SHARE EXCHANGE AGREEMENT by and among Gold Industry Limited (“Gold Industry“) and the Shareholders of Gold Industry, on the one hand; and Artistry Publications, Inc. (“Pubco”), a Delaware corporation, and the Majority Stockholders of Pubco, on the...
Exhibit 2.2
by
and among
Gold
Industry Limited (“Gold Industry“)
and
the
Shareholders of Gold Industry,
on the one hand;
and
Artistry
Publications, Inc. (“Pubco”),
a
Delaware corporation,
and
the
Majority Stockholders of Pubco,
on
the other hand
February
12, 2010
This
Share Exchange Agreement, dated as of February 12, 2010 (this “Agreement”), is
made and entered into by and among Gold Industry Limited, a company incorporated
in the Cayman Islands (“Gold Industry”), and
the shareholders of Gold Industry (“Gold Industry
Shareholders”) listed on the Signature Pages for Gold Industry
Shareholders that are attached hereto, on the one hand; and Artistry
Publications, Inc., a Delaware corporation (“Pubco”), and the
stockholders of Pubco listed on Signature Page for Pubco Stockholders
that is attached hereto (the “Pubco Stockholders”),
on the other hand.
R
E C I T A L S
WHEREAS,
on February 11, 2010, the Board of Directors of Pubco has adopted resolutions
approving Pubco’s acquisition of the equity interests of Gold Industry held by
the Gold Industry Stockholders (the “Acquisition”) by
means of a share exchange with the Gold Industry Shareholders, upon the terms
and conditions hereinafter set forth in this Agreement;
WHEREAS,
the Gold Industry Shareholders own all of the equity interest (in shares of
capital stock or otherwise) of Gold Industry (the “Gold Industry Equity
Interest”);
WHEREAS,
the Pubco Stockholders are the majority stockholders of Pubco which hold,
collectively, an 10,875,000 shares of Pubco common stock, par value $.001
(“Pubco Common
Stock”) which represents approximately 83.17% of the issued and
outstanding capital stock of Pubco;
WHEREAS,
the Pubco Stockholders will enter into this Agreement for the purpose of making
certain covenants, indemnifications and agreements;
WHEREAS,
upon consummation of the transactions contemplated by this Agreement, Gold
Industry will become a 100% wholly-owned subsidiary of Pubco; and
WHEREAS, it is intended
that the terms and conditions of this Agreement comply in all respects with
Section 368(a)(1)(B) and/or Section 351 of the Internal Revenue Code of 1986, as
amended (the “Code”) and the
regulations corresponding thereto, so that the Acquisition shall qualify as a
tax free reorganization under the Code, and that this share exchange transaction
shall qualify as a transaction in securities exempt from registration or
qualification under the Securities Act of 1933, as amended and in effect on the
date of this Agreement.
A
G R E E M E N T
NOW,
THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE
1
THE
ACQUISITION
1.1 The Acquisition. Upon
the terms and subject to the conditions hereof, at the Closing (as hereinafter
defined) the parties shall do the following:
(a) The
Gold Industry Shareholders will each sell, convey, assign, transfer and deliver
to Pubco certificates representing the Gold Industry Equity Interest held by
each Gold Industry Shareholder as set forth in Column II of Annex I hereto, which
in the aggregate shall constitute 100% of the issued and outstanding equity
interests of Gold Industry, accompanied by a properly executed and authenticated
stock power or instrument of like tenor.
(b) As
consideration for the acquisition of the Gold Industry Equity Interests, Pubco
will issue to each Gold Industry Shareholder and/or its designee(s), in exchange
for such Gold Industry’s portion of the Gold Industry Equity Interests, the
number of shares of Pubco Common Stock set forth opposite such party’s name in
Column III on Annex
I attached hereto (collectively, the “Pubco
Shares”). The Pubco Shares issued shall equal approximately
80.00% of the outstanding shares of Pubco Common Stock at the time of
Closing. For example, if there are 10,000,000 shares of Pubco Common
Stock outstanding immediately prior to the Closing, then there shall be
8,000,000 shares of Pubco Common Stock issued to the Gold Industry Shareholders
at Closing.
1.2 Closing Date. The
closing of the Acquisition (the “Closing”) shall take
place on February 12, 2010, or on such other date as may be mutually agreed upon
by the parties. Such date is referred to herein as the “Closing
Date.”
1.3 Taking of Necessary Action;
Further Action. If, at any time after the Closing, any further action is
necessary or desirable to carry out the purposes of this Agreement, the Gold
Industry Shareholders, Gold Industry, the Pubco Stockholders, and/or Pubco (as
applicable) shall take all such lawful and necessary action.
1.4 Certain Definitions.
The following capitalized terms as used in this Agreement shall have the
respective definitions:
“Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.
“Contract” means any
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“FINRA” means
Financial Industry Regulatory Authority.
“Knowledge” means the
actual knowledge of the officers, directors or advisors of the referenced
party.
“Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.
“Material Adverse
Effect” means a adverse effect on either referenced party or the combined
entity resulting from the consummation of the transaction contemplated by this
Agreement, or on the financial condition, results of operations or business,
before or after the consummation of the transaction contemplated in this
Agreement, which as a whole is or would be considered material to an investor in
the securities of Pubco.
“Non-U.S. Person”
means any person who is not a U.S. Person or is deemed not to be a U.S. Person
under Rule 902(k)(2).
“Person” means any
individual, corporation, partnership, joint venture, trust, business
association, organization, governmental authority or other entity.
“Restricted Period”
shall have the meaning set forth in Section 3.4(b)(vi).
“Securities Act” means
the Securities Act of 1933, as amended.
“SEC” means the
Securities & Exchange Commission.
“Tax Returns” means
all federal, state, local and foreign returns, estimates, information statements
and reports relating to Taxes.
“Tax” or “Taxes” means any and
all applicable central, federal, provincial, state, local, municipal and foreign
taxes, including, without limitation, gross receipts, income, profits, sales,
use, occupation, value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, assessments,
governmental charges and duties together with all interest, penalties and
additions imposed with respect to any such amounts and any obligations under any
agreements or arrangements with any other person with respect to any such
amounts and including any liability of a predecessor entity for any such
amounts.
“Trading Day” means a
day on which the principal Trading Market is open for trading.
“Trading Market” means
the following markets or exchanges on which Pubco Common Stock is listed or
quoted for trading on the date in question: the NYSE Alternext US Exchange, the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange or the OTC Bulletin Board.
“Transaction” means
the transactions contemplated by this Agreement, including the share
exchange.
“United States” means
and includes the United States of America, its territories and possessions, any
State of the United States, and the District of Columbia.
“U.S. Person” as defined in
Regulation S means: (i) a natural person resident in the United States; (ii) any
partnership or corporation organized or incorporated under the laws of the
United States; (iii) any estate of which any executor or administrator is a U.S.
Person; (iv) any trust of which any trustee is a U.S. Person; (v) any agency or
branch of a foreign entity located in the United States; (vi) any
nondiscretionary account or similar account (other than an estate or trust) held
by a dealer or other fiduciary for the benefit or account of a U.S. Person;
(vii) any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated and (if an
individual) resident in the United States; and (viii) a corporation or
partnership organized under the laws of any foreign jurisdiction and formed by a
U.S. Person principally for the purpose of investing in securities not
registered under the Securities Act, unless it is organized or incorporated,
owned, by accredited investors (as defined in Rule 501(a) under the Securities
Act) who are not natural persons, estates or trusts).
1.5 Tax
Consequences. It is intended that the terms and conditions of
this Agreement comply in all respects with Section 368(a)(1)(B) and/or Section
351 of the Code and the regulations corresponding thereto, so that the
Acquisition shall qualify as a tax-free reorganization under the
Code.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF GOLD INDUSTRY
Except as
otherwise disclosed herein or in the disclosure schedule delivered by Gold
Industry to Pubco at the time of execution of this Agreement, Gold Industry
hereby represents and warrants to Pubco and the Pubco Stockholders as of the
date hereof and as of the Closing Date (unless otherwise indicated), as
follows:
2.1 Organization. Gold
Industry has been duly incorporated, validly exists as a corporation, and is in
good standing under the laws of its jurisdiction of incorporation, and has the
requisite power to carry on its business as now conducted. Set forth
on Schedule 2.1
of the disclosure schedules is a list of those jurisdictions in which Gold
Industry presently conducts its business, owns, holds and operates its
properties and assets.
2.2 Capitalization. The
authorized capital stock of Gold Industry consists of 50,000 ordinary shares,
US$1.00 par value, of which at the Closing, no more than 50,000 shares shall be
issued and outstanding. All of the issued and outstanding shares of
capital stock of Gold Industry, as of the Closing, are duly authorized, validly
issued, fully paid, non-assessable and free of preemptive
rights. There are no voting trusts or any other agreements or
understandings with respect to the voting of Gold Industry’s capital
stock. Except as set forth in the preceding sentence, no other class
of capital stock or other security of Gold Industry is authorized, issued,
reserved for issuance or outstanding. There are no authorized or
outstanding options, warrants, equity securities, calls, rights, commitments or
agreements of any character by which Gold Industry or any of the Gold Industry
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 Gold
Industry. There are no outstanding contractual obligations
(contingent or otherwise) of Gold Industry to retire, repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of, or other ownership
interests in, Gold Industry.
