Exhibit 10.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of the 11th day of November 2005
AMONG:
GOLDTECH MINING CORPORATION, a corporation formed pursuant to the laws
of the State of Nevada and having an office for business located at
0-00 Xxxxxxxx Xxxxx, Xxxxx 000, Xx. Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
("GMNC")
AND:
DALIAN ACQUISITION CORP., a corporation formed pursuant to the laws of
the State of Delaware and a wholly owned subsidiary of GMNC
(the "Acquirer")
AND:
CHINA INDUSTRIAL WASTE MANAGEMENT INC., a corporation formed pursuant
to the laws of the State of Delaware and having an office for business
located at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
("CIWM")
AND:
JINQING DONG, an individual having an address at Xx. 0 Xxxxxx Xxxx
Xxxx, X.X.X. Xxxx, Xxxxxx Xxxx, X. R. China, 116600
AMERICAN UNION SECURITIES, INC., a corporation formed pursuant to the
laws of the State of New York and having an office for business
located at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
XXXXXX XXXX, an individual having an address at Xx. 0 Xxxxxx Xxxx
Xxxx, X.X.X. Xxxx, Xxxxxx Xxxx, X. R. China, 116600
WARNER TECHNOLOGY AND INVESTMENT CORP., a corporation formed pursuant
to the laws of the State of New Jersey and having an office for
business located at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000
XXX XX, an individual having an address at Xx. 0 Xxxxxx Xxxx Xxxx,
X.X.X. Xxxx, Xxxxxx Xxxx, X. R. China, 116600
XXXXX XXX, an individual having an address at Xx. 0 Xxxxxx Xxxx Xxxx,
X.X.X. Xxxx, Xxxxxx Xxxx, X. R. China, 116600
XXXXXXX XXX, an individual having an address at Xx. 0 Xxxxxx Xxxx
Xxxx, X.X.X. Xxxx, Xxxxxx Xxxx, X. R. China, 116600
XXX XXX, an individual having an address at Xx. 0 Xxxxxx Xxxx Xxxx,
X.X.X. Xxxx, Xxxxxx Xxxx, X. R. China, 116600
XXXX X. XXX, an individual having an address at 00 Xxxxxx Xxxxxx,
#000, Xxxxxx Xxxx, Xxx Xxxxxx 00000
TONGJIE XING, an individual having an address at Xx. 0 Xxxxxx Xxxx
Xxxx, X.X.X. Xxxx, Xxxxxx Xxxx, X. R. China, 116600
(individually, a "CIWM Shareholder" and collectively, the "CIWM
Shareholders")
WHEREAS:
A. CIWM is a Delaware corporation engaged in the business of collecting,
treating, disposing and recycling of industrial wastes in China through its
majority-owned subsidiary, Dalian Dongtai Industrial Waste Treatment Co., Ltd.;
B. The CIWM Shareholders own 1,280,000 CIWM Shares, being 100% of the presently
issued and outstanding CIWM Shares;
C. GMNC is a reporting company whose common stock is quoted on the NASD
"Bulletin Board" and which is not presently engaged in any business;
D. The respective Boards of Directors of GMNC, CIWM and the Acquirer deem it
advisable and in the best interests of GMNC, CIWM and the Acquirer that CIWM
merge with and into the Acquirer (the "Merger") pursuant to this Agreement and
the Certificate of Merger, and the applicable provisions of the laws of the
State of Delaware; and
E. It is intended that the Merger shall qualify for United States federal income
tax purposes as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement the following terms will have the following meanings:
(a) "Acquisition Shares" means the 64,000 GMNC Preferred Shares to be
issued to the CIWM Shareholders at Closing pursuant to the terms of
the Merger;
(b) "Agreement" means this agreement and plan of merger among GMNC, the
Acquirer, CIWM, and the CIWM Shareholders;
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(c) "CIWM Accounts Payable and Liabilities" means all accounts payable and
liabilities of CIWM, due and owing or otherwise constituting a binding
obligation of CIWM (other than a CIWM Material Contract) as of June
30, 2005 as set forth in Schedule "K" hereto;
(d) "CIWM Accounts Receivable" means all accounts receivable and other
debts owing to CIWM, as of June 30, 2005 as set forth in Schedule "L"
hereto;
(e) "CIWM Assets" means the undertaking and all the property and assets of
the CIWM Business of every kind and description wheresoever situated
including, without limitation, CIWM Equipment, CIWM Inventory, CIWM
Material Contracts, CIWM Accounts Receivable, CIWM Cash, CIWM
Intangible Assets and CIWM Goodwill, and all credit cards, charge
cards and banking cards issued to CIWM;
(f) "CIWM Bank Accounts" means all of the bank accounts, lock boxes and
safety deposit boxes of CIWM or relating to the CIWM Business as set
forth in Schedule "M" hereto;
(g) "CIWM Business" means all aspects of the business conducted by CIWM;
(h) "CIWM Cash" means all cash on hand or on deposit to the credit of CIWM
on the Closing Date;
(i) "CIWM Debt to Related Parties" means the debts owed by CIWM and its
subsidiaries to any CIWM Shareholder or to any family member thereof,
or to any affiliate, director or officer of CIWM or any CIWM
Shareholder as described in Schedule "N";
(j) "CIWM Equipment" means all machinery, equipment, furniture, and
furnishings used in the CIWM Business, including, without limitation,
the items more particularly described in Schedule "O" hereto;
(k) "CIWM Financial Statements" means, collectively, the audited
consolidated financial statements of GMNC for the fiscal years ended
December 31, 2004 and 2003, together with the unqualified auditors'
reports thereon, and the unaudited consolidated financial statements
of GMNC for the six month period ended June 30, 2005, true copies of
which are attached as Schedule "J" hereto. Subject to the consent of
GMNC, unaudited financial statements for the same period shall be
acceptable;
(l) "CIWM Goodwill" means the goodwill of the CIWM Business together with
the exclusive right of GMNC to represent itself as carrying on the
CIWM Business in succession of CIWM subject to the terms hereof, and
the right to use any words indicating that the CIWM Business is so
carried on including the right to use the names "China Industrial
Waste Management" or "Dalian Dongtai Industrial Waste Treatment Co.,
Ltd." or any variations thereof as part of the name of or in
connection with the CIWM Business or any part thereof carried on or to
be carried on by CIWM, the right to all corporate, operating and trade
names associated with the CIWM Business, or any variations of such
names as part of or in connection with the CIWM Business, all
telephone listings and telephone advertising contracts, all lists of
customers, books and records and other information relating to the
CIWM Business, all necessary licenses and authorizations and any other
rights used in connection with the CIWM Business;
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(m) "CIWM Insurance Policies" means the public liability insurance and
insurance against loss or damage to CIWM Assets and the CIWM Business
as described in Schedule "P" hereto;
(n) "CIWM Intangible Assets" means all of the intangible assets of CIWM,
including, without limitation, CIWM Goodwill, all trademarks, logos,
copyrights, designs, and other intellectual and industrial property of
CIWM and its subsidiaries;
(o) "CIWM Inventory" means all inventory and supplies of the CIWM Business
as of June 30, 2005 as set forth in Schedule "Q" hereto;
(p) "CIWM Material Contracts" means the burden and benefit of and the
right, title and interest of CIWM in, to and under all trade and
non-trade contracts, engagements or commitments, whether written or
oral, to which CIWM is entitled in connection with the CIWM Business
whereunder CIWM is obligated to pay or entitled to receive the sum of
$5,000 or more including, without limitation, any pension plans,
profit sharing plans, bonus plans, loan agreements, security
agreements, indemnities and guarantees, any agreements with employees,
lessees, licensees, managers, accountants, suppliers, agents,
distributors, officers, directors, attorneys or others which cannot be
terminated without liability on not more than one month's notice, and
those contracts listed in Schedule "R" hereto;
(q) "CIWM Shares" means all of the issued and outstanding shares of CIWM's
equity stock;
(r) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 9 hereof;
