Share Exchange Agreement
This
Share Exchange Agreement, dated as of December 23, 2007, is made by and among
KINGLAKE RESOURCES, INC., a Nevada corporation (“Acquiror Company”), Orient Come
Holdings Limited, a company incorporated in British Virgin Island (“Orient Come”
or "Acquired Company"), each of the Persons listed on Schedule I hereto
(“Orient Come Shareholders” or "Shareholders"), and Beijing K’s Media
Advertisement Ltd. Co., a company organized under the laws of The Peoples'
Republic of China (“K’s Media”) (Acquiror Company, Orient Come, Orient Come
Shareholders and K's Media are collectively referred to as “All
Parties”).
BACKGROUND
WHEREAS,
the Orient Come Shareholders have agreed to transfer to the Acquiror Company,
and the Acquiror Company has agreed to acquire from Orient Come Shareholders,
all of the shares of Orient Come, which shares constitute 100% of the issued
and
outstanding shares of Orient Come, in exchange for 13,000,000 shares of the
Acquiror's Common Stock to be issued on the Closing Date (the “Acquiror Company
Shares”), on the terms and conditions as set forth herein; and
WHEREAS,
simultaneously with the consummation of the transactions contemplated hereby,
Orient Come shall enter into a Business Cooperation Agreement with K’s Media
(the “Management Contract”).
NOW
THEREFORE in consideration
of the premises and the mutual covenants, agreements, representations and
warranties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION
I.
DEFINITIONS
Unless
the context otherwise requires, the terms defined in this Section 1 will have
the meanings herein specified for all purposes of this Agreement, applicable
to
both the singular and plural forms of any of the terms herein defined.
1.1 “Accredited
Investor” has the meaning set forth in Regulation D under the Securities Act and
set forth on Exhibit
B.
1.2 “Acquired
Company” means Orient Come.
1.3 “Acquiror
Company Balance Sheet” means the Acquiror Company’s balance sheet at July 31,
2007.
1.4 “Acquiror
Company Board” means the Board of Directors of the Acquiror
Company.
1.5 “Acquiror
Company Common Stock” means the Acquiror Company’s common stock, par value US
$0.00001 per share.
1.6 “Acquiror
Company Shares” means the Acquiror Company Common Stock being issued to Orient
Come Shareholders and K’s Media pursuant hereto.
1.7 “Affiliate”
means any Person that directly or indirectly controls, is controlled by or
is
under common control with the indicated Person.
1.8 “Agreement”
means this Share Exchange Agreement, including all Schedules and Exhibits
hereto, as this Share Exchange Agreement may be from time to time amended,
modified or supplemented.
1.9 “Closing
Acquiror Company Shares” means the aggregate number of Acquiror Shares issuable
to Orient Come Shareholders and K’s Media at Closing, less the Escrow
Shares.
1.10 “Closing
Date” has the meaning set forth in Section 3.
1.11 “Code”
means the Internal Revenue Code of 1986, as amended.
1.12 “Commission”
means the Securities and Exchange Commission or any other federal agency then
administering the Securities Act.
1.13 “Environmental
Laws” means any Law or other requirement relating to the environment, natural
resources, or public or employee health and safety.
1.14 “Environmental
Permit” means all licenses, permits, authorizations, approvals, franchises and
rights required under any applicable Environmental Law or Order.
1.15 “Equity
Security” means any stock or similar security, including, without limitation,
securities containing equity features and securities containing profit
participation features, or any security convertible into or exchangeable for,
with or without consideration, any stock or similar security, or any security
carrying any warrant, right or option to subscribe to or purchase any shares
of
capital stock, or any such warrant or right.
1.16 “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
1.17 “Escrow
Share” has the meaning set forth in Section 3.2.
1.18 “Exchange
Act” means the Securities Exchange Act of 1934 or any similar federal statute,
and the rules and regulations of the Commission thereunder, all as the same
will
then be in effect.
1.19 “Exhibits”
means the several exhibits referred to and identified in this
Agreement.
1.20 “Form
8-K” means a current report on Form 8-K under the Exchange Act.
1.21 “GAAP”
means, with respect to any Person, United States generally accepted accounting
principles applied on a consistent basis with such Person’s past
practices.
1.22 “Governmental
Authority” means any federal or national, state or provincial, municipal or
local government, governmental authority, regulatory or administrative agency,
governmental commission, department, board, bureau, agency or instrumentality,
political subdivision, commission, court, tribunal, official, arbitrator or
arbitral body, in each case whether U.S. or non-U.S.
1.23 “Indebtedness”
means any obligation, contingent or otherwise. Any obligation secured by a
Lien
on, or payable out of the proceeds of, or production from, property of the
relevant party will be deemed to be Indebtedness.
1.24 “Intellectual
Property” means all industrial and intellectual property, including, without
limitation, all U.S. and non-U.S. patents, patent applications, patent rights,
trademarks, trademark applications, common law trademarks, Internet domain
names, trade names, service marks, service xxxx applications, common law service
marks, and the goodwill associated therewith, copyrights, in both published
and
unpublished works, whether registered or unregistered, copyright applications,
franchises, licenses, know-how, trade secrets, technical data, designs, customer
lists, confidential and proprietary information, processes and formulae, all
computer software programs or applications, layouts, inventions, development
tools and all documentation and media constituting, describing or relating
to
the above, including manuals, memoranda, and records, whether such intellectual
property has been created, applied for or obtained anywhere throughout the
world.
1.25 “Laws”
means, with respect to any Person, any U.S. or non-U.S. federal, national,
state, provincial, local, municipal, international, multinational or other
law
(including common law), constitution, statute, code, ordinance, rule, regulation
or treaty applicable to such Person.
1.26 “Lien”
means any mortgage, pledge, security interest, encumbrance, lien or charge
of
any kind, including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code
of
any jurisdiction and including any lien or charge arising by Law.
1.27 “Material
Acquiror Company Contract” means any and all agreements, contracts,
arrangements, leases, commitments or otherwise, of the Acquiror Company, of
the
type and nature that the Acquiror Company is required to file with the
Commission.
1.28 “Material
Adverse Effect” means, when used with respect to the Acquiror Company or the
Acquired Company, as the case may be, any change, effect or circumstance which,
individually or in the aggregate, would reasonably be expected to (a) have
a
material adverse effect on the business, assets, financial condition or results
of operations of the Acquiror Company or the Acquired Company, as the case
may
be, in each case taken as a whole or (b) materially impair the ability of the
Acquiror Company or the Acquired Company, as the case may be, to perform their
obligations under this Agreement, excluding any change, effect or circumstance
resulting from (i) the announcement, pendency or consummation of the
transactions contemplated by this Agreement, (ii) changes in the United States
securities markets generally, or (iii) changes in general economic, currency
exchange rate, political or regulatory conditions in industries in which the
Acquiror Company or the Acquired Company, as the case may be, operate or (c)
result in litigation, claims, disputes or property loss in excess of US$150,000
in the future, and that would prohibit or otherwise materially interfere with
the ability of any party to this Agreement to perform any of its obligations
under this Agreement in any material respect.
1.29 “Order”
means any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any Governmental
Authority.
1.30 “Organizational
Documents” means (a) the articles or certificate of incorporation and the
by-laws or code of regulations of a corporation; (b) the partnership agreement
and any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) the articles or certificate of formation and operating
agreement of a limited liability company; (e) any other document performing
a
similar function to the documents specified in clauses (a), (b), (c) and (d)
adopted or filed in connection with the creation, formation or organization
of a
Person; and (f) any and all amendments to any of the foregoing.
1.31 “Permitted
Liens” means (a) Liens for Taxes not yet payable or in respect of which the
validity thereof is being contested in good faith by appropriate proceedings
and
for the payment of which the relevant party has made adequate reserves; (b)
Liens in respect of pledges or deposits under workmen’s compensation laws or
similar legislation, carriers, warehousemen, mechanics, laborers and materialmen
and similar Liens, if the obligations secured by such Liens are not then
delinquent or are being contested in good faith by appropriate proceedings
conducted and for the payment of which the relevant party has made adequate
reserves; (c) statutory Liens incidental to the conduct of the business of
the
relevant party which were not incurred in connection with the borrowing of
money
or the obtaining of advances or credits and that do not in the aggregate
materially detract from the value of its property or materially impair the
use
thereof in the operation of its business; and (d) Liens that would not have
a
Material Adverse Effect.
1.32 “Person”
means all natural persons, corporations, business trusts, associations,
companies, partnerships, limited liability companies, joint ventures and other
entities, governments, agencies and political subdivisions.
1.33 “PRC”
means the People’s Republic of China, excluding Taiwan, Hong Kong and
Macau.
1.34 “Proceeding”
means any action, arbitration, audit, hearing, investigation, litigation, or
suit (whether civil, criminal, administrative or investigative) commenced,
brought, conducted, or heard by or before, or otherwise involving, any
Governmental Authority.
1.35 “Rule
144” means Rule 144 under the Securities Act, as the same may be amended from
time to time, or any successor statute.
1.36 “Schedule
14(f) Filing” means an information statement filed by the Acquiror Company on
Schedule 14f-1 under the Exchange Act.
1.37 “Schedules”
means the several schedules referred to and identified herein, setting forth
certain disclosures, exceptions and other information, data and documents
referred to at various places throughout this Agreement.
1.38 “SEC
Documents” has the meaning set forth in Section 6.26.
1.39 “Section
4(2)” means Section 4(2) under the Securities Act, as the same may be amended
from time to time, or any successor statute.
1.40 “Securities
Act” means the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as
the
same will be in effect at the time.
1.41 “Share
Escrow Agreement” means the escrow agreement substantially in the form of
Exhibit A hereto, pursuant to which the Acquiror Company will deposit [10,500,000] of the Acquiror
Company Shares into an escrow account, which will be released to K’s Media
according to the achievement of performance thresholds following the Share
Exchange.
1.42 “Share
Exchange” has the meaning set forth in Section 2.1.
1.43 “Shares”
means the issued and outstanding ordinary shares of Orient Come.
1.44 “Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
joint venture or partnership of which such Person (a) beneficially owns, either
directly or indirectly, more than 50% of (i) the total combined voting power
of
all classes of voting securities of such entity, (ii) the total combined equity
interests, or (iii) the capital or profit interests, in the case of a
partnership or limited liability company; or (b) otherwise has the power to
vote
or to direct the voting of sufficient securities to elect a majority of the
board of directors or similar governing body.
1.45 “Survival
Period” has the meaning set forth in Section 11.1.
