EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT ("Agreement") is entered into on January 30,
2005, by and between XXXXX INVEST INC., a British Virgin Islands corporation
("Xxxxx"), and COMP HOTEL INTERNATIONAL LIMITED and WAYWOOD INVESTMENT
LIMITED, (collectively the "Selling Stockholder"), shareholders of NORTON
INDUSTRIES CORP., a Delaware corporation ("Norton").
RECITALS
WHEREAS, Xxxxx, through its majority-owned subsidiary Beijing Dahua Real
Estate Development Limited, a Chinese corporation ("Dahua Real Estate"),
engages in the business of developing and marketing residential real
properties in Beijing, China; and
WHEREAS, Norton is a development stage company that has no specific business
plan or purpose or has indicated its business plan is to engage in a merger
or acquisition with an unidentified entity or person; and
WHEREAS, Norton has filed with the U.S. Securities and Exchange Commission a
registration statement on Form 10-SB that became effective in June 2002
pursuant to the Securities Exchange Act of 1934 and is a reporting company
pursuant to Section 12 (g) thereunder. Norton is currently an SEC reporting
company; and
WHEREAS, Norton has an authorized capitalization consisting of 80,000,000
shares of common stock, $.0001 par value ("Norton Common Stock"), of which
5,000,000 shares ("Outstanding Norton Shares") are issued, outstanding and
held by the Selling Stockholder, and 20,000,000 shares of preferred stock,
$.0001 par value, none of which has been issued.
WHEREAS, the Selling Stockholder wishes to sell, and Xxxxx wishes to acquire,
all of the Norton Shares on the Closing Date (as defined below), in exchange
for US$100,000 in cash and the issuance of certain number of shares of Norton
Common Stock, which constitutes 5% of Norton's capital shares, subject to and
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual representations,
warranties and covenants herein contained, the parties hereby agree as
follows:
1. ACQUISITION AND EXCHANGE OF SHARES.
1.1 Subject to the terms and upon the conditions set forth herein,
the Selling Stockholder agrees to sell, assign, transfer and deliver to Xxxxx,
and Xxxxx agrees to purchase from Selling Stockholder, at the Closing, the
outstanding Norton Shares owned by the Selling Stockholder in exchange for
US$100,000 in cash and certain number of shares of post-merger Norton Common
Stock ("New Shares"), which shall represent five percent (5%) of all shares
of common stock issued and outstanding after the acquisition contemplated
hereby ("Post-Acquisition Shares").
1.2 INSTRUMENTS OF TRANSFER
a. OUTSTANDING NORTON SHARES. The Selling Stockholder hereby
endorses, assigns and transfers to Xxxxx all of his right and interest in and
to the Outstanding Norton Shares. Immediately following the share exchange,
the Outstanding Norton Shares acquired by Xxxxx pursuant to this Agreement
will be retired and cancelled by Xxxxx.
b. PAYMENT OF US$100,000. Xxxxx shall deliver US $100,000 or an
equivalent amount in Reminbi (RMB) in full upon execution of this Agreement
to the bank account in the People's Republic of Chinas as designated by the
Selling Shareholder.
c. NEW SHARES. Xxxxx shall issue or cause to be issued and
delivered to the Selling Stockholder, or to those persons designated by
Selling Stockholder, on the Closing Date an original certificate evidencing the
New Shares, in form and substance satisfactory to the Selling Stockholder, in
order to effectively vest in the Selling Stockholder all right, title and
interest in and to the Post-Acquisition Shares. From time to time after the
Closing Date, and without further consideration, Xxxxx will execute and deliver
such other instruments and take such other actions as the Selling Stockholder
may reasonably request in order to more effectively issue to him Post-
Acquisition Shares.
d. LOCKUP OF NEW SHARES. The New Shares shall have a lockup of
six (6) months during which the Selling Stockholder may not sell in the public
market.
e. NO DILUTION. As provided in Section 1.1 hereof, the New Shares
shall constitute five percent (5%) of the Post Acquisition Shares. Xxxxx hereby
warrants and covenants that the New Shares shall not be diluted through stock
dividends, splits or reverse splits, recapitalization, or issuance of additional
shares.
