STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into
as of August 24, 2006 by and among the persons listed under the heading
"Shareholders" on the signature page hereto (collectively, the "Sellers") and
Gas Investment China Co., Ltd., a company organized under the laws of the
British Virgin Islands("Purchaser").
WHEREAS, Sellers are the sole record and beneficial owners of Seventy Two
Million Five Hundred Sixty Nine Thousand Seven Hundred Sixty Four (72,569,764)
shares of $.001 par value per share common stock of Dolce Ventures, Inc., a Utah
corporation (the "Company") and wish to sell all of those shares (the "Stock");
and
WHEREAS, Purchaser wishes to purchase Stock from Sellers in a private sale
that is not part of a distribution or public offering;
NOW, THEREFORE, in the parties hereto agree as follows:
1. Agreement to Purchase and Sell the Stock. Sellers will sell to Purchaser
and Purchaser agrees to purchase the Stock for a purchase price of Six
Hundred Seventy Five Thousand Dollars ($675,000)(the "Purchase Price") in
a private sale exempt from registration under Section 4(1) of the
Securities Act of 1933, as amended (the "Act").
2. Closing And Payment. Subject to the terms and conditions hereof, and in
reliance upon the written representations and warranties of Purchaser,
Sellers will sell and, subject to the terms and conditions hereof, and in
reliance upon the written representations and warranties of Sellers,
Purchaser will purchase, at a single closing, the Stock. The closing shall
be held on September 7, 2006, or such other date as the Parties may agree
(the "Closing Date"), at the offices of Guzov Ofsink, LLC, 000 Xxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, xxx Xxxx 00000 (the "Closing"). At the
Closing, Sellers will deliver to Purchaser original stock certificates
evidencing the Stock to be purchased hereunder, along with stock powers
executed in blank. At the Closing, Purchaser will deliver to Xxxxxx
Xxxxxxxxxx, as agent for all Sellers, the Purchase Price, by wire
transfer, cashier's check, or by such other means as the parties may agree
upon in writing.
3. Representations and Warranties of Sellers. Sellers hereby represent and
warrant to Purchaser that the statements in the following paragraphs of
this Section 3 are all true and complete as of the date hereof, and will
be true and complete as of the Closing Date as if first made on such date.
3.1 Authority; Due Authorization. This Agreement has been duly and
validly executed and delivered by Sellers, and upon the execution
and delivery by Purchaser of this Agreement and the performance by
Purchaser of its obligations herein, will constitute, a legal, valid
and binding obligation of Sellers enforceable against Sellers in
accordance with its terms, except as such enforcement may be limited
by bankruptcy or insolvency laws or other laws affecting enforcement
of creditors' rights or by general principles of equity.
1
3.2 No Conflicts. The execution and delivery by Sellers of this
Agreement does not, and the performance by Sellers of their
obligations under this Agreement and the consummation of the
transactions contemplated hereby will not, conflict with or result
in a violation or breach of any of the terms, conditions or
provisions of any other agreement to which Sellers are a party.
3.3 Title to Securities. Sellers are the sole record and beneficial
owner of the Stock and have sole managerial and dispositive
authority with respect to the Stock. Sellers have not granted any
person a proxy with respect to the Stock that has not expired or
been validly withdrawn. The sale and delivery of the Stock to
Purchaser pursuant to this Agreement will vest in Purchaser legal
and valid title to the Stock, free and clear of all liens, security
interests, adverse claims or other encumbrances of any character
whatsoever ("Encumbrances") (other than Encumbrances created by
Purchaser and restrictions on resales of the Shares under applicable
securities laws).
3.4 Valid Issuance. The Common Stock being purchased by the Purchaser
hereunder is, and shall be at the Closing, duly and validly issued,
fully paid, and non-assessable and in each instance have been issued
in accordance with the registration requirements of applicable
securities laws, including, without limitation, the Securities Act
of 1933, as amended (the "Act"), or valid exemptions therefrom.