2.3 Subsidiaries. As of
the Closing, Gold Industry has no direct or indirect subsidiaries, except as
disclosed in Schedule
2.3 of the disclosure schedules hereto (collectively the “Gold Industry
Subsidiaries,” and each a “Gold Industry
Subsidiary”). Each Gold Industry Subsidiary is an entity duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of formation and has the requisite corporate power and
authority to own, lease and to carry on its business as now being
conducted. Except as disclosed in Schedule 2.3, Gold
Industry owns all of the shares of each Gold Industry Subsidiary, and there are
no outstanding options, warrants, subscriptions, conversion rights or other
rights, agreements or commitments obligating any Gold Industry Subsidiary to
issue any additional shares of common stock or ordinary stock, as the case may
be, of such subsidiary, or any other securities convertible into, exchangeable
for or evidence the right to subscribe for or acquire from any Gold Industry
Subsidiary any shares of such subsidiary.
2.4 Certain Corporate
Matters. Gold Industry is duly qualified to do business as a corporation
and is in good standing under the laws of the Cayman Islands, and in each other
jurisdiction in which the ownership of its property or the conduct of its
business requires it to be so qualified, except where the failure to be so
qualified would not have a Material Adverse Effect on Gold Industry’s financial
condition, results of operations or business. Gold Industry has full
corporate power and authority and all authorizations, licenses and permits
necessary to carry on the business in which it is engaged and to own and use the
properties owned and used by it.
2.5 Authority Relative to this
Agreement. Gold Industry has the requisite power and authority
to enter into this Agreement and to carry out its respective obligations
hereunder. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby by Gold Industry
have been duly authorized by Gold Industry’s Board of Directors and no other
actions on the part of Gold Industry are necessary to authorize this Agreement
or the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Gold Industry and constitutes a valid and
binding agreement, enforceable against Gold Industry in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity.
2.6 Consents and Approvals; No
Violations. Except for applicable requirements of federal securities laws
and state securities or blue-sky laws, no filing with, and no permit,
authorization, consent or approval of, any third party, public body or authority
is necessary for the consummation by Gold Industry of the transactions
contemplated by this Agreement. Neither the execution and delivery of this
Agreement by Gold Industry nor the consummation by Gold Industry of the
transactions contemplated hereby, nor compliance by them with any of the
provisions hereof, will (a) conflict with or result in any breach of any
provisions of the charter or bylaws (or operating agreement) of Gold Industry or
any Gold Industry Subsidiary, (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, Contract, agreement or other instrument or obligation to which Gold
Industry or any Gold Industry Subsidiary is a party or by which any of their
respective properties or assets may be bound, or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Gold Industry or
any Gold Industry Subsidiary, or any of its properties or assets, except in the
case of clauses (b) and (c) for violations, breaches or defaults which are not
in the aggregate material to Gold Industry taken as a whole.
2.7 Books and Records.
The books and records of Gold Industry delivered to Pubco prior to the Closing
fully and fairly reflect the transactions to which Gold Industry is a party or
by which it or its properties are bound, and there shall be no material
difference between the unaudited combined financial statements of Gold Industry
given to Pubco and the Pubco Stockholders and the actual reviewed US GAAP
results of Gold Industry for the three-month period ended September 30,
2009.
2.8 Intellectual
Property. Gold Industry has no knowledge of any claim that, or inquiry as
to whether, any product, activity or operation of Gold Industry or a Gold
Industry Subsidiary infringes upon or involves, or has resulted in the
infringement of, any trademarks, trade-names, service marks, patents, copyrights
or other proprietary rights of any other person, corporation or other entity;
and no proceedings have been instituted, are pending or are
threatened.
2.9 Litigation. Except as
disclosed in Schedule
2.9 of the disclosure schedules hereto, there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the
Knowledge of Gold Industry, threatened against or affecting Gold Industry or any
of its properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of this
Agreement or the Pubco Shares or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither Gold Industry nor any director or officer thereof, is
or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the Knowledge of Gold
Industry, there is not pending or contemplated, any investigation by the SEC
involving Gold Industry or any current or former director or officer of Gold
Industry.
2.10 Legal Compliance. To
the best Knowledge of Gold Industry, after due investigation, no claim has been
filed against Gold Industry or any of the Gold Industry Subsidiaries alleging a
violation of any applicable laws and regulations of foreign, federal, state and
local governments and all agencies thereof. Gold Industry and each of the Gold
Industry Subsidiaries holds all of the material permits, licenses, certificates
or other authorizations of foreign, federal, state or local governmental
agencies required for the conduct of their respective businesses as presently
conducted.
2.11 Contracts. Except as
disclosed in Schedule
2.11 of the disclosure schedules hereto, there are no Contracts that are
material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the Gold
Industry. Gold Industry is not in violation of or in default under
(nor does there exist any condition which upon the passage of time or the giving
of notice would cause such a violation of or default under) any Contract to
which they are a party or by which they or any of their properties or assets are
bound, except for violations or defaults that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect.
2.12 Material Changes.
Since January 1, 2009, except as disclosed in Schedule 2.12 of the
disclosures schedules hereto: (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) Gold Industry has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice, and
(B) liabilities not required to be reflected in Gold Industry’s financial
statements pursuant to GAAP, (iii) Gold Industry has not altered its method of
accounting, (iv) Gold Industry has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) Gold Industry has not issued any equity securities to any officer,
director or Affiliate.
2.13 Labor
Relations. No labor dispute exists or, to the Knowledge of
Gold Industry, is imminent with respect to any of the employees of Gold Industry
or a Gold Industry Subsidiary which could reasonably be expected to result in a
Material Adverse Effect. None of Gold Industry’s or Gold Industry
Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with Gold Industry or such Gold Industry Subsidiary, and neither
Gold Industry nor any of the Gold Industry Subsidiaries is a party to a
collective bargaining agreement, and Gold Industry and the Gold Industry
Subsidiaries believe that their relationships with their employees are
good. No executive officer, to the Knowledge of Gold Industry, is, or
is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such
executive officer does not subject Gold Industry or any of the Gold Industry
Subsidiaries to any liability with respect to any of the foregoing
matters. Gold Industry and the Gold Industry Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
2.14 Title to
Assets. Gold Industry and the Gold Industry Subsidiaries have
good and marketable title in fee simple to all real property owned by them and
good and marketable title in all personal property owned by them that is
material to the business of Gold Industry and the Gold Industry Subsidiaries, in
each case free and clear of all Liens, except for Liens that do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by Gold Industry and the Gold
Industry Subsidiaries and Liens for the payment of Taxes, the payment of which
is neither delinquent nor subject to penalties. Any real property and
facilities held under lease by Gold Industry and the Gold Industry Subsidiaries
are held by them under valid, subsisting and enforceable leases with which Gold
Industry and the Gold Industry Subsidiaries are in compliance.
2.15 Transactions with Affiliates
and Employees. None of the officers or directors of Gold
Industry and, to the Knowledge of Gold Industry, none of the employees of Gold
Industry or a Gold Industry Subsidiary is presently a party to any transaction
with Gold Industry or any Gold Industry Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the Knowledge of Gold
Industry, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000, other than for: (i) payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of Gold Industry or a Gold Industry Subsidiary and (iii) other employee
benefits.
2.17 Certain
Fees. Except as disclosed in Schedule 2.17 of the
disclosure schedules hereto, no brokerage or finder’s fees or commissions are or
will be payable by Gold Industry to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement.
2.18 Registration
Rights. No Person has any right to cause (or any successor) to
effect the registration under the Securities Act of any securities of Gold
Industry (or any successor).
2.19 Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, Gold Industry and each Gold Industry Subsidiary has timely filed all
necessary Tax Returns and has paid or accrued all Taxes shown as due thereon,
and Gold Industry has no Knowledge of a tax deficiency which has been asserted
or threatened against Gold Industry or any Gold Industry
Subsidiary.
2.20 No General
Solicitation. Neither Gold Industry nor any person acting on
behalf of Gold Industry has offered or sold securities in connection herewith by
any form of general solicitation or general advertising.
2.21 Foreign Corrupt
Practices. Neither Gold Industry, nor to the Knowledge of Gold
Industry, any agent or other person acting on behalf of Gold Industry , has: (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by Gold Industry (or made by any person acting on its behalf
of which Gold Industry is aware) which is in violation of law or (iv) violated
in any material respect any provision of the Foreign Corrupt Practices Act of
1977, as amended (“FCPA”).
2.22 Obligations of
Management. Each officer and key employee of Gold Industry and Gold
Industry Subsidiaries is currently devoting substantially all of his or her
business time to the conduct of business of Gold Industry and Gold Industry
Subsidiaries. Neither Gold Industry nor any of the Gold Industry
Subsidiaries is aware that any officer or key employee of Gold Industry or any
Gold Industry Subsidiary is planning to work less than full time at Gold
Industry or any Gold Industry Subsidiary, as applicable, in the
future. No officer or key employee is currently working or, to Gold
Industry’s Knowledge, plans to work for a competitive enterprise, whether or not
such officer or key employee is or will be compensated by such
enterprise.
