EXHIBIT 10.1
SHARE EXCHANGE AGREEMENT
DIVERSIFIED PRODUCT INSPECTIONS, INC.
FOR THE EXCHANGE OF
CAPITAL STOCK
OF
PARALLEL TECHNOLOGIES, INC.
DATED AS OF DECEMBER 13, 2005
SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT, dated as of December 13, 2005 (the
"Agreement") by and among DIVERSIFIED PRODUCT INSPECTIONS, INC., a newly-formed
Delaware corporation ("DPI"), PARALLEL TECHNOLOGIES, INC., a Nevada corporation
("Parallel"), and all of the shareholders of DPI, whose names are set forth on
Exhibit A attached hereto ("SHAREHOLDERS").
WHEREAS, SHAREHOLDERS own 100% of the issued and outstanding shares of
Common Stock, par value $.01 per share, of DPI (the "DPI Shares");
WHEREAS, SHAREHOLDERS believe it is in their best interest to exchange the
DPI Shares for shares of Series A Convertible Preferred Stock, par value $.001
per share, of Parallel ("Parallel Shares"), and Parallel believes it is in its
best interests to acquire the DPI Shares in exchange for Parallel Shares, upon
the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, it the intention of the parties that: (i) Parallel shall acquire
100% of the DPI Shares in exchange solely for the amount of Parallel Shares set
forth herein; (ii) said exchange of shares shall qualify as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended (the "Code"); and (iii) said exchange 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 (the "Securities
Act")
NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein, the parties hereto hereby agree as follows:
ARTICLE I
EXCHANGE OF SHARES FOR COMMON STOCK
SECTION 1.1 Agreement to Exchange DPI Shares for Parallel Shares. On the
Closing Date (as hereinafter defined) and upon the terms and subject to the
conditions set forth in this Agreement, SHAREHOLDERS shall sell, assign,
transfer, convey and deliver the DPI Shares (representing 15,560 DPI Shares or
100% of the issued and outstanding DPI Shares), to Parallel, and Parallel shall
accept the DPI Shares from the SHAREHOLDERS in exchange for the issuance to the
SHAREHOLDERS of the number of Parallel Shares set forth opposite the names of
the SHAREHOLDERS on Exhibit A hereto.
SECTION 1.2 Capitalization. On the Closing Date, immediately before the
transactions to be consummated pursuant to this Agreement, Parallel shall have
authorized (a) 100,000,000 shares of Common Stock, par value $.006 per share, of
which 39,243,659 shares shall be issued and outstanding, all of which are duly
authorized, validly issued and fully paid; and (b) 5,000,000 shares of Preferred
Stock, $.001 par value, of which no shares are issued or outstanding, but
785,000 shares shall have been designated as Series A Convertible Preferred
Stock and 216,000 shares shall have been designated as Series B Convertible
Preferred Stock, par value $.001 per share ("Series B Stock").
SECTION 1.3 Closing. The closing of the exchange to be made pursuant to
this Agreement (the "Closing") shall take place at 10:00 a.m. E.D.T. on the
second business day after the conditions to closing set forth in Articles V and
VI have been satisfied or waived, or at such other time and date as the parties
hereto shall agree in writing (the "Closing Date"), at the offices of Guzov
Ofsink, LLC, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. At the
Closing, SHAREHOLDERS shall deliver to Parallel the stock certificates
representing 100% of the DPI Shares, duly endorsed in blank for transfer or
accompanied by appropriate stock powers duly executed in blank. In full
consideration and exchange for the DPI Shares, Parallel shall issue and exchange
with SHAREHOLDERS 784,575.16 Parallel Shares representing approximately 50.42
Parallel Shares for each DPI Share exchanged.
1.4 Tax Treatment. The exchange described herein is intended to comply
with Section 368(a)(1)(B) of the Code, and all applicable regulations
thereunder. In order to ensure compliance with said provisions, the parties
agree to take whatever steps may be necessary, including, but not limited to,
the amendment of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARALLEL
Parallel hereby represents, warrants and agrees as follows:
SECTION 2.1 Corporate Organization
a. Parallel is a corporation duly organized, validly existing and in
good standing under the laws of Nevada, and has all requisite corporate power
and authority to own its properties and assets and to conduct its business as
now conducted and is duly qualified to do business in good standing in each
jurisdiction in which the nature of the business conducted by Parallel or the
ownership or leasing of its properties makes such qualification and being in
good standing necessary, except where the failure to be so qualified and in good
standing will not have a material adverse effect on the business, operations,
properties, assets, condition or results of operation of Parallel (a "Parallel
Material Adverse Effect");
b. Copies of the Articles of Incorporation and By-laws of Parallel
as well as the Certificates of Designation of the Series A Stock and the Series
B Stock, with all amendments thereto to the date hereof, have been furnished to
DPI and the SHAREHOLDERS, and such copies are accurate and complete as of the
date hereof. The minute books of Parallel are current as required by law,
contain the minutes of all meetings of the Board of Directors and shareholders
of Parallel from its date of incorporation to the date of this Agreement, and
adequately reflect all material actions taken by the Board of Directors and
shareholders of Parallel.