3.5 Corporate Documents. Copies of the Company's current articles of
incorporation, all amendments thereto, and bylaws, as of the date
hereof, other than a Certificate of Correction filed in August,
2006, have been filed as exhibits to the Company's reports (the
"Filings") with the Securities and Exchange Commission ("SEC").
3.6 The Company. The Company, and its subsidiaries, are corporations
duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation.
3.7 Capitalization of the Company. Immediately prior to the Closing, the
authorized capital stock of the Company shall consist of a total of
250,000,000 (two hundred fifty million) shares of Common Stock,
$.001 par value (the "Common Stock"), and 100,000,000 (one hundred
million) shares of Preferred Stock, $.001 par value. Immediately
prior to the Closing there will be no shares of preferred stock
outstanding and no more than 100,770,140 shares of Common Stock
outstanding. There are no commitments to issue, and there are no
outstanding warrants, options, convertible securities or debt,
preferred stock, or any other securities. In addition, there are no
conversion or exchange privileges, preemptive rights, or other
rights or agreements to purchase or otherwise acquire or issue any
securities of the Company, and there is no agreement or
understanding between any persons and/or entities, which affects or
relates to the voting or giving of written consents with respect to
any security of the Company or any instrument or security
exercisable or exchangeable for, or convertible into any security of
the Company.
2
3.8 Subsidiaries. Other than as set forth in the Filings, the Company
does not own, directly or indirectly, any capital stock or other
equity securities of any other corporation, partnership, limited
liability company, association or other business entity other than
as set forth in the Filings. The Company is not a participant in any
joint venture, partnership or similar arrangement.
3.9 Financial Statements. The Company's financial statements contained
in its Filings (the "Financial Statements") have been prepared in
accordance with U.S. GAAP applied on a consistent basis throughout
the periods indicated and with each other, except that the unaudited
Financial Statements do not contain all footnotes required by U.S.
GAAP. The Financial Statements fairly present the financial
condition and operating results of the Company as of the dates, and
for the periods, indicated therein, subject to normal year-end audit
adjustments. Except as set forth in the Financial Statements, the
Company has no material liabilities (contingent or otherwise). The
Company is not a guarantor or indemnitor of any indebtedness of any
other person, firm or corporation. The Company maintains and will
continue to maintain a standard system of accounting established and
administered in accordance with U.S. GAAP until Closing.
3.10 No Conflicts. Neither the Company, nor any subsidiary, is in
violation of, in conflict with, in breach of or in default under any
term or provision of, and no right of any party to accelerate,
terminate, modify or cancel has come into existence under, (i) its
articles of incorporation or by-laws (each as may have been amended,
supplemented or restated), (ii) any provision of any judgment, writ,
injunction, decree or order to which the any of them is a party; or
(iii) any law, statute, rule or regulation applicable to any of
them.
3.11 Litigation. There is no action, suit, proceeding or investigation
pending or, to the best knowledge of Sellers, currently threatened
against the Company or any subsidiary that may affect the validity
of this Agreement or the right of the Sellers to enter into this
Agreement or to consummate the transactions contemplated hereby.
There is no action, suit, proceeding or investigation pending or, to
the best knowledge of Sellers, currently threatened against the
Company or its subsidiaries, before any court or by or before any
governmental body or any arbitration board or tribunal, nor is there
any judgment, decree, injunction or order of any court, governmental
department, commission, agency, instrumentality or arbitrator
against the Company or any of its subsidiaries. The Company and its
subsidiaries are not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or
government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company or any subsidiary
currently pending or which the Company intends to initiate. When any
reference to the "knowledge" or "best knowledge" of the Company or
Sellers is made in this Agreement, such terms shall mean the
knowledge that would be gained from due inquiry into the matters
referenced.
3
3.12 Brokers' Fees and Commissions. Neither the Company nor any of its
officers, directors, employees, stockholders, agents or
representatives, nor Seller have employed any investment banker,
broker, or finder in connection with the transactions contemplated
by this Agreement and no such person or entity is entitled to a fee
with respect to the transactions contemplated by this Agreement,
except that Sellers are obligated to pay a commission of $75,000 to
Belmont Partners, LLC from the Purchase Price.
