Exhibit 2.1 Agreement and Plan of Merger
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AGREEMENT AND PLAN OF MERGER
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AMONG
KUSHI NATURAL FOODS CORPORATION
KUSHI SUB, INC.
AND
HANXIN (CORK) INTERNATIONAL HOLDING CO., LTD.
XI'AN CORK INVESTMENTS CONSULTATIVE MANAGEMENT CO., LTD.
XXXX XXX XIN SCIENCE AND TECHNOLOGY CO., LTD
JULY 11, 2005
THIS AGREEMENT AND PLAN OF MERGER ("AGREEMENT") is made and entered
into as of July 11, 2005, by and among KUSHI NATURAL FOODS CORPORATION, a
Delaware corporation ("PARENT"), KUSHI SUB, INC., a Delaware corporation and a
wholly owned subsidiary of Parent ("ACQUISITION SUB") and HANXIN (CORK)
INTERNATIONAL HOLDING CO., LTD., a British Virgin Islands limited liability
corporation (the "COMPANY"), as the direct parent of XI'AN CORK INVESTMENTS
CONSULTATIVE MANAGEMENT CO., LTD. ("INVESTMENTS") and the indirect parent of
XXXX XXX XIN SCIENCE AND TECHNOLOGY CO., LTD. ("Hanxin"), both of which
subsidiaries are corporations incorporated under the laws of The People's
Republic of China (the Company, Investments and Hanxin are referred hereinafter
as the "Companies").
WHEREAS, the respective Boards of Directors of Parent, Acquisition Sub
and the Company have determined that a merger of the Company with and into the
Acquisition Sub (the "Merger"), upon the terms and subject to the conditions set
forth in this Agreement, would be fair and in the best interests of their
respective shareholders, and such Boards of Directors have approved such Merger,
pursuant to which Parent shall issue to the Company's shareholders, as Merger
Consideration (as defined in Section 2.01), shares of Common Stock of Parent, as
well as shares of Preferred Stock thereof, which shall, upon conversion of the
Preferred Stock, constitute ninety-five percent (95%) of the issued and
outstanding total shares of Parent's Common Stock ("PARENT COMMON STOCK")
immediately after the Merger, and whereby the stockholders of the Parent (as
determined immediately preceding the Merger) shall retain the remaining five
percent (5%) of the Parent Common Stock; and
WHEREAS, the parties hereto intend and accordingly designate the Merger
so that the Merger shall qualify as a reorganization for federal income tax
purposes under the provisions of Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE"); and
WHEREAS, Parent, Acquisition Sub, and the Companies desire to make
certain representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Acquisition Sub and the Companies hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), the Company shall merge with and into Acquisition
Sub at the Effective Time of the Merger (as defined in Section 1.03). Following
the Effective Time, the separate existence of the Company shall cease, and the
Acquisition Sub shall continue as the surviving corporation ("SURVIVING
CORPORATION"), with Investments as its wholly owned subsidiary, and shall
further succeed to and assume all the rights and obligations of the Company in
accordance with the DGCL.
SECTION 1.02 THE CLOSING.
(a) The Closing of the transactions contemplated by this Agreement (the
"CLOSING") shall take place in the offices of XxXxxxxxxx & Xxxxx LLP, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the 18th day of July, 2005,
commencing at 10:00am Eastern Daylight Saving Time (the "CLOSING DATE"), unless
another place or time is mutually agreed upon in writing by the parties;
PROVIDED, HOWEVER, that the Closing Date shall be no later than July 31, 2005.
(b) At the Closing or prior thereto, Parent and the Company shall
exchange the various certificates, instruments and such documents referred to in
Article VII of this Agreement.
SECTION 1.3 EFFECTIVE TIME.
(a) Subject to the provisions of this Agreement, as soon as practicable
on or after the Closing Date, Acquisition Sub shall file the Articles of Merger
or other appropriate documents (in any such case, the "ARTICLES OF MERGER")
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL in order to effectuate
the Merger and in order to accomplish the proper execution of Acquisition Sub's
and Parent's obligations under this Agreement.
(b) The Merger shall become effective at such time as the Articles of
Merger are duly filed with the Delaware Secretary of State, or at such other
time as the Parent and the Company shall agree as should be specified in the
Articles of Merger (the time the Merger becomes effective being hereinafter
referred to as the "EFFECTIVE TIME").
(c) Upon the Effective Time, Parent shall deliver to the Company's
shareholders the certificates evidencing the Merger Consideration shares issued
by the Parent as set forth in Section 2.01, with stock powers duly executed in
blank, which shall be subject to the restrictions thereon as set forth in
Section 1.09.
(d) The Surviving Corporation may, at any time after the Effective
Time, take any action (including executing and delivering any document) in the
name and on behalf of either the Company or the Acquisition Sub in order to
carry out and effectuate the transactions contemplated by this Agreement. From
the Effective Time, the Surviving Corporation shall possess all of the rights,
privileges, powers and franchises and be subject to all of the restrictions,
disabilities and duties of the Company and Acquisition Sub, all as provided
under the DGCL.
SECTION 1.04 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of the DGCL.
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SECTION 1.05 ARTICLES OF INCORPORATION AND BYLAWS.
(a) The Articles of Incorporation of Acquisition Sub as in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
(b) The bylaws of the Acquisition Sub as in effect immediately
prior to the Effective Time shall be the bylaws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06 DIRECTORS. At the Closing Date, the incumbent Directors of
Parent at the date thereof shall stay in office but shall not authorize any
action by Parent or any subsidiary without the written consent of the holders of
a majority of the shares of Series A Preferred Stock. Following the Closing,
Parent shall distribute to the Parent's shareholders information with respect to
the new directors to be elected to the Board in accordance with the Securities
Exchange Act of 1934 (the "Exchange Act") and following the expiration of any
applicable notice period, the Parent's incumbent directors shall resign, and be
replaced by the Directors chosen by the holders of a majority of the then
outstanding shares of Common Stock of the Parent.
SECTION 1.07 OFFICERS. At the Closing Date, the resignation letters of
the Parent's officers shall become effective, and the new officers of the
Company, as determined by the Company, shall be appointed as officers of the
Parent and the Surviving Corporation until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be. With each resignation, the resigning officer shall confirm in
writing that he or she does not owe and is not owed anything by Parent.
SECTION 1.08 NAME CHANGE; STOCKHOLDER ACTION. As soon as practicable
following the Closing and prior to the quotation on the OTC Bulletin Board or
listing on the American Stock Exchange, Parent shall hold a special meeting of
its shareholders or take action with out a meeting by the consent of the holders
of a sufficient number of shares of voting capital stock with respect to the
following proposals: (i) the amendment of Parent's Certificate of Incorporation
to change its name to any name as designated by the Company upon Closing; and
(ii) the amendment of Parent's Certificate of Incorporation so as to increase
the Parent's authorized shares of Common Stock to not less than 500,000,000
shares of Common Stock; and (iii) the appointment of new directors as provided
in Section 1.06 and the approval of change in the majority of Parent's Board of
Directors; and (iv) approval of a stock option, SAR and stock bonus plan for the
directors, officers, employees and consultants of Parent and the Surviving
Corporation; and (v) the approval of a reverse stock split of Parent's capital
stock on terms acceptable to the Company; and (vi) authorization and approval of
any such actions as the directors of Parent to be designated by the shareholders
of the Company following the Closing may determine are necessary, required or
appropriate, including (if necessary) the approval of this Agreement and the
transactions contemplated herein. Subject to obtaining the necessary approval of
Parent's stockholders under Delaware Law for the aforementioned amendments to
the Parent's Certificate of Incorporation, and simultaneously with the filing of
the Articles of Merger contemplated by Section 1.03, Parent shall file a
certificate of amendment to its Certificate of Incorporation with the Secretary
of State of the State of Delaware and make all other filings and records
required by Delaware Law in connection with the amendment of the certificate of
incorporation contemplated hereby.
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SECTION 1.09 SHARES NOT REGISTERED. The shares of Common Stock and
Preferred Stock (collectively, the "Shares") issued by the Parent to the
Company's shareholders as set forth below, when issued, will not be registered
under the Securities Act of 1933, as amended ("ACT"), or the securities laws of
any state or states, but shall be issued in reliance upon the exemptions from
registration provided by Section 4(2) of the Act and/or Rule 505 or 506 of
Regulation D under the Act and under analogous state securities laws, or upon
any other such exemption, on the grounds that the issuance does not involve any
public offering. The shares issued by the Parent will be "restricted securities"
as that term is defined in Rule 144(a) of the General Rules and Regulations
under the Act and must be held indefinitely, unless they are subsequently
registered under the Act or an exemption from the Act's registration
requirements is available for their resale. All certificates evidencing the
shares issued by the Parent shall, unless and until removed in accordance with
law, bear a restrictive legend substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS
DEFINED IN RULE 144 UNDER THE ACT. THESE SHARES MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT."
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITALIZATION OF
THE CONSTITUENT ENTITIES
SECTION 2.01 EFFECT ON CAPITALIZATION. As of the Effective Time, by
such actions to be taken by the parties' hereto, or otherwise by virtue of the
Merger and without any action on the part of the holders of the Company's Common
Stock or the holder of shares of capital stock of Acquisition Sub or Parent:
(a) ISSUANCE OF PARENT'S COMMON AND PREFERRED STOCK. Subject
to this Section 2.01, and subject to the Parent's capitalization prior to the
execution of the Merger as set forth in Section 4.03, as of the Effective Time,
Parent, upon the prior authorization of its Board of Directors, shall issue the
shareholders of the Company 24,000,000 shares of Common Stock and 1,000 shares
of Series A Preferred Stock (the "Preferred Stock"), according to the latter
terms and conditions as set forth in the Certificate of Designation annexed
hereto as Schedule 2.01, each of such share of Preferred Stock shall be
convertible into 177,185.642 shares of Common Stock of Parent, such that the sum
of (i) the shares of Common Stock issuable upon conversion of the Preferred
Stock, and (ii) the issued 24,000,000 shares of Common Stock, shall equal ninety
five percent (95%) of the total issued and outstanding Common Stock of Parent as
of Closing, on a fully diluted basis (both items (i) and (ii) together referred
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to as "MERGER CONSIDERATION"), PROVIDED, HOWEVER, that the conversion of the
shares of Preferred Stock shall be contingent upon amendment of Parent's
Certificate of Incorporation so as to increase the authorized shares of Common
Stock thereof to not less than 500,000,000 shares, as set forth in Section 1.08.
Subject to the terms as set forth in this Section 2.01(a), it is further agreed
that pursuant to the issuance of the Merger Consideration by Parent to the
Company's shareholders, the stockholders of the Parent (as determined
immediately preceding the Merger) shall retain the remaining five percent (5%)
of the Parent Common Stock.
