EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of the 16th day of June,
2004 (the "Agreement"), by and among Xxxxxxxxx X. Xxxxxxx, Xxxxxxx X. Hair, P.C.
and Xxxxxx X. Xxxxxxxxxxx, (collectively, the "Sellers) who are all stockholders
of Rim Holdings, Inc., a Nevada corporation (the "Company"), on the one hand,
and Best Development Company, Ltd., a British Virgin Islands international
business company (the "Buyer") on the other hand. Each of Xxxxxxxxx X. Xxxxxxx,
Xxxxxxx X. Hair, P.C., Xxxxxx X. Xxxxxxxxxxx and the Buyer is referred to herein
as a "Party," and they are referred to collectively as "Parties." The Company is
party to this Agreement solely for the purpose of making certain representations
and warranties.
W I T N E S S E T H:
WHEREAS, the Sellers collectively own and wish to sell to Buyer 8,888,224
shares (the "Shares") of the common stock of the Company, which constitutes
50.1% of the total outstanding shares of common stock of the Company (after the
redemption of 1,000,000 shares of common stock owned by Xxxxxxxxx X. Xxxxxxx),
and Buyer wishes to purchase from the Sellers the Shares (the "Sale");
WHEREAS, the Sellers will, upon closing of this transaction, contribute all
of the proceeds of the sale of the Shares to the Company in order for the
Company to payoff all of its liabilities in exchange for promissory notes, the
form of which is set forth herein as Exhibit "A" (the "Promissory Notes").
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and agreements set forth herein, the Parties hereto
agree as follows:
ARTICLE I
PURCHASE OF SHARES
1.1 INCORPORATION OF RECITALS. The provisions and recitals set forth above
are hereby referred to and incorporated herein and made a part of this Agreement
by reference.
1.2 PURCHASE OF SHARES. Subject to the terms and conditions of this
Agreement and the Escrow Agreement, on the Closing Date (as hereinafter defined)
Buyer shall purchase 8,888,224 shares of the common stock of the Company and
each of the Sellers shall sell to Buyer as follows:
(a) Xxxxxxxxx X. Xxxxxxx shall sell to Buyer 3,993,700 shares of
common stock of the Company;
(b) Xxxxxx X. Xxxxxxxxxxx shall sell to Buyer 1,126,300 shares of
common stock of the Company; and
(c) Xxxxxxx X. Hair, P.C. shall sell to Buyer 3,768,224 shares of
common stock of the Company.
1.3 CLOSING. The Closing shall take place no later than 3 days after the
date of this Agreement (the "Closing Date"). Prior to the Closing Date, in
addition to the delivers set forth in Article V hereof, (a) Buyer shall deposit
$225,000 in the account of the Escrow Agent as set forth in the Escrow
Agreement, a form of which is attached hereto as Exhibit "B" (the "Escrow
Agreement"); (b) Sellers shall deliver to the Escrow Agent stock certificate(s)
evidencing 8,888,224 shares of the Company's common stock, constituting at least
50.1% (after the redemption of 1,000,000 shares of common stock owned by
Xxxxxxxxx X. Xxxxxxx) of the then outstanding shares of the Company's common
stock in the name of the Buyer and/or its designees (the "Shares Certificate");
and (c) Sellers shall handover the management rights of the Company to the Buyer
in terms of all documents (minutes, resolutions, agreements and contracts), bank
accounts, check books, common seals, memorandum and articles and amendments, and
so forth. On the Closing Date, the Escrow Agent shall transfer the Shares
Certificate to Buyer per Buyer's instructions and shall deposit the $225,000,
less wire transfer fees, as set forth in the Escrow Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer that now and/or as of the
Closing:
2.1 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES; DUE AUTHORIZATION.
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of formation, with full
corporate power and authority to own, lease and operate its respective business
and properties and to carry on its respective business in the places and in the
manner as presently conducted. The Company is in good standing as a foreign
corporation in each jurisdiction in which the properties owned, leased or
operated, or the business conducted, by it requires such qualification except
for any failure, which when taken together with all other failures, is not
likely to have a material adverse effect on the business of the Company, taken
as a whole.
(b) Except for shares of Xxxxxx Computer, Inc., the Company does not
have, and has never had, any subsidiaries and does not own, directly or
indirectly, any capital stock, equity or interest in any corporation, firm,
partnership, joint venture or other entity.
(c) The Company has all requisite corporate power and authority to
execute and deliver this Agreement, and to consummate the transactions
contemplated hereby and thereby. The Company has taken all corporate action
necessary for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, and this Agreement constitutes the
valid and binding obligation of the Company, enforceable against the Company in
accordance with its respective terms, except as may be affected by bankruptcy,
insolvency, moratoria or other similar laws affecting the enforcement of
creditors' rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought. This Agreement, the
Actions, and the transactions contemplated hereby have been unanimously approved
by the Board of Directors of the Company and by the holders of a majority of the
outstanding shares of Common Stock of the Company.