3.13 Securities Laws. The Company has complied in all respects with
applicable federal and state securities laws, rules and regulations,
including the Sarbanes Oxley Act of 2002, as such laws, rules and
regulations apply to the Company and its securities; and all shares
of capital stock of the Company have been issued in accordance with
applicable federal and state securities laws, rules and regulations.
There are no stop orders in effect with respect to any of the
Company's securities.
3.14 Books and Financial Records. All the accounts, books, registers,
ledgers, Board minutes and financial and other material records of
whatsoever kind of each of the Company and its subsidiaries have
been fully properly and accurately kept and completed; there are no
material inaccuracies or discrepancies of any kind contained or
reflected therein; and they give and reflect a true and fair view of
the financial, contractual and legal position of each company.
3.15 Employee Benefit Plans. The Company does not have any "Employee
Benefit Plan" as defined in the U.S. Employee Retirement Income
Security Act of 1974 or similar plans under applicable laws.
3.16 Tax Returns, Payments and Elections. Each of the Company and its
subsidiaries has timely filed all Tax (as defined below) returns,
statements, reports, declarations and other forms and documents
(including, without limitation, estimated Tax returns and reports
and material information returns and reports) ("Tax Returns")
required pursuant to applicable law to be filed with any Tax
Authority (as defined below), all such Tax Returns are accurate,
complete and correct in all material respects, and each Group
Company has timely paid all Taxes due. Each of the Company and its
subsidiaries has withheld or collected from each payment made to
each of its employees, the amount of all Taxes (including, but not
limited to, United States income taxes and other foreign taxes)
required to be withheld or collected therefrom, and has paid the
same to the proper Tax Authority. For purposes of this Agreement,
the following terms have the following meanings: "Tax" (and, with
correlative meaning, "Taxes" and "Taxable") means any and all taxes
including, without limitation, (i) any net income, alternative or
add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, value added, net worth,
license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount imposed by any United
States, local or foreign governmental authority or regulatory body
responsible for the imposition of any such tax (domestic or foreign)
(a "Tax Authority"), (ii) any liability for the payment of any
amounts of the type described in (i) as a result of being a member
of an affiliated, consolidated, combined or unitary group for any
taxable period or as the result of being a transferee or successor
thereof and (iii) any liability for the payment of any amounts of
the type described in (i) or (ii) as a result of any express or
implied obligation to indemnify any other person.
4
3.17 Minute Books. The minute books of each of the Company and its
subsidiaries contain a complete summary of all meetings of directors
and stockholders since the time of incorporation of such company and
reflect all transactions referred to in such minutes accurately in
all material respects.
3.18 Labor Agreements and Actions; Employee Compensation. Neither the
Company, nor any of its subsidiaries is bound by or subject to (and
none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested
or has sought to represent any of the employees, representatives or
agents of any such company.
3.19 Investment Company. The Company is not an "investment company" or a
company "controlled" by an "investment company," within the meaning
of the Investment Company Act of 1940, as amended.
3.20 `34 Act Reports. To the best knowledge of the Sellers, none of the
Company's Flings, contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
therein not misleading, in light of the circumstances in which they
were made.
3.21 Material Agreements. The Company is not a party to or bound by any
contracts, including, but not limited to:
5
3.21.1 employment, advisory or consulting contract;
3.21.2 plan providing for employee benefits of any nature;
3.21.3 lease with respect to any property or equipment;
3.21.4 contract, agreement, understanding or commitment for any
future expenditure in excess of $1,000 in the aggregate;
3.21.5 contract or commitment pursuant to which it has assumed,
guaranteed, endorsed, or otherwise become liable for any
obligation of any other person, entity or organization;
3.21.6 agreement with any person relating to the dividend, purchase
or sale of securities, that has not been settled by the
delivery or payment of securities when due, and which remains
unsettled upon the date of the Agreement.
