SHARE EXCHANGE AGREEMENT
AMONG
UNIVERSAL TRAVEL GROUP
SHENZHEN YU XXX XX AVIATION SERVICE COMPANY LIMITED
FOSHAN OVERSEAS INTERNATIONAL TRAVEL SERVICE CO., LTD.
AND
THE SHAREHOLDERS
OF
FOSHAN OVERSEAS INTERNATIONAL TRAVEL SERVICE CO., LTD.
LISTED ON SCHEDULE 1
DATED AS OF
September 20, 2007
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INDEX OF SCHEDULES AND EXHIBITS
Exhibits:
A. Certain Definitions
B. Form of Promissory Note
Schedules:
1. Shareholders of Foshan Overseas International Travel Service Co., Ltd.
2. Foshan Overseas International Travel Service Co., Ltd. Disclosure Schedule
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SHARE EXCHAGE AGREEMENT
This Share Exchange Agreement (the "Agreement") dated as of September 20, 2007,
is entered into by and among Universal Travel Group, a Nevada corporation
("UTVG"), Shenzhen Yu Xxx Xx Aviation Service Company Limited, an indirect
wholly own subsidiary of UTVG ("YZL"), Foshan Overseas International Travel
Service Co., Ltd., a Foshan Corporation in China ("FOI"), and the shareholders
of FOI listed on Schedule 1 to this Agreement (each, a "Shareholder" and,
collectively, the "Shareholders").
RECITALS
A. Each of the Shareholders owns the percentage of the outstanding shares of FOI
(the "Shares") set forth opposite his name on Schedule 1, which Shares
collectively constitute 100% of the outstanding shares of FOI.
B. YZL is an indirect wholly owned subsidiary of UTVG. YZL desires to purchase
from the Shareholders, and the Shareholders desire to sell to YZL the Shares in
exchange for shares of UTVG Common Stock, and a promissory note of UTVG in the
aggregate principal amount of $3,153,500, all on the terms and subject to the
conditions set forth in this Agreement (the "Exchange").
C. As a result of the Exchange, YZL will become the sole shareholder of FOI.
UTVG will indirectly own FOI.
D. Certain capitalized terms used in this Agreement are defined on Exhibit A.
AGREEMENT
In consideration of the agreements, provisions and covenants set forth below,
UTVG, YZL, the Shareholders and FOI, hereby agree as follows:
ARTICLE I.
EXCHANGE OF SHARES
1.1 AGREEMENT TO SELL.
Upon the terms and subject to all of the conditions contained herein, each of
the Shareholders hereby agrees to sell, assign, transfer and deliver to YZL, and
YZL hereby agrees to purchase and accept from each of the Shareholders, on the
Closing Date, the Shares.
1.2 PURCHASE PRICE.
As full consideration for the sale, assignment, transfer and delivery of the
Shares by the Shareholders to YZL, and upon the terms and subject to all of the
conditions contained herein, UTVG shall issue to the Shareholders an aggregate
of 1,122,986 shares of UTVG Common Stock (the "Acquisition Shares") and deliver
to the Shareholders a promissory note of UTVG in the aggregate principal amount
of $3,153,500 in the form of Exhibit B attached hereto (the "Cash Component").
The parties understand and acknowledge that such exchange is based upon a
valuation of FOI at US $6,500,000.
1.3 MECHANICS OF EXCHANGE.
(a) At the Closing, each Shareholder shall surrender the certificate or
certificates that immediately prior to the Closing represented the Shares (the
"Certificates") to the exchange agent designated by YZL, duly executed by such
Shareholder for transfer to YZL, in exchange for the Acquisition Shares and the
Cash Component.
(b) At the Closing YZL shall deliver, or cause to be delivered, to each
Shareholder a promissory note representing such portion of the Cash Component
due such Shareholder and promptly after the Closing shall cause to be delivered
to each Shareholder the portion of the Acquisition Shares due to such
Shareholder.
1.4 NO FRACTIONAL SHARES.
No fraction of a share of UTVG Common Stock shall be issued to either
Shareholder. In lieu of fractional shares, the Shareholders upon surrender of
their Certificates as set forth in Section 1.3 shall be paid an amount in cash,
without interest, rounded to the nearest cent, determined by multiplying the
fractional interest to which such Shareholder would otherwise be entitled by
$2.98, the UTVG stock price agreed to by all parties.
1.5 CLOSING.
The closing of the transactions contemplated by this Agreement (the "Closing")
shall take place in Shennan Middle Rd., Hualian Center Room 405, Shenzhen City,
PR of China, on or before October 1, 2007, (the "Closing Date"); provided,
however, that if all of the other conditions set forth in Articles VI and VII
hereof are not satisfied or waived at such date, unless this agreement has been
terminated under Section 9 hereof, the Closing Date shall be the business day
following the day on which all such conditions have been satisfied or waived, or
at such other date, time and place as UTVG, YZL, FOI, and the Shareholders shall
agree.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF FOI
Except as set forth in the Disclosure Schedule attached hereto provided by FOI
(the "FOI Disclosure Schedule"), the parts of which are numbered to correspond
to the section numbers of this Agreement, each of FOI and the Shareholders,
jointly and severally, represents and warrants to UTVG and YZL as follows:
2.1 ORGANIZATION AND QUALIFICATION.
FOI is duly incorporated, validly and in good standing existing under the laws
of China, has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and as contemplated to be conducted, to own,
hold and operate its properties and assets as now owned, held and operated by
it, to enter into this Agreement, to carry out the provisions hereof, except for
such failures to be in good standing or to have such governmental licenses,
authorizations, consents and approvals as will not, in the aggregate, either (i)
have a Material Adverse Effect on FOI, or (ii) impair the ability of FOI to
perform its material obligations under this Agreement. FOI duly qualified,
licensed or domesticated as a foreign corporation in good standing in each
jurisdiction wherein the nature of its activities or its properties owned or
leased requires such qualification, licensing or domestication, except where the
failure to be so qualified, licensed or domesticated will not have a Material
Adverse Effect on FOI. Set forth on Part 2.1 of the FOI Disclosure Schedule is a
list of those jurisdictions in which FOI presently conducts its business, owns,
holds and operates its properties and assets.
2.2 SUBSIDIARIES.
FOI does not own directly or indirectly, any equity or other ownership interest
in any corporation, partnership, joint venture or other entity or enterprise.
FOI does not have any direct or indirect interests of stock ownership or
otherwise in any corporation, partnership, joint venture, firm, association or
business enterprise, and is not party to any agreement to acquire such an
interest.
2.3 ARTICLES OF INCORPORATION AND BYLAWS.
The copies of the Articles of Incorporation and bylaws of FOI (collectively, the
"Organizational Documents") that have been delivered to UTVG and YZL prior to
the execution of this Agreement are true and complete and have not been amended
or repealed. FOI is not in violation or breach of any of the provisions of the
Organizational Documents, except for such violations or breaches which, in the
aggregate, will not have a Material Adverse Effect on FOI.
2.4 AUTHORIZATION AND VALIDITY OF THIS AGREEMENT.
This Agreement and each of the Transaction Agreements constitute the legal,
valid and binding obligation of FOI and each of the Shareholders, enforceable
against each of them in accordance with its terms, except as such enforcement is
limited by general equitable principles, or by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors rights generally. Each of
the Shareholders and FOI has all requisite legal capacity to execute and deliver
this Agreement and the Transaction Agreements to which he, she or it is a party,
and to perform its, his or her obligations hereunder and thereunder. The
execution and delivery by FOI and each Shareholder of this Agreement and the
Transaction Agreements (to the extent either is a party thereto), and the
consummation of the transactions contemplated herein and therein (the
"Transactions") have been authorized by all necessary corporate or other action
on the part of FOI and each of the Shareholders. This Agreement and the
Transaction Agreements have been duly executed and delivered by each of the
Shareholders and FOI.
2.5 NO VIOLATION.
Neither the execution nor delivery of this Agreement or the Transaction
Agreements, nor the consummation or performance of any of the Transactions by
FOI or the Shareholders will directly or indirectly:
(i) violate or conflict with any provision of the Organizational Documents of
FOI; (B) result in (with or without notice or lapse of time) a violation or
breach of, or conflict with or constitute a default under or result in the
termination or in a right of termination or cancellation of, or accelerate the
performance required by, or require notice under, any agreement, promissory
note, lease, instrument or arrangement to which FOI or any of its assets are
bound or result in the creation of any Liens upon FOI or any of its assets; (C)
violate any order, writ, judgment, injunction, ruling, award or decree of any
Governmental Body; ("Governmental Body"); (D) violate any statute, law or
regulation of any jurisdiction that relates to the Shareholders, FOI or any of
the assets of FOI; or (E) result in the cancellation, modification, revocation
or suspension of any permits, licenses, registrations, consents, approvals,
authorizations or certificates issued or granted by any Governmental Body which
are held by or granted to the Shareholders or FOI, or which are necessary for
the conduct of FOI's business; or
(ii) to the knowledge of FOI or any of the Shareholders, cause FOI to become
subject to, or to become liable for the payment of, any Tax (as hereinafter
defined) or cause any of the assets owned by FOI to be reassessed or revalued by
any taxing authority or other Governmental Body.
None of FOI or the Shareholders is or will be required to give any notice to or
obtain any approval, consent, ratification, waiver or other authorization (a
"Consent") from any person or entity (including, without limitation, any
Governmental Body) in connection with (i) the execution and delivery of this
Agreement or any of the Transaction Agreements, or (ii) the consummation or
performance of any of the Transactions.
2.6 CAPITALIZATION AND RELATED MATTERS.
(a) Capitalization. The registered capital amount of FOI is USD$489,269, which
equals 100% ownership percentage of FOI. Except as set forth in the preceding
sentence, no other class of capital stock or other security of FOI is
authorized, issued, reserved for issuance or outstanding. The Shareholders, as
of the Closing Date, are the lawful, record and beneficial owners of the FOI
Ownership Stock set forth opposite each Seller's name on Schedule 1 attached
hereto. Zhiyong Su and Sida He, as of the Closing Date, are the lawful, record
and beneficial owners of the total ownership interest of FOI. The Shareholders
have, as of the date hereof and as of the Closing Date, valid and marketable
title to their respective ownership interest of FOI, free and clear of all Liens
(including, without limitation, any claims of spouses under applicable community
property laws) and are the lawful, record and beneficial owners of all of the
outstanding shares of capital stock of FOI. Except as is issued to and held by
the Shareholders or FOI, no other class of capital stock or other security of
FOI, as applicable, is authorized, issued, reserved for issuance or outstanding.
At the Closing, UTVG will be vested with good and marketable title to the
ownership of all of the outstanding shares of capital stock of FOI, free and
clear of all Liens (including, without limitation, any claims of spouses under
applicable community property laws). No legend or other reference to any
purported Lien appears upon any certificate representing the Shares. Each of the
outstanding shares of FOI has been duly authorized and validly issued and is
fully paid and nonassessable. None of the outstanding capital or other
securities of FOI was issued, redeemed or repurchased in violation of the
Securities Act of 1933, as amended (the "Securities Act"), or any other
securities or "blue sky" laws.