(b) CANCELLATION OF COMPANY'S COMMON STOCK. As of the
Effective Time, the Company's Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and
holders of certificates representing the Company's Common Stock shall cease to
have any rights with respect thereto, except the right to receive the Merger
Consideration.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
shares of Parent Common Stock issued upon the consummation of the Merger in
accordance with the terms of this Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the Company's Common Stock.
(d) CANCELLATION OF TREASURY STOCK. As of the Effective Time,
each share of Parent's Common Stock held by the Parent as treasury stock shall
be cancelled, and no payment shall be made with respect thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANIES
Each of the Companies, jointly and severally, represents and warrants
to Parent and Acquisition Sub that the statements contained in this Article III
are true, correct, and complete as of the date of this Agreement and will be
true and correct as of the Closing Date.
SECTION 3.01 ORGANIZATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the British Virgin
Islands and Investments and Hanxin are corporations duly organized, validly
existing and in good standing under the laws of The People's Republic of China
and the Companies have all requisite corporate power and authority to carry on
their business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
could not be reasonably expected to (i) prevent or materially delay the
consummation of the Merger, or (ii) have a material adverse effect on the
Companies. Each of the Companies are duly qualified or licensed to do business
and are in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary.
SECTION 3.02 SUBSIDIARIES. The Company directly owns one hundred
percent (100%) of the capital stock of its sole subsidiary, Investments, which,
in turn, is the owner of ninety two percent (92%) of the issued and outstanding
shares of capital stock of Hanxin. Except for the Company's ownership and
indirect ownership as provided above, the Company does not own, directly or
indirectly, any capital stock or other ownership interest in any corporation,
partnership, joint venture or other entity.
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SECTION 3.03 CAPITALIZATION. As of the date of this Agreement, the
Company's authorized capital is 50,000 shares of Common Stock $1 par value, all
of which shares are issued and outstanding. As of the date of this Agreement,
the Company's shareholders and their respective holdings percentages is as set
forth on Schedule 3.03 attached hereto. The Company's shares are duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures, notes or other indebtedness
of the Company having the right to vote (or that are convertible into, or
exchanged for, securities having the right to vote) on any matters on which
shareholders of the Company may vote. There are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which Company is a party or by which either is bound obligating
the Company to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares in the Company or obligating the Company to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of the Company.
SECTION 3.04 AUTHORITY.
(a) Each of the Companies has the requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation by the Company of the Merger and of the
other transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Companies and no other proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions so contemplated, subject to the filing of the Articles of
Merger. This Agreement has been duly executed and delivered by the Companies
and, assuming this Agreement constitutes a valid and binding obligation of
Parent and Acquisition Sub, constitutes a valid and binding obligation of the
Companies enforceable against the Companies in accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally.
(b) The Company's Board of Directors have duly adopted
resolutions (i) approving this Agreement and the Merger, and (ii) determining
that the terms of the Merger are in the best interests of the Company.
(c) The holders of the Company's capital stock have executed a
written consent adopting resolutions approving this Agreement and the Merger.
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SECTION 3.05 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of the applicable and relevant laws of the laws of
the British Virgin Islands and the DGCL, neither the execution, delivery or
performance of this Agreement by the Company nor the consummation by the Company
of the transactions contemplated hereby will (i) conflict with or result in any
breach of any provision of the Articles of Incorporation of the Companies, (ii)
require any filing with, or permit, authorization, consent or approval of, any
federal, state or local government or any court, tribunal, administrative agency
or commission or other governmental or other regulatory authority or agency,
domestic, foreign or supranational (a "GOVERNMENTAL Entity") (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings could not reasonably be expected to have a material adverse effect
on the Companies or prevent or materially delay the consummation of the Merger),
(iii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which any of the
Companies is a party or by which any of the Companies or its properties or
assets may be bound; or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to any of the Companies or any of its
properties or assets, except in the case of clauses (iii) or (iv) for
violations, breaches or defaults that could not reasonably be expected to have a
material adverse effect on any of the Companies or prevent or materially delay
the consummation of the Merger.
SECTION 3.06 FINANCIAL STATEMENTS. The audited financial statements of
the Company as of and for the period from January 1, 2003 through December 31,
2004 and as of and for the three months ended March 31, 2004 (the "BALANCE SHEET
DATE") set forth in Schedule 3.06 have been prepared in accordance with
generally accepted accounting principles consistently applied ("GAAP") with
respect thereto throughout the periods involved as explained in the notes to
such financial statements. The Company's financial statements present fairly, in
all material respects, as are their respective dates the financial position of
the Companies. The Company did not have, as of the date of any such financial
statements, except as and to the extent reflected or reserved against therein,
any material liabilities or obligations (absolute or contingent) which should be
reflected therein in accordance with GAAP, and all assets reflected therein
presents fairly the assets of Company in accordance with GAAP.
SECTION 3.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the Balance
Sheet Date, each of the Companies has conducted its business only in the
ordinary course consistent with past practice, and there has not been any
material adverse change (as defined in Section 7.03) with respect to each of the
Companies.
SECTION 3.08 NO UNDISCLOSED LIABILITIES. As of the Balance Sheet Date,
to the best knowledge of the Company, the Company has no liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, that
would be required by GAAP to be reflected on a balance sheet of the Company
(including the notes thereto). Since the Balance Sheet Date, except for
liabilities or obligations incurred in the ordinary course of business
consistent with past practice, the Company has not incurred any liabilities of
any nature, whether or not accrued, contingent or otherwise, that could be
reasonably expected to have a material adverse effect on the Company, or would
be required by GAAP to be reflected on a consolidated balance sheet of the
Company (including the notes thereto).
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SECTION 3.09 BENEFIT PLANS. The Company has no "employee pension
benefit plan" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA) or other plan, arrangement or policy (written
or oral) relating to stock options, stock purchases, compensation, deferred
compensation, bonuses, severance, fringe benefits or other employee benefits, in
each case maintained or contributed to, or required to be maintained or
contributed to, by Company for the benefit of any present or former employee,
officer or director (each of the foregoing, a "COMPANY BENEFIT PLAN").
SECTION 3.10 OTHER COMPENSATION ARRANGEMENTS. Except as set forth in
Schedule 3.10 provided in this Agreement, as of the date of this Agreement, none
of the Companies is a party to any oral or written (i) consulting agreement
where the annual compensation exceeds $60,000 per annum that is not terminable
on not more than 30 calendar days notice, without penalty, or union or
collective bargaining agreement, (ii) agreement where the annual compensation
exceeds $60,000 per annum with any member of Board of Directors or other key
employee of any of the Companies, or (iii) agreement or plan, including any
stock option plan, stock appreciation right plan, restricted stock plan or stock
purchase plan.
SECTION 3.11 LITIGATION. There is no material suit, claim, action,
proceeding pending or threatened against any of the Companies, nor is there any
investigation against any of the Companies threatened or pending before any
Governmental Entity. None of the Companies are subject to any outstanding order,
judgment, writ, injunction or decree.
SECTION 3.12 PERMITS; COMPLIANCE WITH LAW. Each of the Companies holds
all permits, licenses, variances, exemptions, orders and approvals of all
governmental entities necessary for the lawful conduct of its business (the
"COMPANY PERMITS"), except for failures to hold such permits, licenses,
variances, exemptions, orders and approvals that could not reasonably be
expected to have a material adverse effect on any of the Companies. Each of the
Companies is in compliance with the terms of the Company Permits, except where
the failure to comply could not reasonably be expected to have a material
adverse effect on any of the Companies. As of the date of this Agreement, no
investigation, inquiry or review by any Governmental Entity with respect to any
of the Companies is pending or, to the best knowledge of the Company,
threatened, nor has any Governmental Entity indicated an intention to conduct
any such investigation, inquiry or review. The consummation of the transactions
contemplated by this Agreement will not adversely affect any of the Company's
permits.
SECTION 3.13 TAX MATTERS. The Company has filed or shall file as of the
Closing Date all of its tax returns required to be filed since inception. All
such returns and reports are accurate and correct in all material respects. The
Company has no liabilities with respect to the payment of any national,
provincial, federal, state, county, local, or other taxes (including any
deficiencies, interest, or penalties) accrued for or applicable as of the
Closing Date, and no deficiency assessment or proposed adjustment of any such
tax return is pending, proposed or contemplated. To the knowledge of the
Company, none of such income tax returns has been examined or is currently being
examined by any governmental authority and no deficiency assessment or proposed
adjustment of any such return is pending, proposed or contemplated. There are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any tax return of the Company.
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SECTION 3.14 INTELLECTUAL PROPERTY.
Except to the extent that the inaccuracy of any of the
following (or the circumstances giving rise to such inaccuracy) could not
reasonably be expected to have a material adverse effect on any of the
Companies:
(1) Each of the Companies owns, or is licensed or
otherwise has the legally
enforceable right to use (in each case, clear of any liens or encumbrances of
any kind), all Intellectual Property (as hereinafter defined) used in or
necessary for the conduct of its business as currently conducted or as proposed
to be conducted;
(2) no claims are pending or, to the best knowledge
of any of the Companies,
threatened that any of the Companies is infringing on or otherwise violating the
rights of any person with regard to any Intellectual Property used by, owned by
and/or licensed to any of the Companies and, to the best knowledge of the
Company, there are no valid grounds for any such claims;
(3) to the best knowledge of the Company, all patents, registered
trademarks, service marks and copyrights held by each of the Companies are valid
and subsisting.
(b) For purposes of this Agreement, "INTELLECTUAL PROPERTY"
means patents, trademarks (registered or unregistered), service marks, brand
names, certification marks, trade dress, assumed names, trade names and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable or not in any jurisdiction, trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person, writings and other works of authorship, whether
copyrighted, copyrightable or not in any jurisdiction; registration or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof, any similar intellectual property or proprietary
rights and computer programs and software; licenses, immunities, covenants not
to xxx and the like relating to the foregoing; and any claims or causes of
action arising out of or related to any infringement or misappropriation of any
of the foregoing.
SECTION 3.15 RISK KNOWLEDGE AND ANALYSIS. Each of the Company's
shareholders, alone, or together with his or her adviser(s), has such knowledge
and experience in financial, tax and business matters as to enable each of them
to utilize the information made available by Parent, in connection with the and
issuance of the Merger Consideration shares or any other consideration that may
be involved, to evaluate the merits and risks of acquiring such shares and to
make an informed investment decision with respect thereto. Each of the Company's
shareholders confirms that, in making his or her decision to receive the Merger
Compensation Shares, such he or she has relied upon independent investigations
made by him, or his representatives, including his own professional tax and
other advisers, and that he and such representatives have been given the
opportunity to examine all documents and to ask questions of, and to receive
answers from Parent or any person(s) acting on its behalf concerning the terms
and conditions of this Agreement, and to obtain any additional information or
documents, to the extent Parent possesses such information or can acquire it
without unreasonable effort or expense, necessary to verify the accuracy of the
information provided by Parent.