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2.2 NO CONFLICTS OR DEFAULTS. The execution and delivery of this Agreement
by the Company and the consummation of the transactions contemplated hereby do
not and shall not (a) contravene the Certificate of Incorporation or By-laws of
the Company or (b) with or without the giving of notice or the passage of time
(i) violate, conflict with, or result in a breach of, or a default or loss of
rights under, any material covenant, agreement, mortgage, indenture, lease,
instrument, permit or license to which the Company is a party or by which the
Company is bound, or any judgment, order or decree, or any law, rule or
regulation to which the Company is subject, (ii) result in the creation of, or
give any party the right to create, any lien, charge, encumbrance or any other
right or adverse interest ("Liens") upon any of the assets of the Company, (iii)
terminate or give any party the right to terminate, amend, abandon or refuse to
perform, any material agreement, arrangement or commitment to which the Company
is a party or by which the Company's assets are bound, or (iv) accelerate or
modify, or give any party the right to accelerate or modify, the time within
which, or the terms under which, the Company is to perform any duties or
obligations or receive any rights or benefits under any material agreement,
arrangement or commitment to which it is a party.
2.3 CAPITALIZATION. The authorized capital stock of the Company, on the
Closing Date, shall be 10,000,000 shares of preferred stock, none of which is
outstanding, and 20,000,000 shares of Common Stock, par value $0.001 per share,
of which 18,740,967 (the "Company Shares") shares are as of the date hereof,
issued and outstanding. The Company has no issued and outstanding shares of
preferred stock. All of the Company Shares are duly authorized, validly issued,
fully paid and nonassessable, and have not been issued in violation of any
preemptive right of stockholders. The Company Shares are not, and those shares
of Common Stock when issued in accordance with the terms hereof will not be,
subject to any preemptive or subscription right. There is no outstanding voting
trust agreement or other contract, agreement, arrangement, option, warrant,
call, commitment or other right of any character obligating or entitling the
Company to issue, sell, redeem or repurchase any of its securities, and there is
no outstanding security of any kind convertible into or exchangeable for the
common stock of the Company, nor has the Company, or any of its agents orally
agreed to issue any of the foregoing, other than the Promissory Notes. There are
no declared or accrued unpaid dividends with respect to any shares of the
Company's common stock. There are no agreements, written or oral, between the
Company and any of their shareholders or among any Company shareholders relating
to the acquisition (including without limitation rights of first refusal or
preemptive rights), or disposition, or registration under the Securities Act or
voting of the capital stock of the Company. There are no outstanding shares of
Company Common Stock that are subject to vesting. The Company has no other
capital stock authorized, issued or outstanding.
2.4 FINANCIAL STATEMENTS.
(a) SEC DOCUMENTS. The Company hereby makes reference to the
following documents filed with the United States Securities and Exchange
Commission (the "SEC"), as posted on the SEC's website, XXX.XXX.XXX:
(collectively, the "SEC Documents"): (a) Annual Report on Form 10-KSB for the
fiscal year ended September 30, 2003, 2002, 2001 and 2000; (b) General Form For
Registration of Securities Of Small Business Issuers on Form 10-SB12G as filed
on July 17, 2000, and all amendments thereto; and (c) Quarterly Reports on Form
10-QSB for the periods ended December 31, 2000, 2001, 2002 and 2003, March 31,
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2001, 2002, 2003 and 2004, and July 31, 2001, 2002 and 2003, and all amendments
thereto. The SEC Documents constitute all of the documents and reports that the
Company was required to file with the SEC pursuant to the Securities Exchange
Act of 1934 ("Exchange Act") and the rules and regulations promulgated
thereunder by the SEC since the effectiveness of the Company's Form 10-SB12G
filed on July 17, 2000, as amended. The financial statements included in the SEC
Documents include copies of the balance sheets of the Company at September 30,
2002 and 2003, and the related statements of operations and stockholders' cash
flows for the fiscal years then ended, including the notes thereto, as audited
by Xxxx Xxxxx, CPA, independent accountants, and the balance sheet of the
Company at March 31, 2004 and the related statements of operations and
stockholders' cash flows for the six-month period then ended prepared by the
Company's management (all such statements being referred to collectively as the
"Company Existing Financial Statements"). All the Company Existing Financial
Statements, together with the notes thereto, have been prepared in accordance
with U.S. generally accepted accounting principles applied on a basis consistent
throughout all periods presented. These Company Existing Financial Statements
present fairly the financial position of the Company as of the dates and for the
periods indicated. The books of account and other financial records of the
Company have been maintained in accordance with good business practices.
(b) Since the date of the latest Company Existing Financial
Statements (the "Most Recent Date"), except as set forth in SCHEDULE 2.4 there
has been no material adverse change in the condition, financial or otherwise,
net worth, prospects or results of operations of the Company. Without limiting
the foregoing, since the Most Recent Date:
(i) the Company has not sold, leased, transferred or assigned
any of their assets, tangible or intangible, other than in the ordinary course
of business;
(ii) the Company has not entered into any agreement, contract,
commitment, lease or license (or series of related agreements, contracts,
commitments, leases and licenses);
(iii) no party (including the Company) has accelerated,
terminated, modified or canceled any agreement, contract, lease or license (or
series of related agreements, contracts, leases and licenses) to which the
Company is a Party or by which the Company or its assets are bound;
(iv) the Company has not made any capital expenditure (or series
of related capital expenditures) of whatever nature;
(v) the Company has not made any capital investments in, any
loans to, or any acquisitions of the securities or assets of any other Person
(or a series of related capital investments, loans and acquisitions);
(vi) the Company has not issued any notes, bonds or other debt
securities, or created, incurred, assumed or guaranteed any indebtedness for
borrowed money or capitalized lease obligation;
(vii) the Company has not canceled, compromised, waived or
released any right or claim (or series of related rights and claims);
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(viii) the Company has not made any loans to, or entered into any
other transactions with, any of their respective directors, officers, or
employees; and
(ix) the Company has committed to do any of the foregoing.
