MERGER AGREEMENT
by
and among
China
Software Technology Group Co., Ltd.,
AWSG
Acquisition Corp.,
and
American
Wenshen Steel Group, Inc.
Dated
as of June 29, 2007
1
Merger
Agreement (the
“Agreement”)
dated
as of June 29, 2007 by and among China Software Technology Group Co., Ltd.,
a
corporation formed under the laws of the State of Delaware (“CSWT”),
AWSG
Acquisition Corp., a corporation newly formed under the laws of the State of
Delaware and a wholly owned subsidiary of CSWT (the “Merger
Sub”),
and
American Wenshen Steel Group, Inc.,
a
corporation formed under the laws of the State of Delaware (“AWSG”).
Each
of
CSWT,
the
Merger Sub, and AWSG is referred to herein individually as a “Party”
and
all
are referred to collectively as the “Parties.”
PREAMBLE
WHEREAS,
AWSG
owns 100% of the registered capital of Chaoyang Liaoyang Speciality Steel Co.,
Ltd. (“CLSS”),
a
corporation organized under the laws of The People’s Republic of China;
WHEREAS,
CSWT
and AWSG have determined that a business combination between them is advisable
and in the best interests of their respective companies and stockholders and
presents an opportunity for their respective companies to achieve long-term
strategic and financial benefits;
WHEREAS,
CSWT
has proposed to acquire AWSG pursuant to a merger transaction whereby, pursuant
to the terms and subject to the conditions of this Agreement, AWSG shall become
a wholly owned subsidiary of CSWT through the merger of AWSG with and into
the
Merger Sub (the “Merger”);
and
WHEREAS,
in the
Merger, all issued and outstanding shares of capital stock of AWSG shall be
cancelled and converted into the right to receive 434,377 Series A Convertible
Shares of CSWT (the
“Merger
Shares”)
which
Shares shall represent 97.58% of the voting power of CSWT after the Merger;
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants, representations and
warranties contained herein, the Parties, intending to be legally bound, hereby
agree as follows:
CERTAIN
DEFINITIONS
As
used
in this Agreement, the following terms shall have the meanings set forth below:
“Applicable
Law”
means
any domestic or foreign law, statute, regulation, rule, policy, guideline or
ordinance applicable to the businesses of the Parties or the Merger.
“DGCL”
means
Delaware General Corporation Law.
“Knowledge”
means,
in the case of CSWT or AWSG, actual awareness by its CEO or CFO of a particular
fact or other matter or information that a prudent individual serving in such
capacity could be expected to discover or otherwise become aware of in the
course of conducting a reasonable
review or
investigation of
the
corporation and its business and affairs.
“Lien”
means,
with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest, claim, encumbrance, royalty interest, any other adverse
claim
of any kind in respect of such property or asset, or any other restrictions
or
limitations of any nature whatsoever.
2
“Material
Adverse Effect”
with
respect to any entity or group of entities means any event, change or effect
that has or would have a materially adverse effect on the financial condition,
business or results of operations of such entity or group of entities, taken
as
a whole.
“Person”
means
any individual, corporation, partnership, trust or unincorporated organization
or a government or any agency or political subdivision thereof.
“Surviving
Entity”
shall
mean AWSG as the surviving entity in the Merger as provided in Section
1.03.
“Tax”
(and,
with correlative meaning, “Taxes”
and
“Taxable”)
means:
(i)
any
income, alternative or add-on minimum tax, gross receipts tax, sales tax, use
tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,
withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp
tax, occupation tax, property tax, environmental or windfall profit tax, custom,
duty or other tax, impost, levy, governmental fee or other like assessment
or
charge of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto by any
governmental or Tax authority responsible for the imposition of any such tax
(domestic or foreign), and
(ii)
any
liability for the payment of any amounts of the type described in clause (i)
above as a result of being a member of an affiliated, consolidated, combined
or
unitary group for any Taxable period, and
(iii)
any
liability for the payment of any amounts of the type described in clauses (i)
or
(ii) above as a result of any express or implied obligation to indemnify any
other person.
“Tax
Return”
means
any return, declaration, form, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof.
ARTICLE
I
THE
MERGER
|
SECTION
|
1.01 |
STRUCTURE
|
Upon
the
terms and subject to the conditions set forth in this Agreement and in
accordance with the DGCL, at the Effective Time (as hereinafter defined), all
AWSG Shares (as hereinafter defined) shall be cancelled and converted into
the
right to receive the Merger Shares. In connection therewith, the following
terms
shall apply:
(a) Exchange
Agent.
Xxxxxx
Xxxxxx, Esq., counsel to AWSG, shall act as the exchange agent (the
“Exchange
Agent”)
for
the purpose of exchanging AWSG Shares for the Merger Shares. At or prior to
the
Closing, CSWT shall deliver to the Exchange Agent the Merger Shares.
(b) Prior
to
the Closing Date, CSWT shall file with the Secretary of State of Delaware a
Certificate of Designations of Series A Convertible Preferred Stock (the
“Series
A Convertible Shares”)
in the
form annexed hereto as Schedule
1.01(a).
3
(c) Conversion
of Securities.
(i) Conversion
of AWSG Securities.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
CSWT, AWSG or the Merger Sub, or the holders of any of their respective
securities:
(A) Each
of
the issued and outstanding shares of common stock of AWSG (the “AWSG
Shares”)
immediately prior to the Effective Time shall be converted into and represent
the right to receive, and shall be exchangeable for, that number of Series
A
Convertible Shares of CSWT as shall be determined by dividing 434,377 by the
number of then issued and outstanding AWSG Shares.
(B) All
AWSG
Shares shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate representing
any such shares shall cease to have any rights with respect thereto, except
the
right to receive the Merger Shares to be issued pursuant to Section
1.01(c)(i)(A) upon the surrender of such certificate in accordance with Section
1.07, without interest. No fractional shares may be issued; but each fractional
share that would result from the Merger will be rounded to the nearest number
of
whole shares.
(C) The
Merger Shares (I) shall represent 97.58%, on a fully diluted basis, of the
voting power of all classes of issued and outstanding stock of CSWT at the
Effective Time, after giving effect to the Merger, and (II) shall be convertible
into 97.58% of the common stock of CSWT on a fully diluted basis on the Closing
Date, subject to the consummation of the spin-off transaction described in
the
Operating Subsidiary Agreement (as defined in Section 5.01(d)
hereof).