(s) "Closing Date" means the day on which all conditions precedent to the
completion of the transaction as contemplated hereby have been
satisfied or waived;
(t) "Effective Time" means the date of the filing of an appropriate
Certificate of Merger in the form required by the State of Delaware,
which certificate shall provide that the Merger shall become effective
upon such filing;
(u) "GMNC Accounts Payable and Liabilities" means all accounts payable and
liabilities of GMNC, on a consolidated basis, due and owing or
otherwise constituting a binding obligation of GMNC and its
subsidiaries (other than a GMNC Material Contract) as of June 30, 2005
as set forth is Schedule "B" hereto;
(v) "GMNC Accounts Receivable" means all accounts receivable and other
debts owing to GMNC, on a consolidated basis, as of June 30, 2005 as
set forth in Schedule "C" hereto;
(w) "GMNC Assets" means the undertaking and all the property and assets of
the GMNC Business of every kind and description wheresoever situated
including, without limitation, GMNC Equipment, GMNC Inventory, GMNC
Material Contracts, GMNC Accounts Receivable, GMNC Cash, GMNC
Intangible Assets and GMNC Goodwill, and all credit cards, charge
cards and banking cards issued to GMNC;
(x) "GMNC Bank Accounts" means all of the bank accounts, lock boxes and
safety deposit boxes of GMNC and its subsidiaries or relating to the
GMNC Business as set forth in Schedule "D" hereto;
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(y) "GMNC Business" means all aspects of any business conducted by GMNC
and its subsidiaries;
(z) "GMNC Cash" means all cash on hand or on deposit to the credit of GMNC
and its subsidiaries on the Closing Date;
(aa) "GMNC Common Shares" means the shares of common stock in the capital
of GMNC;
(bb) "GMNC Debt to Related Parties" means the debts owed by GMNC and its
subsidiaries to any affiliate, director or officer of GMNC as
described in Schedule "E" hereto;
(cc) "GMNC Equipment" means all machinery, equipment, furniture, and
furnishings used in the GMNC Business, including, without limitation,
the items more particularly described in Schedule "F" hereto;
(dd) "GMNC Financial Statements" means, collectively, the audited
consolidated financial statements of GMNC for the fiscal years ended
December 31, 2004 and 2003, together with the unqualified auditors'
reports thereon, and the unaudited consolidated financial statements
of GMNC for the six month period ended June 30, 2005, true copies of
which are attached as Schedule "A" hereto;
(ee) "GMNC Goodwill" means the goodwill of the GMNC Business including the
right to all corporate, operating and trade names associated with the
GMNC Business, or any variations of such names as part of or in
connection with the GMNC Business, all books and records and other
information relating to the GMNC Business, all necessary licenses and
authorizations and any other rights used in connection with the GMNC
Business;
(ff) "GMNC Insurance Policies" means the public liability insurance and
insurance against loss or damage to the GMNC Assets and the GMNC
Business as described in Schedule "G" hereto;
(gg) "GMNC Intangible Assets" means all of the intangible assets of GMNC
and its subsidiaries, including, without limitation, GMNC Goodwill,
all trademarks, logos, copyrights, designs, and other intellectual and
industrial property of GMNC and its subsidiaries;
(hh) "GMNC Inventory" means all inventory and supplies of the GMNC Business
as of June 30, 2005, as set forth in Schedule "H" hereto;
(ii) "GMNC Material Contracts" means the burden and benefit of and the
right, title and interest of GMNC and its subsidiaries in, to and
under all trade and non-trade contracts, engagements or commitments,
whether written or oral, to which GMNC or its subsidiaries are
entitled whereunder GMNC or its subsidiaries are obligated to pay or
entitled to receive the sum of $5,000 or more including, without
limitation, any pension plans, profit sharing plans, bonus plans, loan
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agreements, security agreements, indemnities and guarantees, any
agreements with employees, lessees, licensees, managers, accountants,
suppliers, agents, distributors, officers, directors, attorneys or
others which cannot be terminated without liability on not more than
one month's notice, and those contracts listed in Schedule "I" hereto;
(jj) "GMNC Preferred Shares" means the shares of preferred stock in the
capital of GMNC;
(kk) "Merger" means the merger, at the Effective Time, of CIWM and the
Acquirer pursuant to this Agreement and Plan of Merger;
(ll) "Merger Consideration" means the Acquisition Shares;
(mm) "Place of Closing" means the offices of Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP, or such other place as GMNC and CIWM may mutually agree
upon;
(nn) "State Corporation Law" means the General Corporation Law of the State
of Delaware; and
(oo) "Surviving Company" means the Acquirer following the merger with CIWM.
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
Captions and Section Numbers
1.2 The headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.
Section References and Schedules
1.3 Any reference to a particular "Article", "section", "paragraph", "clause" or
other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement.
The Schedules to this Agreement are as follows:
Information concerning GMNC
Schedule "A" GMNC Financial Statements
Schedule "B" GMNC Accounts Payable and Liabilities
Schedule "C" GMNC Accounts Receivable
Schedule "D" GMNC Bank Accounts
Schedule "E" GMNC Debts to Related Parties
Schedule "F" GMNC Equipment
Schedule "G" GMNC Insurance Policies
Schedule "H" GMNC Inventory
Schedule "I" GMNC Material Contracts
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Information concerning CIWM
Schedule "J" CIWM Financial Statements
Schedule "K" CIWM Accounts Payable and Liabilities
Schedule "L" CIWM Accounts Receivable
Schedule "M" CIWM Bank Accounts
Schedule "N" CIWM Debts to Related Parties
Schedule "O" CIWM Equipment
Schedule "P" CIWM Insurance Policies
Schedule "Q" CIWM Inventory
Schedule "R" CIWM Material Contracts
Agreement
Schedule "S" Certificate of Designation for Series A Convertible Preferred
Stock
Severability of Clauses
1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
ARTICLE 2
THE MERGER
The Merger
2.1 At Closing, CIWM shall be merged with and into the Acquirer pursuant to this
Agreement and Plan of Merger and the separate corporate existence of CIWM shall
cease and the Acquirer, as it exists from and after the Closing, shall be the
Surviving Company.
Effect of the Merger
2.2 The Merger shall have the effect provided therefor by the State Corporation
Law. Without limiting the generality of the foregoing, and subject thereto, at
Closing (i) all the rights, privileges, immunities, powers and franchises, of a
public as well as of a private nature, and all property, real, personal and
mixed, and all debts due on whatever account, including without limitation
subscriptions to shares, and all other choses in action, and all and every other
interest of or belonging to or due to CIWM or the Acquirer, as a group, subject
to the terms hereof, shall be taken and deemed to be transferred to, and vested
in, the Surviving Company without further act or deed; and all property, rights
and privileges, immunities, powers and franchises and all and every other
interest shall be thereafter as effectually the property of the Surviving
Company, as they were of CIWM and the Acquirer, as a group, and (ii) all debts,
liabilities, duties and obligations of CIWM and the Acquirer, as a group,
subject to the terms hereof, shall become the debts, liabilities and duties of
the Surviving Company and the Surviving Company shall thenceforth be responsible
and liable for all debts, liabilities, duties and obligations of CIWM and the
Acquirer, as a group, and neither the rights of creditors nor any liens upon the
property of CIWM or the Acquirer, as a group, shall be impaired by the Merger,
and may be enforced against the Surviving Company.
