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EXHIBIT 10.1
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement (hereinafter the "Agreement"), is
effective as of January 17, 1997, between Flour City International, Inc., a
Nevada Corporation (hereinafter "Flour City"); Hockley International Limited, a
British Virgin Islands Corporation (hereinafter "Hockley"); and the shareholders
of Hockley (hereinafter "Transferring Shareholders"). Flour City, Hockley and
the Transferring Shareholders shall hereinafter be referred to collectively as
the "Parties".
RECITALS
The Parties desire to enter into this Agreement to effectuate a stock
for stock exchange in a tax-free reorganization; and
The Transferring Shareholders represent that they own one hundred
percent (100%) of the outstanding shares of the capital stock of Hockley; and
The Transferring Shareholders desire to exchange the stock of Hockley
for shares of common stock of Flour City, and Flour City desires to affect such
exchange, all on the terms and conditions herein after set forth and in such
manner that the exchange will constitute a tax-free reorganization pursuant to
the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended.
In consideration of the promises and mutual agreements and undertakings
hereinafter set forth, the Parties do hereby adopt said plan of reorganization,
and in order to consummate said plan, to hereby agree as follows:
1. Agreement. Subject to the other terms and conditions of this Agreement, set
forth hereinafter, Flour City, Hockley and the Transferring Shareholders entered
into this Agreement in order to effectuate a stock for stock exchange in a
tax-free reorganization.
A. Pursuant to the terms of this Agreement, the Transferring
Shareholders agree to transfer one hundred percent (100%) of the issued
and outstanding shares of Hockley to Flour City.
B. Flour City agrees to issue a total of eight million (8,000,000)
shares of its restricted common stock to the Transferring Shareholders.
2. Delivery of Shares. On the Closing Date (as hereinafter defined) and upon the
terms and subject to the conditions set forth in this Agreement, Flour City
agrees to transfer and deliver to the Transferring Shareholders and the
Transferring Shareholders agree to accept, a total of 8,000,000 shares of
restricted common stock of Flour City, of which 1,200,000 shares shall be
delivered to
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Gold Manor Limited; 1,200,000 shares shall be delivered to Dynamic Choices
Enterprises, Inc.; 4,800,000 shares shall be delivered to Xxxxxx International
Limited; and 800,000 shares shall be delivered to Xxxx W.Y. Tang.
A. The Flour City shares, when issued and delivered hereunder, will not
be registered under the Securities Act of 1933, as amended (the "1933
Act") and are therefore "restricted" as that term is defined in Rule 144
promulgated under the 1933 Act.
B. The Flour City shares will contain a legend substantially to the
following effect: "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED,
ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE
WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
3. Consideration, Terms, and Conditions for Transfer of Shares. Upon the terms
and subject to the conditions set forth in this Agreement, the Transferring
Shareholders agree to deliver to Flour City, in full consideration of and in
exchange for said shares of Stock of Flour City, a total of one hundred (100)
shares of common stock of Hockley representing hundred percent (100%) of the
issued and outstanding shares of common stock of Hockley, to be delivered at the
closing provided for herein.
4. Transferring Shareholders Responsible for Actions of Hockley. The
Transferring Shareholders, as the majority and controlling shareholders of
Hockley, shall act in good faith and exercise their best efforts to cause
Hockley to comply with all duties and responsibilities set forth for Hockley in
this Agreement.
5. Conduct of Business Prior to Closing. From the date hereof until the time of
closing hereunder, the Parties covenant and agree that they shall exercise their
best efforts to conduct their business in the usual and ordinary course, and
Hockley shall not, without the written consent of Flour City:
A. Purchase, acquire, sell or otherwise dispose of any property or
services of any kind whatsoever, other than purchases and sales in the
ordinary course of business; or
B. Mortgage, pledge, create a security interest in or otherwise encumber
any of its properties or assets; or
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C. Make or incur any commitment or expenditure or any unusual or
long-term commitment; or
D. Declare or pay any dividend or make any other distribution to
shareholders; or enter into any transaction, contract or other
commitment to take any action which would constitute a material breach
of the representations, warranties or agreements of the Shareholders
contained herein or which would interfere with or prevent a closing
provided for herein.