1.46 “Taxes”
means all foreign, federal, state or local taxes, charges, fees, levies,
imposts, duties and other assessments, as applicable, including, but not limited
to, any income, alternative minimum or add-on, estimated, gross income, gross
receipts, sales, use, transfer, transactions, intangibles, ad valorem,
value-added, franchise, registration, title, license, capital, paid-up capital,
profits, withholding, payroll, employment, unemployment, excise, severance,
stamp, occupation, premium, real property, recording, personal property, federal
highway use, commercial rent, environmental (including, but not limited to,
taxes under Section 59A of the Code) or windfall profit tax, custom, duty or
other tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalties or additions to tax with
respect to any of the foregoing; and “Tax” means any of the foregoing
Taxes.
1.47 “Tax
Group” means any federal, state, local or foreign consolidated, affiliated,
combined, unitary or other similar group of which the Acquiror Company is now
or
was formerly a member.
1.48 “Tax
Return” means any return, declaration, report, claim for refund or credit,
information return, statement or other similar document filed with any
Governmental Authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
1.49 “Transaction
Documents” means, collectively, all agreements, instruments and other documents
to be executed and delivered in connection with the transactions contemplated
by
this Agreement.
1.50 “U.S.”
means the United States of America.
1.51 “U.S.
Dollars” or “US $” means the currency of the United States of
America.
1.52 “U.S.
Person” has the meaning set forth in Regulation S under the Securities Act and
set forth on Exhibit C hereto.
SECTION
II.
EXCHANGE
OF SHARES AND SHARE CONSIDERATION
2.1 Share
Exchange.
At the Closing, the Orient Come Shareholders shall transfer 2 Shares,
representing all of the issued and outstanding shares of Orient Come, and,
in
consideration therefor, subject to Section 2.2, Acquiror Company shall issue
to
Orient Come Shareholders and their assignees an aggregate of 13,000,000 fully
paid and nonassessable shares of Acquiror Company Common Stock (the “Share
Exchange”).
2.2 Withholding.
The Acquiror Company shall be entitled to deduct and withhold from the Acquiror
Company Shares otherwise issuable pursuant to this Agreement to any Shareholder
such amounts as it is required to deduct and withhold with respect to the making
of such payment under the Code or any provision of state, local, provincial
or
foreign tax Law. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid
to such Shareholder in respect of which such deduction and withholding was
made.
2.3 Section
368
Reorganization. For U.S. federal income tax purposes, the Share Exchange
is intended to constitute a “reorganization” within the meaning of Section
368(a)(1)(B) of the Code. The parties to this Agreement hereby adopt this
Agreement as a “plan of reorganization” within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
Notwithstanding the foregoing or anything else to the contrary contained in
this
Agreement, the parties acknowledge and agree that no party is making any
representation or warranty as to the qualification of the Share Exchange as
a
reorganization under Section 368 of the Code or as to the effect, if any, that
any transaction consummated prior to the Closing Date has or may have on any
such reorganization status. The parties acknowledge and agree that each (i)
has
had the opportunity to obtain independent legal and tax advice with respect
to
the transaction contemplated by this Agreement, and (ii) is responsible for
paying its own Taxes, including without limitation, any adverse Tax consequences
that may result if the transaction contemplated by this Agreement is not
determined to qualify as a reorganization under Section 368 of the
Code.
2.4 Directors
of Acquiror
Company at Closing Date. On the Closing Date, Xxxx Xxx, the current
President and a member of the Acquiror Company Board, shall nominate each of
Xxx
Xxxxxx, Xx Xxxx and Kun (Xxxxx) Wei as a member of the Acquiror Company Board,
Xx Xxxx will be nominated Chairman of the Acquiror Company Board, such
nominations to be effective on the tenth day after mailing the Schedule 14(f)
to
the stockholders of record of the Acquiror Company (the “Effective Time”). On
the Closing Date, Xxx Xxxx and Xxxxx Xxx, current directors of the Acquiror
Company Board, shall tender their resignation as a director of the Acquiror
Company to be effective at the Effective Time. Xxxx Xxx shall remain
a director of the Acquiror Company.
2.5 Officers
of Acquiror
Company at Closing Date. On the Closing Date, Xxxx Xxx and Xxxxx Xxx
shall resign from each officer position held at the Acquiror
Company. The Acquiror Company Board shall appoint Xxxx Xxx to serve
as Chief Financial Officer, Treasurer and Secretary and Xxx Xxxxxx to serve
as
President and Chief Executive Officer.
SECTION
III.
CLOSING
DATE
3.1 Closing
Date.
The closing of the Share Exchange will occur on the date on which all of the
closing conditions set forth in Sections 8 and 9 have been satisfied or waived
(the “Closing Date”), subject to extension by mutual agreement of All Parties,
but in no event later than December 31, 2007.
3.2 Escrow.
Notwithstanding any provision of this Agreement to the contrary, in lieu of
delivering to Orient Come Shareholders certificates for the full number of
Acquiror Company Shares provided for in Section 2.1, the Acquiror Company shall
deliver or cause to be delivered (A) to each Orient Come Shareholder, a
certificate registered in the name of such Shareholder, evidencing such number
of Closing Acquiror Company Shares as set forth in Exhibit A; and (B)
to
Xxxxxxxx & Xxxx LLP, as escrow agent (the “Escrow Agent”) for deposit into
escrow pursuant to the Escrow Agreement, a certificate(s) in the name of K’s
Media shareholders, representing 10,500,000 Acquiror Company Shares (the “Escrow
Shares”), together with stock powers endorsed in blank, which certificate will
be held in the escrow account and disposed of by the Escrow Agent in accordance
with the terms and provisions of the Share Escrow Agreement.
SECTION
IV.
REPRESENTATIONS
AND WARRANTIES OF ORIENT COME SHAREHOLDERS
4.1 Generally.
Each
Orient Come Shareholder, severally and jointly, hereby represents and warrants
to the Acquiror Company:
4.1.1 Authority.
Such
Shareholder has the right, power, authority and capacity to execute and deliver
this Agreement and each of the Transaction Documents to which such Shareholder
is a party, to consummate the transactions contemplated by this Agreement and
each of the Transaction Documents to which such Shareholder is a party, and
to
perform such Shareholder’s obligations under this Agreement and each of the
Transaction Documents to which such Shareholder is a party. This Agreement
has
been, and each of the Transaction Documents to which such Shareholder is a
party
will be, duly and validly authorized and approved, executed and delivered by
such Shareholder. Assuming this Agreement and the Transaction Documents have
been duly and validly authorized, executed and delivered by the parties thereto
other than such Shareholder, this Agreement is, and each of the Transaction
Documents to which such Shareholder is a party have been, duly authorized,
executed and delivered by such Shareholder and constitutes the legal, valid
and
binding obligation of such Shareholder, enforceable against such Shareholder
in
accordance with their respective terms, except as such enforcement is limited
by
general equitable principles, or by bankruptcy, insolvency and other similar
Laws affecting the enforcement of creditors rights generally.
4.1.2 No
Conflict.
Neither the execution or delivery by such Shareholder of this Agreement or
any
Transaction Document to which such Shareholder is a party, nor the consummation
or performance by such Shareholder of the transactions contemplated hereby
or
thereby will, directly or indirectly, (a) contravene, conflict with, or result
in a violation of any provision of the Organizational Documents of such
Shareholder (if such Shareholder is not a natural person); (b) contravene,
conflict with, constitute a default (or an event or condition which, with notice
or lapse of time or both, would constitute a default) under, or result in the
termination or acceleration of, any agreement or instrument to which such
Shareholder is a party or by which the properties or assets of such Shareholder
are bound; or (c) contravene, conflict with, or result in a violation of, any
Law or Order to which such Shareholder, or any of the properties or assets
of
such Shareholder, may be subject.
4.1.3 Ownership
of
Shares. Such Shareholder owns, of record and beneficially, and has good,
valid and indefeasible title to and the right to transfer to the Acquiror
Company pursuant to this Agreement, such Shareholder’s Shares free and clear of
any and all Liens. There are no options, rights, voting trusts, stockholder
agreements or any other contracts or understandings to which such Shareholder
is
a party or by which such Shareholder or such Shareholder’s Shares are bound with
respect to the issuance, sale, transfer, voting or registration of such
Shareholder’s Shares. At the Closing Date, the Acquiror Company will acquire
good, valid and marketable title to such Shareholder’s Shares free and clear of
any and all Liens.
4.1.4 Litigation.
There is no pending Proceeding against such Shareholder that involves the Shares
or that challenges, or may have the effect of preventing, delaying or making
illegal, or otherwise interfering with, any of the transactions contemplated
by
this Agreement and, to the knowledge of such Shareholder, no such Proceeding
has
been threatened, and no event or circumstance exists that is reasonably likely
to give rise to or serve as a basis for the commencement of any such
Proceeding.
4.1.5 No
Brokers or
Finders. Except as disclosed in Schedule
4.1.5, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against such Shareholder for any commission, fee or
other compensation as a finder or broker, or in any similar capacity, and such
Shareholder will indemnify and hold the Acquiror Company harmless against any
liability or expense arising out of, or in connection with, any such
claim.
4.2 Investment
Representations. Each Shareholder, severally and not jointly, hereby
represents and warrants to the Acquiror Company:
4.2.1 Acknowledgment.
Each Shareholder understands and agrees that the Acquiror Company Shares to
be
issued pursuant to this Agreement and the Share Exchange have not been
registered under the Securities Act or the securities laws of any state of
the
U.S. and that the issuance of the Acquiror Company Shares is being effected
in
reliance upon an exemption from registration afforded either under Section
4(2)
of the Securities Act for transactions by an issuer not involving a public
offering or Regulation S for offers and sales of securities outside the
U.S.
4.2.2 Status.
By its
execution of this Agreement, each Shareholder, severally and not jointly,
represents and warrants to the Acquiror Company as indicated on its signature
page to this Agreement, either that:
(a) such
Shareholder is
an Accredited Investor; or
(b) such
Shareholder is
not a U.S. Person.
Each
Shareholder severally understands that the Acquiror Company Shares are being
offered and sold to such Shareholder in reliance upon the truth and accuracy
of
the representations, warranties, agreements, acknowledgments and understandings
of such Shareholder set forth in this Agreement, in order that the Acquiror
Company may determine the applicability and availability of the exemptions
from
registration of the Acquiror Company Shares on which the Acquiror Company is
relying.
4.2.3 Additional
Representations and Warranties of Accredited Investors. Each Shareholder
indicating that such Shareholder is an Accredited Investor on its signature
page
to this Agreement, severally and not jointly, further makes the representations
and warranties to the Acquiror Company set forth on Exhibit
D.
4.2.4 Additional
Representations and Warranties of Non-U.S. Persons. Each Shareholder
indicating that it is not a U.S. person on its signature page to this Agreement,
severally and not jointly, further makes the representations and warranties
to
the Acquiror Company set forth on Exhibit
E.