(b) No Redemption Requirements. There are no authorized or outstanding options,
warrants, equity securities, calls, rights, commitments or agreements of any
character by which FOI or any of the Shareholders is obligated to issue, deliver
or sell, or cause to be issued, delivered or sold, any shares of capital stock
or other securities of FOI. There are no outstanding contractual obligations
(contingent or otherwise) of FOI to retire, repurchase, redeem or otherwise
acquire any outstanding shares of capital stock of, or other ownership interests
in, FOI or to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity.
2.7 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS.
Except as would not have a Material Adverse Effect, the business and operations
of FOI have been and are being conducted in accordance with all applicable
foreign, federal, provincial and local laws, rules and regulations and all
applicable orders, injunctions, decrees, writs, judgments, determinations and
awards of all courts and governmental agencies and instrumentalities. There are
no permits, bonuses, registrations, consents, approvals, authorizations,
certificates, or any waiver of the foregoing, which are required to be issued or
granted by a Governmental Body for the conduct of the business of FOI as
presently conducted (the "Business") or the ownership of the assets of FOI.
Except as would not have a Material Adverse Effect, FOI is not, and has not
received notice alleging that it is, in violation of, or (with or without notice
or lapse of time or both) in default under, or in breach of, any term or
provision of the Organizational Documents or of any indenture, loan or credit
agreement, note, deed of trust, mortgage, security agreement or other material
agreement, lease, license or other instrument, commitment, obligation or
arrangement to which FOI is a party or by which any of FOI's properties, assets
or rights are bound or affected. To the knowledge of FOI, no other party to any
material contract, agreement, lease, license, commitment, instrument or other
obligation to which FOI is a party is (with or without notice or lapse of time
or both) in default thereunder or in breach of any term thereof. FOI is not
subject to any obligation or restriction of any kind or character, nor is there,
to the knowledge of FOI, any event or circumstance relating to FOI that
materially and adversely affects in any way its business, properties, assets or
prospects or that prohibits FOI from entering into this Agreement and the
Transaction Agreements or would prevent or make burdensome its performance of or
compliance with all or any part of this Agreement, the Transaction Agreements or
the consummation of the Transactions contemplated hereby or thereby.
2.8 CERTAIN PROCEEDINGS.
There is no outstanding or pending proceeding that has been commenced against or
involving FOI or any of its assets and, to the knowledge of FOI and the
Shareholders, no matters of the foregoing nature are contemplated or threatened.
None of FOI or the Shareholders have been charged with, and none are threatened
with or subject to, any investigation with respect to, any allegation concerning
any violation of any provision of any federal, provincial, local or foreign law,
regulation, ordinance, order or administrative ruling, and neither FOI or either
of the Shareholders is in default with respect to any order, writ, injunction or
decree of any Governmental Body.
2.9 NO BROKERS OR FINDERS.
None of FOI, the Shareholders, or any officer, director, independent contractor,
consultant, agent or employee of FOI has agreed to pay, or has taken any action
that will result in any person or entity becoming obligated to pay or entitled
to receive, any investment banking, brokerage, finder's or similar fee or
commission in connection with this Agreement or the Transactions. FOI and the
Shareholders shall jointly and severally indemnify and hold UTVG harmless
against any liability or expense arising out of, or in connection with, any such
claim.
2.10 TITLE TO AND CONDITION OF PROPERTIES.
FOI has good, valid and marketable title to all of its properties and assets
(whether real, personal or mixed, and whether tangible or intangible) reflected
as owned in its books and records, free and clear of all Liens. FOI owns or
holds under valid leases or other rights to use all real property, plants,
machinery, equipment and all assets necessary for the conduct of its business as
presently conducted, except where the failure to own or hold such property,
plants, machinery, equipment and assets would not have a Material Adverse Effect
on FOI. No Person other than FOI owns or has any right to the use or possession
of the assets used in FOI's business. The material buildings, plants, machinery
and equipment necessary for the conduct of the business of FOI as presently
conducted are structurally sound, are in good operating condition and repair and
are adequate for the uses to which they are being put or would be put in the
Ordinary Course of Business, in each case, taken as a whole, and none of such
buildings, plants, machinery or equipment is in need of maintenance or repairs,
except for ordinary, routine maintenance and repairs that are not material in
nature or cost.
2.11 ABSENCE OF UNDISCLOSED LIABILITIES.
FOI has no debt, obligation or liability (whether accrued, absolute, contingent,
liquidated or otherwise, whether asserted or unasserted, whether due or to
become due, whether or not known to FOI) arising out of any transaction entered
into prior to the Closing Date or any act or omission prior to the Closing Date
which individually or taken together would constitute a Material Adverse Effect
on FOI and have no debt, obligation or liability to each other or any of the
Shareholders or their affiliates, except to the extent specifically set forth on
or reserved against on the balance sheet of FOI dated June 30, 2007, a copy of
which has been provided to UTVG (the "Balance Sheet").
The financial statements are consistent with the books and records of FOI and
fairly present in all material respects the financial condition, assets and
liabilities of FOI, as applicable, taken as a whole, as of the dates and periods
indicated, and were prepared in accordance with GAAP (except as otherwise
indicated therein or in the notes thereto).
2.12 CHANGES.
FOI has not, since the date of the Balance Sheet:
(a) Ordinary Course of Business. Conducted its business or entered into any
transaction other than in the Ordinary Course of Business, except for this
Agreement.
(b) Adverse Changes. Suffered or experienced any change in, or affecting, its
condition (financial or otherwise), properties, assets, liabilities, business,
operations, results of operations or prospects which would have a Material
Adverse Effect;
(c) Loans. Made any loans or advances to any Person other than travel advances
and reimbursement of expenses made to employees, officers and directors in the
Ordinary Course of Business;
(d) Compensation and Bonuses. Made any payments of any bonuses or compensation
other than regular salary payments, or increase in the salaries, or payment on
any of its debts in the Ordinary Course of Business, to any of its shareholders,
directors, officers, employees, independent contractors or consultants or
entered into any employment, severance, or similar contract with any director,
officer, or employee, independent contractor or consultant; adopted, or
increased the payments to or benefits under, any profit sharing, bonus, deferred
compensation, savings, insurance, pension, retirement, or other employee benefit
plan for or with any of its employees;
(e) Liens. Created or permitted to exist any Lien on any of its properties or
assets other than Permitted Liens;
(f) Capital Stock. Issued, sold, disposed of or encumbered, or authorized the
issuance, sale, disposition or encumbrance of, or granted or issued any option
to acquire any shares of its capital stock or any other of its securities or any
Equity Security, or altered the term of any of its outstanding securities or
made any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise; changed its authorized or issued capital stock; granted any stock
option or right to purchase shares of its capital stock; issued any security
convertible into any of its capital stock; granted any registration rights with
respect to shares of its capital stock; purchased, redeemed, retired, or
otherwise acquired any shares of its capital stock; declared or paid any
dividend or other distribution or payment in respect of shares of capital stock
of any other entity;
(g) Dividends. Declared, set aside, made or paid any dividend or other
distribution to any of its shareholders;
(h) Material Contracts. Terminated or modified any of its Material Contracts
except for termination upon expiration in accordance with the terms of such
agreements, a description of which is included in the FOI's Disclosure Schedule;
(i) Claims. Released, waived or cancelled any claims or rights relating to or
affecting FOI in excess of $10,000 in the aggregate or instituted or settled any
Proceeding involving in excess of $10,000 in the aggregate;
(j) Discharged Liabilities. Paid, discharged, cancelled, waived or satisfied any
claim, obligation or liability in excess of $10,000 in the aggregate, except for
liabilities incurred prior to the date of this Agreement in the Ordinary Course
of Business;
(k) Indebtedness. Created, incurred, assumed or otherwise become liable for any
Indebtedness or commit to any endeavor involving a commitment in excess of
$10,000 in the aggregate, other than contractual obligations incurred in the
Ordinary Course of Business;
(l) Guarantees. Guaranteed or endorsed in a material amount any obligation or
net worth of any Person;
(m) Acquisitions. Acquired the capital stock or other securities or any
ownership interest in, or substantially all of the assets of, any other Person;
(n) Accounting. Changed its method of accounting or the accounting principles or
practices utilized in the preparation of its financial statements, other than as
required by GAAP;
(o) Agreements. Entered into any agreement, or otherwise obligated itself, to do
any of the foregoing.
2.13 MATERIAL CONTRACTS.
FOI has delivered to UTVG, prior to the date of this Agreement, true, correct
and complete copies of each of its Material Contracts. The Material Contracts of
FOI are valid and binding agreements of FOI, as applicable, and are in full
force and effect and are enforceable in accordance with their terms. Except as
would not have a Material Adverse Effect on FOI, FOI is not in breach or default
of any of its Material Contracts and, to the knowledge of FOI, no other party to
any of its Material Contracts is in breach or default thereof. Except as would
not have a Material Adverse Effect on FOI, no event has occurred or circumstance
has existed that (with or without notice or lapse of time) would (a) contravene,
conflict with or result in a violation or breach of, or become a default or
event of default under, any provision of any of its Material Contracts or (b)
permit FOI or any other Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify any of its Material Contracts. FOI has not received any
notice and neither FOI nor the Shareholders has any knowledge of any pending or
threatened cancellation, revocation or termination of any of its Material
Contracts, and there are no renegotiations of, or attempts to renegotiate any of
the Material Contracts.
2.14 TAX RETURNS AND AUDITS.
(a) Tax Returns. (a) All material Tax Returns required to be filed by or on
behalf of FOI have been timely filed and all such Tax Returns were (at the time
they were filed) and are true, correct and complete in all material respects;
(b) all Taxes of FOI required to have been paid (whether or not reflected on any
Tax Return) have been fully and timely paid, except those Taxes which are
presently being contested in good faith or for which an adequate reserve for the
payment of such Taxes has been established on FOI Balance Sheet; (c) no waivers
of statutes of limitation have been given or requested with respect to FOI in
connection with any Tax Returns covering FOI or with respect to any Taxes
payable by it; (d) no Governmental Body in a jurisdiction where FOI does not
file Tax Returns has made a claim, assertion or threat to FOI that FOI is or may
be subject to taxation by such jurisdiction; (e) FOI has duly and timely
collected or withheld, paid over and reported to the appropriate Governmental
Body all amounts required to be so collected or withheld for all periods under
all applicable laws; (f) there are no Liens with respect to Taxes on the
property or assets of FOI other than Permitted Liens; (g) there are no Tax
rulings, requests for rulings, or closing agreements relating to FOI for any
period (or portion of a period) that would affect any period after the date
hereof; and (h) any adjustment of Taxes of FOI made by a Governmental Body in
any examination that FOI is required to report to the appropriate provincial,
local or foreign taxing authorities has been reported, and any additional Taxes
due with respect thereto have been paid. No state of fact exists or has existed
which would constitute ground for the assessment of any tax liability by any
Governmental Body.
(b) No Adjustments, Changes. Neither FOI nor any other Person on behalf of FOI
(a) has executed or entered into a closing agreement pursuant to any tax law
applicable to the activities of FOI or any predecessor thereof or any similar
provision of provincial, local or foreign law; or (b) has agreed to or is
required to make any adjustments pursuant to Section 481(a) of the Code or any
similar provision of provincial, local or foreign law.