6. Payment of Taxes and Preservation of Goodwill. From the date hereof until the
time of closing hereunder, Flour City and Hockley shall duly and timely file all
reports and returns required to be filed with the United States, the State of
Nevada, the British Virgin Islands, and the jurisdiction or jurisdictions in
which they are doing business; promptly pay when due all foreign, federal, state
and local taxes, assessments and government fees, charges, interest and
penalties lawfully levied or assessed; duly observe and conform to all lawful
requirements applicable to their business; preserve their business organizations
intact and retain their present officers and employees; preserve the goodwill of
their suppliers, customers and those having business relations with them;
maintain insurance coverage now in effect on all their properties and on all
properties for which they are responsible, and carry the same coverage of public
liability, personal injury and property damage that is now in effect; maintain,
keep and preserve all of their properties and assets in good condition and state
of repair; and meet their contractual obligations and not become in default in
any thereof.
7. Confidentiality of Information. Flour City agrees to treat any information
which is disclosed to it by Hockley as proprietary or confidential to Hockley,
and in the event the closing does not take place, all documents shall be
returned to Hockley and Flour City will not make or retain copies of any
documents or make use of any confidential information disclosed within the
context of its business.
8. Closing. The exchange provided herein (the "Closing") shall take place at
Xxxxxxx, Xxxxxx & Xxxxx, located at 000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, on January 21, 1997, at 1:00 p.m. or such other date
and time as may be mutually agreed upon by the parties hereto, but in no event
later than seven (7) days from the date hereof, such time and date being herein
referred to as the "Closing Date". At the Closing:
A. The Transferring Shareholders shall deliver to Flour City all
certificates, assignments, and other instruments which may be necessary,
desirable or appropriate in order to transfer to Flour City all of the
outstanding shares of stock of Hockley, all in form and substance
reasonably satisfactory to Flour City; and
B. Upon receipt of all such documents, Flour City shall issue and
deliver to the Transferring Shareholders the shares of common stock as
set forth in paragraph 2, above.
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9. Representations and Warranties of Transferring Shareholders. The Transferring
Shareholders represent, warrant to and agree as follows:
A. Investment Intent. The Transferring Shareholders have acquired the
shares of Flour City pursuant to this Agreement for investment and with
no present intent to make any resale, assignment, transfer or
hypothecation of all or any part thereof and a certificate representing
such shares will bear a restrictive legend which states, in effect, that
such shares have not been registered under the 1933 Act, and
consequently may not be resold, assigned, transferred or hypothecated
unless registered under such Act or an exemption from the registration
requirement of such Act is available for any such transaction. The
Transferring Shareholders further acknowledge that they are aware of the
business affairs and financial condition of Flour City and the
Transferring Shareholders have had ample opportunity to examine the
books and records of Flour City and have had adequate opportunity to
inquire and receive answers from the officers and directors regarding
Flour City, the Flour City shares and the business of Flour City.
B. Organization and Standing. Hockley is a corporation duly organized,
validly existing and in good standing under the laws of the British
Virgin Islands, with full corporate power to carry on its business as
now being conducted and to own and operate the property and assets now
owned and operated by it, and is duly qualified to transact business and
in good standing in each jurisdiction where the ownership of its
properties or the conduct of its business requires it to be licensed or
qualified to do business. Hockley has complied with all applicable laws
in connection with its formation, issuance of securities, organization,
capitalization and operations. Hockley has also delivered to Flour City
a copy of its Memorandum and Articles of Association and all amendments
thereto, and a copy of its By-Laws as amended, certified by its
Secretary, which documents are complete and correct as of the date of
this Agreement.