2.23 Minute Books. The
minute books of Gold Industry and the Gold Industry Subsidiaries made available
to Pubco contain a complete summary of all meetings and written consents in lieu
of meetings of directors and stockholders since the time of
incorporation.
2.24 Employee
Benefits. Neither Gold Industry nor any Gold Industry
Subsidiary has (nor for the two years preceding the date hereof has had) any
plans which are subject to ERISA. “ERISA” means the
Employee Retirement Income Security Act of 1974 or any successor law and the
regulations and rules issued pursuant to that act or any successor
law.
2.25 Money Laundering
Laws. The operations of Gold Industry 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 action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving Gold Industry
with respect to the Money Laundering Laws is pending or, to the knowledge of
Gold Industry, threatened.
2.26 Disclosure. The
representations and warranties and statements of fact made by Gold Industry in
this Agreement are, as applicable, accurate, correct and complete and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained herein
not false or misleading.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE GOLD INDUSTRY SHAREHOLDERS
Except as
otherwise disclosed herein or in the disclosure schedule delivered by the Gold
Industry Shareholders to Pubco at the time of execution of this Agreement, the
Gold Industry Shareholders each hereby represent and warrant to Pubco as of the
date hereof and as of the Closing Date (unless otherwise indicated), as
follows:
3.1 Ownership of the Gold
Industry Equity Interest. Each Gold Industry Shareholder owns,
beneficially and of record, good and marketable title to the amount of the Gold
Industry Equity Interest set forth opposite such Gold Industry Shareholder’s
name in Column II of Annex I hereto, free
and clear of all security interests, liens, adverse claims, encumbrances,
equities, proxies, options or voting agreements. Gold Industry
Shareholders represent that they each have no right or claims whatsoever to any
equity interests of Gold Industry, other than the Gold Industry Equity Interest
and do not have any options, warrants or any other instruments entitling any of
them to exercise or purchase or convert into additional equity interests of Gold
Industry. At the Closing, the Gold Industry Shareholders will convey to Pubco
good and marketable title to the Gold Industry Equity Interests, free and clear
of any security interests, liens, adverse claims, encumbrances, equities,
proxies, options, shareholders’ agreements or restrictions.
3.2 Authority Relative to this
Agreement. This Agreement has been duly and validly executed and
delivered by the Gold Industry Shareholders and constitutes a valid and binding
agreement of such person, enforceable against such person in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity.
3.3 Purchase of Restricted
Securities for Investment. The Gold Industry Shareholders each
acknowledge that the Pubco Shares will not be registered pursuant to the
Securities Act or any applicable state securities laws, that the Pubco Shares
will be characterized as “restricted securities” under federal securities laws,
and that under such laws and applicable regulations the Pubco Shares cannot be
sold or otherwise disposed of without registration under the Securities Act or
an exemption therefrom. In this regard, each Gold Industry
Shareholder is familiar with Rule 144 promulgated under the Securities Act, as
currently in effect, and understands the resale limitations imposed thereby and
by the Securities Act. Further, each Gold Industry Shareholder
acknowledges and agrees that:
SHARE
EXCHANGE AGREEMENT
Page
9
(a) Each
Gold Industry Shareholder is acquiring the Pubco Shares for investment, for such
Gold Industry Shareholder’s own account and not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and each Gold
Industry Shareholder has no present intention of selling, granting any
participation in, or otherwise distributing the same. Each Gold
Industry Shareholder further represents that he, she or it does not have any
Contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Pubco Shares.
(b) Each
Gold Industry Shareholder understands that the Pubco Shares are not registered
under the Securities Act on the ground that the sale and the issuance of
securities hereunder is exempt from registration under the Securities Act
pursuant to Section 4(2) thereof, and that Pubco’s reliance on such exemption is
predicated on the each Shareholder’s representations set forth
herein.
3.4 Status of
Stockholder. Each of the Gold Industry Shareholders hereby makes the
representations and warranties in either paragraph (a) or (b) of this Section 3.4, as
indicated on the Signature Page of Gold Industry Shareholders which is attached
and part of this Agreement:
(a) Accredited Investor Under
Regulation D. The Gold Industry Shareholder is an “Accredited Investor”
as that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act, an excerpt of which is included in the attached Annex III, and such
Gold Industry Shareholder is not acquiring its portion of the Pubco Shares as a
result of any advertisement, article, notice or other communication regarding
the Pubco Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
(b) Non-U.S. Person Under
Regulation S. The Gold Industry Shareholder:
(i)
is not a “U.S. person” as defined by Rule 902 of Regulation S promulgated under
the Securities Act, was not organized under the laws of any U.S. jurisdiction,
and was not formed for the purpose of investing in securities not registered
under the Securities Act;
(ii)
at the time of Closing, the Gold Industry Shareholder was located outside the
United States;
(iii) no
offer of the Pubco Shares was made to the Gold Industry Shareholder within the
United States;
(iv) the
Gold Industry Shareholder is either (a) acquiring the Pubco Shares for its own
account for investment purposes and not with a view towards distribution, or (b)
acting as agent for a principal that has signed this Agreement or has delivered
representations and warranties substantially similar to this Section
3.4(b);
(v) all
subsequent offers and sales of the Pubco Shares by the Gold Industry Shareholder
will be made outside the United States in compliance with Rule 903 of Rule 904
of Regulation S, pursuant to registration of the Shares under the Securities
Act, or pursuant to an exemption from such registration; the Gold Industry
Shareholder understands the conditions of the exemption from registration
afforded by section 4(l) of the Securities Act and acknowledges that there can
be no assurance that it will be able to rely on such exemption.
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(vi) the
Gold Industry Shareholder will not resell the Pubco Shares to U.S. Persons or
within the United States until after the end of the one (1) year period
commencing on the date of Closing (the “Restricted
Period”);
(vii)
the Gold Industry Shareholder shall not and hereby agrees not to enter into any
short sales with respect to Pubco Common Stock at any time after the execution
of this Agreement by the Gold Industry Shareholder and prior to the
expiration of the Restricted Period;
(viii) in
the event of resale of the Pubco Shares to non-U.S. Persons outside of the U.S.
during the Restricted Period, the Gold Industry Shareholder shall provide a
written confirmation or other written notice to any distributor, dealer, or
person receiving a selling concession, fee, or other remuneration in respect of
the Shares stating that such purchaser is subject to the same restrictions on
offers and sales that apply to the undersigned, and shall require that any such
purchase shall provide such written confirmation or other notice upon resale
during the Restricted Period;
(ix) the
Gold Industry Shareholder has not engaged, nor is it aware that any party has
engaged, and it will not engage or cause any third party to engage in any
“directed selling” efforts (as such term is defined in Regulation S) in the
United States with respect to the Pubco Shares;
(x) the
Gold Industry Shareholder is not a “distributor” as such term is defined in
Regulation S, and it is not a “dealer” as such term is defined in the Securities
Act;
(xi) the
Gold Industry Shareholder has not taken any action that would cause any of the
parties to this Agreement to be subject to any claim for commission or other or
remuneration by any broker, finder, or other person; and
(xii)
the Gold Industry Shareholder hereby represents that it has satisfied fully
observed of the laws of the jurisdiction in which it is located or domiciled, in
connection with the acquisition of the Pubco Shares or this Agreement, including
(i) the legal requirements of the Gold Industry Shareholder’s jurisdiction for
the purchase and acquisition of the Pubco Shares, (ii) any foreign exchange
restrictions applicable to such purchase and acquisition, (iii) any governmental
or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, which may be relevant to the purchase, holding,
redemption, sale, or transfer of the Pubco Shares; and further, the Gold
Industry Shareholder agrees to continue to comply with such laws as long as it
shall hold the Pubco Shares.
(c) The
Gold Industry Shareholder understands that the Pubco Shares are being offered
and sold to it in reliance on specific provisions of federal and state
securities laws and that the parties to this Agreement are relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understanding of the Gold Industry Shareholder set forth
herein in order to determine the applicability of such
provisions. Accordingly, the Gold Industry Shareholder agrees to
notify Pubco of any events which would cause the representations and warranties
of the Gold Industry Shareholder to be untrue or breached at any time after the
execution of this Agreement by such Gold Industry Shareholder and prior to the
expiration of the Restricted Period.
3.5 Investment Risk. The
Gold Industry Shareholder is able to bear the economic risk of acquiring the
Pubco Shares pursuant to the terms of this Agreement, including a complete loss
of such the Gold Industry Shareholder’s investment in the Pubco
Shares.
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3.6 Restrictive Legends.