(c) No Disputes. There is no pending audit, examination, investigation, dispute,
proceeding or claim with respect to any Taxes of or Tax Return filed or required
to be filed by FOI, nor is any such claim or dispute pending or contemplated.
FOI has made available to UTVG true, correct and complete copies of all Tax
Returns, examination reports and statements of deficiencies assessed or asserted
against or agreed to by FOI since January 1, 2004, and any and all
correspondence with respect to the foregoing. FOI does not have any outstanding
closing agreement, ruling request, requests for consent to change a method of
accounting, subpoena or request for information to or from a Governmental Body
in connection with any Tax matter.
(d) No Tax Allocation, Sharing. FOI is not a party to any Tax allocation or
sharing agreement. Other than with respect to the Tax Group of which FOI is the
common parent, FOI (a) has not been a member of a Tax Group filing a
consolidated income Tax Return under Section 1501 of the Code (or any similar
provision of provincial, local or foreign law), and (b) does not have any
liability for Taxes for any Person under Treasury Regulations Section 1.1502-6
(or any similar provision of provincial, local or foreign law) as a transferee
or successor, by contract or otherwise.
2.15 MATERIAL ASSETS.
The financial statements of FOI reflect the material properties and assets (real
and personal) owned or leased by FOI.
2.16 INSURANCE COVERAGE.
FOI has made available to UTVG, prior to the date of this Agreement, true,
correct and complete copies of all insurance and general liability policies
maintained by FOI on its properties and assets, and all claims made under any
such current or prior insurance policies. All of such policies (a) taken
together, provide adequate insurance coverage for the properties, assets and
operations of FOI for all risks normally insured against by a Person carrying on
the same business as FOI, and (b) are sufficient for compliance with all
applicable Laws and Material Contracts of FOI. All of such policies are valid,
outstanding and in full force and effect and, by their express terms, will
continue in full force and effect following the consummation of the transactions
contemplated by this Agreement. Except as set forth on Schedule 2.16, FOI has
not received and has no knowledge of (a) any refusal of coverage or any written
notice that a defense will be afforded with reservation of rights, or (b) any
notice of cancellation or any other indication in writing or otherwise that any
insurance policy is no longer in full force or effect or will not be renewed or
that the issuer of any policy is not willing or able to perform its obligations
thereunder. All premiums due on such insurance policies on or prior to the date
hereof have been paid. There are no, and FOI and the Shareholders have no
knowledge of any, circumstances or facts which, with or without notice of lapse
of time or both would lead to any: (i) pending or threatened claims with respect
to FOI or their properties or assets under any such insurance policies; (ii)
claims as to which the insurers have notified FOI that they intend to deny
liability; and (iii) existing defaults on the part of FOI under any such
insurance policies.
2.17 LITIGATION; ORDERS.
There is no Proceeding (whether federal, provincial, local or foreign) pending
or, to the knowledge of FOI, threatened or appealable against or affecting FOI
or any of its properties, assets, business or employees. To the knowledge of
FOI, there is no fact that might result in or form the basis for any such
Proceeding. FOI is not subject to any Orders and have not received any written
opinion or memorandum or legal advice from their legal counsel to the effect
that FOI is exposed, from a legal standpoint, to any liability which would be
material to its business. FOI is not engaged in any legal action to recover
monies due it or for damages sustained by any of them.
2.18 LICENSES.
Except as would not have a Material Adverse Effect on FOI, FOI possesses from
the appropriate Governmental Body all licenses, permits, authorizations,
approvals, franchises and rights that are necessary for it to engage in its
business as currently conducted and to permit it to own and use its properties
and assets in the manner in which it currently owns and uses such properties and
assets (collectively, "Permits"). Except as would not have a Material Adverse
Effect, FOI has not received any written notice from any Governmental Body or
other Person that there is lacking any license, permit, authorization, approval,
franchise or right necessary for FOI to engage in its business as currently
conducted and to permit FOI to own and use its properties and assets in the
manner in which it currently owns and uses such properties and assets. Except as
would not have a Material Adverse Effect, the Permits are valid and in full
force and effect. Except as would not have a Material Adverse Effect, no event
has occurred or circumstance exists that may (with or without notice or lapse of
time): (a) constitute or result, directly or indirectly, in a violation of or a
failure to comply with any Permit; or (b) result, directly or indirectly, in the
revocation, withdrawal, suspension, cancellation or termination of, or any
modification to, any Permit. Neither FOI nor the Shareholders has received any
written notice from any Governmental Body or any other Person regarding: (a) any
actual, alleged, possible or potential contravention of any Permit; or (b) any
actual, proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to, any Permit. All applications
required to have been filed for the renewal of such Permits have been duly filed
on a timely basis with the appropriate Persons, and all other filings required
to have been made with respect to such Permits have been duly made on a timely
basis with the appropriate Persons. All Permits are renewable by their terms or
in the Ordinary Course of Business without the need to comply with any special
qualification procedures or to pay any amounts other than routine fees or
similar charges, all of which have, to the extent due, been duly paid.
2.19 INTERESTED PARTY TRANSACTIONS.
No officer, director or shareholder of FOI or any Affiliate, Related Person or
"associate" (as such term is defined in Rule 405 of the SEC under the Securities
Act) of any such Person, either directly or indirectly, (1) has an interest in
any Person which (a) furnishes or sells services or products which are furnished
or sold or are proposed to be furnished or sold by FOI, or (b) purchases from or
sells or furnishes to, or proposes to purchase from, sell to or furnish FOI any
goods or services; (2) has a beneficial interest in any contract or agreement to
which FOI is a party or by which it may be bound or affected; or (3) is a party
to any material agreements, contracts or commitments in effect as of the date
hereof with FOI. "Related Person" means: (i) with respect to a particular
individual, the individual's immediate family which shall include the
individual's spouse, parents, children, siblings, mothers and fathers-in-law,
sons and daughters-in-law, and brothers and sisters-in-law; and (ii) with
respect to a specified individual or entity, any entity or individual that,
directly or indirectly, controls, is controlled by, or is under common control
with such specified entity or individual.
2.20 GOVERNMENTAL INQUIRIES.
FOI has made available to UTVG a copy of each material written inspection
report, questionnaire, inquiry, demand or request for information received by
FOI from (and the response of FOI thereto), and each material written statement,
report or other document filed by FOI with, any Governmental Body since January
1, 2002.
2.21 BANK ACCOUNTS AND SAFE DEPOSIT BOXES.
Part 2.21 of the FOI Disclosure Schedule discloses the title and number of each
bank or other deposit or financial account, and each lock box and safety deposit
box used by FOI, the financial institution at which that account or box is
maintained and the names of the persons authorized to draw against the account
or otherwise have access to the account or box, as the case may be.
2.22 INTELLECTUAL PROPERTY.
Any Intellectual Property FOI uses in its business as presently conducted is
owned by FOI or properly licensed.
2.23 STOCK OPTION PLANS; EMPLOYEE BENEFITS.
(a) FOI does not have any stock option or similar plan requiring or providing
for the grant by FOI of stock options to directors, officers or employees.
(b) Except as set forth on Part 2.23 of the FOI Disclosure Schedule, FOI does
not have any employee benefit plans or arrangements covering their present and
former employees or providing benefits to such persons in respect of services
provided to FOI. FOI has no commitment, whether formal or informal and whether
legally binding or not, to create any additional plan, arrangement or practice
similar to the Approved Plans.
(c) The consummation of the transactions contemplated hereby will not result in
(i) any payment (including, without limitation, severance, unemployment
compensation or bonus payments) becoming due from FOI or due to any Person, (ii)
any increase in the amount of compensation or benefits payable to any Person or
(iii) any acceleration of the vesting or timing of payment of any compensation,
award or determination of options, warrants, rights, severance payments or other
contingent obligations of any nature whatsoever of FOI in favor of any Person.
No agreement, arrangement or other contract of FOI provides benefits or payments
contingent upon, triggered by, or increased as a result of a change in the
ownership or effective control of FOI.
(d) FOI is not a party to or bound by any written or oral agreement or
understanding to employ, subsequent to the Closing, any of its respective
present or former directors, officers, independent contractors, consultants,
agents or employees.
2.24 EMPLOYEE MATTERS.
(a) No former or current employee of FOI is a party to, or is otherwise bound
by, any agreement or arrangement (including, without limitation, any
confidentiality, non-competition or proprietary rights agreement) that in any
way adversely affected, affects, or will affect (i) the performance of his, her
or its duties to FOI, or (ii) the ability of FOI to conduct its business.
(b) None of FOI's employees, directors, officers, consultants, independent
contractors, representatives or agents has a contract of employment or
engagement that cannot be terminated by less than three months' notice and the
payment of less than three months' severance.
(c) FOI is not required or obligated to pay, and since January 1, 2002, has not
paid any moneys other than in respect of remuneration, pension or other benefits
pursuant to plans described in Part 2.23 of the FOI Disclosure Schedule, to or
for the benefit of, any director, officer, employee, consultant, independent
contractor, representative or agent of FOI.
(d) FOI is in compliance with all applicable laws respecting employment and
employment practices, terms and conditions or employment and wages and hours,
and is not engaged in any unfair labor practice. There is no labor strike,
dispute, shutdown or stoppage actually pending or, to the knowledge of FOI or
the Shareholders, threatened against or affecting FOI.
2.25 ENVIRONMENTAL AND SAFETY MATTERS.
Except as would not have a Material Adverse Effect on FOI:
(a) FOI has at all time been and is in compliance with all Environmental Laws
and Orders applicable to FOI.
(b) There are no Proceedings pending or, to the knowledge of FOI or the
Shareholders, threatened against FOI alleging the violation of any Environmental
Law or Environmental Permit applicable to FOI or alleging that FOI is a
potentially responsible party for any environmental site contamination. None of
FOI or the Shareholders are aware of, or has ever received notice of, any past,
present or future events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or prevent continued
compliance, or which may give rise to any common law or legal liability, or
otherwise form the basis of any claim, action, suit, proceeding, hearing or
investigation, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling, or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, or hazardous or toxic material or waste.
(c) Neither this Agreement nor the consummation of the transactions contemplated
by this Agreement shall impose any obligations to notify or obtain the consent
of any Governmental Body or third Persons under any Environmental Laws
applicable to FOI.
2.26 MATERIAL CUSTOMERS.
Since January 1, 2002, none of the Material Customers (as hereinafter defined)
of FOI has notified any of FOI or the Shareholders of their intent to terminate
their business with FOI because of any dissatisfaction on the part of any such
person or entity. The transaction contemplated by this Agreement has not caused
any of the Material Customers of FOI to terminate or provide notice of their
intent or threaten to terminate their business with FOI or to notify FOI or the
Shareholders of their intent not to continue to do such business with FOI after
the Closing. As used herein, "Material Customers" means those customers from
whom FOI derives annual revenues in excess of RMB 100,000.
2.27 INVENTORIES.
All inventories of FOI are of good, usable and merchantable quality in all
material respects, and, except as set forth in the FOI Disclosure Schedule, do
not include a material amount of obsolete or discontinued items. Except as set
forth in the FOI Disclosure Schedule, (a) all such inventories are of such
quality as to meet in all material respects the quality control standards of
FOI, (b) all such inventories are recorded on the books at the lower of cost or
market value determined in accordance with GAAP, and (c) no write-down in
inventory has been made or should have been made pursuant to GAAP during the
past two years.
