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EXHIBIT 2.1
Exhibit 2.1 SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is dated as of 28
August 2000 by and between (a) Paddington Inc., (the "Company"); (b) Gi-Tech
Developments Limited and Xxxxxxx Xxx Xxx Man (Gi-Tech Developments Limited and
Xxxxxxx Xxx Wai Man collectively being referred to herein as the "The
Shareholders"); and (c) Supply Chain Services Limited ("SCS"). Each of the
Company, SCS and the Shareholders may herein be referred to individually as a
"Party" and collectively as the "Parties".
RECITALS
WHEREAS, the Shareholders own effectively one hundred percent of the
issued and outstanding stock of SCS, constituting a total of 10,000 ordinary
shares (the "Shares"), and;
WHEREAS, the Company is incorporated in the State of Delaware, U.S.A.
and has, pursuant to a Form 10SB filing, voluntarily registered as a "reporting
company" for purposes of the Securities Exchange Act of 1934, and;
WHEREAS, the Company desires to exchange its newly-issued common stock
for the Shares, and the Shareholders desire to exchange the Shares for
newly-issued common stock in the Company.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and terms
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the Parties agree as follows:
I. EXCHANGE OF THE SHARES AND CONSIDERATION
1.01. SHARES BEING EXCHANGED. Upon execution and delivery of this
Agreement, the Shareholders shall assign, transfer and deliver to the
Company all of the Shares.
1.02. CONSIDERATION. Subject to the terms and conditions of this
Agreement, and in consideration of the assignment and delivery of the
Shares to the Company, the Company shall issue to the Shareholders
and/or its designees, and the Shareholders and/or its designees shall
purchase, acquire and/or accept from the Company, 27,333,333 shares of
Common Stock in the Company (the "Consideration"), equal to 82% of all
issued and outstanding stock. The Consideration shall be distributed to
the Shareholders in the following proportions:
Gi-Tech Development Limited 25,299,999 shares
Xxxx Xxx Tat 666,667 shares
(A designee of G-Tech Development
Limited)
Xxxxxxx Xxx Wai Man 1,366,667 shares
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27,333,333 shares
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II. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS AND SCS
Each of the Shareholders and SCS represent and warrant to the Company
as follows.
2.01. ORGANIZATION. SCS is a corporation duly organized, validly
existing and in good standing under the laws of the Hong Kong Special
Administrative Region. SCS has the corporate power and authority to
carry on its business as presently conducted, and is qualified to do
business in all jurisdictions where the failure to be so qualified
would have a material adverse effect on its business. SCS has good
legal title to all issued and outstanding shares of Leader Industrial
Group Limited, a corporation duly organized, validly existing and in
good standing under the laws of the Hong Kong Special Administrative
Region.
2.02. CAPITALIZATION.
2.02(a) SCS has 10,000 total shares authorized, of which
10,000 are issued and outstanding. All issued and outstanding shares of
SCS are duly authorized, validly issued, issued for value, fully paid
and non-assessable.
2.02(b) There are no outstanding preferred stock, options,
convertible securities or instruments, warrants, or any other rights to
purchase any securities of SCS.
2.03. AUTHORITY. The Shareholders have full power and authority to
enter into this Agreement and to carry out the transactions
contemplated herein. The execution, performance and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
have been duly authorized and approved by the Shareholders and no other
corporate proceedings on the part of SCS and/or the Shareholders are
necessary to authorize this Agreement and the transactions contemplated
hereby.
2.04. FINANCIAL INFORMATION The Shareholders have presented SCS's
unaudited financial statements for the period from 12 March 1999 to 30
June 2000 to the Company. This financial information is accurate and
not misleading, to the best of the Shareholders' knowledge. Other than
as set forth in its financial statements, SCS has no undisclosed
material liabilities.