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SECTION 3.16 TITLE TO PROPERTY. Each of the Companies has good and
defensible title to all of its properties and assets, free and clear of all
liens, charges and encumbrances, except liens for taxes not yet due and payable
and such liens or other imperfections of title, if any, as do not materially
detract from the value of or interfere with the present use of the property
affected thereby or which could not reasonably be expected to have a material
adverse effect.
SECTION 3.17 ENVIRONMENTAL MATTERS. The Company is not aware of nor has
ever received notice of any past or present violations of any environmental laws
or any event, condition, circumstance, activity, practice, incident, action or
plan which is reasonably likely to interfere with or prevent continued
compliance with or which would give rise to any common law or statutory
liability, or otherwise form the basis of any claim, action, suit or proceeding
against any of the Companies based on or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, emission, discharge or release into the environment of any pollutant,
contaminant, or hazardous or toxic material or waste.
SECTION 3.18 INTERESTED PARTY TRANSACTIONS. Except as set forth on
Schedule 3.18, since the Balance Sheet Date, no event has occurred that would be
required to be reported as a Certain Relationship or Related Transaction,
pursuant to Item 404 of Regulation S-K promulgated by the SEC.
SECTION 3.19 INSURANCE. Each of the Companies maintains all insurance
policies reasonably required for its businesses and assets, in character and
amount at least equivalent to that carried by persons engaged in similar
businesses and subject to the same or similar perils or hazards.
SECTION 3.20 FULL DISCLOSURE. No statement contained in any certificate
or schedule furnished or to be furnished by the Company to Parent and
Acquisition Sub in, or pursuant to the provisions of, this Agreement, contains
or will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary, in light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading.
SECTION 3.21 CONTRACTS. Except as set forth on Schedule 3.21, none of
the Companies are a party to any agreement (or group of related agreements)
that: (a) provides for payments in excess of $ 100,000 per annum; (b) concerns a
partnership or joint venture; (c) guarantees any indebtedness; (d) concerns
non-competition; (e) relates to monies advanced or loaned to any of their
directors, officers or employees; or (f) a default or termination would have a
material adverse effect on the business, financial condition, operations or
results of operations of any of the Companies. The Company has delivered to the
Parent or its counsel a correct and complete copy of each written agreement
listed in Schedule 3.21 (as amended to date) and a written summary setting forth
the material terms and conditions of each oral agreement referred to in Schedule
3.21. With respect to each such agreement: (i) the agreement is valid and
binding on each of the Companies that are a party to such agreement, and in full
force and effect in all material respects; (ii) to the Company's knowledge, no
party is in material breach or default, and, no event has occurred which with
notice or lapse of time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreement; and (iii) no
party has provided any of the Companies with notice of repudiation of any
material provision of the agreement.
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SECTION 3.22 REAL PROPERTY. Except as set forth on Schedule 3.22, none
of the Companies own any real property. Schedule 3.22 lists and describes
briefly all real property leased or subleased to Company. With respect to each
material lease and sublease listed in Schedule 3.22, except as otherwise stated
therein: (a) the lease or sublease is legal, valid, binding, enforceable, and in
full force and effect in all material respects in accordance with its terms; and
(b) no party to the lease or sublease is in material breach or material default,
and, to each of the Company's knowledge, no event has occurred which, with
notice or lapse of time, would constitute a material breach or material default
or permit termination, modification, or acceleration.
SECTION 3.23 BROKERS. The Company has engaged one consultants which
shall be entitled to the fees and commissions in connection with the
transactions contemplated by this Agreement: Cranberry Heights Group, Ltd..
Cranberry is entitled to receive shares equivalent to two percent (2%) of the
post-Merger issued and outstanding shares of Common Stock of the Company
following the Closing, which shares shall be deducted from the shares of
Preferred Stock otherwise issuable to the Company's shareholders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB
Each of Parent and Acquisition Sub represents and warrants to the
Company that the statements contained in this Article IV are true, correct, and
complete as of the date of this Agreement and will be true and correct as of the
Closing Date:
SECTION 4.1 ORGANIZATION. Each of the Parent and the Acquisition Sub is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate power and
authority to carry on its business as now being conducted or to have such power
and authority could not be reasonably expected to (i) prevent or materially
delay the consummation of the Merger, or (ii) have a material adverse effect on
the Parent or the Acquisition Sub. Each of the Parent and the Acquisition Sub is
in good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such good
standing necessary. Parent has not conducted any business after December 31,
2000, other than activities incident to filing SEC reports of seeking an
acquisition partner.
SECTION 4.02 SUBSIDIARIES. The only subsidiary of Parent is Acquisition
Sub. Acquisition Sub has no subsidiaries. All the outstanding shares of capital
stock of Acquisition Sub are owned by Parent, free and clear of all liens, and
are duly authorized, validly issued, fully paid and nonassessable. Except for
the capital stock of the Acquisition Sub owned by Parent, neither Parent nor
Acquisition Sub owns, directly or indirectly, any capital stock or other
ownership interest in any corporation, partnership, joint venture or other
entity.
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SECTION 4.03 CAPITALIZATION. The authorized capitalization of Parent
consists of 35,000,000 shares of Common Stock, $0.0001 par value, of which
10,588,718 shares of Common Stock are issued and outstanding; and 5,000,000
shares of preferred stock, $0.0001 par value, are authorized, none of which are
issued and outstanding. All issued and outstanding capital stock of Parent are
legally issued, fully paid, and non-assessable and not issued in violation of
the preemptive or other right of any person or any federal or state securities
laws. There are no dividends or other amounts due or payable with respect to any
of the shares of capital stock of Parent. As of the date of this Agreement and
as of the Closing Date, there are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require Parent or
Acquisition Sub to purchase, issue, sell, or otherwise cause to become
outstanding any of their capital stock, outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Parent or Acquisition Sub, or voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock of
Parent or Acquisition Sub. There are no preemptive rights applicable with
respect to Parent's Common Stock. Prior to the Date of Closing, the Parent's
shareholders shall not have agreed to transfer any of their shares of Common
Stock to any third-party, except for an option agreement (the "Option) with Nice
Holdings Ltd., without the written consent of the Company.
SECTION 4.04 AUTHORIZATION. Each of Parent and Acquisition Sub has all
requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The board of directors of each
of Parent and Acquisition Sub has approved the execution and delivery of this
Agreement and the transactions contemplated by this Agreement including the
Merger in accordance with the applicable Delaware law and with the DGCL and
Acquisition Sub's articles of incorporation and bylaws. Parent, as sole
stockholder of Acquisition Sub, has approved the Merger, and no other corporate
proceedings on the part of Parent or Acquisition Sub are necessary to authorize
the execution, delivery, and performance, and the resolutions approving such
Merger are irrevocable. This Agreement has been duly executed and delivered by
each of Parent and Acquisition Sub and constitutes their valid and binding
obligations, enforceable against each of them in accordance with its terms.
SECTION 4.05 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings,
permits, authorizations, consents and approvals as may be required under the
DGCL, and except for the filings required to consummate the Merger and any
required Form 8-K, neither the execution, delivery or performance of this
Agreement by Parent and Acquisition Sub nor the consummation by the Parent and
Acquisition Sub of the transactions contemplated hereby will: (i) conflict with
or result in any breach of any provision of the Articles of Incorporation or
bylaws of Parent or Acquisition Sub, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings could not reasonably be expected to have a material adverse effect
on Parent or Acquisition Sub or prevent or materially delay the consummation of
the Merger), (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which the
Parent or Acquisition Sub is a party or by which the Parent or Acquisition Sub
or their respective properties or assets may be bound; or (iv) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Parent or Acquisition Sub or any of their respective properties or assets,
except in the case of clauses (iii) or (iv) for violations, breaches or defaults
that could not reasonably be expected to have a material adverse effect on
Parent or Acquisition Sub or prevent or materially delay the consummation of the
Merger. No filing of preliminary and definitive Schedule 14C is required in
order to consummate the Merger.
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SECTION 4.06 FINANCIAL STATEMENTS / SEC FILINGS.
(a) Included in the last Form 10-KSB filed by Parent with the
SEC are the audited balance sheet of Parent as of December 31, 2003 and December
31, 2004, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the fiscal year ended December 31, 2004, including
the notes thereto, and the accompanying report of the company's independent
certified public accountant.
(b) The financial statements of Parent contained in the SEC
Documents including the Forms 10-QSB for the three months ended March 31, 2005
(the "MOST RECENT FILING DATE") have been prepared in accordance with GAAP and
in accordance with the published rules and regulations of the SEC with respect
thereto throughout the periods involved as explained in the notes to such
financial statements. The Parent financial statements present fairly, in all
material respects, as of their respective dates, the financial position of
Parent. Parent did not have, as of the date of any such financial statements,
except as and to the extent reflected or reserved against therein, any
liabilities or obligations (absolute or contingent) which should be reflected
therein in accordance with GAAP, and all assets reflected therein present fairly
the assets of Parent in accordance with GAAP.
(c) Beginning with the Form 10-KSB for the year ended December
31, 2000, Parent has made all filings with the SEC that it has been required to
make under the Securities Act of 1933 and the Securities Exchange Act of 1934.
All documents required to be filed as exhibits to the SEC Documents have been so
filed, and all material contracts so filed as exhibits are in full force and
effect, except those which have expired in accordance with their terms. Each of
Parent's SEC Documents has complied in all material respects with the Exchange
Act in effect as of their respective dates. None of Parent's SEC Documents
including the Forms 10-KSB and Form 10-QSB, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
SECTION 4.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the Most
Recent Filing Date Parent has conducted its business only in the ordinary course
consistent with past practice, and there has not been any material adverse
change (as defined in Section 7.03) with respect to Parent.
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SECTION 4.08 NO UNDISCLOSED LIABILITIES. As of the Most Recent Filing
Date, to the best knowledge of the Parent, neither the Parent nor the
Acquisition Sub had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by GAAP to be reflected
on a balance sheet of Parent or Acquisition Sub (including the notes thereto).
Since the Most Recent Filing Date, except for liabilities or obligations
incurred in the ordinary course of business consistent with past practice,
neither the Parent nor the Acquisition Sub has incurred any liabilities of any
nature, whether or not accrued, contingent or otherwise, that could be
reasonably expected to have a material adverse effect on the Parent or the
Acquisition Sub, or would be required by GAAP to be reflected on a consolidated
balance sheet of the Parent or the Acquisition Sub (including the notes
thereto).
SECTION 4.09 BENEFIT PLANS. Neither Parent nor Acquisition Sub has
operated any Pension Plan, Welfare Plan, or other plan, arrangement or policy
(written or oral) relating to stock options, stock purchases, compensation,
deferred compensation, bonuses, severance, fringe benefits or other employee
benefits.