3.22 No Disagreements with Accountants and Lawyers. There are no
disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the accountants and
lawyers formerly or presently employed by the Company. The Company
is current with respect to fees owed to its accountants and lawyers.
4. Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to Sellers that the statements in the following paragraphs of
this Section 4 are all true and complete as of the date hereof:
4.1 Exempt Transaction. Purchaser understands that the offering and sale
of the Stock is intended to be exempt from registration under the
Act and exempt from registration or qualification under any state
law.
4.2 Authorization. Purchaser represents that it has full power and
authority to enter into this Agreement. This Agreement has been duly
and validly executed and delivered by Purchaser, and upon the
execution and delivery by Sellers of this Agreement and the
performance by Sellers of their obligations herein, will constitute,
a legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms, except as such
enforcement may be limited by bankruptcy or insolvency laws or other
laws affecting enforcement of creditors' rights or by general
principles of equity.
4.3 Purchase for Own Account. The Stock to be purchased by Purchaser
hereunder will be acquired for investment for Purchaser's own
account, not as a nominee or agent, and not with a view to the
public resale or distribution thereof, and Purchaser has no present
intention of selling, granting any participation in, or otherwise
distributing the same.
6
4.4 Investment Experience. The Purchaser understands that the purchase
of the Stock involves substantial risk.
5. Conditions to Purchaser's Obligations at the Closing.
5.1 Conditions to Each Closing. Subject to the terms hereof, the
obligation of the Purchaser to purchase the Stock at the Closing is
subject to the fulfillment, prior to the Closing to the satisfaction
of the Purchaser, of the following conditions, the waiver of which
shall not be effective against Purchaser without written consent
thereto:
5.1.1 Representations and Warranties True and Correct. The
representations and warranties made by Sellers in Section 3
hereof shall be true and correct and complete as of the date
hereof, and shall be true and correct and complete as of the
date of the Closing with the same force and effect as if they
had been made on and as of such date.
5.1.2 Performance of Obligations. The Sellers shall have performed
and complied with all agreements, obligations and conditions
contained in this Agreement that are required to be performed
or complied with by it on or before the Closing.
5.1.3 Securities Laws. The offer and sale of the Stock to the
Purchaser pursuant to this Agreement shall be exempt from the
registration and/or qualification requirements of all
applicable securities laws.
5.1.4 Change in Board of Directors and Management. The Sellers shall
cause (i) the current members of the Board of Directors to
appoint Purchaser's appointees to the Board and to resign
their positions on the Company's Board, and (ii) the current
officers of the Company to resign their positions as officers
of the Company.
5.1.5 Assumption of Liabilities. Sellers shall cause Pegasus Tel,
Inc. ("Pegasus") to assume all liabilities of the Company, and
with respect to any liability as of the Closing Date, whether
contingent or otherwise, which was not assumed or paid by
Pegasus (collectively "Liabilities"), the Sellers hereby agree
to indemnify, defend and hold harmless Purchaser and the
Company from and against any and all claims, expenses and/or
losses which may be incurred by the Company or Purchaser in
connection with a Liability.
5.1.6 Spinoff. Sellers shall cause the Company and its Board of
Directors to pass such resolutions as may be necessary to set
a record date for a spinoff of Pegasus which shall be no later
than October 15, 2006 and to authorize a spinoff of Pegasus to
the shareholders of the Company in accordance with SEC Staff
Legal Bulletin No. 4 dated September 16, 1997 and such other
laws and regulations as may be applicable to such transaction
(the "Spinoff").
7
6. Conditions to Sellers' Obligations at the Closing.
6.1 The obligations of the Sellers under this Agreement with respect to
the Investor are subject to the fulfillment at or before the Closing
of the following conditions:
6.1.1 Representations and Warranties. The representations and
warranties of the Purchaser contained in Section 4 hereof
shall be true and correct as of such Closing.
6.1.2 Payment of Purchase Price. Purchaser shall have delivered to
the Sellers the Purchase Price.