2.05. LITIGATION. There is no litigation, proceeding or
investigation pending or threatened against SCS affecting any of its
properties, subsidiaries, or assets that might result, either in any
case or in the aggregate, in any adverse change in the business,
operations, affairs or condition of SCS or its properties or assets, or
that might call into question the validity of this Agreement, or any
action taken or to be taken pursuant hereto.
2.06. TITLE TO ASSETS. The Shareholders have good title to SCS, free
and clear of any lien, claim, pledge or encumbrance, and SCS has good
title to all of its assets and properties now carried on its books and
records.
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2.07. CONTRACTS AND UNDERTAKINGS. SCS and its subsidiary business
operations are not in material default, or alleged to be in material
default, under any contracts, agreements, leases, licenses,
arrangements, commitments and other undertakings (collectively referred
to herein as the "Contracts") to which SCS is a party.
2.08. NO CONFLICT. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not
conflict with or result in a breach of any term or provision of, or
constitute a default under, the Memorandum of Association or Articles
of Association of SCS, or any agreement, contract, approval by any
governmental body or instrument to which SCS is a party or by which it
or any of its assets are bound, nor will this transaction create any
lien, claim, pledge or encumbrance upon any of its properties.
2.09. ACCURACY. No document furnished to the Company by or on behalf
of the Company in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact or when taken as a
whole omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading.
2.10. FINANCIAL STATEMENTS AND TAX FILINGS. The financial statements
of SCS (the "SCS Financial Statements") submitted to the Company (a)
were prepared in accordance with the books and records of SCS; (b) are
accurate and fairly present SCS's financial condition and the results
of its operations as of the relevant dates thereof and for the periods
covered thereby; (c) contain and reflect all necessary adjustments and
accruals for a fair presentation of SCS's financial condition and the
results of its operations for the periods covered by the SCS Financial
Statements; and (d) contain and reflect adequate provisions for all
reasonably anticipated liabilities with respect to the period(s) then
ended. All SCS tax filings and payments are current. The Shareholders
acknowledge that they will cause SCS to complete and file audited SCS
Financial Statements prepared in accordance with Generally Accepted
Accounting Principles of the United States ("US GAAP") for the period
from 12 March 1999 to 30 June 2000 with the appropriate US governmental
authorities no later than 60 days from the date the transactions
contemplated hereby are first reported to the US governmental
authorities. SCS undertakes to provide to the proper government
authorities all relevant tax returns and filings on a timely basis, has
not received any notice of deficiency and knows of no tax audit upon
it, and has adequate funds to cover all taxes and interest (and
penalties, if any).
2.11. ABSENCE OF MATERIAL CHANGES. Since 1 July 2000 except as
described in any Exhibit hereto or as required or permitted under this
Agreement, there has not been any material negative change in the
condition (financial or otherwise) of the properties, assets,
liabilities or business of SCS or changes in its management or key
employees, except changes in the ordinary
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course of business which, individually and in the aggregate, have not
been materially adverse.
2.12 COMPLIANCE WITH LAW. SCS has in all material respects complied
with and is now in all material respects in compliance with, all
relevant statutes, laws, ordinances, rules, regulations, judgments,
orders, decrees, directives, consent agreements, memoranda of
understanding, permits, concessions, grants, franchises, licenses and
other governmental authorizations and approvals applicable to SCS. The
transfer of SCS stock contemplated by this Agreement will take place in
compliance with relevant laws applicable to such transfer.
2.13 REORGANIZATION RELATED REPRESENTATIONS.
2.13(a) Following the consummation of the transactions
contemplated by this Agreement, SCS will continue its historic
business.
2.13(b) SCS is not an investment company as defined under
Section 368(a)(2)(f)(iii) and (iv) of the Internal Revenue Code of
1986, as amended.
2.13(c) SCS is not under any jurisdiction of a court in Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the
Internal Revenue Code of 1986, as amended.