SECTION 4.10 OTHER COMPENSATION ARRANGEMENTS. Neither the Parent nor
the Acquisition Sub is a party to any oral or written (i) consulting agreement
or union or collective bargaining agreement, (ii) agreement with any executive
officer or other key employee of Parent or Acquisition Sub, or (iii) agreement
or plan, including any stock option plan, stock appreciation right plan,
restricted stock plan or stock purchase plan. Parent is not and will not be
indebted to any officer, director, employee or shareholder, or former officer,
director employee or shareholder thereof as of the Closing Date. No officer,
director, employee or shareholder owes Parent any monies, and none will be owed
as of the Closing. No person currently receives a salary or other cash
compensation from Parent, and no person will receive a salary or other cash
compensation from Parent prior to Closing.
SECTION 4.11 LITIGATION. To the knowledge of Parent, there is no suit,
claim, action, proceeding pending or threatened against Parent or Acquisition
Sub, nor is there any investigation against Parent or Acquisition Sub threatened
or pending before any Governmental Entity. Neither the Parent nor the
Acquisition Sub is subject to any outstanding order, judgment, writ, injunction
or decree.
SECTION 4.12 PERMITS; COMPLIANCE WITH LAW. Parent and Acquisition Sub
do not hold any permits, licenses, variances, exemptions, orders and approvals
of any Governmental Entities except for their incorporation and active status in
Delaware (the "PARENT PERMITS"). Neither Parent nor Acquisition Sub is in
violation of, or has violated, any applicable provisions of any laws, statutes,
ordinances or regulations To its knowledge, as of the date of this Agreement, no
investigation, inquiry or review by any Governmental Entity with respect to the
Parent or Acquisition Sub is pending or threatened, nor has any Governmental
Entity indicated an intention to conduct any such investigation, inquiry or
review.
SECTION 4.13 TAX MATTERS. Parent has filed or shall file as of the
Closing Date all of its tax returns required to be filed. All such returns and
reports are accurate and correct in all material respects. Parent has duly filed
all tax returns or reports of every nature required to be filed by Parent and
has paid all taxes as shown on such returns and all assessments, fees and
charges received by it to the extent that such taxes, assessments, fees and
charges have become due. Parent has paid all income, excises, unemployment,
social security, occupational, franchise and other taxes, duties, assessments or
charges levied, assessed or imposed upon Parent by the United States or by any
state municipal government or subdivision or instrumentality thereof. To the
-14-
extent that tax liabilities have accrued, but have not become payable, they have
been adequately reflected as liabilities on the books of Parent, and provided
for adequately. No deficiency assessment or proposed adjustment of any such tax
return is pending, proposed or contemplated. To the knowledge of Parent, none of
such income tax returns has been examined or is currently being examined by the
Internal Revenue Service and no deficiency assessment or proposed adjustment of
any such return is pending, proposed or contemplated. To its knowledge, there
are no outstanding agreements or waivers extending the statutory period of
limitation applicable to any tax return of Parent.
SECTION 4.14 INTELLECTUAL PROPERTY.
(a) Parent does not own any Intellectual Property;
(b) no claims are pending or, to the best knowledge of Parent,
threatened that Parent is infringing on or otherwise violating the rights of any
person with regard to any Intellectual Property and, to the best knowledge of
the Parent, there are no valid grounds for any such claims.
SECTION 4.15 KNOWLEDGE OF RISK. Each of the Parent's shareholders and
members of Parent's Board of Directors, alone, or together with his or her
adviser(s), has such knowledge and experience in financial, tax and business
matters as to enable each of them to utilize the information made available by
the Company, in connection with the and the issuance of the Merger Consideration
shares or with the receipt of the Company's shares as part of the Transaction at
subject, to evaluate the merits and risks of acquiring such shares of the
Company and to make an informed investment decision with respect thereto. Parent
has been given the opportunity to examine all documents and to ask questions of,
and to receive answers from the Company or any person(s) acting on its behalf
concerning the terms and conditions of this Agreement, and to obtain any
additional information or documents, to the extent the Company possesses such
information or can acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the information provided by the Company
SECTION 4.16 LABOR MATTERS. Parent has no employees.
SECTION 4.17 TITLE TO PROPERTY. Parent has good and defensible title to
all of its properties and assets, free and clear of all liens, charges and
encumbrances, except liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, as do not materially detract from the
value of or interfere with the present use of the property affected thereby or
which could not reasonably be expected to have a material adverse effect.
SECTION 4.18 ENVIRONMENTAL MATTERS. Parent is not aware of nor to its
knowledge it has ever received notice of any past or present violations of any
environmental laws or any event, condition, circumstance, activity, practice,
incident, action or plan which is reasonably likely to interfere with or prevent
continued compliance with or which would give rise to any common law or
statutory liability, or otherwise form the basis of any claim, action, suit or
proceeding against Parent based on or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, emission, discharge or release into the environment of any pollutant,
contaminant, or hazardous or toxic material or waste.
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SECTION 4.19 INTERESTED PARTY TRANSACTIONS. Since the Most Recent
Filing Date, no event has occurred that would be required to be reported by
Parent as a Certain Relationship or Related Transaction, pursuant to Item 404 of
Regulation S-B promulgated by the SEC.
SECTION 4.20 ABSENCE OF CERTAIN PAYMENTS. To its knowledge, neither the
Parent nor any of its respective affiliates, officers, directors, employees or
agents or other people acting on behalf of any of them have (i) engaged in any
activity prohibited by the United States Foreign Corrupt Practices Act of 1977,
or any other similar law, regulation, decree, directive or order of any other
country and (ii) without limiting the generality of the preceding clause (i),
used any corporate or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures relating to political activity
to government officials or others. To its knowledge, neither the Parent nor any
of its respective affiliates, directors, officers, employees or agents of other
persons acting on behalf of any of them, has accepted or received any unlawful
contributions, payments, gifts or expenditures.
SECTION 4.21 INSURANCE. Parent does not maintain any
insurance policies.
SECTION 4.22 FULL DISCLOSURE. No statement contained in any certificate
or schedule furnished or to be furnished by the Parent and Acquisition Sub to
the Company, or pursuant to the provisions of, this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary, in light of the circumstances under which it was
made, in order to make the statements herein or therein not misleading.
SECTION 4.23 CONTRACTS. Parent and Acquisition Sub are not in default
in any material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition thereof and there is no event of default in any
material respect under any such contract, agreement, lease, or other commitment
in respect of which Parent and Acquisition Sub have not taken adequate steps to
prevent such a default from occurring. Parent is not a party to any agreement or
agreements that: (a) provides for aggregate payments pursuant to all agreements
in excess of $15,000 per annum; (b) concerns a partnership or joint venture; (c)
guarantees any indebtedness; (d) concerns noncompetition; (e) relates to monies
advanced or loaned to any of its directors, officers or employees; or (f) a
default or termination would have a material adverse effect on the business,
financial condition, operations or results of operations of Parent or
Acquisition Sub. Also, there is no shareholders agreement in place.
SECTION 4.24 REAL PROPERTY. Neither Parent nor Acquisition Sub owns or
leases any real property.
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SECTION 4.25 INTERNAL ACCOUNTING CONTROLS; XXXXXXXX-XXXXX ACT OF 2002.
To the best of its knowledge, the Parent is in compliance with the requirements
of the Xxxxxxxx-Xxxxx Act of 2002 applicable to it as of the date of this
Agreement. The Parent has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Parent and
designed such disclosures controls and procedures to ensure that material
information relating to the Parent, is made known to the certifying officers by
others within those entities, particularly during the period in which the
Parent's Form 10-K or 10-Q, as the case may be, is being prepared. The Parent's
certifying officers have evaluated the effectiveness of the Parent's controls
and procedures as of the date of its most recently filed periodic report (such
date, the "Evaluation Date"). The Parent presented in its most recently filed
periodic report the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no significant changes in the Parent's internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the
Parent's knowledge, in other factors that could significantly affect the
Parent's internal controls. The Parent's auditors, at all relevant times, have
been duly registered in good standing with the Public Company Accounting
Oversight Board.
SECTION 4.26 BROKERS. Neither Parent nor Acquisition Sub has engaged
any broker, investment banker, financial advisor or other person, pursuant to
which such party is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement.
SECTION 4.27 LACK OF CLAIMS. No director, officer or shareholder of
Parent or Kushi Sub has any claims, pending, contingent or otherwise, against
Parent or Kushi Sub for any payments, reimbursements, expenses or any sort of
compensation whatsoever.
ARTICLE V
COVENANTS
SECTION 5.01 PAYMENT OF CERTAIN LIABILITIES. As of the Effective
Time, Parent shall cause all liabilities and obligations of Parent and of
Acquisition Sub (including legal, accounting and financial advisor fees) to be
satisfied in full).
SECTION 5.02 ACCOMPLISHMENT OF LISTING OR QUOTATION. Parent shall
assist the Company, or any of its subsidiaries, to file a 15c-211 application
with the NASD for purposes of establishing quotation of the Company on the OTC
Bulletin Board. In the event that subsequent to the consummation of the Merger,
and not later than 09/30/05, Parent shall fail to accomplish and complete
neither quotation of the Parent on the OTC Bulletin Board nor listing on the
AMEX thereof, the Company shall have the right, at its option and in its
absolute discretion, to rescind and wind up the Merger and every transaction
contemplated hereunder, by sending a Notice to Parent, without that such
termination be considered a breach of this Agreement on its behalf, and in such
event Parent shall not be entitled to any sort of damages or reimbursement of
costs which may derive from such termination or any other costs which were
involved in the consummation of the Merger.
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SECTION 5.03 REGISTRATION RIGHTS. Within 60 days subsequent to the
commencement of quotation of the Company's, or of any of its subsidiaries',
shares of Common Stock on the OTC Bulletin Board or Amex, the Company or any of
its subsidiaries shall file a registration statement that includes approximately
1.9 million shares of Common Stock that were issued by Parent under Regulation D
in 1999, and shall further incur the expenses of such registration and use its
best efforts to cause such registration statement to become effective.
SECTION 5.04 MUTUAL USE OF BEST EFFORTS. The Parties agree as follows
with respect to the period from and after the execution of this Agreement.
(a) Each of the parties hereto will use its reasonable best
efforts to take all action and to do all things necessary in order to consummate
and make effective the transactions contemplated by this Agreement.
(b) Each of the parties hereto will give any notices (and will
cause its subsidiary to give any notices) to third parties, and will use its
reasonable best efforts to obtain (and will cause its subsidiary to use its
reasonable best efforts to obtain) any third party consents, that the other
Parties reasonably may request in connection with this Agreement.
(c) Each of the parties hereto will give any notices to, make
any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters in this Agreement.
(d) Each party hereto will give prompt written notice to the
other of any material adverse development causing a breach of any of its own
representations and warranties in this Agreement. No disclosure by any Party
pursuant to this Section 5.04, however, shall be deemed to amend or supplement
any Disclosure Schedule or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant.