(ii) Conversion
of Merger Sub Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
AWSG, CSWT, the Merger Sub, or the holders of any of their respective
securities, each share of capital stock of Merger Sub outstanding immediately
prior to the Effective Time shall be converted into one share of the common
stock of the Surviving Entity and the shares of common stock of the Surviving
Entity so issued in such conversion shall constitute the only outstanding shares
of capital stock of the Surviving Entity and the Surviving Entity shall be
a
wholly owned subsidiary of CSWT.
(d) Exemption
from Registration.
The
Parties intend that the issuance of the Merger Shares to the AWSG Shareholders
shall be exempt from the registration requirements of the Securities Act of
1933
(the “Securities
Act”)
pursuant to Section 4(2) of the Securities Act and the rules and regulations
promulgated thereunder.
|
SECTION
|
1.02 |
CLOSING.
|
The
closing of the Share Purchase and the Merger (the “Closing”)
will
take place at the offices of Xxxxxx Xxxxxx, Esq., counsel for AWSG, within
one
(1) business day following the satisfaction or waiver of the conditions
precedent set forth in Article V or at such other date as CSWT and AWSG shall
agree (the “Closing
Date”),
but
in any event no later than July 31, 2007 unless extended by a written agreement
of CSWT and AWSG.
4
|
SECTION
|
1.03 |
MERGER;
EFFECTIVE TIME.
|
At
the
Effective Time and subject to and upon the terms and conditions of this
Agreement, Merger Sub shall, and CSWT shall cause Merger Sub to, merge with
and
into AWSG in accordance with the provisions of the DGCL, the separate corporate
existence of Merger Sub shall cease and AWSG shall continue as the Surviving
Entity. The Effective Time shall occur upon the filing with the Secretary of
State of the State of Delaware of a Certificate of Merger, executed in
accordance with the applicable provisions of the DGCL (the “Effective
Time”).
The
date on which the Effective Time occurs is referred to as the “Effective
Date.”
Provided that this Agreement has not been terminated pursuant to Article VI,
the
Parties will cause the Certificate of Merger to be filed as soon as practicable
after the Closing.
|
SECTION
|
1.04 |
EFFECT
OF THE MERGER.
|
The
Merger shall have the effect set forth in Title 8, Section 259 of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the properties, rights, privileges, powers and franchises
of
AWSG and Merger Sub shall vest in the Surviving Entity, and all debts,
liabilities and duties of AWSG and Merger Sub shall become the debts,
liabilities and duties of the Surviving Entity.
|
SECTION
|
1.05 |
CERTIFICATE
OF INCORPORATION AND BYLAWS; DIRECTORS AND
OFFICERS.
|
Pursuant
to the Merger:
(a) The
Certificate of Incorporation and Bylaws of AWSG as in effect immediately prior
to the Effective Time shall be the Certificate of Incorporation and Bylaws
of
the Surviving Entity immediately following the Merger.
(b) The
directors and officers of the AWSG immediately prior to the Merger shall be
the
directors and officers of the Surviving Entity subsequent to the Merger.
|
SECTION
|
1.06
|
RESTRICTIONS
ON RESALE
|
(a) The
Merger Shares will not be registered under the Securities Act, or the securities
laws of any state, and shall not be transferred, hypothecated, sold or otherwise
disposed of until: (i) a registration statement with respect to such securities
is declared effective under the Securities Act, or (ii) CSWT receives an opinion
of counsel for CSWT that an exemption from the registration requirements of
the
Securities Act is available.
The
certificates representing the Series A Convertible Preferred Shares which are
being issued to the AWSG Shareholders shall contain a legend substantially
as
follows:
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR CHINA SOFTWARE
TECHNOLOGY GROUP CO., LTD. RECEIVES AN OPINION OF COUNSEL FOR CHINA SOFTWARE
TECHNOLOGY GROUP CO., LTD. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF SUCH ACT IS AVAILABLE.”
5
|
SECTION
|
1.07 |
EXCHANGE
OF CERTIFICATES.
|
(a) Exchange of Certificates. After the Effective Time, the AWSG Shareholders shall be required to surrender all their AWSG Shares to the Exchange Agent, and the AWSG Shareholders shall be entitled upon such surrender to receive in exchange therefor certificates representing the proportionate number of Merger Shares into which the AWSG Shares theretofore represented by the stock transfer forms so surrendered shall have been exchanged pursuant to this Agreement. Beginning at the Effective Time and until so surrendered, each outstanding certificate which, prior to the Effective Time, represented AWSG Shares shall be deemed for all corporate purposes, subject to the further provisions of this Article I, to evidence the ownership of the number of whole Merger Shares for which such AWSG Shares will have been so exchanged. No dividend payable to holders of record of Merger Shares as of any date subsequent to the Effective Time shall be paid to the owner of any certificate which, prior to the Effective Time, represented AWSG Shares, until such certificate or certificates representing all the relevant AWSG Shares, together with a stock transfer form, are surrendered as provided in this Article I or pursuant to letters of transmittal or other instructions with respect to lost certificates provided by the Exchange Agent.
(b) Full
Satisfaction of Rights.
All
Merger Shares for which the AWSG Shares shall have been exchanged pursuant
to
this Article I shall be deemed to have been issued in full satisfaction of
all
rights pertaining to the AWSG Shares.
(c) Exchange
of Certificates.
All
certificates representing AWSG Shares converted into the right to receive Merger
Shares pursuant to this Article I shall be furnished to CSWT subsequent to
delivery thereof to the Exchange Agent pursuant to this Agreement.
(d) Closing
of Transfer Books.
On the
Effective Date, the stock transfer book of AWSG shall be deemed to be closed
and
no transfer of AWSG Shares shall thereafter be recorded thereon.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF CSWT
CSWT
and,
where applicable, the Merger Sub hereby jointly and severally represent and
warrant to AWSG and to the Shareholders of AWSG, as of the date of this
Agreement, as of the Closing Date and as of the Effective Time, as follows:
|
SECTION
|
2.01 |
ORGANIZATION,
STANDING AND POWER.
|
CSWT
is a
corporation duly incorporated, validly existing and in good standing under
the
laws of the State of Delaware, and has corporate power and authority to conduct
its business as presently conducted by it and to enter into and perform this
Agreement and to carry out the transactions contemplated by this Agreement.
Merger Sub is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and has corporate power and
authority to enter into and perform this Agreement and to carry out the
transactions contemplated by this Agreement.
|
SECTION
|
2.02 |
SUBSIDIARIES
|
Except
as
described specifically in the Annual Report on Form 10-KSB filed by CSWT on
April 6, 2007 (the “10-KSB”)
and as
set forth specifically in this Agreement, CSWT does not have a material
ownership interest in any Person. Merger
Sub is a recently formed corporation and prior to the date hereof and through
the Effective Date, Merger Sub shall not conduct any operating business, become
a party to any agreements, or incur any liabilities or obligations.
