SECURITIES PURCHASE AGREEMENT AND PLAN OF REORGANIZATION
(Supersedes all prior agreements)
THIS SECURITIES PURCHASE AGREEMENT AND PLAN OF REORGANIZATION
("Agreement") is entered into on July 1, 2004 by and among CHINA HOTEL HOLDINGS,
INC, a Nevada corporation ("China Hotel Holdings, Inc."), SHENYANG HOLIDAY
BUILDING COMPANY LIMITED, a Chinese corporation ("Shenyang Holiday Building
Company Limited"), and the Holiday Investment, Inc., a California corporation
and the sole stockholder of Shenyang Holiday Building Company Limited (the
"Stockholder" or "Selling Stockholder").
R E C I T A L S
A. The sole shareholder, Holiday Investment Inc., of Shenyang Holiday
Building Company Limited has authorized capital stock consisting of 100,000
shares of common stock ("Holiday Investment Inc. Shares"), of which 100,000
111shares are issued and outstanding as of the date of this Agreement.
B. China Hotel Holdings, Inc. has authorized capital stock consisting
of 10,000,000 shares of common stock ("China Hotel Holding, Inc. Common Stock"),
$0.001 par value, of which 1,400,000 shares of China Hotel Holdings, Inc. Common
Stock are issued and outstanding as of the date of this Agreement.
C. The holders of the Holiday Investment Inc. Shares wish to sell, and
China Hotel Holdings, Inc. wishes to acquire, all of the issued and outstanding
Holiday Investment Inc. Shares in exchange for China Hotel Holding Inc.'s
issuance of shares ("China Hotel Holdings, Inc Shares") to the holders of
Holiday Investment Inc. Shares at the rate of 86 China Hotel Holdings Inc. share
for every one (1) Holiday Investment Inc. Share (the "Exchange Ratio"), subject
to and upon the terms and conditions hereinafter set forth.
D. The Stockholders will transfer to China Hotel Holding, Inc. at the
closing, Holiday Investment Inc. Shares representing 100% of the issued and
outstanding voting securities of Shenyang Holiday Building Company Limited. All
the Stockholders are sometimes collectively referred to herein as the "Selling
Stockholders".
E. At the end of the closing, the Selling Stockholder shall become eighty-six
percent (86%) shareholder of China Hotel Holding, Inc.
F. No money shall be exchanged for this transaction. This will be a stock-swap
transaction.
A G R E E M E N T
It is agreed as follows:
1. SECURITIES PURCHASE AND REORGANIZATION.
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 AGREEMENT TO EXCHANGE SECURITIES. Subject to the terms and
upon the conditions set forth herein:
(a) CLOSING. All the Stockholder agree to sell,
assign, transfer and deliver to China Hotel Holdings, Inc., and China Hotel
Holdings, Inc. agrees to purchase from each Stockholder, at the Closing, the
Holiday Investment, Inc. Shares owned by the Stockholder, in exchange for the
issuance, at the Closing, by China Hotel Holdings, Inc. to the Stockholder 86
China Hotel Holdings, Inc. Share for every one (1) Holiday Investment Inc.
Shares sold and delivered to China Hotel Holdings, Inc.. No fractional shares of
China Hotel Holdings, Inc. Common Stock shall be issued. In lieu thereof, each
recipient of China Hotel Holdings, Inc. Common Stock who would otherwise be
entitled to a fraction of a share of China Hotel Holdings, Inc. Common Stock
(after aggregating all fractional shares of China Hotel Holdings, Inc. Common
Stock to be received by such holder) shall be entitled to receive one whole
share of China Hotel Holdings, Inc. Common Stock.
1.3 CLOSING. The initial closing ("Closing") of the exchange
of the Holiday Investment Inc. Shares Shares and the China Hotel Holdings, Inc.
Shares shall take place on July 1, 2004.
1.4 INSTRUMENTS OF TRANSFER.
(a) Each Selling Stockholder shall deliver to China
Hotel Holdings, Inc. on the Closing Date original certificates evidencing the
shares owned by the Selling Stockholder, along with duly executed stock powers
in form attached hereto as Exhibit A, in order to effectively vest in China
Hotel Holdings, Inc. all right, title and interest in and to the Holiday
Investment Inc. Shares owned by the Selling Stockholder. From time to time after
the Closing Date, and without further consideration, the Selling Stockholder
will execute and deliver such other instruments of transfer and take such other
actions as China Hotel Holdings, Inc. may reasonably request in order to more
effectively transfer to China Hotel Holdings, Inc. the securities intended to be
transferred hereunder.