SECTION 2.2 Capitalization of Parallel. The authorized capital stock of
Parallel consists of (a) 100,000,000 shares of Common Stock, par value $.006 per
share, of which 39,243,659 shares are issued and outstanding, all of which are
duly authorized, validly issued and fully paid; and (b) 5,000,000 shares of
Preferred Stock, $.001 par value, of which no shares are issued or outstanding,
but of which 785,000 shares of Series A Stock and 216,000 shares of Series B
Stock have been designated. The parties agree that they have been informed of
the issuances of these Parallel Shares, and that all such issuances of Parallel
Shares pursuant to this Agreement will be in accordance with the provisions of
this Agreement. All of the Parallel Shares to be issued pursuant to this
Agreement have been duly authorized and will be validly issued, fully paid and
non-assessable and no personal liability will attach to the ownership thereof.
As of the date of this Agreement there are and as of the Closing Date, there
will be, no outstanding options, warrants, agreements, commitments, conversion
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any shares of capital stock or any un-issued or treasury
shares of capital stock of Parallel.
SECTION 2.3 Subsidiaries and Equity Investments. Parallel has no
subsidiaries or equity interest in any corporation, partnership or joint
venture.
SECTION 2.4 Authorization and Validity of Agreements. Parallel has all
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Parallel and the
consummation by Parallel of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of Parallel, and no other corporate
proceedings on the part of Parallel are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby.
SECTION 2.5 No Conflict or Violation. The execution, delivery and
performance of this Agreement by Parallel does not and will not violate or
conflict with any provision of its Articles of Incorporation or By-laws, and
does not and will not violate any provision of law, or any order, judgment or
decree of any court or other governmental or regulatory authority, nor violate
or result in a breach of or constitute (with due notice or lapse of time or
both) a default under, or give to any other entity any right of termination,
amendment, acceleration or cancellation of, any contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or instrument
to which Parallel is a party or by which it is bound or to which any of their
respective properties or assets is subject, nor will it result in the creation
or imposition of any lien, charge or encumbrance of any kind whatsoever upon any
of the properties or assets of Parallel, nor will it result in the cancellation,
modification, revocation or suspension of any of the licenses, franchises,
permits to which Parallel is bound.
SECTION 2.6 Consents and Approvals. No consent, waiver, authorization or
approval of any governmental or regulatory authority, domestic or foreign, or of
any other person, firm or corporation, is required in connection with the
execution and delivery of this Agreement by Parallel or the performance by
Parallel of its obligations hereunder.
SECTION 2.7 Absence of Certain Changes or Events. Since its inception:
a. Parallel has operated in the ordinary course of business
consistent with past practice and there has not been any material adverse change
in the assets, properties, business, operations, prospects, net income or
condition, financial or otherwise of Parallel. As of the date of this Agreement,
Parallel does not know or have reason to know of any event, condition,
circumstance or prospective development which threatens or may threaten to have
a material adverse effect on the assets, properties, operations, prospects, net
income or financial condition of Parallel;
b. there has not been any declaration, setting aside or payment of
dividends or distributions with respect to shares of capital stock of Parallel
or any redemption, purchase or other acquisition of any capital stock of
Parallel or any other of Parallel's securities; and
c. there has not been an increase in the compensation payable or to
become payable to any director or officer of Parallel.
SECTION 2.8 Disclosure. This Agreement and any certificate attached hereto
or delivered in accordance with the terms hereby by or on behalf of Parallel in
connection with the transactions contemplated by this Agreement, when taken
together, do not contain any untrue statement of a material fact or omit any
material fact necessary in order to make the statements contained herein and/or
therein not misleading.
