Exhibit 2.3.1
AGREEMENT
This Agreement ("Agreement") is made this date by and between CHINA
VOICE HOLDING CORP., a New York corporation ("CHVC"), and the parties signatory
to this agreement ("Xxx xxxxxxx\Xing chunlin").
Xxx xxxxxxx\Xing chunlin desires to sell and CHVC desires to purchase
for the benefit of BEIJING CVC COMMUNICATIONS CO. LTD., a China corporation
("BCVC") sixty-five percent (65%) of the issued and outstanding capital stock of
CANDID SOFT TECHNOLOGIES CO. LTD. OF BEIJING, a China corporation ("BCT") on the
terms and conditions set forth in this Agreement.
In consideration of the mutual promises of the parties; in reliance on
the representations, warranties, covenants, and conditions contained in this
Agreement; and for other good and valuable consideration, the parties agree as
follows:
ARTICLE 1: SALE
1.01 Sale of Stock. Xxx xxxxxxx\Xing chunlin agrees to sell, convey,
transfer, assign, and deliver to BCVC shares representing sixty-five percent
(65%) of the issued and outstanding capital stock of the BCT and CHVC agrees to
purchase such stock (collectively, the "Stock") on behalf of BCVC.
1.02 Consideration; Terms of Sale.
(a) In consideration of the sale and transfer of the Stock and
the representations, warranties, and covenants of Xxx xxxxxxx\Xing
chunlin set forth in this Agreement, CHVC shall deliver to Xxx
xxxxxxx\Xing chunlin 2,925,000 shares of common stock of CHVC on the
Closing Date. Both parties agree that the consideration and Contingent
Consideration, as defined below, have been determined based on the
valuation memo attached as Exhibit A.
(b) Xxx xxxxxxx\Xing chunlin shall assign to BCT any
indebtedness owed to Xxx xxxxxxx\Xing chunlin by BCT on the Closing
Date.
(c) CHVC shall deliver up to 4,000,000 shares of common stock
of CHVC to Xxx xxxxxxx\Xing chunlin to be distributed based on BCT's
net income, as described below ("Contingent Consideration"):
(i) For the calendar years 2006, 2007, and 2008 the
Xxx xxxxxxx\Xing chunlin shall receive 1 share of common stock
for each U.S. $1.00 of net earnings of BCT determined under
U.S. Generally Accepted Accounting Principles ("Net Income")
in excess of U.S. $600,000 per year.
(ii) The total number of shares of common stock of
CHVC issued as Contingent Consideration shall not exceed the
lesser of 4,000,000 shares or 1 share for each U.S. $1.00 of
Net Income of BCT in excess of U.S. $1,800,000 total for the
three calendar years 2006, 2007, and 2008.
(d) Xxx xxxxxxx\Xing chunlin and BCT agree to cooperate with
CHVC's auditors, provided that CHVC reimburses Xxx xxxxxxx\Xing chunlin
reasonable costs of producing information to CHVC's auditors.
1.03 Directors. At Closing and thereafter the board of directors of BCT
shall be reconstituted as a board containing five members, three of which shall
be appointed by BCVC and two of which shall be appointed by Xxx xxxxxxx\Xing
chunlin.
1.04 Management. Immediately after Closing, BCT shall cause the
existing officers of BCT to remain in management for a further term of three
years.
1.05 Closing. The date of execution of this Agreement shall be deemed
the "Closing Date" of this transaction.
ARTICLE 2: SELLER'S REPRESENTATIONS AND WARRANTIES
Xxx xxxxxxx\Xing chunlin hereby represents and warrants to CHVC that
the following facts and circumstances are true and correct as of the date of
this Agreement:
2.01 Organization. BCT is a corporation duly organized, validly
existing, and in good standing under the laws of China. BCT is qualified to do
business in all jurisdictions in which it does business and has all requisite
power and authority (corporate and, when applicable, government) to own,
operate, and carry on its business as now being conducted.
2.01 Ownership. Xxx xxxxxxx\Xing chunlin is the sole owner of the BCT
with full right to sell or dispose of the shares of BCT as it may choose.