4.2.5 Stock
Legends.
Each Shareholder hereby agrees with the Acquiror Company as
follows:
(a) Securities
Act Legend
Accredited Investors. The certificates evidencing the Acquiror Company
Shares issued to those Shareholders who are Accredited Investors, and each
certificate issued in transfer thereof, will bear the following legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT
TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND
APPLICABLE STATE SECURITIES LAWS.
(b) Securities
Act Legend -
Non-U.S. Persons. The certificates evidencing the Acquiror Company Shares
issued to those Shareholders who are not U.S. Persons, and each certificate
issued in transfer thereof, will bear the following legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES
ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF REGULATION S
HAVE
BEEN SATISFIED, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (3) PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND
APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY
BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
(c) Other
Legends. The
certificates representing such Acquiror Company Shares, and each certificate
issued in transfer thereof, will also bear any other legend required under
any
applicable Law, including, without limitation, any U.S. state corporate and
state securities law, or contract.
(d) Opinion.
No
Shareholder will transfer any or all of the Acquiror Company Shares pursuant
to
Regulation S or absent an effective registration statement under the Securities
Act and applicable state securities law covering the disposition of such
Shareholder’s Acquiror Company Shares, without first providing the Acquiror
Company with an opinion of counsel (which counsel and opinion are reasonably
satisfactory to the Acquiror Company) to the effect that such transfer will
be
made in compliance with Regulation S or will be exempt from the registration
and
the prospectus delivery requirements of the Securities Act and the registration
or qualification requirements of any applicable U.S. state securities
laws.
(e) Consent.
Each
Shareholder understands and acknowledges that the Acquiror Company may refuse
to
transfer the Acquiror Company Shares, unless such Shareholder complies with
this
Section 4.2.5 and any other restrictions on transferability set forth in Exhibits D and E.
Each Shareholder
consents to the Acquiror Company making a notation on its records or giving
instructions to any transfer agent of the Acquiror Company’s Common Stock in
order to implement the restrictions on transfer of the Acquiror Company
Shares.
SECTION
V.
REPRESENTATIONS
AND WARRANTIES OF ORIENT COME
Orient
Come hereby represents and warrants to the Acquiror Company:
5.1 Organization
and Qualification. Orient Come is
duly
incorporated and validly existing under the laws of the British Virgin Island,
and has all requisite authority and power (corporate and other), governmental
licenses, authorizations, consents and approvals to carry on its business as
presently conducted and as contemplated to be conducted, to own, hold and
operate its properties and assets as now owned, held and operated by it, to
enter into this Agreement, to carry out the provisions hereof except where
the
failure to be so organized, existing and in good standing or to have such
authority or power will not, in the aggregate, have a Material Adverse Effect.
Orient Come is duly qualified, licensed or domesticated as a foreign corporation
in good standing in each jurisdiction wherein the nature of its activities
or
its properties owned or leased makes such qualification, licensing or
domestication necessary, except where the failure to be so qualified, licensed
or domesticated will not have a Material Adverse Effect. Set forth on Schedule 5.1 is a
list of those jurisdictions in which Orient Come presently conducts its
business, owns, holds and operates its properties and assets.
5.2 Subsidiaries.
Orient Come does not directly or indirectly, own any equity or other ownership
interest in any corporation, partnership, joint venture or other entity or
enterprise.
5.3 Organizational
Documents. The copies of the Memorandum and Articles of
Association of Orient Come, and the documents which constitute all other
Organization Documents of Orient Come, that have been delivered to the Acquiror
Company prior to the execution of this Agreement are true and complete and
have
not been amended or repealed. Orient Come are not in violation or breach of
any
of the provisions of its Organizational Documents, except for such violations
or
breaches as, in the aggregate, will not have a Material Adverse
Effect.
5.4 Authorization
and
Validity of this Agreement. Orient Come has all requisite authority and
power (corporate and other), governmental licenses, authorizations, consents
and
approvals to enter into this Agreement and each of the Transaction Documents
to
which Orient Come is a party, to consummate the transactions contemplated by
this Agreement and each of the Transaction Documents to which Orient Come is
a
party, to perform its obligations under this Agreement and each of the
Transaction Documents to which Orient Come is a party. Orient Come shall record
the transfer of its Shares and the delivery of the new certificates representing
the Shares registered in the name of the Acquiror Company. The execution,
delivery and performance by Orient Come of this Agreement and each of the
Transaction Documents to which Orient Come is a party have been duly authorized
by all necessary corporate action and do not require from the Company Board
or
the Shareholders any consent or approval that has not been validly and lawfully
obtained. The execution, delivery and performance by Orient Come of this
Agreement and each of the Transaction Documents to which Orient Come is a party
requires no authorization, consent, approval, license, exemption of or filing
or
registration with any Governmental Authority or other Person.
5.5 No
Violation.
Neither the execution nor the delivery by Orient Come of this Agreement or
any
Transaction Document to which Orient Come is a party, nor the consummation
or
performance by Orient Come of the transactions contemplated hereby or thereby
will, directly or indirectly, (a) contravene, conflict with, or result in a
violation of any provision of the Organizational Documents of Orient Come;
(b)
contravene, conflict with, constitute a default (or an event or condition which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination or acceleration of, or result in the imposition or
creation of any Lien under, any agreement or instrument to which Orient Come
is
a party or by which the properties or assets of Orient Come are bound; (c)
contravene, conflict with, or result in a violation of, any Law or Order to
which Orient Come, or any of the properties or assets owned or used by Orient
Come, may be subject; or (d) contravene, conflict with, or result in a violation
of, the terms or requirements of, or give any Governmental Authority the right
to revoke, withdraw, suspend, cancel, terminate or modify, any licenses,
permits, authorizations, approvals, franchises or other rights held by Orient
Come or that otherwise relate to the business of, or any of the properties
or
assets owned or used by, Orient Come, except, in the case of clause (b), (c),
or
(d), for any such contraventions, conflicts, violations, or other occurrences
as
would not have a Material Adverse Effect.
5.6 Binding
Obligations. Assuming this Agreement and the Transaction Documents have
been duly and validly authorized, executed and delivered by the parties thereto
other than Orient Come, this Agreement and each of the Transaction Documents
to
which Orient Come is a party are duly authorized, executed and delivered by
Orient Come and constitute the legal, valid and binding obligations of Orient
Come, enforceable against Orient Come in accordance with their respective terms,
except as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors rights generally.
5.7 Capitalization
and
Related Matters.
5.7.1 Capitalization
of
Orient Come. The authorized capital stock of Orient Come consists of
50,000 shares of Common Stock, of which 2 shares of Common Stock are issued
and
outstanding. There are no outstanding or authorized options,
warrants, calls, purchase agreements, participation agreements, subscription
rights, conversion rights, exchange rights or other securities or contracts
that
could require Orient Come to issue, sell or otherwise cause to become
outstanding any of its authorized but unissued shares of capital stock or any
securities convertible into, exchangeable for or carrying a right or option
to
purchase shares of capital stock or to create, authorize, issue, sell or
otherwise cause to become outstanding any new class of capital stock. There
are
no outstanding stockholders’ agreements, voting trusts or arrangements,
registration rights agreements, rights of first refusal or other contracts
pertaining to the capital stock of Orient Come. The issuance of all of the
shares of Orient Come’s Common Stock described in this Section 5.7.1 have been
in compliance with the laws of British Virgin Island. All issued and outstanding
shares of Orient Come ’s capital stock are duly authorized, validly issued,
fully paid and nonassessable and have not been issued in violation of any
preemptive or similar rights.
5.7.2 No
Redemption
Requirements. There are no outstanding contractual obligations
(contingent or otherwise) of Orient Come to retire, repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of, or other ownership
interests in, Orient Come or to provide funds to or make any investment (in
the
form of a loan, capital contribution or otherwise) in any other
Person.
5.8 Shareholders.
Exhibit A-1
contains a true and complete list of the names and addresses of the record
and
beneficial holders of all of the outstanding capital stock of Orient Come.
Except as expressly provided in this Agreement, no holder of Shares or any
other
security of Orient Come or any other Person is entitled to any preemptive right,
right of first refusal or similar right as a result of the issuance of the
shares or otherwise. There is no voting trust, agreement or arrangement among
any of the Shareholders of any capital stock of Orient Come affecting the
exercise of the voting rights of any such capital stock.
5.9 Compliance
with Laws
and Other Instruments. Except as would not have a Material Adverse
Effect, the business and operations of Orient Come have been and are being
conducted in accordance with all applicable Laws and Orders. Except as would
not
have a Material Adverse Effect, Orient Come has not received notice of any
violation (or any Proceeding involving an allegation of any violation) of any
applicable Law or Order by or affecting Orient Come and, to the knowledge of
Orient Come, no Proceeding involving an allegation of violation of any
applicable Law or Order is threatened or contemplated. Except as would not
have
a Material Adverse Effect, Orient Come is not alleged to be, in violation of,
or
(with or without notice or lapse of time or both) in default under, or in breach
of, any term or provision of its Organizational Documents or of any indenture,
loan or credit agreement, note, deed of trust, mortgage, security agreement
or
other material agreement, lease, license or other instrument, commitment,
obligation or arrangement to which Orient Come is a party or by which any of
Orient Come’s properties, assets or rights are bound or affected. To the
knowledge of Orient Come, no other party to any material contract, agreement,
lease, license, commitment, instrument or other obligation to which Orient
Come
is a party is (with or without notice or lapse of time or both) in default
there
under or in breach of any term thereof. Orient Come is not subject to any
obligation or restriction of any kind or character, nor is there, to the
knowledge of Orient Come, any event or circumstance relating to Orient Come,
that materially and adversely affects in any way its business, properties,
assets or prospects or that prohibits Orient Come from entering into this
Agreement or would prevent or make burdensome its performance of or compliance
with all or any part of this Agreement or the consummation of the transactions
contemplated hereby or thereby.
5.10 Certain
Proceedings. There is no pending Proceeding that has been commenced
against Orient Come and that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated in this Agreement. To Orient Come's knowledge, no such Proceeding
has been threatened.
5.11 No
Brokers or
Finders. Except as disclosed in Schedule
5.11, no
person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against Orient Come for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, and Orient
Come
will indemnify and hold the Acquiror Company harmless against any liability
or
expense arising out of, or in connection with, any such claim.
5.12 Title
to and Condition
of Properties. Except as would not have a Material Adverse Effect,
Orient Come owns (with good and marketable title in the case of real property)
or holds under valid leases or other rights to use all real property, plants,
machinery and equipment necessary for the conduct of the business of Orient
Come
as presently conducted, free and clear of all Liens, except Permitted Liens.