2.28 MONEY LAUNDERING LAWS.
The operations of FOI are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the money
laundering statutes of all U.S. and non-U.S. jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any Governmental Body
(collectively, the "Money Laundering Laws") and no Proceeding involving FOI with
respect to the Money Laundering Laws is pending or, to the knowledge of FOI,
threatened.
2.29 DISCLOSURE.
(a) Any information set forth in this Agreement, the FOI Disclosure Schedule, or
the Transaction Agreements shall be true, correct and complete in all material
respects as of the date hereof and as of the Closing Date.
(b) No statement, representation or warranty of FOI or the Shareholders in this
Agreement (taken with the Schedules) or the Transaction Agreements or any
exhibits or schedules thereto contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements herein or
therein, taken as a whole, in light of the circumstances in which they were
made, not misleading.
(c) Except as set forth in the FOI Disclosure Schedule, the Shareholders and FOI
have no knowledge of any fact that has specific application to FOI (other than
general economic or industry conditions) and that adversely affects the assets
or the business, prospects, financial condition, or results of operations of
FOI.
(d) In the event of any inconsistency between the statements in the body of this
Agreement and those in the Schedules (other than an exception expressly set
forth as such in the Schedules with respect to a specifically identified
representation or warranty), the statements in the Schedules shall control.
(e) The books of account, minute books and stock record books of FOI, all of
which have been made available to UTVG, are complete and accurate and have been
maintained in accordance with sound business practices. Without limiting the
generality of the foregoing, the minute books of FOI contain complete and
accurate records of all meetings held, and corporate action taken, by the
shareholders, the boards of directors, and committees of the boards of directors
of FOI, as applicable, and no meeting of any such shareholders, board of
directors, or committee has been held for which minutes have not been prepared
and are not contained in such minute books.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF UTVG
UTVG hereby represents and warrants to the Shareholders as of the date hereof:
3.1 ORGANIZATION; GOOD STANDING.
UTVG is duly incorporated, validly existing and in good standing existing under
the laws of Nevada, has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and as contemplated to be conducted, to own,
hold and operate its properties and assets as now owned, held and operated by
it, to enter into this Agreement and to carry out the provisions hereof except
where the failure to be in good standing or to have such governmental licenses,
authorizations, consents and approvals will not, in the aggregate, either (i)
have a Material Adverse Effect on the business, assets or financial condition of
UTVG, or (ii) impair the ability of UTVG to perform its material obligations
under this Agreement. UTVG is duly qualified, licensed or domesticated as a
foreign corporation in good standing in each jurisdiction wherein the nature of
its activities or its properties owned or leased requires such qualification,
licensing or domestication, except where the failure to be so qualified,
licensed or domesticated will not have a Material Adverse Effect on UTVG.
3.2 UTVG COMMON STOCK.
As of June 1, 2007, there were 34,934,285 shares of UTVG's common stock issued
and outstanding. The Acquisition Shares, when issued in connection with this
Agreement and the other Transactional Agreements, will be duly authorized,
validly issued, fully paid and nonassessable.
3.3 AUTHORITY; BINDING NATURE OF AGREEMENTS.
(a) The execution, delivery and performance of this Agreement, the Transactional
Agreements, and all other agreements and instruments contemplated to be executed
and delivered by UTVG in connection herewith have been duly authorized by all
necessary corporate action on the part of UTVG and its board of directors.
(b) This Agreement, the Transactional Agreements, and all other agreements and
instruments contemplated to be executed and delivered by UTVG constitute the
legal, valid and binding obligation of UTVG, enforceable against UTVG in
accordance with their terms, except to the extent that enforceability may be
limited by applicable bankruptcy, Exchange, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
principles of equity regardless of whether such enforceability is considered in
a proceeding in law or equity.
(c) There is no pending Proceeding, and, to UTVG's knowledge, no Person has
threatened to commence any Proceeding that challenges, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
the Exchange or UTVG's ability to comply with or perform its obligations and
covenants under the Transactional Agreements, and, to the knowledge of UTVG, no
event has occurred, and no claim, dispute or other condition or circumstance
exists, that might directly or indirectly give rise to or serve as a basis for
the commencement of any such Proceeding.
3.4 NON-CONTRAVENTION; CONSENTS.
The execution and delivery of this Agreement and the other Transactional
Agreements, and the consummation of the Exchange, by UTVG will not, directly or
indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a material violation of (i) UTVG's
Certificate of Incorporation or Bylaws, or (ii) any resolution adopted by UTVG
Board or any committee thereof or the stockholders of UTVG;
(b) to the knowledge of UTVG, contravene, conflict with or result in a material
violation of, or give any Governmental Body the right to challenge the Exchange
or to exercise any remedy or obtain any relief under, any legal requirement or
any Order to which UTVG or any material assets owned or used by it are subject;
(c) to the knowledge of UTVG, cause any material assets owned or used by UTVG to
be reassessed or revalued by any taxing authority or other Governmental Body;
(d) to the knowledge of UTVG, contravene, conflict with or result in a material
violation of any of the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by UTVG or that otherwise relates to
UTVG's business or to any of the material assets owned or used by UTVG, where
such contraventions, conflict, violation, revocation, withdrawal, suspension,
cancellation, termination or modification would have a Material Adverse Effect
on UTVG;
(e) contravene, conflict with or result in a material violation or material
breach of, or material default under, any Contract to which UTVG is a party;
(f) give any Person the right to any payment by UTVG or give rise to any
acceleration or change in the award, grant, vesting or determination of options,
warrants, rights, severance payments or other contingent obligations of any
nature whatsoever of UTVG in favor of any Person, in any such case as a result
of the Exchange; or
(g) result in the imposition or creation of any material Lien upon or with
respect to any material asset owned or used by UTVG.
Except for Consents, filings or notices required under the state and federal
securities laws or any other laws or regulations or as otherwise contemplated in
this Agreement and the other Transactional Agreements, UTVG will not be required
to make any filing with or give any notice to, or obtain any Consent from, any
Person in connection with the execution and delivery of this Agreement and the
other Transactional Agreements or the consummation or performance of the
Exchange.
3.5 FINDERS AND BROKERS.
(a) Neither UTVG nor any Person acting on behalf of UTVG has engaged any finder,
broker, intermediary or any similar Person in connection with the Exchange.
(b) UTVG has not entered into a contract or other agreement that provides that a
fee shall be paid to any Person or Entity if the Exchange is consummated.
3.6 REPORTS AND FINANCIAL STATEMENTS; ABSENCE OF CERTAIN CHANGES.
(a) UTVG has filed all reports required to be filed with the SEC pursuant to the
Exchange Act since September 30, 2006 (all such reports, including those to be
filed prior to the Closing Date and all registration statements and prospectuses
filed by UTVG with the SEC, are collectively referred to as the "UTVG SEC
Reports"). All of the UTVG SEC Reports, as of their respective dates of filing
(or if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing): (i) complied in all material respects as to
form with the applicable requirements of the Securities Act or Exchange Act and
the rules and regulations thereunder, as the case may be, and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The audited financial statements of UTVG included in the UTVG SEC
Reports comply in all material respects with the published rules and regulations
of the SEC with respect thereto, and such audited financial statements (i) were
prepared from the books and records of UTVG, (ii) were prepared in accordance
with GAAP applied on a consistent basis (except as may be indicated therein or
in the notes or schedules thereto) and (iii) present fairly the financial
position of UTVG as of the dates thereof and the results of operations and cash
flows for the periods then ended. The unaudited financial statements included in
the UTVG SEC Reports comply in all material respects with the published rules
and regulations of the SEC with respect thereto; and such unaudited financial
statements (i) were prepared from the books and records of UTVG, (ii) were
prepared in accordance with GAAP, except as otherwise permitted under the
Exchange Act and the rules and regulations thereunder, on a consistent basis
(except as may be indicated therein or in the notes or schedules thereto) and
(iii) present fairly the financial position of UTVG as of the dates thereof and
the results of operations and cash flows (or changes in financial condition) for
the periods then ended, subject to normal year-end adjustments and any other
adjustments described therein or in the notes or schedules thereto.
(b) Except as specifically contemplated by this Agreement or reflected in the
UTVG SEC Reports, since September 30, 2006, there has not been (i) any material
adverse change in UTVG's business, assets, liabilities, operations, and, to the
knowledge of UTVG, no event has occurred that is likely to have a material
adverse effect on UTVG's business, assets, liabilities or operations, (ii) any
declarations setting aside or payment of any dividend or distribution with
respect to the UTVG Common Stock other than consistent with past practices,
(iii) any material change in UTVG's accounting principles, procedures or
methods, (iv) cancellation in writing of any material customer contract or (v)
the loss of any customer relationship which would have a material adverse effect
on UTVG's business, assets, liabilities or operations.
3.7 COMPLIANCE WITH APPLICABLE LAW.
Except as disclosed in the UTVG SEC Reports filed prior to the date of this
Agreement and except to the extent that the failure or violation would not in
the aggregate have a Material Adverse Effect on the business, results of
operations or financial condition of UTVG, to UTVG's knowledge UTVG holds all
Governmental Authorizations necessary for the lawful conduct of its business
under and pursuant to, and the business of UTVG is not being conducted in
violation of, any Governmental Authorization applicable to UTVG.
3.8 COMPLETE COPIES OF REQUESTED REPORTS.
UTVG has delivered or made available true and complete copies of each document
that has been reasonably requested by FOI or the Shareholders.
3.9 FULL DISCLOSURE.
(a) Neither this Agreement (including all Schedules and Exhibits hereto) nor any
of the Transactional Agreements contemplated to be executed and delivered by
UTVG in connection with this Agreement contains any untrue statement of material
fact; and none of such documents omits to state any material fact necessary to
make any of the representations, warranties or other statements or information
contained therein not misleading.
(b) All of the information set forth in the prospectus and all other information
regarding UTVG and the business, condition, assets, liabilities, operations,
financial performance, net income and prospects of either that has been
furnished to FOI or the Shareholders by or on behalf of UTVG or any of the
UTVG's Representatives, is accurate and complete in all material respects.
ARTICLE IV.
COVENANTS OF THE SHAREHOLDERS AND FOI
4.1 ACCESS AND INVESTIGATION.
Each of the Shareholders and FOI shall ensure that, at all times during the
Pre-Closing Period:
(a) FOI and their Representatives will provide UTVG and its Representatives
access, at reasonable times and with twenty-four (24) hours notice from UTVG to
FOI, to all of the premises and assets of FOI, to all existing books, records,
Tax Returns, work papers and other documents and information relating to FOI,
and to responsible officers and employees of FOI, and FOI and its
Representatives provide UTVG and its Representatives with copies of such
existing books, records, Tax Returns, work papers and other documents and
information relating to FOI as UTVG may request in good faith;
(b) Each of FOI and their Representatives confer regularly with UTVG upon its
request, concerning operational matters and otherwise report regularly (not less
than semi-monthly and as UTVG may otherwise request) to UTVG and discuss with
UTVG and its Representatives concerning the status of the business, condition,
assets, liabilities, operations, and financial performance of FOI, and promptly
notify UTVG of any material change in the business, condition, assets,
liabilities, operations, and financial performance of FOI , or any event
reasonably likely to lead to any such change.