SECTION 2.9 Survival. Each of the representations and warranties set forth
in this Article II shall be deemed represented and made by Parallel at the
Closing as if made at such time and shall survive the Closing for a period
terminating on the second anniversary of the date of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF DPI AND SHAREHOLDERS
DPI and each of the SHAREHOLDERS, severally, represent, warrant and agree
as follows:
SECTION 3.1 Corporate Organization.
a. DPI is a newly-formed corporation with no prior business
activities. It is duly organized, validly existing and in good standing under
the laws of the state of Delaware and has all requisite corporate power and
authority to own its properties and assets and to conduct its business as now
conducted and is duly qualified to do business in good standing in each
jurisdiction in where the nature of the business conducted by DPI or the
ownership or leasing of its properties makes such qualification and being in
good standing necessary, except where the failure to be so qualified and in good
standing will not have a material adverse effect on the business, operations,
properties, assets, condition or results of operation of DPI (a "DPI Material
Adverse Effect").
b. Copies of the Certificate of Incorporation and By-laws of DPI,
with all amendments thereto to the date hereof, have been furnished to Parallel,
and such copies are accurate and complete as of the date hereof. The minute
books of DPI are current as required by law, contain the minutes of all meetings
of the Board of Directors and shareholders of DPI, and committees of the Board
of Directors of DPI from the date of incorporation to the date of this
Agreement, and adequately reflect all material actions taken by the Board of
Directors, shareholders and committees of the Board of Directors of DPI.
SECTION 3.2 Capitalization of DPI; Title to the DPI Shares. On the Closing
Date, immediately before the transactions to be consummated pursuant to this
Agreement, DPI shall have authorized One Million (1,000,000) DPI Shares, of
which 15,560 DPI Shares will be issued and outstanding. The DPI Shares are the
sole outstanding shares of capital stock of DPI, and there are no outstanding
options, warrants, agreements, commitments, conversion rights, preemptive rights
or other rights to subscribe for, purchase or otherwise acquire any shares of
capital stock or any un-issued or treasury shares of capital stock of DPI.
SECTION 3.3 Subsidiaries and Equity Investments; Assets. As of the date
hereof and on the Closing Date, except for Dalian Diversified Product
Inspections Cable Company, Ltd. a corporation organized under the laws of the
Peoples Republic of China which is wholly owned by DPI, DPI does not and will
not directly or indirectly, own any shares of capital stock or any other equity
interest in any entity or any right to acquire any shares or other equity
interest in any entity and DPI does not and will not have any assets or
liabilities.
SECTION 3.4 Authorization and Validity of Agreements. DPI has all
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by DPI and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action and no other corporate proceedings on the part of DPI
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. The SHAREHOLDERS have approved this Agreement on behalf of
DPI and no other stockholder approvals are required to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by each SHAREHOLDER which is not a natural person ("Entity Shareholder") and the
consummation of the transactions contemplated hereby by each Entity Shareholder
have been duly authorized by all necessary action by the Entity Shareholder and
no other proceedings on the part of DPI or any SHAREHOLDER are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
SECTION 3.5 No Conflict or Violation. The execution, delivery and
performance of this Agreement by DPI or any SHAREHOLDER does not and will not
violate or conflict with any provision of the constituent documents of DPI, and
does not and will not violate any provision of law, or any order, judgment or
decree of any court or other governmental or regulatory authority, nor violate,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under or give to any other entity any right of termination, amendment,
acceleration or cancellation of any contract, lease, loan agreement, mortgage,
security agreement, trust indenture or other agreement or instrument to which
DPI or any SHAREHOLDER is a party or by which it is bound or to which any of its
respective properties or assets is subject, nor result in the creation or
imposition of any lien, charge or encumbrance of any kind whatsoever upon any of
the properties or assets of DPI or any SHAREHOLDER, nor result in the
cancellation, modification, revocation or suspension of any of the licenses,
franchises, permits to which DPI or any SHAREHOLDER is bound.
SECTION 3.6 Investment Representations. (a) The Parallel Shares will be
acquired hereunder solely for the account of the SHAREHOLDERS, for investment,
and not with a view to the resale or distribution thereof. Each SHAREHOLDER
understands and is able to bear any economic risks associated with such
SHAREHOLDER'S investment in the Parallel Shares. Each SHAREHOLDER has had full
access to all the information such SHAREHOLDER considers necessary or
appropriate to make an informed investment decision with respect to the Parallel
Shares to be acquired under this Agreement. Each SHAREHOLDER further has had an
opportunity to ask questions and receive answers from Parallel's sole director
regarding Parallel and to obtain additional information (to the extent
Parallel's director possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to
such SHAREHOLDER or to which such SHAREHOLDER had access. Each SHAREHOLDER ,
other than a SHAREHOLDER which is also a PRC Shareholder (as such term is
hereinafter defined) is an "accredited investor" (as such term is defined in
Rule 501(a) of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act).
