPANY AND THE SHAREHOLDERS
|
31
|
SECTION
XI
|
INDEMNIFICATION;
REMEDIES
|
33
|
SECTION
XII
|
GENERAL
PROVISIONS
|
35
|
SCHEDULES
|
41
|
|
EXHIBIT
A
|
DEFINITION
OF “ACCREDITED INVESTOR”
|
|
EXHIBIT
B
|
DEFINITION
OF “U.S. PERSON”
|
|
EXHIBIT
C
|
ACCREDITED
INVESTOR REPRESENTATIONS
|
|
EXHIBIT
D
|
NON
U.S. PERSON REPRESENTATIONS
|
|
EXHIBIT
E
|
FORM
OF LEGAL OPINION
|
|
EXHIBIT
F
|
FORM
OF LEGAL OPINION
|
|
EXHIBIT
G
|
SERIES
M CERTIFICATE OF DESIGNATION
|
|
This
Share Exchange Agreement, dated as of April 22, 2010, is made by and among
Silver Pearl Enterprises, Inc., a Nevada corporation (the “Acquiror Company”), Xxxxxx
Xxxxx (the “Acquiror Company Principal Shareholder”), Keyuan International Group
Limited, a company organized under the laws of the British Virgin Islands (the
“Company”), and Delight
Reward Limited (the “Shareholder”), a company
organized under the laws of the British Virgin Islands.
WHEREAS, the Shareholder has
agreed to transfer to the Acquiror Company, and the Acquiror Company has agreed
to acquire from the Shareholder, all of the Shares, which Shares constitute 100%
of the issued and outstanding shares of the Company, in exchange for 47,658
shares of the Acquiror Company’s Series M preferred stock to be issued on the
Closing Date (the “Acquiror
Company Preferred Shares”), whereby each Acquiror Company Preferred Share
convertible into One Thousand (1,000) shares of Acquiror Company’s common stock
(the “Conversion
Shares”) when the Acquiror Company amends its Article of Incorporation to
increase the number of its authorized common stock to One Hundred Million
(100,000,000) (the “Mandatory
Conversion”). After giving effect to the Automatic Conversion, the
Conversion Shares shall constitute approximately 95.3% of the Acquiror Company’s
issued and outstanding common shares immediately after the closing of the Share
Exchange (without giving effect to the Financing). The designation, rights,
preferences and other terms and provisions of the Acquiror Company Preferred
Shares are set forth in the Certificate of Designations, Preferences, Rights of
the Series M Preferred Stock attached hereto as Exhibit G (the “Series M
Certificate of Designations”).
WHEREAS, concurrent with the
Share Exchange and as a condition to its consummation, there shall be released
from escrow and paid to the Acquiror Company Principal Shareholder the sum of
US$400,000 in consideration for the consummation of the Share Exchange which
shall be used for the repurchase of 3,264,000 shares of common stock held by the
Acquiror Company Principal Shareholder (the “Repurchase”).
WHEREAS, such Share Exchange
is in connection with the closing of the Financing pursuant to a Securities
Purchase Agreement dated April 22, 2010 by and among the Acquiror Company and
the subscribers identified on the signature page thereto. The Closing of the
Share Exchange is conditioned upon all of the conditions of the Financing being
met, and the Financing is conditioned upon the closing of the Share
Exchange.
NOW THEREFORE, in
consideration of the premises and the mutual covenants, agreements,
representations and warranties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1
SECTION
I
Unless
the context otherwise requires, the terms defined in this Section 1 will have
the meanings herein specified for all purposes of this Agreement, applicable to
both the singular and plural forms of any of the terms herein
defined.
1.1 “Accredited Investor” has the
meaning set forth in Regulation D under the Securities Act and set forth on
Exhibit
A.
1.2 “Acquired Companies” means,
collectively, the Company and the Company Subsidiaries.
1.3 “Acquiror Company Balance
Sheet” means the Acquiror Company’s balance sheet at December 31,
2009.
1.4 “Acquiror Company Board” means
the Board of Directors of the Acquiror Company.
1.5 “Acquiror Company Common Stock”
means the Acquiror Company’s common stock, par value US $0.001 per
share.
1.6 “Acquiror Company Preferred
Shares” means the Series M preferred stock of the Acquiror Company being
issued to the Shareholder pursuant hereto.
1.7 “Affiliate” shall mean, with
respect to any Person, any other Person that (a) directly or indirectly, whether
through one or more intermediaries or otherwise, controls or is controlled by or
is under common control with such Person. For purposes of this
definition, “control” (including with correlative meanings “controlled by” and
“under common control with”) of a Person means the power, direct or indirect, to
direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by contract or
otherwise. For the purposes of this definition, a Person shall be
deemed to control any of his or her immediate family members.
1.8 “Agreement” means this Share
Exchange Agreement, including all Schedules and Exhibits hereto, as this Share
Exchange Agreement may be from time to time amended, modified or
supplemented.
1.9 “Closing” has the meaning set
forth in Section 3.1.
1.10 “Closing Date” has the meaning
set forth in Section 3.1.
1.11 “Code” means the Internal
Revenue Code of 1986, as amended.
1.12 “Commission” means the
Securities and Exchange Commission or any other federal agency then
administering the Securities Act and the Exchange Act.
2
1.13 “Company” means Keyuan
International Group Limited, a company organized under the laws of the British
Virgin Islands.
1.14 “Company Board” means the Board
of Directors of the Company.
1.15 “Company Indemnified Party” has
the meaning set forth in Section 9.1.
1.16 “Company Subsidiaries” means
all of the direct and indirect Subsidiaries of the Company.
1.17 “Equity Security” means any
stock or similar security, including, without limitation, securities containing
equity features and securities containing profit participation features, or any
security convertible into or exchangeable for, with or without consideration,
any stock or similar security, or any security carrying any warrant, right or
option to subscribe to or purchase any shares of capital stock, or any such
warrant or right.
1.18 “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.
1.19 “Exchange Act” means the
Securities Exchange Act of 1934 or any similar federal statute, and the rules
and regulations of the Commission thereunder, all as the same will then be in
effect.
1.20 “Exhibits” means the several
exhibits referred to and identified in this Agreement.
1.21 “Financing” has the meaning set
forth in Section 8.11 herein.
1.22 “Form 8-K” means a current
report on Form 8-K under the Exchange Act.
1.23 “GAAP” means, with respect to
any Person, United States generally accepted accounting principles applied on a
consistent basis with such Person’s past practices.
1.24 “Governmental Authority” means
any federal or national, state or provincial, municipal or local government,
governmental authority, regulatory or administrative agency, governmental
commission, department, board, bureau, agency or instrumentality, political
subdivision, commission, court, tribunal, official, arbitrator or arbitral body,
in each case whether U.S. or non-U.S.
1.25 “HK Company” means Keyuan Group
Limited, a company organized under the laws of Hong Kong.
1.26 “Indebtedness” means any
obligation, contingent or otherwise. Any obligation secured by a Lien
on, or payable out of the proceeds of, or production from, property of the
relevant party will be deemed to be Indebtedness.
3
1.27 “Intellectual Property” means
all industrial and intellectual property, including, without limitation, all
U.S. and non-U.S. patents, patent applications, patent rights, trademarks,
trademark applications, common law trademarks, Internet domain names, trade
names, service marks, service xxxx applications, common law service marks, and
the goodwill associated therewith, copyrights, in both published and unpublished
works, whether registered or unregistered, copyright applications, franchises,
licenses, know-how, trade secrets, technical data, designs, customer lists,
confidential and proprietary information, processes and formulae, all computer
software programs or applications, layouts, inventions, development tools and
all documentation and media constituting, describing or relating to the above,
including manuals, memoranda, and records, whether such intellectual property
has been created, applied for or obtained anywhere throughout the
world.
1.28 “Laws” means, with respect to
any Person, any U.S. or non-U.S. federal, national, state, provincial, local,
municipal, international, multinational or other law (including common law),
constitution, statute, code, ordinance, rule, regulation or treaty applicable to
such Person.
1.29 “Lien” means any mortgage,
pledge, security interest, encumbrance, lien or charge of any kind, including,
without limitation, any conditional sale or other title retention agreement, any
lease in the nature thereof and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction and including
any lien or charge arising by Law.
1.30 “Material Acquiror Company
Contract” means any and all agreements, contracts, arrangements, leases,
commitments or otherwise, of the Acquiror Company, of the type and nature that
the Acquiror Company is required to file with the Commission.
1.31 “Material Adverse Effect”
means, any change, effect or circumstance which, individually or in the
aggregate, would reasonably be expected to (a) have a material adverse effect on
the business, assets, financial condition or results of operations of the
Acquiror Company or the Acquired Companies, as the case may be, in each case
taken as a whole or (b) materially impair the ability of the Acquiror
Company or the Acquired Companies, as the case may be, to perform their
obligations under this Agreement, excluding any change, effect or circumstance
resulting from (i) the announcement, pendency or consummation of the
transactions contemplated by this Agreement, (ii) changes in the United States
securities markets generally, or (iii) changes in general economic, currency
exchange rate, political or regulatory conditions in industries in which the
Acquiror Company or the Acquired Companies, as the case may be, operate or (c)
result in litigation, claims, disputes or property loss in excess of US$150,000
in the future, and that would prohibit or otherwise materially interfere with
the ability of any party to this Agreement to perform any of its obligations
under this Agreement in any material respect.
1.32 “Order” means any award,
decision, injunction, judgment, order, ruling, subpoena, or verdict entered,
issued, made, or rendered by any Governmental Authority.
1.33 “Ordinary Shares” means the
Company’s ordinary shares, par value US$1.00 per share.
1.34 “Organizational Documents”
means (a) the articles or certificate of incorporation and the by-laws or code
of regulations of a corporation; (b) the partnership agreement and any statement
of partnership of a general partnership; (c) the limited partnership agreement
and the certificate of limited partnership of a limited partnership; (d) the
articles or certificate of formation and operating agreement of a limited
liability company; (e) any other document performing a similar function to the
documents specified in clauses (a), (b), (c) and (d) adopted or filed in
connection with the creation, formation or organization of a Person; and (f) any
and all amendments to any of the foregoing.
4
1.35 “Permitted Liens” means (a)
Liens for Taxes not yet payable or in respect of which the validity thereof is
being contested in good faith by appropriate proceedings and for the payment of
which the relevant party has made adequate reserves; (b) Liens in respect of
pledges or deposits under workmen’s compensation laws or similar legislation,
carriers, warehousemen, mechanics, laborers and material men and similar Liens,
if the obligations secured by such Liens are not then delinquent or are being
contested in good faith by appropriate proceedings conducted and for the payment
of which the relevant party has made adequate reserves; (c) statutory Liens
incidental to the conduct of the business of the relevant party which were not
incurred in connection with the borrowing of money or the obtaining of advances
or credits and that do not in the aggregate materially detract from the value of
its property or materially impair the use thereof in the operation of its
business; and (d) Liens that would not have a Material Adverse
Effect.
1.36 “Person” means all natural
persons, corporations, business trusts, associations, companies, partnerships,
limited liability companies, joint ventures and other entities, governments,
agencies and political subdivisions.