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Certificate of Incorporation; Bylaws; Directors and Officers
2.3 The Certificate of Incorporation of the Surviving Company from and after the
Closing shall be the Certificate of Incorporation of the Acquirer until
thereafter amended in accordance with the provisions therein and as provided by
the applicable provisions of the State Corporation Law. The Bylaws of the
Surviving Company from and after the Closing shall be the Bylaws of CIWM as in
effect immediately prior to the Closing, continuing until thereafter amended in
accordance with their terms, the Certificate of Incorporation of the Surviving
Company and as provided by the State Corporation Law. The Directors of the
Acquirer at the Effective Time shall continue to be the Directors of CIWM.
Conversion of Securities
2.4 At the Effective Time, by virtue of the Merger and without any action on the
part of the Acquirer, CIWM or the CIWM Shareholders, the shares of capital stock
of each of CIWM and the Acquirer shall be converted as follows:
(a) Capital Stock of the Acquirer. Each issued and outstanding share of
the Acquirer's capital stock shall continue to be issued and
outstanding and shall be converted into one share of validly issued,
fully paid, and non-assessable common stock of the Surviving Company.
Each stock certificate of the Acquirer evidencing ownership of any
such shares shall continue to evidence ownership of such shares of
capital stock of the Surviving Company.
(b) Conversion of CIWM Shares. Each CIWM Share that is issued and
outstanding at the Effective Time shall automatically be cancelled and
extinguished and converted, without any action on the part of the
holder thereof, into the right to receive at the time and in the
amounts described in this Agreement an amount of Acquisition Shares
equal to the number of Acquisition Shares divided by the number of
CIWM Shares outstanding immediately prior to Closing. All such CIWM
Shares, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and
each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive
the Acquisition Shares paid in consideration therefor upon the
surrender of such certificate in accordance with this Agreement.
Adherence with Applicable Securities Laws
2.5 The CIWM Shareholders agree that they are acquiring the Acquisition Shares
for investment purposes and will not offer, sell or otherwise transfer, pledge
or hypothecate any of the Acquisition Shares issued to them (other than pursuant
to an effective Registration Statement under the Securities Act of 1933, as
amended) directly or indirectly unless:
(a) the sale is to GMNC;
(b) the sale is made pursuant to the exemption from registration under the
Securities Act of 1933,as amended, provided by Rule 144 thereunder; or
(c) the Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act of 1933, as amended, or any
applicable United States state laws and regulations governing the
offer and sale of securities, and the vendor has furnished to GMNC an
opinion of counsel to that effect or such other written opinion as may
be reasonably required by GMNC.
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The CIWM Shareholders acknowledge that the certificates representing the
Acquisition Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE SHALL BE MADE UNLESS A
REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN
EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SAID ACT IS THEN IN FACT APPLICABLE TO SAID SHARES.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF GMNC
Representations and Warranties
3.1 GMNC represents and warrants in all material respects to CIWM, with the
intent that CIWM will rely thereon in entering into this Agreement and in
approving and completing the transactions contemplated hereby, that:
GMNC - Corporate Status and Capacity
(a) Incorporation. GMNC is a corporation duly incorporated and validly
subsisting under the laws of the State of Nevada, and is in good
standing with the office of the Secretary of State for the State of
Nevada;
(b) Carrying on Business. GMNC does not currently conduct business, except
for the actual operations of the corporation which are carried on in
Xx. Xxxxxx, Xxxxxxx, Xxxxxx and does carry on any other material
business activity in any other jurisdictions. GMNC is duly authorized
to carry on such business in Xx. Xxxxxx, Xxxxxxx, Xxxxxx. The nature
of the GMNC Business does not require GMNC to register or otherwise be
qualified to carry on business in any other jurisdictions;
(c) Corporate Capacity. GMNC has the corporate power, capacity and
authority to own the GMNC Assets and to enter into and complete this
Agreement;
(d) Reporting Status; Listing. GMNC is required to file current reports
with the Securities and Exchange Commission pursuant to section 12(g)
of the Securities Exchange Act of 1934, the GMNC Common Shares are
quoted on the NASD "Bulletin Board", and all reports required to be
filed by GMNC with the Securities and Exchange Commission or NASD have
been timely filed;
Acquirer - Corporate Status and Capacity
(e) Incorporation. The Acquirer is a corporation duly incorporated and
validly subsisting under the laws of the State of Delaware, and is in
good standing with the office of the Secretary of State for the State
of Delaware;
(f) Carrying on Business. Other than corporate formation and organization,
the Acquirer has not carried on business activities to date.
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(g) Corporate Capacity. The Acquirer has the corporate power, capacity and
authority to enter into and complete this Agreement;
GMNC - Capitalization
(h) Authorized Capital. The authorized capital of GMNC consists of
95,000,000 GMNC Common Shares, $0.001 par value and 5,000,000 shares
of preferred stock. $0.001 par value, of which 7,773,841 GMNC Common
Shares, and no shares of Preferred Stock are presently issued and
outstanding;
(i) No Option. No person, firm or corporation has any agreement or option
or any right capable of becoming an agreement or option for the
acquisition of GMNC Common Shares or for the purchase, subscription or
issuance of any of the unissued shares in the capital of GMNC;
(j) Capacity. GMNC has the full right, power and authority to enter into
this Agreement on the terms and conditions contained herein;
Acquirer Capitalization
(k) Authorized Capital. The authorized capital of the Acquirer consists of
200 shares of common stock, $0.001 par value, of which 200 shares of
common stock are presently issued and outstanding;
(l) No Option. No person, firm or corporation has any agreement or option
or any right capable of becoming an agreement or option for the
acquisition of any common or preferred shares in Acquirer or for the
purchase, subscription or issuance of any of the unissued shares in
the capital of Acquirer;
(m) Capacity. The Acquirer has the full right, power and authority to
enter into this Agreement on the terms and conditions contained
herein;
GMNC - Records and Financial Statements
(n) Charter Documents. The charter documents of GMNC and the Acquirer have
not been altered since the incorporation of each, respectively, except
as filed in the record books of GMNC or the Acquirer, as the case may
be;
(o) Corporate Minute Books. The corporate minute books of GMNC and its
subsidiaries are complete and each of the minutes contained therein
accurately reflect the actions that were taken at a duly called and
held meeting or by consent without a meeting. All actions by GMNC and
its subsidiaries which required director or shareholder approval are
reflected on the corporate minute books of GMNC and its subsidiaries.
GMNC and its subsidiaries are not in violation or breach of, or in
default with respect to, any term of their respective Certificates of
Incorporation (or other charter documents) or by-laws.