4.2 OPERATION OF BUSINESS.
Each of the Shareholders and FOI shall ensure that, during the Pre-Closing
Period:
(a) FOI conducts its operations in the Ordinary Course of Business and in the
same manner as such operations have been conducted prior to the date of this
Agreement;
(b) FOI uses its commercially reasonable efforts to preserve intact its current
business organization, keep available and not terminate the services of its
current officers and employees and maintain its relations and goodwill with all
suppliers, customers, landlords, creditors, licensors, licensees, employees and
other Persons having business relationships with FOI;
(c) FOI does not declare, accrue, set aside or pay any dividend or make any
other distribution in respect of any shares of its capital stock, and does not
repurchase, redeem or otherwise reacquire any shares of its capital stock or
other securities;
(d) FOI does not sell or otherwise issue (or grant any warrants, options or
other rights to purchase) any shares of capital stock or any other securities;
(e) FOI does not amend its Articles of Incorporation, Bylaws or other
Organizational Documents, and does not effect or become a party to any
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(f) FOI does not form any subsidiary or acquire any equity interest or other
interest in any other Entity;
(g) FOI does not establish or adopt any Employee Benefit Plan, and does not pay
any bonus or make any profit sharing or similar payment to, or increase the
amount of the wages, salary, commissions, fringe benefits or other compensation
or remuneration payable to, any of its directors, officers or employees;
(h) FOI does not change any of its methods of accounting or accounting practices
in any respect;
(i) FOI does not make any Tax election;
(j) FOI does not commence or take any action or fail to take any action which
would result in the commencement of any Proceeding;
(k) FOI does not (i) acquire, dispose of, transfer, lease, license, mortgage,
pledge or encumber any fixed or other assets, other than in the Ordinary Course
of Business; (ii) incur, assume or prepay any indebtedness, Indebtedness or
obligation or any other liabilities or issue any debt securities, other than in
the Ordinary Course of Business; (iii) assume, guarantee, endorse for the
obligations of any other person, other than in the Ordinary Course of Business;
(iv) make any loans, advances or capital contributions to, or investments in,
any other Person, other than in the Ordinary Course of Business; or (v) fail to
maintain insurance consistent with past practices for its business and property;
(l) FOI pays all debts and Taxes, files all of its Tax Returns (as provided
herein) and pays or performs all other obligations, when due;
(m) FOI does not enter into or amend any agreements pursuant to which any other
Person is granted distribution, marketing or other rights of any type or scope
with respect to any of its services, products or technology;
(n) FOI does not hire any new officer-level employee;
(o) FOI does not revalue any of its assets, including, without limitation,
writing down the value of inventory or writing off notes or accounts receivable,
except as required under GAAP and in the Ordinary Course of Business;
(p) Except as otherwise contemplated hereunder, FOI does not enter into any
transaction or take any other action outside the Ordinary Course of Business;
and
(q) FOI does not enter into any transaction or take any other action that likely
would cause or constitute a Breach of any representation or warranty made by it
in this Agreement.
4.3 FILINGS AND CONSENTS; COOPERATION.
Each of the Shareholders and FOI shall ensure that:
(a) Each filing or notice required to be made or given (pursuant to any
applicable Law, Order or contract, or otherwise) by FOI or the Shareholders in
connection with the execution and delivery of any of the Transactional
Agreements, or in connection with the consummation or performance of the
Exchange, is made or given as soon as possible after the date of this Agreement;
(b) Each Consent required to be obtained (pursuant to any applicable Law, Order
or contract, or otherwise) by FOI or the Shareholders in connection with the
execution and delivery of any of the Transactional Agreements, or in connection
with the consummation or performance of the Exchange, is obtained as soon as
possible after the date of this Agreement and remains in full force and effect
through the Closing Date;
(c) There is promptly delivered to UTVG a copy of each filing made, each notice
given and each Consent obtained by FOI during the Pre-Closing Period; and
(d) During the Pre-Closing Period, FOI and its Representatives cooperate with
UTVG and UTVG's Representatives, and prepare and make available such documents
and take such other actions as UTVG may request in good faith, in connection
with any filing, notice or Consent that UTVG is required or elects to make, give
or obtain.
4.4 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULES.
(a) During the Pre-Closing Period, FOI shall promptly notify UTVG in writing of:
(i) the discovery by it or any Shareholder of any event, condition, fact
or circumstance that occurred or existed on or prior to the date of this
Agreement which is contrary to any representation or warranty made by it in this
Agreement, or that would upon the giving of notice or lapse of time, cause any
of the representations and warranties set forth in this Agreement to become
untrue or otherwise cause any of the conditions of Closing set forth in Article
VI or Article VII not to be satisfied;
(ii) any event, condition, fact or circumstance that occurs, arises or
exists after the date of this Agreement (except as a result of actions taken
pursuant to the express written consent of UTVG) and that is contrary to any
representation or warranty made in this Agreement, or that would upon the giving
of notice or lapse of time, cause any of the representations and warranties set
forth in this Agreement to become untrue or otherwise cause any of the
conditions of Closing set forth in Article VI or Article VII not to be
satisfied;
(b) The occurrence of any event, condition, fact or circumstances that is
required to be disclosed pursuant to Section 4.4(a) or that otherwise requires
any material change in the FOI Disclosure Schedule, or if any such event,
condition, fact or circumstance would require such a change assuming the FOI
Disclosure Schedule were dated as of the date of the occurrence, existence or
discovery of such event, condition, fact or circumstances, then FOI, as
applicable, shall promptly deliver to UTVG an update to the FOI Disclosure
Schedule specifying such change (a "Disclosure Schedule Update").
(c) FOI will promptly update any relevant and material information provided to
UTVG after the date hereof pursuant to the terms of this Agreement.
4.5 Commercially Reasonable Efforts.
During the Pre-Closing Period, each of the Shareholders and FOI shall use its
commercially reasonable efforts to cause the conditions set forth in Article VI
to be satisfied on a timely basis and so that the Closing can take place on or
before November, 2007, in accordance with Section 1.5, and shall not take any
action or omit to take any action, the taking or omission of which would or
could reasonably be expected to result in any of the representations and
warranties of FOI or the Shareholders set forth in this Agreement becoming
untrue, or in any of the conditions of Closing set forth in Article VI not being
satisfied.
4.6 CONFIDENTIALITY; PUBLICITY.
Each of the Shareholders and FOI shall ensure that:
(a) FOI and its Representatives keep strictly confidential the existence and
terms of this Agreement prior to the issuance or dissemination of any mutually
agreed upon press release or other disclosure of the Exchange; and
(b) neither FOI nor any of its Representatives issues or disseminates any press
release or other publicity or otherwise makes any disclosure of any nature (to
any of its suppliers, customers, landlords, creditors or employees or to any
other Person) regarding any of the Exchange; except in each case to the extent
that it is required by law to make any such disclosure regarding such
transactions or as separately agreed by the parties; provided, however, that if
it is required by law to make any such disclosure, FOI advises UTVG, at least
five business days before making such disclosure, of the nature and content of
the intended disclosure.
4.7 Investment Purposes. FOI acknowledges that it is acquiring the Shares of
UTVG for its own account as principal, not as a nominee or agent, for investment
purposes only, and not with a view to, or for, resale, distribution or
fractionalization thereof in whole or in part in any transactions that would be
in violation of the Securities Act or the securities or "blue-sky" laws of any
jurisdiction. No other person has a direct or indirect beneficial interest in,
and the undersigned does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to, the Shares or any part of the
Shares for which the undersigned is subscribing that would be in violation of
the Securities Act or the securities or "blue-sky" laws of any jurisdiction. FOI
acknowledges that it has been advised that the Shares have not been registered
under the Securities Act of 1933, as amended, and may be resold only if
registered or in a transaction exempt from such registration requirements.
ARTICLE V.
COVENANTS OF UTVG
5.1 NOTIFICATION.
During the Pre-Closing Period, UTVG shall promptly notify FOI in writing of:
(a) the discovery by UTVG of any event, condition, fact or circumstance that
occurred or existed on or prior to the date of this Agreement which is contrary
to any representation or warranty made by UTVG in this Agreement; and,
(b) any event, condition, fact or circumstance that occurs, arises or exists
after the date of this Agreement (except as a result of actions taken pursuant
to the written consent of FOI) and that is contrary to any representation or
warranty made by UTVG in this Agreement;
5.2 FILINGS AND CONSENTS; COOPERATION.
UTVG shall ensure that:
(a) Each filing or notice required to be made or given (pursuant to any
applicable Law, Order or contract, or otherwise) by UTVG in connection with the
execution and delivery of any of the Transactional Agreements, or in connection
with the consummation or performance of the Exchange, is made or given as soon
as possible after the date of this Agreement;
(b) Each Consent required to be obtained (pursuant to any applicable Law, Order
or contract, or otherwise) by UTVG in connection with the execution and delivery
of any of the Transactional Agreements, or in connection with the consummation
or performance of the Exchange, is obtained as soon as possible after the date
of this Agreement and remains in full force and effect through the Closing Date;
(c) UTVG promptly delivers to FOI a copy of each filing made, each notice given
and each Consent obtained by UTVG during the Pre-Closing Period; and
(d) During the Pre-Closing Period, UTVG and its Representatives cooperate with
FOI and its Representatives, and prepare and make available such documents and
take such other actions as FOI may request in good faith, in connection with any
filing, notice or Consent that FOI is required or elects to make, give or
obtain.
5.3 COMMERCIALLY REASONABLE EFFORTS.
During the Pre-Closing Period, UTVG shall use its commercially reasonable
efforts to cause the conditions set forth in Article VII to be satisfied on a
timely basis and so that the Closing can take place on or before November ,
2007or as soon thereafter as is reasonably practical, in accordance with Section
1.5, and shall not take any action or omit to take any action, the taking or
omission of which would or could reasonably be expected to result in any of the
representations and warranties or UTVG set forth in this Agreement becoming
untrue or in any of the conditions of closing set forth in Article VII not being
satisfied.
5.4 DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) Each of UTVG, FOI and the Shareholders acknowledges and agrees that it may
receive Confidential Information in connection with this Transaction including
without limitation, the FOI Disclosure Schedule and any information disclosed
during the due diligence process, the public disclosure of which will harm the
disclosing party's business. The Receiving Party may use Confidential
Information only in connection with the Transaction. The results of the due
diligence review may not be used for any other purpose other than in connection
with the Transaction. Except as expressly provided in this Agreement, the
Receiving Party shall not disclose Confidential Information to anyone without
the Disclosing Party's prior written consent. The Receiving Party shall take all
reasonable measures to avoid disclosure, dissemination or unauthorized use of
Confidential Information, including, at a minimum, those measures it takes to
protect its own confidential information of a similar nature. The Receiving
Party shall not export any Confidential Information in any manner contrary to
the export regulations of the governmental jurisdiction to which it is subject.