C. Stock. The authorized capital stock of Hockley consists of fifty
thousand (50,000) shares of common stock with $1.00 par value, of which
one hundred (100) shares are validly issued and outstanding. All of said
outstanding shares of Hockley have been duly authorized and validly
issued, fully paid and are non-assessable. There are no options,
warrants or other agreements or commitments which now or in the future
may obligate Hockley to issue or purchase any shares of its stock or
other securities.
D. Indebtedness. Hockley is not a party to any note, loan agreement,
agreement to borrow money from others or any commitment by others to
lend money (collectively "Indebtedness").
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E. Financial Statements. Hockley has delivered to Flour City an
unaudited balance sheet (the "Balance Sheet") of Hockley as of October
31, 1996 (the "Balance Sheet Date") an income statement, a statement of
retained earnings and a statement of cash flows for the year then ended.
All of such financial statements are complete and accurately present the
financial position of Hockley on the indicated dates and the results of
its operations for the indicated periods. All of such statements have
been prepared in accordance with generally accepted principles of
accounting consistently applied. Other than those liabilities incurred
in an "arms length" transaction during the ordinary course of business
subsequent to the date of the Balance Sheet Date, Hockley has not
incurred any liabilities, whether absolute, accrued, contingent or
otherwise.
F. Contracts and Other Commitments. Hockley has not committed any
material default on any obligation to be performed by Hockley under any
Material Contract nor has Hockley waived any material right under any
Material Contract. For purposes of this Agreement, the term "Material
Contracts" shall be defined to mean (i) all contracts outside the
ordinary course of business; (ii) all contracts or commitments involving
an obligation which cannot or, in reasonable probability , will not be
performed or terminated with sixty (60) days from the date hereof; (iii)
any bonus, incentive compensation, pension, group insurance or employee
welfare plans; (iv) all collective bargaining agreements or other
contracts or commitments to or with any labor unions or other employee
representatives or groups of employees; or (v) employment contracts and
other contracts, agreements or commitments to or with individual
employees, agents or consultants extending for a period of more than
three (3) months from the date hereof or providing for earlier
termination only upon the payment of a penalty or equivalent thereof.
G. Assets. At the Closing, Hockley will deliver to Flour City copies of
all records, including all signatures or authorization cards, pertaining
to all bank accounts of Hockley, if any.
H. Litigation. Hockley has not engaged in or been threatened with any
legal action or other proceeding before any court or administrative
agency. To its knowledge Hockley has not violated any laws, regulations,
or orders applicable to its business or activities.
I. Changes in Financial Condition. Since the Balance Sheet Date there
has been no material adverse change in the condition of the physical
assets, capitalization, or business of Hockley, no dividend or other
distribution declared, paid or made on any of the shares of Hockley's
capital stock, no direct or indirect redemption, purchase or other
acquisition by Hockley of any shares of its capital stock, no damage,
destruction or loss (whether or not covered by insurance) adversely
affecting the properties, business, or prospects of Hockley, no increase
in the rate of compensation
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payable or to become payable to any officer or other employee of
Hockley, no significant labor disturbances, and no other event or
condition which materially and adversely affects the business of
Hockley. Since the Balance Sheet Date, the business of Hockley has not
sold or transferred any of its property or assets except in the ordinary
course of business, and no contracts have been entered into by Hockley
except in the ordinary course of business.
J. Tax Returns and Liabilities. Hockley has filed or caused to be filed
on a timely basis all Tax Returns that are or were required to be filed
pursuant to the laws, regulations, or administrative requirements of
each governmental body with taxing power over it or its assets or
business operations. Hockley has delivered to Flour City all such Tax
Returns filed since Hockley's inception. Hockley has paid, or made
provision for the payment of, all Taxes that have or may have become due
pursuant to those Tax Returns, or otherwise, or pursuant to any
assessment received by Hockley.