1.37 “PRC” means the People’s
Republic of China, excluding Taiwan, Hong Kong and Macau.
1.38 “PRC Company” means Keyuan
Plastics Co., Ltd (宁波科元塑胶有限公司), a
company organized under the laws of the PRC and a direct wholly-owned Subsidiary
of Keyuan Group Limited, a company organized under the laws of Hong
Kong.
1.39 “Proceeding” means any action,
arbitration, audit, hearing, investigation, litigation, or suit (whether civil,
criminal, administrative or investigative) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental
Authority.
1.40 “Regulation S” means Regulation
S under the Securities Act, as the same may be amended from time to time, or any
successor statute.
1.41 “Rule 144” means Rule 144 under
the Securities Act, as the same may be amended from time to time, or any
successor statute.
1.42 “Series M Certificate of
Designations” has the meaning set forth in the Background section of this
Agreement.
1.43 “Schedule 14(f) Filing” means
an information statement filed by the Acquiror Company on Schedule 14f-1 under
the Exchange Act.
5
1.44 “Schedules” means the several
schedules referred to and identified herein, setting forth certain disclosures,
exceptions and other information, data and documents referred to at various
places throughout this Agreement.
1.45 “SEC Documents” has the meaning
set forth in Section 6.25.
1.46 “Section 4(2)” means Section
4(2) under the Securities Act, as the same may be amended from time to time, or
any successor statute.
1.47 “Securities Act” means the
Securities Act of 1933, as amended, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the same will be in
effect at the time.
1.48 “Share Exchange” has the
meaning set forth in Section 2.1.
1.49 “Shares” means the issued and
outstanding Ordinary Shares.
1.50 “Subsidiary” means, with
respect to any Person, any corporation, limited liability company, joint venture
or partnership of which such Person (a) beneficially owns, either directly or
indirectly, more than 50% of (i) the total combined voting power of all classes
of voting securities of such entity, (ii) the total combined equity interests,
or (iii) the capital or profit interests, in the case of a partnership or
limited liability company; or (b) otherwise has the power to vote or to direct
the voting of sufficient securities to elect a majority of the board of
directors or similar governing body.
1.51 “Survival Period” has the
meaning set forth in Section 11.1.
1.52 “Taxes” means all foreign,
federal, state or local taxes, charges, fees, levies, imposts, duties and other
assessments, as applicable, including, but not limited to, any income,
alternative minimum or add-on, estimated, gross income, gross receipts, sales,
use, transfer, transactions, intangibles, ad valorem, value-added, franchise,
registration, title, license, capital, paid-up capital, profits, withholding,
payroll, employment, unemployment, excise, severance, stamp, occupation,
premium, real property, recording, personal property, federal highway use,
commercial rent, environmental (including, but not limited to, taxes under
Section 59A of the Code) or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest, penalties or additions to tax with respect to any of
the foregoing; and “Tax” means any of the foregoing Taxes.
1.53 “Tax Group” means any federal,
state, local or foreign consolidated, affiliated, combined, unitary or other
similar group of which the Acquiror Company is now or was formerly a
member.
1.54 “Tax Return” means any return,
declaration, report, claim for refund or credit, information return, statement
or other similar document filed with any Governmental Authority with respect to
Taxes, including any schedule or attachment thereto, and including any amendment
thereof.
6
1.55 “Transaction Documents” means,
collectively, all agreements, instruments and other documents to be executed and
delivered in connection with the transactions contemplated by this
Agreement.
1.56 “U.S.” means the United States
of America.
1.57 “U.S. Dollars” or “US $” means the currency of
the United States of America.
1.58 “U.S. Person” has the meaning
set forth in Regulation S under the Securities Act and set forth on Exhibit B
hereto.
SECTION
II
2.1 Share
Exchange. At the Closing, (i) the Shareholder shall transfer
50,000 Shares, representing all of the issued and outstanding Shares of the
Company to the Acquiror Company, and (ii) the Company’s deposit of $400,000
currently being held in escrow, shall be released to the Acquiror Company
Shareholder for the Repurchase in accordance with an escrow agreement and in
consideration therefor, subject to Section 2.2, Acquiror Company shall issue
47,658 fully paid and nonassessable Acquiror Company Preferred Shares (the
“Share Exchange”) to the
Shareholder
2.2 Withholding. The
Acquiror Company shall be entitled to deduct and withhold from the Acquiror
Company Shares otherwise issuable pursuant to this Agreement to any Shareholder
such amounts as it is required to deduct and withhold with respect to the making
of such payment under the Code or any provision of state, local, provincial or
foreign tax Law. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to such Shareholder in respect of which such deduction and withholding
was made.
2.3 Directors of Acquiror
Company at Closing Date. On the Closing Date, the current sole
director of the Acquiror Company shall appoint Xx. Xxxxxxxx Xxx to serve as a
member and Chairman of the Acquiror Company Board to be effective on the tenth
day after the mailing of the Schedule 14(f) to the stockholders of record of the
Acquiror Company (the “Effective
Time”). On the Closing Date, Xxxxx shall tender his
resignation as a director of the Acquiror Company to be effective at the
Effective Time.
2.4 Officers of Acquiror Company
at Closing Date. On the Closing Date, Xxxxx shall resign from
each officer position held at the Acquiror Company and the Acquiror Company
Board shall appoint Xx. Xxxxxxxx Xxx to serve as the President, Chief Executive
Officer, Chief Financial Officer, Treasurer and Secretary.
2.5 Section 368
Reorganization. For U.S. federal income tax purposes, the
Share Exchange is intended to constitute a “reorganization” within the
meaning of Section 368(a)(1)(B) of the Code. The parties to this
Agreement hereby adopt this Agreement as a “plan of reorganization” within
the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury
Regulations. Notwithstanding the foregoing or anything else to the
contrary contained in this Agreement, the parties acknowledge and agree that no
party is making any representation or warranty as to the qualification of the
Share Exchange as a reorganization under Section 368 of the Code or as to the
effect, if any, that any transaction consummated prior to the Closing Date has
or may have on any such reorganization status. The parties acknowledge and agree
that each (i) has had the opportunity to obtain independent legal and tax advice
with respect to the transaction contemplated by this Agreement, and (ii) is
responsible for paying its own Taxes, including without limitation, any adverse
Tax consequences that may result if the transaction contemplated by this
Agreement is not determined to qualify as a reorganization under Section 368 of
the Code.
7
SECTION
III
3.1 Closing
Date. The closing of the Share Exchange (the “Closing”) shall take place at
10:00 a.m. Eastern Time on the day all of the closing conditions set forth in
Sections 8 and 9 herein have been satisfied or waived, or at such other time and
date as the parties hereto shall agree in writing (the “Closing Date”), at the offices
of Xxxxxx & Xxxxxx, LLP, 000 Xxxxx 0 Xxxxx, Xxxxxxxxx, Xxx Xxxxxx
00000.
SECTION
IV
4.1 Generally. Subject
to the disclosures contained in the relevant Schedules attached hereto, the
Shareholder hereby represents and warrants to the Acquiror Company as
follows:
4.1.1 Authority. Such
Shareholder has the right, power, authority and capacity to execute and deliver
this Agreement and each of the Transaction Documents to which such Shareholder
is a party, to consummate the transactions contemplated by this Agreement and
each of the Transaction Documents to which such Shareholder is a party, and to
perform such Shareholder’s obligations under this Agreement and each of the
Transaction Documents to which such Shareholder is a party. This
Agreement has been, and each of the Transaction Documents to which such
Shareholder is a party will be, duly and validly authorized and approved,
executed and delivered by such Shareholder. Assuming this Agreement
and the Transaction Documents have been duly and validly authorized, executed
and delivered by the parties thereto other than such Shareholder, this Agreement
is, and each of the Transaction Documents to which such Shareholder is a party
have been, duly authorized, executed and delivered by such Shareholder and
constitutes the legal, valid and binding obligation of such Shareholder,
enforceable against such Shareholder in accordance with their respective terms,
except as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
4.1.2 No
Conflict. Neither the execution or delivery by such
Shareholder of this Agreement or any Transaction Document to which such
Shareholder is a party, nor the consummation or performance by such Shareholder
of the transactions contemplated hereby or thereby will, directly or indirectly,
(a) contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of such Shareholder (if such Shareholder is not a
natural person); (b) contravene, conflict with, constitute a default (or an
event or condition which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination or acceleration of, any agreement
or instrument to which such Shareholder is a party or by which the properties or
assets of such Shareholder are bound; or (c) contravene, conflict with, or
result in a violation of, any Law or Order to which such Shareholder, or any of
the properties or assets of such Shareholder, may be subject.
8
4.1.3 Ownership of
Shares. Such Shareholder owns, of record and beneficially, and
has good, valid and indefeasible title to and the right to transfer to the
Acquiror Company pursuant to this Agreement, such Shareholder’s Shares free and
clear of any and all Liens. Except as set forth on Schedule 4.1.3, there
are no options, rights, voting trusts, stockholder agreements or any other
contracts or understandings to which such Shareholder is a party or by which
such Shareholder or such Shareholder’s Shares are bound with respect to the
issuance, sale, transfer, voting or registration of such Shareholder’s
Shares. At the Closing Date, the Acquiror Company will acquire good,
valid and marketable title to such Shareholder’s Shares free and clear of any
and all Liens.
4.1.4 Litigation. There
is no pending Proceeding against such Shareholder that involves the Shares or
that challenges, or may have the effect of preventing, delaying or making
illegal, or otherwise interfering with, any of the transactions contemplated by
this Agreement and, to the knowledge of such Shareholder, no such Proceeding has
been threatened, and no event or circumstance exists that is reasonably likely
to give rise to or serve as a basis for the commencement of any such
Proceeding.
4.1.5 No Brokers or
Finders. No Person has, or as a result of the transactions
contemplated herein will have, any right or valid claim against such Shareholder
for any commission, fee or other compensation as a finder or broker, or in any
similar capacity, and such Shareholder will indemnify and hold the Acquiror
Company harmless against any liability or expense arising out of, or in
connection with, any such claim.
4.2 Investment
Representations. The Shareholder hereby represents and
warrants, solely with respect to the Acquiror Company as follows:
4.2.1 Acknowledgment. The
Shareholder understands and agrees that the Acquiror Company Preferred Shares to
be issued pursuant to this Agreement and the Share Exchange have not been
registered under the Securities Act or the securities laws of any state of the
U.S. and that the issuance of the Acquiror Company Preferred Shares is being
effected in reliance upon an exemption from registration afforded either under
Section 4(2) of the Securities Act for transactions by an issuer not involving a
public offering, Regulation D for offers and sales to accredited investors, or
Regulation S for offers and sales of securities outside the U.S.
4.2.2 Status. By its
execution of this Agreement, the Shareholder represents and warrants to the
Acquiror Company that
(a) the
Shareholder is an Accredited Investor; and
(b) the
Shareholder is not a U.S. Person.
9
The
Shareholder understands that the Acquiror Company Preferred Shares are being
offered and sold to the Shareholder in reliance upon the truth and accuracy of
the representations, warranties, agreements and understandings of the
Shareholder set forth in this Agreement, in order that the Acquiror Company may
determine the applicability and availability of the exemptions from registration
of the Acquiror Company Preferred Shares on which the Acquiror Company is
relying.