1.3 REORGANIZATION. Immediately after the Closing Date, as a result of
the transactions contemplated by this Agreement, (i) Xxxxx shall become a
wholly-owned subsidiary of Norton; (ii) the name of Norton shall be changed to
Dahua Inc., and (iii) all members of the Board of Directors and executive
officers of Norton shall resign, and new Board members and executive officers
will be appointed by Xxxxx.
1.4 CLOSING. The closing ("Closing") of the transactions contemplated
by Section 1.1 of this Agreement shall take place at the offices of Norton
Industries Corp., located at 00 Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000,
U.S.A., at 4:00 p.m., local time, on January 30, 2005, or at such other time
and place as may be mutually agreed to by the Selling Stockholder and Xxxxx
("Closing Date").
1.5 SEC REPORTING OBLIGATION. Upon execution of this Agreement, Xxxxx
shall assume all SEC reporting obligations.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER. The Selling
Stockholder hereby represents, warrants and covenants to and with Xxxxx as
follows:
2.1 POWER AND AUTHORITY. The Selling Stockholder has all requisite
individual power and authority to enter into and to carry out all of the terms
of this Agreement and all other documents executed and delivered in connection
herewith (collectively, the "Documents"). All individual action on the part
of the Selling Stockholder necessary for the authorization, execution,
delivery and performance of the Documents by the Selling Stockholder has been
taken and no further authorization on the part of the Selling Stockholder is
required to consummate the transactions provided for in the Documents. When
executed and delivered by the Selling Stockholder, the Documents shall
constitute the valid and legally binding obligation of the Selling Stockholder
enforceable in accordance with their respective terms.
2.2 OWNERSHIP OF AND TITLE TO SECURITIES. The Selling Stockholder
represents that he is the sole owner of all of the issued and outstanding
shares of common stock of Norton and that there are no warrants, options,
subscriptions, calls, or other similar rights of any kind for the issuance or
purchase of any securities of Norton held by the Selling Stockholder or any
other persons. The Selling Stockholder represents that the Selling
Stockholder has and will transfer to Xxxxx good and marketable title to the
Outstanding Norton Shares, free and clear of all pledges, security interests,
mortgages, liens, claims, charges, restrictions or other encumbrances.
2.3 CAPITALIZATION OF NORTON. Prior to any action to be taken in
contemplation of this Agreement, the authorized capital stock of Norton
consisted of 80,000,000 shares of common stock, par value $.0001 per share,
of which 5,000,000 were issued and outstanding. All shares of common stock
of Norton currently issued and outstanding have been duly authorized, validly
issued and are fully paid and non-assessable. There are no preemptive rights,
or other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, calls, agreements
or commitments of any character obligating Norton to issue any shares of its
capital stock or any security representing the right to acquire, purchase or
otherwise receive any such stock.
2.4 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. The Selling
Stockholder represents that, to his best knowledge, no order of any court or
administrative agency is in effect which restrains or prohibits the Selling
Stockholder from consummating the transactions contemplated hereby, and no
suit, action, investigation, inquiry or proceeding by any governmental body or
other person or legal or administrative proceeding has been instituted or
threatened which questions the validity or legality of the Selling
Stockholder's consummation of the transactions contemplated hereby.
2.5 APPROVALS AND CONSENTS. The Selling Stockholder represents that,
to his best knowledge, there are no permits, consents, mandates or approvals
of public authorities, either foreign, federal, state or local, or of any
third party necessary for the Selling Stockholder's consummation of the
transactions contemplated hereby.
2.6 INVESTMENT AND RELATED REPRESENTATIONS. The Selling Stockholder
is aware that neither the New Shares nor the offer or sale thereof to the
Selling Stockholder has been registered under the U.S. Securities Act of 1933,
as amended ("Securities Act"), or under any foreign or state securities law.
The Selling Stockholder acknowledges that the New Shares are being issued
through share exchange (the "Exchanged New Shares") will be characterized as
"restricted" securities under U.S. federal securities laws inasmuch as they
are being acquired in a transaction not involving a public offering and that
under such laws and applicable regulations such securities may be resold
without registration under the Securities Act only in certain limited
circumstances. The Selling Stockholder understands that the certificate for
Exchanged New Shares issued to the Selling Stockholder or to any subsequent
transferee shall bear a restrictive legend in substantially the following
form:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be offered
for sale, sold or otherwise transferred except in compliance with the
registration provisions of such Act or pursuant to an exemption from
such registration provisions, the availability of which is to be
established to the satisfaction of the Company.