(b) China Hotel Holdings, Inc. Shares. China Hotel
Holdings, Inc. shall deliver to the Selling Stockholders on the Closing Date
original certificates evidencing the China Hotel Holdings, Inc. Shares, in form
and substance satisfactory to the Selling Stockholders, in order to effectively
vest in each Selling Stockholder its respective right, title and interest in and
to the China Hotel Holdings, Inc. Shares. From time to time after the Closing
Date, and without further consideration, China Hotel Holdings, Inc. will execute
and deliver such other instruments and take such other actions as the Selling
Stockholders may reasonably request in order to more effectively issue to them
the China Hotel Holdings, Inc. Shares.
1.5 TAX FREE REORGANIZATION. The parties intend that the
transaction under this Agreement qualify as a tax free reorganization under
Sections 351 and 368 of the Internal Revenue Code of 1986, as amended.
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2. DELIVERIES AT THE CLOSING
2.1 CHINA HOTEL HOLDINGS, INC.'S DELIVERIES AT THE CLOSING. At
or prior to the Closing, China Hotel Holdings, Inc. shall deliver or cause to be
delivered to All the Stockholders certificates representing the China Hotel
Holdings, Inc. Shares registered in the names of All the Stockholders; and such
other documents and instruments as shall be reasonably necessary to effect the
transactions contemplated hereby.
2.2 SELLING STOCKHOLDERS' DELIVERIES AT CLOSING. At or prior
to the Closing, each Selling Stockholder shall deliver or cause to be delivered
to China Hotel Holdings, Inc. all of the following:
(a) An original certificate representing the Shenyang
Holiday Building Company Limited Shares owned by such Selling Stockholder, along
with a duly executed stock power, in form attached hereto as Exhibit A; and
(b) Such other documents and instruments as shall be
reasonably necessary to effect the transactions contemplated hereby.
3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
All the Stockholder severally and not jointly represents, warrants and covenants
to and with China Hotel Holdings, Inc. with respect to himself, as follows:
3.1 POWER AND AUTHORITY. Each Stockholder has all requisite
power and authority to enter into and to carry out all of the terms of this
Agreement and all other documents executed and delivered in connection herewith
(collectively, the "Documents"). All action on the part of the Stockholder
necessary for the authorization, execution, delivery and performance of the
Documents by the Stockholder has been taken and no further authorization on the
part of the Stockholder is required to consummate the transactions provided for
in the Documents. When executed and delivered by the Stockholder, the Documents
shall constitute the valid and legally binding obligation of the Stockholder
enforceable in accordance with their respective terms.
3.2 OWNERSHIP OF AND TITLE TO SECURITIES. Exhibit A to this
Agreement accurately and completely sets forth all of the capital stock of
Holiday Investment Inc. owned by All the Stockholders. Each Stockholder
represents that the Stockholder has and will transfer to China Hotel Holdings,
Inc. good and marketable title to the Holiday Investment Inc. Shares which he
owns, free and clear of all pledges, security interests, mortgages, liens,
claims, charges, restrictions or encumbrances.
3.3 INVESTMENT AND RELATED REPRESENTATIONS.
(a) SECURITIES LAWS COMPLIANCE. The Stockholder is
aware that neither the China Hotel Holdings, Inc. Shares nor the offer or sale
thereof to the Stockholder has been registered under the Securities Act, or
under any state securities law. The Stockholder understands that the China Hotel
Holdings, Inc. Shares will be characterized as "restricted" securities under
federal securities laws inasmuch as they are being acquired in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
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in certain limited circumstances. The Stockholder agrees that the Stockholder
will not sell all or any portion of China Hotel Holdings, Inc. Shares except
pursuant to registration under the Securities Act or pursuant to an available
exemption from registration under the Securities Act. The address of the
Stockholder is as set forth on Exhibit A attached hereto. The Stockholder
understands that each certificate for China Hotel Holdings, Inc. Shares issued
to the Stockholder or to any subsequent transferee shall be stamped or otherwise
imprinted with the legend set forth below summarizing the restrictions described
in this Section 3.3 and that China Hotel Holdings, Inc. shall refuse to transfer
the China Hotel Holdings, Inc. Shares except in accordance with such
restrictions:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"). THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT WITH RESPECT TO SUCH SHARES, OR AN OPINION OF THE
ISSUER'S COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933
ACT.