(b) The Receiving Party may disclose Confidential Information as required to
comply with binding orders of governmental entities that have jurisdiction over
it, provided that the Receiving Party (i) gives the Disclosing Party reasonable
notice (to the extent permitted by law) to allow the Disclosing Party to seek a
protective order or other appropriate remedy, (ii) discloses only such
information as is required by the governmental entity, and (iii) uses
commercially reasonable efforts to obtain confidential treatment for any
Confidential Information so disclosed.
(c) All Confidential Information shall remain the exclusive property of the
Disclosing Party. The Disclosing Party's disclosure of Confidential Information
shall not constitute an express or implied grant to the Receiving Party of any
rights to or under the Disclosing Party's patents, copyrights, trade secrets,
trademarks or other intellectual property rights.
(d) The Receiving Party shall notify the Disclosing Party immediately upon
discovery of any unauthorized use or disclosure of Confidential Information or
any other breach of this Agreement by the Receiving Party. The Receiving Party
shall cooperate with the Disclosing Party in every reasonable way to help the
Disclosing Party regain possession of such Confidential Information and prevent
its further unauthorized use.
(e) The Receiving Party shall return or destroy all tangible materials embodying
Confidential Information (in any form and including, without limitation, all
summaries, copies and excerpts of Confidential Information) promptly following
the Disclosing Party's written request; provided, however, that, subject to the
provisions of this Agreement, the Receiving Party may retain one copy of such
materials in the confidential, restricted access files of its legal department
for use only in the event a dispute arises between the parties related to the
Transaction and only in connection with that dispute. At the Disclosing Party's
option, the Receiving Party shall provide written certification of its
compliance with this Section.
5.5 INDEMNIFICATION.
(a) Each of FOI and the Shareholders, jointly and severally, each shall defend,
indemnify and hold harmless UTVG and YZL and their respective employees,
officers, directors, stockholders, controlling persons, affiliates, agents,
successors and assigns (collectively, the "UTVG Indemnified Persons"), and shall
reimburse the UTVG Indemnified Person, for, from and against any loss,
liability, claim, damage, expense (including costs of investigation and defense
and reasonable attorneys' fees) or diminution of value, whether or not involving
a third-party claim (collectively, "Damages"), directly or indirectly, relating
to, resulting from or arising out of:
(i) any untrue representations, misrepresentations or breach of warranty by or
of FOI or the Shareholders contained in or pursuant to this Agreement, and the
FOI Disclosure Schedule;
(ii) any breach or nonfulfillment of any covenant, agreement or other obligation
by or of FOI or the Shareholders (only to the extent made or occurring prior to
or at the Closing) contained in or pursuant to this Agreement, the Transaction
Agreements executed by FOI or any of the Shareholders in their individual
capacity, the FOI Disclosure Schedule, or any of the other agreements,
documents, schedules or exhibits to be entered into by FOI or any of the
Shareholders in their individual capacity pursuant to or in connection with this
Agreement;
(iii) all of Pre-Closing liabilities of FOI or the Shareholders; and
(iv) any liability, claim, action or proceeding of any kind whatsoever, whether
instituted or commenced prior to or after the Closing Date, which directly or
indirectly relates to, arises or results from, or occurs in connection with
facts or circumstances relating to the conduct of business of FOI, or the assets
of FOI, or events or circumstances existing on or prior to the Closing Date.
(b) UTVG shall defend, indemnify and hold harmless FOI and its respective
affiliates, agents, successors and assigns (collectively, the "FOI Indemnified
Persons"), and shall reimburse the FOI Indemnified Persons, for, from and
against any Damages, directly or indirectly, relating to, resulting from or
arising out of:
(i) any untrue representation, misrepresentation or breach of warranty by or of
UTVG contained in or pursuant to this Agreement;
(ii) any breach or nonfulfillment of any covenant, agreement or other
obligations by or of UTVG contained in or pursuant to this Agreement, the
Transaction Agreements or any other agreements, documents, schedules or exhibits
to be entered into or delivered to pursuant to or in connection with this
Agreement.
(c) Promptly after receipt by an indemnified Party under Section 5.5 of this
Agreement of notice of a claim against it ("Claim"), such indemnified Party
shall, if a claim is to be made against an indemnifying Party under such
Section, give notice to the indemnifying Party of such Claim, but the failure to
so notify the indemnifying Party will not relieve the indemnifying Party of any
liability that it may have to any indemnified Party, except to the extent that
the indemnifying Party demonstrates that the defense of such action is
prejudiced by the indemnified Party's failure to give such notice.
(d) A claim for indemnification for any matter not involving a third-party claim
may be asserted by notice to the Party from whom indemnification is sought.
ARTICLE VI.
CLOSING CONDITIONS OF UTVG
UTVG's obligations to effect the Closing and consummate the Exchange are subject
to the satisfaction of each of the following conditions:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of FOI and the Shareholders in this Agreement
shall have been true and correct as of the date of this Agreement and shall be
true and correct on and as of the Closing. FOI and the Shareholders shall have
performed all obligations in this Agreement required to be performed or observed
by them on or prior to the Closing.
6.2 ADDITIONAL CONDITIONS TO CLOSING.
(a) All necessary approvals under federal and state securities laws and other
authorizations relating to the issuance of the Acquisition Shares and the
transfer of the Shares shall have been received.
(b) No preliminary or permanent injunction or other order by any federal, state
or foreign court of competent jurisdiction which prohibits the consummation of
the Exchange shall have been issued and remain in effect. No statute, rule,
regulation, executive order, stay, decree, or judgment shall have been enacted,
entered, issued, promulgated or enforced by any court or governmental authority
which prohibits or restricts the consummation of the Exchange. All
authorizations, consents, orders or approvals of, or declarations or filings
with, and all expirations of waiting periods imposed by, any Governmental Body
which are necessary for the consummation of the Exchange, other than those the
failure to obtain which would not materially adversely affect the consummation
of the Exchange or in the aggregate have a material adverse effect on UTVG and
its subsidiaries, taken as a whole, shall have been filed, occurred or been
obtained (all such permits, approvals, filings and consents and the lapse of all
such waiting periods being referred to as the "Requisite Regulatory Approvals")
and all such Requisite Regulatory Approvals shall be in full force and effect.
(c) There shall not be any action taken, or any statute, rule, regulation or
order enacted, entered, enforced or deemed applicable to the Exchange, by any
Governmental Body which, in connection with the grant of a Requisite Regulatory
Approval, imposes any material condition or material restriction upon UTVG or
its subsidiaries or FOI, including, without limitation, requirements relating to
the disposition of assets, which in any such case would so materially adversely
impact the economic or business benefits of the Exchange as to render
inadvisable the consummation of the Exchange.
6.3 PERFORMANCE OF AGREEMENTS.
FOI or the Shareholders, as the case may be, shall have executed and delivered
each of the agreements, instruments and documents required to be executed and
delivered, and performed all actions required to be performed by FOI or any of
the Shareholders, as the case may be, pursuant to this Agreement, except as UTVG
has otherwise consented in writing.
6.4 CONSENTS.
Each of the Consents identified or required to have been identified in the FOI
Disclosure Schedule shall have been obtained and shall be in full force and
effect, other than those Consents, which have been expressly waived by UTVG.
6.5 NO MATERIAL ADVERSE CHANGE AND SATISFACTORY DUE DILIGENCE.
There shall not have been any material adverse change in the business,
condition, assets, liabilities, operations or financial performance of FOI since
the date of this Agreement as determined by UTVG in its discretion. UTVG shall
be satisfied in all respects with the results of its due diligence review of
FOI.
6.6 FOI CLOSING CERTIFICATES.
In addition to the documents required to be received under this Agreement, UTVG
shall also have received the following documents:
(a) copies of resolutions of FOI , certified by a Secretary, Assistant Secretary
or other appropriate officer of FOI, authorizing the execution, delivery and
performance of this Agreement and other Transactional Agreements;
(b) good standing certificate from China of FOI; and
(c) such other documents as UTVG may request in good faith for the purpose of
(i) evidencing the accuracy of any representation or warranty made by FOI, (ii)
evidencing the compliance by FOI, or the performance by FOI of, any covenant or
obligation set forth in this Agreement or any of the other Transactional
Agreements, (iii) evidencing the satisfaction of any condition set forth in
Article VII or this Article VI, or (iv) otherwise facilitating the consummation
or performance of the Exchange.
6.7 TRANSACTIONAL AGREEMENTS.
Each Person (other than UTVG) shall have executed and delivered prior to or on
the Closing Date all Transactional Agreements to which it is to be a party.
6.8 RESIGNATION OF DIRECTORS AND OFFICERS.
UTVG shall have received a written resignation from each of the directors and
officers of FOI effective as of the Closing.
6.9 DELIVERY OF STOCK CERTIFICATES, MINUTE BOOK AND CORPORATE SEAL.
The Shareholders shall have delivered to UTVG the stock books, stock ledgers,
minute books and corporate seals of FOI.
ARTICLE VII.
CLOSING CONDITIONS OF THE SHAREHOLDERS
The Shareholders' obligations to effect the Closing and consummate the Exchange
are subject to the satisfaction of each of the following conditions:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of UTVG in this Agreement shall have been
true and correct as of the date of this Agreement and shall be true and correct
on and as of the Closing and UTVG shall have performed all obligations in this
Agreement required to be performed or observed by them on or prior to the
Closing.
7.2 ADDITIONAL CONDITIONS TO CLOSING.
(a) All necessary approvals under federal and state securities laws and other
authorizations relating to the issuance and transfer of the Acquisition Shares
by UTVG and the transfer of the Shares by FOI shall have been received.
(b) No preliminary or permanent injunction or other order by any federal, state
or foreign court of competent jurisdiction which prohibits the consummation of
the Exchange shall have been issued and remain in effect. No statute, rule,
regulation, executive order, stay, decree, or judgment shall have been enacted,
entered, issued, promulgated or enforced by any court or governmental authority
which prohibits or restricts the consummation of the Exchange. All Requisite
Regulatory Approvals shall have been filed, occurred or been obtained and all
such Requisite Regulatory Approvals shall be in full force and effect.
(c) There shall not be any action taken, or any statute, rule, regulation or
order enacted, entered, enforced or deemed applicable to the Exchange, by any
federal or state Governmental Body which, in connection with the grant of a
Requisite Regulatory Approval, imposes any condition or restriction upon the
Surviving Corporation or its subsidiaries (or, in the case of any disposition of
assets required in connection with such Requisite Regulatory Approval, upon
UTVG, its subsidiaries or FOI or any of their subsidiaries), including, without
limitation, requirements relating to the disposition of assets, which in any
such case would so materially adversely impact the economic or business benefits
of the Exchange as to render inadvisable the consummation of the Exchange.
7.3 UTVG CLOSING CERTIFICATES.
The Shareholders shall have received the following documents:
(a) copies of resolutions of UTVG, certified by a Secretary, Assistant Secretary
or other appropriate officer of UTVG, authorizing the execution, delivery and
performance of the Transactional Agreements and the Exchange;
(b) good standing certificates for the State of Nevada; and
(c) such other documents as FOI may request in good faith for the purpose of (i)
evidencing the accuracy of any representation or warranty made by UTVG, (ii)
evidencing the compliance by UTVG with, or the performance by UTVG of, any
covenant or obligation set forth in this Agreement or any of the other
Transactional Agreements, (iii) evidencing the satisfaction of any condition set
forth in Article VI or this Article VII, or (iv) otherwise facilitating the
consummation or performance of the Exchange.