(p) GMNC Financial Statements. The GMNC Financial Statements present
fairly, in all material respects, the assets and liabilities (whether
accrued, absolute, contingent or otherwise) of GMNC, on a consolidated
basis, as of the respective dates thereof, and the sales and earnings
of the GMNC Business during the periods covered thereby, in all
material respects and have been prepared in substantial accordance
with generally accepted accounting principles consistently applied;
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(q) GMNC Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of GMNC or its subsidiaries
which are not disclosed in Schedule "B" hereto or reflected in the
GMNC Financial Statements except those incurred in the ordinary course
of business since the date of the said schedule and the GMNC Financial
Statements, and neither GMNC nor its subsidiaries have guaranteed or
agreed to guarantee any debt, liability or other obligation of any
person, firm or corporation. Without limiting the generality of the
foregoing, all accounts payable and liabilities of GMNC and its
subsidiaries as of June 30, 2005 are described in Schedule "B" hereto;
(r) GMNC Accounts Receivable. All the GMNC Accounts Receivable result from
bona fide business transactions and services actually rendered
without, to the knowledge and belief of GMNC, any claim by the obligor
for set-off or counterclaim;
(s) GMNC Bank Accounts. All of the GMNC Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule "D" hereto;
(t) No Debt to Related Parties. Except as disclosed in Schedule "E"
hereto, neither GMNC nor its subsidiaries are, and on Closing will not
be, materially indebted to any affiliate, director or officer of GMNC
except accounts payable on account of bona fide business transactions
of GMNC incurred in normal course of the GMNC Business, including
employment agreements, none of which are more than 30 days in arrears;
(u) No Related Party Debt to GMNC. No director or officer or affiliate of
GMNC is now indebted to or under any financial obligation to GMNC or
its subsidiaries on any account whatsoever, except for advances on
account of travel and other expenses not exceeding $5,000 in total;
(v) No Dividends. No dividends or other distributions on any shares in the
capital of GMNC have been made, declared or authorized since the date
of GMNC Financial Statements;
(w) No Payments. No payments of any kind have been made or authorized
since the date of the GMNC Financial Statements to or on behalf of
officers, directors, shareholders or employees of GMNC or its
subsidiaries or under any management agreements with GMNC or its
subsidiaries, except payments made in the ordinary course of business
and at the regular rates of salary or other remuneration payable to
them;
(x) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting GMNC or its subsidiaries;
(y) No Adverse Events. Since the date of the GMNC Financial Statements
(i) there has not been any material adverse change in the financial
position or condition of GMNC, its subsidiaries, its liabilities
or the GMNC Assets or any damage, loss or other change in
circumstances materially affecting GMNC, the GMNC Business or the
GMNC Assets or GMNC' right to carry on the GMNC Business, other
than changes in the ordinary course of business,
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(ii) there has not been any damage, destruction, loss or other event
(whether or not covered by insurance) materially and adversely
affecting GMNC, its subsidiaries, the GMNC Business or the GMNC
Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by GMNC to any of GMNC' officers,
employees or agents or any bonus, payment or arrangement made to
or with any of them,
(iv) the GMNC Business has been and continues to be carried on in the
ordinary course,
(v) GMNC has not waived or surrendered any right of material value,
(vi) Neither GMNC nor its subsidiaries have discharged or satisfied or
paid any lien or encumbrance or obligation or liability other
than current liabilities in the ordinary course of business, and
(vii) no capital expenditures in excess of $5,000 individually or
$10,000 in total have been authorized or made.
GMNC - Income Tax Matters
(z) Tax Returns. All tax returns and reports of GMNC and its subsidiaries
required by law to be filed have been filed and are true, complete and
correct, and any taxes payable in accordance with any return filed by
GMNC and its subsidiaries or in accordance with any notice of
assessment or reassessment issued by any taxing authority have been so
paid;
(aa) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by GMNC or its subsidiaries. GMNC is not aware of any
contingent tax liabilities or any grounds which would prompt a
reassessment including aggressive treatment of income and expenses in
filing earlier tax returns;
GMNC - Applicable Laws and Legal Matters
(bb) Licenses. GMNC and its subsidiaries hold all licenses and permits as
may be requisite for carrying on the GMNC Business in the manner in
which it has heretofore been carried on, which licenses and permits
have been maintained and continue to be in good standing except where
the failure to obtain or maintain such licenses or permits would not
have a material adverse effect on the GMNC Business;
(cc) Applicable Laws. Neither GMNC nor its subsidiaries have been charged
with or received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which they are subject or
which apply to them the violation of which would have a material
adverse effect on the GMNC Business, and to GMNC' knowledge, neither
GMNC nor its subsidiaries are in breach of any laws, ordinances,
statutes, regulations, bylaws, orders or decrees the contravention of
which would result in a material adverse impact on the GMNC Business;
12
(dd) Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened
against or relating to GMNC, its subsidiaries, the GMNC Business, or
any of the GMNC Assets nor does GMNC have any knowledge of any
deliberate act or omission of GMNC or its subsidiaries that would form
any material basis for any such action or proceeding; other than
disclosed in public filings.
(ee) No Bankruptcy. Neither GMNC nor its subsidiaries have made any
voluntary assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed or
presented against GMNC or its subsidiaries and no order has been made
or a resolution passed for the winding-up, dissolution or liquidation
of GMNC or its subsidiaries;
(ff) Labor Matters. Neither GMNC nor its subsidiaries are party to any
collective agreement relating to the GMNC Business with any labor
union or other association of employees and no part of the GMNC
Business has been certified as a unit appropriate for collective
bargaining or, to the knowledge of GMNC, has made any attempt in that
regard;
(gg) Finder's Fees. Neither GMNC nor its subsidiaries are party to any
agreement which provides for the payment of finder's fees, brokerage
fees, commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated herein;
Execution and Performance of Agreement
(hh) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby,
have been duly and validly authorized by all necessary corporate
action on the part of GMNC and the Acquirer;
(ii) No Violation or Breach. The execution and performance of this
Agreement will not:
(i) violate the charter documents of GMNC or the Acquirer or result
in any breach of, or default under, any loan agreement, mortgage,
deed of trust, or any other agreement to which GMNC or its
subsidiaries are party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, the GMNC Material Contracts, or
any right or rights enjoyed by GMNC or its subsidiaries,
(iii) result in any alteration of GMNC' or its subsidiaries'
obligations under any agreement to which GMNC or its subsidiaries
are party including, without limitation, the GMNC Material
Contracts,
(iv) result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party
upon or against the GMNC Assets,
(v) result in the imposition of any tax liability to GMNC or its
subsidiaries relating to the GMNC Assets, or
(vi) violate any court order or decree to which either GMNC or its
subsidiaries are subject;
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The GMNC Assets - Ownership and Condition
(jj) Business Assets. The GMNC Assets comprise all of the property and
assets of the GMNC Business, and no other person, firm or corporation
owns any assets used by GMNC or its subsidiaries in operating the GMNC
Business, whether under a lease, rental agreement or other
arrangement, other than as disclosed in Schedules "F" or "I" hereto;
(kk) Title. GMNC or its subsidiaries are the legal and beneficial owner of
the GMNC Assets, free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims whatsoever,
save and except as disclosed in Schedules "F" or "I" hereto;
(ll) No Option. No person, firm or corporation has any agreement or option
or a right capable of becoming an agreement for the purchase of any of
the GMNC Assets;
(mm) GMNC Insurance Policies. GMNC and its subsidiaries maintain the public
liability insurance and insurance against loss or damage to the GMNC
Assets and the GMNC Business as described in Schedule "G" hereto;
(nn) GMNC Material Contracts. The GMNC Material Contracts listed in
Schedule "I" constitute all of the material contracts of GMNC and its
subsidiaries;
(oo) No Default. There has not been any default in any material obligation
of GMNC or any other party to be performed under any of the GMNC
Material Contracts, each of which is in good standing and in full
force and effect and unamended (except as disclosed in Schedule "I"
hereto), and GMNC is not aware of any default in the obligations of
any other party to any of the GMNC Material Contracts;
(pp) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of GMNC or its
subsidiaries. Neither GMNC nor its subsidiaries are obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law;
GMNC Assets - GMNC Equipment
(qq) GMNC Equipment. The GMNC Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such equipment
is in good working condition;
GMNC Assets - GMNC Goodwill and Other Assets
(rr) GMNC Goodwill. GMNC and its subsidiaries does not carry on the GMNC
Business under any other business or trade names. GMNC does not have
any knowledge of any infringement by GMNC or its subsidiaries of any
patent, trademarks, copyright or trade secret;
The GMNC Business
(ss) Maintenance of Business. Since the date of the GMNC Financial
Statements, GMNC and its subsidiaries have not entered into any
material agreement or commitment except in the ordinary course and
except as disclosed herein;
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(tt) Subsidiaries. Except for the Acquirer, GMNC does not own any
subsidiaries and does not otherwise own, directly or indirectly, any
shares or interest in any other corporation, partnership, joint
venture or firm; and
GMNC - Acquisition Shares
(uu) Acquisition Shares. The Acquisition Shares when delivered to the
holders of CIWM Shares pursuant to the Merger shall be validly issued
and outstanding as fully paid and non-assessable shares and the
Acquisition Shares shall be transferable upon the books of GMNC, in
all cases subject to the provisions and restrictions of all applicable
securities laws.