6
|
SECTION
|
2.03 |
CAPITALIZATION.
|
(a) There are 41,000,000 shares of capital stock of CSWT authorized, consisting of 40,000,000 shares of common stock, $0.001 par value per share (the “CSWT Common Shares”) and 1,000,000 shares of preferred stock, $0.001 per share (“CSWT Preferred Shares”). As of the date of this Agreement and as of the Closing Date, there are and will be 21,502,568 CSWT Common Shares issued and outstanding.
(b) No
CSWT
Common Shares or CSWT Preferred Shares have been reserved for issuance to any
Person, and there are no outstanding rights, warrants, options or agreements
for
the purchase of CSWT Common or Preferred Shares except as provided in this
Agreement or in the Operating Subsidiary Agreement.
(c) All
outstanding CSWT Common Shares are validly issued, fully paid, non-assessable,
not subject to pre-emptive rights and have been issued in compliance with all
state and federal securities laws or other Applicable Law. The Series A
Convertible Shares issuable to the AWSG Shareholders pursuant to the Merger
will, when issued pursuant to this Agreement, be duly and validly authorized
and
issued, fully paid and non-assessable.
|
SECTION
|
2.04 |
AUTHORITY
FOR AGREEMENT.
|
The
execution, delivery, and performance of this Agreement by each of CSWT and
Merger Sub have been duly authorized by all necessary corporate and shareholder
action, and this Agreement, upon its execution by the Parties, will constitute
the valid and binding obligation of each of CSWT and the Merger Sub, enforceable
against each of them in accordance with and subject to its terms, except as
enforceability may be affected by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors' rights. The
execution and consummation of the transactions contemplated by this Agreement
and compliance with its provisions by CSWT and Merger Sub will not violate
any
provision of Applicable Law and will not conflict with or result in any breach
of any of the terms, conditions, or provisions of, or constitute a default
under, CSWT's or Merger Sub’s Certificate of Incorporation, or either of their
Bylaws, in each case as amended, or, in any material respect, any indenture,
lease, loan agreement or other agreement or instrument to which CSWT is a party
or by which it or any of its properties is bound, or any decree, judgment,
order, statute, rule or regulation applicable to CSWT or Merger Sub.
|
SECTION
|
2.05 |
FINANCIAL
CONDITION
|
The
financial statements of CSWT and the additional information regarding the
financial condition of CSWT contained in the 10-KSB are true, correct and
complete in all material respects, are not misleading and do not omit to state
any material fact which is necessary to make the statements and information
contained in the Annual Report not misleading in any material respect. The
financial statements included in the Annual Report were prepared in accordance
with generally accepted accounting principles and fairly reflect the financial
condition of CSWT as of the dates stated and the results of its operations
for
the periods presented.
7
|
SECTION
|
2.06 |
ABSENCE
OF CERTAIN CHANGES OR EVENTS.
|
Since December 31, 2006, except as reported in the 10-KSB and other public reports of CSWT filed with the SEC and except as contemplated by this Agreement:
(a) there
has
not been any Material Adverse Change in the business, operations, properties,
assets, or condition of CSWT;
(b) CSWT
has
not (i) amended its Certificate of Incorporation; (ii) declared or made, or
agreed to declare or make, any payment of dividends or distributions of any
assets of any kind whatsoever to stockholders or purchased or redeemed, or
agreed to purchase or redeem, any outstanding capital stock; (iii) made any
material change in its method of management, operation, or accounting; (iv)
entered into any material transaction; or (v) made any material accrual or
arrangement for payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer or employee;
(c) CSWT
has
not (i) borrowed or agreed to borrow any material amount of funds or incurred,
or become subject to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary course of business;
(ii)
paid any material obligation or liability (absolute or contingent) other than
current liabilities reflected in or shown on the most recent CSWT balance sheet,
and current liabilities incurred since that date in the ordinary course of
business; (iii) sold or transferred, or agreed to sell or transfer, any material
assets, properties, or rights, or canceled, or agreed to cancel, any material
debts or claims; or (iv) made or permitted any material amendment or termination
of any contract, agreement, or license to which it is a party.
|
SECTION
|
2.07 |
GOVERNMENTAL
AND THIRD PARTY
CONSENTS
|
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party
to
any agreement with CSWT or Merger Sub, is required by or with respect to CSWT
or
Merger Sub in connection with the execution and delivery of this Agreement
or
the consummation of the transactions contemplated hereby, except for such
consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under (i) applicable securities
laws, or (ii) the DGCL.
|
SECTION
|
2.08 |
LITIGATION
|
There
is
no material action, suit, investigation, audit or proceeding pending against,
or
to the Knowledge of CSWT, threatened against or affecting, CSWT or the Merger
Sub or any of their respective assets or properties before any court or
arbitrator or any governmental body, agency or official.
|
SECTION
|
2.09 |
INTERESTED
PARTY TRANSACTIONS
|
CSWT
is
not indebted to any officer or director of CSWT, and no such person is indebted
to CSWT.
|
SECTION
|
2.10 |
COMPLIANCE
WITH APPLICABLE LAWS.
|
8
To
the
Knowledge of CSWT, the business of each of CSWT and the Merger Sub has not
been,
and is not being, conducted in violation of any Applicable Law.
|
SECTION
|
2.11 |
TAX
RETURNS AND
PAYMENT
|
CSWT
has
duly and timely filed all material Tax Returns required to be filed by it and
has duly and timely paid all Taxes shown thereon to be due, or has corrected
any
late filing and paid any fees due in relation thereto. Except as disclosed
in
financial statements filed with the 10-KSB or other public filing with the
SEC
of CSWT, there is no material claim for Taxes that is a Lien against the
property of CSWT other than Liens for Taxes not yet due and payable, none of
which is material. CSWT has not received written notification of any audit
of
any Tax Return of CSWT being conducted or pending by a Tax authority, no
extension or waiver of the statute of limitations on the assessment of any
Taxes
has been granted by CSWT which is currently in effect, and CSWT is not a party
to any agreement, contract or arrangement with any Tax authority or otherwise,
which may result in the payment of any material amount in excess of the amount
reflected on the above referenced CSWT financial statements.