(b) No offer to enter into this Agreement has been made by Parallel to any of
Dalian Fushi Enterprise Group Co., Ltd., Xxx Xxxx, Xxxxxx Xxxx, Chunyian Xu or
Redwood Capital (each a "PRC Shareholder" and collectively, the "PRC
Shareholders") in the United States. At the times of the offer and execution of
this Agreement, each PRC Shareholder was domiciled and resided outside the
United States. No PRC Shareholder, nor any affiliate of any PRC Shareholder, nor
any person acting on behalf of any PRC Shareholder or any behalf of any such
affiliate, has engaged or will engage in any activity undertaken for the purpose
of, or that reasonably could be expected to have the effect of, conditioning the
markets in the United States for the Parallel Shares, including, but not limited
to, effecting any sale or short sale of securities through any PRC Shareholder
or any of affiliate of any PRC Shareholder prior to the expiration of any
restricted period contained in Regulation S promulgated under the Securities Act
(any such activity being defined herein as a "Directed Selling Effort"). To the
best knowledge of each of the PRC Shareholders, this Agreement and the
transactions contemplated herein are not part of a plan or scheme to evade the
registration provisions of the Securities Act, and the Parallel Shares are being
acquired for investment purposes by the PRC Shareholders. Each PRC Shareholder
agrees that all offers and sales of Parallel Shares from the date hereof and
through the expiration of the any restricted period set forth in Rule 903 of
Regulation S (as the same may be amended from time to time hereafter) shall not
be made to U.S. Persons or for the account or benefit of U.S. Persons and shall
otherwise be made in compliance with the provisions of Regulation S and any
other applicable provisions of the Securities Act. Neither any PRC Shareholder
nor the representatives of any PRC Shareholder have conducted any Directed
Selling Effort as that term is used and defined in Rule 902 of Regulation S and
no PRC Shareholder nor any representative of any PRC Shareholder will engage in
any such Directed Selling Effort within the United States through the expiration
of any restricted period set forth in Rule 903 of Regulation S.
SECTION 3.7 Brokers' Fees. No SHAREHOLDER has any liability to pay any
fees or commissions or other consideration to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
SECTION 3.8 Disclosure. This Agreement, the schedules hereto and any
certificate attached hereto or delivered in accordance with the terms hereby by
or on behalf of DPI or the SHAREHOLDERS in connection with the transactions
contemplated by this Agreement, when taken together, do not contain any untrue
statement of a material fact or omit any material fact necessary in order to
make the statements contained herein and/or therein not misleading.
SECTION 3.8 Survival. Each of the representations and warranties set forth
in this Article III shall be deemed represented and made by DPI and the
SHAREHOLDERS at the Closing as if made at such time and shall survive the
Closing for a period terminating on the second anniversary of the date of this
Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1 Certain Changes and Conduct of Business.