2.02 Authority. Xxx xxxxxxx\Xing chunlin has full power and authority
to execute, deliver, and consummate this Agreement, subject to the conditions to
Closing set forth in this Agreement.
2.03 Full Disclosure. No representation, warranty, or covenant made to
CHVC in this Agreement nor any document, certificate, exhibit, or other
information given or delivered to Purchaser pursuant to this Agreement contains
or will contain any untrue statement of a material fact, or omits or will omit a
material fact necessary to make the statements contained in this Agreement or
the matters disclosed in the related documents, certificates, information, or
exhibits not misleading.
2.04 Broker. Neither Xxx xxxxxxx\Xing chunlin nor BCT, nor any of BCT's
officers, directors, employees, or stockholders, has retained, consented to, or
authorized any broker, investment banker, or third party to act on its behalf,
directly or indirectly, as a broker or finder in connection with the
transactions contemplated by this Agreement.
2.05 Compliance with U.S. Securities Laws. (a) Xxx xxxxxxx\Xing chunlin
acknowledges that CHVC is relying upon the accuracy and completeness of the
2
statements and representations contained in the section in complying with its
obligations under the U.S. federal and state securities laws. Xxx xxxxxxx\Xing
chunlin acknowledges and represents that:
(i) Xxx xxxxxxx\Xing chunlin is in a financial
position to hold the shares of common stock of CHVC (the
"Securities") for an indefinite period of time, is able to
bear the economic risk of an investment to the Securities and
may withstand a complete loss of Xxx xxxxxxx\Xing chunlin's
investment in the Securities;
(ii) The Xxx xxxxxxx\Xing chunlin believes that it,
either alone or together with the assistance of its own
professional advisor or advisors, has the knowledge and
experience in business and financial matters that make it
capable of reading and interpreting financial statements of
and concerning CHVC and of evaluating the merits and risks of
an investment in the Securities;
(iii) Xxx xxxxxxx\Xing chunlin has obtained, to the
extent it deems necessary, its own personal professional
advice with respect to the risks inherent in an investment in
the Securities and to the suitability of an investment in the
Securities in light of its financial condition and investment
needs;
(iv) Xxx xxxxxxx\Xing chunlin understands that an
investment in the Securities is highly speculative but that it
believes that an investment in the Securities is suitable
based upon Xxx xxxxxxx\Xing chunlin's investment objectives
and financial needs, and that it has adequate means for
providing for its current financial needs and contingencies
and has no need for liquidity of investment with respect to
the Securities;
(v) Xxx xxxxxxx\Xing chunlin acknowledges access to
full and complete information regarding CHVC and has utilized
that access to their satisfaction for the purpose of obtaining
information concerning the named entities, an investment in
the Securities and the terms and conditions of this offering
of the Securities, and has either attended or been given
reasonable opportunity to attend a meeting with
representatives of CHVC for the purpose of asking questions
of, and receiving answers from, these representatives
concerning CHVC, an investment in the Securities and the terms
and conditions of this offering of the Securities, and for the
purpose of obtaining any additional information to the extent
reasonable available that is necessary to verify the
information provided;
(vi) Xxx xxxxxxx\Xing chunlin recognizes that the
Securities as an investment involves a high degree of risk;
(vii) Xxx xxxxxxx\Xing chunlin represents that there
no U.S. persons included in the Xxx xxxxxxx\Xing chunlin;
(b) Xxx xxxxxxx\Xing chunlin has been advised that the
Securities have not been registered under the Securities Act of 1933,
as amended, or applicable state securities laws, that the Securities
are being offered and sold pursuant to exemptions from the registration
3
requirements of these laws, and that the reliance of CHVC on these
exemptions is predicated in part on Xxx xxxxxxx\Xing chunlin's
representations contained in this section. Xxx xxxxxxx\Xing chunlin
understands that the Securities can be freely traded one year after the
Closing date.