(b) INVESTMENT REPRESENTATION. This Agreement is made
with the Stockholder in reliance upon the Stockholder's representation, which by
the Stockholder's execution of this Agreement the Stockholder hereby confirms,
that the China Hotel Holdings, Inc. Shares to be received by the Stockholder are
being acquired pursuant to this Agreement for investment and not with a view to
the public resale or distribution thereof unless pursuant to an effective
registration statement or exemption under the Securities Act.
(c) NO PUBLIC SOLICITATION. The Stockholder is
acquiring the China Hotel Holdings, Inc. Shares after private negotiation and
has not been attracted to the acquisition of the China Hotel Holdings, Inc.
Shares by any press release, advertising or publication.
(d) ACCESS TO INFORMATION. The Stockholder
acknowledges that China Hotel Holdings, Inc. has given to the Stockholder and
his counsel, accountants and other advisors, agents, consultants and
representatives, full access to all of the properties, books, contracts,
commitments and records of China Hotel Holdings, Inc., and has furnished or will
furnish all such information concerning it (including its operations, financial
condition and business plan) as the Stockholder has requested or may request.
(e) INVESTOR SOLICITATION AND ABILITY TO BEAR RISK TO
LOSS. The Stockholder, if a corporation or a partnership, has not been organized
for the purpose of acquiring the China Hotel Holdings, Inc. Shares. The
Stockholder acknowledges that it is able to protect its interests in connection
with the acquisition of the China Hotel Holdings, Inc. Shares and can bear the
economic risk of investment in such securities without producing a material
adverse change in the Stockholder's financial condition. The Stockholder
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otherwise has such knowledge and experience in financial or business matters
that the Stockholder is capable of evaluating the merits and risks of the
investment in the China Hotel Holdings, Inc. Shares.
(f) ACCREDITED INVESTOR STATUS. The Stockholder is an
"accredited investor" as that term is defined in Regulation D promulgated under
the Securities Act.
4. REPRESENTATIONS AND WARRANTIES OF CHINA HOTEL HOLDINGS, INC.. Except
as set forth in the schedule attached hereto as Exhibit C (the "China Hotel
Holdings, Inc. Disclosure Schedule"), China Hotel Holdings, Inc. represents,
warrants and covenants to and with Shenyang Holiday Building Company Limited and
each of the Selling Stockholders that China Hotel Holdings, Inc. is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full corporate power and authority to
enter into and perform its obligations under this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF SHENYANG HOLIDAY BUILDING COMPANY
LIMITED. Except as set forth in the schedule attached hereto as Exhibit D (the
"Shenyang Holiday Building Company Limited Disclosure Schedule"), Shenyang
Holiday Building Company Limited represents, warrants and covenants to and with
China Hotel Holdings, Inc. as follows:
5.1 ORGANIZATION AND GOOD STANDING. Holiday Investment Inc.
is a corporation duly organized, validly existing, and in good standing under
the laws of the California and has full corporate power and authority to enter
into and perform its obligations under this Agreement.
5.2 CAPITALIZATION. Recital A to this Agreement accurately and
completely describes the authorized, issued and outstanding capital stock of
Holiday Investment Inc. All outstanding shares of Holiday Investment Inc. Shares
have been duly authorized and validly issued, and are fully paid, nonassessable,
and free of any preemptive rights.
5.3 VALIDITY OF TRANSACTIONS. This Agreement, and each
document executed and delivered by Holiday Investment Inc. in connection with
the transactions contemplated by this Agreement, and the performance of the
transactions contemplated therein have been duly authorized by the directors of
Holiday Investment, Inc., have been duly executed and delivered by Holiday
Investment, Inc. and is each the valid and legally binding obligation of Holiday
Investment, Inc., enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency reorganization and moratorium laws and other
laws affecting enforcement of creditor's rights generally and by general
principles of equity.