2.7 FINANCIAL STATEMENTS AND SEC REPORTS. Norton is presently subject
to the reporting requirements of Section 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and has filed with the U.S.
Securities and Exchange Commission (the "SEC"), all reports, including
financial statements, required to be filed pursuant to such Act and is
"current" in its reporting obligations. Norton's successor will continue to
file with the SEC all requisite documents and reports necessary for it to
maintain its current status as a reporting company under the Exchange Act.
2.8 TAX RETURNS AND PAYMENTS. Norton has filed with the appropriate
governmental authority, all tax returns, whether based upon income, sales or
franchise, as required by law to be filed on or before the date of this
Agreement, and Norton has paid all taxes to be due on said returns, any
assessments made against Norton and all other taxes, fees and similar charges
imposed on Norton by any governmental authority. No tax liens have been
filed and no claims are being assessed and no returns are under audit with
respect to any such taxes, fees or other similar charges.
2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
financial statements of Norton have been filed with the SEC, and except as
disclosed otherwise herein, Norton has not (i) issued or sold any promissory
note, stock, bond, option or other corporate security of which it was an issuer
or other obligor, (ii) incurred or suffered to be incurred any liability or
obligation other than in the ordinary and usual course of business, (iii)
caused or permitted any lien, encumbrance or security interest to be created
or arise on or in any of its properties or assets, (iv) declared, set aside
or made any dividend, payment or other distribution to any shareholder or
purchased or redeemed or agreed to purchase or redeem any shares of its
capital stock, (v) reclassified its shares of capital stock, or (vi) entered
into any agreement or transaction except in the ordinary and usual course of
business or in connection with the execution and performance of this
Agreement.
2.10 COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS. Norton is in
compliance with and is not in violation of applicable federal, state, or
local laws and regulations affecting its properties or the operation of its
business. Norton is not subject to any order, decree, judgment or other
sanction of any court, administrative agency or other tribunal.
2.11 LITIGATION. There is no litigation, arbitration, proceeding or
investigation pending or threatened to which Norton is a party or which may
result in any material adverse change in the business or condition, financial
or otherwise, of Norton or in any of its properties or assets, or which might
result in any liability on the part of Norton, or which questions the validity
of this Agreement or of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement and, to the best knowledge
of Norton, there is no basis for any such litigation, arbitration, proceeding
or investigation.
3. REPRESENTATIONS AND WARRANTIES OF XXXXX/DAHUA REAL ESTATE. Xxxxx/Dahua
Real Estate hereby represents, warrants and covenants to and with Selling
Stockholder as follows:
3.1 ORGANIZATION, GOOD STANDING AND CORPORATE POWER OF XXXXX. Xxxxx
is a corporation duly organized, validly existing and presently in good
standing under the laws of the British Virgin Islands, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which such qualification is necessary, and has the corporate
power and authority to own its properties and assets and to transact the
business in which it is engaged. There are no corporations or other entities
with respect to which (i) Xxxxx owns any of the outstanding stock or other
interest, or (ii) Xxxxx may be deemed to be in control because of factors or
relationships other that the quantity of stock or other interest owned.
3.2 ORGANIZATION, GOOD STANDING AND CORPORATE POWER OF DAHUA REAL
ESTATE. Dahua Real Estate is a company duly organized, validly existing and
presently in good standing under the laws of the People's Republic of China,
is duly qualified to do business and is in good standing as a foreign
liability company in each jurisdiction in which such qualification is
necessary, and has the power and authority to own its properties and assets
and to transact the business in which it is engaged. Dahua Real Estate is
a majority-owned subsidiary of Xxxxx, and will continue to be a majority-
owned subsidiary of Xxxxx following the transactions contemplated by this
Agreement.
3.3 SHARES OF EXCHANGED NEW SHARES. The common stock shares of
Norton to be issued to the Selling Stockholder pursuant to this Agreement,
when so issued, will be duly authorized, validly issued, fully paid and non-
assessable.