2.5 FURTHER FINANCIAL MATTERS. The Company does not have any (a) assets of
any kind or (b) liabilities or obligations, whether secured or unsecured,
accrued, determined, absolute or contingent, asserted or unasserted or
otherwise, which are required to be reflected or reserved in a balance sheet or
the notes thereto under generally accepted accounting principles, and which are
not reflected in the Company Financial Statements.
2.6 TAXES. The Company has filed all United States federal, state, county,
local and foreign, national, provincial and local returns and reports which were
required to be filed on or prior to the Closing Date hereof in respect of all
income, withholding, franchise, payroll, excise, property, sales, use,
value-added or other taxes or levies, imposts, duties, license and registration
fees, charges, assessments or withholdings of any nature whatsoever (together,
"Taxes"), and has paid all Taxes (and any related penalties, fines and interest)
which have become due pursuant to such returns or reports or pursuant to any
assessment which has become payable, or, to the extent its liability for any
Taxes (and any related penalties, fines and interest) has not been fully
discharged, the same have been properly reflected as a liability on the books
and records of the Company and adequate reserves therefore have been
established. All such returns and reports filed on or prior to the date hereof
have been properly prepared and are true, correct (and to the extent such
returns reflect judgments made by the Company, as the case may be, such
judgments were reasonable under the circumstances) and complete in all material
respects. The amount shown on the Company's most recent balance sheet as
provision for taxes is sufficient in all material respects to pay all accrued
and unpaid federal, state, local and foreign taxes for the period then ended and
all prior periods. No tax return or tax return liability of the Company has been
audited or, presently under audit. The Company has not given or been requested
to give waivers of any statute of limitations relating to the payment of any
Taxes (or any related penalties, fines and interest). There are no claims
pending or, to the knowledge of the Company, threatened, against the Company for
past due Taxes. All payments for withholding taxes, unemployment insurance and
other amounts required to be paid for periods prior to the date hereof to any
governmental authority in respect of employment obligations of the Company,
including, without limitation, amounts payable pursuant to the Federal Insurance
Contributions Act, have been paid or shall be paid prior to the Closing and have
been duly provided for on the books and records of the Company and in the
Financial Statements. The Company's subsidiary, Xxxxxx Computer has a federal
and a state tax lien for back taxes. All such amounts and penalties are set
forth in the Company's balance sheet.
2.7 INDEBTEDNESS; CONTRACTS; NO DEFAULTS.
(a) Except for the Promissory Notes, the Company has no instruments,
agreements, indentures, mortgages, guarantees, notes, commitments,
accommodations, letters of credit or other arrangements or understandings,
whether written or oral, to which the Company is a party, all of which will be
extinguished shortly after the Closing.
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(b) Neither the Company, nor, to the Company's knowledge, any other
person or entity is in breach, or in default under any contract, agreement,
arrangement, commitment or plan to which the Company is a party, and no event or
action has occurred, is pending or is threatened, which, after the giving of
notice, passage of time or otherwise, would constitute or result in such a
breach or default by the Company or, to the knowledge of the Company, any other
person or entity. The Company has not received any notice of default under any
contract, agreement, arrangement, commitment or plan to which it is a party,
which default has not been cured to the satisfaction of, or duly waived by, the
party claiming such default on or before the date hereof.
2.8 REAL PROPERTY. The Company does not own or lease any real property.
The Company's subsidiary, Xxxxxx Computer leases real property for its
operations.
2.9 COMPLIANCE.
(a) The Company is not conducting its respective business or affairs
in violation of any applicable federal, state or local law, ordinance, rule,
regulation, court or administrative order, decree or process, or any requirement
of insurance carriers. The Company has not received any notice of violation or
claimed violation of any such law, ordinance, rule, regulation, order, decree,
process or requirement.
(b) The Company is in compliance with all applicable federal, state,
local and foreign laws and regulations. There are no claims, notices, actions,
suits, hearings, investigations, inquiries or proceedings pending or, to the
knowledge of the Company, threatened against the Company, and there are no past
or present conditions that the Company has reason to believe are likely to give
rise to any material liability or other obligations of the Company under any
circumstances.
2.10 PERMITS AND LICENSES. The Company has all certificates of occupancy,
rights, permits, certificates, licenses, franchises, approvals and other
authorizations as are reasonably necessary to conduct its respective business
and to own, lease, use, operate and occupy its assets, at the places and in the
manner now conducted and operated, except those the absence of which would not
materially adversely affect its respective business. The Company has not
received any written or oral notice or claim pertaining to the failure to obtain
any material permit, certificate, license, approval or other authorization
required by any federal, state or local agency or other regulatory body, the
failure of which to obtain would materially and adversely affect its business.