The Gold Industry Shareholder acknowledges that the certificate(s) representing
the Gold Industry Shareholder’s pro rata portion of the Pubco Shares shall each
conspicuously set forth on the face or back thereof a legend in substantially
the following form, corresponding to the stockholder’s status as set forth in
Section 3.4 and
the signature pages hereto:
REGULATION D
LEGEND:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”
REGULATION S
LEGEND:
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION;
HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
3.7 Disclosure. The
representations and warranties and statements of fact made by Gold Industry
Shareholders in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF PUBCO AND THE PUBCO STOCKHOLDERS
Except as
otherwise disclosed herein or in the disclosure schedule delivered by Pubco and
the Pubco Stockholders to Gold Industry at the time of execution of this
Agreement, Pubco and the Pubco Stockholders hereby, jointly and severally,
represent and warrant to Gold Industry and the Gold Industry Shareholders as of
the date hereof and as of the Closing Date (unless otherwise indicated), as
follows:
4.1 Organization and
Qualification. Pubco is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Pubco is not, to its Knowledge, in violation
nor default of any of the provisions of its certificate or articles of
incorporation, bylaws or other organizational or charter documents (collectively
the “Charter
Documents”). Pubco is duly qualified to conduct business and
is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have or reasonably
be expected to result in a Material Adverse Effect, and no proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.
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4.2 Authorization;
Enforcement. Pubco has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The
execution and delivery of this Agreement by Pubco and the consummation by it of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of Pubco and no further action is required by Pubco, the
Board of Directors or Pubco’s stockholders in connection therewith other than in
connection with the Required Approvals, as defined in Section
4.4. This Agreement has been (or upon delivery will have been)
duly executed by Pubco and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of Pubco enforceable against
Pubco in accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
4.3 No
Conflicts. The execution, delivery and performance by Pubco of
this Agreement and the consummation by Pubco of the other transactions to which
it is a party and as contemplated hereby do not and will not: (i) conflict with
or violate any provision of Pubco’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any of
the properties or assets of Pubco, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Pubco debt or otherwise) or other understanding to which Pubco is
a party or by which any property or asset of Pubco is bound or affected, or
(iii) subject to the Required Approvals, as defined by Section 4.4, conflict
with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which Pubco is subject (including federal and state securities laws and
regulations), or by which any property or asset of Pubco is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.
4.4 Filings, Consents and
Approvals. Pubco is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by Pubco of this Agreement, other than the filing of a
Current Report on Form 8-K and Form D with the SEC and such filings as are
required to be made under applicable state securities laws (collectively, the
“Required
Approvals”).
4.5 Issuance of the Pubco
Shares. The Pubco Shares are duly authorized and, when issued
and paid for in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens imposed on or by Pubco
other than restrictions on transfer provided for in this Agreement.
4.6 Capitalization. The
capitalization of Pubco is as set forth on Schedule 4.6, which
Schedule 4.6
shall also include the number of shares of Pubco Common Stock owned
beneficially, and of record, by Affiliates of Pubco as of the date hereof, if
any. Other than as set forth in Schedule 4.6, Pubco
has not issued any capital stock since its most recently filed periodic report
under the Exchange Act. No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by this Agreement. There are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Pubco Common Stock,
or Contracts, commitments, understandings or arrangements by which Pubco or any
subsidiary of Pubco is or may become bound to issue additional shares of Pubco
Common Stock or Common Stock Equivalents.
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The
issuance of the Pubco Shares will not obligate Pubco to issue shares of Pubco
Common Stock or other securities to any Person (other than to the Gold Industry
Shareholders) and will not result in a right of any holder of Pubco securities
to adjust the exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of Pubco
are validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities. No further approval or authorization of
any stockholder or Pubco’s board of directors is required for the issuance of
the Pubco Shares. There are no stockholders agreements, voting
agreements or other similar agreements with respect to Pubco’s capital stock to
which Pubco is a party or, to the Knowledge of Pubco, between or among any of
Pubco’s stockholders. “Common Stock
Equivalents” means any securities of Pubco or of any subsidiary of Pubco
which would entitle the holder thereof to acquire at any time Pubco Common
Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive Pubco Common Stock.
4.7 SEC Reports; Financial
Statements. Pubco has filed all reports, schedules, forms,
statements and other documents required to be filed by Pubco under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as Pubco was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension. To the Knowledge of Pubco and the Pubco Stockholders, as
of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
financial statements of Pubco included in the SEC Reports (“Financial
Statements”) comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing. Such financial statements have been
prepared in accordance with GAAP, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of Pubco as of and for the dates
thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.
4.8 Material Changes.
Since the date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof or in connection herewith: (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) Pubco has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in Pubco’s financial statements
pursuant to GAAP or disclosed in filings made with the SEC, (iii) Pubco has not
altered its method of accounting, (iv) Pubco has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) Pubco has not issued any equity securities to any
officer, director or Affiliate. Pubco does not have pending before
the SEC any request for confidential treatment of information. Except
for the issuance of the Pubco Shares contemplated by this Agreement or as set
forth on Schedule
4.8, no event, liability or development has occurred or exists with
respect to Pubco or any subsidiary of Pubco or their respective business,
properties, operations or financial condition, that would be required to be
disclosed by Pubco under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least one (1) Trading Day prior to the date that this representation is
made.
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4.9 Litigation. There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the Knowledge of Pubco and the Pubco Stockholders, threatened
against or affecting Pubco or any of its properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of this
Agreement or the Pubco Shares, or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither Pubco nor any director or officer thereof, is or has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the Knowledge of Pubco and the Pubco
Stockholders, there is not pending or contemplated, any investigation by the SEC
involving Pubco or any current or former director or officer of
Pubco. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by Pubco under
the Securities Act.
4.10 Labor
Relations. No labor dispute exists or, to the Knowledge of
Pubco and the Pubco Stockholders, is imminent with respect to any of the
employees of Pubco which could reasonably be expected to result in a Material
Adverse Effect. None of Pubco’s employees is a member of a union that
relates to such employee’s relationship with Pubco, and Pubco is not a party to
a collective bargaining agreement, and Pubco believes that its relationships
with their employees are good. No executive officer, to the Knowledge
of Pubco and the Pubco Stockholders, is, or is now expected to be, in violation
of any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
Contract or agreement or any restrictive covenant in favor of any third party,
and the continued employment of each such executive officer does not subject
Pubco to any liability with respect to any of the foregoing
matters. Pubco is in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
4.11 Compliance. To
the Knowledge of Pubco and the Pubco Stockholders, Pubco: (i) is not in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by Pubco
under), nor has Pubco received notice of a claim that it is in default under or
that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) is not n violation of any order of any court, arbitrator or governmental
body, or (iii) is or has been in violation of any statute, rule or regulation of
any governmental authority, including without limitation all foreign, federal,
state and local laws applicable to its business and all such laws that affect
the environment, except in each case as could not have or reasonably be expected
to result in a Material Adverse Effect.
4.12 Regulatory
Permits. Pubco possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its business, except where the failure to
possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”),
and Pubco has not received any notice of proceedings relating to the revocation
or modification of any Material Permit.
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4.13 Title to
Assets. Pubco has good and marketable title in all personal
property owned by it that is material to the business of, in each case free and
clear of all Liens, except for Liens that do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by Pubco and Liens for the payment of Taxes, the
payment of which is neither delinquent nor subject to
penalties. Pubco does not own any real property. Any real
property and facilities held under lease by Pubco, if any, is held by Pubco
under valid, subsisting and enforceable leases with which Pubco is in
compliance.
4.14 Patents and
Trademarks. Pubco has, or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the SEC Reports as necessary
or material for use in connection with their business and which the failure to
so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). Pubco has not received a notice (written or
otherwise) that any of the Intellectual Property Rights used by Pubco violates
or infringes upon the rights of any Person. To the Knowledge of Pubco
and the Pubco Stockholders, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of
the Intellectual Property Rights. Pubco has taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.15 Transactions with Affiliates
and Employees. Except as set forth in the SEC Reports, none of
the officers or directors of Pubco and, to the Knowledge of Pubco and the Pubco
Stockholders, none of the employees of Pubco is presently a party to any
transaction with Pubco (other than for services as employees, officers and
directors), including any Contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the Knowledge of Pubco, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner, in each case in excess of $120,000, other
than for: (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of Pubco and (iii) other employee
benefits.
4.16 Xxxxxxxx-Xxxxx; Internal
Accounting Controls. Pubco is in material compliance with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it as of
the Closing Date. Pubco maintains a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Pubco has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for Pubco and designed such disclosure controls and procedures to
ensure that information required to be disclosed by Pubco in the reports it
files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the SEC’s rules and
forms. Pubco’s certifying officers have evaluated the effectiveness
of Pubco’s disclosure controls and procedures as of the end of the period
covered by Pubco’s most recently filed periodic report under the Exchange Act
(such date, the “Evaluation
Date”). Pubco presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officer about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date,
there have been no changes in Pubco’s internal control over financial reporting
(as such term is defined in the Exchange Act) that has materially affected, or
is reasonably likely to materially affect, Pubco’s internal control over
financial reporting.
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4.17 Certain
Fees. No brokerage or finder’s fees or commissions are or will
be payable by Pubco to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement.