(c) Xxx xxxxxxx\Xing chunlin represents and warrants that the
Securities are being received by Xxx xxxxxxx\Xing chunlin in Xxx
xxxxxxx\Xing chunlin's own name solely for Xxx xxxxxxx\Xing chunlin's
own beneficial interest, and not as nominee for, or on behalf of, or
for the beneficial interest of, or with the intention to transfer to,
any other person, trust or organization, except as specifically set
forth hereinbelow.
(d) Xxx xxxxxxx\Xing chunlin is informed of the significance
to CHVC of the foregoing representations, agreements and consents, and
they are made with the intention that CHVC may rely upon them and
agrees to indemnify CHVC, and its officers, directors and agents (the
"Indemnified Parties") for any loss, claim or liability which any
Indemnified Party might incur as a result of reliance upon any fact
misrepresented by Seller in this section.
(e) Xxx xxxxxxx\Xing chunlin additionally represents that the
representations contained in this section have been duly authorized by
all necessary action on the part of Xxx xxxxxxx\Xing chunlin, has been
duly executed by an authorized officer or representative of Xxx
xxxxxxx\Xing chunlin, and is a legal, valid and binding obligation of
Xxx xxxxxxx\Xing chunlin enforceable according to its terms.
ARTICLE 3: CHVC'S REPRESENTATIONS AND WARRANTIES
CHVC represents and warrants to Xxx xxxxxxx\Xing chunlin that:
3.01 Authority. CHVC has full power and authority to execute, deliver,
and consummate this Agreement subject to the conditions to Closing set forth in
this Agreement. All corporate acts, reports, and returns required to be filed by
CHVC with any government or regulatory agency with respect to this transaction
have been or will be properly filed prior to the date of this Agreement. No
provisions exist in any contract, document, or other instrument to which CHVC is
a party or by which CHVC is bound that would be violated by consummation of the
transactions contemplated by this Agreement.
3.02 Organization and Standing of CHVC. CHVC is a corporation duly
organized, validly existing, and in good standing under the laws of New York,
with corporate power to own property and carry on its business as it is now
being conducted.
ARTICLE 4: CONDITIONS TO CHVC'S OBLIGATION TO CLOSE
The obligation of CHVC to Close under this Agreement is subject to each
of the following conditions (any one of which may, at the option of CHVC, be
waived in writing by CHVC) existing on the date of this Agreement, or such
earlier date as the context may require.
4
4.01 Representations and Warranties. Each of the representations and
warranties of Xxx xxxxxxx\Xing chunlin in this Agreement and all other
information delivered under this Agreement shall be true in all material
respects as of the date of this Agreement.
4.02 Compliance With Conditions. Xxx xxxxxxx\Xing chunlin shall have
complied with and performed all agreements, covenants, and conditions in this
Agreement required to be performed and complied with. All requisite action
(corporate and other) in order to consummate this Agreement shall have been
properly taken by Xxx xxxxxxx\Xing chunlin.
4.03 Suit or Proceeding. No suit or proceeding, legal or
administrative, relating to any of the transactions contemplated by this
Agreement shall have been overtly threatened or commenced that, in the sole
discretion of CHVC and its counsel, would make it inadvisable for CHVC to Close
this transaction.
4.04 Government Approvals and Filings. All necessary government
approvals and filings regarding this transaction, if any, shall have been
received or made prior to the date of this Agreement in substantially the form
applied for to the reasonable satisfaction of CHVC and its counsel. Any
applicable waiting period for the approvals and filings shall have expired.
4.05 Corporate and Stockholder Action. All corporate and stockholder
action necessary to consummate the transactions contemplated in this Agreement
shall have been properly taken by Xxx xxxxxxx\Xing chunlin.
ARTICLE 5: CONDITIONS TO XXX XXXXXXX\XING CHUNLIN'S OBLIGATION TO CLOSE
The obligation of Xxx xxxxxxx\Xing chunlin to Close under this
Agreement is subject to each of the following conditions (any one of which at
the option of Xxx xxxxxxx\Xing chunlin may be waived in writing by Xxx
xxxxxxx\Xing chunlin) existing on the date of this Agreement.