2.11 LITIGATION.
(a) There is no claim, dispute, action, suit, inquiry, proceeding or
investigation pending or, to the knowledge of the Company, threatened, against
or affecting the business of the Company, or challenging the validity or
propriety of the transactions contemplated by this Agreement, at law or in
equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor has
any such claim, dispute, action, suit, proceeding or investigation been pending
or threatened, during the 12 month period preceding the date hereof;
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(b) There is no outstanding judgment, order, writ, ruling,
injunction, stipulation or decree of any court, arbitrator or federal, state,
local, foreign or other governmental authority, board, agency, commission or
instrumentality, against or affecting the business of the Company; and
(c) The Company has not received any written or verbal inquiry from
any federal, state, local, foreign or other governmental authority, board,
agency, commission or instrumentality concerning the possible violation of any
law, rule or regulation or any matter disclosed in respect of its business.
2.12 INSURANCE. The Company does not currently maintain any form of
insurance. The Company's subsidiary, Xxxxxx Computer carries insurance that is
customary for its type of operations.
2.13 CERTIFICATE OF INCORPORATION AND BY-LAWS; MINUTE BOOKS. The copies of
the Certificate of Incorporation and By-laws (or similar governing documents) of
the Company, and all amendments to each are true, correct and complete. The
minute books of the Company contain true and complete records of all meetings
and consents in lieu of meetings of their respective Board of Directors (and any
committees thereof), or similar governing bodies, since the time of their
respective organization. The stock books of the Company are true, correct and
complete.
2.14 EMPLOYEE BENEFIT PLANS. The Company does not maintain, nor has the
Company maintained in the past, any employee benefit plans ("as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), or any plans, programs, policies, practices, arrangements or
contracts (whether group or individual) providing for payments, benefits or
reimbursements to employees of the Company, former employees, their
beneficiaries and dependents under which such employees, former employees, their
beneficiaries and dependents are covered through an employment relationship with
the Company, any entity required to be aggregated in a controlled group or
affiliated service group with the Company for purposes of ERISA or the Internal
Revenue Code of 1986 (the "Code") (including, without limitation, under Section
414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA, at any relevant
time ("Benefit Plans").
2.15 PATENTS; TRADEMARKS AND INTELLECTUAL PROPERTY RIGHTS. The Company does
not own or possess any patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, Internet web site(s) or
proprietary rights of any nature. The business conducted by the Company has not
and will not cause the Company to infringe or violate any of the patents,
trademarks, service marks, trade names, copyrights, mask-works, licenses, trade
secrets, processes, data, know-how or other intellectual property rights of any
other Person.
2.16 BROKERS. The Company has not agreed to or incurred any obligation or
other liability that could be claimed against the Company, Seller or Buyer or
any other person for any finder's fee, brokerage commission or similar payment.
2.17 AFFILIATE TRANSACTIONS. Other than the Promissory Notes, neither the
Company nor any officer, director or employee of the Company (or any of the
relatives or Affiliates of any of the aforementioned Persons) is a party to any
agreement, contract, commitment or transaction with the Company or affecting the
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business of the Company, or has any interest in any property, whether real,
personal or mixed, or tangible or intangible, used in or necessary to the
Company which will subject the Company to any liability or obligation from and
after the Closing Date.
2.18 TRADING. The Company Common Stock is currently listed for trading on
the OTC Bulletin Board (the "Bulletin Board"), and the Company has not received
any notices that its common stock is subject to being delisted therefrom.
2.19 COMPLIANCE. The Company has complied with the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
Securities Act of 1933, as amended (the "Securities Act"), and is current in its
filings under the Exchange Act and the Securities Act.
2.20 FILINGS. To the knowledge of the Company, none of the filings made by
the Company under the Securities Act or the Exchange Act make any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which they were
made, not misleading.
2.21 CONSENTS. No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other federal, state, county, local or other foreign governmental
authority, instrumentality, agency or commission ("Governmental Entity") is
required by or with respect to the Company in connection with the execution and
delivery of this Agreement and any related agreements to which the Company is a
party or the consummation of the transactions contemplated hereby and thereby,
except for such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
securities laws.
2.22 SCHEDULES. All lists or other statements, information or documents set
forth in, attached to any Schedule provided pursuant to this Agreement or
delivered hereunder shall be deemed to be representations and warranties by the
Company with the same force and effect as if such lists, statements, information
and documents were set forth herein. Any list, statement, document or any
information set forth in, attached to any Schedule provided pursuant to this
Agreement or delivered hereunder shall not be deemed to constitute disclosure
for any other Schedule provided pursuant to this Agreement unless specific cross
reference is made and shall survive after closing.
2.23 ENVIRONMENTAL MATTERS. The Company has never: (i) operated any
underground storage tanks at any property that the Company has at any time
owned, operated, occupied or leased; or (ii) illegally released any material
amount of any substance that has been designated by any Governmental Entity or
by applicable foreign, federal, state, or local law to be radioactive, toxic,
hazardous or otherwise a danger to health or the environment, including, without
limitation, PCBs, asbestos, petroleum, and urea-formaldehyde and all substances
listed as hazardous substances pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, or defined as a
hazardous waste pursuant to the United States Resource Conservation and Recovery
Act of 1976, as amended, and the regulations promulgated pursuant to said laws),
but excluding office and janitorial supplies properly and safely maintained.