4.2.3 Additional Representations
and Warranties of the Shareholder as an Accredited Investor. The
Shareholder further makes the representations and warranties to the Acquiror
Company set forth on Exhibit
C.
4.2.4 Additional
Representations and Warranties of the Shareholder as a Non-U.S. Person. The
Shareholder further makes the representations and warranties to the Acquiror
Company set forth on Exhibit
D.
4.2.5 Stock
Legends. The Shareholder hereby agrees with the Acquiror
Company as follows:
(a) Securities Act Legend -
Accredited Investor. The certificate(s) evidencing the
Acquiror Company Preferred Shares issued to the Shareholder and the Conversion
Shares to be issued to the Shareholder upon the Automatic Conversion, and each
certificate issued in transfer thereof, will bear the following
legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS.
(b) Securities Act Legend -
Non-U.S. Person. The certificate(s) evidencing the Acquiror
Company Preferred Shares issued to the Shareholder and the Conversion Shares to
be issued to the Shareholder upon the Automatic Conversion, and each certificate
issued in transfer thereof, will bear the following legend:
10
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES
ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF REGULATION S HAVE
BEEN SATISFIED, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (3) PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.
(c) Other
Legends. The certificate(s) representing such Acquiror Company
Preferred Shares and the Conversion Shares to be issued to the Shareholder upon
the Automatic Conversion, and each certificate issued in transfer thereof, will
also bear any other legend required under any applicable Law, including, without
limitation, any U.S. state corporate and state securities law, or
contract.
(d) Opinion. The
Shareholder will not transfer any or all of the Acquiror Company Preferred
Shares or the Conversion Shares pursuant to Regulation S or absent an effective
registration statement under the Securities Act and applicable state securities
law covering the disposition of the Shareholder’s Acquiror Company Preferred
Shares or the Conversion Shares, as the case may be, without first providing the
Acquiror Company with an opinion of counsel (which counsel and opinion are
reasonably satisfactory to the Acquiror Company) to the effect that such
transfer will be made in compliance with Regulation S or will be exempt from the
registration and the prospectus delivery requirements of the Securities Act and
the registration or qualification requirements of any applicable U.S. state
securities laws.
(e) Consent. The
Shareholder understands and acknowledges that the Acquiror Company may refuse to
transfer the Acquiror Company Preferred Shares and the Conversion Shares, unless
the Shareholder complies with this Section 4.2.5 and any other restrictions on
transferability set forth in Exhibits C and D. The
Shareholder consents to the Acquiror Company making a notation on its records or
giving instructions to any transfer agent of the Acquiror Company’s preferred
stock and Common Stock in order to implement the restrictions on transfer of the
Acquiror Company Perferred Shares and the Conversion Shares.
11
SECTION
V
Subject
to the disclosures contained in the relevant Schedules attached hereto, the
Company represents and warrants to the Acquiror Company as follows:
5.1.1 The
Company is duly incorporated and validly existing under the laws of the British
Virgin Islands, has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted, to own, hold and operate its properties and
assets as now owned, held and operated by it, to enter into this Agreement, to
carry out the provisions hereof except where the failure to be so organized,
existing and in good standing or to have such authority or power will not, in
the aggregate, have a Material Adverse Effect. The Company is duly
qualified, licensed or domesticated as a foreign corporation in good standing in
each jurisdiction wherein the nature of its activities or its properties owned
or leased makes such qualification, licensing or domestication necessary, except
where the failure to be so qualified, licensed or domesticated will not have a
Material Adverse Effect. Set forth on Schedule 5.1 is a
list of those jurisdictions in which the Company presently conducts its
business, owns, holds and operates its properties and assets.
5.1.2 The HK
Company is duly organized, validly existing and in good standing under the laws
of Hong Kong, and has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and to own, hold and operate its properties and
assets as now owned, held and operated, except where the failure to be so
organized, existing and in good standing or to have such authority and power,
governmental licenses, authorizations, consents or approvals would not have a
Material Adverse Effect.
5.1.3 The PRC
Company is duly organized, validly existing and in good standing under the laws
of the PRC, and has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and to own, hold and operate its properties and
assets as now owned, held and operated, except where the failure to be so
organized, existing and in good standing or to have such authority and power,
governmental licenses, authorizations, consents or approvals would not have a
Material Adverse Effect. All registered capital and other capital
contributions have been duly paid up in accordance with the relevant PRC
regulations and requirements and all necessary capital verification reports have
been duly issued and not revoked.
5.2 Subsidiaries. Except
for the PRC Company and the HK Company and as set forth on Schedule 5.2, the
Company does not own directly or indirectly, any equity or other ownership
interest in any corporation, partnership, joint venture or other entity or
enterprise.
5.3.1 The
copies of the Memorandum and Articles of Association of the Company and the
documents which constitute all other Organizational Documents of the Company,
that have been delivered to the Acquiror Company prior to the execution of this
Agreement are true and complete and have not been amended or
repealed. The Company is not in violation or breach of any of the
provisions of its Organizational Documents.
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5.3.2 The
copies of the Memorandum and Articles of Association of the HK Company and the
documents which constitute all other Organizational Documents of the HK Company,
that have been delivered to the Acquiror Company prior to the execution of this
Agreement are true and complete and have not been amended or
repealed. The HK Company is not in violation or breach of any of the
provisions of its Organizational Documents.
5.3.3 True,
correct and complete translated copies of the Organizational Documents of the
PRC Company have been delivered to the Acquiror Company prior to the execution
of this Agreement, and no action has been taken to amend or repeal such
Organizational Documents. The PRC Company is not in violation or
breach of any of the provisions of its Organizational Documents.
5.4 Authorization and Validity
of this Agreement. The Company has all requisite authority and
power (corporate and other), authorizations, consents and approvals to enter
into this Agreement and each of the Transaction Documents to which the Company
is a party, to consummate the transactions contemplated by this Agreement and
each of the Transaction Documents to which the Company is a party, to perform
its obligations under this Agreement and each of the Transaction Documents to
which the Company is a party, and to record the transfer of the Shares and the
delivery of the new certificates representing the Shares registered in the name
of the Acquiror Company. The execution, delivery and performance by
the Company of this Agreement and each of the Transaction Documents to which the
Company is a party have been duly authorized by all necessary corporate action
and do not require from the Company Board or the Shareholder any consent or
approval that has not been validly and lawfully obtained. The
execution, delivery and performance by the Company of this Agreement and each of
the Transaction Documents to which the Company is a party requires no
authorization, consent, approval, license, exemption of or filing or
registration with any Governmental Authority or other Person.
5.5 No
Violation. Neither the execution nor the delivery by the
Company of this Agreement or any Transaction Document to which the Company is a
party, nor the consummation or performance by the Company of the transactions
contemplated hereby or thereby will, directly or indirectly, (a) contravene,
conflict with, or result in a violation of any provision of the Organizational
Documents of the Company; (b) contravene, conflict with, constitute a default
(or an event or condition which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or acceleration of, or
result in the imposition or creation of any Lien under, any agreement or
instrument to which the Company is a party or by which the properties or assets
of the Company are bound ; (c) contravene, conflict with, or result in a
violation of, any Law or Order to which the Company, or any of the properties or
assets owned or used by the Company, may be subject; or (d) contravene, conflict
with, or result in a violation of, the terms or requirements of, or give any
Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate
or modify, any licenses, permits, authorizations, approvals, franchises or other
rights held by the Company or that otherwise relate to the business of, or any
of the properties or assets owned or used by, the Company, except, in the cases
of clauses (b), (c) and (d), for any such contraventions, conflicts, violations,
or other occurrences as would not have a Material Adverse Effect.
13
5.6 Binding
Obligations. Assuming this Agreement and the Transaction
Documents have been duly and validly authorized, executed and delivered by the
parties hereto and thereto other than the Company, this Agreement and each of
the Transaction Documents to which the Company is a party are duly authorized,
executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforcement is limited by
general equitable principles, or by bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors rights generally.
5.7.1 Capitalization of the
Company. The authorized capital stock of the Company consists
of 50,000 Ordinary Shares, of which 50,000 shares are issued and
outstanding. Except as set forth on Schedule 5.7.1, there
are no outstanding or authorized options, warrants, calls, purchase agreements,
participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require the Company to issue,
sell or otherwise cause to become outstanding any of its authorized but unissued
shares of capital stock or any securities convertible into, exchangeable for or
carrying a right or option to purchase shares of capital stock or to create,
authorize, issue, sell or otherwise cause to become outstanding any new class of
capital stock. There are no outstanding stockholders’ agreements,
voting trusts or arrangements, registration rights agreements, rights of first
refusal or other contracts pertaining to the capital stock of the
Company. The issuance of all of the Ordinary Shares described in this
Section 5.7.1 has been in compliance with the laws of the British Virgin
Islands. All issued and outstanding shares of the Company’s capital
stock are duly authorized, validly issued, fully paid and nonassessable and have
not been issued in violation of any preemptive or similar rights. The
owners of the Ordinary Shares of the Company own, and have good, valid and
marketable title to, all the Ordinary Shares of the Company.
5.7.2 Capitalization of the HK
Company. The authorized capital stock of the HK Company
consists of 10,000 ordinary shares, par value HK$1.00 per share, of which 10,000
shares are issued and outstanding. Except as set forth on Schedule 5.7.2, there
are no outstanding or authorized options, warrants, calls, purchase agreements,
participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require the HK Company to
issue, sell or otherwise cause to become outstanding any of its authorized but
unissued shares of capital stock or any securities convertible into,
exchangeable for or carrying a right or option to purchase shares of capital
stock or to create, authorize, issue, sell or otherwise cause to become
outstanding any new class of capital stock. There are no outstanding
stockholders’ agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the capital
stock of the HK Company. The issuance of all of the ordinary shares
of the HK Company described in this Section 5.7.2 has been in compliance with
the laws of Hong Kong. All issued and outstanding shares of the HK
Company’s capital stock are duly authorized, validly issued, fully paid and
nonassessable and have not been issued in violation of any preemptive or similar
rights. The owner of the ordinary shares of the HK Company owns, and
has good, valid and marketable title to, all the ordinary shares of the HK
Company.
14
5.7.3 Capitalization of the PRC
Company. The capitalization of the PRC Company is set forth on
Schedule
5.7.3(a). There are no outstanding options, warrants or commitments in
respect of increase of registered capital or transfer of equity interest of the
company as of the date hereof. The equity interest of the PRC Company
is free of any liens or encumbrances other than any liens or encumbrances
created by or imposed upon the holder thereof, and is not subject to preemptive
rights or rights of first refusal created by statute, their respective
organizational documents or any agreement to which the Company is a party or by
which it is bound, and such equity interest set forth on Schedule 5.7.3(a)
constitutes all of the equity interest of the PRC Company. All
registered capital and other capital contributions regarding the PRC Company
have been duly paid up in accordance with the relevant PRC regulations and
requirements and all necessary capital verification reports have been duly
issued and not revoked or withdrawn. The owners of the equity
interest of the PRC Company own, and have good, valid and marketable title to,
all equity interest of the PRC Company. There are no outstanding or
authorized options, warrants, purchase agreements, participation agreements,
subscription rights, conversion rights, exchange rights or other securities or
contracts that could require the PRC Company to increase its registered capital,
sell or transfer its equity interest, or otherwise to cause any change on the
ownership of its equity interest. There are no outstanding
stockholders’ agreements, voting trusts or arrangements, rights of first refusal
or other contracts pertaining to the equity interest of the PRC
Company. None of the outstanding equity interest of the PRC Company
has been owned in violation of any rights of any Person or in violation of any
Law.