Non-Merger and Survival
3.2 The representations and warranties of GMNC contained herein will be true at
and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by CIWM or the CIWM Shareholders, the
representations and warranties of GMNC shall survive the Closing.
Indemnity
3.3 GMNC agrees to indemnify and save harmless CIWM and the CIWM Shareholders
from and against any and all claims, demands, actions, suits, proceedings,
assessments, judgments, damages, costs, losses and expenses, including any
payment made in good faith in settlement of any claim (subject to the right of
GMNC to defend any such claim), resulting from the breach by it of any
representation or warranty made under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by GMNC to CIWM or the CIWM Shareholders hereunder.
ARTICLE 4
COVENANTS OF GMNC
Covenants
4.1 GMNC covenants and agrees with CIWM that it will:
(a) Conduct of Business. Until the Closing, conduct its business
diligently and in the ordinary course consistent with the manner in
which it generally has been operated up to the date of execution of
this Agreement;
(b) Preservation of Business. Until the Closing, use its best efforts to
preserve the GMNC Business and the GMNC Assets and, without
limitation, preserve for CIWM GMNC' and its subsidiaries'
relationships with any third party having business relations with
them;
(c) Access. Until the Closing, give CIWM, the CIWM Shareholders, and their
representatives full access to all of the properties, books,
contracts, commitments and records of GMNC, and furnish to CIWM, the
CIWM Shareholders and their representatives all such information as
they may reasonably request;
15
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents
required to permit the Merger and to preserve and maintain the GMNC
Assets notwithstanding the change in control of CIWM arising from the
Merger; and
(e) Name Change. Forthwith after the Closing, take such steps are required
to change the name of GMNC to "China Industrial Waste Management Inc"
or such similar name as may be acceptable to the board of directors of
CIWM.
Authorization
4.2 GMNC hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting GMNC and its subsidiaries to release any and all
information in their possession respecting GMNC and its subsidiaries to CIWM.
GMNC shall promptly execute and deliver to CIWM any and all consents to the
release of information and specific authorizations which CIWM reasonably
requires to gain access to any and all such information.
Survival
4.3 The covenants set forth in this Article shall survive the Closing for the
benefit of CIWM and the CIWM Shareholders.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
CIWM AND THE CIWM SHAREHOLDERS
Representations and Warranties
5.1 CIWM and the CIWM Shareholders jointly and severally represent and warrant
in all material respects to GMNC, with the intent that it will rely thereon in
entering into this Agreement and in approving and completing the transactions
contemplated hereby, that:
CIWM - Corporate Status and Capacity
(a) Incorporation. CIWM is a corporation duly incorporated and validly
subsisting under the laws of the State of Delaware, and is in good
standing with the office of the Secretary of State for the State of
Delaware;
(b) Carrying on Business. CIWM, through its operating subsidiary, carries
on business primarily in the People's Republic of China and does not
carry on any material business activity in any other jurisdiction.
CIWM has an office at 000 Xxxx Xxxxxx, 15th Floor, x/x Xxxxxxxx Xxxxx,
Xxx Xxxx, XX 00000, and through its operating subsidiary has
operations in Dalian City, People's Republic of China and in no other
locations. The nature of the CIWM Business does not require CIWM to
register or otherwise be qualified to carry on business in any other
jurisdiction;
(c) Corporate Capacity. CIWM has the corporate power, capacity and
authority to own CIWM Assets, to carry on the Business of CIWM and to
enter into and complete this Agreement;
16
CIWM - Capitalization
(d) Authorized Capital. The authorized capital of CIWM consists of
60,000,000 shares of common stock, $.0001 par value per share;
(e) Ownership of CIWM Shares. The issued and outstanding share capital of
CIWM will on Closing consist of 1,280,000 common shares (being the
CIWM Shares), which shares on Closing shall be validly issued and
outstanding as fully paid and non-assessable shares. The CIWM
Shareholders will be at Closing the registered and beneficial owners
of 1,280,000 CIWM Shares. The CIWM Shares owned by the CIWM
Shareholders will on Closing be free and clear of any and all liens,
charges, pledges, encumbrances, restrictions on transfer and adverse
claims whatsoever;
(f) No Option. No person, firm or corporation has any agreement, option,
warrant, preemptive right or any other right capable of becoming an
agreement or option for the acquisition of CIWM Shares held by the
CIWM Shareholders or for the purchase, subscription or issuance of any
of the unissued shares in the capital of CIWM;
(g) No Restrictions. There are no restrictions on the transfer, sale or
other disposition of CIWM Shares contained in the charter documents of
CIWM or under any agreement;
CIWM - Records and Financial Statements
(h) Charter Documents. The charter documents of CIWM have not been altered
since its incorporation date, except as filed in the record books of
CIWM;
(i) Corporate Minute Books. The corporate minute books of CIWM are
complete and each of the minutes contained therein accurately reflect
the actions that were taken at a duly called and held meeting or by
consent without a meeting. All actions by CIWM which required director
or shareholder approval are reflected on the corporate minute books of
CIWM. CIWM is not in violation or breach of, or in default with
respect to, any term of its Certificates of Incorporation (or other
charter documents) or by-laws.
(j) CIWM Financial Statements. The CIWM Financial Statements present
fairly, in all material respects, the assets and liabilities (whether
accrued, absolute, contingent or otherwise) of CIWM, on consolidated
basis, as of the respective dates thereof, and the sales and earnings
of the CIWM Business during the periods covered thereby, in all
material respects, and have been prepared in substantial accordance
with generally accepted accounting principles consistently applied;
(k) CIWM Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of CIWM which are not disclosed
in Schedule "K" hereto or reflected in the CIWM Financial Statements
except those incurred in the ordinary course of business since the
date of the said schedule and the CIWM Financial Statements, and CIWM
has not guaranteed or agreed to guarantee any debt, liability or other
obligation of any person, firm or corporation. Without limiting the
generality of the foregoing, all accounts payable and liabilities of
CIWM as of June 30, 2005 are described in Schedule "K" hereto;
17
(l) CIWM Accounts Receivable. All CIWM Accounts Receivable result from
bona fide business transactions and services actually rendered
without, to the knowledge and belief of CIWM, any claim by the obligor
for set-off or counterclaim;
(m) CIWM Bank Accounts. All of the CIWM Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule "M" hereto;
(n) No Debt to Related Parties. Except as disclosed in Schedule "N"
hereto, CIWM is not, and on Closing will not be, materially indebted
to any CIWM Shareholder nor to any family member thereof, nor to any
affiliate, director or officer of CIWM or any CIWM Shareholder except
accounts payable on account of bona fide business transactions of CIWM
incurred in normal course of CIWM Business, including employment
agreements with any CIWM Shareholder, none of which are more than 30
days in arrears;
(o) No Related Party Debt to CIWM. Neither any CIWM Shareholder nor any
director, officer or affiliate of CIWM are now indebted to or under
any financial obligation to CIWM on any account whatsoever, except for
advances on account of travel and other expenses not exceeding $5,000
in total;
(p) No Dividends. No dividends or other distributions on any shares in the
capital of CIWM have been made, declared or authorized since the date
of the CIWM Financial Statements;
(q) No Payments. No payments of any kind have been made or authorized
since the date of the CIWM Financial Statements to or on behalf of any
CIWM Shareholder or to or on behalf of officers, directors,
shareholders or employees of CIWM or under any management agreements
with CIWM, except payments made in the ordinary course of business and
at the regular rates of salary or other remuneration payable to them;
(r) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting CIWM;
(s) No Adverse Events. Since the date of the CIWM Financial Statements:
(i) there has not been any material adverse change in the