5.01 Corporate Action. CHVC shall have taken appropriate corporate
action regarding this transaction, which shall be evidenced by resolutions of
its board of directors and certified by CHVC's corporate secretary, authorizing
CHVC to enter into and complete this transaction.
ARTICLE 6: PARTIES' OBLIGATIONS AT THE CLOSING
6.01 Obligations of Xxx xxxxxxx\Xing chunlin at the Closing. At the
Closing, Xxx xxxxxxx\Xing chunlin shall deliver or cause to be delivered to BCVC
instruments of assignment and transfer of sixty-five percent (65%) of the issued
and outstanding capital stock of BCT in form and substance satisfactory to CHVC.
Xxx xxxxxxx\Xing chunlin, at any time before or after the date of this
Agreement, shall execute, acknowledge, and deliver to CHVC any further deeds,
assignments, conveyances, other assurances, documents, and instruments of
transfer reasonably requested by CHVC. Xxx xxxxxxx\Xing chunlin shall also take
any other action consistent with the terms of this Agreement that may be
reasonably requested by CHVC for the purpose of assigning, transferring,
granting, conveying, and confirming to CHVC or reducing to possession any or all
property and assets to be conveyed and transferred by this Agreement.
5
6.02 CHVC's Obligation at Closing. At the Closing, CHVC shall deliver
2,925,000 shares of common stock of CHVC against delivery of the items specified
in Paragraph 6.01, above.
ARTICLE 7: GENERAL PROVISIONS
7.01 Survival of Representations, Warranties and Covenants. The
representations, warranties, covenants, and agreements of the parties contained
in this Agreement or contained in any writing delivered pursuant to this
Agreement shall survive the date of this Agreement for a period of three years.
7.02 Notices. All notices or other communications hereunder must be
given in writing and either (i) delivered in person, (ii) transmitted by
facsimile telecommunication, provided that any notice so given is also mailed as
provided for herein, (iii) delivered by Federal Express or similar commercial
delivery service, or (iv) mailed by certified mail, postage prepaid, return
receipt requested, as follows:
If to Xxx xxxxxxx\Xing chunlin: ____________________
facsimile number: _______________
If to CHVC: China Voice Holding Corp.
00000 X. Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
facsimile number: 972.381.1211
or to such other address or facsimile number as Xxx xxxxxxx\Xing chunlin or CHVC
shall have designated to the other by like notice. Each such notice or other
communication shall be effective (i) if given by facsimile telecommunication,
when transmitted, (ii) if given by mail, five (5) business days after such
communication is deposited in the mail and addressed as aforesaid, (iii) if
given by Federal Express or similar commercial delivery service, one (1)
business day after such communication is deposited with such service and
addressed as aforesaid, and (iv) if given by any other means, when actually
delivered at such address.
7.03 Assignment of Agreement. This Agreement shall be binding on and
inure to the benefit of the parties to this Agreement and their respective
successors and permitted assigns. This Agreement may not be assigned by any
other party without the written consent of all parties and any attempt to make
an assignment without consent is void.
7.04 Amendments; Waiver. This Agreement may be amended only in writing
by the mutual consent of all of the parties, evidenced by all necessary and
proper corporate authority. No waiver of any provision of this Agreement shall
arise from any action or inaction of any party, except an instrument in writing
expressly waiving the provision executed by the party entitled to the benefit of
the provision.
7.05 Entire Agreement. This Agreement, together with any documents and
exhibits given or delivered pursuant to this Agreement, constitutes the entire
agreement between the parties to this Agreement on the subject matter of this
Agreement. No party shall be bound by any communications between them on the
6
subject matter of this Agreement unless the communication is (a) in writing, (b)
bears a date contemporaneous with or subsequent to the date of this Agreement,
and (c) is agreed to by all parties to this Agreement. On execution of this
Agreement, all prior agreements or understandings between the parties on the
subject matter of this Agreement shall be null and void.
7.06 English and Chinese Version. This agreement is being executed in
English language and Chinese language counterparts, both of which shall be
equally binding on the parties.