7.4 PERFORMANCE OF AGREEMENTS.
UTVG shall have executed and delivered each of the agreements, instruments and
documents required to be executed and delivered, and performed all actions
required by UTVG pursuant to this Agreement, except as FOI and the Shareholders
have otherwise consented in writing.
7.5 CONSENTS.
Each of the Consents identified or required to have been identified in Section
3.4 shall have been obtained and shall be in full force and effect, other than
those Consents the absence of which shall not have a material adverse effect on
UTVG.
7.6 UTVG STOCK.
On the Closing Date, shares of UTVG Common Stock shall be eligible for quotation
on the OTC Bulletin Board.
ARTICLE VIII.
FURTHER ASSURANCES
Each of the parties hereto agrees that it will, from time to time after the date
of the Agreement, execute and deliver such other certificates, documents and
instruments and take such other action as may be reasonably requested by the
other party to carry out the actions and transactions contemplated by this
Agreement, including the closing conditions described in Articles VI and VII.
FOI and the Shareholders shall reasonably cooperate with UTVG in its review of
the books and records of FOI, or in preparing any solicitation materials to be
sent to the shareholders of UTVG in connection with the approval of the Exchange
and the transactions contemplated by the Transactional Agreements.
ARTICLE IX.
TERMINATION
9.1 TERMINATION.
This Agreement may be renegotiated or terminated and the Exchange abandoned at
any time prior to the Closing Date:
(a) by mutual written consent of UTVG, YZL, FOI, and the Shareholders;
(b) by UTVG if it is not satisfied with the results of its due diligence of FOI
for any reason;
(c) by UTVG if (i) there is a material Breach of any covenant or obligation of
FOI or the Shareholders; provided however, that if such Breach or Breaches are
capable of being cured prior to the Closing Date, such Breach or Breaches shall
not have been cured within 10 days of delivery of the written notice of such
Breach, or (ii) UTVG reasonably determines that the timely satisfaction of any
condition set forth in Article VI has become impossible or impractical (other
than as a result of any failure on the part of UTVG to comply with or perform
its covenants and obligations under this Agreement or any of the other
Transactional Agreements);
(d) by FOI if (i) there is a material Breach of any covenant or obligation of
UTVG; provided however, that if such Breach or Breaches are capable of being
cured prior to the Closing Date, such Breach or Breaches shall not have been
cured within 10 days of delivery of the written notice of such Breach, or (ii)
FOI reasonably determines that the timely satisfaction of any condition set
forth in Article VII has become impossible or impractical (other than as a
result of any failure on the part of FOI or any Shareholder to comply with or
perform any covenant or obligation set forth in this Agreement or any of the
other Transactional Agreements);
(e) by UTVG if the Closing has not taken place on or before November, 2007
(except if as a result of any failure on the part of UTVG to comply with or
perform its covenants and obligations under this Agreement or in any other
Transactional Agreement);
(f) by FOI if the Closing has not taken place on or before November , 2007
(except if as a result of the failure on the part of FOI or the Shareholders to
comply with or perform any covenant or obligation set forth in this Agreement or
in any other Transactional Agreement);
(g) by any of UTVG, on the one hand or FOI, on the other hand, if any court of
competent jurisdiction in the United States or other United States governmental
body shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Exchange and such order,
decree, ruling or any other action shall have become final and non-appealable;
provided, however, that the party seeking to terminate this Agreement pursuant
to this clause (g) shall have used all commercially reasonable efforts to remove
such order, decree or ruling; or
(h) The parties hereby agree and acknowledge that a breach of the provisions of
Sections 4.1, 4.2, 4.3, 4.4 and 4.6 are, without limitation, material Breaches
of this Agreement.
9.2 TERMINATION PROCEDURES.
If UTVG wishes to terminate this Agreement pursuant to Section 9.1, UTVG shall
deliver to the Shareholders, FOI a written notice stating that UTVG is
terminating this Agreement and setting forth a brief description of the basis on
which UTVG is terminating this Agreement. If FOI wishes to terminate this
Agreement pursuant to Section 9.1, FOI, as applicable, shall deliver to UTVG a
written notice stating that FOI is terminating this Agreement and setting forth
a brief description of the basis on which FOI is terminating this Agreement.
9.3 EFFECT OF TERMINATION.
In the event of termination of this Agreement as provided above, this Agreement
shall forthwith have no further effect. Except for a termination resulting from
a Breach by a party to this Agreement, there shall be no liability or obligation
on the part of any party hereto. In the event of a breach, the remedies of the
non-breaching party shall be to seek damages from the breaching party or to
obtain an order for specific performance, in addition to or in lieu of other
remedies provided herein. Upon request after termination, each party will
redeliver or, at the option of the party receiving such request, destroy all
reports, work papers and other material of any other party relating to the
Exchange, whether obtained before or after the execution hereof, to the party
furnishing same; provided, however, that FOI and the Shareholders shall, in all
events, remain bound by and continue to be subject to Section 4.6 and all
parties shall in all events remain bound by and continue to be subject to
Section 5.4 and 5.5.
Notwithstanding the above, both UTVG, on the one hand, and FOI and the
Shareholders, on the other hand, shall be entitled to announce the termination
of this Agreement by means of a mutually acceptable press release.
ARTICLE X.
MISCELLANEOUS
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties of FOI and the Shareholders in this Agreement
and the FOI Disclosure Schedule shall survive shall survive indefinitely. The
right to indemnification, reimbursement or other remedy based on such
representations and warranties will not be affected by any investigation
conducted by the parties.
10.2 EXPENSES.
Except as otherwise set forth herein, each of the parties to the Exchange shall
bear its own expenses incurred in connection with the negotiation and
consummation of the transactions contemplated by this Agreement.
10.3 ENTIRE AGREEMENT.
This Agreement and the other Transactional Agreements contain the entire
agreement of the parties hereto, and supersede any prior written or oral
agreements between them concerning the subject matter contained herein, or
therein. There are no representations, agreements, arrangements or
understandings, oral or written, between the parties to this Agreement, relating
to the subject matter contained in this Agreement and the other Transaction
Agreements, which are not fully expressed herein or therein. The schedules and
each exhibit attached to this Agreement or delivered pursuant to this Agreement
are incorporated herein by this reference and constitute a part of this
Agreement.
10.4 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
instrument.
10.5 DESCRIPTIVE HEADINGS.
The Article and Section headings in this Agreement are for convenience only and
shall not affect the meanings or construction of any provision of this
Agreement.
10.6 NOTICES.
Any notices required or permitted to be given under this Agreement shall be in
writing and shall be deemed sufficiently given on the earlier to occur of the
date of personal delivery, the date of receipt or three (3) days after posting
by overnight courier or registered or certified mail, postage prepaid, addressed
as follows:
c/o Universal Travel Group,
If to UTVG, 00000 Xxxxxxxx Xxxx. Xxxxx 0000
XXX: Xxx Xxxxxxx, XX 00000
Attention: President
If to FOI or the
Shareholders: Foshan Overseas International Travel Service Co., Ltd.
Middle Shouthern Sea Ave. # 184 - 200
Gui Town, Shouthern Sea District
Foshan City, PR of China
Attention: President
To such address or addresses as a party shall have previously designated by
notice to the sender given in accordance with this section.
10.7 CHOICE OF LAW.
This Agreement shall be construed in accordance with and governed by the laws of
the State of New York without regard to choice of law principles. The parties
hereto each consent to the non-exclusive jurisdiction of the courts of the state
of New York, county of New York and to the federal courts located in the county
of New York, State of New York.
10.8 BINDING EFFECT; BENEFITS.
This Agreement shall inure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to confer on any Person other than the parties
or their respective successors and permitted assigns, the Shareholders and other
Persons expressly referred to herein, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
10.9 ASSIGNABILITY.
Neither this Agreement nor any of the parties' rights hereunder shall be
assignable by any party without the prior written consent of the other parties
and any attempted assignment without such consent shall be void.
10.10 WAIVER AND AMENDMENT.
Any term or provision of this Agreement may be waived at any time by the party,
which is entitled to the benefits thereof. The waiver by any party of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach. The parties may, by mutual agreement in writing, amend
this Agreement in any respect. FOI and the Shareholders hereby acknowledge their
intent that this Agreement includes as a party any holder of capital stock in
FOI at the time of Closing. UTVG, YZL, FOI, and the Shareholders therefore agree
that this Agreement may be amended, without the further consent of any party to
this Agreement, (i) to add as a new Shareholder any existing shareholder of FOI
and (ii) to modify Schedule 1 to reflect the addition of such shareholder.
10.11 ATTORNEYS' FEES.
In the event of any action or proceeding to enforce the terms and conditions of
this Agreement, the prevailing party shall be entitled to an award of reasonable
attorneys' and experts' fees and costs, in addition to such other relief as may
be granted.
10.12 SEVERABILITY.
If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
10.13 CONSTRUCTION.
In executing this Agreement, the parties severally acknowledge and represent
that each: (a) has fully and carefully read and considered this Agreement; (b)
has or has had the opportunity to consult independent legal counsel regarding
the legal effect and meaning of this document and all terms and conditions
hereof; (c) has been afforded the opportunity to negotiate as to any and all
terms hereof; and (d) is executing this Agreement voluntarily, free from any
influence, coercion or duress of any kind. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of
the day and year first above written.
UNIVERSAL TRAVEL GROUP
SHENZHEN YU XXX XX AVIATION SERVICE
COMPANY LIMITED
By: /s/ Xxxxxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Chairman and CEO of each of the above
named Companies
FOSHAN OVERSEAS INTERNATIONAL TRAVEL
SERVICE CO., LTD.
By: /s/ Zhiyong Su
-------------------------------------------------
Name: Zhiyong Su
Title: Shareholders
/s/ Sida He
-------------------------------------------------
Name: Sida He
Title: Shareholders
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
"Agreement" shall mean the Share Exchange Agreement to which this Exhibit A is
attached (including all Disclosure Schedules and all Exhibits), as it may be
amended from time to time.
"Approved Plans" shall mean a stock option or similar plan for the benefit of
employees or others, which has been approved by the shareholders of FOI.
"Breach" There shall be deemed to be a "Breach" of a representation, warranty,
covenant, obligation or other provision if there is or has been any inaccuracy
in or breach of, or any failure to comply with or perform, such representation,
warranty, covenant, obligation or other provision.
"Certificates" shall have the meaning specified in Section 1.3 of the Agreement.
"Closing" shall have the meaning specified in Section 1.5 of the Agreement.
"Closing Date" shall have the meaning specified in Section 1.5 of the Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or the
comparable tax code applicable to FOI in those countries in which it is subject
to taxation.