5.7.4 No Redemption
Requirements. There are no outstanding contractual obligations
(contingent or otherwise) of the Company to retire, repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of, or other ownership
interests in, the Company or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any other
Person.
5.8 Compliance with Laws and
Other Instruments. Except as would not have a Material Adverse
Effect, the business and operations of the Company, the HK Company and the PRC
Company have been and are being conducted in accordance with all applicable Laws
and Orders. Except as would not have a Material Adverse Effect,
neither the Company, the HK Company, nor the PRC Company has received notice of
any violation (or any Proceeding involving an allegation of any violation) of
any applicable Law or Order by or affecting the Company, the HK Company or the
PRC Company and, to the knowledge of the Company, each HK Company and the PRC
Company, no Proceeding involving an allegation of violation of any applicable
Law or Order is threatened or contemplated. Except as would not have
a Material Adverse Effect, neither the Company, the HK Company, nor the PRC
Company is, and is not alleged to be, in violation of, or (with or without
notice or lapse of time or both) in default under, or in breach of, any term or
provision of its Organizational Documents or of any indenture, loan or credit
agreement, note, deed of trust, mortgage, security agreement or other material
agreement, lease, license or other instrument, commitment, obligation or
arrangement to which the Company is a party or by which any of the Company’s
properties, assets or rights are bound or affected. To the knowledge
of the Company, each HK Company and the PRC Company, no other party to any
material contract, agreement, lease, license, commitment, instrument or other
obligation to which the Company, the HK Company or the PRC Company is a party is
(with or without notice or lapse of time or both) in default thereunder or in
breach of any term thereof. The Company is not subject to any
obligation or restriction of any kind or character, nor is there, to the
knowledge of the Company, any event or circumstance relating to the Company, the
HK Company or the PRC Company that materially and adversely affects in any way
its business, properties, assets or prospects or that prohibits the Company from
entering into this Agreement or would prevent or make burdensome its performance
of or compliance with all or any part of this Agreement or the consummation of
the transactions contemplated hereby or thereby.
15
5.9 Certain
Proceedings. There is no pending Proceeding that has been
commenced against the Company and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated in this Agreement. To the Company’s
knowledge, no such Proceeding has been threatened.
5.10 No Brokers or
Finders. Except as disclosed in Schedule 5.10, no Person has,
or as a result of the transactions contemplated herein will have, any right or
valid claim against the Company for any commission, fee or other compensation as
a finder or broker, or in any similar capacity, and the Company will indemnify
and hold the Acquiror Company harmless against any liability or expense arising
out of, or in connection with, any such claim.
5.11 Title to and Condition of
Properties. Except as would not have a Material Adverse
Effect, the Company owns (with good and marketable title in the case of real
property) or holds under valid leases or other rights to use all real property,
plants, machinery and equipment necessary for the conduct of the business of the
Company as presently conducted, free and clear of all Liens, except Permitted
Liens. The material buildings, plants, machinery and equipment
necessary for the conduct of the business of the Company as presently conducted
are structurally sound, are in good operating condition and repair and are
adequate for the uses to which they are being put, in each case, taken as a
whole, and none of such buildings, plants, machinery or equipment is in need of
maintenance or repairs, except for ordinary, routine maintenance and repairs
that are not material in nature or cost.
5.12 Board
Recommendation. The Company Board has, by unanimous written
consent, determined that this Agreement and the transactions contemplated by
this Agreement, are advisable and in the best interests of the Company and its
Shareholder.
5.13 Intellectual
Property. The Company and each of the Company Subsidiaries
owns or possesses all patents, trademarks, domain names (whether or not
registered) and any patentable improvements or copyrightable derivative works
thereof, websites and intellectual property rights relating thereto, service
marks, trade names, copyrights, licenses and authorizations, and all rights with
respect to the foregoing, which are necessary for the conduct of its business as
now conducted without any conflict with the rights of others.
5.14 Due
Diligence. The Company has had the opportunity to perform all
due diligence investigations of the Acquiror Company and its business that the
Company has deemed necessary or appropriate and to ask all questions of the
officers and directors of the Acquiror Company that the Company wished to
ask. The Company has reviewed sufficient information to allow it to
make the satisfactory evaluation on the merits and risks of the transactions
contemplated by this Agreement. Notwithstanding the foregoing,
nothing herein shall derogate from or otherwise modify the representations and
warranties of the Acquiror Company set forth in this Agreement, on which the
Shareholder has relied in making an exchange of his Shares of the Company for
the Acquiror Company Preferred Shares.
16
5.15 Liabilities. Except
as indicated in the financial statements and those incurred in the ordinary
business hereto, since December 31, 2009, neither the Company or the Company
Subsidiaries has incurred any external liabilities, obligations, claims or
losses (whether liquidated or unliquidated, secured or unsecured, absolute,
accrued, contingent or otherwise) which, individually or in the aggregate, are
reasonably likely to cause a Material Adverse Effect.
5.16 Adverse
Interest. No current officer, director or Person known to the
Company or the Company Subsidiaries to be the record or beneficial owner in
excess of 5% of such entity’s outstanding stock, is a party adverse to the
Company or the Company Subsidiaries or has a material interest adverse to the
Company or the Company Subsidiaries in any material pending
Proceeding.
5.17 No Material Adverse
Effect. Since December 31, 2009, the Company and the Company
Subsidiaries has not suffered a Material Adverse Effect.
SECTION
VI
Subject
to the disclosures contained in the relevant Schedules attached hereto, the
Acquiror Company and the Acquiror Company Principal Shareholder, jointly and
severally, represent and warrant to the Shareholder and the Company as
follows:
6.1 Organization and
Qualification. The Acquiror Company is duly organized, validly
existing and in good standing under the laws of Nevada, has all requisite
corporate authority and power, governmental licenses, authorizations, consents
and approvals to carry on its business as presently conducted and to own, hold
and operate its properties and assets as now owned, held and operated by it. The
Acquiror Company is duly qualified, licensed or domesticated as a foreign
corporation in good standing in each jurisdiction wherein the nature of its
activities or its properties owned, held or operated makes such qualification,
licensing or domestication necessary, except where the failure to be so duly
qualified, licensed or domesticated and in good standing would not have a
Material Adverse Effect. Schedule 6.1 sets
forth a true, correct and complete list of the Acquiror Company’s jurisdiction
of organization and each other jurisdiction in which the Acquiror Company
presently conducts its business or owns, holds and operates its properties and
assets.
6.2 Subsidiaries. Except
as disclosed in Schedule 6.2, the
Acquiror Company does not own, directly or indirectly, any equity or other
ownership interest in any corporation, partnership, joint venture or other
entity or enterprise.
6.3 Organizational
Documents. True, correct and complete copies of the
Organizational Documents of the Acquiror Company have been delivered to the
Company prior to the execution of this Agreement, and no action has been taken
to amend or repeal such Organizational Documents since such date of
delivery. The Acquiror Company is not in violation or breach of any
of the provisions of its Organizational Documents.
17
6.4 Authorization. The
Acquiror Company and the Acquiror Company Principal Shareholder have all
requisite authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to enter into this Agreement and each of
the Transaction Documents to which the Acquiror Company and the Acquiror Company
Principal Shareholder is a party, to consummate the transactions contemplated by
this Agreement and each of the Transaction Documents to which the Acquiror
Company and the Acquiror Company Principal Shareholder is a party and to perform
its obligations under this Agreement and each of the Transaction Documents to
which the Acquiror Company and the Acquiror Company Principal Shareholder is a
party. The execution, delivery and performance by the Acquiror
Company and the Acquiror Company Principal Shareholder of this Agreement and
each of the Transaction Documents to which the Acquiror Company and the Acquiror
Company Principal Shareholder is a party have been duly authorized by all
necessary corporate action and do not, other than approval by the Acquiror
Company stockholders in relation to the actions contemplated by the Schedule 14F
Filing, require from the Acquiror Company Board any consent or approval that has
not been validly and lawfully obtained. The execution, delivery and
performance by the Acquiror Company and the Acquiror Company Principal
Shareholder of this Agreement and each of the Transaction Documents to which the
Acquiror Company and the Acquiror Company Principal Shareholder is a party
requires no authorization, consent, approval, license, exemption of or filing or
registration with any Governmental Authority or other Person other than such
other customary filings with the Commission for transactions of the type
contemplated by this Agreement and the Transaction Documents.
6.5 No
Violation. Neither the execution nor the delivery by the
Acquiror Company and the Acquiror Company Principal Shareholder of this
Agreement or any Transaction Document to which the Acquiror Company and the
Acquiror Company Principal Shareholder is a party, nor the consummation or
performance by the Acquiror Company and the Acquiror Company Principal
Shareholder of the transactions contemplated hereby or thereby will, directly or
indirectly, (a) contravene, conflict with, or result in a violation of any
provision of the Organizational Documents of the Acquiror Company; (b)
contravene, conflict with, constitute a default (or an event or condition which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination or acceleration of, or result in the imposition or
creation of any Lien under, any agreement or instrument to which the Acquiror
Company or the Acquiror Company Principal Shareholder is a party or by which the
properties or assets of the Acquiror Company or the Acquiror Company Principal
Shareholder are bound; (c) contravene, conflict with, or result in a
violation of, any Law or Order to which the Acquiror Company or the Acquiror
Company Principal Shareholder, or any of the properties or assets owned or used
by the Acquiror Company or the Acquiror Company Principal Shareholder, may be
subject; or (d) contravene, conflict with, or result in a violation of, the
terms or requirements of, or give any Governmental Authority the right to
revoke, withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by the Acquiror
Company or the Acquiror Company Principal Shareholder or that otherwise relate
to the business of, or any of the properties or assets owned or used by, the
Acquiror Company or the Acquiror Company Principal Shareholder, except, in the
case of clauses (b), (c), or (d), for any such contraventions, conflicts,
violations, or other occurrences as would not have a Material Adverse
Effect.
18
6.6 Binding
Obligations. Assuming this Agreement and the Transaction
Documents have been duly and validly authorized, executed and delivered by the
parties hereto and thereto other than the Acquiror Company and the Acquiror
Company Principal Shareholder, this Agreement and each of the Transaction
Documents to which the Acquiror Company and the Acquiror Company Principal
Shareholder is a party are duly authorized, executed and delivered by the
Acquiror Company and the Acquiror Company Principal Shareholder and constitutes
the legal, valid and binding obligations of the Acquiror Company and the
Acquiror Company Principal Shareholder, enforceable against the Acquiror Company
and the Acquiror Company Principal Shareholder in accordance with their
respective terms, except as such enforcement is limited by general equitable
principles, or by bankruptcy, insolvency and other similar Laws affecting the
enforcement of creditors rights generally.