Signed as of January 18, 2006.
PURCHASER:
----------
China Voice Holding Corp.
By: /s/ Hin Hiong Khoo
------------------
Hin Hiong Khoo, Director
Xxx xxxxxxx\Xing chunlin
By: /s/ Four signatures illegible
-----------------------------
7
EXHIBIT A
VALUATION MEMO
VALUATION FORMULA TO BCT
The Revenue/Profit is stated as follows:
Yr 2002 - 190,830/26,022
Yr 2003 - 1,009,913/188,351
Yr 2004 - 1,861,214/372,986
Yr 2005 Est - 2,478,314/619,578
Valuation Approach:
1. Normal Valuation for private company: 4 to 10 times net earnings,
based on average of three years earnings. In this case, total of net revenue for
years 2003, 2004, 2005 divided by 3 equals $393,628. Let's round figure to
$400,000.
2. Proposed Valuation:
A. Let's take the average net earnings of $400,000. Because of
the nature and potential of the business, let me give two allowances:
(i) use the highest factor of 10, giving the value of
the company at $4,000,000;
(ii) give a discount of 10% from CVC share value of
$1.00, or 90 cents.
So, the exchange will amount to 4,444,440 of CVC shares. Let's round
the figure to 4,500,000. For 65% of the company, the shares to be delivered
would be 2,925,000.
B. Let's say the company has great potential of future
earnings. For every dollar earned, we give 1 CVC share in addition,
with a cap at 4 million additional shares.
So if the net earnings jump to $1 million in Year 2006, the
shareholders get an additional 400,000 shares.
If the net earnings jump to $2 million in Year 2007, the shareholders
get an additional 1,400,000 shares,
If the earnings jump to $3 million in Year 2008, the shareholders get
an additional 2,400,000 shares. Because there is a cap of 4 million shares, they
get 2,200,000 shares.
The 4 million shares will terminate at the end of Year 2008, or when
the figure of 4 million shares is reached, whichever is earlier.
8
POST-CLOSING AGREEMENT
This Agreement ("Agreement") is made this date by and between CHINA
VOICE HOLDING CORP., a New York corporation (CHVC), and the parties signatory to
this agreement ("Xxx xxxxxxx\Xing chunlin").
WHEREAS, Xxx xxxxxxx\Xing chunlin have sold sixty-five percent (65%) of
the issued and outstanding capital stock of CANDID SOFT TECHNOLOGIES CO. LTD. OF
BEIJING, a China corporation ("Candidsoft") on the terms and conditions set
forth in an Agreement dated January 18, 2006 ("The Purchase Agreement").
AND WHEREAS, the parties have agreed to certain modifications in the
Purchase Agreement,
NOW, THEREFORE, the parties agree as follows:
1) All consideration payable to Xxx xxxxxxx\Xing chunlin pursuant to
the Purchase Agreement shall be payable to Xing Chulin.
2) CHVC shall issue 2,000,000 shares of CHVC common stock as advance
payment on the contingent consideration in recognition of the contracts with
"The State Council Leading Group Office of Poverty Allegiation and Development"
and the "Navigation Affair Administration Bureau of the Guang Xi Autonomous
Region" ("the Contracts").
3) CHVC shall exert its best efforts to raise funds to be loaned to
Candidsoft for finding needs of the Contract.
4) The Candidsoft shares issuable pursuant to the Agreement,
representing 65% of the issued and outstanding shares of Candidsoft, shall be
issued to a party designated by CHVC.
5) Candidsoft and Xing Chulin agree to provide management services for
all enterprises of CHVC in China.
6) Candidsoft shall provide timely accounting information and engage
auditors selected by CHVC to provide accounting reports which are necessary for
U.S. public company reporting.
Signed as of September 22, 2006.
9
PURCHASER:
----------
China Voice Holding Corp.
By: /s/ Hin Hiong Khoo
------------------
Hin Hiong Khoo, Director
Xxx xxxxxxx\Xing chunlin
By: /s/ Four signatures illegible
-----------------------------