7. Seller's Covenants.
7.1 Spinoff. By November 15, 2006, Sellers shall have taken all steps
necessary to effect the Spinoff and Sellers hereby agree to pay all
expenses necessary to effect the Spinoff, including, but not limited
to, attorney's fees, transfer agent fees and filing fees and
expenses. Purchaser agrees to cause the Company to provide any
assistance reasonably necessary to effect the Spinoff which cannot
be performed by Pegasus or Sellers; provided, however, that neither
Purchaser nor the Company shall have any obligation to pay any
monies to accomplish the Spinoff.
8. Indemnification.
8.1 Sellers shall indemnify and hold Purchasers, the Company and their
affiliates, officers, directors, employees, agents, successors and
assigns harmless from and against any claim, action, suit,
proceeding, loss, liability, damage or expense (including, without
limitation, reasonable attorneys' fees), directly or indirectly
arising from or related to any breach by Sellers of this Agreement,
including, but not limited to, Sellers' representations, warranties
or covenants hereunder. Each Seller's liability pursuant to this
indemnification provision shall be apportioned based on the number
of Shares sold to Purchaser as compared to the total number of
Shares sold to Purchaser.
8.2 Purchaser shall indemnify and hold Sellers harmless from and against
any claim, action, suit, proceeding, loss, liability, damage or
expense (including, without limitation, reasonable attorneys' fees)
directly or indirectly arising from or related to any breach by
Purchaser of this Agreement, including, but not limited to,
Purchaser's representations, warranties or covenants hereunder.
8
9. General Provisions.
9.1 Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.
9.2 Governing Law; Jurisdiction. Any dispute, disagreement, conflict of
interpretation or claim arising out of or relating to this
Agreement, or its enforcement, shall be governed by the laws of the
State of New York. Sellers and Purchaser hereby irrevocably and
unconditionally submit, for themselves and their property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New
York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action
or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Each party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so,
any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating
to this Agreement in any court referred to above. Each of the
parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court. Each
party to this Agreement irrevocably consents to service of process
in the manner provided for notices below. Nothing in this Agreement
will affect the right of any party to this Agreement to serve
process in any other manner permitted by law. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
9
9.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement. A
telefaxed copy of this Agreement shall be deemed an original.
9.4 Headings. The headings and captions used in this Agreement are used
for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to
sections, paragraphs, exhibits and schedules shall, unless otherwise
provided, refer to sections and paragraphs hereof and exhibits and
schedules attached hereto, all of which exhibits and schedules are
incorporated herein by this reference.
9.5 Costs, Expenses. Each party hereto shall bear its own costs in
connection with the preparation, execution and delivery of this
Agreement.
9.6 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
Sellers and the Purchaser. No delay or omission to exercise any
right, power, or remedy accruing to Purchaser, upon any breach,
default or noncompliance of Sellers under this Agreement shall
impair any such right, power, or remedy, nor shall it be construed
to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or
noncompliance thereafter occurring. All remedies, either under this
Agreement, by law, or otherwise afforded to Purchaser, shall be
cumulative and not alternative.
9.7 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall
be interpreted as if such provision(s) were so excluded and shall be
enforceable in accordance with its terms.
9.8 Entire Agreement. This Agreement, together with all exhibits and
schedules hereto, constitutes the entire agreement and understanding
of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence,
agreements, understandings duties or obligations between the parties
with respect to the subject matter hereof.
9.9 Further Assurances. From and after the date of this Agreement, upon
the request of the Purchaser or Sellers, Purchaser and Sellers shall
execute and deliver such instruments, documents or other writings as
may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GAS INVESTMENT CHINA CO., LTD.
By:____________________________
Title:_________________________
SHAREHOLDERS:
--------------------------- ------------------------------
--------------------------- ------------------------------
--------------------------- ------------------------------
--------------------------- ------------------------------
--------------------------- ------------------------------
--------------------------- ------------------------------
--------------------------- ------------------------------
--------------------------- ------------------------------
11