SECTION 5.05 CONDUCT OF BUSINESS PRIOR TO CLOSING Prior to the Closing
Date, Parent shall not engage in any business or activity other than attempting
to consummate and Close the Merger. Furthermore, Parent, its officers and
directors will not, without the prior written authorization of Target, (i) make
any changes in Parent's capital structure, (ii) incur any liability or
obligation other than current liabilities incurred in the ordinary and usual
course, (iii) declare or pay any dividend or make any other distribution with
respect to its capital stock, (iv) issue, sell, or deliver or purchase or
otherwise acquire for value any of its stock or other securities, (v) make any
investment of a capital nature, or (vi) enter into any contract, agreement, or
other commitment which is material to Parent.
SECTION 5.06 PUBLIC COMPANY STATUS. Parent shall make any and all
required filings under the Exchange Act so that it remains a reporting company
under the Exchange Act.
SECTION 5.07 FINANCIAL CONDITION AS OF THE CLOSING DATE. As of the
Closing Date, Parent shall not be a guarantor of any indebtedness of any other
person, firm or corporation, and, there shall be no liabilities or debts of the
Parent of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances which could reasonably be expected to result
in such a liability or debt.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 FEES AND EXPENSES. All fees and expenses incurred in
connection with the Merger, this Agreement and the transactions contemplated by
this Agreement shall be paid as of the Closing Date by the party incurring such
fees or expenses, whether or not the Merger is consummated.
SECTION 6.02 INDEMNIFICATION; INSURANCE.
(a) Parent and Acquisition Sub agree that all rights to
indemnification for acts or omissions occurring prior to the Effective Time now
existing in favor of the current or former directors or officers of Company (the
"COMPANY INDEMNIFIED PARTIES") and the current or former directors or officers
of Parent (the "PARENT INDEMNIFIED PARTIES") as provided in their respective
certificates of incorporation or bylaws (or similar organizational documents) or
existing indemnification contracts shall survive the Merger and shall continue
in full force and effect in accordance with their terms for a period of one (1)
year.
(b) This Section 6.02 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Company, Parent, the
Surviving Corporation, the Company Indemnified Parties and the Parent
Indemnified Parties and their respective heirs, personal representatives,
successors and assigns, and shall be binding on all successors and assigns of
the Company, Parent and the Surviving Corporation.
SECTION 6.03 RESCISSION. In the event that subsequent to the
consummation of the Merger, either the OTC Bulletin Board or the AMEX, whichever
is the subject of the Company's listing application, raise objections or ask for
additional information regarding the capitalization or operations or Parent
prior to the Merger, which cannot be resolved or answered to the satisfaction of
the OTC Bulletin Board or the AMEX, despite the Company's good faith efforts, as
determined by the Company the Company or its affiliates shall have the right, at
its option and in its absolute discretion, to rescind and wind up the
Transaction, by sending a notice to Parent. Such termination shall not be
considered a breach on of this Agreement, and in such event Parent shall not be
entitled to any damages or reimbursement of costs which may derive from such
termination or any other costs which were involved in the consummation of the
Transaction.
ARTICLE VII
CONDITIONS PRECEDENT TO COMPANY'S PERFORMANCE
The obligations of the Company to consummate the transactions
contemplated by this Agreement are subject to the satisfaction on the Closing
Date of all the conditions set out below in this Article Seven. Any such
condition may be waived by the Company by notice in writing to Parent and
Acquisition Sub.
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SECTION 7.01 All representations and warranties by Parent and
Acquisition Sub contained in this Agreement or in any written statement
delivered by Parent and Acquisition Sub under this Agreement shall be true on
and as of the Closing as though such representations and warranties were made on
and as of that date.
SECTION 7.02 Parent and Acquisition Sub shall have performed and
complied with all covenants and agreements, and satisfied all conditions that it
is required by this Agreement to perform, comply with or satisfy before or at
the Closing.
SECTION 7.03 The Company shall have received a certificate, dated the
Closing Date, signed by the president or any vice president of Parent and
Acquisition Sub and by the secretary or any assistant secretary of Parent and
Acquisition Sub, certifying that the conditions specified in paragraphs 7.1 and
7.2 have been fulfilled.
SECTION 7.04 Parent and Acquisition Sub shall have furnished the
Company with an opinion, dated the Closing Date, of Xxxxx Xxxxxxx, Esq., in form
and substance satisfactory to The Company and their counsel, to the effect that:
(i) Parent and Acquisition Sub are duly incorporated, validly
existing, and in good standing under the laws of the State
of Delaware and have all requisite corporate power to
perform its obligations under this Agreement;
(ii) All corporate proceedings required by law or by the
provisions of this Agreement to be taken by Parent and
Acquisition Sub on or before the Closing Date, in connection
with the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this
Agreement, have been duly and validly taken;
(iii) To the best of counsel's knowledge, every consent,
approval, authorization, or order of any court or
governmental agency or body that is required for the
consummation by Parent and Acquisition Sub of the
transactions contemplated by this Agreement has been
obtained and will be in effect on the Closing Date;
(iv) The consummation of the transaction contemplated by this
Agreement does not violate or contravene any of the
provisions of any charter, bylaw or resolution of Parent and
Acquisition Sub or, to the best of such counsel's knowledge,
any indenture, agreement, judgment or order to which Parent
and Acquisition Sub is a party or by which Parent and
Acquisition Sub is bound;
(v) The shares of Common Stock and Preferred Stock to be issued
and delivered hereunder are validly issued, fully paid and
nonassessable.
(vi) The certificates for the shares of Common Stock to be
delivered pursuant to the Option may, upon exercise of the
Option, be delivered without restrictive legend and be free
from restrictions on transfer under Rule 144(k) of the
Securities Act of 1933, assuming that the purchaser is not
an affiliate of the Company.
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In rendering its opinion, counsel for Parent and Acquisition Sub may
rely upon such certificates, permits and representations and warranties of
governmental authorities, officers of Parent and Acquisition Sub and opinions of
other counsel.
SECTION 7.05 The Closing of the transaction contemplated by this
Agreement shall have taken place on or before July 31, 2005.
SECTION 7.06 The execution and delivery of this Agreement by Parent and
Acquisition Sub, and the performance of its covenants and obligations under it,
shall have been duly authorized by all necessary corporate action
SECTION 7.07 No action, suit or proceeding before any court or any
governmental body or authority pertaining to the transaction contemplated by
this Agreement or to its consummation shall have been instituted or threatened
on or before the Closing Date.
SECTION 7.08 Each of the following documents shall be delivered to the
Company, by the Parent, and the documents must be satisfactory in form and
content to Company and its counsel:
(a) Articles of Incorporation, including all amendments;
(b) All Certificates of Amendment and Restatements to Articles
of Incorporation;
(c) Parent's current Bylaws;
(d) Certificates of good standing with respect to the Parent,
issued by its jurisdiction of incorporation and for any
other jurisdiction in which the Company is required to be
authorized to conduct business;
(e) All of the Minutes from all of the board of directors
meetings and shareholders meetings from inception; -
(f) All State and Federal Tax Returns filed from 1996 to present
(including extensions);
(g) Description of all Parent's assets and evidence of
ownership, including all deeds, judgments and contracts;
(h) List of all persons owning Common Stock; and
(i) A shareholder list from the transfer agent as of the Closing
Date, and copies of all written instructions to transfer
agent to issue shares from January 1, 2005 to present;
-21-
(j) Rresignation letters in forms satisfactory to the Company,
effective as of the Closing from each of the officers,
directors and employees (if any) of the Parent.
(k) A copy of all bank statements, savings and investment
accounts;
(l) Certificates evidencing the Merger Consideration shares
(m) A certificate executed by Parent dated the Closing Date, and
signed by each of the authorized officers of Parent,
certifying that the representations and warranties of Parent
contained in this Agreement and the information set forth in
all Schedules of Parent are then true and correct and that
Parent has complied with all agreements and conditions
required by this Agreement to be performed or complied with
by it;
(n) An incumbency certificate identifying the executive
officers, or equivalents thereof, of the Purchaser;
(o) A certificate executed by the Secretary of the Parent
certifying (i) as to the resolutions of the Company
authorizing the transactions contemplated by this Agreement;
and (ii) that attached to such certificate are true, correct
and complete copies of the Parent's and Acquisition Subs'
governing documents
(p) Any further document as may be reasonably requested by the
Company in order to substantiate any of the representations
or warranties of Parent set forth herein.
SECTION 7.09 the form and substance of all certificates, instruments,
opinions and other documents delivered to the Company under this Agreement shall
be satisfactory in all reasonable respects to the Company.
ARTICLE VIII
CONDITIONS PRECEDENT TO PARENT'S PERFORMANCE
The obligations of Parent to consummate the transaction contemplated by
this Agreement are subject to the satisfaction on the Closing Date of all the
conditions set out below in this Article Six. Parent may waive any such
condition by notice in writing to the Company.
SECTION 8.01 Except as otherwise permitted by this Agreement, all
representations and warranties by the Companies in this Agreement or in any
written statement that shall be delivered to Parent by any of them under this
Agreement shall be true on and as of the Closing Date as though made at that
time.
SECTION 8.02 The Companies shall have performed, satisfied and complied
with all covenants, agreements and conditions required by this Agreement to be
performed or complied with on or before the Closing Date.
-22-
SECTION 8.03 Parent shall have received a certificate, dated the
Closing Date, signed and verified by the chief executive officer of and the
Company certifying, in such detail as Parent and its counsel may reasonably
request, that the conditions specified in paragraphs 8.1 through 8.2 have been
fulfilled.
SECTION 8.04 Parent shall have received from XxXxxxxxxx & Xxxxx LLP,
counsel for the Company, an opinion dated the Closing Date, in form and
substance satisfactory to Parent and its counsel, that:
(i) The Company is a corporation duly incorporated, validly
existing, and in good standing under the laws of the British
Virgin Islands and has all requisite corporate power to
perform its obligations under this Agreement;
(ii) All corporate proceedings required by law or by the
provisions of this Agreement to be taken by the Company on
or before the Closing Date, in connection with the execution
and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement, have been duly
and validly taken;
(iii) to the best of such counsel's knowledge, very consent,
approval, authorization, or order of any court or
governmental agency or body that is required for the
consummation by the Company of the transactions contemplated
by this Agreement has been obtained and will be in effect on
the Closing Date;
(iv) The consummation of the transaction contemplated by this
Agreement does not violate or contravene any of the
provisions of any charter, bylaw or resolution of the
Company or, to the best of such counsel's knowledge, any
indenture, agreement, judgment or order to which the Company
is a party or by which the Company is bound;
In rendering its opinion, counsel for The Company and The Company may
rely upon such certificates, permits and representations and warranties of
governmental authorities, officers of The Company, The Company and opinions of
other counsel.
SECTION 8.06 No action, suit, or proceeding before any court or any
governmental body or authority, pertaining to the transaction contemplated by
this Agreement or to its consummation, shall have been instituted or threatened
on or before the Closing Date.