3.4 FINANCIAL STATEMENTS OF XXXXX. The audited financial statements
of Xxxxx and its subsidiary Dahua Real Estate for the period from the date of
its inception to September 30, 2004 have been delivered to the Selling
Stockholder. The financial statements are true and complete in all material
respects and fairly present the financial condition of Xxxxx and its
subsidiary as of the date of such report. Xxxxx has good and marketable title
to all of its assets and property to be exchanged with Selling Shareholder
hereunder, free and clear of any and all liens, claims and encumbrances, except
as may be otherwise set forth herein and in its financial statements. Other
than according to the ordinary and usual course of Xxxxx'x business,
consistent with such practice, (a) Xxxxx has engaged only in its routine
daily business since the date of its financial statements, and (b) there has
not been any material adverse change in the business operations, assets,
properties, prospects or condition (financial or otherwise) of Xxxxx and its
subsidiary taken as a whole, from that reflected in the financial statements
referred to in this Section 3.4.
3.5 TAX RETURNS AND PAYMENTS. All tax returns for Xxxxx and its
subsidiary (national, local or foreign) which are required by law to be filed
on or before the date of this Agreement, have been duly filed or extended
with the appropriate governmental authority. No tax liens have been filed
and no claims are being assessed with respect to any such taxes, fees or other
similar charges.
3.6 REQUIRED AUTHORIZATIONS. There have been or will be timely
filed, given, obtained or taken, all applications, notices, consents,
approvals, orders, registrations, qualifications waivers or other actions of
any kind required by virtue of execution and delivery of this Agreement by
Xxxxx and Dahua Real Estate or the consummation by them of the transactions
contemplated hereby.
3.7 COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS. Xxxxx and Dahua
Real Estate are in compliance with all applicable national, local or foreign
statutes, laws and regulations affecting their properties or operation of
their businesses. Xxxxx and Dahua Real Estate are not subject to any order,
decree, judgment or other sanction of any court, administrative agency or
other tribunal.
3.8 LITIGATION. There is no material litigation, arbitration,
proceeding or investigation pending or threatened to which Xxxxx is a party or
which may result in any material change in the business or condition,
financial or otherwise, of Xxxxx or in any of its properties or assets, or
which if determined against Xxxxx, would have a material adverse effect
against Xxxxx, or which might result in any liability on the part of Xxxxx,
or which questions the validity of this Agreement or of any action taken or to
be taken pursuant to or in connection with the provisions of this Agreement,
and to the best knowledge of Xxxxx, there is no basis for any such litigation,
arbitration, proceeding or investigation.
3.9 GOVERNMENTAL CONSENT. No notices, reports or other filings are
required to be made nor are any consents, registrations, approvals, permits,
authorizations or designations required to be obtained by Xxxxx or Dahua Real
Estate from any court, governmental or regulatory authority, agency,
commission, body or other governmental entity, in connection with the
execution and delivery of this Agreement by Xxxxx or Dahua Real Estate or the
carrying out and consummation of any transactions contemplated hereby, except
those that the failure to make or obtain are not, individually or in the
aggregate, reasonably likely to have a material adverse effect or prevent,
materially delay or materially impair the ability of Xxxxx or Dahua Real
Estate to consummate the transactions contemplated by this Agreement.
3.10 Full Disclosure. None of the representations and warranties made
by Xxxxx and/or Dahua Real Estate herein, or in any attachment, exhibit,
certificate or memorandum furnished or to be furnished by Xxxxx and Dahua Real
Estate, contains or will contain any untrue statement of material fact, or
omit any material fact, the omission of which would be misleading.
4. ADDITIONAL AGREEMENTS
4.1 PIGGYBACK REGISTRATION RIGHTS. Xxxxx/Dahua Real Estate shall
notify Selling Stockholder in writing as soon as Xxxxx/Dahua Real Estate
determines to file any registration statement under the Securities Act of 1933,
as amended for purposes of effecting a public offering of securities of Xxxxx
and/or Dahua Real Estate and will afford Selling Stockholder an opportunity
to include in such registration statement all the Exchanged New Shares held
by Selling Stockholder. Selling Stockholder shall notify Xxxxx/Dahua Real
Estate the number of Exchanged New Shares Selling Stockholder wishes to
include in such registration statement.
4.2 EXPENSES. Whether or not the transactions contemplated in this
Agreement are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense or as otherwise agreed to herein.
4.3 BROKERS AND FINDERS. Each of the parties hereto represents, as
to itself, that no agent, broker, investment banker or firm or person is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement, except as may be otherwise set forth herein or by separate document.