4.18 Issuance of Pubco
Shares. Assuming the accuracy of the Gold Industry Shareholders’
representations and warranties set forth in Section 3, no
registration under the Securities Act is required for the offer and issuance of
the Pubco Shares by Pubco to the Gold Industry Shareholders as contemplated
hereby. The issuance of the Pubco Shares hereunder does not contravene the rules
and regulations of the applicable Trading Market.
4.19 Investment Company.
Pubco is not, and is not an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
4.20 Listing and Maintenance
Requirements. Pubco Common Stock is currently quoted on
FINRA’s Over-the-Counter Bulletin Board Quotation Service (“OTC Bulletin Board”)
under the symbol “APBS” and Pubco has not, in the 24 months preceding the date
hereof, received any notice from the OTC Bulletin Board or FINRA or any trading
market on which Pubco Common Stock is or has been listed or quoted to the effect
that Pubco is not in compliance with the quoting, listing or maintenance
requirements of the OTCBB or such other trading market. Pubco is, and
has no reason to believe that it will not, in the foreseeable future continue to
be, in compliance with all such quoting, listing and maintenance
requirements.
4.21 Application of Takeover
Protections. Pubco has taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under Pubco’s certificate of
incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Gold Industry
Shareholders as a result of the Gold Industry Shareholders and Pubco fulfilling
their obligations or exercising their rights under this Agreement, including
without limitation as a result of Pubco’s issuance of the Pubco Shares and the
Gold Industry Shareholders’ ownership of the Pubco Shares.
4.22 No Integrated
Offering. To the Knowledge of Pubco and the Pubco Stockholders, and
assuming the accuracy of the Gold Industry Shareholders’ representations and
warranties set forth in Section 3, neither
Pubco, nor any of its Affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Pubco Shares to be integrated with prior offerings by Pubco
for purposes of (i) the Securities Act which would require the registration of
any such securities under the Securities Act, or (ii) any applicable shareholder
approval provisions of any Trading Market on which any of the securities of
Pubco are listed or designated.
4.23 Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, Pubco has filed all necessary Tax Returns and has paid or accrued all
Taxes shown as due thereon, and Pubco has no knowledge of a tax deficiency which
has been asserted or threatened against Pubco.
4.24 No General
Solicitation. Neither Pubco nor any person acting on behalf of
Pubco has offered or sold any of the Pubco Shares by any form of general
solicitation or general advertising.
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4.25 Foreign Corrupt
Practices. Neither Pubco, nor to the Knowledge of Pubco and
the Pubco Stockholders, any agent or other person acting on behalf of Pubco,
has: (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by Pubco (or made by any person acting on its behalf of which
Pubco is aware) which is in violation of law or (iv) violated in any material
respect any provision of the FCPA.
4.26 Accountants. Pubco’s
accounting firm is set forth on Schedule 4.26 of the
disclosure schedules. To the Knowledge and belief of Pubco and the
Pubco Stockholders, such accounting firm: (i) is a registered public accounting
firm as required by the Exchange Act and (ii) expressed its opinion with respect
to the financial statements included in Pubco’s Annual Report for the year ended
August 31, 2009.
4.27 No Disagreements with
Accountants and Lawyers. To the Knowledge of Pubco and the
Pubco Stockholders, there are no disagreements of any kind, including but not
limited to any disagreements regarding fees owed for services rendered,
presently existing, or reasonably anticipated by Pubco to arise, between Pubco
and the accountants and lawyers formerly or presently employed by Pubco which
could affect Pubco’s ability to perform any of its obligations under this
Agreement, and Pubco is current with respect to any fees owed to its accountants
and lawyers.
4.28 Regulation M
Compliance. Pubco has not, and to the Knowledge of Pubco and the
Pubco Stockholders, no one acting on behalf of Pubco has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of Pubco to facilitate the sale or
resale of any of the Pubco Shares, (ii) sold, bid for, purchased, or paid any
compensation for soliciting purchases of, any of the securities of Pubco, or
(iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of Pubco.
4.29 Money Laundering
Laws. The operations of Pubco are and have been conducted at all times in
compliance with the Money Laundering Laws and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving Pubco with respect to the Money Laundering Laws is pending or, to the
best Knowledge of Pubco and the Pubco Stockholders, threatened.
4.30 Minute Books. The
minute books of Pubco made available to Gold Industry and the Gold Industry
Shareholders contain a complete summary of all meetings and written consents in
lieu of meetings of directors and stockholders since the time of
incorporation.
4.31 Employee
Benefits. Pubco has not (nor for the two years preceding the
date hereof has) had any plans which are subject to ERISA.
4.32 Business Records and Due
Diligence. Prior to the Closing, Pubco delivered to Gold
Industry all records and documents relating to Pubco, which Pubco and possesses,
including, without limitation, books, records, government filings, Tax Returns,
Charter Documents, corporate records, stock records, consent decrees, orders,
and correspondence, director and stockholder minutes, resolutions and written
consents, stock ownership records, financial information and records, and other
documents used in or associated with Pubco and Pubco’s subsidiaries, if
any.
4.33 Contracts. Except
as set forth in Schedule 4.33 of the
disclosure schedules hereto, there are no Contracts that are material to the
business, properties, assets, condition (financial or otherwise), results of
operations or prospects of Pubco taken as a whole. Pubco is not in
violation of or in default under (nor does there exist any condition which upon
the passage of time or the giving of notice would cause such a violation of or
default under) any Contract to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
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4.34 No Undisclosed
Liabilities. Except as otherwise disclosed in Schedule 4.34 of the
disclosure schedules, Pubco’s Financial Statements or incurred in the ordinary
course of business after the fiscal year ended August 31, 2009 (the financial
statements of which were filed with the SEC along with Pubco’s annual report on
Form 10-K on November 2, 2009), Pubco has no other undisclosed liabilities
whatsoever, either direct or indirect, matured or unmatured, accrued, absolute,
contingent or otherwise. Pubco and the Pubco Stockholders represent
that at the date of Closing, Pubco shall have no liabilities or obligations
whatsoever, either direct or indirect, matured or unmatured, accrued, absolute,
contingent or otherwise.
4.35 No SEC or FINRA
Inquiries. To the Knowledge of Pubco and the Pubco Stockholders, neither
Pubco nor any of its present officers or directors is, or has ever been, the
subject of any formal or informal inquiry or investigation by the SEC or
FINRA.
4.36 Shell
Company. Pubco is a shell company with no substantial business
operations.
4.37 Transfer
Agent. Pubco’s transfer agent is listed on Schedule 4.37 with
its name, address, telephone number, fax number, contact person and email
address. Such transfer agent is eligible to transfer securities via
Depository Trust Company (“DTC”) and Deposit Withdrawal Agent Commission
(“DWAC”).
4.38 Disclosure. The
representations and warranties and statements of fact made by Pubco and the
Pubco Stockholders in this Agreement, and all statements set forth in the
certificates delivered by Pubco and the Pubco Stockholders at the Closing
pursuant to this Agreement, are, as applicable, accurate, correct and complete
and do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained herein not false or misleading. The copies of all documents furnished
by Pubco and the Pubco Stockholders pursuant to the terms of this Agreement are
complete and accurate copies of the original documents. The
schedules, certificates, and any and all other statements and information,
whether furnished in written or electronic form, to Gold Industry or its
representatives by or on behalf of Pubco and the Pubco Stockholders in
connection with the negotiation of this Agreement and the transactions
contemplated hereby do not contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading.
ARTICLE
5
INDEMNIFICATION;
SURVIVAL OF REPRESENTATIONS
5.1 Indemnification.
(a) Subject
to the provisions of this Article 5, and
irrespective of any due diligence investigation conducted by Gold Industry with
regard to the transactions contemplated hereby, the Pubco Stockholders agree to
indemnify fully in respect of, hold harmless and defend Gold Industry, the Gold
Industry Subsidiaries and the Gold Industry Shareholders, and each of the
officers, agents and directors of Gold Industry, the Gold Industry Subsidiaries
or the Gold Industry Shareholders, against any damages, liabilities, costs,
claims, proceedings, investigations, penalties, judgments, deficiencies,
including taxes, expenses (including, but not limited to, any and all interest,
penalties and expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever) and losses (each, a “Claim” and
collectively “Claims”) to which it
or they may become subject arising out of or based on either (i) any breach of
or inaccuracy in any of the representations and warranties or covenants or
conditions made by Pubco and/or the Pubco Stockholders herein in this Agreement;
or (ii) any and all liabilities arising out of or in connection with: (A) any of
the assets of Pubco prior to the Closing; or (B) the operations of Pubco prior
to the Closing.
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(b) Subject
to the provisions of this Article 5, Gold
Industry agrees to indemnify fully in respect of, hold harmless and defend the
Pubco Stockholders and each of the officers, agents and directors of the Pubco
Stockholders against any Claims to which it or they may become subject arising
out of or based on (i) any breach of or inaccuracy in any of the representations
and warranties or covenants or conditions made by Gold Industry and/or the Gold
Industry Shareholders herein in this Agreement; or (ii) any and all liabilities
arising out of or in connection with: (A) any of the assets of Gold Industry
subsequent to the Closing; or (B) the operations of Gold Industry subsequent to
the Closing.