|
SECTION
|
2.12 |
SECURITY
LISTING
|
CSWT
is
in material compliance with all requirements of the Securities Exchange Act
of
1934, as amended (the “Exchange
Act”),
and
all CSWT public filings required under the Exchange Act have been made. The
common stock of CSWT is listed for quotation on the OTC Bulletin Board. To
the
Knowledge of CSWT, CSWT has not been threatened or is not subject to removal
of
its common stock from the OTC Bulletin Board.
|
SECTION
|
2.13 |
FINDERS’
FEES
|
CSWT
has
not incurred, nor will it incur, directly or indirectly, any material liability
for brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF AWSG
AWSG
hereby represents and warrants to CSWT and to Merger Sub, as of the date of
this
Agreement, as of the Closing Date, and as of the Effective Time (except as
otherwise indicated), as follows:
|
SECTION
|
3.01 |
ORGANIZATION,
STANDING AND POWER.
|
AWSG
is a
privately held corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and has corporate power and
authority to conduct its business as presently conducted by it and to enter
into
and perform this Agreement and to carry out the transactions contemplated by
this Agreement.
|
SECTION
|
3.02 |
CAPITALIZATION.
|
There
are
100,000,000 shares of AWSG capital stock authorized, consisting of 100,000,000
shares of common stock with $.00001 par value (the “AWSG
Common Shares”).
As of
the date of this Agreement, and as of the Closing Date, there are 30,000 issued
and outstanding AWSG Common Shares. No AWSG Common Shares have been reserved
for
issuance to any Person, and there are no outstanding rights, warrants, options
or agreements for the purchase of AWSG Common Shares. No Person is entitled
to
any rights with respect to the conversion, exchange or delivery of the AWSG
Common Shares. The AWSG Common Shares have been issued in compliance with
Applicable Law.
9
|
SECTION
|
3.03 |
AUTHORITY
FOR AGREEMENT.
|
The
execution, delivery and performance of this Agreement by AWSG has been duly
authorized by all necessary corporate and shareholder action, and this Agreement
constitutes the valid and binding obligation of AWSG, enforceable against AWSG
in accordance with its terms, except as enforceability may be affected by
bankruptcy, insolvency or other laws of general application affecting the
enforcement of creditors' rights. The execution and consummation of the
transactions contemplated by this Agreement and compliance with its provisions
by AWSG will not violate any provision of Applicable Law and will not conflict
with or result in any breach of any of the terms, conditions, or provisions
of,
or constitute a default under, AWSG’s Certificate of Incorporation or Bylaws, in
each case as amended, or in any material respect, any indenture, lease, loan
agreement or other agreement instrument to which AWSG is a party or by which
it
or any of its properties are bound, or any decree, judgment, order, statute,
rule or regulation applicable to AWSG.
|
SECTION
|
3.04 |
GOVERNMENTAL
OR THIRD PARTY CONSENT
|
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party
to
any agreement with AWSG, is required by or with respect to AWSG in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for such consents, waivers, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under (i) applicable securities laws, or (ii) the
DGCL.
|
SECTION
|
3.05 |
BUSINESS
OPERATIONS AND LIABILITIES -
AWSG.
|
AWSG
has
conducted no business operations other than the acquisition of ownership of
the
capital stock of CLSS. AWSG has no liabilities other than liabilities that
were
incurred in the ordinary course of business and that will not exceed $10,000
on
the Closing Date.
|
SECTION
|
3.06 |
ORGANIZATION
AND STANDING - CLSS.
|
CLSS
is a
corporation duly organized, validly existing and in good standing under the
laws
of the People’s Republic of China. CLSS has corporate power and authority to
carry on its business as now conducted and to own and operate its assets,
properties and business.
|
SECTION
|
3.07 |
OWNERSHIP
OF CLSS SHARES.
|
AWSG
is
the owner of one hundred percent (100%) of the registered capital stock of
CLSS,
free and clear of all Liens, encumbrances, and restrictions whatsoever. No
Person has any right to acquire capital stock of CLSS, whether by tender of
consideration or otherwise.
|
SECTION
|
3.08 |
CORPORATE
RECORDS.
|
All
of
the books and records of each of AWSG and CLSS, including, without limitation,
its books of account, corporate records, minute book, stock certificate books
and other records, are up-to-date and complete, and reflect accurately and
fairly the conduct of its business in all material respects since its date
of
incorporation. All reports, returns and statements currently required to be
filed by either AWSG or CLSS with any government agency with respect to the
business and operations of AWSG or CLSS have been filed or valid extensions
have
been obtained in accordance with normal procedures (and such extensions will
be
valid as of the Closing Date) and all governmental reporting requirements have
been complied with.
10
|
SECTION
|
3.09 |
FINANCIAL
STATEMENTS - CLSS
|
The financial statements of CLSS for the years ended December 31, 2006 and 2005 previously delivered to CSWT have been prepared in accordance with accounting principles generally accepted in the United States and fairly present the financial condition of CLSS at the date presented and the results of operations of CLSS for those two years.
|
SECTION
|
3.10 |
TAXES.
|
Each
of
AWSG and CLSS has filed all Tax Returns that it is required to file with all
governmental agencies, wherever situate, and has paid or accrued for payment
of
all Taxes as shown on such returns except
for Taxes being contested in good faith. There is no material claim for Taxes
that is a Lien against the property of AWSG or CLSS other than Liens for Taxes
not yet due and payable. All Taxes due and owing by either AWSG or CLSS have
been paid. Neither AWSG or CLSS is the beneficiary of any extension of time
within which to file any tax return.
|
SECTION
|
3.11 |
PENDING
ACTIONS.
|
There
are
no material legal actions, lawsuits, proceedings or investigations, either
administrative or judicial, pending or threatened, against or affecting AWSG,
CLSS, or against CLSS’s Officers or Directors that arose out of their operation
of CLSS. Neither AWSG, CLSS, nor any of CLSS’s Officers or Directors are subject
to any order, writ, judgment, injunction, decree, determination or award of
any
court, arbitrator or administrative, governmental or regulatory authority or
body which would be likely to have a material adverse effect on the business
of
CLSS or AWSG.
|
SECTION
|
3.12 |
INTELLECTUAL
PROPERTY AND INTANGIBLE ASSETS.
|
To
the
Knowledge of AWSG,
CLSS
has full legal right, title and interest in and to all of the intellectual
property utilized in the operation of its business. CLSS has not received any
written notice that the rights of any other person are violated by the use
by
CLSS of the intellectual property. None of the intellectual property has ever
been declared invalid or unenforceable, or is the subject of any pending or,
to
the knowledge of any of the AWSG
Shareholders,
threatened action for opposition, cancellation, declaration, infringement,
or
invalidity, unenforceability or misappropriation or like claim, action or
proceeding.