The
material buildings, plants, machinery and equipment necessary for the conduct
of
the business of Orient Come as presently conducted are structurally sound,
are
in good operating condition and repair and are adequate for the uses to which
they are being put, in each case, taken as a whole, and none of such buildings,
plants, machinery or equipment is in need of maintenance or repairs, except
for
ordinary, routine maintenance and repairs that are not material in nature or
cost.
5.13 No
Changes.
Since October 31, 2007, Orient Come has not experienced or suffered any Material
Adverse Effect.
5.14 No
Undisclosed
Events. Except as disclosed herein, since October 31, 2007, no material
event exists with respect to Orient Come or their respective businesses,
properties, operations or financial condition, which has not been disclosed
to
the Acquiror Company in writing as of the date of this Agreement.
5.15 Board
Recommendation. Orient Come Board has, by unanimous written consent,
determined that this Agreement and the transactions contemplated by this
Agreement, are advisable and in the best interests of Orient Come and its
Shareholders.
SECTION
VI.
REPRESENTATIONS
AND WARRANTIES OF K’S MEDIA
K's
Media hereby represents and warrants to the Acquiror Company:
6.1 Organization
and Qualification. K's Media is duly
incorporated and validly existing under the laws of the PRC, and has all
requisite authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to carry on its business as presently
conducted and as contemplated to be conducted, to own, hold and operate its
properties and assets as now owned, held and operated by it, to enter into
this
Agreement, to carry out the provisions hereof except where the failure to be
so
organized, existing and in good standing or to have such authority or power
will
not, in the aggregate, have a Material Adverse Effect. K's Media is duly
qualified, licensed or domesticated as a foreign corporation in good standing
in
each jurisdiction wherein the nature of its activities or its properties owned
or leased makes such qualification, licensing or domestication necessary, except
where the failure to be so qualified, licensed or domesticated will not have
a
Material Adverse Effect. Set forth on Schedule 6.1 is a
list of those jurisdictions in which K's Media presently conducts its business,
owns, holds and operates its properties and assets. All registered
capital and other capital contributions shall have been duly paid up in
accordance with the relevant PRC regulations and requirements and all necessary
capital verification reports have been duly issued and not revoked.
6.2 Subsidiaries.
K's Media does not directly or indirectly, own any equity or other ownership
interest in any corporation, partnership, joint venture or other entity or
enterprise.
6.3 Organizational
Documents.
6.3.1 The
copies of the Memorandum and Articles of Association of K's Media, and the
documents which constitute all other Organization Documents of K's Media, that
have been delivered to the Acquiror Company prior to the execution of this
Agreement are true and complete and have not been amended or repealed. K's
Media
are not in violation or breach of any of the provisions of its Organizational
Documents, except for such violations or breaches as, in the aggregate, will
not
have a Material Adverse Effect.
6.3.2 True,
correct and complete certified translated copies of the organizational documents
of each of K's Media have been delivered to the Acquiror Company prior to the
execution of this Agreement, and no action has been taken to amend or repeal
such organizational documents. K’s Media will not in violation or breach of any
of the provisions of its organizational documents, except for such violations
or
breaches as would not have a Material Adverse Effect.
6.4 Authorization
and
Validity of this Agreement. K's Media has all requisite authority and
power (corporate and other), governmental licenses, authorizations, consents
and
approvals to enter into this Agreement and each of the Transaction Documents
to
which K's Media is a party, to consummate the transactions contemplated by
this
Agreement and each of the Transaction Documents to which K's Media is a party,
to perform its obligations under this Agreement and each of the Transaction
Documents to which K's Media is a party. K's Media shall record the transfer
of
its Shares and the delivery of the new certificates representing the Shares
registered in the name of the Acquiror Company. The execution, delivery and
performance by K's Media of this Agreement and each of the Transaction Documents
to which K's Media is a party have been duly authorized by all necessary
corporate action and do not require from the Company Board or the Shareholders
any consent or approval that has not been validly and lawfully obtained. The
execution, delivery and performance by K's Media of this Agreement and each
of
the Transaction Documents to which K's Media is a party requires no
authorization, consent, approval, license, exemption of or filing or
registration with any Governmental Authority or other Person.
6.5 No
Violation.
Neither the execution nor the delivery by K's Media of this Agreement or any
Transaction Document to which K's Media is a party, nor the consummation or
performance by K's Media of the transactions contemplated hereby or thereby
will, directly or indirectly, (a) contravene, conflict with, or result in a
violation of any provision of the Organizational Documents of K's Media; (b)
contravene, conflict with, constitute a default (or an event or condition which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination or acceleration of, or result in the imposition or
creation of any Lien under, any agreement or instrument to which K's Media
is a
party or by which the properties or assets of K's Media are bound; (c)
contravene, conflict with, or result in a violation of, any Law or Order to
which K's Media, or any of the properties or assets owned or used by K's Media,
may be subject; or (d) contravene, conflict with, or result in a violation
of,
the terms or requirements of, or give any Governmental Authority the right
to
revoke, withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by K's Media or
that
otherwise relate to the business of, or any of the properties or assets owned
or
used by, K's Media, except, in the case of clause (b), (c), or (d), for any
such
contraventions, conflicts, violations, or other occurrences as would not have
a
Material Adverse Effect.
6.6 Binding
Obligations. Assuming this Agreement and the Transaction Documents have
been duly and validly authorized, executed and delivered by the parties thereto
other than K's Media, this Agreement and each of the Transaction Documents
to
which K's Media is a party are duly authorized, executed and delivered by K's
Media and constitute the legal, valid and binding obligations of K's Media,
enforceable against K's Media in accordance with their respective terms, except
as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors rights generally.
6.7 Capitalization
and
Related Matters.
6.7.1 Capitalization
of K's
Media. There are two shareholders of K’s Media. There are no
outstanding or authorized options, warrants, calls, purchase agreements,
participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require K's
Media to issue, sell or otherwise cause to become outstanding any of
its authorized but unissued shares of capital stock or any securities
convertible into, exchangeable for or carrying a right or option to purchase
shares of capital stock or to create, authorize, issue, sell or otherwise cause
to become outstanding any new class of capital stock. There are no outstanding
stockholders’ agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the capital
stock of K's Media . The ownership of K's Media’s described in this Section
6.7.1 is in compliance with the laws of the PRC.
6.7.2 No
Redemption
Requirements. There are no outstanding contractual obligations
(contingent or otherwise) of K's Media to retire, repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of, or other ownership
interests in, K's Media or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any other
Person.
6.8 Shareholders.
Exhibit A-1
contains a true and complete list of the names and addresses of the record
and
beneficial owners of K's Media. There is no voting trust, agreement or
arrangement among any of the Shareholders of any capital stock of K's Media
affecting the exercise of the voting rights of any such capital
stock.
6.9 Compliance
with Laws
and Other Instruments. Except as would not have a Material Adverse
Effect, the business and operations of K's Media have been and are being
conducted in accordance with all applicable Laws and Orders. Except as would
not
have a Material Adverse Effect, the K's Media has not received notice of any
violation (or any Proceeding involving an allegation of any violation) of any
applicable Law or Order by or affecting K's Media and, to the knowledge of
K's
Media, no Proceeding involving an allegation of violation of any applicable
Law
or Order is threatened or contemplated. Except as would not have a Material
Adverse Effect, K's Media is not alleged to be, in violation of, or (with or
without notice or lapse of time or both) in default under, or in breach of,
any
term or provision of its Organizational Documents or of any indenture, loan
or
credit agreement, note, deed of trust, mortgage, security agreement or other
material agreement, lease, license or other instrument, commitment, obligation
or arrangement to which K's Media is a party or by which any of K's Media’s
properties, assets or rights are bound or affected. To the knowledge of K's
Media, no other party to any material contract, agreement, lease, license,
commitment, instrument or other obligation to which K's Media is a party is
(with or without notice or lapse of time or both) in default there under or
in
breach of any term thereof. K's Media is not subject to any obligation or
restriction of any kind or character, nor is there, to the knowledge of K's
Media, any event or circumstance relating to K's Media, that materially and
adversely affects in any way its business, properties, assets or prospects
or
that prohibits K's Media from entering into this Agreement or would prevent
or
make burdensome its performance of or compliance with all or any part of this
Agreement or the consummation of the transactions contemplated hereby or
thereby.
6.10 Certain
Proceedings. There is no pending Proceeding that has been commenced
against K's Media and that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated in this Agreement. To K's Media's knowledge, no such Proceeding
has
been threatened.
6.11 No
Brokers or
Finders. Except as disclosed in Schedule
6.11, no
person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against K's Media for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, and K's Media
will indemnify and hold the Acquiror Company harmless against any liability
or
expense arising out of, or in connection with, any such claim.
6.12 Title
to and Condition
of Properties. Except as would not have a Material Adverse Effect,
K's Media owns (with good and marketable title in the case of real property)
or
holds under valid leases or other rights to use all real property, plants,
machinery and equipment necessary for the conduct of the business of K's Media
as presently conducted, free and clear of all Liens, except Permitted Liens.
The
material buildings, plants, machinery and equipment necessary for the conduct
of
the business of K's Media as presently conducted are structurally sound, are
in
good operating condition and repair and are adequate for the uses to which
they
are being put, in each case, taken as a whole, and none of such buildings,
plants, machinery or equipment is in need of maintenance or repairs, except
for
ordinary, routine maintenance and repairs that are not material in nature or
cost.
6.13 No
Changes.
Since October 31, 2007, K's Media has not experienced or suffered any Material
Adverse Effect.
6.14 No
Undisclosed
Events. Except as disclosed here, since October 31, 2007, no
material event exists with respect to K's Media or their respective businesses,
properties, operations or financial condition, which has not been disclosed
to
the Acquiror Company in writing as of the date of this Agreement.
6.15 Board
Recommendation. K's Media Board has, by unanimous written consent,
determined that this Agreement and the transactions contemplated by this
Agreement, are advisable and in the best interests of K's Media and its
Shareholders.
SECTION
VII.
REPRESENTATIONS
AND WARRANTIES OF THE ACQUIROR COMPANY
The
Acquiror Company represents and warrants to Orient Come’s Shareholders, Orient
Come and K’s Media as follows:
7.1 Disclosure
Schedules. The disclosure schedules attached hereto as Schedule
7.1 through
Schedule
7.30_(the “Acquiror Company Disclosure Schedules”) are divided into
sections that correspond to the sections of this Section VII. The Acquiror
Company Disclosure Schedule comprises a list of all exceptions to the truth
and
accuracy in all material respects of, and of all disclosures or descriptions
required by, the representations and warranties set forth in the remaining
sections of this Section VII. For purposes of this Section VII, any statement,
facts, representations, or admissions contained in the public filings made
by
the Acquiror Company with the United States Securities and Exchange Commissions,
are deemed to be included in the Acquiror Company Disclosure Schedules and
all
such information is deemed to be fully disclosed to Orient Come’s Shareholders,
Orient Come and K’s Media. Notwithstanding anything contained herein to the
contrary in this Agreement, any representation, warranty or covenant made by
the
Acquiror Company shall be deemed to have been made to the best of its knowledge.