SECTION 8.07 The execution and delivery of this Agreement by the
Company, and the performance of its covenants and obligations under it, shall
have been duly authorized by all necessary corporate action
-23-
SECTION 8.08 The Closing of the transaction contemplated by this
Agreement shall have taken place on or before July 31, 2005.
SECTION 8.09 The Company shall deliver each of the following documents
to the Parent, and the documents must be satisfactory in form and content to the
Parent and its counsel:
(a) The Company's audited consolidated financial statements which shall
comply in form and substance with applicable regulations of the United
States Securities and Exchange Commission as of December 31, 2003 and
December 31, 2004, and such unaudited financial statements and pro
forma financial statements as required by Form 8-K and other
requirements of the SEC regarding the Transaction;
(b) Certificates evidencing the Merger Consideration shares issued to
Company's shareholders with stock powers duly executed in blank;
(c) An incumbency certificate identifying the executive officers, or
equivalents thereof, of the Parent and Acquisition Sub;
(d) A certificate executed by the Secretary of the Company certifying
(i) as to the resolutions of the Company authorizing the transactions
contemplated by this Agreement; and (ii) that attached to such
certificate are true, correct and complete copies of the companies'
governing documents;
(e) Any further document as may be reasonably requested by the
Company's legal counsel in order to substantiate any of the
representations or warranties of Parent set forth herein.
SECTION 8.10 The form and substance of all certificates, instruments,
opinions and other documents delivered to Parent under this Agreement shall be
satisfactory to Parent and its counsel.
ARTICLE IX
THE CLOSING
SECTION 9.01 The Closing shall take place on the date, at the time and
at the place specified in Section 1.4 hereof or as otherwise established
pursuant thereto.
SECTION 9.02 At the Closing, the Company shall deliver or cause to be
delivered to the Parent:
(i) The documents referred to in Article Eight hereof (except
for any document waived pursuant thereto) or evidence
satisfactory to Parent and Acquisition Sub and its counsel
that each condition referred to therein has been satisfied;
-24-
(ii) Certificates representing all of the Company Stock
registered in the name of the Company duly endorsed by the
respective shareholder as the registered owners thereof for
registration of transfer or accompanied by assignments of
all of the Company Stock duly executed by the respective
shareholder;
SECTION 9.03 At the Closing Parent and Acquisition shall deliver or
cause to be delivered to the Company:
(i) The documents referred to in Article Seven hereof (except for any
document waived pursuant thereto) or evidence reasonably satisfactory
to counsel for the Company and the Company that each condition referred
to therein has been satisfied; and
(ii) Certificates evidencing the Shares to be issued and delivered
pursuant to Section 1.2 and bearing the legend provided for in Section
1.09
SECTION 9.04 All documents and instruments to be delivered at the
Closing shall be regarded as having been delivered concurrently, and no document
or instrument shall be regarded as having been delivered until all have been
delivered.
ARTICLE X
TERMINATION AND INEMNIFICATION
SECTION 10.01 This Agreement may be terminated:
(a) by mutual consent in writing;
(b) by either the Company or Parent if there has been a material
misrepresentation or material breach of any warranty or covenant by any
other party that is not cured by the time of Closing;
(c) automatically, if the Closing has not taken place or on before
August 31, 2005, unless adjourned to a later date by mutual consent in
writing;
(d) by the Company or Parent if all the conditions precedent to its
respective obligations hereunder have not been satisfied or waived
prior to the Closing Date, as it may be accelerated or extended,
(e) By any party, if any party shall have defaulted or refused to
perform in any material respect under this Agreement, or if Parent or
the Company should have reasonable cause to believe there has been a
material representation concerning, or failure or breach of, any
representation or warranty by the other party, or if it appears that
either the Company, its officers or directors; or Parent, its officers,
or directors have committed any unlawful acts affecting the other
party;
-25-
(f) By any party, if either Parent or the Company shall reasonably
determine that the transactions contemplated in this Agreement have
become inadvisable by reason of the institution or threat by any
federal, state or municipal governmental authorities or by other person
whatever of a formal investigation or of any action, suit or proceeding
of any kind against either or both parties which in one party's
reasonable belief is material in light of the other party's business,
prospects, properties or financial condition;
SECTION 10.2 Any termination of this Agreement (other than an automatic
termination) shall be made in accordance with the above listed grounds and, if
terminated by Parent or the Company, shall be made by written notice of
termination, given to the other party as required in this Agreement as promptly
as is practical under the circumstances. Upon a party's receipt of such
termination notice, this Agreement shall terminate and the parties shall abandon
the transactions herein contemplated without further action.
SECTION 10.3 Upon termination of this Agreement for any reason, (i) the
covenants of the parties concerning the confidentiality and proprietary nature
of all documents and other information furnished hereunder shall remain in force
except as to information which has otherwise become public knowledge, and (ii)
each party shall promptly return all documents received from the other party in
connection with this Agreement. This Section constitutes a mutual covenant of
the parties, and either may judicially enforce it.
SECTION 10.4 INDEMNIFICATION
(a) The Parent and those shareholders of the Parent who own a minimum
of five percent of the issued and outstanding shares of the Parent as of the
Closing Date, prior to the Effective Time (as set forth on Schedule 10.4) shall,
jointly and severally, indemnify and hold the Company and its affiliates
harmless, and shall reimburse Company and its affiliates for, any loss,
liability, claim, damage, expense (including, but not limited to, reasonable
cost of investigation and defense and reasonable attorneys' fees) or diminution
of value (collectively, "Damages") arising from or in connection with any
inaccuracy in any of the representations and warranties of Parent or Acquisition
Sub pursuant to this Agreement or in any certificate delivered by the Parent
pursuant to this Agreement.
(b) The Company shall indemnify and hold the Parent harmless, and shall
reimburse Parent for any Damages arising from any inaccuracy in any of the
representations and warranties of the Companies in this Agreement or in any
certificate delivered by the Company pursuant to this Agreement.
Section 10.5 PROCEDURE FOR INDEMNIFICATION. Promptly after receipt by
an indemnified party of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such section, give notice to the indemnifying party of
the commencement thereof, but the failure so to notify the indemnifying party
shall not relieve it of any liability that it may have to any indemnified party
except to the extent the defense of such action by the indemnifying party is
prejudiced thereby. In case any such action shall be brought against an
indemnified party and it shall give notice to the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, to assume the defense thereof
with counsel reasonable satisfactory to such indemnified party and, after notice
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from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such section for any fees of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party in
connection with the defense thereof, other than reasonable costs of
investigation, If an indemnifying party assume the defense of such an action,
(a) no compromise or settlement thereof may be effected by the indemnifying
party without the indemnified party's consent (which shall not be unreasonable
withheld) unless (i) there is no finding or admission of any violation of law or
any violation of the rights of any person which is not fully remedied by the
payment referred to in clause (ii) and no adverse effect on any other claims
that may be made against the indemnified party and (ii) the sole relief provided
is monetary damages that are paid in full by the indemnifying party, (b) the
indemnifying party shall have no liability with respect to any compromise or
settlement thereof effected without its consent (which shall not be reasonably
withheld) and (c) the indemnified party will reasonable cooperate with the
indemnifying party in the defense of such action. If notice is given to an
indemnifying party of the commencement of any action and it does not, within 15
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense thereof, the
indemnifying party shall be bound by any determination made in such action or
any compromise or settlement thereof effected by the indemnified party.
Notwithstanding the foregoing, if an indemnified party determined in good faith
that there is a reasonable probability that an action may materially and
adversely affect it or its affiliated other than as a result of monetary
damages, such indemnified party may, by notice to the indemnifying party, assume
the exclusive right to defend, compromise or settle such action, but the
indemnifying party shall not be bound by any determination of an action so
defended or any compromise or settlement thereof effected without its consent
(which shall not be unreasonably withheld).
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive for one year after the Effective Time.
This Section 11.01 shall not limit any covenant or agreement of the parties,
which by its terms contemplates performance after the Effective Time of the
Merger.
SECTION 11. NOTICES. All notices and other communications hereunder
("NOTICE") shall be in writing and shall be deemed given if delivered
personally, telecopied (which is confirmed), sent by overnight courier
(providing proof of delivery) or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
-27-
if to Parent or Kushi Natural Foods Corporation C/O Xx. Xxxxxx Xxxxxxxx
Acquisition Sub, to: 00 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
with a copy to: Xxxxx Xxxxxxx, Esq.
0000 Xxxxx Xxxxx Xxxx
Xxxxx Xxxxxx, XX 00000
Facsimile:000-000-0000
if to the Company or Hanxin, to: Xxxx Xxx Xin Science and Technology Co., Ltd,
703, No. 61, Gao Xin Rd.,
High Tech Development Park, Xian Shanxi Province, The People's
Republic of China
and
Xx. Xxxxxx Xxx
Genes Investment Consulting Company
Room 23B,Building Guangdong Development Bank,
Xx. 000 Xxxx Xxxxxxxx,
Xxxxxxxx, China(200433)
with a copy to: Xxxxxx X. Xxxxxxxx, Esq.
XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
SECTION 11.03 INTERPRETATION. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or a
Section of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "INCLUDE," "INCLUDES" or "INCLUDING" are used in this Agreement, they
shall be deemed to be followed by the words "WITHOUT LIMITATION." The phrase
"MADE AVAILABLE" in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available. As used in this Agreement, the term "SUBSIDIARY" of any
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person, and the term "AFFILIATE"
shall have the meaning set forth in Rule 12b-2 promulgated under the Exchange
Act. As used in this Agreement, "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE
EFFECT" means, when used in connection with a person, any change or effect (or
any development that, insofar as can reasonably be foreseen, is likely to result
in any change or effect) that, individually or in the aggregate with any such
other changes or effects, is materially adverse to the business, prospects,
assets (including intangible assets), financial condition or results of
operations of such person and its subsidiaries taken as a whole.
-28-
SECTION 11.04 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when said counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
SECTION 11.05 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This
Agreement (including the documents and the instruments referred to herein)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
SECTION 11.06 GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of New York, without regard
to any applicable conflicts of law. The Parties hereto irrevocably further
consent to the jurisdiction of the courts of the State of New York and of any
Federal court located in New York City in connection with any action or
proceeding arising out of or relating to this Agreement, any document or
instrument delivered pursuant to, in connection with or simultaneously with this
Agreement, or a breach of this Agreement or any such document or instrument.
SECTION 11.07 PUBLICITY. Except as otherwise required by law, for so
long as this Agreement is in effect, neither the Company nor Parent shall, nor
shall Parent permit Acquisition Sub to, issue or cause the publication of any
press release or other public announcement with respect to the transactions
contemplated by this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld or delayed.