K. Breaches of Contract. Neither the execution nor the delivery of this
Agreement by Hockley, nor the performance of any of its obligations
hereunder, will result in a breach or violation of any term or provision
of or constitute a default under any indenture, mortgage or other
agreement or instrument to which Hockley is a party. Neither the
execution nor the delivery of this Agreement by the Transferring
Shareholders, nor the performance of any its obligations hereunder, will
result in a breach or violation of any term or provision of or
constitute a default under any indenture, mortgage, or other agreement
under which any of them is bound, or any law or order, rule, regulation,
writ, injunction, or decree of any government, governmental
instrumentality or court having jurisdiction over the Transferring
Shareholders or any of its assets or rights, or result in the creation
or imposition of any lien, charge, or encumbrance of any kind whatsoever
on any of such assets or rights.
L. Title to Hockley Stock. The Transferring Shareholders represent and
warrant that this Agreement has been duly executed and delivered by it
and is, as to it, a valid agreement binding upon it in accordance with
its terms; that the Transferring Shareholders have valid title to the
validly issued, fully paid, and nonassessable shares of capital stock of
Hockley set forth in Schedule A, with full right, power, and authority
to transfer, sell, and deliver such shares pursuant to this Agreement;
and that, upon delivery of its shares pursuant to this Agreement, Flour
City will receive valid and marketable title to its shares, free and
clear of all voting and other trust arrangements, liens, encumbrances,
restrictions, and adverse claims, whether existing or contingent.
M. Disclosure. No representations or warranties by Hockley in this
Agreement and no statement contained in any document including, without
limitation, financial
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statements, the schedules, certificates, or other writings furnished or
to be furnished to Flour City or any of its representatives pursuant to
the provisions hereof or in connection with the contemplated
transactions, contains or will contain any untrue statement of material
fact or omits or will omit to state any fact necessary, in light of the
circumstances under which it was made, in order to make the statements
herein or therein not misleading. Documents delivered or to be delivered
to Flour City pursuant to this Agreement are or will be true and
complete copies of what they purport to be. There is no fact known to
the officers, directors, or employees of Hockley unknown to Flour City
on the date this Agreement that may affect or does affect in a
materially adverse manner Flour City's ability to conduct the business
of Hockley substantially as conducted prior to such date.
10. Representations and Warranties of Flour City. Flour City represents and
warrants as follows:
A. Organization and Standing. Flour City is a corporation duly
organized, validly existing and in good standing under the laws of the
state of Nevada, with full corporate power to carry on its business as
now being conducted and to own and operate property and assets now owned
and operated by it, and is duly qualified to transact business and in
good standing in each jurisdiction where the ownership of its properties
or the conduct of its business requires it to be licensed or qualified
to do business.
B. Capital Stock. The authorized capital stock of Flour City consists of
twenty-five million (25,000,000) shares of common stock, $.0001 par
value, of which approximately ten million (10,000,000) shares are issued
and outstanding at the close of business on the effective date of this
Agreement, and five million (5,000,000) shares of preferred stock, $.001
par value, of which no shares are issued and outstanding.
C. Validity of Shares. The shares of Common Stock to be delivered by
Flour City pursuant to this Agreement will, when so delivered, be
validly issued, fully paid and non-assessable.
D. Changes, Dividends. Prior to the Closing hereunder, Flour City will
not split or subdivide or otherwise change or reclassify its outstanding
common stock or declare or distribute any cash or stock dividend upon
such common stock.
E. Authorization of Agreement. The execution, delivery, and performance
of this Agreement by Flour City have been duly authorized by its Board
of Directors, and will not result in any breach, violation, or
constitute a default under its Articles of Incorporation or By-Laws or
any indenture, mortgage, or other agreement, or instrument to which it
is a party.