6.7 Securities
Laws. Assuming the accuracy of the representations and
warranties of the Shareholder, contained in Section 4 and Exhibits B, the
issuance of the Acquiror Company Preferred Shares pursuant to this Agreement
will be when issued and paid for in accordance with the terms of this Agreement
issued in accordance with exemptions from the registration and prospectus
delivery requirements of the Securities Act and the registration permit or
qualification requirements of all applicable state securities laws.
6.8.1 Capitalization. The
authorized capital stock of the Acquiror Company consists of 70,000,000 shares:
50,000,000 shares of the Acquiror Company’s Common Stock are authorized, par
value $0.001, of which 5,696,800 shares are issued and outstanding immediately
prior to the Repurchase and 2,432,800 are issued and outstanding immediately
after the Repurchase; 20,000,000 shares of the Acquiror Company’s preferred
stock are authorized, par value $0.001, of which none are issued or outstanding.
All issued and outstanding shares of the Acquiror Company’s Common Stock
immediately prior to the Repurchase and the Share Exchange are duly authorized,
validly issued, fully paid and nonassessable, and have not been issued in
violation of any preemptive or similar rights. At the Closing Date, the Acquiror
Company will have sufficient authorized and unissued Acquiror Company’s Common
Stock and Preferred Stock to consummate the transactions contemplated hereby.
There are no outstanding options, warrants, purchase agreements, participation
agreements, subscription rights, conversion rights, exchange rights or other
securities or contracts that could require the Acquiror Company to issue, sell
or otherwise cause to become outstanding any of its authorized but unissued
shares of capital stock or any securities convertible into, exchangeable for or
carrying a right or option to purchase shares of capital stock or to create,
authorize, issue, sell or otherwise cause to become outstanding any new class of
capital stock. There are no outstanding stockholders’ agreements,
voting trusts or arrangements, registration rights agreements, rights of first
refusal or other contracts pertaining to the capital stock of the Acquiror
Company. The issuance of all of the shares of Acquiror Company’s
Common Stock described in this Section 6.8.1 have been in compliance with U.S.
federal and state securities laws and state corporate laws and no stockholder of
the Acquiror Company has any right to rescind or bring any other claim against
the Acquiror Company for failure to comply under the Securities Act, or state
securities laws.
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6.8.2 No Redemption
Requirements. Except as contemplated by the Repurchase, there
are no outstanding contractual obligations (contingent or otherwise) of the
Acquiror Company to retire, repurchase, redeem or otherwise acquire any
outstanding shares of capital stock of, or other ownership interests in, the
Acquiror Company or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any other Person.
6.8.3 Duly
Authorized. The issuance of the Acquiror Company Preferred
Shares has been duly authorized and, upon delivery to the Shareholder of
certificates therefor in accordance with the terms of this Agreement, the
Acquiror Company Preferred Shares will have been validly issued and fully paid,
and will be nonassessable, have the rights, preferences and privileges
specified, will be free of preemptive rights and will be free and clear of all
Liens and restrictions, other than Liens created by the Shareholder and
restrictions on transfer imposed by this Agreement and the Securities
Act.
6.9 Compliance with
Laws. The business and operations of the Acquiror Company have
been and are being conducted in accordance with all applicable Laws and Orders.
The Acquiror Company has not received notice of any violation (or any Proceeding
involving an allegation of any violation) of any applicable Law or Order by or
affecting the Acquiror Company and, to the knowledge of the Acquiror Company, no
Proceeding involving an allegation of violation of any applicable Law or Order
is threatened or contemplated. The Acquiror Company is not subject to
any obligation or restriction of any kind or character, nor is there, to the
knowledge of the Acquiror Company, any event or circumstance relating to the
Acquiror Company that materially and adversely affects in any way its business,
properties, assets or prospects or that prohibits the Acquiror Company from
entering into this Agreement or would prevent or make burdensome its performance
of or compliance with all or any part of this Agreement or the consummation of
the transactions contemplated hereby.
6.10 Certain
Proceedings. There is no pending Proceeding that has been
commenced against the Acquiror Company and that challenges, or may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the transactions contemplated by this Agreement. To the
knowledge of the Acquiror Company, no such Proceeding has been
threatened.
6.11 No Brokers or
Finders. Except as disclosed in Schedule 6.11, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against the Acquiror Company for any commission, fee or
other compensation as a finder or broker, or in any similar capacity, and after
the Closing, the Acquiror Company Principal Shareholder will indemnify and hold
the Acquiror Company and the Company harmless against any liability or expense
arising out of, or in connection with, any such claim.
6.12 Absence of Undisclosed
Liabilities. Except as set forth on Schedule 6.12 or in
the SEC Documents, as hereafter defined, the Acquiror Company has no debt,
obligation or liability (whether accrued, absolute, contingent, liquidated or
otherwise, whether due or to become due, whether or not known to the Acquiror
Company) arising out of any transaction entered into at or prior to the Closing
Date or any act or omission at or prior to the Closing Date, except to the
extent set forth on or reserved against on the Acquiror Company Balance
Sheet. Any and all debts, obligations or liabilities with respect to
directors and officers of the Acquiror Company and of the Acquiror Company will
be cancelled prior to the Closing. The Acquiror Company has not
incurred any liabilities or obligations under agreements entered into, in the
usual and ordinary course of business since December 31, 2009.
20
6.13 Changes. Except
as set forth on Schedule 6.13 or in
the SEC Documents, the Acquiror Company has conducted its business in the usual
and ordinary course of business consistent with past practice and has
not:
6.13.1 Ordinary Course of
Business. Entered into any transaction other than in the usual
and ordinary course of business, except for this Agreement and each of the
Transaction Documents;
6.13.2 Adverse
Changes. Suffered or experienced any change in, or affecting,
its condition (financial or otherwise), properties, assets, liabilities,
business, operations, results of operations or prospects other than changes,
events or conditions in the usual and ordinary course of its business or those
that would not have a Material Adverse Effect;
6.13.3 Loans. Made
any loans or advances to any Person other than travel advances and reimbursement
of expenses made to employees, officers and directors in the ordinary course of
business;
6.13.4 Liens. Created
or permitted to exist any Lien on any material property or asset of the Acquiror
Company, other than Permitted Liens;
6.13.5 Capital
Stock. Issued, sold, disposed of or encumbered, or authorized
the issuance, sale, disposition or encumbrance of, or granted or issued any
option to acquire any shares of its capital stock or any other of its securities
or any Equity Security, or altered the term of any of its outstanding securities
or made any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise;
6.13.6 Dividends. Declared,
set aside, made or paid any dividend or other distribution to any of its
stockholders;
6.13.7 Material Acquiror Company
Contracts. Terminated or modified any Material Acquiror
Company Contract, except for termination upon expiration in accordance with the
terms thereof;
6.13.8 Claims. Released,
waived or cancelled any claims or rights relating to or affecting the Acquiror
Company in excess of US $10,000 in the aggregate or instituted or settled any
Proceeding involving in excess of US $10,000 in the aggregate;
6.13.9 Discharged
Liabilities. Paid, discharged or satisfied any claim,
obligation or liability in excess of US $10,000 in the aggregate, except for
liabilities incurred prior to the date of this Agreement in the ordinary course
of business;
21
6.13.10 Indebtedness. Created,
incurred, assumed or otherwise become liable for any Indebtedness in excess of
US $10,000 in the aggregate, other than professional fees;
6.13.11 Guarantees. Guaranteed
or endorsed in a material amount any obligation or net worth of any
Person;
6.13.12 Acquisitions. Acquired
the capital stock or other securities or any ownership interest in, or
substantially all of the assets of, any other Person;
6.13.13 Accounting. Changed
its method of accounting or the accounting principles or practices utilized in
the preparation of its financial statements, other than as required by
GAAP;
6.13.14 Agreements. Entered
into any agreement, or otherwise obligated itself, to do any of the
foregoing.
6.14 Material Acquiror Company
Contracts. The Acquiror Company has provided to the Company,
prior to the date of this Agreement, true, correct and complete copies of each
written Material Acquiror Company Contract, including each amendment, supplement
and modification thereto.
6.14.1 No
Defaults. Each Material Acquiror Company Contract is a valid
and binding agreement of the Acquiror Company that is party thereto, and is in
full force and effect. The Acquiror Company is not in breach or
default of any Material Acquiror Company Contract to which it is a party and, to
the knowledge of the Acquiror Company, no other party to any Material Acquiror
Company Contract is in breach or default thereof. No event has
occurred or circumstance exists that (with or without notice or lapse of time)
would (a) contravene, conflict with or result in a violation or breach of, or
become a default or event of default under, any provision of any Material
Acquiror Company Contract or (b) permit the Acquiror Company or any other Person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate or modify any Material
Acquiror Company Contract. The Acquiror Company has not received
notice of the pending or threatened cancellation, revocation or termination of
any Material Acquiror Company Contract to which it is a party. There
are no renegotiations of, or attempts to renegotiate, or outstanding rights to
renegotiate any material terms of any Material Acquiror Company
Contract.
6.15 Employees.
6.15.1 Except as
set forth on Schedule
6.15.1, the Acquiror Company has no employees, independent contractors or
other Persons providing services to them. Except as would not have a
Material Adverse Effect, the Acquiror Company is in full compliance with all
Laws regarding employment, wages, hours, benefits, equal opportunity, collective
bargaining, the payment of Social Security and other taxes, and occupational
safety and health. The Acquiror Company is not liable for the payment
of any compensation, damages, taxes, fines, penalties or other amounts, however
designated, for failure to comply with any of the foregoing Laws.
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6.15.2 No
director, officer or employee of the Acquiror Company is a party to, or is
otherwise bound by, any contract (including any confidentiality, non-competition
or proprietary rights agreement) with any other Person that in any way adversely
affects or will materially affect (a) the performance of his or her duties as a
director, officer or employee of the Acquiror Company or (b) the ability of the
Acquiror Company to conduct its business. Except as set forth on
Schedule
6.15.2, each employee of the Acquiror Company is employed on an at-will
basis and the Acquiror Company does not have any contract with any of its
employees which would interfere with its ability to discharge its
employees.
6.16 Tax Returns and
Audits.
6.16.1 Tax
Returns. The Acquiror Company has filed all material Tax
Returns required to be filed (if any) by or on behalf of the Acquiror Company
and has paid all material Taxes of the Acquiror Company required to have been
paid (whether or not reflected on any Tax Return). No Governmental
Authority in any jurisdiction has made a claim, assertion or threat to the
Acquiror Company that the Acquiror Company is or may be subject to taxation by
such jurisdiction; there are no Liens with respect to Taxes on the Acquiror
Company’s property or assets other than Permitted Liens; and there are no Tax
rulings, requests for rulings, or closing agreements relating to the Acquiror
Company for any period (or portion of a period) that would affect any period
after the date hereof.
6.16.2 No Adjustments,
Changes. Neither the Acquiror Company nor any other Person on
behalf of the Acquiror Company (a) has executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign law; or (b) has
agreed to or is required to make any adjustments pursuant to Section 481(a) of
the Code or any similar provision of state, local or foreign law.