5.2 Survival of Representations and
Warranties. Notwithstanding provision in this Agreement to the
contrary, the representations and warranties given or made by Pubco, the Pubco
Stockholders, Gold Industry and the Gold Industry Shareholders under this
Agreement shall survive the date hereof for a period of twenty four (24) months
from and after the Closing Date (the last day of such period is herein referred
to as the “Expiration
Date”), except that any written claim for breach thereof made and
delivered prior to the Expiration Date to the party against whom such
indemnification is sought shall survive thereafter and, as to any such claim,
such applicable expiration will not effect the rights to indemnification of the
party making such claim; provided, however, that any
representations and warranties that were fraudulently made shall not expire on
the Expiration Date and shall survive indefinitely, and claims with respect to
fraud by Pubco, the Pubco Stockholders, Gold Industry or the Gold Industry
Shareholders may be made at any time.
5.3 Method of Asserting Claims,
Etc. The party claiming indemnification is hereinafter
referred to as the “Indemnified Party”
and the party against whom such claims are asserted hereunder is hereinafter
referred to as the “Indemnifying Party.”
All Claims for indemnification by any Indemnified Party under this Article 5 shall be
asserted as follows:
(a) In
the event that any Claim or demand for which an Indemnifying Party would be
liable to an Indemnified Party hereunder is asserted against or sought to be
collected from such Indemnified Party by a third party, said Indemnified Party
shall, within ten (10) business days from the date upon which the Indemnified
Party has Knowledge of such Claim, notify the Indemnifying Party of such claim
or demand, specifying the nature of and specific basis for such claim or demand
and the amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such Claim or
demand) (the “Claim
Notice”). The Indemnified Party’s failure to so notify the
Indemnifying Party in accordance with the provisions of this Agreement shall not
relieve the Indemnifying Party of liability hereunder unless such failure
materially prejudices the Indemnifying Party’s ability to defend against the
claim or demand. The Indemnifying Party shall have 30 days from the
giving of the Claim Notice (the “Notice Period”) to
notify the Indemnified Party: (i) whether or not the Indemnifying
Party disputes the liability of the Indemnifying Party to the Indemnified Party
hereunder with respect to such Claim or demand, and (ii) whether or not the
Indemnifying Party desires, at the sole cost and expense of the Indemnifying
Party, to defend the Indemnified Party against such Claims or demand; provided,
however, that any Indemnified Party is hereby authorized prior to and during the
Notice Period to file any motion, answer or other pleading which he shall deem
necessary or appropriate to protect his interests or those of the Indemnifying
Party and not prejudicial to the Indemnifying Party.
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In the
event that the Indemnifying Party notifies the Indemnified Party within the
Notice Period that he does not dispute liability for indemnification under this
Article 5 and
that he desires to defend the Indemnified Party against such claim or demand and
except as hereinafter provided, the Indemnifying Party shall have the right to
defend by all appropriate proceedings, which proceedings shall be promptly
settled or prosecuted by him to a final conclusion. The Indemnified
Party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party except to the extent that the
employment thereof has been specifically authorized by the Indemnifying Party in
writing, the Indemnifying Party has failed after a reasonable period of time to
assume such defense and to employ counsel or in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the Indemnifying Party and the position of such
Indemnified Party (a “Material
Conflict”). If requested by the Indemnifying Party and there
is no Material Conflict, the Indemnified Party agrees to cooperate with the
Indemnifying Party and his counsel in contesting any Claim or demand which the
Indemnifying Party elects to contest or, if appropriate and related to the Claim
in question, in making any Counterclaim against the person asserting the third
party Claim or demand, or any cross-complaint against any person. No
Claim for which indemnity is sought hereunder and for which the Indemnifying
Party has acknowledged liability for indemnification under this Article 5 may be
settled without the consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed.
(b) In
the event any Indemnified Party should have a Claim against any Indemnifying
Party hereunder which does not involve a Claim or demand being asserted against
or sought to be collected from him by a third party, the Indemnified Party shall
give a Claim Notice with respect to such Claim to the Indemnifying
Party. If, after receipt of a Claim Notice, the Indemnifying Party
does not notify the Indemnified Party within the Notice Period that he disputes
such Claim, then the Indemnifying Party shall be deemed to have admitted
liability for such Claim in the amount set forth in the Claim
Notice.
ARTICLE
6
COVENANTS
OF THE PARTIES
6.1 Corporate Examinations and
Investigations. Prior to the Closing, each party shall be entitled,
through its employees and representatives, to make such investigations and
examinations of the books, records and financial condition of Gold Industry and
Pubco as each party may request. In order that each party may have the full
opportunity to do so, Gold Industry and Pubco, the Gold Industry Shareholders
and the Pubco Stockholders shall furnish each party and its representatives
during such period with all such information concerning the affairs of Gold
Industry or Pubco as each party or its representatives may reasonably request
and cause Gold Industry or Pubco and their respective officers, employees,
consultants, agents, accountants and attorneys to cooperate fully with each
party’s representatives in connection with such review and examination and to
make full disclosure of all information and documents requested by each party
and/or its representatives. Any such investigations and examinations shall be
conducted at reasonable times and under reasonable circumstances, it being
agreed that any examination of original documents will be at each party’s
premises, with copies thereof to be provided to each party and/or its
representatives upon request.
6.2 Cooperation;
Consents. Prior to the Closing, each party shall cooperate with the other
parties to the end that the parties shall (i) in a timely manner make all
necessary filings with, and conduct negotiations with, all authorities and other
persons the consent or approval of which, or the license or permit from which is
required for the consummation of the Acquisition and (ii) provide to each other
party such information as the other party may reasonably request in order to
enable it to prepare such filings and to conduct such negotiations.
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6.3 Conduct of Business.
Subject to the provisions hereof, from the date hereof through the Closing, each
party hereto shall (i) conduct its business in the ordinary course and in such a
manner so that the representations and warranties contained herein shall
continue to be true and correct in all material respects as of the Closing as if
made at and as of the Closing and (ii) not enter into any material transactions
or incur any material liability not required or specifically contemplated
hereby, without first obtaining the written consent of Gold Industry and the
Gold Industry Shareholders on the one hand and Pubco and the Pubco Stockholders
on the other hand. Without the prior written consent of Gold Industry, the Gold
Industry Shareholders, Pubco or the Pubco Stockholders, except as required or
specifically contemplated hereby, each party shall not undertake or fail to
undertake any action if such action or failure would render any of said
warranties and representations untrue in any material respect as of the
Closing.
6.4 Litigation. From the
date hereof through the Closing, each party hereto shall promptly notify the
representative of the other parties of any lawsuits, claims, proceedings or
investigations which after the date hereof are threatened or commenced against
such party or any of its affiliates or any officer, director, employee,
consultant, agent or shareholder thereof, in their capacities as such, which, if
decided adversely, could reasonably be expected to have a Material Adverse
Effect on Pubco.
6.5 Notice of Default.
From the date hereof through the Closing, each party hereto shall give to the
representative of the other parties prompt written notice of the occurrence or
existence of any event, condition or circumstance occurring which would
constitute a violation or breach of this Agreement by such party or which would
render inaccurate in any material respect any of such party’s representations or
warranties herein.
6.6 Bylaws. If necessary,
Pubco shall amend its bylaws to permit the election and/or appointment of
additional new directors to Pubco’s Board of Directors as set forth in Section 7.1(a)
below.
6.7 Confidentiality; Access to
Information.
(a) Confidentiality. Any
confidentiality agreement or letter of intent previously executed by the parties
shall be superseded in its entirety by the provisions of this Agreement. Each
party agrees to maintain in confidence any non-public information received from
the other party, and to use such non-public information only for purposes of
consummating the transactions contemplated by this Agreement. Such
confidentiality obligations will not apply to (i) information which was known to
the one party or their respective agents prior to receipt from the other party;
(ii) information which is or becomes generally known; (iii) information acquired
by a party or their respective agents from a third party who was not bound to an
obligation of confidentiality; and (iv) disclosure required by law. In the event
this Agreement is terminated as provided in Article 8 hereof,
each party will return or cause to be returned to the other all documents and
other material obtained from the other in connection with the Transaction
contemplated hereby.
(b) Access to
Information.
(i) Gold
Industry will afford Pubco and its financial advisors, accountants, counsel and
other representatives reasonable access during normal business hours, upon
reasonable notice, to the properties, books, records and personnel of Gold
Industry during the period prior to the Closing to obtain all information
concerning the business, including the status of product development efforts,
properties, results of operations and personnel of Gold Industry, as Pubco may
reasonably request. No information or Knowledge obtained by Pubco in any
investigation pursuant to this Section 6.7(b) will
affect or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the parties to consummate the
Transaction.
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(ii) Pubco
will afford Gold Industry and its financial advisors, underwriters, accountants,
counsel and other representatives reasonable access during normal business
hours, upon reasonable notice, to the properties, books, records and personnel
of Pubco during the period prior to the Closing to obtain all information
concerning the business, including the status of product development efforts,
properties, results of operations and personnel of Pubco, as Gold Industry may
reasonably request. No information or knowledge obtained by Gold Industry in any
investigation pursuant to this Section 6.7(b) will
affect or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the parties to consummate the
Transaction.