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F. Contracts and Other Commitments. Flour City has not committed any
material default on any obligation to be performed by Flour City under
any Material Contract nor has Flour City waived any material right under
any Material Contract. For purposes of this Agreement, the term
"Material Contracts" shall be defined to mean (i) all contracts outside
the ordinary course of business; (ii) all contracts or commitments
involving an obligation which cannot or, in reasonable probability, will
not be performed or terminated with sixty (60) days from the date
hereof; (iii) any bonus, incentive compensation, pension, group
insurance or employee welfare plans; (iv) all collective bargaining
agreements or other contracts or commitments to or with any labor unions
or other employee representatives or groups of employees; or (v)
employment contracts and other contracts, agreements or commitments to
or with individual employees, agents or consultants extending for a
period of more than three (3) months from the date hereof or providing
for earlier termination only upon the payment of a penalty or equivalent
thereof.
G. Breaches of Contract. Neither the execution nor the delivery of this
Agreement by Flour City, nor the performance of any obligations
hereunder, will result in a breach or violation of any term or provision
of or constitute a default under any indenture, mortgage or other
agreement or instrument to which Flour City is a party which would
prevent Flour City from executing and performing under this Agreement.
Neither the execution nor the delivery of this Agreement by Flour City,
nor the performance of any its obligations hereunder, will result in a
breach or violation of any term or provision of or constitute a default
under an indenture, mortgage, or other agreement under which any of them
is bound, or any law or order, rule, regulation, writ, injunction or
decree of any government, governmental instrumentality or court having
jurisdiction over Flour City or any of its assets or rights, or result
in the creation or imposition of any lien, charge, encumbrance of any
kind whatsoever on any of such assets or rights which would prevent
Flour City from executing and performing under this Agreement.
H. Litigation. Flour City is not engaged in or threatened with any legal
action or other proceeding before any court or administrative agency
which would prevent Flour City from executing and performing under this
Agreement. To the best of its knowledge, Flour City has not violated any
laws, regulations, or order applicable to its business or activities.
11. Conditions to Obligations of Flour City. The obligations of Flour City
under this Agreement are subject to the fulfillment, at or prior to the
Closing Date, of the following conditions precedent:
A. All representations and warranties of the Transferring Shareholders
and Hockley contained herein and in any certificate or other instrument
delivered pursuant to the provisions hereof, or in connection with the
transactions
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contemplated hereby, shall be true on the Closing Date with the same
force and effect as though such representations and warranties had been
made on the Closing Date.
B. The Transferring Shareholders and Hockley shall have performed and
complied with all of the terms, covenants, and conditions of this
Agreement to be performed or complied with by them, respectively, on or
before the Closing Date.
C. The Transferring Shareholders shall have taken all necessary action
to authorize the execution and performance of this Agreement and shall
have delivered to Flour City true and complete copies, certified by the
Secretary, of resolutions of the Board of Directors evidencing such
action.
D. One hundred percent (100%) of the issued and outstanding shares of
Hockley common stock, which are to be delivered on the Closing Date to
Flour City in accordance with the terms hereof shall be so delivered.
E. No action or proceeding by any governmental body or agency shall have
been threatened, asserted or instituted to restrain or prohibit the
carrying out of the transactions contemplated by this Agreement.
F. All corporate and other proceedings and action taken in connection
with the transactions contemplated by this Agreement and all
certificates, opinions, agreements, instruments, and documents mentioned
in this Paragraph or incident to any such transaction shall be
reasonably satisfactory in form and substance to Flour City and to its
counsel.
The conditions contained in this Paragraph are included for the benefit of Flour
City and, without constituting a waiver of any of its rights hereunder, may be
waived, in whole or in part, by Flour City.
12. Conditions to Obligations of the Transferring Shareholders. The obligations
of the Transferring Shareholders under this Agreement are subject to the
fulfillment, on or before the Closing Date, of the following conditions:
A. All representations and warranties of Flour City contained herein and
in any certificate or other instrument delivered pursuant to the
provisions hereof, or in connection with the transactions contemplated
hereby, shall be true on the Closing Date with the same force and effect
as though such representations and warranties had been made on the
Closing Date.
B. Flour City shall have performed and complied with all of the terms,
covenants, and conditions of this Agreement to be performed or complied
with by it, on or before the Closing Date.