|
SECTION
|
3.13 |
COMPLIANCE
WITH LAWS.
|
CLSS's
operations have been conducted in all material respects in accordance with
all
applicable statutes, laws, rules and regulations. CLSS is not in violation
of
any law, ordinance or regulation of the People’s Republic of China or of any
other jurisdiction. CLSS holds all the environmental, health and safety and
other permits, licenses, authorizations, certificates and approvals of
governmental authorities (collectively, "Permits") necessary or proper for
the
current use, occupancy or operation of its business, and all of the Permits
are
now in full force and effect.
|
SECTION
|
3.14 |
FINDERS’
FEES
|
Neither
AWSG nor CLSS has incurred, nor will it incur, directly or indirectly, any
liability for brokers’ or finders’ fees or agents’ commissions or investment
bankers’ fees or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
11
ARTICLE
IV
CERTAIN
COVENANTS AND AGREEMENTS
|
SECTION
|
4.01 |
COVENANTS
OF
AWSG
|
AWSG,
for
itself and on behalf of CLSS, covenants and agrees that, during the period
from
the date of this Agreement until the Closing Date, AWSG shall, except as
otherwise disclosed in this Agreement and other than as contemplated by this
Agreement or for the purposes of effecting the Closing pursuant to this
Agreement, conduct its business as presently operated and solely in the ordinary
course, and consistent with such operation, and, in connection therewith,
without the written consent of CSWT:
| (a) |
shall
not amend its Certificate of Incorporation or
Bylaws;
|
| (b) |
shall
not pay or agree to pay to any employee, officer or director compensation
that is in excess of the current compensation level of such employee,
officer or director other than salary increases or payments made in
the
ordinary course of business or as otherwise provided in any contracts
or
agreements with any such employees;
|
| (c) |
shall
not merge or consolidate with any other entity or acquire or agree
to
acquire any other entity;
|
| (d) |
shall
not sell, transfer, or otherwise dispose of any material assets required
for the operations of AWSG’s business, except in the ordinary course of
business consistent with past practices;
|
| (e) |
shall
not declare or pay any dividends on or make any distribution of any
kind
with respect to the AWSG Shares; and
|
| (f) |
shall
use commercially reasonable efforts to comply with and not be in default
or violation under any known law, regulation, decree or order applicable
to AWSG’s business, operations or assets where such violation would have a
Material Adverse Effect on AWSG.
|
|
SECTION
|
4.02 |
COVENANTS
OF CSWT
|
CSWT
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, CSWT shall not, other than as contemplated by this
Agreement or for the purposes of effecting the Closing pursuant to this
Agreement, conduct its business as presently operated and solely in the ordinary
course, and consistent with such operation, and, in connection therewith,
without the written consent of AWSG:
| (a) |
shall
not amend its Articles of Incorporation or Bylaws, except to create
the
Series A Convertible Shares as provided in Section
1.01;
|
| (b) |
shall
not pay or agree to pay to any employee, officer or director compensation
of any kind or amount;
|
| (c) |
shall
not merge or consolidate with any other entity or acquire or agree
to
acquire any other entity;
|
12
| (d) |
shall
not create, incur, assume, or guarantee any material indebtedness for
money borrowed except in the ordinary course of business, or create
or
suffer to exist any mortgage, Lien or other encumbrance on any of its
material assets;
|
| (e) |
shall
not make any material capital expenditure or series of capital
expenditures except in the ordinary course of
business;
|
| (f) |
shall
not declare or pay any dividends on or make any distribution of any
kind
with respect to CSWT;
|
| (g) |
shall
not issue any additional shares of CSWT capital stock or take any action
affecting the capitalization of CSWT or the CSWT Common or Preferred
Shares; and
|
| (h) |
shall
not grant any severance or termination pay to any director, officer
or any
other employees of CSWT.
|
|
SECTION
|
4.03 |
COVENANTS
OF THE PARTIES
|
(a) Tax-free
Reorganization.
The
Parties intend that the Merger qualify as a Tax-free “reorganization” under
Sections 368(a) of the Code, as amended, and the Parties will take the position
for all purposes that the Merger shall qualify as a reorganization under such
Section. In addition, the Parties covenant and agree that they will not engage
in any action, or fail to take any action, which action or failure to take
action would reasonably be expected to cause the Merger to fail to qualify
as a
Tax-free “reorganization” under Section 368(a) of the Code, whether or not
otherwise permitted by the provisions of this Agreement;
(b) Announcement.
Neither
AWSG nor CSWT shall issue any press release or otherwise make any public
statement with respect to this Agreement or the transactions contemplated hereby
without the prior consent of the other Party (which consent shall not be
unreasonably withheld), except as may be required by applicable law or
securities regulation. Upon execution of this Agreement, CSWT shall issue a
press release, after approval thereof by AWSG, and file a Current Report on
Form
8-K reporting the execution of the Agreement.
(c) Notification
of Certain Matters.
AWSG
shall give prompt written notice to CSWT, and CSWT shall give prompt written
notice to AWSG, of:
(i) The
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time; and
(ii) Any
material failure of AWSG or any of the AWSG Shareholders on the one hand, or
CSWT, on the other hand, to comply with or satisfy any covenant, condition
or
agreement to be complied with or satisfied by it hereunder.
(d) Reasonable
Best Efforts.
Before
Closing, upon the terms and subject to the conditions of this Agreement, the
Parties agree to use their respective reasonable best efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable (subject to applicable laws) to consummate and make
effective the Merger and other transactions contemplated by this Agreement
as
promptly as practicable including, but not limited to:
13
(i) The
preparation and filing of all forms, registrations and notices required to
be
filed to consummate the Share Purchase and the Merger, including without
limitation, any approvals, consents, orders, exemptions or waivers by any third
party or governmental entity; and
(ii) The
satisfaction of the Party's conditions precedent to Closing.
(e) Access
to Information
(i) Inspection
by AWSG.
CSWT
will make available for inspection by AWSG, during normal business hours and
in
a manner so as not to interfere with normal business operations, all of CSWT’s
records (including tax records), books of account, premises, contracts and
all
other documents in CSWT’s possession or control that are reasonably requested by
AWSG to inspect and examine the business and affairs of CSWT. CSWT will cause
its managerial employees and regular independent accountants to be available
upon reasonable advance notice to answer questions of AWSG concerning the
business and affairs of CSWT. AWSG will treat and hold as confidential any
information it receives from CSWT in the course of the reviews contemplated
by
this Section 4.03(e). No examination by AWSG will, however, constitute a waiver
or relinquishment by AWSG of its rights to rely on CSWT’s covenants,
representations and warranties made herein or pursuant hereto.