consolidated financial position or condition of CIWM, its
liabilities or the CIWM Assets or any damage, loss or other
change in circumstances materially affecting CIWM, the CIWM
Business or the CIWM Assets or CIWM's right to carry on the CIWM
Business, other than changes in the ordinary course of business,
(ii) there has not been any damage, destruction, loss or other event
(whether or not covered by insurance) materially and adversely
affecting CIWM, the CIWM Business or the CIWM Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by CIWM to any CIWM Shareholder or
to any of CIWM's officers, employees or agents or any bonus,
payment or arrangement made to or with any of them,
(iv) the CIWM Business has been and continues to be carried on in the
ordinary course,
18
(v) CIWM has not waived or surrendered any right of material value,
(vi) CIWM has not discharged or satisfied or paid any lien or
encumbrance or obligation or liability other than current
liabilities in the ordinary course of business, and
(vii) no capital expenditures in excess of $5,000 individually or
$10,000 in total have been authorized or made;
CIWM - Income Tax Matters
(t) Tax Returns. All tax returns and reports of CIWM required by law to be
filed have been filed and are true, complete and correct, and any
taxes payable in accordance with any return filed by CIWM or in
accordance with any notice of assessment or reassessment issued by any
taxing authority have been so paid;
(u) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by CIWM. CIWM is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment including
aggressive treatment of income and expenses in filing earlier tax
returns;
CIWM - Applicable Laws and Legal Matters
(v) Licenses. CIWM holds all licenses and permits as may be requisite for
carrying on the CIWM Business in the manner in which it has heretofore
been carried on, which licenses and permits have been maintained and
continue to be in good standing except where the failure to obtain or
maintain such licenses or permits would not have a material adverse
effect on the CIWM Business;
(w) Applicable Laws. CIWM has not been charged with or received notice of
breach of any laws, ordinances, statutes, regulations, by-laws, orders
or decrees to which it is subject or which applies to it the violation
of which would have a material adverse effect on the CIWM Business,
and, to CIWM's knowledge, CIWM is not in breach of any laws,
ordinances, statutes, regulations, by-laws, orders or decrees the
contravention of which would result in a material adverse impact on
the CIWM Business;
(x) Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened
against or relating to CIWM, the CIWM Business, or any of the CIWM
Assets, nor does CIWM have any knowledge of any deliberate act or
omission of CIWM that would form any material basis for any such
action or proceeding;
(y) No Bankruptcy. CIWM has not made any voluntary assignment or proposal
under applicable laws relating to insolvency and bankruptcy and no
bankruptcy petition has been filed or presented against CIWM and no
order has been made or a resolution passed for the winding-up,
dissolution or liquidation of CIWM;
(z) Labor Matters. CIWM is not a party to any collective agreement
relating to the CIWM Business with any labor union or other
association of employees and no part of the CIWM Business has been
certified as a unit appropriate for collective bargaining or, to the
knowledge of CIWM, has made any attempt in that regard and CIWM has no
reason to believe that any current employees will leave CIWM's employ
as a result of this Merger.
19
(aa) Finder's Fees. CIWM is not a party to any agreement which
provides for the payment of finder's fees, brokerage fees,
commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution
and delivery of this Agreement and the transactions
contemplated herein;
Execution and Performance of Agreement
(bb) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby,
have been duly and validly authorized by all necessary corporate
action on the part of CIWM;
(cc) No Violation or Breach. The execution and performance of this
Agreement will not
(i) violate the charter documents of CIWM or result in any breach of,
or default under, any loan agreement, mortgage, deed of trust, or
any other agreement to which CIWM is a party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, CIWM Material Contracts, or any
right or rights enjoyed by CIWM,
(iii) result in any alteration of CIWM's obligations under any
agreement to which CIWM is a party including, without limitation,
the CIWM Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party
upon or against the CIWM Assets,
(v) result in the imposition of any tax liability to CIWM relating to
CIWM Assets or the CIWM Shares, or
(vi) violate any court order or decree to which either CIWM is
subject;
CIWM Assets - Ownership and Condition
(dd) Business Assets. The CIWM Assets comprise all of the property and
assets of the CIWM Business, and neither the CIWM Shareholders nor any
other person, firm or corporation owns any assets used by CIWM in
operating the CIWM Business, whether under a lease, rental agreement
or other arrangement, other than as disclosed in Schedules "O" or "R"
hereto;
(ee) Title. CIWM is the legal and beneficial owner of the CIWM Assets, free
and clear of all mortgages, liens, charges, pledges, security
interests, encumbrances or other claims whatsoever, save and except as
disclosed in Schedules "O" or "R" hereto;
(ff) No Option. No person, firm or corporation has any agreement or option
or a right capable of becoming an agreement for the purchase of any of
the CIWM Assets;
20
(gg) CIWM Insurance Policies. CIWM maintains the public liability insurance
and insurance against loss or damage to the CIWM Assets and the CIWM
Business as described in Schedule "P" hereto;
(hh) CIWM Material Contracts. The CIWM Material Contracts listed in
Schedule "R" constitute all of the material contracts of CIWM;
(ii) No Default. There has not been any default in any material obligation
of CIWM or any other party to be performed under any of CIWM Material
Contracts, each of which is in good standing and in full force and
effect and unamended (except as disclosed in Schedule "R"), and CIWM
is not aware of any default in the obligations of any other party to
any of the CIWM Material Contracts;
(jj) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of CIWM. CIWM is not
obliged to pay benefits or share profits with any employee after
termination of employment except as required by law;
CIWM Assets - CIWM Equipment
(kk) CIWM Equipment. The CIWM Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such equipment
is in good working condition;
CIWM Assets - CIWM Goodwill and Other Assets
(ll) CIWM Goodwill. CIWM carries on the CIWM Business only under the name
"CIWM Incorporated" and variations thereof and under no other business
or trade names. CIWM does not have any knowledge of any infringement
by CIWM of any patent, trademark, copyright or trade secret;
The Business of CIWM
(mm) Maintenance of Business. Since the date of the CIWM Financial
Statements, the CIWM Business has been carried on in the ordinary
course and CIWM has not entered into any material agreement or
commitment except in the ordinary course; and
(nn) Subsidiaries. CIWM does not own any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest in any
other corporation, partnership, joint venture or firm and CIWM does
not own any subsidiary and does not otherwise own, directly or
indirectly, any shares or interest in any other corporation,
partnership, joint venture or firm.
Non-Merger and Survival
5.2 The representations and warranties of CIWM and the CIWM Shareholders
contained herein will be true at and as of Closing in all material respects as
though such representations and warranties were made as of such time.
Notwithstanding the completion of the transactions contemplated hereby, the
waiver of any condition contained herein (unless such waiver expressly releases
a party from any such representation or warranty) or any investigation made by
GMNC, the representations and warranties of CIWM and the CIWM Shareholders shall
survive the Closing.
21
Indemnity
5.3 CIWM and the CIWM Shareholders jointly and severally agree to indemnify and
save harmless GMNC from and against any and all claims, demands, actions, suits,
proceedings, assessments, judgments, damages, costs, losses and expenses,
including any payment made in good faith in settlement of any claim (subject to
the right of CIWM and the CIWM Shareholders to defend any such claim), resulting
from the breach by any of them of any representation or warranty of such party
made under this Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished by CIWM or the CIWM
Shareholders to GMNC hereunder.