6.16.3 No
Disputes. There is no pending audit, examination,
investigation, dispute, proceeding or claim with respect to any Taxes of the
Acquiror Company, nor is any such claim or dispute pending or
contemplated. The Acquiror Company has delivered to the Company true,
correct and complete copies of all Tax Returns and examination reports and
statements of deficiencies assessed or asserted against or agreed to by the
Acquiror Company, if any, since its inception and any and all correspondence
with respect to the foregoing.
6.16.4 Not a U.S. Real Property
Holding Corporation. The Acquiror Company is not and has not
been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code at any time during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.
6.16.5 No Tax Allocation,
Sharing. The Acquiror Company is not and has not been a party
to any Tax allocation or sharing agreement.
23
6.16.6 No Other
Arrangements. The Acquiror Company is not a party to any
agreement, contract or arrangement for services that would result, individually
or in the aggregate, in the payment of any amount that would not be deductible
by reason of Section 162(m), 280G or 404 of the Code. The
Acquiror Company is not a “consenting corporation” within the meaning of Section
341(f) of the Code. The Acquiror Company does not have any
“tax-exempt bond financed property” or “tax-exempt use property” within the
meaning of Section 168(g) or (h), respectively of the Code. The
Acquiror Company does not have any outstanding closing agreement, ruling
request, request for consent to change a method of accounting, subpoena or
request for information to or from a Governmental Authority in connection with
any Tax matter. During the last two years, the Acquiror Company has
not engaged in any exchange with a related party (within the meaning of Section
1031(f) of the Code) under which gain realized was not recognized by reason of
Section 1031 of the Code. The Company is not a party to any
reportable transaction within the meaning of Treasury Regulation Section
1.6011-4.
6.17 Material
Assets. The financial statements of the Acquiror Company set
forth in the SEC Documents reflect the material properties and assets (real and
personal) owned or leased by the Acquiror Company.
6.18 Litigation;
Orders. There is no Proceeding (whether federal, state, local
or foreign) pending or, to the knowledge of the Acquiror Company, threatened
against or affecting the Acquiror Company or any of Acquiror Company’s
properties, assets, business or employees. To the knowledge of the
Acquiror Company, there is no fact that might result in or form the basis for
any such Proceeding. The Acquiror Company is not subject to any
Orders.
6.19 Licenses. The
Acquiror Company possesses from the appropriate Governmental Authority all
licenses, permits, authorizations, approvals, franchises and rights that are
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties and
assets in the manner in which it currently owns and uses such properties and
assets (collectively, “Acquiror
Company Permits”). The Acquiror Company has not received
notice from any Governmental Authority or other Person that there is lacking any
license, permit, authorization, approval, franchise or right necessary for the
Acquiror Company to engage in its business as currently conducted and to permit
the Acquiror Company to own and use its properties and assets in the manner in
which it currently owns and uses such properties and assets. The
Acquiror Company Permits are valid and in full force and effect. No
event has occurred or circumstance exists that may (with or without notice or
lapse of time): (a) constitute or result, directly or indirectly, in
a violation of or a failure to comply with any Acquiror Company Permit; or (b)
result, directly or indirectly, in the revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any Acquiror Company
Permit. The Acquiror Company has not received notice from any
Governmental Authority or any other Person regarding: (a) any actual,
alleged, possible or potential contravention of any Acquiror Company Permit; or
(b) any actual, proposed, possible or potential revocation, withdrawal,
suspension, cancellation, termination of, or modification to, any Acquiror
Company Permit. All applications required to have been filed for the
renewal of such Acquiror Company Permits have been duly filed on a timely basis
with the appropriate Persons, and all other filings required to have been made
with respect to such Acquiror Company Permits have been duly made on a timely
basis with the appropriate Persons. All Acquiror Company Permits are
renewable by their terms or in the ordinary course of business without the need
to comply with any special qualification procedures or to pay any amounts other
than routine fees or similar charges, all of which have, to the extent due, been
duly paid.
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6.20 Interested Party
Transactions. Except as set forth on Schedule 6.20, no
officer, director or stockholder of the Acquiror Company or any Affiliate or
“associate” (as such term is defined in Rule 405 of the Commission under the
Securities Act) of any such Person, has or has had, either directly or
indirectly, (1) an interest in any Person which (a) furnishes or sells services
or products which are furnished or sold or are proposed to be furnished or sold
by the Acquiror Company, or (b) purchases from or sells or furnishes to, or
proposes to purchase from, sell to or furnish the Acquiror Company any goods or
services; or (2) a beneficial interest in any contract or agreement to which the
Acquiror Company is a party or by which it may be bound or
affected.
6.21 Governmental
Inquiries. The Acquiror Company has provided to the Company a
copy of each material written inspection report, questionnaire, inquiry, demand
or request for information received by the Acquiror Company from any
Governmental Authority, and the Acquiror Company’s response thereto, and each
material written statement, report or other document filed by the Acquiror
Company with any Governmental Authority.
6.22 Bank Accounts and Safe
Deposit Boxes. Except as set forth on Schedule 6.22, the
Acquiror Company does not have any bank or other deposit or financial account,
nor does the Acquiror Company have any lock boxes or safety deposit
boxes.
6.23 Intellectual
Property. The Acquiror Company does not own, use or license
any Intellectual Property in its business as presently conducted.
6.24 Title to
Properties. The Acquiror Company owns (with good and
marketable title in the case of real property) or holds under valid leases the
rights to use all real property, plants, machinery, equipment and other personal
property necessary for the conduct of its business as presently conducted, free
and clear of all Liens, except Permitted Liens.
6.25 SEC Documents; Financial
Statements. Except as set forth on Schedule 6.25, the
Acquiror Company has filed all reports required to be filed by it under the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
three (3) years preceding the date hereof (or such shorter period as the
Acquiror Company was required by law to file such material) (the foregoing
materials being collectively referred to herein as the “SEC Documents”). As
of their respective dates, the SEC Documents and any registration statements
filed under the Securities Act (the “Registration Statements”)
complied in all material respects with the requirements of the Exchange Act and
the Securities Act, as applicable, and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents or Registration
Statements, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. All Material Acquiror Company
Contracts to which the Acquiror Company is a party or to which the property or
assets of the Acquiror Company are subject have been appropriately filed as
exhibits to the SEC Documents and the Registration Statements as and to the
extent required under the Exchange Act and the Securities Act, as
applicable. The financial statements of the Acquiror Company included
in the Registration Statement and the SEC Documents comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing, were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto, or, in the
case of unaudited statements as permitted by Form 10-Q of the Commission), and
fairly present in all material respects (subject in the case of unaudited
statements, to normal, recurring audit adjustments) the financial position of
the Acquiror Company as at the dates thereof and the results of its operations
and cash flows for the periods then ended. The Acquiror Company was
originally organized and operated through the date hereof as a bona fide
operating business without any pre-existing plan or strategy that the Acquiror
Company would serve primarily as a merger or acquisition candidate for an
unidentified company or companies. The disclosure set forth in the
SEC Documents and Registration Statements regarding the Acquiror Company’s
business is current and complete and accurately reflects operations of the
Acquiror Company as it exists as of the date hereof.
25
6.26.1 The
Acquiror Company has no stock option plans providing for the grant by the
Acquiror Company of stock options to directors, officers or
employees.
6.26.2 The
Acquiror Company has no employee benefit plans or arrangements covering their
present and former employees or providing benefits to such persons in respect of
services provided the Acquiror Company.
6.26.3 Neither
the consummation of the transactions contemplated hereby alone, nor in
combination with another event, with respect to each director, officer, employee
and consultant of the Acquiror Company, will result in (a) any payment
(including, without limitation, severance, unemployment compensation or bonus
payments) becoming due from the Acquiror Company, (b) any increase in the amount
of compensation or benefits payable to any such individual or (c) any
acceleration of the vesting or timing of payment of compensation payable to any
such individual. No agreement, arrangement or other contract of the
Acquiror Company provides benefits or payments contingent upon, triggered by, or
increased as a result of a change in the ownership or effective control of the
Acquiror Company.
6.27 Money Laundering
Laws. The operations of the Acquiror Company is and has been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all U.S. and non-U.S.
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
Governmental Authority (collectively, the “Money Laundering Laws”) and no
Proceeding involving the Acquiror Company with respect to the Money Laundering
Laws is pending or, to the knowledge of the Acquiror Company,
threatened.
6.28 Board
Recommendation. The Acquiror Company Board, by unanimous
written consent, has determined that this Agreement and the transactions
contemplated by this Agreement are advisable and in the best interests of the
Acquiror Company’s stockholders and has duly authorized this Agreement and the
transactions contemplated by this Agreement.
6.29 Certain Registration
Matters. Except as set forth on Schedule 6.29, the
Acquiror Company has not granted or agreed to grant any person any rights
(including “piggy-back registration rights) to have any securities of the
Acquiror Company registered with the Commission or any other Governmental
Authority that have not been satisfied.
26
SECTION
VII
7.1 SEC
Documents. From and after the Closing Date, in the event the
Commission notifies the Acquiror Company of its intent to review any SEC
Document filed prior to the Closing Date or the Acquiror Company receives any
oral or written comments from the Commission with respect to any SEC Document
filed prior to the Closing Date or any disclosure regarding the Acquiror
Company’s business or operations, as in existence through the date hereof in any
SEC Document or registration statement filed after the Closing Date, the
Acquiror Company shall promptly notify the Acquiror Company Principal
Shareholder and the Acquiror Company Principal Shareholder shall fully cooperate
with the Acquiror Company in connection with such review and
response.
7.2 Schedule 14(f) Information
Statement. Within ten (10) days following the Closing Date,
the Acquiror Company will file and mail a Schedule 14(f) information statement
to the stockholders of record of the Acquiror Company.
7.3 Form
8-K. Within four (4) business days of the Closing Date, the
Acquiror Company shall file the Form 8-K.
SECTION
VIII
8.1 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 the Company
and the Acquiror Company (and any Subsidiary) as each party may reasonably
request. In order that each party may have the full opportunity to do
so, the Company and the Acquiror Company, the Shareholder and the Acquiror
Company Principal Shareholder shall furnish each party and its representatives
during such period with all such information concerning the affairs of the
Company or the Acquiror Company or any Subsidiary as each party or its
representatives may reasonably request and cause the Company or the Acquiror
Company 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.
8.2 Cooperation;
Consents. Prior to the Closing, each party shall cooperate
with the other parties and 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 Share Exchange 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.
27
8.3 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 (except
in the ordinary course of its business) not required or specifically
contemplated hereby, without first obtaining the written consent of the Company
and the holders of a majority of voting stock of the Company, on the one hand,
and the Acquiror Company and the holders of a majority of the Acquiror Company
Common Stock, on the other hand. Without the prior written consent of
the Company, the Shareholder, the Acquiror Company or the Acquiror Company
Principal Shareholder, 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.
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8.9 Transfers. The
Acquiror Company Principal Shareholder will not sell, transfer, assign,
hypothecate, lien, or otherwise dispose or encumber the shares owned by
him.