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2.24 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company included in this Agreement and any list, statement, document or
information set forth in, attached to any Schedule provided pursuant to this
Agreement or delivered hereunder, are true and complete in all material respects
and do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading, under the circumstance under which they were
made and shall survive after closing as set forth herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers represents and warrants to the Company that now and/or
as of the Closing:
3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of the Sellers has the
requisite power and/or authority to enter into this Agreement and carry out
his/her obligations hereunder. This Agreement has been duly and validly executed
and delivered by each of the Sellers and constitutes a valid and binding
obligation of each of the Sellers, enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally or by
general principles of equity.
3.2 OWNERSHIP AND TITLE OF SHARES SOLD. Each of the Sellers represent
respectively that:
(a) Each of Xxxxxxxxx X. Xxxxxxx, Xxxxxx X. Kordorffer and Xxxxxxx X.
Hair owns 4,993,700, 1,126,300 and 4,667,872 shares, respectively, of the
Company's common stock.
(b) As of the Closing Date, each of the Sellers will own and will
have good and marketable title to, and sole record and legal ownership of, the
Shares, free and clear of any and all liens, security interests, pledges,
mortgages, charges, limitations, claims, restrictions, rights of first refusal,
rights of first offer, rights of first negotiation or other encumbrances of any
kind or nature whatsoever (collectively, "Encumbrances").
(c) Upon consummation of the Closing, without exception, Buyer will
acquire from Seller legal and beneficial ownership of, and good and marketable
title to the Shares to be sold to Buyer by each of the Sellers, free and clear
of all Encumbrances.
3.3 NO CONFLICTS OR DEFAULTS. The execution and delivery of this
Agreement by, each of the Sellers and the consummation of the transactions
contemplated hereby do not and shall not with or without the giving of notice or
the passage of time, violate, conflict with, or result in a breach of, or a
default or loss of rights under, any material covenant, agreement, mortgage,
indenture, lease, instrument, permit or license to which Seller is a party or by
which the Sellers are bound.
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ARTICLE IV
INDEMNIFICATION
4.1 INDEMNITY BY THE COMPANY AND XXXXXXXXX X. XXXXXXX.
(a) The Company and Xxxxxxxxx X. Xxxxxxx, an individual, agree to
defend, indemnify and hold harmless the Buyer or and their respective officers,
directors, shareholders, attorneys and other agents ("Indemnitiees"), from and
against, and to reimburse, the Indemnitiees, with respect to, all liabilities,
losses, costs and expenses, including, without limitation, reasonable attorneys'
fees and disbursements (collectively the "Losses") asserted against or incurred
by each or any of them by reason of, arising out of, or in connection with: (i)
any liabilities of the Company which have not been disclosed or otherwise
reflected in this Agreement or in any document or certificate delivered by or on
behalf of the Company pursuant to the provisions of this Agreement or in
connection with the transactions contemplated thereby arising out of facts
existing prior to or as of the Closing; (ii) any material breach of any
representation or warranty contained in this Agreement or in any document or
certificate delivered by or on behalf of the Company; (iii) any fraudulent or
negligent acts or statements made by the Company to Buyer in connection with
this Agreement or in connection with the transactions contemplated thereby; and
(iv) any failure by the Company to perform any of its respective covenants,
agreements, or obligations in this Agreement or any related document.
(b) No indemnification payments pursuant to this Agreement shall be
made by the Company or Xxxxxxxxx X. Xxxxxxx to:
(i) indemnify or advance costs to an Indemnitee with respect to
proceedings initiated or brought voluntarily by an Indemnitee and not by way of
defense, except with respect to proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or law or
otherwise as required under applicable law;
(ii) indemnify an Indemnitee for any costs resulting from an
Indemnitee's conduct which is finally adjudged by a court of competent
jurisdiction to have been willful misconduct or knowingly fraudulent or
deliberately dishonest or to have resulted in an improper personal benefit in
money, property or services to the Indemnitee; or
(iii) indemnify an Indemnitee if a court of competent
jurisdiction shall finally determine that such payment is unlawful.
4.2 INDEMNIFICATION PROCEDURE.
(a) A Party (an "Indemnified Party") seeking indemnification shall
give prompt written notice to the other Party (the "Indemnifying Party") of any
claim for indemnification arising under this Article 4. After the notice
required by Article 4, if the Indemnifying Party undertakes to use his best
endeavors to defend any such claim, then the Indemnifying Party shall be
entitled, if it so elects, to take control of the defense and investigation with
respect to such claim and to employ and engage attorneys of its own choice to
handle and defend the same, at the Indemnifying Party's reasonable cost, risk
and expense, upon written notice to the Indemnified Party of such election,
which notice acknowledges the Indemnifying Party's obligation to provide
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indemnification hereunder. The Indemnifying Party shall not settle any
third-party claim that is the subject of indemnification without the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed; provided, however, that the Indemnifying Party
may settle a claim without the Indemnified Party's consent if such settlement
(i) makes no admission or acknowledgment of any liability or culpability with
respect to the Indemnified Party, (ii) includes a complete release of the
Indemnified Party and (iii) does not require the Indemnified Party to make any
payment or forego or take any action. The Indemnified Party shall cooperate in
all reasonable respects with the Indemnifying Party and its attorneys in the
investigation, trial and defense of any lawsuit or action with respect to such
claim and any appeal arising therefrom (including the filing in the Indemnified
Party's name of appropriate cross claims and counter-claims). The Indemnified
Party may, at its own cost, participate in any investigation, trial and defense
of such lawsuit or action controlled by the Indemnifying Party and any appeal
arising therefrom.