(ii) Inspection
by CSWT.
AWSG
will, if requested, make available for inspection by CSWT, during normal
business hours and in a manner so as not to interfere with normal business
operations, all of AWSG’s records (including tax records), books of account,
premises, contracts and all other documents in AWSG’s possession or control that
are reasonably requested by CSWT to inspect and examine the business and affairs
of AWSG and/or CLSS. AWSG will cause its managerial employees and regular
independent accountants to be available upon reasonable advance notice to answer
questions of CSWT concerning the business and affairs of AWSG and CLSS. CSWT
will treat and hold as confidential any information it receives from AWSG in
the
course of the reviews contemplated by this Section 4.03(e). No examination
by
CSWT will, however, constitute a waiver or relinquishment by CSWT of its rights
to rely on AWSG’s covenants, representations and warranties made herein or
pursuant hereto.
ARTICLE
V
CONDITIONS
PRECEDENT
SECTION
5.01 CONDITIONS
PRECEDENT TO THE PARTIES' OBLIGATIONS.
The
obligations of the Parties as provided herein shall be subject to each of the
following conditions precedent, unless waived in writing by both CSWT and AWSG:
(a) Consents,
Approvals.
The
Parties shall have obtained all necessary consents and approvals of their
respective boards of directors, and all consents, approvals and authorizations
required under their respective charter documents, and all material consents,
including any material consents and waivers by the Parties’ respective lenders
and other third parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
(b) Shareholder
Approval.
This
Agreement and the transactions contemplated hereby shall have been approved
by
the shareholders of AWSG in accordance with the applicable provisions of the
DGCL and its bylaws.
14
(c) Absence
of Certain Litigation.
No
action or proceeding shall be threatened or pending before any governmental
entity or authority which, in the reasonable opinion of counsel for the Parties,
is likely to result in a restraint, prohibition or the obtaining of damages
or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
(d) Operating
Subsidiary Agreement.
CSWT
shall have entered into an Assignment and Assumption and Management Agreement
(the “Operating
Subsidiary Agreement”)
in the
form attached hereto as Schedule
5.01 (d))
with HXT
Holdings, Inc. (the “Operating
Sub”)
and
the individuals identified as “Managers” in the Operating Subsidiary
Agreement regarding
(i) the transfer to the Operating Sub of all of the assets and liabilities
of
CSWT, (ii) the management and operation of the Operating Sub following the
Closing, (iii) the indemnification by the CSWT Principal Shareholder of CSWT
and
AWSG (and their respective officers, directors and shareholders) from and
against all liabilities of the Operating Sub existing on the Closing Date or
arising thereafter, and (iv) the distribution of the stock of the Operating
Sub
to the holders of CSWT common stock when the registration statement with respect
to the common stock of the Operating Sub has become effective.
|
SECTION
|
5.02 |
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF CSWT
|
The
obligations of CSWT on the Closing Date as provided herein shall be subject
to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived in writing by CSWT:
(a) Consents
and Approvals.
AWSG
shall have obtained all material consents, including any material consents
and
waivers by AWSG's lenders and other third parties, if necessary, to the
consummation of the transactions contemplated by this Agreement.
(b)
Representations
and Warranties.
The
representations and warranties by AWSG in Article III herein shall be true
and
accurate in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made
at
and as of the Closing Date, except to the extent that any changes therein are
specifically contemplated by this Agreement.
(c) Performance.
AWSG
and CLSS shall have performed and complied in all material respects with all
agreements to be performed or complied with by it pursuant to this Agreement
at
or prior to the Closing.
(d) Proceedings
and Documents.
All
corporate, company and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be reasonably satisfactory in substance and form to
CSWT
and its counsel, and CSWT and its counsel shall have received all such
counterpart originals (or certified or other copies) of such documents as they
may reasonably request.
(e) Certificate
of Good Standing.
AWSG
shall have delivered to CSWT a certificate as to the good standing of AWSG
certified by the Secretary of State of the State of Delaware on or within five
(5) business days prior to the Closing Date.
(f) Material
Changes.
Except
as contemplated by this Agreement, since the date hereof, neither CLSS nor
AWSG
shall have suffered a Material Adverse Effect, and, without limiting the
generality of the foregoing, there shall be no pending litigation to which
CLSS
or AWSG is a party which is reasonably likely to have a Material Adverse Effect
on AWSG.
15
(g) SEC
Filing.
No less
than one week prior to the Closing, AWSG shall have delivered to CSWT the
financial statements, report of AWSG’s independent registered public accountant,
and other information required for inclusion in the Current Report that CSWT
will file with the SEC within four business days after the Closing.
(h) Stock
Option Agreement.
The
Stock Option Agreement of even date herewith among Yuan Xxxx Xx, Xxxx Xxxx,
and
Xxxxxx Technology and Investment Corp. shall have been executed and be in full
force and effect, and the Option Purchase Price thereunder shall be tendered
to
the Sellers thereunder simultaneous with the Closing hereunder.
|
SECTION
|
5.03 |
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF
AWSG
|
The
obligations of AWSG on the Closing Date as provided herein shall be subject
to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived in writing by AWSG:
(a) Consents
And Approvals.
CSWT
and the Merger Sub shall have obtained all material consents, including any
material consents and waivers of its respective lenders and other third parties,
if necessary, to the consummation of the transactions contemplated by this
Agreement.
(b) Representations
And Warranties.
The
representations and warranties by CSWT and Merger Sub in Article II herein
shall
be true and accurate in all material respects on and as of the Closing Date
with
the same force and effect as though such representations and warranties had
been
made at and as of the Closing Date, except to the extent that any changes
therein are specifically contemplated by this Agreement.
(c) Performance.
CSWT
and Merger Sub shall have performed and complied in all material respects with
all agreements to be performed or complied with by it pursuant to this Agreement
prior to or at the Closing.
(d) Proceedings
And Documents.
All
corporate, company and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be reasonably satisfactory in substance and form to
AWSG
and its counsel, and AWSG and its counsel shall have received all such
counterpart originals (or certified or other copies) of such documents as they
may reasonably request.
(e) Certificates
of Good Standing.