6.8 Share Cancellation and
Transfers. Immediately prior to the Closing, the Pubco Stockholders shall
surrender the number of shares of Pubco Common Stock set forth opposite each
such party’s name in Column III on Annex II attached
hereto for cancellation. In connection with such share cancellation, the Pubco
Stockholders agree to execute and deliver any documents and instruments
reasonably necessary to effect such cancellation, including originally executed
certificate(s) and stock powers, with proper endorsements and/or medallion
certified signatures as may be required by Pubco’s transfer agent.
6.9 Public Disclosure.
Except to the extent previously disclosed or to the extent the parties believe
that they are required by applicable law or regulation to make disclosure, prior
to Closing, no party shall issue any statement or communication to the public
regarding the transaction contemplated herein without the consent of the other
party, which consent shall not be unreasonably withheld. To the extent a party
hereto believes it is required by law or regulation to make disclosure regarding
the Transaction, it shall, if possible, immediately notify the other party prior
to such disclosure. Notwithstanding the foregoing, the parties hereto agree that
Gold Industry will prepare and file a Current Report on Form 8-K pursuant to the
Exchange Act to report the execution of this Agreement.
6.10 Information Statement for
Change in Majority of Directors. As directed by Gold Industry,
Pubco and the Pubco Stockholders will use their best efforts to ensure that
Pubco’s current sole director will remain a director of Pubco until the
expiration of the 10-day period beginning on the date of the filing of the
information statement relating to a change in majority of directors of Pubco
with the SEC pursuant to Rule 14f-1 promulgated under the Exchange Act (“Information
Statement”), which Information Statement shall be prepared by Gold
Industry and filed by the Gold Industry Officers (as defined hereafter) on
behalf of Pubco after the Closing.
6.11 Assistance with Post-Closing
SEC Reports and Inquiries. Upon the reasonable request of Gold Industry,
after the Closing Date, each Pubco Stockholder shall use its, his or her
reasonable best efforts to provide such information available to it, including
information, filings, reports, financial statements or other circumstances of
Pubco occurring, reported or filed prior to the Closing, as may be necessary or
required by Pubco for the preparation of the post-Closing Date reports that
Pubco is required to file with the SEC to remain in compliance and current with
its reporting requirements under the Securities Act, or filings required to
address and resolve matters as may relate to the period prior to the Closing and
any SEC comments relating thereto or any SEC inquiry thereof.
6.12 Payment of Pubco
Liabilities. The Pubco Stockholders hereby agree, jointly and
severally, to pay all of the liabilities of Pubco listed in Schedule 4.34 of the
disclosures schedules attached hereto in their entirety on or before the Closing
Date.
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ARTICLE
7
CONDITIONS
TO CLOSING
7.1 Conditions to Obligations of
Gold Industry and the Gold Industry Shareholders. The obligations of Gold
Industry and the Gold Industry Shareholders under this Agreement shall be
subject to each of the following conditions:
(a) Closing Deliveries.
At the Closing, Pubco and the Pubco Stockholders shall have delivered or caused
to be delivered to Gold Industry and the Gold Industry Shareholders the
following:
(i) this
Agreement duly executed by Pubco and the Pubco Stockholders;
(ii) letter
of resignation from Pubco’s current sole officer, with his resignation as to all
of the offices he currently holds with Pubco to be effective on the Closing
Date, and confirming that he has no claim against Pubco in respect of any
outstanding remuneration or fees of whatever nature as of the
Closing;
(iii) letter
of resignation of Pubco’s current sole director, with the resignation of such
director to be effective on the Closing Date;
(iv) resolutions
duly adopted by the Board of Directors of Pubco approving the following events
or actions, as applicable:
|
a.
|
the
execution, delivery and performance of this
Agreement;
|
|
b.
|
the
Acquisition and the terms thereof;
|
|
c.
|
adoption
of bylaws in the form agreed by the
parties;
|
|
d.
|
fixing
the number of authorized directors on the board of directors at four
(4);
|
|
e.
|
the
appointment of Yiyou Ran as Chairman of the board of directors, and the
appointment of Xxxxxxxx Xxxx, Xxxxxxx Xxxx and Xxx Xxxxxx as additional
directors, to serve on the Pubco board of directors, effective on the
Closing Date;
|
|
f.
|
the
appointment of the following persons as officers of Pubco, effective on
the Closing Date, with the titles set forth opposite his name (the “Gold Industry
Officers”):
|
|
|
Yiyou
Ran
|
Chief
Executive Officer, President and Chairman of the
Board
|
|
|
Xxxxxxx
Xxxx
|
Chief
Financial Officer and Treasurer
|
|
|
Xxxxxxx
Xxxx
|
Secretary
|
|
|
g.
|
the
change of the Pubco’s fiscal year end from August 31st to March
31st.
|
(v) a
certificate of good standing for Pubco from its jurisdiction of incorporation,
dated not earlier than five (5) days prior to the Closing Date;
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(vi) an
instruction letter signed by the President of Pubco addressed to Pubco’s
transfer agent of record, in a form reasonably acceptable to Gold Industry and
consistent with the terms of this Agreement, instructing the transfer agent to
issue stock certificates representing the Pubco Shares to be delivered pursuant
to this Agreement registered in the names of the Gold Industry Shareholders as
set forth in Annex
I;
(vii) a
shareholder list of Pubco as certified by the Pubco’s Secretary or transfer
agent, dated within ten (10) days of the Closing Date;
(xiii) a
certificate of the Secretary of the Pubco, dated as of the Closing Date,
certifying as to (i) the incumbency of officers of the Pubco executing this
Agreement and all exhibits and schedules hereto and all other documents,
instruments and writings required pursuant to this Agreement (the “Transaction
Documents”), (ii) a copy of the Certificate of Incorporation and By-Laws
of the Pubco, as in effect on and as of the Closing Date, and (iii) a copy of
the resolutions of the Board of Directors of the Pubco authorizing and approving
the Pubco’s execution, delivery and performance of the Transaction Documents,
all matters in connection with the Transaction Documents, and the transactions
contemplated thereby;
(ix) all
corporate records, board minutes and resolutions, tax and financial records,
agreements, seals and any other information or documents reasonably requested by
Gold Industry’s representatives with respect to Pubco; and
(x) such
other documents as Gold Industry and/or the Gold Industry Shareholders may
reasonably request in connection with the transactions contemplated
hereby.
(b) Representations and
Warranties to be True. The representations and warranties of Pubco and
the Pubco Stockholders herein contained shall be true in all material respects
at the Closing with the same effect as though made at such time. Pubco and the
Pubco Stockholders shall have performed in all material respects all obligations
and complied in all material respects with all covenants and conditions required
by this Agreement to be performed or complied with by them at or prior to the
Closing.
(c) No Assets and
Liabilities. At the Closing, Pubco shall have no liabilities, debts or
payables (contingent or otherwise) other than those liabilities listed in Schedule 4.34 of the
disclosure schedules hereto, no tax obligations, no material assets, and except
as contemplated in this Agreement, no material changes to its business or
financial condition shall have occurred since the date of this
Agreement.
(d) SEC Filings. At the
Closing, Pubco will be current in all SEC filings required by it to be
filed.
(e) Outstanding Capital
Stock. Pubco shall have at least 100,000,000 shares of Pubco Common Stock
authorized of which no more than 11,000,000 shares shall be issued and
outstanding in the aggregate at the Closing. Pubco shall have at least
20,000,000 shares of its preferred stock authorized of which no share shall be
issued and outstanding in the aggregate at the Closing.
(f) No Adverse
Effect. The business and operations of Pubco will not have
suffered any Material Adverse Effect.
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7.2 Conditions to Obligations of
Pubco and the Pubco Stockholders. The obligations of Pubco and the Pubco
Stockholders under this Agreement shall be subject to each of the following
conditions:
(a) Closing Deliveries.
On the Closing Date, Gold Industry and/or the Gold Industry Shareholders shall
have delivered to Pubco the following:
(i) this
Agreement duly executed by Gold Industry and the Gold Industry
Shareholders;
(ii) resolutions
duly adopted by the Board of Directors of Gold Industry authorizing and
approving the execution, delivery and performance of this
Agreement;
(iii) certificates
representing the Gold Industry Equity Interests to be delivered pursuant to this
Agreement duly endorsed or accompanied by duly executed stock powers or
instruments of like tenor; and
(iv) such
other documents as Pubco may reasonably request in connection with the
transactions contemplated hereby.
(b) Representations and
Warranties True and Correct. The representations and warranties of Gold
Industry and the Gold Industry Shareholders herein contained shall be true in
all material respects at the Closing with the same effect as though made at such
time. Gold Industry and the Gold Industry Shareholders shall have performed in
all material respects all obligations and complied in all material respects with
all covenants and conditions required by this Agreement to be performed or
complied with by them at or prior to the Closing.
(c) No Adverse
Effect. The business and operations of Gold Industry will not
have suffered any Material Adverse Effect.