For purposes of this Agreement, "to the best of our knowledge" or similar phrase
shall mean that such person shall have current actual knowledge of a condition
or event, or have received notice that would give rise to current actual
knowledge of such condition or event.
7.2 Organization
and
Qualification. The Acquiror Company is duly organized, validly existing
and in good standing under the laws of Nevada, has all requisite corporate
authority and power, governmental licenses, authorizations, consents and
approvals to carry on its business as presently conducted and to own, hold
and
operate its properties and assets as now owned, held and operated by it. The
Acquiror Company is duly qualified, licensed or domesticated as a foreign
corporation in good standing in each jurisdiction wherein the nature of its
activities or its properties owned, held or operated makes such qualification,
licensing or domestication necessary, except where the failure to be so duly
qualified, licensed or domesticated and in good standing would not have a
Material Adverse Effect. Schedule 7.2 sets
forth a true, correct and complete list of the Acquiror Company’s jurisdiction
of organization and each other jurisdiction in which the Acquiror Company
presently conducts its business or owns, holds and operates its properties
and
assets.
7.3 Subsidiaries.
the Acquiror Company does not own, directly or indirectly, any equity or other
ownership interest in any corporation, partnership, joint venture or other
entity or enterprise.
7.4 Organizational
Documents. True, correct and complete copies of the Organizational
Documents of the Acquiror Company have been delivered to Orient Come’s
Shareholders, Orient Come and K’s Media prior to the execution of this
Agreement, and no action has been taken to amend or repeal such Organizational
Documents since such date of delivery except as disclosed in Schedule 7.4. The
Acquiror Company is not in violation or breach of any of the provisions of
its
Organizational Documents, except for such violations or breaches as would not
have a Material Adverse Effect.
7.5 Authorization.
The Acquiror Company has all requisite authority and power (corporate and
other), governmental licenses, authorizations, consents and approvals to enter
into this Agreement and each of the Transaction Documents to which the Acquiror
Company is a party, to consummate the transactions contemplated by this
Agreement and each of the Transaction Documents to which the Acquiror Company
is
a party and to perform its obligations under this Agreement and each of the
Transaction Documents to which the Acquiror Company is a party. The execution,
delivery and performance by the Acquiror Company of this Agreement and each
of
the Transaction Documents to which the Acquiror Company is a party have been
duly authorized by all necessary corporate action and do not require from the
Acquiror Company Board any consent or approval that has not been validly and
lawfully obtained except for approval by the Acquiror Company stockholders.
The
execution, delivery and performance by the Acquiror Company of this Agreement
and each of the Transaction Documents to which the Acquiror Company is a party
requires no authorization, consent, approval, license, exemption of or filing
or
registration with any Governmental Authority or other Person other than (a)
the
Schedule 14(f) Filing, and (b) such other customary filings with the Commission
for transactions of the type contemplated by this Agreement and the Transaction
Documents.
7.6 No
Violation.
Neither the execution nor the delivery by the Acquiror Company of this Agreement
or any Transaction Document to which the Acquiror Company is a party, nor the
consummation or performance by the Acquiror Company of the transactions
contemplated hereby or thereby will, directly or indirectly, (a) contravene,
conflict with, or result in a violation of any provision of the Organizational
Documents of the Acquiror Company (b) contravene, conflict with, constitute
a
default (or an event or condition which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination or acceleration
of, or result in the imposition or creation of any Lien under, any agreement
or
instrument to which the Acquiror Company is a party or by which the properties
or assets of the Acquiror Company is bound; (c) contravene, conflict with,
or
result in a violation of, any Law or Order to which the Acquiror Company, or
any
of the properties or assets owned or used by the Acquiror Company, may be
subject; or (d) contravene, conflict with, or result in a violation of, the
terms or requirements of, or give any Governmental Authority the right to
revoke, withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by the Acquiror
Company or that otherwise relate to the business of, or any of the properties
or
assets owned or used by, the Acquiror Company, except, in the case of clause
(b), (c), or (d), for any such contraventions, conflicts, violations, or other
occurrences as would not have a Material Adverse Effect.
7.7 Binding
Obligations. Assuming this Agreement and the Transaction Documents have
been duly and validly authorized, executed and delivered by the parties thereto
other than the Acquiror Company, this Agreement and each of the Transaction
Documents to which the Acquiror Company is a party are duly authorized, executed
and delivered by the Acquiror Company and constitutes the legal, valid and
binding obligations of the Acquiror Company, enforceable against the Acquiror
Company in accordance with their respective terms, except as such enforcement
is
limited by general equitable principles, or by bankruptcy, insolvency and other
similar Laws affecting the enforcement of creditors rights
generally.
7.8 Securities
Laws. Assuming the accuracy of the representations and warranties of
Orient Come’s Shareholders, contained in Section 4 and Exhibits D and E, the
issuance of the Acquiror Company Shares pursuant to this Agreement will be
when
issued and paid for in accordance with the terms of this Agreement issued in
accordance with exemptions from the registration and prospectus delivery
requirements of the Securities Act and the registration permit or qualification
requirements of all applicable state securities laws.
7.9 Capitalization
and
Related Matters.
7.9.1 Capitalization.
The authorized capital stock of the Acquiror Company consists of 100,000,000
shares of the Acquiror Company’s Common Stock, at $0.00001 par value per share,
of which 6,087,000 shares are issued and outstanding; 100,000,000 shares of
the
Acquiror Company’s Preferred Stock are authorized, none Preferred Stock is
issued and outstanding. At the Closing Date, the Acquiror Company will have
sufficient authorized and unissued Acquiror Company’s Common Stock to consummate
the transactions contemplated hereby. There are no outstanding options,
warrants, purchase agreements, participation agreements, subscription rights,
conversion rights, exchange rights or other securities or contracts that could
require the Acquiror Company to issue, sell or otherwise cause to become
outstanding any of its authorized but unissued shares of capital stock or any
securities convertible into, exchangeable for or carrying a right or option
to
purchase shares of capital stock or to create, authorize, issue, sell or
otherwise cause to become outstanding any new class of capital stock. There
are
no outstanding stockholders’ agreements, voting trusts or arrangements,
registration rights agreements, rights of first refusal or other contracts
pertaining to the capital stock of the Acquiror Company. The issuance of all
of
the shares of Acquiror Company’s Common Stock described in this Section 7.9.1
have been in compliance with U.S. federal and state securities
laws.
7.9.2 No
Redemption
Requirements. There are no outstanding contractual obligations
(contingent or otherwise) of the Acquiror Company to retire, repurchase, redeem
or otherwise acquire any outstanding shares of capital stock of, or other
ownership interests in, the Acquiror Company or to provide funds to or make
any
investment (in the form of a loan, capital contribution or otherwise) in any
other Person.
7.9.3 Duly
Authorized. The issuance of the Acquiror Company Shares has been duly
authorized and, upon delivery to the Shareholders of certificates therefor
in
accordance with the terms of this Agreement, the Acquiror Company Shares will
have been validly issued and fully paid, and will be nonassessable, have the
rights, preferences and privileges specified, will be free of preemptive rights
and will be free and clear of all Liens and restrictions, other than Liens
created by the Shareholders and restrictions on transfer imposed by this
Agreement and the Securities Act.
7.10 Compliance
with
Laws. Since inception of the Acquiror Company and, to the best of the
Acquiror Company’s knowledge, for all periods after thereto, (i) the business
and operations of the Acquiror Company have been and are being conducted in
accordance with all applicable Laws and Orders; and (ii) the Acquiror Company
has not received notice of any violation (or any Proceeding involving an
allegation of any violation) of any applicable Law or Order by or affecting
the
Acquiror Company and no Proceeding involving an allegation of violation of
any
applicable Law or Order is threatened or contemplated. The Acquiror Company
is
not subject to any obligation or restriction of any kind or character, nor
is
there, to the knowledge of the Acquiror Company, any event or circumstance
relating to the Acquiror Company that materially and adversely affects in any
way its business, properties, assets or prospects or that prohibits the Acquiror
Company from entering into this Agreement or would prevent or make burdensome
its performance of or compliance with all or any part of this Agreement or
the
consummation of the transactions contemplated hereby.
7.11 Certain
Proceedings. There is no pending Proceeding that has been commenced
against the Acquiror Company and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of
the
transactions contemplated by this Agreement. To the knowledge of the Acquiror
Company, no such Proceeding has been threatened.
7.12 No
Brokers or
Finders. Except as disclosed in Schedule
7.12, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against the Acquiror Company for any commission, fee
or
other compensation as a finder or broker, or in any similar
capacity.
7.13 Absence
of Undisclosed
Liabilities. Except as set forth on Schedule
7.13 or in
the SEC Documents, the Acquiror Company has no debt, obligation or liability
(whether accrued, absolute, contingent, liquidated or otherwise, whether due
or
to become due) arising out of any transaction entered into at or prior to the
Closing Date or any act or omission at or prior to the Closing Date, except
to
the extent set forth on or reserved against on the Acquiror Company Balance
Sheet. Any and all debts, obligations or liabilities with respect to directors
and officers of the Acquiror Company will be cancelled prior to the Closing.
Except as set forth on Schedule 6.13, the Acquiror Company has not incurred
liabilities, obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured, absolute, accrued, contingent or otherwise) under
agreements entered into, other than in the usual and ordinary course of business
since July 31, 2007.
7.14 Changes.
Except
as set forth in the SEC Documents or in Schedule 7.14, since
July 31, 2007 and, to the best of the Acquiror Company’s knowledge, for all
periods prior thereto, the Acquiror Company has, conducted its business in
the
usual and ordinary course of business consistent with past practice and has
not:
7.14.1 Ordinary
Course of
Business. Entered into any transaction other than in the usual and
ordinary course of business, except for this Agreement and each of the
Transaction Documents.
7.14.2 Adverse
Changes. Suffered or experienced any change in, or affecting, its
condition (financial or otherwise), properties, assets, liabilities, business,
operations, results of operations or prospects other than changes, events or
conditions in the usual and ordinary course of its business, none of which
would
have a Material Adverse Effect;
7.14.3 Loans.
Made any
loans or advances to any Person other than travel advances and reimbursement
of
expenses made to employees, officers and directors in the ordinary course of
business;
7.14.4 Liens.
Created
or permitted to exist any Lien on any material property or asset of the Acquiror
Company, other than Permitted Liens;
7.14.5 Capital
Stock.