SECTION
IX
The
Acquiror Company’s obligation to acquire the Shares and to take the other
actions required to be taken by the Acquiror Company at the Closing Date is
subject to the satisfaction, at or prior to the Closing Date, of each of the
following conditions (any of which may be waived by the Acquiror Company, in
whole or in part):
9.1 Accuracy of
Representations. The representations and warranties of the
Company and the Shareholder set forth in this Agreement or in any Schedule or
certificate delivered pursuant hereto that are not qualified as to materiality
shall be true and correct in all material respects as of the date of this
Agreement except to the extent a representation or warranty is expressly limited
by its terms to another date and without giving effect to any supplemental
Schedule.
9.2 No Force Majeure
Event. There shall not have been any delay, error, failure or
interruption in the conduct of the business of the Company, or any loss, injury,
delay, damage, distress, or other casualty, due to force majeure including but
not limited to (a) acts of God; (b) fire or explosion; (c) war, acts of
terrorism or other civil unrest; or (d) national emergency.
9.3 Consents. All
material consents, waivers, approvals, authorizations or orders required to be
obtained, and all filings required to be made, by the Company and/or the
Shareholder for the authorization, execution and delivery of this Agreement and
the consummation by them of the transactions contemplated by this Agreement,
shall have been obtained and made by the Company or the Shareholder, as the case
may be, except where the failure to receive such consents, waivers, approvals,
authorizations or orders or to make such filings would not have a Material
Adverse Effect on the Company or the Acquiror Company.
29
9.4 Certificate of
Officer. The Company will have delivered to the Acquiror
Company a certificate executed by an officer of the Company, certifying the
satisfaction of the conditions specified in Sections 9.1, 9.2, and 9.3 relating
to the Company.
9.5 Certificate of
Shareholder. An authorized officer of the Shareholder will
have delivered to the Acquiror Company a certificate certifying the satisfaction
of the conditions specified in Section 9.1 relating to such
Shareholder.
9.6 Documents. The
Company and the Shareholder must deliver to the Acquiror Company at the
Closing:
9.6.1 share
certificate evidencing the number of Shares held by the Shareholder, along with
executed share transfer forms transferring such Shares to the Acquiror Company
together with a certified copy of a board resolution of the Company approving
the registration of the transfer of such shares to Acquiror Company (subject to
Closing and payment of stamp duty);
9.6.2 a
Secretary’s Certificate, dated the Closing Date certifying attached copies of
(A) the Organizational Documents of the Company, (B) the resolutions of the
Company Board approving this Agreement and the transactions contemplated hereby;
and (C) the incumbency of each authorized officer of the Company signing this
Agreement and any other agreement or instrument contemplated hereby to which the
Company is a party;
9.6.3 each of
the Transaction Documents to which the Company and/or the Shareholder is a
party, duly executed;
9.6.4 such
other documents as the Acquiror Company may reasonably request for the purpose
of (A) evidencing the accuracy of any of the representations and warranties of
the Company and the Shareholder pursuant to Section 9.1, (B) evidencing the
performance of, or compliance by the Company and the Shareholder with, any
covenant or obligation required to be performed or complied with by the Company
or the Shareholder, as the case may be, (C) evidencing the satisfaction of
any condition referred to in this Section 9, or (D) otherwise facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement.
9.6.5 legal
opinion of Han Kun Law Offices, PRC legal counsel to the Company, substantially
in the form attached as Exhibit
E.
9.7 No
Proceedings. There must not have been commenced or threatened
against the Acquiror Company, the Company or the Shareholder, or against any
Affiliate thereof, any Proceeding (which Proceeding remains unresolved as of the
Closing Date) (a) involving any challenge to, or seeking damages or other relief
in connection with, any of the transactions contemplated by this Agreement, or
(b) that may have the effect of preventing, delaying, making illegal, or
otherwise interfering with any of the transactions contemplated by this
Agreement.
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9.8 No Claim Regarding Stock
Ownership or Consideration. There must not have been made or
threatened by any Person any claim asserting that such Person (a) is the holder
of, or has the right to acquire or to obtain beneficial ownership of the Shares
or any other stock, voting, equity, or ownership interest in, the Company, or
(b) is entitled to all or any portion of the Acquiror Company Preferred
Shares.
9.9 Repurchase. Prior
to the Closing, the Repurchase shall have been completed.
SECTION
X
The
Shareholder’s obligation to transfer the Shares and the obligations of the
Company to take the other actions required to be taken by the Company in advance
of or at the Closing Date are subject to the satisfaction, at or prior to the
Closing Date, of each of the following conditions (any of which may be waived by
the Company and the Shareholder jointly, in whole or in part):
10.1 Accuracy of
Representations. The representations and warranties of the
Acquiror Company and Acquiror Company Principal Shareholder set forth in this
Agreement or in any Schedule or certificate delivered pursuant hereto that are
not qualified as to materiality shall be true and correct in all material
respects as of the date of this Agreement except to the extent a representation
or warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Schedule.
10.2 No Force Majeure
Event. There shall not have been any delay, error, failure or
interruption in the conduct of the business of the Acquiror Company, or any
loss, injury, delay, damage, distress, or other casualty, due to force majeure
including but not limited to (a) acts of God; (b) fire or explosion; (c) war,
acts of terrorism or other civil unrest; or (d) national emergency.
10.3 Consents.
10.3.1 All
material consents, waivers, approvals, authorizations or orders required to be
obtained, and all filings required to be made, by the Acquiror Company for the
authorization, execution and delivery of this Agreement and the consummation by
it of the transactions contemplated by this Agreement, shall have been obtained
and made by the Acquiror Company, except where the failure to receive such
consents, waivers, approvals, authorizations or orders or to make such filings
would not have a Material Adverse Effect on the Company or the Acquiror
Company.
10.3.2 Without
limiting the foregoing, the Schedule 14(f) Filing shall have been prepared to be
filed with the Commission by the Acquiror Company after the Closing
Date.
10.4 Certificate of
Officer. The Acquiror Company will have delivered to the
Company a certificate, dated the Closing Date, executed by an officer of the
Acquiror Company, certifying the satisfaction of the conditions specified in
Sections 10.1, 10.2, and 10.3 relating to the Acquiror Company.
31
10.5 Certificate of Acquiror
Company Principal Shareholder. The Acquiror Company Principal
Shareholder will have delivered to the Company a certificate, dated the Closing
Date, executed by such Acquiror Company Principal Shareholder, certifying the
satisfaction of the conditions specified in Section 10.1 relating to the
Acquiror Company Principal Shareholder.
10.6 Documents. The
Acquiror Company must have caused the following documents to be delivered to the
Company and/or the Shareholder:
10.6.1 share
certificate(s) evidencing 47,658 shares of Acquiror Company Preferred Shares
being issued to the Shareholder pursuant hereto;
10.6.2 a
Secretary’s Certificate, dated the Closing Date certifying attached copies of
(A) the Organizational Documents of the Acquiror Company, (B) the resolutions of
the Acquiror Company Board approving this Agreement and the transactions
contemplated hereby; and (C) the incumbency of each authorized officer of the
Acquiror Company signing this Agreement and any other agreement or instrument
contemplated hereby to which the Acquiror Company is a party;
10.6.3 a
Certificate of Good Standing of the Acquiror Company that is dated within five
(5) business days of the Closing;
10.6.4 each of
the Transaction Documents to which the Acquiror Company is a party, duly
executed;
10.6.5 the
resignation of Xxxxx as the sole officer of the Acquiror Company on the Closing
Date;
10.6.6 Acquiror
Company Board Resolutions (i) appointing Xx. Xxxxxxxx Xxx to serve as Chairman
of the Acquiror Company Board to be effective at the Effective Time, and (ii)
appointing Xxxxxxxx Xxx as President, Chief Executive Officer, Chief Financial
Officer, Secretary and Treasurer of the Acquiror Company to be effective at the
Closing.
10.6.7 legal
opinion of Law Offices of X. Xxxxxxxx XxXxxxxx, PC, substantially in the form
attached as Exhibit
F;
10.6.8 a
statement from the Acquiror Company’s transfer agent regarding the number of
issued and outstanding shares of common stock and preferred stock immediately
before the Closing; and
10.6.9 such
other documents as the Company may reasonably request for the purpose of (i)
evidencing the accuracy of any representation or warranty of the Acquiror
Company pursuant to Section 10.1, (ii) evidencing the performance by the
Acquiror Company of, or the compliance by the Acquiror Company with, any
covenant or obligation required to be performed or complied with by the Acquiror
Company, (iii) evidencing the satisfaction of any condition referred to in this
Section 10, or (iv) otherwise facilitating the consummation of any of the
transactions contemplated by this Agreement.
32
10.7 No
Proceedings. Since the date of this Agreement, there must not
have been commenced or threatened against the Acquiror Company, the Company or
the Shareholder, or against any Affiliate thereof, any Proceeding (which
Proceeding remains unresolved as of the date of this Agreement) (a) involving
any challenge to, or seeking damages or other relief in connection with, any of
the transactions contemplated hereby, or (b) that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with any of the
transactions contemplated hereby.
10.8 No Claim Regarding Stock
Ownership or Consideration. There must not have been made or
threatened by any Person any claim asserting that such Person (a) is the holder
of, or has the right to acquire or to obtain beneficial ownership of the
Acquiror Company Common Stock or any other stock, voting, equity, or ownership
interest in, the Acquiror Company, or (b) is entitled to all or any portion of
the Acquiror Company Preferred Shares.
10.9 No
Liability. There must not be any outstanding obligation or
liability (whether accrued, absolute, contingent, liquidated or otherwise,
whether due or to become due) of the Acquiror Company, whether or not known to
the Acquiror Company.
10.10 Cancellation of
Shares. Prior to the Closing, the Repurchase shall have been
completed.
10.11 Certificate of
Designation. Prior to the Closing, the Series M Certificate of
Designation of the Relative Rights and Preferences of the Series M Convertible
Preferred Stock attached hereto as Exhibit E shall have
been filed with the Secretary of State of Nevada.
SECTION
XI
11.1 Survival. All
representations, warranties, covenants, and obligations in this Agreement shall
expire eighteen (18) months following the date this Agreement is executed (the
“Survival
Period”). The right to indemnification, payment of damages or
other remedy based on such representations, warranties, covenants, and
obligations will not be affected by any investigation conducted with respect to,
or any knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition based
on the accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.
11.2 Indemnification by the
Acquiror Company Principal Shareholder. From and after the
execution of this Agreement until the expiration of the Survival Period, the
Acquiror Company Principal Shareholder shall indemnify and hold harmless the
Acquiror Company, the Company and the Shareholder (collectively, the “Company Indemnified Parties”),
from and against any damages arising, directly or indirectly, from or in
connection with:
(a) any
breach of any representation or warranty made by the Acquiror Company or the
Acquiror Company Principal Shareholder in this Agreement or any Transaction
Document or in any certificate delivered by the Acquiror Company pursuant to
this Agreement;
33
(b) any
breach by the Acquiror Company or the Acquiror Company Principal Shareholder of
any covenant or obligation of the Acquiror Company in this Agreement or any
Transaction Document required to be performed by the Acquiror Company or the
Acquiror Company Principal Shareholder on or prior to the Closing Date or after
the Closing Date; or
(c) any and
all losses, claims, damages, or liabilities against the Acquiror Company or the
Acquiror Company Principal Shareholder, occurring on or prior to the Closing
Date.