SECTION 11.08 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
SECTION 11.09 ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement. In addition, each of the parties
hereto (i) consents to submit such party to the personal jurisdiction of any
Federal court located in the City of New York in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (iii)
agrees that such party will not bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than a Federal
court sitting in the City of New York. The prevailing party in any judicial
action shall be entitled to receive from the other party reimbursement for the
prevailing party's reasonable attorneys' fees and disbursements, and court
costs.
-29-
SECTION 11.10 NO REMEDY IN CERTAIN CIRCUMSTANCES. Each party agrees
that, should any court or other competent authority hold any provision of this
Agreement to be null, void or unenforceable, or order any party to take any
action inconsistent herewith or not to take an action consistent herewith or
required hereby, the validity, legality and enforceability of the remaining
provisions and obligations contained or set forth in this Agreement shall not in
any way be affected or impaired thereby, unless the foregoing inconsistent
action or the failure to take an action constitutes a material breach of this
Agreement or makes this Agreement impossible to perform, in which case this
Agreement shall terminate. Except as otherwise contemplated by this Agreement,
to the extent that a party hereto took an action inconsistent herewith or failed
to take action consistent herewith or required hereby pursuant to an order or
judgment of a court or other competent authority, such party shall incur no
liability or obligation unless such party did not in good faith seek to resist
or object to the imposition or entering of such order or judgment.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, Parent, Acquisition Sub and the Companies have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
KUSHI NATURAL FOODS CORPORATION
By: /s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxx
Title: President
KUSHI SUB, INC.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxx
Title: Xxxxxx Xxxxxxxx
HANXIN (CORK) INTERNATIONAL HOLDING CO., LTD.
By: /s/ Pencheng Chen
---------------------
Name: Pencheng Chen
Title: Chief Executive Officer
XI'AN CORK INVESTMENTS CONSULTATIVE MANAGEMENT CO., LTD.
By: /s/ Pencheng Chen
---------------------
Name: Pencheng Chen
Title: Chief Executive Officer
XXXX XXX XIN SCIENCE AND TECHNOLOGY CO., LTD
By: /s/ Pencheng Chen
---------------------
Name: Pencheng Chen
Title: Chief Executive Officer
-31-
In acknowledgement only of their obligation under Section 10.4 of this
Agreement:
/S/ XXXX XXXXXXXXX
------------------
XXXX XXXXXXXXX
/S/ XXXXXX XXXXXXXX
-------------------
XX. XXXXXX XXXXXXXX
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HANXIN (CORK) INTERNATIONAL HOLDING CO., LTD.
00 Xxxx Xxxxxx, Xxxxx 000,
Xxx Xxxx, Xxx Xxxx 00000
August 9, 2005
Kushi Natural Foods Corporation
Kushi Sub, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX00000
Re: Merger Agreement dated as of July 11, 2005 (the "Agreement")
Gentlemen:
Please let this confirm that Section 5.02 of the Agreement is amended
to extend the date by which listing of Kushi Natural Foods Corporations'
securities on the Over the Counter Bulletin Board must be completed by from
September 30, 2005 to November 30, 2005.
Please let this also confirm that the current directors of the Kushi
Natural Foods Corporation shall resign immediately upon notice from the holders
of a majority of the shares of common stock of Kushi Natural Foods Corporation,
and that the directors constituting a majority of the board of directors of
Kushi Natural Foods Corporation will be elected upon compliance with the notice
requirements set forth in Rule 14f-1 of the Securities Exchange Act of 1934.
Except as set forth herein, the Agreement is ratified and confirmed
in all respects and all other provisions therein shall continue in full force
and effect.
If this correctly sets forth our understanding, please so acknowledge
by signing below.
Hanxin (Cork) International Holding Co., LTD.
By:/s/ Xxxxxxxxx Xxxx
---------------------
Name: Xxxxxxxxx Xxxx
Title: Chief Executive Officer
Kushi Natural Foods Corporation
Kushi Sub, Inc.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxx
Title: President
CERTIFICATE OF DESIGNATIONS,
RIGHTS AND PREFERENCES
OF
SERIES A PREFERRED STOCK
$.0001 PAR VALUE
OF
KUSHI NATURAL FOODS CORPORATION
--------------------
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
--------------------
KUSHI NATURAL FOODS CORPORATION, a corporation organized and
existing under and by virtue of the provisions of the General Corporation Law of
the State of Delaware (the "Corporation") DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of
Directors of the Corporation (the "Board") by the Certificate of Incorporation
of the Corporation, the Board, by a Unanimous Written Consent dated June ___,
2005, adopted the following resolution authorizing the creation and issuance of
a series of 1,000 shares of Series A Preferred Stock, $.0001 par value per share
(the "Series A Preferred Stock" or the "Series"), which resolution is as
follows:
RESOLVED, that pursuant to authority expressly granted to and
vested in the Board of Directors by the Certificate of Incorporation, as
amended, of the Corporation, the Board hereby creates a series of 1,000 shares
of Series A Convertible Preferred Stock, $.0001 par value per share, of the
Corporation and authorizes the issuance thereof, and hereby fixes the
designation thereof, and the voting powers, preferences and relative,
participating, optional and other special limitations or restrictions thereon
(in addition to the designations, preferences and relative, participating and
other special rights, and the qualifications, limitations or restrictions
thereof, set forth in the Certificate of Incorporation, as amended, of the
Corporation, which are applicable to the preferred stock of all series) as
follows:
1. DESIGNATION. The shares of the Series shall be designated "Series
A Convertible Preferred Stock" (hereinafter referred to as the "Series A
Preferred Stock"), and the number of shares constituting the Series shall be
1,000, $.0001 par value per share. The number of authorized shares of the Series
may be reduced by further resolution duly adopted by the Board of Directors of
the Corporation and by filing amendments to the Certificate of Designations
pursuant to the provisions of the General Corporation Law of the State of
Delaware stating that such reduction has been so authorized, but the number of
authorized shares of this Series shall not be increased.
-1-
2. DIVIDENDS. Holders of the Series A Preferred Stock (the "Holders")
shall not be entitled to dividends.
3. VOTING RIGHTS.
The holder of each share of Series A Preferred Stock, shall have,
upon the conversion thereof, the right to one vote for each share of Common
Stock into which such Series A Preferred Stock could then be converted, and with
respect to such vote, such holder shall have full voting rights and powers equal
to the voting rights and powers of the holders of Common Stock, and shall be
entitled, notwithstanding any provision hereof, to notice of any shareholders
meeting in accordance with the bylaws of this corporation, and shall be entitled
to vote, together with holders of Common Stock, with respect to any question
upon which holders of Common Stock have the right to vote. The Holders shall
have the right or power to vote only to the extent and only equal to the number
of shares of authorized and unissued shares of Common Stock into which such
shares of Series A Preferred Stock are then convertible in accordance with
Section 4 hereof.
4. CONVERSION RIGHTS. The Series A Preferred Stock shall be
convertible into Common Stock immediately as follows:
a. Each share of Series A Preferred Stock shall be automatically
converted into fully paid and non-assessable shares of Common Stock at the
Conversion Rate (as hereinafter defined) immediately upon the amendment of the
Certificate of Incorporation of the Corporation, by a duly accepted resolution
of its shareholders, so as to increase the Corporation's authorized shares of
Common Stock to not less than 500,000,000 shares of Common Stock.
b. Upon the amendment of the Corporation's Certificate of
Incorporation as set forth in Section 4(a), all of the shares of Series A
Preferred Stock then outstanding shall be converted, without any further action
by the Holders thereof, into shares of Common Stock in accordance with the
Conversion Rate. The Holders of shares of Series A Preferred Stock so converted
shall surrender the stock certificates therefor, duly endorsed to the
Corporation or in blank, at the principal office of the Corporation or of any
transfer agent for shares of Common Stock in exchange for shares of Common
Stock. The Corporation shall, forthwith upon such surrender, issue to such
Holders, a certificate or certificates, registered in such name or names as such
Holder may direct, representing the number of shares of Common Stock into which
the shares of Series A Preferred Stock surrendered were convertible on the date
on which such automatic conversion occurred.
c. CONVERSION RATE. Each share of Preferred Stock is convertible into
177,185,642 shares of Common Stock.
-2-
d. CONVERSION RATE ADJUSTMENTS. The Conversion Rate shall be subject
to adjustment from time to time as follows:
(1) CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE. In case of any
consolidation with or merger of the Corporation with or into another
corporation, or in case of any sale, lease or conveyance to another corporation
of the assets of the Corporation as an entirety or substantially as an entirety,
each share of Series A Preferred Stock shall after the date of such
consolidation, merger, sale, lease or conveyance be convertible into the number
of shares of stock or other securities or property (including cash) to which the
Common Stock issuable (at the time of such consolidation, merger, sale, lease or
conveyance) upon conversion of such share of Series A Preferred Stock would have
been entitled upon such consolidation, merger, sale, lease or conveyance; and in
any such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the holder of the shares of Series A
Preferred Stock shall be appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to any shares of stock of other securities or
property thereafter deliverable on the conversion of the shares of Series A
Preferred Stock.
(2) STOCK DIVIDENDS, SUBDIVISIONS, RECLASSIFICATION OR COMBINATIONS.
If the Corporation shall (i) declare a dividend or make a distribution on its
Common Stock in shares of its Common Stock, (ii) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify the outstanding Common Stock into a smaller number of
shares, the Conversion Rate in effect at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted so that the holder of any
shares of Series A Preferred Stock surrendered for conversion after such date
shall be entitled to receive the number of shares of Common Stock which he would
have owned or been entitled to receive had such Series A Preferred Stock been
converted immediately prior to such date. Successive adjustments in the
Conversion Rate shall be made whenever any event specified above shall occur.
e. FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Stock. In lieu of any
fractional shares to which the Holder would otherwise be entitled, the
Corporation shall round the fraction to the nearest whole number of shares such
that the Corporation will round up if the fraction is one-half or more, and
round down if the fraction is less than one-half.
f. TREASURY STOCK. For the purposes of this paragraph 4, the sale or
other disposition of any Common Stock theretofore held in the Corporation's
treasury shall be deemed to be an issuance thereof.
g. COSTS. The Holder shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance or delivery of shares of
Common Stock upon conversion of any shares of Series A Preferred Stock; provided
further that the Corporation shall not be required to pay any taxes which may be
payable in respect of any transfer involved in the issuance or delivery of any
certificate for such shares in a name other than that of the holder of the
shares of Series A Preferred Stock in respect of which such shares are being
issued.
-3-
h. VALID ISSUANCE. All shares of Common Stock which may be issued
upon conversion of shares of Series A Preferred Stock will, upon issuance by the
Corporation, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof, and the
Corporation shall take no action which will cause a contrary result.
i. STATUS OF CONVERTED STOCK. In case any share of Series A Preferred
Stock shall be converted pursuant to Section 4 hereof, the shares so converted
shall be retired and not reissued.