"Confidential Information" shall mean all nonpublic information disclosed by one
party or its agents (the "Disclosing Party") to the other party or its agents
(the "Receiving Party") that is designated as confidential or that, given the
nature of the information or the circumstances surrounding its disclosure,
reasonably should be considered as confidential. Confidential Information
includes, without limitation (i) nonpublic information relating to the
Disclosing Party's technology, customers, vendors, suppliers, business plans,
intellectual property, promotional and marketing activities, finances,
agreements, transactions, financial information and other business affairs, and
(ii) third-party information that the Disclosing Party is obligated to keep
confidential. Confidential Information does not include any information that (i)
is or becomes publicly available without breach of this Agreement, (ii) can be
shown by documentation to have been known to the Receiving Party at the time of
its receipt from the Disclosing Party, (iii) is received from a third party who,
to the knowledge of the Receiving Party, did not acquire or disclose such
information by a wrongful or tortuous act, or (iv) can be shown by documentation
to have been independently developed by the Receiving Party without reference to
any Confidential Information.
"Consent" shall mean any approval, consent, ratification, permission, waiver or
authorization (including any Governmental Authorization).
"Disclosure Schedule Update" shall have the meaning specified in Section 4.4 of
the Agreement.
"UTVG" shall have the meaning specified in the first paragraph of the Agreement.
"UTVG Common Stock" shall mean the shares of common stock of UTVG.
"UTVG SEC Reports" shall have the meaning specified in Section 4.6 of the
Agreement.
"Entity" shall mean any corporation (including any non profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, cooperative, foundation, society, political party,
union, company (including any limited liability company or joint stock company),
firm or other enterprise, association, organization or entity.
"Environmental Laws" shall mean any Law or other requirement relating to the
protection of the environment, health, or safety from the release or disposal of
hazardous materials.
"Environmental Permit" means all licenses, permits, authorizations, approvals,
franchises and rights required under any applicable Environmental Law or Order.
"Equity Security" shall mean any stock or similar security, including, without
limitation, securities containing equity features and securities containing
profit participation features, or any security convertible into or exchangeable
for, with or without consideration, any stock or similar security, or any
security carrying any warrant, right or option to subscribe to or purchase any
shares of capital stock, or any such warrant or right.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FOI" shall have the meaning specified in the first paragraph of the Agreement
"FOI Balance Sheet" shall mean FOI's audited balance sheet at December 31, 2006.
"FOI Disclosure Schedule" shall have the meaning specified in introduction to
Article II of the Agreement.
"GAAP" shall mean Generally Accepted Accounting Principles, applied on a
consistent basis.
"Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, concession, approval, consent,
ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration, qualification or authorization
that is issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Law; or
(b) right under any contract with any Governmental Body.
"Governmental Body" shall mean any:
(a) nation, principality, state, federation, commonwealth, province, territory,
county, municipality, district or other jurisdiction, national or local, of any
nature;
(b) governmental or quasi-governmental authority of any nature (including any
governmental division, subdivision, department, agency, bureau, branch, office,
commission, council, board, instrumentality, officer, official, representative,
organization, unit, body or Entity and any court or other tribunal); or
(c) individual, Entity or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature, including any court, arbitrator,
administrative agency or commissioner, or other governmental authority or
instrumentality.
"Indebtedness" shall mean any obligation, contingent or otherwise. Any
obligation secured by a Lien on, or payable out of the proceeds of, or
production from, property of the relevant party will be deemed to be
Indebtedness.
"Intellectual Property" means all industrial and intellectual property,
including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service xxxx
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.
"Knowledge" A corporation shall be deemed to have "knowledge" of a particular
fact or matter only if a director or officer of such corporation has, had or
should have had knowledge of such fact or matter.
"Laws" means, with respect to any Person, any U.S. or non-U.S. federal,
national, state, provincial, local, municipal, international, multinational or
other law (including common law), constitution, statute, code, ordinance, rule,
regulation or treaty applicable to such Person.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance, lien or
charge, right of first refusal, encumbrance or other adverse claim or interest
of any kind, including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction and including any lien or charge arising by Law.
"Material Adverse Effect" means any change, effect or circumstance which,
individually or in the aggregate, would reasonably be expected to (a) have a
material adverse effect on the business, assets, financial condition or results
of operations of the affected party, in each case taken as a whole or (b)
materially impair the ability of the affected party to perform its obligations
under this Agreement and the Transaction Agreements, excluding any change,
effect or circumstance resulting from (i) the announcement, tendency or
consummation of the transactions contemplated by this Agreement, (ii) changes in
the United States securities markets generally, or (iii) changes in general
economic, currency exchange rate, political or regulatory conditions in
industries in which the affected party operates.
"Material Contract" means any and all agreements, contracts, arrangements,
understandings, leases, commitments or otherwise, providing for potential
payments by or to the company in excess of $10,000, and the amendments,
supplements and modifications thereto.
"Order" shall mean any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any Governmental
Body.
"Ordinary Course of Business" shall mean an action taken by FOI if (i) such
action is taken in normal operation, consistent with past practices, (ii) such
action is not required to be authorized by the Shareholders, Board of Directors
or any committee of the Board of the Directors or other governing body of FOI
and (iii) does not require any separate or special authorization or consent of
any nature by any Governmental Body or third party.
"Permitted Liens" shall mean (a) Liens for Taxes not yet payable or in respect
of which the validity thereof is being contested in good faith by appropriate
proceedings and for the payment of which the relevant party has made adequate
reserves; (b) Liens in respect of pledges or deposits under workmen's
compensation laws or similar legislation, carriers, warehousemen, mechanics,
laborers and materialmen and similar Liens, if the obligations secured by such
Liens are not then delinquent or are being contested in good faith by
appropriate proceedings conducted and for the payment of which the relevant
party has made adequate reserves; and (c) statutory Liens incidental to the
conduct of the business of the relevant party which were not incurred in
connection with the borrowing of money or the obtaining of advances or credits
and that do not in the aggregate materially detract from the value of its
property or materially impair the use thereof in the operation of its business.
"Person" shall mean any individual, Entity or Governmental Body.
"Pre-Closing Period" shall mean the period commencing as of the date of the
Agreement and ending on the Closing Date.
"Proceeding" shall mean any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding and any informal proceeding), prosecution, contest, hearing, inquiry,
inquest, audit, examination or investigation, commenced, brought, conducted or
heard by or before, or otherwise has involved, any Governmental Body or any
arbitrator or arbitration panel.
"Representatives" of a specified party shall mean officers, directors,
employees, attorneys, accountants, advisors and representatives of such party,
including, without limitation, all subsidiaries of such specified party, and all
such Persons with respect to such subsidiaries. The Related Persons of FOI shall
be deemed to be "Representatives" of FOI, as applicable.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Taxes" shall mean all taxes, charges, fees, levies, imposts, duties and other
assessments, as applicable, imposed upon a Person by any Governmental Body
including, but not limited to, any income, alternative minimum or add-on,
estimated, gross income, gross receipts, sales, use, transfer, transactions,
intangibles, ad valorem, value-added, franchise, registration, title, license,
capital, paid-up capital, profits, withholding, payroll, employment,
unemployment, excise, severance, stamp, occupation, premium, real property,
recording, personal property, federal highway use, commercial rent,
environmental (including, but not limited to, taxes under Section 59A of the
Code) or windfall profit tax, custom, duty or other tax, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest, penalties or additions to tax with respect to any of the foregoing;
and "Tax" means any of the foregoing Taxes.
"Tax Group" shall mean any federal, state, local or foreign consolidated,
affiliated, combined, unitary or other similar group of which FOI is now or was
formerly a member.
"Tax Return" shall mean any return, declaration, report, claim for refund or
credit, information return, statement or other similar document filed with any
Governmental Body with respect to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
"Transactional Agreements" shall mean (a) this Agreement and (b) the Promissory
Note.
EXHIBIT B
FORM OF PROMISSORY NOTE
UNIVERSAL TRAVEL GROUP
PROMISSORY NOTE
NO. ___ $________ ______, 2007
FOR VALUE RECEIVED, the undersigned, Universal Travel Group, a Nevada
corporation (the "Maker"), hereby promises to pay to the order of _________ (the
"Payee"), the principal amount of $______, all in accordance with the provisions
of this promissory note.
1. Payment of Principal. The full amount of the principal of this promissory
note shall be due and payable _____, 2008 (the "Maturity Date").
2. No Interest. Under no circumstances shall interest accrue or be charged on
the unpaid principal balance of this promissory note.
3. Method of Payment. Payments hereunder shall be in lawful money of the United
States and shall be made to Payee at the following address or at such other
place as Payee may designate to Maker in writing: c/o .
4. Prepayment. This promissory note may be prepaid in whole or in part at any
time without penalty or premium by payment of all or any part of the outstanding
principal amount.
5. Unconditional Payment Obligation. No provision of this promissory note shall
alter or impair the obligation of the Maker, which is absolute and
unconditional, to pay the principal of this promissory note at the time and
place and in the currency herein prescribed.
6. Events of Default. If any of the following events ("Events of Default") shall
occur, Payee may, by notice to Maker, declare this promissory note and all
amounts payable hereunder to be due and payable, whereupon the same shall become
immediately due and payable:
(a) Maker shall become insolvent or admit in writing its inability to pay its
debts as they become due, or shall make a general assignment for the benefit of
creditors;
(b) Any proceedings shall be instituted by or against Maker seeking either (i)
an order for relief with respect to, or reorganization, arrangement, adjustment
or composition of, its debts under the United States Bankruptcy Code or under
any other law relating to bankruptcy, insolvency, reorganization, or relief of
debtors, or (ii) appointment of a trustee, receiver or similar official for
Maker or for any substantial part of its property;
(c) Maker's failure to conduct business in the ordinary course, dissolution or
termination of existence; or
(d) Maker's failure after the Maturity Date to repay the amounts due hereunder
within ten (10) days of receiving written notice from Payee that such amounts
are due and payable.
7. Waiver of Notice. Maker hereby waives presentment, demand, notice, protest
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this promissory note, and assents to extension of
the time of payment or forbearance or other indulgence without notice.
8. Governing Law. This promissory note shall be construed in accordance with the
laws of the State of New York, without regard to its conflicts of laws rules.
9. Notices. All notices, requests, demands and other communications with respect
to this promissory note shall be given in person or forwarded by first class
United States mail, postage prepaid, registered or certified mail, with return
receipt requested, addressed to the party's address. Any notice, request, demand
or communication shall be deemed validly given and received upon delivery if
given in person, and on the 5th business day after deposit in the United States
mail if given by mail as provided for in the preceding sentence.
IN WITNESS WHEREOF, the Maker has executed and delivered this Note effective as
of _________, 2007.
UNIVERSAL TRAVEL GROUP
---------------------------
Xx. Xxxxxxxxx Xxxxx
Chairman of the Board and
Chief Executive Officer
SCHEDULE 1
FOI Shareholders
[Add column for promissory note]
-----------------------------------------------------------------------------------------------------------------
Shareholders Name Ownership Percentage of Shares of UTVG Common Principal Amount of UTVG
FOI Stock to be issued Note
-----------------------------------------------------------------------------------------------------------------
Zhiyong Su 90% 1,010,687 shares $2,838,150
-----------------------------------------------------------------------------------------------------------------
Sida He 10% 112,299 shares $315,350
-----------------------------------------------------------------------------------------------------------------
SCHEDULE 2
FOI Disclosure Schedule