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C. The Board of Directors of Flour City shall have taken all necessary
action to authorize the execution and performance of this Agreement,
including the issuance and delivery of shares of common stock of Flour
City to the Transferring Shareholders in accordance with this Agreement,
and Flour City shall have delivered to the Transferring Shareholders
true and complete copies, certified by the Secretary, of resolutions of
the Board of Directors evidencing such action.
D. No action or proceeding by any governmental body or agency shall have
been threatened, asserted or instituted to restrain or prohibit the
carrying out of the transactions contemplated by this Agreement.
E. All corporate and other proceedings and action taken in connection
with the transactions contemplated by this Agreement and all
certificates, opinions, agreements, instruments, and documents mentioned
in this Paragraph or incident to any such transaction shall be
reasonably satisfactory in form and substance to the Transferring
Shareholders and their counsel.
The conditions contained in this Paragraph are included for the benefit of the
Transferring Shareholders and, without constituting a waiver of any of their
rights hereunder, may be waived, in whole or in part, by the Transferring
Shareholders.
13. Certain Covenants Prior to Closing.
A. The Transferring Shareholders will use their best efforts, and take
such other action as may be necessary, to fulfill all of the conditions
contained in this Agreement and to authorize and consummate, and cause
Hockley to authorize and consummate, all of the transactions herein
contemplated.
B. Flour City will use its best efforts, and take such other action as
may be necessary, to fulfill all of the conditions contained in this
Agreement and to authorize and consummate all of the transactions
contemplated herein.
C. Between the date of this Agreement and the Closing Date, Hockley
shall (a) give Flour City and its authorized representatives full access
to the books and records of Hockley (and permit Flour City to make
copies thereof), (b) permit Flour City to make inspections thereof, and
(c) cause its officers and its advisors (including without limitation
its auditors, attorneys, financial advisors and other consultants) to
furnish Flour City with such financial and operating data and other
information with respect to the business and properties of Hockley, and
to discuss with Flour City and its authorized representatives the
affairs of Hockley, all as Flour City may from time to time reasonably
request.
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D. Between the date of this Agreement and the Closing Date, Hockley
shall give notice to Flour City promptly upon Hockley becoming aware of
any (a) inaccuracy of a representation or warranty set forth herein, or
in any document provided to Flour City hereunder, or (b) any event or
state of facts that, if it had occurred or existed on or prior to the
date of this Agreement, would have caused any such representation or
warranty to be inaccurate, any such notice shall describe such
inaccuracy, event or state of facts in reasonable detail.
E. Between the date of this Agreement and the Closing Date, Hockley
shall cause (a) copies of all reports and other documents given to the
members of the Board of Directors (or any committee thereof) of Hockley
to be delivered to Flour City at the same time and (b) copies of the
minutes of meetings of, and actions taken without a meeting of the Board
of Directors (or any committee thereof) of Hockley to be delivered to
Flour City promptly after the preparation thereof.
F. The Transferring Shareholders and Hockley shall comply with the
intent and all requirements of this Agreement and cooperate with all
parties as they may reasonably request in connection with the provisions
of this Agreement.
14. Survival of Representations and Warranties; Indemnification
A. Survival. All representations, warranties, and agreements contained
in this Agreement shall survive the Closing notwithstanding any
investigation conducted with respect thereto; however, a party shall
have no liability with respect to a representation and warranty, or an
agreement to be performed or complied with prior to the Closing Date, to
the extent that the inaccuracy of such representation and warranty or
the failure to perform and comply with such agreement was not
intentional and was disclosed in another document delivered pursuant to
this Agreement.