ARTICLE 6
COVENANTS OF CIWM AND
THE CIWM SHAREHOLDERS
Covenants
6.1 CIWM and the CIWM Shareholders covenant and agree with GMNC that they will:
(a) Conduct of Business. Until the Closing, conduct the CIWM Business
diligently and in the ordinary course consistent with the manner in
which the CIWM Business generally has been operated up to the date of
execution of this Agreement;
(b) Preservation of Business. Until the Closing, use their best efforts to
preserve the CIWM Business and the CIWM Assets and, without
limitation, preserve for GMNC CIWM's relationships with their
suppliers, customers and others having business relations with them;
(c) Access. Until the Closing, give GMNC and its representatives full
access to all of the properties, books, contracts, commitments and
records of CIWM relating to CIWM, the CIWM Business and the CIWM
Assets, and furnish to GMNC and its representatives all such
information as they may reasonably request;
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents
required to permit the Merger and to preserve and maintain the CIWM
Assets, including the CIWM Material Contracts, notwithstanding the
change in control of CIWM arising from the Merger;
(e) Reporting and Internal Controls. From and after the Effective Time,
the CIWM Shareholders shall forthwith take all required actions to
implement internal controls on the business of the Surviving Company
to ensure that the Surviving Company and GMNC comply with Section
13(b)(2) of the Securities and Exchange Act of 1934;
(f) Audited Financial Statements. Immediately upon execution of this
Agreement, cause to be prepared audited financial statements of CIWM
in compliance with the requirements of Regulation SB as promulgated by
the Securities and Exchange Commission, such audited financial
statements to be provided no later than 2 business days after the
Closing Date; and
22
(g) Name Change. Forthwith after the Closing, take such steps are required
to change the name of GMNC to "China Industrial Waste Management, Inc"
or such similar name as may be acceptable to the board of directors of
GMNC.
Authorization
6.2 CIWM hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting CIWM to release any and all information in their
possession respecting CIWM to GMNC. CIWM shall promptly execute and deliver to
GMNC any and all consents to the release of information and specific
authorizations which GMNC reasonably require to gain access to any and all such
information.
Survival
6.3 The covenants set forth in this Article shall survive the Closing for the
benefit of GMNC.
ARTICLE 7
CONDITIONS PRECEDENT
Conditions Precedent in favor of GMNC
7.1 GMNC' obligations to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to GMNC hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by CIWM or the CIWM Shareholders at or
prior to the Closing will have been complied with or performed;
(c) GMNC shall have completed its review and inspection of the books and
records of CIWM and shall be satisfied with same in all material
respects;
(d) title to the CIWM Shares held by the CIWM Shareholders and to the CIWM
Assets will be free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims whatsoever,
save and except as disclosed herein;
(e) the Certificate of Merger shall be executed by CIWM in form acceptable
for filing with the Delaware Secretary of State;
(f) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or condition of
CIWM, its liabilities or the CIWM Assets or any damage, loss or other
change in circumstances materially and adversely affecting the CIWM
Business or the CIWM Assets or CIWM's right to carry on the CIWM
Business, other than changes in the ordinary course of business, none
of which has been materially adverse, or
23
(ii) any damage, destruction, loss or other event, including changes to any
laws or statutes applicable to CIWM or the CIWM Business (whether or
not covered by insurance) materially and adversely affecting CIWM, the
CIWM Business or the CIWM Assets;
(g) GMNC's issued and outstanding common share capital shall be reduced to
4,823,841 GMNC Common Shares by the return to treasury of 2,950,000
GMNC Common Shares and GMNC shall have received a release in form
satisfactory to CIWM from the persons returning such shares in that
regard; and
(h) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any.
Waiver by GMNC
7.2 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of GMNC and any such condition may be waived in whole or
in part by GMNC at or prior to Closing by delivering to CIWM a written waiver to
that effect signed by GMNC. In the event that the conditions precedent set out
in the preceding section are not satisfied on or before the Closing, GMNC shall
be released from all obligations under this Agreement.
Conditions Precedent in Favor of CIWM and the CIWM Shareholders
7.3 The obligation of CIWM and the CIWM Shareholders to carry out the
transactions contemplated hereby is subject to the fulfillment of each of the
following conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to CIWM hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by GMNC at or prior to the Closing will
have been complied with or performed;
(c) CIWM shall have completed its review and inspection of the books and
records of GMNC and its subsidiaries and shall be satisfied with same
in all material respects;
(d) GMNC will have delivered the Acquisition Shares to be issued pursuant
to the terms of the Merger to CIWM at the Closing and the Acquisition
Shares will be registered on the books of GMNC in the name of the
holder of CIWM Shares at the Effective Time;
(e) title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances
or other claims whatsoever;
(f) the Certificate of Merger shall be executed by the Acquirer in form
acceptable for filing with the Delaware Secretary of State;
(g) the filing of the Certificate of Designation for the Series A
Convertible Preferred Stock with the Nevada Secretary of State, in the
form attached hereto as Schedule "S";
(h) subject to Article 8 hereof, there will not have occurred
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(i) any material adverse change in the financial position or
condition of GMNC, its subsidiaries, their liabilities or the
GMNC Assets or any damage, loss or other change in circumstances
materially and adversely affecting GMNC, the GMNC Business or the
GMNC Assets or GMNC' right to carry on the GMNC Business, other
than changes in the ordinary course of business, none of which
has been materially adverse, or
(ii) any damage, destruction, loss or other event, including changes
to any laws or statutes applicable to GMNC or the GMNC Business
(whether or not covered by insurance) materially and adversely
affecting GMNC, its subsidiaries, the GMNC Business or the GMNC
Assets;
(h) GMNC' issued and outstanding common share capital shall be reduced to
4,823,841 GMNC Common Shares (prior to the conversion of outstanding
shares of Series A Preferred Stock, by the return to treasury of
2,950,000 GMNC Common Shares and GMNC shall have received a release in
form satisfactory to CIWM from the persons returning such shares in
that regard;
(i) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any; and
(j) the satisfaction of all liabilities of GMNC on or prior to the Closing
Date.
Waiver by CIWM and the CIWM Shareholders
7.4 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of CIWM and the CIWM Shareholders and any such condition
may be waived in whole or in part by CIWM or the CIWM Shareholders at or prior
to the Closing by delivering to GMNC a written waiver to that effect signed by
CIWM and the CIWM Shareholders. In the event that the conditions precedent set
out in the preceding section are not satisfied on or before the Closing CIWM and
the CIWM Shareholders shall be released from all obligations under this
Agreement.
Nature of Conditions Precedent
7.5 The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favor of the other party or parties set forth in this
Article.
Termination
7.6 Notwithstanding any provision herein to the contrary, if the Closing does
not occur on or before November 10, 2005, this Agreement will be at an end and
will have no further force or effect, unless otherwise agreed upon by the
parties in writing.
Confidentiality
7.7 Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
25
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from CIWM and GMNC and the
contents thereof confidential and not utilize nor reveal or release same,
provided, however, that GMNC will be required to issue news releases regarding
the execution and consummation of this Agreement and file a Current Report on
Form 8-K with the Securities and Exchange Commission respecting the proposed
Merger contemplated hereby together with such other documents as are required to
maintain the currency of GMNC' filings with the Securities and Exchange
Commission.
ARTICLE 8
RISK
Material Change in the Business of CIWM
8.1 If any material loss or damage to the CIWM Business occurs prior to Closing
and such loss or damage, in GMNC' reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, GMNC shall, within two (2) days
following any such loss or damage, by notice in writing to CIWM, at its option,
either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Merger and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the
proceeds of all insurance covering such loss or damage will, as a
condition precedent to GMNC' obligations to carry out the transactions
contemplated hereby, be vested in CIWM or otherwise adequately secured
to the satisfaction of GMNC on or before the Closing Date.
Material Change in the GMNC Business
8.2 If any material loss or damage to the GMNC Business occurs prior to Closing
and such loss or damage, in CIWM's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, CIWM shall, within two (2) days
following any such loss or damage, by notice in writing to GMNC, at its option,
either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Merger and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the
proceeds of all insurance covering such loss or damage will, as a
condition precedent to CIWM's obligations to carry out the
transactions contemplated hereby, be vested in GMNC or otherwise
adequately secured to the satisfaction of CIWM on or before the
Closing Date.
ARTICLE 9
CLOSING
Closing
9.1 The Merger and the other transactions contemplated by this Agreement will be
closed at the Place of Closing in accordance with the closing procedure set out
in this Article.