(b) If, after receipt of a claim notice pursuant to Article 4, the
Indemnifying Party does not undertake to defend any such claim, the Indemnified
Party may, but shall have no obligation to, contest any lawsuit or action with
respect to such claim and the Indemnifying Party shall be bound by the result
obtained with respect thereto by the Indemnified Party (including, without
limitation, the settlement thereof without the prior written consent of the
Indemnifying Party). If there are one or more legal defenses available to the
Indemnified Party that conflict with those available to the Indemnifying Party,
the Indemnified Party shall have the right to assume the defense of the lawsuit
or action; provided, however, that the Indemnified Party may not settle such
lawsuit or action without the prior written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld or delayed.
(c) At any time after the commencement of defense of any lawsuit or
action, the Indemnifying Party may request the Indemnified Party to agree in
writing to the abandonment of such contest or to the payment or compromise in
full settlement by the Indemnifying Party of such claim, whereupon such action
shall be taken unless the Indemnified Party determines that the contest should
be continued and so notifies the Indemnifying Party in writing within 15 days of
such request from the Indemnifying Party. If the Indemnified Party determines
that the contest should be continued, the Indemnifying Party shall be liable
hereunder only to the extent of the lesser of (i) the amount which the other
party(ies) to the contested claim had agreed to accept in payment or compromise
as of the time the Indemnifying Party made its request therefore to the
Indemnified Party or (ii) such amount for which the Indemnifying Party may be
liable with respect to such claim by reason of the provisions hereof.
ARTICLE V
DELIVERIES
5.1 ITEMS TO BE DELIVERED TO BUYER PRIOR TO OR AT THE CLOSING BY THE
SELLER OR THE COMPANY.
(a) Full and complete responses to the due diligence request list of
Buyer including but not limited to the following:
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(i) articles of incorporation and amendments thereto, by-laws
and amendments thereto, certificate of good standing in the Company's state of
incorporation;
(ii) all minutes and resolutions of the board of directors and of
the shareholders (and meetings of shareholders) in possession of the Company;
(iii) shareholder list of the Company;
(iv) all financial statements and tax returns in possession of
the Company;
(v) all applicable schedules hereto;
(b) Letters of resignation from the Company's current officers and
directors to be effective upon Closing and confirming that they have no claim
against the Company in respect of any outstanding remuneration or fees of
whatever nature to be effective upon closing and after the appointments
described in this section;
(c) Any other document reasonably requested by Buyer that Buyer deems
necessary for the consummation of this transaction
(d) A copy of the Redemption Agreement evidencing that Xxxxxx
Computer, Inc., the wholly-owned Company subsidiary ("Xxxxxx"), will be sold to
Xxxxxxxxx X. Xxxxxxx for no less than 1,000,000 shares of the common stock of
the Company.
(e) An Agreement of Indemnification by Xxxxxxxxx X. Xxxxxxx
personally indemnifying Buyer for the Company's warranty and covenant that, all
of the debts and liabilities owed by the Company shall be paid off.
5.2 ITEMS TO BE DELIVERED TO THE SELLERS PRIOR TO OR AT CLOSING BY
BUYER.
(a) All applicable exhibits and schedules hereto;
(b) Financial statements of Starway Management Ltd., a British
Virgin Islands corporation ("Starway");
(c) any other document reasonably requested by the Sellers that
it deems necessary for the consummation of this transaction.
ARTICLE VI
COVENANTS
6.1 SELLER COVENANTS.
(a) Sellers shall contribute all of the proceeds of the sale of the
Shares to the Company in exchange for the Promissory Notes and shall cause the
Company to pay off all of the Company and its subsidiaries'outstanding
liabilities.
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(b) Xxxxxxxxx X. Xxxxxxx and Xxxxxx X. Kordorffer shall cooperate
with the designees of Buyer with: (i) filing the necessary documents with the
SEC and the Nevada Secretary of State in order to effect a 1 for 20 reverse
stock split of the common stock of the Company and to effect a name change as
determined by the Buyer; (ii) appoint designees of the Buyer as members of the
board of directors or officers of the Company and to promptly resign when
requested by the Buyer as a member of the board of directors or officer of the
Company; (iii) the purchase by the Company of the shares of Starway.
(c) Sellers shall assist in any way to ensure that the shares of the
Company's common stock shall continue to be listed on the Over-the-Counter
Bulletin Board, and to notify the Buyer if the Company receives any notification
(either oral or written) materially adversely effecting such status.
(d) Xxxxxxxxx X. Xxxxxxx covenants to sell back to the Company
1,000,000 shares of the Company's common stock in exchange for all of the stock
of the Company's subsidiary, Xxxxxx Computer and the assumption of all of the
liabilities of Xxxxxx Computer.
6.2 BUYER COVENANTS.
(a) Buyer shall cooperate with the Company and the Sellers in the
purchase by the Company of the shares of Starway.
6.3 COMPANY COVENANTS. During the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement or the
Closing Date, the Company agrees to carry on the Company's business in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted, to pay the debts and Taxes of the Company when due, to pay
or perform other obligations when due, and, to the extent consistent with such
business, use their commercially reasonable efforts consistent with past
practice and policies to preserve intact the Company's present business
organizations, keep available the services of the Company's present officers and
key employees and preserve the Company's relationships with customers,
suppliers, distributors, licensors, licensees, and others having business
dealings with it, all with the goal of preserving unimpaired the Company's
goodwill and ongoing businesses at the Closing Date. The Company shall promptly
notify Buyer of any event or occurrence or emergency not in the ordinary course
of business of the Company and any material event involving the Company.