a. From and after the date of this Agreement and until the Closing
Date, Parallel shall conduct its business solely in the ordinary course
consistent with past practices and, in a manner consistent with all
representations, warranties or covenants of Parallel, and without the prior
written consent of DPI will not, except as required or permitted pursuant to the
terms hereof:
i. make any material change in the conduct of its businesses
and/or operations or enter into any transaction other than in
the ordinary course of business consistent with past
practices;
ii. make any change in its Articles of Incorporation or By-laws;
issue any additional shares of capital stock or equity
securities or grant any option, warrant or right to acquire
any capital stock or equity securities or issue any security
convertible into or exchangeable for its capital stock or
alter in any material term of any of its outstanding
securities or make any change in its outstanding shares of
capital stock or its capitalization, whether by reason of a
reclassification, recapitalization, stock split or
combination, exchange or readjustment of shares, stock
dividend or otherwise;
iii. A. incur, assume or guarantee any indebtedness for borrowed
money, issue any notes, bonds, debentures or other
corporate securities or grant any option, warrant or
right to purchase any thereof, except pursuant to
transactions in the ordinary course of business
consistent with past practices; or
B. issue any securities convertible or exchangeable for
debt or equity securities of Parallel;
iv. make any sale, assignment, transfer, abandonment or other
conveyance of any of its assets or any part thereof, except
pursuant to transactions in the ordinary course of business
consistent with past practice;
v. subject any of its assets, or any part thereof, to any lien or
suffer such to be imposed other than such liens as may arise
in the ordinary course of business consistent with past
practices by operation of law which will not have an Parallel
Material Adverse Effect;
vi. acquire any assets, raw materials or properties, or enter into
any other transaction, other than in the ordinary course of
business consistent with past practices;
vii. enter into any new (or amend any existing) employee benefit
plan, program or arrangement or any new (or amend any
existing) employment, severance or consulting agreement, grant
any general increase in the compensation of officers or
employees (including any such increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment) or grant
any increase in the compensation payable or to become payable
to any employee, except in accordance with pre-existing
contractual provisions or consistent with past practices;
viii. make or commit to make any material capital expenditures;
ix. pay, loan or advance any amount to, or sell, transfer or lease
any properties or assets to, or enter into any agreement or
arrangement with, any of its affiliates;
x. guarantee any indebtedness for borrowed money or any other
obligation of any other person;
xi. fail to keep in full force and effect insurance comparable in
amount and scope to coverage maintained by it (or on behalf of
it) on the date hereof;
xii. take any other action that would cause any of the
representations and warranties made by it in this Agreement
not to remain true and correct in all material aspect;
xiii. make any material loan, advance or capital contribution to or
investment in any person;
xiv. make any material change in any method of accounting or
accounting principle, method, estimate or practice;
xv. settle, release or forgive any claim or litigation or waive
any right;
xvi. commit itself to do any of the foregoing.
b. From and after the date of this Agreement, DPI will:
1. continue to maintain, in all material respects, its properties
in accordance with present practices in a condition suitable
for its current use;
2. file, when due or required, federal, state, foreign and other
tax returns and other reports required to be filed and pay
when due all taxes, assessments, fees and other charges
lawfully levied or assessed against it, unless the validity
thereof is contested in good faith and by appropriate
proceedings diligently conducted;
3. continue to conduct its business in the ordinary course
consistent with past practices;
4. keep its books of account, records and files in the ordinary
course and in accordance with existing practices; and
5. continue to maintain existing business relationships with
suppliers.
SECTION 4.2 Access to Properties and Records. DPI shall afford Parallel's
accountants, counsel and authorized representatives, and Parallel shall afford
to DPI's accountants, counsel and authorized representatives full access during
normal business hours throughout the period prior to the Closing Date (or the
earlier termination of this Agreement) to all of such parties' properties,
books, contracts, commitments and records and, during such period, shall furnish
promptly to the requesting party all other information concerning the other
party's business, properties and personnel as the requesting party may
reasonably request, provided that no investigation or receipt of information
pursuant to this Section 4.2 shall affect any representation or warranty of or
the conditions to the obligations of any party.
SECTION 4.3 Negotiations. From and after the date hereof until the earlier
of the Closing or the termination of this Agreement, no party to this Agreement
nor its officers or directors (subject to such director's fiduciary duties) nor
anyone acting on behalf of any party or other persons shall, directly or
indirectly, encourage, solicit, engage in discussions or negotiations with, or
provide any information to, any person, firm, or other entity or group
concerning any merger, sale of substantial assets, purchase or sale of shares of
capital stock or similar transaction involving any party. A party shall promptly
communicate to any other party any inquiries or communications concerning any
such transaction which they may receive or of which they may become aware of.
SECTION 4.4 Consents and Approvals. The parties shall:
i. use their reasonable commercial efforts to obtain all
necessary consents, waivers, authorizations and approvals of
all governmental and regulatory authorities, domestic and
foreign, and of all other persons, firms or corporations
required in connection with the execution, delivery and
performance by them of this Agreement; and
ii. diligently assist and cooperate with each party in preparing
and filing all documents required to be submitted by a party
to any governmental or regulatory authority, domestic or
foreign, in connection with such transactions and in obtaining
any governmental consents, waivers, authorizations or
approvals which may be required to be obtained connection in
with such transactions.
SECTION 4.5 Public Announcement. Unless otherwise required by applicable
law, the parties hereto shall consult with each other before issuing any press
release or otherwise making any public statements with respect to this Agreement
and shall not issue any such press release or make any such public statement
prior to such consultation.