5. COVENANTS. In addition to any other rights provided by law, so
long as any Series A Preferred Stock is outstanding, the Corporation, without
first obtaining the affirmative vote or written consent of the holders of not
less than a majority of such outstanding shares of Preferred Stock, will not:
a. amend or repeal any provision of, or add any provision to, the
Corporation's Certificate of Incorporation or By-Laws if such action would alter
adversely the preferences, rights, privileges or powers of, or the restrictions
provided for the benefit of, any Series A Preferred Stock, or increase the
number of shares of Series A Preferred Stock authorized hereby;
b. authorize or issue shares of any class or series of stock not
expressly authorized herein having any preference or priority as to dividends or
assets or other rights superior to or on a parity with any such preference or
priority of the Preferred Stock, or authorize or issue shares of stock of any
class or any bonds, debentures, notes or other obligations convertible into or
exchangeable for, or having option rights to purchase, any shares of stock of
the Corporation having any preference or priority as to dividends, assets or
other rights superior to or on a parity with any such preference or priority of
the Preferred Stock;
c. reclassify any class or series of any stock junior in liquidation
rights to the Series A Preferred Stock ("Junior Stock") into stock in parity
with the Series A Preferred Stock with respect to liquidation rights ("Parity
Stock") or stock senior to the Series A Preferred Stock with respect to
liquidation rights ("Senior Stock") or reclassify any series of Parity Stock
into Senior Stock;
d. declare or pay on any Junior Stock any dividend whatsoever,
whether in cash, property or otherwise (other than dividends payable in shares
of the class or series upon which such dividends are declared or paid, or
payable in shares of Common Stock with respect to Junior Stock other than Common
Stock, together with cash in lieu of fractional shares), nor shall the
Corporation make any distribution on any Junior Stock, nor shall any Junior
Stock be purchased or redeemed by the Corporation.
-4-
e. the Directors of the Corporation shall not authorize the taking of
any corporate action.
6. NO PREEMPTIVE RIGHTS. No holders of Series A Preferred Stock, nor
of the security convertible into, nor of any warrant, option or right to
purchase, subscribe for or otherwise acquire Series A Preferred Stock, whether
now or hereafter authorized, shall, as such holder, have any preemptive right
whatsoever to purchase, subscribe for or otherwise acquire, stock of any class
of the Corporation nor of any security convertible into, nor of any warrant,
option or right to purchase, subscribe for or otherwise acquire, stock of any
class of the Corporation, whether now or hereafter authorized.
7. EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by
law, the shares of Series A Preferred Stock shall not have any preferences or
relative, participating, optional or other special rights, other than those
specifically set forth in this resolution (as such resolution may be amended
from time to time) and in the Corporation's Certificate of Incorporation. The
Shares of Series A Preferred Stock shall have no preemptive or subscription
rights.
8. HEADINGS OF SUBDIVISIONS. The headings of the various subdivisions
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
9. SEVERABILITY OF PROVISIONS. If any right, preference or limitation
of the Preferred Stock set forth in this Certificate (as such Certificate may be
amended from time to time) is invalid, unlawful or incapable of being enforced
by reason of any rule of law or public policy, all other rights, preferences and
limitations set forth in this Certificate (as so amended) which can be given
effect without the invalid, unlawful or unenforceable right, preference or
limitation shall, nevertheless, remain in full force and effect, and no right,
preference or limitation herein set forth shall be deemed dependent upon any
other such right, preference or limitation unless so expressed herein.
10. STATUS OF REACQUIRED SHARES. Shares of Preferred Stock which have
been issued and reacquired in any manner shall (upon compliance with any
applicable provisions of the laws of the State of Delaware) have the status of
authorized and unissued shares of Preferred Stock issuable in series
undesignated as to series and may be redesignated and reissued.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
-5-
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed in its name and on its behalf by its President and attested to this ___
day of _________, 2005.
KUSHI NATURAL FOODS CORPORATION
By: ___________________________
Xx. Xxxxxx Xxxxxxxx, President
ATTESTED
----------------------------
Xxxx Xxxxxxxxx, Secretary
-6-
SCHEDULE 3.10
OTHER COMPENSATION AGREEMENTS
No such agreements.
-7-
SCHEDULE 3.18
INTERESTED PARTY TRANSACTIONS
The Company purchased a patent from one of its shareholders on March 14, 2004 at
a price of US$1,208,080.
-8-
SCHEDULE 10.4
LIST OF PARENT'S SHAREHOLDERS OWNING IN EXCESS OF 5% OF PARENT'S ISSUED AND
OUTSTANDING SHARES
1. Xx. Xxxxxx Xxxxxxxx
2. Xxxx Xxxxxxxxx
-9-
XI'AN HANXIN SCIENCE AND TECHNOLOGY CO., LTD.
Real Properties Owned
-----------------------------------------------------------------------------------------------------------------
NO NO OF CERTIFICATE OF TITLE ADDRESS TOTAL BUILDING AREA(M2)
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
1 Xx 000, 0000, Xxxxx 078-1801, Maple New City, High-tech Zone, Xi'an 196.2
-----------------------------------------------------------------------------------------------------------------
2 No 0000, Xxxxxx Xxxx Xxxxx Xxxxxxxx, Xxxxxx Xxxx, Xxxxx'xx Xxxxxx, Xi'an 6,201.40
-----------------------------------------------------------------------------------------------------------------
-10-
XI'AN HANXIN SCIENCE AND TECHNOLOGY CO., LTD.
Real Properties Leased
--------------------------------------------------------------------------------------------------------------------------------
ANNUAL
NO LESSOR OBJECT RENT(RMB) ADDRESS TERM TOTAL AREA
--------------------------------------------------------------------------------------------------------------------------------
1 Villagers' Committee of Land 12,000 Beida Villiage, Dongda Town, Mar 2002- 13.1191 acre
Beida Villiage, Dongda Town, Xxxxx'an County, Feb 2007
Xxxxx'an County, Xi'an, China
--------------------------------------------------------------------------------------------------------------------------------
2 Shihuai, Jiao Room in 108,000 Room 802, Block B, Jan 2004- 150(M2)
office building Hua'ao Mansion, Xx. 00, Xxx 0000
Xxxx Xxxx, Xx'xx, Xxxxx
--------------------------------------------------------------------------------------------------------------------------------
3 Bao'an Yang Room in 252,000 Xxxx 000, Xx. 00, Xxx Xxx Xx, Aug 2002- 263(M2)
office building High Tech Development Park, Jul 2005
Xi'an, China
--------------------------------------------------------------------------------------------------------------------------------
4 Xi'an Innovation Information Room in
Development Co., Ltd. office building 156,960 3rd Floor, Block A, Innovation Dec 2004- 436(M2)
Information Mansion, No 72, 2nd Dec 0000
Xxxx Xxxx, Xx-Xxxx Xxxx,
Xx'xx, Xxxxx
--------------------------------------------------------------------------------------------------------------------------------
Right to the use of Land
-11-
XI'AN HANXIN SCIENCE AND TECHNOLOGY CO., LTD.
Schedule 3.22 - Right to the use of land
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
NO NO OF CERTIFICATE OF TITLE LOCATION YEARS OF LEGAL LAND USING TOTAL BUILDING AREA(M(2))
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
1 107(State 2001), Xxxxx'an Beida Villiage, Dongda Town 40 3038.359
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
2 108(State 2001), Xxxxx'an Beida Villiage, Dongda Town 40 7351.93
----------------------------------------------------------------------------------------------------------------------------------
-12-
SCHEDULE 3.21 - CONTRACTS
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
NO. TYEP OF CONTRACT PARTY CONCERNED AMOUNT(RMB) SIGNING DATE
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
1 Purchase order Xi'an Xiang He Chemical Co. Ltd. 24,500.00 2005-2-25
------------------------------
------------------------------
846,000.00 2005/1/4
------------------------------
------------------------------
846,000.00 2004/9/1
------------------------------
------------------------------
1,234,800.00 2004/5/8
------------------------------
------------------------------
477,000.00 2004/3/5
------------------------------
------------------------------
327,600.00 2004-2-2
------------------------------
------------------------------
198,000.00 2004-1-4
------------------------------
------------------------------
1,170,000.00 7/20/2003
------------------------------
------------------------------
180,000.00 3/29/2003
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
2 Purchase order Xi'an Fu Rui Biochemical Co., Ltd. 927,000.00 2005/1/4
------------------------------
------------------------------
1,440,000.00 2004-7-1
------------------------------
------------------------------
943,200.00 2004-4-15
------------------------------
------------------------------
491,400.00 2004-2-3
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
3 Purchase order Shanghai Kun Lun Chemical Coating Co., Ltd. 1,048,600.00 2005-1-3
------------------------------
------------------------------
1,127,000.00 2004-9-25
------------------------------
------------------------------
2,162,800.00 2004-6-25
------------------------------
------------------------------
1,813,000.00 2004-4-1
------------------------------
------------------------------
705,600.00 2004-1-4
------------------------------
------------------------------
784,000.00 2003-9-21
------------------------------
------------------------------
1,078,000.00 2003-6-20
------------------------------
------------------------------
58,800.00 2003-5-9
------------------------------
------------------------------
245,000.00 2003-3-20
------------------------------
------------------------------
294,000.00 2003-2-21
------------------------------
------------------------------
98,000.00 2/10/2003
------------------------------
------------------------------
78,400.00 2003-1-10
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
4 Purchase order Shanghai Zhong Xxxxx Xxxx Industry Co., Ltd. 224,560.32 2005-1-8
------------------------------
------------------------------
352,000.00 2005-1-3
------------------------------
------------------------------
20,000.00 2004-11-10
------------------------------
------------------------------
288,000.00 2004-9-10
------------------------------
------------------------------
960,000.00 2004-4-1
------------------------------
------------------------------
560,000.00 2004-1-4
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
5 Purchase order Xxxxx'an Da Yuan Carton Plant 140,000.00 2005-3-5
------------------------------
------------------------------
203,000.00 2005-1-3
------------------------------
------------------------------
63,000.00 2004-10-8
------------------------------
------------------------------
322,000.00 2004-7-2
------------------------------
------------------------------
399,000.00 2004-3-1
------------------------------
------------------------------
63,560.00 2004-2-1
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
6 Purchase order Kaifeng Xin De Ji Man-made Board Co., Ltd. 544,360.00 2005-1-3
------------------------------
------------------------------
35,900.00 2004-7-15
------------------------------
------------------------------
1,122,200.00 2004-7-1
------------------------------
------------------------------
372,000.00 2004-4-10
------------------------------
------------------------------
310,000.00 2003-9-20
------------------------------
------------------------------
434,000.00 2003-6-20
------------------------------
------------------------------
124,000.00 2003-5-8
------------------------------
------------------------------
155,000.00 2003-2-8
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
7 Purchase agreement BinTian 3,735,000.00 2004-10-18
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
8 Purchase agreement Xxxxxx Xxx 4,500,000.00 2004-10-18
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
9 Loan agreement Xxxxxxxxx Xxxx 4,000,000.00 2004-11-20
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-13-