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Documents to be Delivered by CIWM
9.2 On or before the Closing, CIWM and the CIWM Shareholders will deliver or
cause to be delivered to GMNC:
(a) the original or certified copies of the charter documents of CIWM and
all corporate records documents and instruments of CIWM, the corporate
seal of CIWM and all books and accounts of CIWM;
(b) all reasonable consents or approvals required to be obtained by CIWM
for the purposes of completing the Merger and preserving and
maintaining the interests of CIWM under any and all CIWM Material
Contracts and in relation to CIWM Assets;
(c) certified copies of such resolutions of the shareholder and director
of CIWM as are required to be passed to authorize the execution,
delivery and implementation of this Agreement;
(d) an acknowledgement from CIWM and the CIWM Shareholders of the
satisfaction of the conditions precedent set forth in section 7.3
hereof;
(e) the Certificate of Merger, duly executed by CIWM;
(f) Opinion of counsel; and
(g) such other documents as GMNC may reasonably require to give effect to
the terms and intention of this Agreement.
Documents to be Delivered by GMNC
9.3 On or before the Closing, GMNC shall deliver or cause to be delivered to
CIWM and the CIWM Shareholders:
(a) share certificates representing the Acquisition Shares duly registered
in the names of the holders of shares of CIWM Common Stock;
(b) certified copies of such resolutions of the directors of GMNC as are
required to be passed to authorize the execution, delivery and
implementation of this Agreement;
(c) a certified copy of a resolution of the directors of GMNC dated as of
the Closing Date appointing the nominees of CIWM as officers of CIWM;
(d) an undated resolution of the directors of GMNC appointing the nominees
of the CIWM Shareholders listed below in Article 10 to the board of
directors of GMNC;
(e) undated resignations of Xxxxx Xxxxxx, Xxx Xxxxxx and Xxxxx Xxxxxxx as
directors of GMNC;
(f) undated resignations of Xxx Xxxxxx and Xxxxx Xxxxxxx as officers of
GMNC;
(g) an acknowledgement from GMNC of the satisfaction of the conditions
precedent set forth in section 7.1 hereof;
27
(h) Opinion of counsel;
(i) documentation evidencing the return to treasury of 2,950,000 GMNC
Common Shares and release in form satisfactory to CIWM from the
persons returning such shares;
(j) Waiver and release in favor of the Company executed by Xxxxx Xxxxxxx;
(k) Assumption of Liabilities Agreement executed by Xxxxx Xxxxxxx and
GMNC;
(l) the Certificate of Merger, duly executed by the Acquirer;
(m) a certified copy of the Certificate of Designation as filed with the
Nevada Secretary of State; and
(n) such other documents as CIWM may reasonably require to give effect to
the terms and intention of this Agreement.
ARTICLE 10
POST-CLOSING MATTERS
Forthwith after the Closing, GMNC, CIWM and the CIWM Shareholders agree to
use all their best efforts to:
(a) file the Certificate of Merger with Secretary of State of the State of
Delaware;
(b) issue a news release reporting the Closing;
(c) file with the Securities and Exchange Commission a report on Form 14f1
disclosing the change in control of GMNC and, 10 days after such
filing, date the resolutions appointing to the board of directors of
GMNC Xxxx X. Xxx, and forthwith date and accept the resignations of
Xxxxx Xxxxxx, Xxxxx Xxxxxxx and Xxx Xxxxxx as directors of GMNC;
(d) file a Form 8-K with the Securities and Exchange Commission within
four business days disclosing the terms of this Agreement and audited
financial statements of CIWM as well as pro forma financial
information of CIWM and GMNC as required by Regulation SB as
promulgated by the Securities and Exchange Commission;
(e) file reports on Forms 13D and 3 with the Securities and Exchange
Commission disclosing the acquisition of the Acquisition Shares by the
CIWM Shareholders, as necessary; and
(f) take such steps are required to change the name of GMNC to "China
Industrial Waste Management Inc." or such similar name as may be
acceptable to the board of directors of GMNC.
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ARTICLE 11
GENERAL PROVISIONS
Arbitration
11.1 The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by negotiation
in good faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in the City of New York, New York.
Notice
11.2 Any notice required or permitted to be given by any party will be deemed to
be given when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
telecopier. Any notice delivered by mail shall be deemed to have been received
on the fourth business day after and excluding the date of mailing, except in
the event of a disruption in regular postal service in which event such notice
shall be deemed to be delivered on the actual date of receipt. Any notice
delivered personally or by telecopier shall be deemed to have been received on
the actual date of delivery.
Addresses for Service
11.3 The address for service of notice of each of the parties hereto is as
follows:
(a) GMNC or the Acquirer:
Goldtech Mining Corporation
0-00 Xxxxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxx Xxxxxxx, CEO
Phone: (000) 000-0000
Telecopier: (780) 973 -6314
(b) CIWM or the CIWM Shareholders
China Industrial Waste Management Inc.
Xx. 0 Xxxxxx Xxxx Xxxx,
X.X.X. Xxxx, Xxxxxx Xxxx, X. R. China, 116600
Attn: Jinqing Dong, President
Phone: (000) 000-0000
Telecopier: (000) 000-0000
Change of Address
11.4 Any party may, by notice to the other parties change its address for notice
to some other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.
Further Assurances
11.5 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
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Time of the Essence
11.6 Time is expressly declared to be the essence of this Agreement.
Entire Agreement
11.7 The provisions contained herein constitute the entire agreement among CIWM,
the CIWM Shareholders, the Acquirer and GMNC respecting the subject matter
hereof and supersede all previous communications, representations and
agreements, whether verbal or written, among CIWM, the CIWM Shareholders, the
Acquirer and GMNC with respect to the subject matter hereof.
Enurement
11.8 This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
Assignment
11.9 This Agreement is not assignable without the prior written consent of the
parties hereto.
Counterparts
11.10 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
Applicable Law
11.11 This Agreement is subject to the laws of the State of New York.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
GOLDTECH MINING CORPORATION
By: /s/ XXXXX XXXXXXX
----------------------------- ------------------
Witness Xxxxxx Xxxxxxx,
Chief Executive Officer
Name
Address
DALIAN ACQUISITION CORP.
By: /s/ XXXXX XXXXXXX
----------------------------- -----------------
Witness Xxxxxx Xxxxxxx,
Chief Executive Officer
Name
Address
CHINA INDUSTRIAL WASTE MANAGEMENT INC.
By: /s/ JINQING DONG
----------------------------- ----------------------
Witness Jinqing Dong, President
Name
Address
/s/ JINQING DONG
----------------------------- ----------------
Witness JINQING DONG
Name
Address
31
/s/ XXXX X. XXX
----------------------------- ---------------
Witness AMERICAN UNION SECURITIES, INC.
-----------------------------
Name By: Xxxx X. Xxx, President
Address
/s/ XXXXXX XXXX
----------------------------- ----------------
Witness XXXXXX XXXX
Name
Address
/s/ XXXXXXX XXXX
----------------------------- -----------------
Witness WARNER TECHNOLOGY AND
INVESTMENT CORP.
Name By: XxxXxxx Xxxx, President
Address
/s/ XXX XX
----------------------------- ----------
Witness XXX XX
Name
Address
/s/ XXXXX XXX
----------------------------- --------------
Witness XXXXX XXX
Name
Address
/s/ DUANFENG ZHU
----------------------------- ----------------
Witness DUANFENG ZHU
Name
Address
/s/ XXX XXX
----------------------------- -----------
Witness XXX XXX
Name
Address
/s/ XXXX X. XXX
----------------------------- ---------------
Witness XXXX X. XXX
-----------------------------
Name
Address
/s/ TONGJIE XING
----------------------------- ----------------
Witness TONGJIE XING
Name
Address