SECTION 4.6 Stock Issuance. From and after the date of this Agreement
until the Closing Date, neither Parallel nor DPI shall issue any additional
shares of its capital stock, except that Parallel may issue up to an aggregate
of 216,000 shares of Series B Stock to certain investors pursuant to the terms
of a Stock Purchase Agreement among Parallel, Dalian Fushi Bimetallic
Manufacturing Co., Ltd. and the investors to be entered into on the Closing
Date, a draft of which agreement is attached hereto.
SECTION 4.7 Notwithstanding anything to the contrary contained herein, it
is herewith understood and agreed that both DPI and Parallel may enter into and
conclude agreements and/or financing transactions as same relate to and/or are
contemplated by any separate written agreements either: (a) annexed hereto as
exhibits; or (b) entered into by Parallel with DPI executed by both parties
subsequent to the date hereof. These Agreements shall become, immediately upon
execution, part of this Agreement and subject to all warranties, representations
and conditions contained herein.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF DPI AND SHAREHOLDERS
The obligations of DPI and the SHAREHOLDERS to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by both DPI and the SHAREHOLDERS in their sole discretion:
SECTION 5.1 Representations and Warranties of Parallel. All
representations and warranties made by Parallel in this Agreement shall be true
and correct on and as of the Closing Date as if again made by Parallel as of
such date.
SECTION 5.2 Agreements and Covenants. Parallel shall have performed and
complied in all material respects to all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date.
SECTION 5.3 Consents and Approvals. Consents, waivers, authorizations and
approvals of any governmental or regulatory authority, domestic or foreign, and
of any other person, firm or corporation, required in connection with the
execution, delivery and performance of this Agreement shall be in full force and
effect on the Closing Date.
SECTION 5.4 No Violation of Orders. No preliminary or permanent injunction
or other order issued by any court or governmental or regulatory authority,
domestic or foreign, nor any statute, rule, regulation, decree or executive
order promulgated or enacted by any government or governmental or regulatory
authority, which declares this Agreement invalid in any respect or prevents the
consummation of the transactions contemplated hereby, or which materially and
adversely affects the assets, properties, operations, prospects, net income or
financial condition of Parallel shall be in effect; and no action or proceeding
before any court or governmental or regulatory authority, domestic or foreign,
shall have been instituted or threatened by any government or governmental or
regulatory authority, domestic or foreign, or by any other person, or entity
which seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement.
SECTION 5.5 Other Closing Documents. DPI shall have received such other
certificates, instruments and documents in confirmation of the representations
and warranties of Parallel or in furtherance of the transactions contemplated by
this Agreement as DPI or its counsel may reasonably request.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PARALLEL
The obligations of Parallel to consummate the transactions contemplated by
this Agreement are subject to the fulfillment, at or before the Closing Date, of
the following conditions, any one or more of which may be waived by Parallel in
its sole discretion:
SECTION 6.1 Representations and Warranties of DPI. All representations and
warranties made by DPI in this Agreement shall be true and correct on and as of
the Closing Date as if again made by DPI on and as of such date.
SECTION 6.2 Agreements and Covenants. DPI shall have performed and
complied in all material respects to all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date.
SECTION 6.3 Consents and Approvals. All consents, waivers, authorizations
and approvals of any governmental or regulatory authority, domestic or foreign,
and of any other person, firm or corporation, required in connection with the
execution, delivery and performance of this Agreement, shall have been duly
obtained and shall be in full force and effect on the Closing Date.
SECTION 6.4 No Violation of Orders. No preliminary or permanent injunction
or other order issued by any court or other governmental or regulatory
authority, domestic or foreign, nor any statute, rule, regulation, decree or
executive order promulgated or enacted by any government or governmental or
regulatory authority, domestic or foreign, that declares this Agreement invalid
or unenforceable in any respect or which prevents the consummation of the
transactions contemplated hereby, or which materially and adversely affects the
assets, properties, operations, prospects, net income or financial condition of
Parallel, taken as a whole, shall be in effect; and no action or proceeding
before any court or government or regulatory authority, domestic or foreign,
shall have been instituted or threatened by any government or governmental or
regulatory authority, domestic or foreign, or by any other person, or entity
which seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement.
SECTION 6.5. Other Closing Documents. Parallel shall have received such
other certificates, instruments and documents in confirmation of the
representations and warranties of DPI or in furtherance of the transactions
contemplated by this Agreement as Parallel or its counsel may reasonably
request.