CSWT
shall have delivered to AWSG certificates as to its and the Merger Sub’s good
standing in the State of Delaware, in each case certified by the Secretary
of
State not more than five (5) business days prior to the Closing
Date.
(f) Material
Changes.
Except
as contemplated by this Agreement, since the date hereof, neither CSWT nor
the
Merger Sub shall have suffered a Material Adverse Effect and, without limiting
the generality of the foregoing, there shall be no pending litigation to which
CSWT or the Merger Sub is a party which is reasonably likely to have a Material
Adverse Effect on CSWT or the Merger Sub.
(g) Status
of CSWT.
At the
Effective Time of the Merger, CSWT (i) shall be in material compliance with
all
requirements of the Exchange Act, and shall be current in all of its reports
required to be filed under the Exchange Act, (ii) shall not have been threatened
or subject to delisting from the OTC Bulletin Board, and (iii) shall have
21,502,568 CSWT Common Shares outstanding, and there shall be no preferred
stock
outstanding nor, except as provided hereunder or in the Operating Subsidiary
Agreement, any options, warrants or rights to acquire capital stock of CSWT
whether for additional consideration or on conversion.
16
(h) Certificate
of Designations. The
Board
of Directors of CSWT shall have filed in the Office of the Secretary of State
of
the State of Delaware a Certification of Designations of the Series A
Convertible Shares in the form of Schedule 1.01(a) hereto.
(i) CSWT
Board of Directors.
At the
Effective Time of the Merger or in accordance with applicable law, all of the
officers and members of the board of directors of CSWT shall tender their
resignations as officers and directors of CSWT, and the vacancies created on
the
CSWT board of directors shall be filled by persons designated by the Board
of
Directors of AWSG.
(j) Information
Statement.
No less
than ten days prior to the Closing, CSWT shall have filed with the SEC and
mailed to its shareholders of record an information statement containing the
information required by SEC Rule 14f-1, which shall be provided by
AWSG.
(k) Stock
Option Agreement.
The
Stock Option Agreement of even date herewith among Yuan Xxxx Xx, Xxxx Xxxx
and
Xxxxxx Technology and Investment Corp. shall have been executed and be in full
force and effect, and certificates for the Option Shares thereunder shall be
delivered to the Escrow Agent thereunder with appropriate endorsements
simultaneous with the Closing hereunder.
ARTICLE
VI
TERMINATION
|
SECTION
|
6.01 |
TERMINATION.
|
This
Agreement may be terminated and the Merger may be abandoned at any time prior
to
the Effective Time by:
(a) The
mutual written consent of the Boards of Directors of CSWT and AWSG;
(b) Either
CSWT, on the one hand, or AWSG, on the other hand, if any governmental entity
or
court of competent jurisdiction shall have issued an order, decree or ruling
or
taken any other action (which order, decree, ruling or other action the Parties
shall use their commercially reasonable best efforts to lift), which restrains,
enjoins or otherwise prohibits the Merger or the issuance of the Series A
Convertible Shares as contemplated herein and such order, decree, ruling or
other action shall have become final and non-appealable;
(c) CSWT,
if
AWSG shall have breached in any material respect any of its or his
representations, warranties, covenants or other agreements contained in this
Agreement, and the breach cannot be or has not been cured within thirty (30)
calendar days after the giving of written notice by CSWT to AWSG;
(d) AWSG,
if
CSWT or the Merger Sub shall have breached in any material respect any of its
representations, warranties, covenants or other agreements contained in this
Agreement, and the breach cannot be or has not been cured within thirty (30)
calendar days after the giving of written notice by AWSG to CSWT; or
(e) Without
any action on the part of the Parties if required by Applicable Law or if the
Closing shall not be consummated by July 31, 2007, unless extended by written
agreement of CSWT and AWSG.
17
|
SECTION
|
6.02 |
EFFECT
OF TERMINATION.
|
If
this
Agreement is terminated as provided in Section 6.01, written notice of such
termination shall be given by the terminating Party to the other Party
specifying the provision of this Agreement pursuant to which such termination
is
made, this Agreement shall become null and void and there shall be no liability
on the part of CSWT or AWSG, provided,
however, that (a) the provisions of Articles VII and VIII hereof shall survive
the termination of this Agreement; (b) nothing in this Agreement shall relieve
any Party from any liability or obligation with respect to any willful breach
of
this Agreement; and (c) termination shall not affect accrued rights or
liabilities of any Party at the time of such termination.
ARTICLE
VII
CONFIDENTIALITY
|
SECTION
|
7.01 |
CONFIDENTIALITY
|
CSWT,
on
the one hand, and AWSG, on the other hand, will keep confidential all
information and documents obtained from the other, including but not limited
to
any information or documents provided pursuant to Section 4.03(e) hereof (except
for any information disclosed to the public pursuant to a press release
authorized by the Parties); and in the event the Closing does not occur or
this
Agreement is terminated for any reason, will promptly return such documents
and
all copies of such documents and all notes and other evidence thereof, including
material stored on a computer, and will not use such information for its own
advantage, except to the extent that (i) the information must be disclosed
by
law, (ii) the information becomes publicly available by reason other than
disclosure by the Party subject to the confidentiality obligation, (iii) the
information is independently developed without use of or reference to the other
Party’s confidential information, (iv) the information is obtained from another
source not obligated to keep such information confidential, or (v) the
information is already publicly known or known to the receiving Party when
disclosed as demonstrated by written documentation in the possession of such
Party at such time.
ARTICLE
VIII
INDEMNIFICATION
|
SECTION
|
8.01 |
INDEMNIFICATION
BY CSWT
|
CSWT
shall indemnify, defend and hold harmless each of AWSG, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior
to
the date hereof or who becomes prior to the Closing, a shareholder, officer,
director or partner of AWSG, any subsidiary or affiliate thereof or an employee
of AWSG, any subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “AWSG
Indemnified Parties”)
against all losses, claims, damages, costs, expenses (including reasonable
attorneys’ fees), liabilities or judgments or amounts that are paid in
settlement of or in connection with any threatened or actual third party claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any material breach of this Agreement
by
CSWT or any subsidiary or affiliate thereof, including but not limited to
failure of any representation or warranty to be true and correct at or before
the Closing, or (ii) any willful or grossly negligent act, omission or conduct
of any officer, director or agent of CSWT or any subsidiary or affiliate thereof
prior to the Closing, whether asserted or claimed prior to, at or after, the
Closing. Any AWSG Indemnified Party wishing to claim indemnification under
this
Section 8.01, upon learning of any such claim, action, suit, proceeding or
investigation, shall notify CSWT in writing, but the failure to so notify shall
not relieve CSWT from any liability that it may have under this Section 8.01,
except to the extent that such failure would materially prejudice
CSWT.