B. Indemnification by Hockley. Hockley and the Transferring
Shareholders, jointly and severally, shall indemnify and hold harmless
Flour City, and shall reimburse Flour City for any loss, liability,
claim, damage, expense (including, but not limited to, costs of
investigation and defense and reasonable attorney's fees) or diminution
of value (collectively "Damages") arising from or in connection with (a)
any inaccuracy in any of the representations or warranties of Hockley or
the Transferring Shareholders in this Agreement, or any actions,
omissions or statement of facts inconsistent with any such
representation or warranty, (b) any failure by Hockley or the
Transferring Shareholders to perform or comply with any covenant,
representation or agreement in this Agreement, or (c) any claim by any
person for
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brokerage or finder's fees or commissions or similar payments based upon
any agreement or understanding alleged to have been made by any such
person with Hockley or the Transferring Shareholders (or any person
acting on their behalf) in connection with any of the contemplated
transactions.
C. Indemnification by Flour City. Flour City shall indemnify and hold
harmless Hockley and the Transferring Shareholders, and shall reimburse
said parties for, any Damages arising from or in connection with (a) any
inaccuracy in any of the representations or warranties of Flour City in
this Agreement, or any actions, omissions or statement of facts
inconsistent with any such representation or warranty, (b) any failure
by Flour City to perform or comply with any covenant, representation or
agreement in this Agreement, (c) any claim by any person for brokerage
or finder's fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by any such person
with Flour City (or any person acting on their behalf) in connection
with any of the contemplated transactions.
D. Procedure for Indemnification. Promptly after receipt by an
indemnified party of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is made against
an indemnifying party, give notice to the indemnifying party of the
commencement thereof, but the failure so to notify the indemnifying
party shall not relieve it of any liability that it may have to any
indemnified party except to the extent the indemnifying party
demonstrates that the defense of such action is prejudiced thereby. In
case any such action shall be brought against an indemnified party and
it shall give notice to the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein
and, to the extent that it shall wish, to assume the defense thereof
with counsel satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such section for any fees of
other counsel or any other expenses, in each case subsequently incurred
by such indemnified party in connection with the defense thereof, other
than reasonable costs of investigation. If an indemnifying party assumes
the defense of such an action, (a) no compromise or settlement thereof
may be effected by the indemnifying party without the indemnified
party's consent, which shall not be unreasonably withheld unless (i)
there is no finding or admission of any violation of law or any
violation of the rights of any person and no effect on any other claims
that may be made again the indemnified party and (ii) the sole relief
provided is monetary damages that are paid in full by the indemnifying
party and (b) the indemnifying party shall have no liability with
respect to any compromise or settlement thereof effected without its
consent, which shall not be unreasonably withheld. If notice is given to
an indemnifying party of the commencement of any action and it does not,
within ten (10) days after the indemnified party's notice is given, give
notice to the indemnified party of its election to assume the defense
thereof, the indemnifying
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party shall be bound by any determination made in such action or any
compromise or settlement thereof effected by the indemnified party.
Notwithstanding the foregoing, if an indemnified party determines in
good faith that there is a reasonable probability that an action may
adversely affect it other than as a result of monetary damages, such
indemnified party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise or settle such action, but the
indemnifying party shall not be bound by any determination of an action
so defended or any compromise or settlement thereof effected without is
consent, which shall not be unreasonably withheld.
15. Further Assurances
A. At the request of Flour City, and without further consideration,
Hockley and the Transferring Shareholders will execute and deliver such
additional instruments of transfer and will take such other actions as
Flour City reasonably requests in order to more effectively transfer to
Flour City full ownership and control of Hockley and all Hockley assets
and properties.
B. At the request of the Transferring Shareholders, and without further
consideration, Flour City will execute and deliver such additional
instruments and will take such other actions as may be reasonably
requested in order to more effectively carry out the transaction
contemplated hereby.
16. Expenses. Each party shall bear its own expenses incident to the
preparation, negotiation, execution, and delivery of this Agreement and
the performance of its obligations hereunder.
17. Other Matters
A. No Other Agreements. All terms and conditions of this Agreement are
set forth herein, and there are no warranties, agreements, or
understandings, express or implied, except those expressly set forth
herein.
B. Binding Agreement. This Agreement is a legal obligation and shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns,
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to
the enforcement of creditor's rights and general equitable principles.