Specifically, the Company shall not, without the prior written consent of Buyer:
(a) declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any of its
capital stock, or split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for shares of capital stock of the Company, or repurchase,
redeem or otherwise acquire, directly or indirectly, any shares of the capital
stock of the Company (or options, warrants or other rights exercisable
therefore);
(b) issue, grant, deliver or sell or authorize or propose the
issuance, grant, delivery or sale of, or purchase or propose the purchase of,
any shares of its capital stock or securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other agreements or
13
commitments of any character obligating it to issue or purchase any such shares
or other convertible securities, or accelerate the vesting of any stock options.
(c) cause or permit any amendments to its Articles of Incorporation
or Bylaws except to the extent required to comply with applicable law or to
effect a 1 for 20 reverse stock split;
(d) acquire or agree to acquire by merging or consolidating with, or
by purchasing any assets or equity securities of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate, to the Company's
business other than the acquisition of Starway;
(e) sell, lease, license or otherwise dispose or agree to do the same
with respect to any of its material properties or assets;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others, unless loans are incurred to cover costs to close this
agreement.
(g) grant any loans to others or purchase debt securities of others
or amend the terms of any outstanding loan agreement;
(h) grant any severance or termination pay (i) to any director or
officer or (ii) to any other employee;
(i) adopt any employee benefit plan, or enter into any employment
contract, pay or agree to pay any special bonus or special remuneration to any
director or employee, or increase the salaries or wage rates of its employees
other than in connection with the regularly scheduled performance reviews of
individual employees;
(j) revalue any of its assets, including without limitation writing
down the value of inventory or writing off notes or accounts receivable other
than in the ordinary course of business;
(k) make or change any material election in respect of Taxes, adopt
or change any accounting method in respect of Taxes, enter into any closing
agreement, settle any claim or assessment in respect of Taxes, or consent to any
extension or waiver of the limitation period applicable to any claim or
assessment in respect of Taxes;
(l) enter into any agreement, contract, or commitment;
(m) change its methods of accounting or change its fiscal year; or
(n) take, or agree in writing or otherwise to take, any of the
actions described in Sections (a) through (m) above, or any other action that
would prevent the Company from performing or cause the Company not to perform
its covenants hereunder, or any other action not in the ordinary course of the
Company's business and consistent with past practice.
In addition, the Company covenants to purchase 100% of the shares of
Starway from Eurofaith Holdings, Limited after the Closing Date and will engage
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in a 1 for 20 reverse stock split. These two covenants shall survive the Closing
Date until the closing of the purchase of the shares of Starway and the 1 for 20
reverse stock split is complete.
ARTICLE VII
TERMINATION
7.1 TERMINATION. This Agreement may be, terminated:
(a) at any time before, or at, Closing by the mutual written
agreement of Buyer and two out of the three Sellers;
(b) at Closing, by a Party if any provision (including, but not
limited to, the representations and warranties) of this Agreement that is
applicable to or required to be performed by the other Party shall be materially
untrue or fail to be accomplished;
(c) Upon termination of this Agreement for any reason, in accordance
with the terms and conditions set forth in this paragraph, each Party shall bear
all costs and expenses as that Party has incurred.
ARTICLE VIII
MISCELLANEOUS
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and statements made by a Party to in this Agreement
or in any document or certificate delivered pursuant hereto shall survive the
Closing Date. Each of the Parties hereto is executing and carrying out the
provisions of this Agreement in reliance upon the representations, warranties
and covenants and agreements contained in this agreement or at the closing of
the transactions herein provided for and not upon any investigation which it
might have made or any representations, warranty, agreement, promise or
information, written or oral, made by the other Party or any other person other
than as specifically set forth herein.
8.2 ACCESS TO BOOKS AND RECORDS. During the course of this transaction
through Closing, each Party agrees to make available for inspection all
corporate books, records and assets, and otherwise afford to each other and
their respective representatives, reasonable access to all documentation and
other information concerning the business, financial and legal conditions of
each other for the purpose of conducting a due diligence investigation thereof.
Such due diligence investigation shall be for the purpose of satisfying each
Party as to the business, financial and legal condition of each other for the
purpose of determining the desirability of consummating the proposed
transaction. The Parties further agree to keep confidential and not use for
their own benefit, except in accordance with this Agreement any information or
documentation obtained in connection with any such investigation.
8.3 FURTHER ASSURANCES. If, at any time after the Closing, the Parties
hereby mutually agree that any further deeds, assignments or assurances in law
or that any other things are necessary, desirable or proper to complete the
transactions contemplated hereby in accordance with the terms of this agreement
15
or to vest, perfect or confirm, of record or otherwise, the title to any
property or rights of the Parties hereto, the Parties agree that their proper
officers and directors shall execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary, desirable or
proper to vest, perfect or confirm title to such property or rights and
otherwise to carry out the purpose of this Agreement, and that the proper
officers and directors the Parties are fully authorized to take any and all such
action.