Issued, sold, disposed of or encumbered, or authorized the issuance, sale,
disposition or encumbrance of, or granted or issued any option to acquire any
shares of its capital stock or any other of its securities or any Equity
Security, or altered the term of any of its outstanding securities or made
any
change in its outstanding shares of capital stock or its capitalization, whether
by reason of reclassification, recapitalization, stock split, combination,
exchange or readjustment of shares, stock dividend or otherwise;
7.14.6 Dividends.
Declared, set aside, made or paid any dividend or other distribution to any
of
its stockholders;
7.14.7 Material
Acquiror
Company Contracts. Terminated or modified any Material Acquiror Company
Contract, except for termination upon expiration in accordance with the terms
thereof;
7.14.8 Claims.
Released, waived or cancelled any claims or rights relating to or affecting
the
Acquiror Company in excess of US $10,000 in the aggregate or instituted or
settled any Proceeding involving in excess of US $10,000 in the
aggregate;
7.14.9 Discharged
Liabilities. Paid, discharged or satisfied any claim, obligation or
liability in excess of US $10,000 in the aggregate, except for liabilities
incurred prior to the date of this Agreement in the ordinary course of
business;
7.14.10 Indebtedness.
Created, incurred, assumed or otherwise become liable for any Indebtedness
in
excess of US $10,000 in the aggregate, other than professional
fees;
7.14.11 Guarantees.
Guaranteed or endorsed any obligation or net worth of any Person exceeding
$10,000 in the aggregate;
7.14.12 Acquisitions.
Acquired the capital stock or other securities or any ownership interest in,
or
substantially all of the assets of, any other Person;
7.14.13 Accounting.
Changed its method of accounting or the accounting principles or practices
utilized in the preparation of its financial statements, other than as required
by GAAP;
7.14.14 Agreements.
Entered into any agreement, or otherwise obligated itself, to do any of the
foregoing.
7.15 Material
Acquiror
Company Contracts.
The Acquiror Company has provided to the Company,
prior to the date of this Agreement, true, correct and complete copies of each
written Material Acquiror Company Contract, including each amendment, supplement
and modification thereto.
7.15.1 No
Defaults.
Each Material Acquiror Company Contract is a valid and binding agreement of
the
Acquiror Company, and is in full force and effect. The Acquiror Company is
not
in breach or default of any Material Acquiror Company Contract to which it
is a
party and, to the knowledge of the Acquiror Company, no other party to any
Material Acquiror Company Contract is in breach or default thereof. No event
has
occurred or circumstance exists that (with or without notice or lapse of time)
would (a) contravene, conflict with or result in a violation or breach of,
or
become a default or event of default under, any provision of any Material
Acquiror Company Contract or (b) permit the Acquiror Company or any other Person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate or modify any Material
Acquiror Company Contract. The Acquiror Company has not received notice of
the
pending or threatened cancellation, revocation or termination of any Material
Acquiror Company Contract to which it is a party. There are no renegotiations
of, or attempts to renegotiate, or outstanding rights to renegotiate any
material terms of any Material Acquiror Company Contract.
7.16 Employees.
7.16.1 The
Acquiror Company has no employees, independent contractors or other Persons
providing research or other services to them. Except as would not have a
Material Adverse Effect, the Acquiror Company is in full compliance with all
Laws regarding employment, wages, hours, benefits, equal opportunity, collective
bargaining, the payment of Social Security and other taxes, and occupational
safety and health. The Acquiror Company is not liable for the payment of any
compensation, damages, taxes, fines, penalties or other amounts, however
designated, for failure to comply with any of the foregoing Laws.
7.16.2 Other
than Xxxx Xxx, Xxx Xxxx and Xxxxx Xxx, the Acquiror Company does not have any
officers, directors or employees. No director, officer or employee of the
Acquiror Company is a party to, or is otherwise bound by, any contract
(including any confidentiality, non-competition or proprietary rights agreement)
with any other Person that in any way adversely affects or will materially
affect (a) the performance of his or her duties as a director, officer or
employee of the Acquiror Company or (b) the ability of the Acquiror Company
to
conduct its business. Except as set forth on Schedule 7.16.2, each
employee of the Acquiror Company is employed on an at-will basis and the
Acquiror Company does not have any contract with any of its employees which
would interfere with its ability to discharge its employees.
7.17 Tax
Returns and Audits.
7.17.1 Tax
Returns.
Since July 31, 2007 and, to the best of the Acquiror Company’s knowledge, for
all periods prior thereto, the Acquiror Company has filed all material Tax
Returns required to be filed (if any) by or on behalf of the Acquiror Company
and has paid all material Taxes of the Acquiror Company required to have been
paid (whether or not reflected on any Tax Return). Except as set forth on Schedule 7.17.1, (a)
no Governmental Authority in any jurisdiction has made a claim, assertion or
threat to the Acquiror Company that the Acquiror Company is or may be subject
to
taxation by such jurisdiction; (b) there are no Liens with respect to Taxes
on
the Acquiror Company’s property or assets other than Permitted Liens; and (c)
there are no Tax rulings, requests for rulings, or closing agreements relating
to the Acquiror Company for any period (or portion of a period) that would
affect any period after the date hereof.
7.17.2 No
Adjustments,
Changes. Neither the Acquiror Company nor any other Person on behalf of
the Acquiror Company (a) has executed or entered into a closing agreement
pursuant to Section 7121 of the Code or any predecessor provision thereof or
any
similar provision of state, local or foreign law; or (b) has agreed to or is
required to make any adjustments pursuant to Section 481(a) of the Code or
any
similar provision of state, local or foreign law.
7.17.3 No
Disputes.
The Acquiror Company has delivered to Orient Come, Orient Come’s Shareholders
and K’s Media true, correct and complete copies of all Tax Returns and
examination reports and statements of deficiencies assessed or asserted against
or agreed to by the Acquiror Company, if any, for each of the last two years
and
any and all correspondence with respect to the foregoing. There is no pending
audit, examination, investigation, dispute, proceeding or claim with respect
to
any Taxes of the Acquiror Company, nor is any such claim or dispute pending
or
contemplated. The Acquiror Company has not receive notice of any such audit,
examination, investigation, dispute, proceeding or claim with respect to any
Taxes with respect to any periods prior to January 1, 2005.
7.17.4 Not
a U.S. Real
Property Holding Corporation. The Acquiror Company is not and has not
been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code at any time during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code.
7.17.5 No
Tax Allocation,
Sharing. The Acquiror Company is not and has not been a party to any Tax
allocation or sharing agreement.
7.17.6 No
Other
Arrangements. The Acquiror Company is not a party to any agreement,
contract or arrangement for services that would result, individually or in
the
aggregate, in the payment of any amount that would not be deductible by reason
of Section 162(m), 280G or 404 of the Code. The Acquiror Company is not a
“consenting corporation” within the meaning of Section 341(f) of the Code. The
Acquiror Company does not have any “tax-exempt bond financed property” or
“tax-exempt use property” within the meaning of Section 168(g) or (h),
respectively of the Code. The Acquiror Company does not have any outstanding
closing agreement, ruling request, request for consent to change a method of
accounting, subpoena or request for information to or from a Governmental
Authority in connection with any Tax matter. During the last two years, the
Acquiror Company has not engaged in any exchange with a related party (within
the meaning of Section 1031(f) of the Code) under which gain realized was not
recognized by reason of Section 1031 of the Code. The Company is not a party
to
any reportable transaction within the meaning of Treasury Regulation Section
1.6011-4.
7.18 Material
Assets. The financial statements of the Acquiror Company set forth in the
SEC Documents reflect the material properties and assets (real and personal)
owned or leased by the Acquiror Company.
7.19 Litigation;
Orders. There is no Proceeding (whether federal, state, local or foreign)
pending or, to the knowledge of the Acquiror Company, threatened against or
affecting the Acquiror Company or any of Acquiror Company’s properties, assets,
business or employees. To the knowledge of the Acquiror Company, there is no
fact that might result in or form the basis for any such Proceeding. The
Acquiror Company is not subject to any Orders.
7.20 Licenses.
The
Acquiror Company possesses from the appropriate Governmental Authority all
licenses, permits, authorizations, approvals, franchises and rights that are
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties
and
assets in the manner in which it currently owns and uses such properties and
assets (collectively, “Acquiror Company Permits”). The Acquiror Company has not
received notice from any Governmental Authority or other Person that there
is
lacking any license, permit, authorization, approval, franchise or right
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties
and
assets in the manner in which it currently owns and uses such properties and
assets. The Acquiror Company Permits are valid and in full force and effect.
No
event has occurred or circumstance exists that may (with or without notice
or
lapse of time): (a) constitute or result, directly or indirectly, in a violation
of or a failure to comply with any Acquiror Company Permit; or (b) result,
directly or indirectly, in the revocation, withdrawal, suspension, cancellation
or termination of, or any modification to, any Acquiror Company Permit. The
Acquiror Company has not received notice from any Governmental Authority or
any
other Person regarding: (a) any actual, alleged, possible or potential
contravention of any Acquiror Company Permit; or (b) any actual, proposed,
possible or potential revocation, withdrawal, suspension, cancellation,
termination of, or modification to, any Acquiror Company Permit. All
applications required to have been filed for the renewal of such Acquiror
Company Permits have been duly filed on a timely basis with the appropriate
Persons, and all other filings required to have been made with respect to such
Acquiror Company Permits have been duly made on a timely basis with the
appropriate Persons. All Acquiror Company Permits are renewable by their terms
or in the ordinary course of business without the need to comply with any
special qualification procedures or to pay any amounts other than routine fees
or similar charges, all of which have, to the extent due, been duly
paid.
7.21 Interested
Party
Transactions. Except as disclosed in Schedule
7.21, since
July 31, 2007 and, to the best of the Acquiror Company’s knowledge, for all
periods prior thereto, no officer, director or principal stockholder of the
Acquiror Company or any Affiliate or “associate” (as such term is defined in
Rule 405 of the Commission under the Securities Act) of any such Person, has
or
has had, either directly or indirectly, (1) an interest in any Person which
(a)
furnishes or sells services or products which are furnished or sold or are
proposed to be furnished or sold by the Acquiror Company, or (b) purchases
from
or sells or furnishes to, or proposes to purchase from, sell to or furnish
the
Acquiror Company any goods or services; or (2) a beneficial interest in any
contract or agreement to which the Acquiror Company is a party or by which
it
may be bound or affected.