18
|
SECTION
|
8.02 |
INDEMNIFICATION
BY AWSG
|
AWSG
shall indemnify, defend and hold harmless each of CSWT, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior
to
the date hereof or who becomes prior to the Closing, a shareholder, officer,
director or partner of CSWT, any subsidiary or affiliate thereof or an employee
of CSWT, any subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “CSWT
Indemnified Parties”)
against all losses, claims, damages, costs, expenses (including reasonable
attorneys’ fees), liabilities or judgments or amounts that are paid in
settlement of or in connection with any threatened or actual third party claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any material breach of this Agreement
by
AWSG, any subsidiary or affiliate thereof or any AWSG Shareholder, including
but
not limited to failure of any representation or warranty to be true and correct
at or before the Closing, or (ii) any willful or negligent act, omission or
conduct of any officer, director or agent of AWSG or any subsidiary or affiliate
thereof prior to the Closing, whether asserted or claimed prior to, at or after,
the Closing. Any CSWT Indemnified Party wishing to claim indemnification under
this Section 8.02, upon learning of any such claim, action, suit, proceeding
or
investigation, shall notify AWSG in writing, but the failure to so notify shall
not relieve AWSG from any liability that it may have under this Section 8.02,
except to the extent that such failure would materially prejudice
AWSG.
|
SECTION
|
8.03 |
INDEMNIFICATION
OF EXCHANGE AGENT
|
CSWT
and
AWSG (for the purposes of this Section 8.03, the “Indemnitors”)
agree
to indemnify the Exchange Agent and his employees and agents (collectively,
the
“Indemnitees”)
against, and hold them harmless of and from, any and all loss, liability, cost,
damage and expense, including without limitation, reasonable counsel fees,
which
the Indemnitees, or any of them, may suffer or incur by reason of any action,
claim or proceeding brought against the Indemnitees, or any one of them, arising
out of or relating in any way to the Exchange Agent’s service in such capacity,
unless such action, claim or proceeding is the result of the willful misconduct
or gross negligence of any of the Indemnitees.
ARTICLE
IX
MISCELLANEOUS
|
SECTION
|
9.01 |
EXPENSES
|
Except
as
contemplated by this Agreement, all costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated by
this Agreement shall be paid by the Party incurring such expenses.
|
SECTION
|
9.02 |
APPLICABLE
LAW
|
This
Agreement shall be governed by the laws of the State of Delaware, without giving
effect to the principles of conflicts of laws thereof, as applied to agreements
entered into and to be performed in such state.
|
SECTION
|
9.03 |
NOTICES.
|
All
notices and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given or made as follows:
19
(a) If
sent
by reputable overnight air courier (such as Federal Express), 2 business days
after being sent;
(b) If
sent
by facsimile transmission, with a copy mailed on the same day in the manner
provided in clause (a) above, when transmitted and receipt is confirmed by
the
fax machine; or
|
(c)
|
If
otherwise actually personally delivered, when delivered.
|
All
notices and other communications under this Agreement shall be sent or delivered
as follows:
If
to
AWSG, to:
American
Wenshen Steel Group, Inc.
c/o
American Union Securities, Inc.
Attn.:
Xxxxx X. Xxxx
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Telephone:
000-000-0000 X 000
Facsimile:
000-000-0000
with
a
copy (which shall not constitute notice) to:
Xxxxxx
Xxxxxx, Esq.
00
Xxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
If
to
CSWT, to:
Xx.
Xxxx
Xxxx Xx
China
Software Technology Group Co., Ltd.
Xxxxxxxx
Xxxxxxxx, Xx. 0, Xxxxx 0, Xxxxx A
Hi-Tech
Industrial Park, Xxxxxxx Xxxxxxxx
Xxxxxxxx,
X.X. Xxxxx 000000
Telephone:
000-000-0000
Facsimile:
000-0000-0000
with
a
copy (which shall not constitute notice) to:
Xxxxxx
Xxxxxx, Esq.
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Telephone:
000-000-0000
Facsimile:
212-688-7273
Each
Party may change its address by written notice in accordance with this Section.
20
|
SECTION
|
9.04 |
ENTIRE
AGREEMENT.
|
This
Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the Parties with respect to
the
subject matter contained in this Agreement, and supersedes and cancels all
prior
agreements, negotiations, correspondence, undertakings and communications of
the
Parties, oral or written, respecting such subject matter including the Letter
of
Intent made by AWSG and CSWT dated January 26, 2007.
|
SECTION
|
9.05 |
ASSIGNMENT.
|
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned by any of the Parties (whether by operation of
law
or otherwise) without the prior written consent of the other Parties;
provided
that in
no event may the right to indemnification provided by Article VIII hereto be
assigned by any of the Parties, with or without consent, except by operation
of
law. Subject to the immediately foregoing sentence of this Section 9.05, this
Agreement will be binding upon, inure to the benefit of and be enforceable
by,
the Parties and their respective successors, assigns, heirs and
representatives.
|
SECTION
|
9.06 |
COUNTERPARTS.
|
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which shall be considered one and the same
agreement.
|
SECTION
|
9.07 |
NO
THIRD PARTY BENEFICIARIES.
|
Except
as
expressly provided by this Agreement, nothing herein is intended to confer
upon
any person or entity not a Party to this Agreement any rights or remedies under
or by reason of this Agreement.
|
SECTION
|
9.08 |
RULES
OF CONSTRUCTION.
|
The
Parties agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that ambiguities
in
an agreement or other document will be construed against the party drafting
such
agreement or document.
IN
WITNESS WHEREOF,
the
Parties have duly executed this Agreement as of the date first above written.
CHINA
SOFTWARE TECHNOLOGY GROUP CO., LTD.
By:
/s/
Yuan Xxxx Xx
|
Name:
|
Yuan
Xxxx Xx
|
|
Title:
|
Chief
Executive Officer
|
AWSG
ACQUISITION CORP.
By:
/s/
Yuan Xxxx Xx
|
Name:
|
Yuan
Xxxx Xx
|
|
Title:
|
Chief
Executive Officer
|
AMERICAN
WENSHEN STEEL GROUP, INC.
By:
/s/
Xxxxxxx Xxxx
|
Name:
|
Xx.
Xxxxxxx Xxxx
|
|
Title:
|
President
|
21