ARTICLE VII
TERMINATION AND ABANDONMENT
SECTION 7.1 Methods of Termination. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time before the
Closing:
a. By the mutual written consent of SHAREHOLDERS, DPI and
Parallel;
b. By Parallel, upon a material breach of any representation,
warranty, covenant or agreement on the part of DPI or the
SHAREHOLDERS set forth in this Agreement, or if any
representation or warranty of DPI or the SHAREHOLDERS shall
become untrue, in either case such that any of the conditions
set forth in Article VI hereof would not be satisfied (a "DPI
Breach"), and such breach shall, if capable of cure, has not
been cured within ten (10) days after receipt by the party in
breach of a notice from the non-breaching party setting forth
in detail the nature of such breach;
c. By DPI, upon a material breach of any representation,
warranty, covenant or agreement on the part of Parallel set
forth in this Agreement, or, if any representation or warranty
of Parallel shall become untrue, in either case such that any
of the conditions set forth in Article V hereof would not be
satisfied (a "Parallel Breach"), and such breach shall, if
capable of cure, not have been cured within ten (10) days
after receipt by the party in breach of a written notice from
the non-breaching party setting forth in detail the nature of
such breach;
d. By either Parallel or DPI, if the Closing shall not have
consummated before ninety (90) days after the date hereof;
provided, however, that this Agreement may be extended by
written notice of either DPI or Parallel, if the Closing shall
not have been consummated as a result of Parallel or DPI
having failed to receive all required regulatory approvals or
consents with respect to this transaction or as the result of
the entering of an order as described in this Agreement; and
further provided, however, that the right to terminate this
Agreement under this Section 7.1(d) shall not be available to
any party whose failure to fulfill any obligations under this
Agreement has been the cause of, or resulted in, the failure
of the Closing to occur on or before this date.
e. By either DPI or Parallel if a court of competent jurisdiction
or governmental, regulatory or administrative agency or
commission shall have issued an order, decree or ruling or
taken any other action (which order, decree or ruling the
parties hereto shall use its best efforts to lift), which
permanently restrains, enjoins or otherwise prohibits the
transactions contemplated by this Agreement.
SECTION 7.2 Procedure Upon Termination. In the event of termination and
abandonment of this Agreement by DPI or Parallel pursuant to Section 7.1,
written notice thereof shall forthwith be given to the other parties and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action. If this Agreement is terminated as provided
herein, no party to this Agreement shall have any liability or further
obligation to any other party to this Agreement; provided, however, that no
termination of this Agreement pursuant to this Article VII shall relieve any
party of liability for a breach of any provision of this Agreement occurring
before such termination.
ARTICLE VIII
POST-CLOSING AGREEMENTS
SECTION 8.1 Consistency in Reporting. Each party hereto agrees that if the
characterization of any transaction contemplated in this agreement or any
ancillary or collateral transaction is challenged, each party hereto will
testify, affirm and ratify that the characterization contemplated in such
agreement was the characterization intended by the party; provided, however,
that nothing herein shall be construed as giving rise to any obligation if the
reporting position is determined to be incorrect by final decision of a court of
competent jurisdiction.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Survival of Provisions. The respective representations,
warranties, covenants and agreements of each of the parties to this Agreement
(except covenants and agreements which are expressly required to be performed
and are performed in full on or before the Closing Date) shall survive the
Closing Date and the consummation of the transactions contemplated by this
Agreement, subject to Sections 2.9, 3.8 and 8.2. In the event of a breach of any
of such representations, warranties or covenants, the party to whom such
representations, warranties or covenants have been made shall have all rights
and remedies for such breach available to it under the provisions of this
Agreement or otherwise, whether at law or in equity, regardless of any
disclosure to, or investigation made by or on behalf of such party on or before
the Closing Date.
SECTION 9.2 Publicity. No party shall cause the publication of any press
release or other announcement with respect to this Agreement or the transactions
contemplated hereby without the consent of the other parties, unless a press
release or announcement is required by law. If any such announcement or other
disclosure is required by law, the disclosing party agrees to give the
non-disclosing parties prior notice and an opportunity to comment on the
proposed disclosure.
SECTION 9.3 Successors and Assigns. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective
successors and assigns; provided, however, that no party shall assign or
delegate any of the obligations created under this Agreement without the prior
written consent of the other parties.
SECTION 9.4 Fees and Expenses. Except as otherwise expressly provided in
this Agreement, all legal and other fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees, costs or expenses.