7.22 Governmental
Inquiries. Since July 31, 2007 and, to the best of the Acquiror Company’s
knowledge, for all periods prior thereto, the Acquiror Company has provided
to
the Company a copy of each material written inspection report, questionnaire,
inquiry, demand or request for information received by the Acquiror Company
from
any Governmental Authority, and the Acquiror Company’s response thereto, and
each material written statement, report or other document filed by the Acquiror
Company with any Governmental Authority.
7.23 Bank
Accounts and Safe
Deposit Boxes. Schedule
7.23
discloses the title and number of each bank or other deposit or financial
account, and each lock box and safety deposit box used by the Acquiror Company
since the inception of the Acquiror Company, the financial institution at which
that account or box is maintained and the names of the persons authorized to
draw against the account or otherwise have access to the account or box, as
the
case may be. To the best of the Acquiror Company’s knowledge, other than the
bank accounts and safe deposit boxes referenced above and included in Schedule
7.23, no other bank accounts or safe deposit boxes exist.
7.24 Intellectual
Property. The Acquiror Company does not own, use or license any
Intellectual Property in its business as presently conducted.
7.25 Title
to and Condition
of Properties. The Acquiror Company owns (with good and marketable title
in the case of real property) or holds under valid leases the rights to use
all
real property, plants, machinery, equipment and other personal property
necessary for the conduct of its business as presently conducted, free and
clear
of all Liens, except Permitted Liens. The material buildings, plants, machinery
and equipment necessary for the conduct of the business of the Acquiror Company
as presently conducted are structurally sound, are in good operating condition
and repair and are adequate for the uses to which they are being put, and none
of such buildings, plants, machinery or equipment is in need of maintenance
or
repairs, except for ordinary, routine maintenance and repairs that are not
material in nature or cost.
7.26 SEC
Documents;
Financial Statements. Except as set forth on Schedule
7.26, since
July 1, 2007 and, to the best of the Acquiror Company’s knowledge, for all
periods prior thereto, the Acquiror Company has filed all reports required
to be
filed by it under the Exchange Act, including pursuant to Section 13(a) or
15(d)
thereof, for the five (5) years preceding the date hereof (or such shorter
period as the Acquiror Company was required by law to file such material) (the
foregoing materials being collectively referred to herein as the “SEC
Documents”). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder,
and
none of the SEC Documents, 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 statement therein, in light of the
circumstances under which they were made, not misleading. All Material Acquiror
Company Contracts to which the Acquiror Company is a party or to which the
property or assets of the Acquiror Company are subject have been appropriately
filed as exhibits to the SEC Documents as and to the extent required under
the
Exchange Act. The financial statements of the Acquiror Company included in
the
SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing, were prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except as may
be
indicated in the notes thereto, or, in the case of unaudited statements as
permitted by Form 10-QSB of the Commission), and fairly present in all material
respects (subject in the case of unaudited statements, to normal, recurring
audit adjustments) the financial position of the Acquiror Company as at the
dates thereof and the results of its operations and cash flows for the periods
then ended.
7.27 Stock
Option Plans;
Employee Benefits: There is no Stock Option Plans, Employee Benefits of
the Acquiror Company as the date of Closing.
7.27.1 The
Acquiror Company has no stock option plans providing for the grant by the
Acquiror Company of stock options to directors, officers or
employees.
7.27.2 The
Acquiror Company has no employee benefit plans or arrangements covering their
present and former employees or providing benefits to such persons in respect
of
services provided the Acquiror Company.
7.27.3 Neither
the consummation of the transactions contemplated hereby alone, nor in
combination with another event, with respect to each director, officer, employee
and consultant of the Acquiror Company, will result in (a) any payment
(including, without limitation, severance, unemployment compensation or bonus
payments) becoming due from the Acquiror Company, (b) any increase in the amount
of compensation or benefits payable to any such individual or (c) any
acceleration of the vesting or timing of payment of compensation payable to
any
such individual. No agreement, arrangement or other contract of the Acquiror
Company provides benefits or payments contingent upon, triggered by, or
increased as a result of a change in the ownership or effective control of
the
Acquiror Company.
7.28 Environmental
and Safety Matters. Except as set forth on Schedule 7.28:
7.28.1 The
Acquiror Company has at all time been and is in compliance with all
Environmental Laws applicable to the Acquiror Company.
7.28.2 There
are no Proceedings pending or threatened against the Acquiror Company alleging
the violation of any Environmental Law or Environmental Permit applicable to
the
Acquiror Company or alleging that the Acquiror Company is a potentially
responsible party for any environmental site contamination.
7.28.3 Neither
this Agreement nor the consummation of the transactions contemplated by this
Agreement shall impose any obligations to notify or obtain the consent of any
Governmental Authority or third Persons under any Environmental Laws applicable
to the Acquiror Company.
7.29 Money
Laundering
Laws. The operations of the Acquiror Company is and has been conducted at
all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as
amended, 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
Authority (collectively, the “Money Laundering Laws”) and no Proceeding
involving the Acquiror Company with respect to the Money Laundering Laws is
pending or, to the knowledge of the Acquiror Company, threatened.
7.30 No
Undisclosed Events
or Circumstances. No event or circumstance has occurred or exists with
respect to the Company or its subsidiaries or their respective businesses,
properties, prospects, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed since
October 31, 2007.
7.31 Adverse
Interest. Except as set forth on Schedule
7.31, no
current officer, director, affiliate or person known to the Acquiror Company
to
be the record or beneficial owner in excess of 5% of Acquiror Company Common
Stock or any person known to be an associate of any of the foregoing is a party
adverse to Acquiror Company or has a material interest adverse to Acquiror
Company in any material pending legal proceeding.
7.32 Investment
Acquisition. Acquiror Company is acquiring Orient Come’s Shares to be
transferred to it under this Agreement for investment and not with a view to
the
sale or distribution thereof. There are no other agreements purporting to
restrict the issuance or transfer of the Acquiror Company Shares nor any voting
agreements, voting trusts or other arrangements restricting or affecting the
voting of the Acquiror Company Shares.
7.33 Untrue
Statements. Neither this Agreement nor the Schedules hereto nor any other
documents, certificates or instruments furnished to Orient Come, or Orient
Come’s Shareholder or K’s Media, by or on behalf of Acquiror Company in
connection with the transactions contemplated by this Agreement contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made herein or therein, in the light of the
circumstances under which they were made herein or therein, not
misleading.
7.34 Trading
Activity. Acquiror Company has not been the subject of any enforcement or
other actions which have questioned its compliance with applicable rules
(including without limitation Commission rules and regulations) and the
applicable trading rules since the inception of its trading on the Over the
Counter Bulletin Board in the U.S. (“OTCBB”). To the best of Acquiror Company’s
knowledge, its shares are eligible for trading publicly on the OTCBB as of
the
date of this Agreement. Acquiror Company has received no notice that its common
stock is not eligible for quotation and is unaware of any legal encumbrance
and
contrived encumbrance to suspend, stop or terminate the trading in its shares
which could negatively affect its application for being transferred to the
Nasdaq National Market in the U.S., provided all substantive listing criteria
are otherwise also met by the Company’s business.
7.35 Board
Recommendation. The Acquiror Company Board, by unanimous written consent,
has determined that this Agreement and the transactions contemplated by this
Agreement are advisable and in the best interests of the Acquiror Company’s
stockholders and has duly authorized this Agreement and the transactions
contemplated by this Agreement.
SECTION
VIII.
COVENANTS
OF THE ACQUIROR COMPANY
8.1 Rule
144
Reporting. With a view to making available to those stockholders of the
Acquiror Company who were not officers, directors, promoters or otherwise
Affiliates prior to and after the Closing, the benefit of certain rules and
regulations of the Commission which may permit the sale of the Acquiror Company
Common Stock to the public without registration, from and after the Closing
Date, the Acquiror Company agrees to:
8.1.1 Make
and keep public information available, as those terms are understood and defined
in Rule 144; and
8.1.2 File
with the Commission, in a timely manner, all reports and other documents
required of the Acquiror Company under the Exchange Act.
8.2 SEC
Documents.
From and after the Closing Date, in the event the Commission notifies the
Acquiror Company of its intent to review any SEC Document filed prior to the
Closing Date or the Acquiror Company receives any oral or written comments
from
the Commission with respect to any SEC Document filed prior to the Closing
Date,
the Acquiror Company shall promptly notify the Acquiror Company Principal
Shareholders and the Acquiror Company Principal Shareholders shall fully
cooperate with the Acquiror Company.
8.3 Schedule
14(f).
At least ten (10) days prior to the Closing Date, the Acquiror Company shall
file the Schedule 14(f) Filing and mail the same to each Acquiror Company
shareholder.
8.4 Form
8-K.
Within four (4) business days of the Closing Date, the Acquiror Company shall
file the Form 8-K.
SECTION
IX.
CONDITIONS
PRECEDENT OF THE ACQUIROR COMPANY
The
Acquiror Company’s obligation to acquire Orient Come’s Shares and to take the
other actions required to be taken by the Acquiror Company at the Closing Date
is subject to the satisfaction, at or prior to the Closing Date, of each of
the
following conditions (any of which may be waived by the Acquiror Company, in
whole or in part):
9.1 Accuracy
of
Representations. The representations and warranties of Orient Come,
Orient Come’s Shareholder and K’s Media set forth in this Agreement or in any
Schedule or certificate delivered pursuant hereto shall be true and correct
in
all material respects as of the date of this Agreement except to the extent
a
representation or warranty is expressly limited by its terms to another date
and
without giving effect to any supplemental Schedule.
9.2 Performance
by
Orient Come, Orient Come’s Shareholders and K’s Media.
9.2.1 All
of the covenants and obligations that Orient Come, Orient Come’s Shareholders
and K’s Media are required to perform or to comply with pursuant to this
Agreement (considered collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and complied with
in
all material respects.
9.2.2 Each
document required to be delivered by Orient Come, Orient Come’s Shareholder and
K’s Media pursuant to this Agreement must have been delivered.
9.2.3 Receipt
of executed signature pages to the Management Contract signed between Orient
Come and K’s Media.
9.3 No
Force Majeure
Event. There shall not have been any delay, error, failure or
interruption in the conduct of the business of the Company, or any loss, injury,
delay, damage, distress, or other casualty, due to force majeure including
but
not limited to (a) acts of God; (b) fire or explosion; (c) war, acts of
terrorism or other civil unrest; or (d) national emergency.
9.4 Certificate
of
Officer. Orient Come and K’s Media will have delivered to the Acquiror
Company a certificate executed by an officer of the Company, certifying the
satisfaction of the conditions specified in Sections 9.1, 9.2, and 9.3 relating
to the Company.