ARTICLE
8
SEC
FILING; TERMINATION
8.1 This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written agreement of Pubco and Gold Industry Shareholders;
(b) by
either Pubco or the Gold Industry Shareholders if the Transaction shall not have
been consummated for any reason by February __, 2010; provided, however, that
the right to terminate this Agreement under this Section 8.1(b) shall
not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Transaction to occur on or
before such date and such action or failure to act constitutes a breach of this
Agreement;
(c) by
either Pubco or the Gold Industry Shareholders if a governmental entity shall
have issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Transaction, which order, decree, ruling or other action is final and
non-appealable;
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(d) by
the Gold Industry Shareholders, upon a material breach of any representation,
warranty, covenant or agreement on the part of Pubco or the Pubco Stockholders
set forth in this Agreement, or if any representation or warranty of Pubco shall
have become materially untrue, in either case such that the conditions set forth
in Section 7.1
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in the representations and warranties by Pubco or the Pubco
Stockholders or breach by Pubco or the Pubco Stockholders is curable by Pubco or
the Pubco Stockholders prior to the Closing Date, then the Gold Industry
Shareholders may not terminate this Agreement under this Section 8.1(d) for
thirty (30) days after delivery of written notice from the Gold Industry
Shareholders to Pubco and the Pubco Stockholders of such breach, provided Pubco
and the Pubco Stockholders continue to exercise commercially reasonable efforts
to cure such breach (it being understood that the Gold Industry Shareholders may
not terminate this Agreement pursuant to this Section 8.1(d) if
they shall have materially breached this Agreement or if such breach by Pubco or
the Pubco Stockholders is cured during such thirty (30) day period);
or
(e) by
Pubco, upon a material breach of any representation, warranty, covenant or
agreement on the part of Gold Industry or the Gold Industry Shareholders set
forth in this Agreement, or if any representation or warranty of Gold Industry
or the Gold Industry Shareholders shall have become materially untrue, in either
case such that the conditions set forth in Section 7.2 would not
be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided, that if such inaccuracy in the
representations and warranties by Gold Industry or the Gold Industry
Shareholders or breach by Gold Industry or the Gold Industry Shareholders is
curable by Gold Industry or the Gold Industry Shareholders prior to the Closing
Date, then Pubco may not terminate this Agreement under this Section 8.1(e) for
thirty (30) days after delivery of written notice from Pubco to Gold Industry
and the Gold Industry Shareholders of such breach, provided Gold Industry and
the Gold Industry Shareholders continue to exercise commercially reasonable
efforts to cure such breach (it being understood that Pubco may not terminate
this Agreement pursuant to this Section 8.1(e) if it
shall have materially breached this Agreement or if such breach by Gold Industry
or the Gold Industry Shareholders is cured during such thirty (30) day
period).
8.2 Notice of Termination;
Effect of Termination. Any termination of this Agreement under Section 8.1 above
will be effective immediately upon (or, if the termination is pursuant to Section 8.1(d) or
Section 8.1(e)
and the proviso therein is applicable, thirty (30) days after) the delivery of
written notice of the terminating party to the other parties hereto. In the
event of the termination of this Agreement as provided in Section 8.1, this
Agreement shall be of no further force or effect and the Transaction shall be
abandoned, except as set forth in Section 8.1, Section 8.2 and Article 9 (General
Provisions), each of which shall survive the termination of this
Agreement.
ARTICLE
9
GENERAL
PROVISIONS
9.1 Notices. Any and all
notices and other communications hereunder shall be in writing and shall be
deemed duly given to the party to whom the same is so delivered, sent or mailed
at addresses and contact information set forth on the signature pages hereof (or
at such other address for a party as shall be specified by like notice) Any and
all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of: (a) on the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (Pacific Standard Time)
on a business day, (b) on the next business day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
business day or later than 5:30 p.m. (Pacific Standard Time) on any business
day, (c) on the second business day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service or (d) upon actual receipt
by the party to whom such notice is required to be given.
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9.2 Interpretation. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
References to Sections and Articles refer to sections and articles of this
Agreement unless otherwise stated.
9.3 Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated and the parties shall negotiate in good faith to modify this
Agreement to preserve each party’s anticipated benefits under this
Agreement.
9.4 Miscellaneous. This
Agreement (together with all other documents and instruments referred to
herein): (a) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof; (b) except as expressly set forth herein,
is not intended to confer upon any other person any rights or remedies hereunder
and (c) shall not be assigned by operation of law or otherwise, except as may be
mutually agreed upon by the parties hereto.
9.5 Separate Counsel.
Each party hereby expressly acknowledges that it has been advised to seek its
own separate legal counsel for advice with respect to this Agreement, and that
no counsel to any party hereto has acted or is acting as counsel to any other
party hereto in connection with this Agreement.
9.6 Governing Law. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of California. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of Los
Angeles. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Los Angeles,
County of Los Angeles for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the Agreement), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or is
an inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law. If either party shall commence an action or
proceeding to enforce any provisions of the Agreement, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.
9.7 Counterparts and Facsimile
Signatures. This Agreement may be executed in two or more counterparts,
which together shall constitute a single agreement. This Agreement and any
documents relating to it may be executed and transmitted to any other party by
facsimile, which facsimile shall be deemed to be, and utilized in all respects
as, an original, wet-inked manually executed document.
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9.8 Amendment. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties upon approval by the party, if such party is an
individual, and upon approval of the Boards of Directors of each of the parties
that are corporate entities.
9.9 Parties In Interest.
Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto.
9.10 Waiver. No waiver by
any party of any default or breach by another party of any representation,
warranty, covenant or condition contained in this Agreement shall be deemed to
be a waiver of any subsequent default or breach by such party of the same or any
other representation, warranty, covenant or condition. No act, delay, omission
or course of dealing on the part of any party in exercising any right, power or
remedy under this Agreement or at law or in equity shall operate as a waiver
thereof or otherwise prejudice any of such party’s rights, powers and remedies.
All remedies, whether at law or in equity, shall be cumulative and the election
of any one or more shall not constitute a waiver of the right to pursue other
available remedies.
9.11 Expenses. At or prior
to the Closing, the parties hereto shall pay all of their own expenses relating
to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
9.12 Counterparts. This
Agreement may be executed simultaneously in two or more counterparts, any one of
which need not contain the signatures of more than one party, but all such
counterparts taken together will constitute one and the same
Agreement. This Agreement, to the extent delivered by means of a
facsimile machine or electronic mail (any such delivery, an “Electronic
Delivery”), shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in
person. At the request of any party hereto, each other party hereto
shall re-execute original forms hereof and deliver them in person to all other
parties. No party hereto shall raise the use of Electronic Delivery
to deliver a signature or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of Electronic Delivery as a
defense to the formation of a contract, and each such party forever waives any
such defense, except to the extent such defense related to lack of
authenticity.
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Intentionally]
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IN
WITNESS WHEREOF, the parties have executed this Share Exchange Agreement as of
the date first written above.
PUBCO:
| ARTISTRY PUBLICATION, INC., | ||
| a Delaware corporation | ||
|
By:
|
/s/ Xxxxx X. Xxxxxxxx | |
| Xxxxx X. Xxxxxxxx | ||
| Chief Executive Officer | ||
Address
for Notices:
| Address: | ______________________ |
| ______________________ | |
| ______________________ | |
| Tel: | ______________________ |
| Fax: | ______________________ |
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SIGNATURE PAGE OF PUBCO
STOCKHOLDERS
PUBCO
STOCKHOLDERS:
|
Name
|
Address, Telephone, and
Facsimile Number for Notice:
|
Signature:
|
|
Xxxxx
X. Xxxxxxxx
|
Address:_____________________ |
/s/
Xxxxx X. Xxxxxxxx
|
| _____________________ | ||
| _____________________ | ||
| Tel:_____________________ | ||
| Fax:_____________________ | ||
|
Xxxx
Xxxxxxx
|
Address:_____________________ | /s/ Xxxx Xxxxxxx |
| _____________________ | ||
| _____________________ | ||
| Tel:_____________________ | ||
| Fax:_____________________ | ||
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SIGNATURE PAGE OF GOLD
INDUSTRY
Gold
Industry:
Gold
Industry Limited
| By: | /s/ Yiyou Ran | |
| Name: | Yiyou Ran | |
| Title: | Director |
Address
for Notices:
| Address: | ________________________ |
| ________________________ | |
| ________________________ | |
| Tel: | ________________________ |
| Fax: | ________________________ |
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SIGNATURE PAGES OF GOLD
INDUSTRY SHAREHOLDERS
GOLD
INDUSTRY SHAREHOLDERS:
Holy
Golden Industry Limited
| By: | /s/ Yiyou Ran | |
| Name: | Yiyou Ran | |
| Title: | Director |
Address
for Notices:
| Address: | ________________________ |
| ________________________ | |
| ________________________ | |
| Tel: | ________________________ |
| Fax: | ________________________ |
Please Check
One:
The Gold
Industry Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see Section 3.4 and
Annex III of this Agreement);
or
|
|
X
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b)
of this Agreement are true and correct as to such Gold Industry
Shareholder, and hereby accepts and agrees to comply with the covenants in
Section
3.4(b).
|
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