5.4 NO CONFLICT. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
conflict with, or result in a breach of any term or provision of, or constitute
a default under or result in a violation of (i) the Certificate of Incorporation
or Bylaws of Holiday Investment, Inc., as amended, (ii) any agreement, contract,
lease, license or instrument to which Holiday Investment, Inc. is a party or by
which Holiday Investment, Inc. or any of its properties or assets are bound,
(iii) any judgment, decree, order, or writ by which Holiday Investment, Inc. is
bound or to which it or any of its properties or assets are subject; or (iv) any
laws of China.
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6. CONDITIONS PRECEDENT
6.1 CONDITIONS PRECEDENT TO EACH PARTY'S OBLIGATIONS. The
respective obligations of each party to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction on or prior to the
Closing of the following conditions unless waived by such party:
(a) GOVERNMENT APPROVALS. All authorizations,
consents, orders or approvals of, or declarations or filings with, or expiration
of waiting periods imposed by, any governmental authority necessary for the
consummation of the transactions contemplated by this Agreement, shall have been
filed, occurred or been obtained.
(b) THIRD-PARTY APPROVALS. Any and all consents or
approvals required from third parties relating to contracts, licenses, leases
and other instruments, material to the respective businesses of China Hotel
Holdings, Inc. and Holiday Investment, Inc., shall have been obtained.
(c) LEGAL ACTION. No temporary restraining order,
preliminary injunction or permanent injunction or other order preventing the
consummation of the transactions contemplated by this Agreement shall have been
issued by any federal or state court and remain in effect, and no litigation
seeking the issuance of such an order or injunction, shall be pending which, in
the good faith judgment of Holiday Investment, Inc. or China Hotel Holdings,
Inc., has a reasonable probability of resulting in such order, injunction or
damages. In the event any such order or injunction shall have been issued, each
party agrees to use its reasonable efforts to have any such injunction lifted.
6.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF CHINA HOTEL
HOLDINGS, INC.. The obligations of China Hotel Holdings, Inc. to consummate the
transactions contemplated by this Agreement are subject to the satisfaction on
or prior to the Closing of the following conditions, unless waived by China
Hotel Holdings, Inc.:
(a) REPRESENTATIONS AND WARRANTIES OF ALL THE
STOCKHOLDERS. The representations and warranties of All the Stockholders set
forth in this Agreement shall be true and correct in all material respects as of
the date of this Agreement and as if made at and as of the Closing Date, except
as otherwise contemplated by this Agreement.
(b) REPRESENTATIONS AND WARRANTIES OF Holiday
Investment, Inc.. The representations and warranties of Holiday Investment, Inc.
set forth in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as if made at and as of the Closing Date.
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(c) PERFORMANCE OF OBLIGATIONS OF HOLIDAY INVESTMENT,
INC.. Holiday Investment, Inc. shall have performed in all material respects all
obligations required to be performed by it under this Agreement prior to the
Closing Date.
(d) ADDITIONAL CLOSING DOCUMENTS. China Hotel
Holdings, Inc. shall have received each of the documents or instruments listed
in Section 2.2 hereof from All the Stockholders.
6.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF HOLIDAY INVESTMENT,
INC. AND THE STOCKHOLDERS. The obligations of Holiday Investment, Inc. and All
the Stockholders to consummate the transactions contemplated by this Agreement
are subject to the satisfaction on or prior to the Closing of the following
conditions unless waived by Holiday Investment, Inc. and All the Stockholders:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of China Hotel Holdings, Inc. set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as if made at and as of the Closing Date, except as otherwise
contemplated by this Agreement, and Holiday Investment, Inc..
(b) PERFORMANCE OF OBLIGATIONS OF CHINA HOTEL
HOLDINGS, INC.. China Hotel Holdings, Inc. shall have performed in all material
respects all obligations required to be performed by it under this Agreement
prior to the Closing Date.
7. CERTAIN ADDITIONAL UNDERSTANDINGS AND AGREEMENTS. As soon as
is reasonably practicable following the Closing, China Hotel Holdings, Inc.
shall make such filings and take such actions as are necessary to secure a
qualification for quotation on the over the counter bulleting board in the U.S.
8. TERMINATION AND ABANDONMENT.
8.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated at any time prior to the Closing by the written consent of Holiday
Investment, Inc. and China Hotel Holdings, Inc..