2.13(d) SCS understands that, upon the execution of this
Agreement, it will become subject to U.S. corporate and Delaware state
taxes upon completion of this Agreement.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Shareholders as
follows:
3.01. ORGANIZATION.
3.01(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware,
has the corporate power and authority to carry on its business as
presently conducted and is qualified to do business in all
jurisdictions where the failure to be so qualified would have a
material adverse effect on the business of the Company.
3.01(b) Copies of the Certificate of Incorporation and the
Article and Bylaws of the Company, furnished to the Shareholders are
complete and correct copies of the Articles of Incorporation and the
Bylaws of the Company as amended and in effect on the date hereof. All
minutes of meetings and actions in writing without a meeting of the
Board of Directors and the Shareholders of the Company are contained in
the minute book of the Company and no minutes or actions in writing
without a meeting have been excluded in such minute book.
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3.02. CAPITALIZATION OF THE COMPANY. The authorized capital stock of
the Company consists of 20,000,000 shares of Preferred Stock, par value
$0.0001 per share and 120,000,000 shares of Common Stock, par value
$0.0001 per share. 6,000,000 shares of Common Stock will be issued and
outstanding prior to the consummation of the transactions contemplated
by this Agreement. All outstanding shares are duly authorized, validly
issued, fully paid and non-assessable. Except for such outstanding
shares, there are no outstanding shares of capital stock or other
securities or other equity interests of the Company or rights of any
kind to acquire stock, other securities or other equity interests.
3.03. AUTHORITY. The Company has full power and authority to enter
into this Agreement and to carry out the transactions contemplated
herein. The execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, and the issuance of the
Consideration in accordance with the terms hereof, have been duly
authorized and approved by the Board of Directors of the Company and no
other corporate proceedings on the part of Company are necessary to
authorize this Agreement, the transactions contemplated hereby and the
issuance of the Consideration in accordance with the terms hereof.
3.04. FINANCIAL STATEMENTS. The Company's financial statements have
been prepared in accordance with US GAAP. The Company has no
liabilities other than as set forth in its financial statements as
filed with the Securities and Exchange Commission in the United States
(the "SEC"). The Company is not subject to any material undisclosed
liability or obligation of any nature, whether absolute, accrued,
contingent, or otherwise and whether due or to become due.
3.05. LITIGATION. There is no litigation, proceeding, government
inquiry, or investigation pending or to the knowledge of the Company,
threatened against the Company affecting any of its properties or
assets, or, to the knowledge of the Company that might result, either
in any case or in the aggregate, in any material adverse change in the
business, operations, affairs or condition of the Company or any of its
properties or assets, or that might call into question the validity of
this Agreement, or any action taken or to be taken pursuant hereto.
3.06. TITLE TO ASSETS. The Company has good and marketable title to
all of its assets and properties now carried on its books including
those reflected in the balance sheet contained in the Company's
financial statements, free and clear of all liens, claims, charges,
security interests or other encumbrances, except as described in the
balance sheet included in the Company's financial statements which were
filed as Form 10QSB with the SEC for the fiscal quarter ended 30 June
2000.
3.07. CONTRACTS AND UNDERTAKINGS. Other than its rental arrangement
with Greenford Enterprises Limited (as disclosed in its Form 10KSB
filing for the period ended 31 December 1999 and provided as Exhibit A
hereto), the Company has no Contracts to which the Company or any such
subsidiary is a party or by which
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it or its property is bound, as of the date of this Agreement. The
Company is not in material default, or alleged to be in material
default, under any Contract and, to the knowledge of the Company, no
other party to any Contract to which the Company is a party is in
default thereunder nor, to the knowledge of the Company, does there
exist any condition or event which, after notice or lapse of time or
both, would constitute a default by any party to any such Contract.
3.08. NO CONFLICT. The execution and delivery of this Agreement and
the consummation of the transaction contemplated hereby will not
conflict with or result in a breach of any term or provision of, or
constitute a default under, the Certificate of Incorporation or Bylaws
of the Company, or any agreement, contract or instrument to which the
Company is a party or by which it or any of its assets are bound.