Notwithstanding
anything to the contrary contained herein, the Acquiror Company and the Acquiror
Company Principal Shareholder’s total indemnification obligations under this
Section 11 shall be limited to and shall not under any circumstances exceed US
$1.00.
11.3.1 The
Acquiror Company Principal Shareholder shall to the fullest extent permitted
under applicable Law, indemnify and hold harmless, each present, former and
future director, officer or employee of the Acquiror Company (collectively, the
“Indemnified Parties”)
against any costs or expenses (including attorneys’ fees), judgments, fines,
losses, claims, damages, liabilities and amounts paid in settlement, in
connection with any Proceeding whether by a third party, the Acquiror Company or
otherwise (x) arising out of or pertaining to the transactions contemplated by
this Agreement or (y) otherwise with respect to any acts or omissions
occurring at or prior to the Closing Date (“Damages”), to the same extent
as provided in the Acquiror Company’s Organizational Documents or any applicable
contract or agreement as in effect on the date hereof, in each case for the
Survival Period. In the event of any such Proceeding (whether arising
before or after the Closing Date), (i) the Acquiror Company Principal
Shareholder shall pay the reasonable fees and expenses of such counsel, promptly
after statements therefor are received, provided that the Indemnified Parties
shall be required to reimburse the Acquiror Company Principal Shareholder for
such payments in the circumstances and to the extent required by the Acquiror
Company’s Organizational Documents, any applicable contract or agreement or
applicable Law, and (ii) the Acquiror Company Principal Shareholder shall
cooperate in the defense of any such matter; provided, however, that the
Acquiror Company Principal Shareholder shall not be liable for any settlement
effected without its written consent (which consent shall not be unreasonably
withheld); and provided, further, that, in the event that any claim or claims
for indemnification are asserted or made within the Survival Period, all rights
to indemnification in respect of any such claim or claims shall continue until
the disposition of any and all such claims. The Indemnified Parties
as a group may retain only one law firm to represent them in each applicable
jurisdiction with respect to any single action unless there is, under applicable
standards of professional conduct, a conflict on any significant issue between
the positions of any two or more Indemnified Parties, in which case each
Indemnified Person with respect to whom such a conflict exists (or group of such
Indemnified Persons who among them have no such conflict) may retain one
separate law firm in each applicable jurisdiction.
34
11.4 Breach by the
Shareholder. Nothing in this Section 11 shall limit the
Acquiror Company’s right to pursue any appropriate legal or equitable remedy
against the Shareholder with respect to any damages from and after the execution
of this Agreement, until the expiration of the Survival Period arising, directly
or indirectly, from or in connection with: (a) any breach by the Shareholder of
any representation or warranty made by the Shareholder in this Agreement or in
any certificate delivered by such Shareholder pursuant to this Agreement or (b)
any breach by the Shareholder of any covenants or obligation in this Agreement
required to be performed by the Acquiror Company or the Acquiror Company
Principal Shareholder on or prior to the Closing Date or after the Closing
Date. All claims of the Acquiror Company pursuant to this Section
11.4 shall be brought by the Acquiror Company Principal Shareholder on behalf of
the Acquiror Company and those Persons who were stockholders of the Acquiror
Company immediately prior to the Closing Date.
SECTION
XII
12.1 Expenses. Except
as otherwise expressly provided in this Agreement, each party to this Agreement
will bear its respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the transactions contemplated
by this Agreement, including all fees and expenses of agents, representatives,
counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
12.2 Public
Announcements. The Acquiror Company shall promptly, but no
later than four (4) business days following the effective date of this
Agreement, issue a press release disclosing the transactions contemplated
hereby. The Acquiror Company shall also file with the Commission a
Form 8-K describing the material terms of the transactions contemplated hereby
as soon as practicable following the Closing Date but in no event more than four
(4) business days following the Closing Date. Prior to the Closing Date, the
Company and the Acquiror Company shall consult with each other in issuing the
Form 8-K, the press release and any other press releases or otherwise making
public statements or filings and other communications with the Commission or any
regulatory agency or stock market or trading facility with respect to the
transactions contemplated hereby and neither party shall issue any such press
release or otherwise make any such public statement, filings or other
communications without the prior written consent of the other, which consent
shall not be unreasonably withheld or delayed, except that no prior consent
shall be required if such disclosure is required by law, in which case the
disclosing party shall provide the other party with prior notice of no less than
three (3) calendar days, of such public statement, filing or other communication
and shall incorporate into such public statement, filing or other communication
the reasonable comments of the other party.
35
12.3 Confidentiality.
12.3.1 The
Acquiror Company, the Acquiror Company Principal Shareholder, the Shareholder
and the Company will maintain in confidence, and will cause their respective
directors, officers, employees, agents, and advisors to maintain in confidence,
any written, oral, or other information obtained in confidence from another
party in connection with this Agreement or the transactions contemplated by this
Agreement, unless (a) such information is already known to such party or to
others not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any required filing with the
Commission, or obtaining any consent or approval required for the consummation
of the transactions contemplated by this Agreement, or (c) the furnishing or use
of such information is required by or necessary or appropriate in connection
with legal proceedings.
12.3.2 In the
event that any party is required to disclose any information of another party
pursuant to clause (b) or (c) of Section 12.3.1, the party requested or required
to make the disclosure (the “disclosing party”) shall
provide the party that provided such information (the “providing party”) with prompt
notice of any such requirement so that the providing party may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of
this Section 12.3. If, in the absence of a protective order or other
remedy or the receipt of a waiver by the providing party, the disclosing party
is nonetheless, in the opinion of counsel, legally compelled to disclose the
information of the providing party, the disclosing party may, without liability
hereunder, disclose only that portion of the providing party’s information which
such counsel advises is legally required to be disclosed, provided that the
disclosing party exercises its reasonable efforts to preserve the
confidentiality of the providing party’s information, including, without
limitation, by cooperating with the providing party to obtain an appropriate
protective order or other relief assurance that confidential treatment will be
accorded the providing party’s information.
12.3.3 If the
transactions contemplated by this Agreement are not consummated, each party will
return or destroy all of such written information each party has regarding the
other party.
12.4 Notices. All
notices, demands, consents, requests, instructions and other communications to
be given or delivered or permitted under or by reason of the provisions of this
Agreement or in connection with the transactions contemplated hereby shall be in
writing and shall be deemed to be delivered and received by the intended
recipient as follows: (i) if personally delivered, on the business day of such
delivery (as evidenced by the receipt of the personal delivery service), (ii) if
mailed certified or registered mail return receipt requested, two (2) business
days after being mailed, (iii) if delivered by overnight courier (with all
charges having been prepaid), on the business day of such delivery (as evidenced
by the receipt of the overnight courier service of recognized standing), or (iv)
if delivered by facsimile transmission, on the business day of such delivery if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that time,
on the next succeeding business day (as evidenced by the printed confirmation of
delivery generated by the sending party’s telecopier machine). If any
notice, demand, consent, request, instruction or other communication cannot be
delivered because of a changed address of which no notice was given (in
accordance with this Section 12.4), or the refusal to accept same, the notice,
demand, consent, request, instruction or other communication shall be deemed
received on the second business day the notice is sent (as evidenced by a sworn
affidavit of the sender). All such notices, demands, consents,
requests, instructions and other communications will be sent to the following
addresses or facsimile numbers as applicable.
36
If
to Acquiror Company:
0000
X. Xxxxxxxxxx 00
Xxxxxxxx,
Xxxxx 00000
Attention:
CEO
Telephone
No.: 000-000-0000
|
with
a copy, which shall not constitute notice, to:
Law
Offices of X. Xxxxxxxx XxXxxxxx
0000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Attention:
Xxxxxxxx XxXxxxxx
Telephone
No.: 000-000-0000
|
If
to the Company:
Keyuan
International Group Limited
c/o
Keyuan Plastics Co., Ltd.
Qingshi
Industrial Park
Ninbo
Economic & Technological Development Zone
Ningbo,
Zhejiang Province, P.R. China 315803
Attention:
Chief Executive Officer
Telephone
No.: (00) 000-0000-0000
Facsimile
No.: (00) 000-0000-0000
|
with
a copy, which shall not constitute notice, to:
Xxxxxx
& Jaclin, LLP
000
Xxxxx 0 Xxxxx
Xxxxxxxxx,
Xxx Xxxxxx 00000
Attention: Xxxx
X. Xxxxx, Esq.
Telephone
No.: 000-000-0000
Facsimile
No.: 000-000-0000
|
12.5 Arbitration. Any
dispute or controversy under this Agreement shall be settled exclusively by
arbitration in the City of New York, County of New York in accordance with the
rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court
having jurisdiction.
12.6 Further
Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the
other party may reasonably request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
12.7 Waiver. The
rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this
Agreement.
37
12.8 Entire Agreement and
Modification. This Agreement supersedes all prior agreements
between the parties with respect to its subject matter and constitutes (along
with the documents referred to in this Agreement) a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended except by a written
agreement executed by the party against whom the enforcement of such amendment
is sought.
12.9 Assignments, Successors, and
No Third-Party Rights. No party may assign any of its rights
under this Agreement without the prior consent of the other
parties. Subject to the preceding sentence, this Agreement will apply
to, be binding in all respects upon, and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the
parties. Except as set forth in Section 11.3 hereof, nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions
are for the sole and exclusive benefit of the parties to this Agreement and
their successors and assigns.
12.10 Severability. If
any provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.
12.11 Section Headings,
Construction. The headings of Sections in this Agreement are
provided for convenience only and will not affect its construction or
interpretation. All references to “Section” or “Sections” refer to
the corresponding Section or Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word
“including” does not limit the preceding words or terms.
12.12 Governing
Law. This Agreement will be governed by the laws of the State
of New York without regard to conflicts of laws principles.
12.13 Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement. In
the event that any signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
38
IN
WITNESS WHEREOF, the parties have executed and delivered this Share Exchange
Agreement as of the date first written above.
Acquiror
Company:
Signed:
/s/
Xxxxxx
Xxxxx
Printed
name: Xxxxxx Xxxxx
Title: President,
Chief Executive Officer and Chief Financial Officer
|
Acquiror
Company Principal Shareholder:
Xxxxxx
Xxxxx
Signed:
/s/ Xxxxxx
Xxxxx
Printed
name: Xxxxxx Xxxxx
|
Company:
Keyuan
International Group Limited
Signed:
/s/ Xxxxxxxx
Xxx
Printed
name: Xxxxxxxx Xxx
Title:
Chief Executive Officer
|
39
COUNTERPART
SIGNATURE PAGE
IN
WITNESS WHEREOF, the parties have executed and delivered this Share Exchange
Agreement as of the date first written above.
SHAREHOLDER:
Delight
Reward Limited
By: /s/
Xxxxxxxx
Xxx
Name: Xxxxxxxx
Xxx
Title: Chief
Executive Officer
Circle
the category under which you are an “accredited investor” pursuant
to Exhibit
B:
1 2 3 7 8
OFFSHORE DELIVERY
INSTRUCTIONS:
PRINT
EXACT NAME IN WHICH YOU WANT
THE
SECURITIES TO BE REGISTERED
Attn:
Address:
Phone
No.
Facsimile
No.
40