9. MISCELLANEOUS.
9.1 THIRD-PARTY BENEFICIARIES. All Selling Stockholders,
including the Subscribers who execute the Subscription Agreements subsequent to
the Closing, shall be permitted beneficiaries of the representations, warranties
and covenants of China Hotel Holdings, Inc. and of the closing documents
delivered by China Hotel Holdings, Inc. at the Closing.
9.2 CUMULATIVE REMEDIES. Any person having any rights under
any provision of this Agreement will be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement, and to exercise all other rights granted by law, which rights
may be exercised cumulatively and not alternatively.
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9.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, this Agreement and any of the rights, interests or obligations
hereunder may not be assigned by any of the parties hereto. All covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto will bind and inure to the benefit of the respective permitted successors
and assigns of the parties hereto whether so expressed or not.
9.4 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement or the other documents.
9.5 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts when taken together will constitute one and
the same agreement.
9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the subject matter
thereof, and supersedes all prior and contemporaneous agreements and
understandings.
9.7 SURVIVAL OF REPRESENTATIONS. All representations,
warranties and agreements contained herein or made in writing by China Hotel
Holdings, Inc., Holiday Investment, Inc. and All the Stockholders in connection
with the transactions contemplated hereby except any representation, warranty or
agreement as to which compliance may have been appropriately waived, shall
survive the execution and delivery of this Agreement.
9.8 EXPENSES AND ATTORNEY FEES. China Hotel Holdings, Inc.
and Holiday Investment, Inc. shall each pay all of their respective legal and
due diligence expenses in connection with the transactions contemplated by this
Agreement, including, without limiting the generality of the foregoing, legal
and accounting fees.
9.9 WAIVER OF CONDITIONS. At any time or times during the term
hereof, China Hotel Holdings, Inc. may waive fulfillment of any one or more of
the conditions to its obligations in whole or in part, and Holiday Investment,
Inc. or All the Stockholders may waive fulfillment of any one or more of the
foregoing conditions to their obligation, in whole or in part, by delivering to
the other party a written waiver or waivers of fulfillment thereof to the extent
specified in such written waiver or waivers. Any such waiver shall be validly
and sufficiently authorized for the purposes of this Agreement if, as to any
party, it is authorized in writing by an authorized representative of such
party. The failure of any party hereto to enforce at any time any provision of
this Agreement shall not be construed to be a waiver of such provision, nor in
any way to affect the validity of this Agreement or any part hereof or the right
of any party thereafter to enforce each and every such provision. No waiver of
any breach of this Agreement shall be held to constitute a waiver of any other
or subsequent breach.
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9.10 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed facsimile if sent during normal business hours of the recipient; if
not, then on the next business day, (c) upon receipt when sent by first-class
registered or certified mail, return receipt requested, postage prepaid, or (d)
upon receipt after deposit with a nationally recognized overnight express
courier, postage prepaid, specifying next day delivery with written verification
of receipt. All communications shall be sent to the party to be notified at the
address as set forth below or at such other address as such party may designate
by three (3) days advance written notice to the Company.
9.11 LAW GOVERNING. This Agreement shall be construed and
interpreted in accordance with and governed and enforced in all respects by the
laws of the State of Delaware.
9.12 ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and disbursements
in addition to any other relief to which such party may be entitled.
9.13 DELIVERY BY FAX. Delivery of an executed counterpart of
the Agreement or any exhibit attached hereto by facsimile transmission shall be
equally as effective as delivery of an executed hard copy of the same. Any party
delivering an executed counterpart of this Agreement or any exhibit attached
hereto by facsimile transmission shall also deliver an executed hard copy of the
same, but the failure by such party to deliver such executed hard copy shall not
affect the validity, enforceability or binding nature effect of this Agreement
or such exhibit.
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IN WITNESS WHEREOF, each of the parties to this Agreement has executed
or caused this Agreement to be executed as of the date first above written.
"China Hotel Holdings, Inc."
CHINA HOTEL HOLDINGS, INC.,
a Nevada Corporation
By:
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__________________, President
"Holiday Investment, Inc."
HOLIDAY INVESTMENT, INC.,
a California Corporation
By:
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______________, Title: _______________
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