3.09. ACCURACY. No public filing, certificate or other document
furnished to the Shareholders by or on behalf of the Company in
connection with the transactions contemplated hereby, contains any
untrue statement of a material fact or when taken as a whole omits to
state a material fact necessary in order to make the statements
contained herein or therein not misleading.
3.10. FINANCIAL STATEMENTS AND TAX FILINGS. The financial statements
of the Company (the "Company Financial Statements") set forth in its
public filings (a) were prepared in accordance with the books and
records of the Company; (b) were prepared in accordance with US GAAP
consistently applied; (c) are accurate and fairly present the Company's
financial condition and the results of its operations as of the
relevant dates thereof and for the periods covered thereby; (d) contain
and reflect all necessary adjustments and accruals for a fair
presentation of the Company's financial condition and the results of
its operations for the periods covered by the Company Financial
Statements; and (e) contain and reflect adequate provisions for all
reasonably anticipated liabilities with respect to the period(s) then
ended. All Company state and federal tax filings are current, with no
outstanding indebtedness.
3.11. ABSENCE OF MATERIAL CHANGES. Since the 30 June 2000 Form 10QSB
filing with the SEC (a copy of which has been provided to the
Shareholders), except as described in any Exhibit hereto or as required
or permitted under this Agreement, there has not been:
3.11(a) any material change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of
Company, except changes in the ordinary course of business which,
individually and in the aggregate, have not been materially adverse; or
3.11(b) other than as contemplated by this Agreement, any
undisclosed redemption, purchase or other acquisition of any shares of
the capital stock of Company, or any issuance of any shares of capital
stock or the granting, issuance or exercise of
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any rights, warrants, options or commitments by the Company relating to
their authorized or issued capital stock.
3.12. COMPLIANCE WITH LAW. The Company has in all material
respects complied with and it is now in all material respects in
compliance with, all Federal and State laws applicable to the Company,
including that the Company is current in its SEC filings. The
Consideration will be issued in full compliance with all State and
Federal securities laws.
IV. MISCELLANEOUS
4.01. EXPENSES OF SALE. Except as otherwise provided herein, the
Company shall bear all direct and indirect expenses incurred in
connection with the negotiation and preparation of this Agreement and
the consummation and performance of the transactions contemplated
herein. Without limitation, such expenses shall include stamp duty, the
fees and expenses of all attorneys, brokers, investment bankers,
accountants, agents, advisors, and finders and other professionals
incurred in connection herewith, acting on behalf of the Company and
the Shareholders.
4.02. NOTICES. All notices, requests, demands and other
communications hereunder in connection with this Agreement shall be in
writing and shall be delivered by courier or other means of personal
service (including by means of a nationally recognized courier service
or professional messenger service), or mailed first class, postage
prepaid, by certified mail, return receipt requested, or by Federal
Express or other reputable overnight delivery service, in all cases,
addressed to:
To the Shareholders:
c/o Supply Chain Services Limited
8/F Guangdong Textile Centre
00 Xxxxxx Xxxxxx, Xxxxxxxxxxx
Xxxxxxx, Xxxx Xxxx
Fax: (000) 0000-0000
To SCS:
8/F Guangdong Textile Centre
00 Xxxxxx Xxxxxx, Xxxxxxxxxxx
Xxxxxxx, Xxxx Xxxx
Attn: Xxxx Xxxxxxx Xxx
Fax: (000) 0000-0000
To the Company:
Paddington Inc.
Suite E
15/F, Xx Xxx Commercial Building
00 X'Xxxxxxx Xxxxxx, Xxxxxxx
Xxxx Xxxx
Attn: King-Xxxx Xx
Fax: (000) 0000-0000
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All notices, requests and other communications shall be deemed given on
the date of actual receipt or delivery as evidenced by written receipt,
acknowledgment or other evidence of actual receipt or delivery to the
address. In case of service by telecopy, a copy of such notice shall be
personally delivered or sent by registered or certified mail, in the
manner set forth above, within three (3) business days thereafter.