8.4 NOTICE. All communications, notices, requests, consents or demands
given or required under this Agreement shall be in writing and shall be deemed
to have been duly given when delivered to, or received by prepaid registered or
certified mail or recognized overnight courier addressed to, or upon receipt of
a facsimile sent to, the Party for whom intended, as follows, or to such other
address or facsimile number as may be furnished by that Party by notice in the
manner provided herein:
If to the Company:
Rim Holdings, Inc.
0000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxxx, President
If to Buyer:
Best Development Company Ltd.
22/F Xxxxxxxx Commercial Xxxxxxxx
00 Xxxxxxxx Xxxx Xxxx
Xxx Xxxx, Xxxx Xxxx
China
Attn: Stellyn Sim
8.5 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules hereto
and any instruments and agreements to be executed pursuant to this Agreement,
set forth the entire understanding of the Parties hereto with respect to its
subject matter, merges and supersedes all prior and contemporaneous
understandings with respect to its subject matter and may not be waived or
modified, in whole or in part, except by a writing signed by each of the Parties
hereto. No waiver of any provision of this Agreement in any instance shall be
deemed to be a waiver of the same or any other provision in any other instance.
Failure of any party to enforce any provision of this Agreement shall not be
construed as a waiver of its rights under such provision.
8.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
enforceable against and inure to the benefit of, the Parties hereto and their
respective heirs, administrators, executors, personal representatives,
successors and assigns, and nothing herein is intended to confer any right,
remedy or benefit upon any other person. This Agreement may not be assigned by
any Party hereto except with the prior written consent of the other Parties,
which consent shall not be unreasonably withheld.
8.7 GOVERNING LAW. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Arizona, USA that are
16
applicable to agreements made and fully to be performed in such state, without
giving effect to conflicts of law principles.
8.8 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
8.9 CONSTRUCTION. Headings contained in this Agreement are for convenience
only and shall not be used in the interpretation of this Agreement. References
herein to Articles, Sections and Exhibits are to the articles, sections and
exhibits, respectively, of this Agreement. The Schedules hereto are hereby
incorporated herein by reference and made a part of this Agreement. As used
herein, the singular includes the plural, and the masculine, feminine and neuter
gender each includes the others where the context so indicates.
8.10 SEVERABILITY. If any provision of this Agreement is held to be invalid
or unenforceable by a court of competent jurisdiction, this Agreement shall be
interpreted and enforceable as if such provision were severed or limited, but
only to the extent necessary to render such provision and this Agreement
enforceable.
8.11 ARBITRATION. Any controversy arising out of, connected to, or relating
to any matters herein of the transactions with the Parties hereto on behalf of
the undersigned, or this Agreement, or the breach thereof, including, but not
limited to any claims of violations of federal and/or state securities laws,
banking statutes, consumer protection statutes, federal and/or state
anti-racketeering (e.g. RICO) claims as well as any common law claims and any
state law claims of fraud, negligence, negligent misrepresentations, and/or
conversion, or the laws of any territory, country or jurisdiction, shall be
settled by arbitration; and in accordance with this paragraph any judgment on
the arbitrator's award may be entered in any court having jurisdiction thereof.
In the event of such a dispute, each party agrees to arbitration conducted
through the auspices of American Arbitration Association. Venue for any action
shall lie in Maricopa County, Arizona, USA.
8.12 REPORTING REQUIREMENTS. The Company will file such reports as required
under the Exchange Act for such matters as required under such Exchange Act as
well as any applicable state securities commissions.
8.13 CONFIDENTIALITY; PUBLIC DISCLOSURE. Each of the parties hereto hereby
agrees that the information obtained pursuant to the negotiation and execution
of this Agreement shall be treated as confidential and not be disclosed to third
parties who are not agents of one of the Parties to this Agreement.
8.14 NOTIFICATION OF CERTAIN MATTERS. Each Party shall give prompt notice
to the other of (i) the occurrence or non-occurrence of any event, the
occurrence or non-occurrence of which is likely to cause any representation or
warranty of such party contained in this Agreement to be untrue or inaccurate
and (ii) any failure of such party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
PROVIDED, HOWEVER, that the delivery of any notice pursuant to this Section
shall not limit or otherwise affect any remedies available to the party
receiving such notice. Further, disclosure pursuant to this Section shall not be
deemed to amend or supplement the Schedules hereto or prevent or cure any
misrepresentations, breach of warranty or breach of covenant.
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8.15 CURRENCY. The parties hereto agree that all monetary amounts set forth
herein are referenced in United States dollars, unless otherwise stated.
8.16 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.17 COUNTERPARTS. This Agreement may be executed in counterparts and by
facsimile signatures. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.
All such counterparts shall together constitute one and the same instrument.
[Signatures to Follow]
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IN WITNESS WHEREOF, each of the Parties hereto has executed this Agreement
as of the date first set forth above.
SELLERS:
/s/ Xxxxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Hair, P.C.
By: /s/ Xxxxxxx X. Hair
-------------------------------
Name: Xxxxxxx X. Hair
Title: President
BUYER:
Best Development Company, Ltd.,
a British Virgin Islands
international business company
By: /s/ Li Shilong
------------------------------
Li Shilong
Sole Director
COMPANY:
RIM HOLDINGS INC.
a Nevada corporation
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxxxx X. Xxxxxxx
President
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