4.4 INDEMNIFICATION.
a. From and after the Closing of this Agreement, Xxxxx and Dahua Real
Estate agree to indemnify, defend and hold harmless the Selling Stockholder
against all loss, damage or expense, (including reasonable legal and accounting
fees), caused by or arising out of (i) any breach or default in the performance
by Xxxxx and/or Dahua Real Estate of any covenant or agreement of Xxxxx and/or
Dahua Real Estate contained in this Agreement, (ii) any breach of warranty or
inaccurate or erroneous representations made by Xxxxx and/or Dahua Real Estate
herein or in any certificate or other instrument delivered by or on behalf of
Xxxxx or Dahua Real Estate pursuant hereto, and (iii) any and all actions,
suits, proceedings, claims, demands, judgments, costs and expenses, (including
reasonable legal and accounting fees) incident to the foregoing.
b. From and after the Closing of this Agreement, the Selling
Stockholder agrees to indemnify, defend and hold harmless Xxxxx and Dahua Real
Estate against all loss, damage or expense, (including reasonable legal and
accounting fees), caused by or arising out of (i) any breach or default in
the performance by the Selling Stockholder of any covenant or agreement of
the Selling Stockholder contained in this Agreement, (ii) any breach of
warranty or inaccurate or erroneous representations made by the Selling
Stockholder herein or in any certificate or other instrument delivered by or
on behalf of the Selling Stockholder pursuant hereto, and (iii) any and all
actions, suits, proceedings, claims, demands, judgments, costs and expenses,
(including reasonable legal and accounting fees) incident to the foregoing.
4.5 CONFIDENTIALITY. All parties hereto agree to keep confidential
this Agreement and all information and documents relating to this Agreement
until such time as the Agreement and the transactions contemplated hereunder
are made public by means of an appropriate press release or by any other means
reasonably assured to make such information publicly available.
5. MISCELLANEOUS
5.1 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed
or not.
5.2 NOTICES. Any notice to any party hereto pursuant to this Agreement
shall be in writing and given by Certified or Registered Mail or by facsimile,
addressed as follows:
If to Xxxxx/Dahua Real Estate
Xxxxx Invest Inc.
Tianchuangshiyuan Mansion
00xx Xxxxx, Xxxxx X
Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx
Attn: President
If to Selling Stockholder
Suite 2307 IBIC
0 Xxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Attn: President
Additional notices are to be given as to each party, at such other address as
should be designated in writing complying as to delivery with the terms of
this Section 5.2. All such notices shall be effective when sent, addressed
as aforesaid.
5.3 NO PERSONAL LIABILITY. This Agreement shall not create or be
deemed to create any personal liability or obligation on Selling Stockholder
or on the part of any direct or indirect shareholder of Norton, Xxxxx or Dahua
Real Estate, or any of their respective officers, directors, employees,
agents or representative.
5.4 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement or the other documents.
5.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts when taken together will constitute one
and the same agreement.
5.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding of the parties with respect to the subject matter thereof,
and supersedes all prior and contemporaneous agreements and understandings.
5.7 GOVERNING LAW. The validity, meaning and effect of this Agreement
shall be determined in accordance with the laws of New York applicable to
contracts made and to be performed in New York. In the event of any dispute
under this Agreement, the parties agree that the jurisdiction for the
resolution of any such dispute will be any appropriate court located in New
York City, New York.
5.8 AMENDMENT. This Agreement may be amended with the approval of
the Selling Stockholder, the boards of directors of Xxxxx and Dahua Real
Estate at any time before the Closing, if required. This Agreement may not
be amended except by an instrument, in writing, signed on behalf of each of
the parties hereto.
IN WITNESS WHEREOF, each of the parties to this Agreement has executed or
caused this Agreement to be executed as of the date first above written.
XXXXX INVEST INC.,
a British Virgin Islands corporation
By: /s/ Du Yonglin
-----------------------------
Du Yonglin, President & CEO
SELLING STOCKHOLDER
By: /s/ Xxxxxxx Sit By: /s/ Xxxxxxx Xxxxx
----------------------------- --------------------------
Xxxxxxx Sit Xxxxxxx Xxxxx
Comp International Hotel Limited Waywood Investment Limited.