Either party hereto may from time to time by notice in writing served
as set forth above designate a different address or a different or
additional person to which all such notices or communications
thereafter are to be given.
4.03. PARTIES IN INTEREST. Except as otherwise expressly provided
herein, all the terms and provisions of this Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the
respective heirs, beneficiaries, personal and legal representatives,
successors, designees and assigns of the parties hereto.
4.04. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, including any
Schedules, Exhibits and other documents and writings referred to herein
or delivered pursuant hereto, which form a part hereof, contains the
entire understanding of the parties with respect to its subject matter.
There are no restrictions, agreements, promises, warranties, covenants
or undertakings other than those expressly set forth herein or therein.
This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter. This Agreement
may be amended only by a written instrument duly executed by the
parties or their respective successors or assigns.
4.05. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
4.06. GOVERNING LAW. This Agreement shall be subject to the laws and
jurisdiction of the State of Delaware.
(SIGNATURES APPEAR ON THE NEXT PAGE)
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the Parties hereto as of the date first above written.
PADDINGTON INC.
By: /s/ Yu Xxxx Xxxx
---------------------------------
Name: Yu Xxxx Xxxx
Title: President
SUPPLY CHAIN SERVICES LIMITED
By: /s/ Xxxxxx Xxx
---------------------------------
Name: Xxxxxx Xxx
Title: Director
THE SHAREHOLDERS OF SCS
A. GI-TECH DEVELOPMENTS LIMITED
By: /s/ Xxxxxx Xxx
---------------------------------
Name: Xxxxxx Xxx
Title: Director
B. Xxxxxxx Xxx Wai Man
By: /s/ Xxxxxxx Xxx Xxx Man
---------------------------------
Name: Xxxxxxx Xxx Wai Man
Title: Director and Secretary
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EXHIBIT A : COMPANY'S RENTAL ARRANGEMENT WITH GREENFORD ENTERPRISES LTD.
GREENFORD ENTERPRISES LIMITED
SUITE E, 15/F XX XXX COMMERCIAL XXXXXXXX 00 X'XXXXXXX XXXXXX,
XXXXXXX XXXX XXXX
20 April, 1999
The Directors
Paddington Inc.
c/o Suite E, 15/F Xx Xxx Commercial Xxxxxxxx
00 X'Xxxxxxx Xxxxxx, Xxxxxxx
Xxxx Xxxx
Re: Paddington Inc. - Use of Office Space and Address
Dear Sirs,
We hereby advise that the Board of Directors of Greenford Enterprises
Limited ("The Company") has authorised the Officers and Directors of
Paddington Inc. to use, at no cost to Paddington Inc., its office space
at Suite E, 15/F, Xx Xxx Xxxxxxxxxx Xxxxxxxx, 00 X'Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxx Xxxx (the "Office Address"), with immediate effect until
such time as Paddington Inc. completes an acquisition or merger. During
this period, Paddington Inc. is also authorised to use the Office
Address as Paddington Inc.`s correspondence address at no cost. We
request Paddington Inc. to notify us as soon as such a transaction is
completed.
Please instruct Paddington Inc.'s Officers and Directors only to use the
Office Address as Paddington Inc.'s correspondence address and should
not represent the Office Address as Paddington Inc.'s registered or
business address in Hong Kong to any third parties.
We also note that the Officers and Directors might use the Office
Address to carry out other lawful activities not relating to those of
Paddington Inc. Under such circumstances, Paddington Inc. should not
bear any legal responsibilities for these actions.
A copy of The Company's Minutes of the Board of Directors authorising
the above arrangement is hereby attached for your reference and record.
Yours faithfully,
For and on behalf of
GREENFORD ENTERPRISES LIMITED
/s/ Xxxxxxx Xxxx Xxx Xxxx
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Xxxxxxx Xxxx Xxx Xxxx, Director