This Agreement is not intended to confer upon any person other than the
parties hereto any rights and remedies hereunder.
C. Amendment. This Agreement may not be supplemented, modified, or
amended except by mutual agreement in writing signed by the parties
hereto.
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D. Notices. Any notice or other communication required or permitted to
be given hereunder shall be deemed properly served if personally
delivered or five (5) days after same is deposited in the United States
Mail, registered or certified and postage prepaid, and properly
addressed as follows:
1. To Gold Manor Limited: P.O. Box 957, Offshore Incorporations
Centre, Road Town, Tortola, British Virgin Islands.
2. To Dynamic Choice Enterprises, Inc.: Wickhams Cay, Road Town,
Tortola, British Virgin Islands.
3. To Xxxxxx International Ltd.:P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin
Islands.
4. To Xxxx W.Y. Tang: Suite 1301, Hollywood Plaza, 610 Xxxxxx Road,
Mongkok, Kowloon, Hong Kong.
5. To Flour City: 000 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxx, XX 00000.
Or at such other addresses as may be designated by the parties in
writing.
E. Specific Performance. The parties acknowledge that the subject matter
of this Agreement (i.e. the business and assets of Hockley) is unique
and that no adequate remedy at law would be available for breach of this
Agreement. Accordingly, each party agrees that the other parties will be
entitled to an appropriate decree of specific performance or other
equitable remedies to enforce this Agreement (without any bond or other
security being required) and each party waives the defense in any action
or proceeding brought to enforce this Agreement that there exists an
adequate remedy at law.
F. Arbitration. Any controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance or
breach of this Agreement shall be settled, at the request of either
party, by binding arbitration conducted in Los Angeles in accordance
with the then-existing rules of the American Arbitration Association,
and judgment upon any award rendered by the arbitrator(s) may be entered
in any state or federal court having jurisdiction thereof. The parties
intend that this agreement to arbitrate shall be valid, enforceable, and
irrevocable.
G. Assignment. Neither this Agreement nor any right created hereby shall
be assignable by any party or their successors in interest without the
prior written consent of all other parties hereto, and any such
attempted assignment shall be void. Nothing in this agreement, expressed
or implied, is intended to confer upon any person, other than the
parties hereto, any rights or remedies under or by reason of this
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Agreement.
H. Paragraphs and Other Headings. Paragraphs and other headings
contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
I. Choice of Law. It is the intention of the parties that the laws of
the State of Nevada should govern the validity of this Agreement, the
construction of the terms and the interpretation of the rights and
duties of the parties.
J. No Waiver. The failure of any party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a
continuing waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement. Any waiver must be in writing.
K. Severability. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid,
illegal or unenforceable, the same shall not affect the any other
provisions of this Agreement, but this Agreement shall be construed as
if such invalid, illegal, or unenforceable provisions had never been
contained herein.
L. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
M. Time. Time is of the essence.
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IN WITNESS HEREOF, the parties hereto have executed and delivered this
Agreement effective as of the day and year first written above.
FLOUR CITY INTERNATIONAL, INC.
By: _______________________________
Name: Xxxxxxx Xxxxx
Title: President
GOLD MANOR LIMITED
By: _______________________________
Name: _______________________________
Title: _______________________________
DYNAMIC CHOICE ENTERPRISES
By: _______________________________
Name: _______________________________
Title: _______________________________
XXXXXX INTERNATIONAL LIMITED
By: _______________________________
Name: _______________________________
Title: _______________________________
________________________________________
Xxxx W.Y. Xxxx
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SCHEDULE A
OWNERSHIP OF STOCK OF HOCKLEY INTERNATIONAL LIMITED
1. Gold Manor Limited 15 Shares
2. Dynamic Choice Enterprises, Inc. 15 Shares
3. Xxxxxx International Ltd. 60 Shares
4. Xxxx W.Y. Xxxx 10 Shares
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