SECTION 9.5 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been given or
made if in writing and delivered personally or sent by registered or certified
mail (postage prepaid, return receipt requested) to the parties at the following
addresses:
If to DPI or the SHAREHOLDERS, to:
Diversified Product Inspections, Inc.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxx 00000
Attn: Xxxx x. Xxxxx
with a copy to:
Guzov Ofsink, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
Fax: 000-000-0000
If to Parallel, to:
Parallel Technologies, Inc.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxx 00000
Attn: Li Fu
or to such other persons or at such other addresses as shall be furnished by any
party by like notice to the others, and such notice or communication shall be
deemed to have been given or made as of the date so delivered or mailed. No
change in any of such addresses shall be effective insofar as notices under this
Section 9.5 are concerned unless such changed address is located in the United
States of America and notice of such change shall have been given to such other
party hereto as provided in this Section 9.5
SECTION 9.6 Entire Agreement. This Agreement, together with the exhibits
hereto, represents the entire agreement and understanding of the parties with
reference to the transactions set forth herein and no representations or
warranties have been made in connection with this Agreement other than those
expressly set forth herein or in the exhibits, certificates and other documents
delivered in accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings and
agreements between the parties relating to the subject matter of this Agreement
and all prior drafts of this Agreement, all of which are merged into this
Agreement. No prior drafts of this Agreement and no words or phrases from any
such prior drafts shall be admissible into evidence in any action or suit
involving this Agreement.
SECTION 9.7 Severability. This Agreement shall be deemed severable, and
the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible so as to be valid and enforceable.
SECTION 9.8 Titles and Headings. The Article and Section headings
contained in this Agreement are solely for convenience of reference and shall
not affect the meaning or interpretation of this Agreement or of any term or
provision hereof.
SECTION 9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
SECTION 9.10 Convenience of Forum; Consent to Jurisdiction. The parties to
this Agreement, acting for themselves and for their respective successors and
assigns, without regard to domicile, citizenship or residence, hereby expressly
and irrevocably elect as the sole judicial forum for the adjudication of any
matters arising under or in connection with this Agreement, and consent and
subject themselves to the jurisdiction of, the courts of the State of New York
located in County of New York, and/or the United States District Court for the
Southern District of New York, in respect of any matter arising under this
Agreement. Service of process, notices and demands of such courts may be made
upon any party to this Agreement by personal service at any place where it may
be found or giving notice to such party as provided in Section 9.5.
SECTION 9.11 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereto, this being in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 9.12 Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of New York
without giving effect to the choice of law provisions thereof.
SECTION 9.13 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the parties hereto.. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
DIVERSIFIED PRODUCT INSPECTIONS, INC.
By:___________________________
Xx Xx
Title: Chief Executive Officer
PARALLEL TECHNOLOGIES, INC.
By:___________________________
Xx Xx
Title: Chief Executive Officer
SHAREHOLDERS:
DALIAN FUSHI ENTERPRISE GROUP CO., LTD.
By:___________________________
-----------------------------
Xxx Xxxx
-----------------------------
Xxxxxx Xxxx
-----------------------------
Xxxxxxx Xx
XXXXX BROTHERS, INC.
By:___________________
Xxxx Xxxxx
-----------------------
Xxxx Xxxxxxx
------------------------
Xxxx Xxxxx
------------------------
Xxx Xxxxxxxxx
------------------------
Xxxxx Xxxx
REDWOOD CAPITAL, INC.
---------------------
By:
Title:
----------------------
Xxxxx Xxxxxx
----------------------
Xxx Xxxxx
----------------------
Xxxx Xxxxx
----------------------
Xxxx Xxxxx
EXHIBIT A
Name Number of DPI Shares Number of
Parallel Shares
of SHAREHOLDER Being Exchanged to be Received
-------------- --------------- --------------
Dalian Fushi Enterprise 12,984.04 654,688.64
Group Co. Ltd.
Xxx Xxxx 1,480.00 74,625.40
Xxxxxx Xxxx 242.72 12,238.57
Xxxxxxx Xx 93.24 4,701.40
Xxxxx Brothers, Inc. 200.64 10116.78
Xxxx Xxxxx 120 6050.71
Xxxx Xxxxxxx 60 3025.35
Xxxx Xxxxx 15 756.34
Xxx Xxxxxxxxx 5.64 284.38
Xxxxx Xxxx 91.20 4,598.54
Redwood Capital, Inc. 91.20 4,598.54
Xxxxx Xxxxxx 121.6 6131.38
Xxx Xxxxx 45.6 2299.27
Xxxx Xxxxx 9.12 459.85