9.5 Certificate
of
Shareholders. Each Orient Come’s Shareholder will have delivered to the
Acquiror Company a certificate executed by such Shareholder, if a natural
person, or an authorized officer of the Shareholder, if an entity, certifying
the satisfaction of the conditions specified in Sections 9.1 and 9.2 relating
to
such Shareholder.
9.6 Consents.
9.6.1 All
material consents, waivers, approvals, authorizations or orders required to
be
obtained, and all filings required to be made, by Orient Come, Orient Come’s
Shareholder and K’s Media for the authorization, execution and delivery of this
Agreement and the consummation by them of the transactions contemplated by
this
Agreement, shall have been obtained and made Orient Come, Orient Come’s
Shareholder and K’s Media, as the case may be, except where the failure to
receive such consents, waivers, approvals, authorizations or orders or to make
such filings would not have a Material Adverse Effect on Orient Come or K’s
Media or the Acquiror Company.
9.6.2 Without
limiting the foregoing, the Schedule 14(f) Filing shall have been prepared
to be
filed with the Commission by the Acquiror Company after the Closing
Date.
9.7 Documents.
The
Company and the Shareholders must deliver to the Acquiror Company at the
Closing:
9.7.1 share
certificates evidencing the number of Shares held by each Orient Come’s
Shareholder (as set forth in Exhibit A), along
with executed share transfer forms transferring such Shares to the Acquiror
Company together with a certified copy of a board resolution of Orient Come
approving the registration of the transfer of such shares to Acquiror Company
(subject to Closing and payment of stamp duty);
9.7.2 each
of the Transaction Documents to which Orient Come, Orient Come’s Shareholder and
K’s Media is a party, duly executed;
9.7.3 such
other documents as the Acquiror Company may reasonably request for the purpose
of (A) evidencing the accuracy of any of the representations and warranties
of
Orient Come, Orient Come’s Shareholder and K’s Media pursuant to Section 9.1,
(B) evidencing the performance of, or compliance by Orient Come, Orient Come’s
Shareholder and K’s Media with, any covenant or obligation required to be
performed or complied with by the Company or the Shareholders, as the case
may
be, (C) evidencing the satisfaction of any condition referred to in this Section
9, or (D) otherwise facilitating the consummation or performance of any of
the
transactions contemplated by this Agreement.
9.8 No
Proceedings.
There must not have been commenced or threatened against the Acquiror Company,
Orient Come, Orient Come’s Shareholder and K’s Media, or against any Affiliate
thereof, any Proceeding (which Proceeding remains unresolved as of the Closing
Date) (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the transactions contemplated by this Agreement, or
(b)
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated by this
Agreement.
9.9 No
Claim Regarding
Stock Ownership or Consideration. There must not have been made or
threatened by any Person, other than persons listed on Schedule I hereto,
any claim asserting that such Person (a) is the holder of, or has the right
to
acquire or to obtain beneficial ownership of Orient Come’s Shares or any other
stock, voting, equity, or ownership interest in, Orient Come, or (b) is entitled
to all or any portion of the Acquiror Company Shares.
SECTION
X.
CONDITIONS
PRECEDENT OF ORIENT COME,
ORIENT
COME SHAREHOLDERS AND K’S MEDIA
The
Shareholders’ obligation to transfer the Shares and the obligations of the
Company to take the other actions required to be taken by the Company in advance
of or at the Closing Date are subject to the satisfaction, at or prior to the
Closing Date, of each of the following conditions (any of which may be waived
by
the Company and the Shareholders jointly, in whole or in part):
10.1 Accuracy
of
Representations. The representations and warranties of the Acquiror
Company set forth in this Agreement or in any Schedule or certificate delivered
pursuant hereto shall be true and correct in all material respects as of the
date of this Agreement except to the extent a representation or warranty is
expressly limited by its terms to another date.
10.2 Performance
by the
Acquiror Company.
10.2.1 All
of the covenants and obligations that the Acquiror Company are required to
perform or to comply with pursuant to this Agreement (considered collectively),
and each of these covenants and obligations (considered individually), must
have
been performed and complied with in all respects.
10.2.2 Each
document required to be delivered by the Acquiror Company pursuant to this
Agreement must have been delivered.
10.3 No
Force Majeure
Event. There shall not have been any delay, error, failure or
interruption in the conduct of the business of the Acquiror Company, or any
loss, injury, delay, damage, distress, or other casualty, due to force majeure
including but not limited to (a) acts of God; (b) fire or explosion; (c) war,
acts of terrorism or other civil unrest; or (d) national emergency.
10.4 Certificate
of
Officer. The Acquiror Company will have delivered to the Company a
certificate, dated the Closing Date, executed by an officer of the Acquiror
Company, certifying the satisfaction of the conditions specified in Sections
10.1, 10.2, and 10.3 relating to the Acquiror Company.
10.5 Consents.
10.5.1 All
material consents, waivers, approvals, authorizations or orders required to
be
obtained, and all filings required to be made, by the Acquiror Company for
the
authorization, execution and delivery of this Agreement and the consummation
by
it of the transactions contemplated by this Agreement, shall have been obtained
and made by the Acquiror Company, except where the failure to receive such
consents, waivers, approvals, authorizations or orders or to make such filings
would not have a Material Adverse Effect on the Company or the Acquiror
Company.
10.5.2 The
Schedule 14(f) Filing shall have been prepared to be filed with the Commission
by the Acquiror Company and the Acquiror Company shareholders at least ten
(10)
days prior to the Closing Date.
10.6 Documents.
The
Acquiror Company must have caused the following documents to be delivered to
the
Company and/or the Shareholders:
10.6.1 share
certificates evidencing each Shareholder’s pro rata share of the Closing
Acquiror Company Shares (as set forth in Exhibit
A);
10.6.2 a
Secretary’s Certificate, dated the Closing Date, certifying attached copies of
(a) the Organizational Documents of the Acquiror Company, (b) the resolutions
of
the Acquiror Company Board approving this Agreement and the transactions
contemplated hereby; and (c) the incumbency of each authorized officer of the
Acquiror Company signing this Agreement and any other agreement or instrument
contemplated hereby to which the Acquiror Company is a party;
10.6.3 a
Certificate of Good Standing of the Acquiror Company;
10.6.4 each
of the Transaction Documents to which the Acquiror Company is a party, duly
executed;
10.6.5 the
resignation of each of Xxxx Xxx and Xxxxx Xxx as officers of the Acquiror
Company on the Closing Date;
10.6.6 Acquiror
Company Board resolutions (i) appointing Xxxx Xxx to serve as Chief Financial
Officer, Treasurer and Secretary of the Acquiror Company and Xxx Xxxxxx to
serve
President and Chief Executive Officer of the Acquiror Company, and (ii)
nominating Xx Xxxx to serve as Chairman of the Acquiror Company Board and Xxxxx
Xxx and Xxx Xxxxxx to serve as members of the Acquiror Company Board, with
such
appointment to be effective on the Effective Date;
10.6.7 the
resignations of Xxx Xxxx and Xxxxx Xxx as directors of the Acquiror Company,
such resignations to be effective on the Effective Date;
10.6.8 a
statement from the Acquiror Company’s transfer agent regarding the number of
issued and outstanding shares of common stock immediately before and after
the
Closing; and,
10.6.9 such
other documents as Orient Come may reasonably request for the purpose of (i)
evidencing the accuracy of any representation or warranty of the Acquiror
Company pursuant to Section 10.1, (ii) evidencing the performance by the
Acquiror Company of, or the compliance by the Acquiror Company with, any
covenant or obligation required to be performed or complied with by the Acquiror
Company, (iii) evidencing the satisfaction of any condition referred to in
this
Section 10, or (iv) otherwise facilitating the consummation of any of the
transactions contemplated by this Agreement.
10.7 No
Proceedings.
Since the date of this Agreement, there must not have been commenced or
threatened against the Acquiror Company, the Company or any Shareholder, or
against any Affiliate thereof, any Proceeding (which Proceeding remains
unresolved as of the date of this Agreement) (a) involving any challenge to,
or
seeking damages or other relief in connection with, any of the transactions
contemplated hereby, or (b) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with any of the transactions
contemplated hereby.
10.8 No
Claim Regarding
Stock Ownership or Consideration. There must not have been made or
threatened by any Person, hereto, any claim asserting that such Person (a)
is
the holder of, or has the right to acquire or to obtain beneficial ownership
of
the Acquiror Company Common Stock or any other stock, voting, equity, or
ownership interest in, the Acquiror Company or (b) is entitled to all or any
portion of the Acquiror Company Shares.
SECTION
XI.
INDEMNIFICATION;
REMEDIES
11.1 Survival.
All
representations, warranties, covenants, and obligations in this Agreement shall
expire on the first day of the nineteenth-month anniversary of the date this
Agreement is executed (the “Survival Period”). The right to indemnification,
payment of damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being acquired) at
any
time, whether before or after the execution and delivery of this Agreement,
with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right
to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.
11.2 Indemnification
Obligations in favor of the Executive Officers, Directors, Employees of the
Acquiror Company. From and after the Closing Date until the expiration of
the Survival Period, Orient Come, Orient Come’s Shareholders and K’s Media shall
reimburse and hold harmless the Acquiror Company’s executive officers,
directors, employees in office immediately prior to the Closing (each such
person and his heirs, executors, administrators, agents, successors and assigns
is referred to herein as an “Acquiror Company Indemnified Party” ) against and
in respect of:
11.2.1 Any
and all damages, losses, settlement payments, in respect of deficiencies,
liabilities, costs, expenses and claims suffered, sustained, incurred or
required to be paid by any Acquiror Company Indemnified Party, and any and
all
actions, suits, claims, or legal, administrative, arbitration, governmental
or
other procedures or investigation against any Acquiror Company Indemnified
Party, which arises or results from a third-party claim brought against an
Acquiror Company Indemnified Person to the extent based on (i) a breach of
the
representations and warranties with respect to the business, operations or
assets of the Company of any, or (ii) the actions or omissions of any officer,
director, shareholder, employee, or agent of the Company after the Closing;
provided, however, that in the event of a third-party claim brought against
an
Acquired Company Indemnified Person based upon subsection 11.2.1(ii), the
Survival Period shall be extended for an additional 12 months.
11.2.2 Orient
Come, Orient Come’s Shareholders and K’s Media shall have no obligation to
indemnify or hold harmless an Acquiror Company Indemnified Party for any
settlement entered into by such Acquiror Company Indemnified Party without
Orient Come, Orient Come’s Shareholders and K’s Media’s prior written consent
after the Closing of this Agreement. In addition, Orient Come, Orient Come’s
Shareholders and K’s Media shall have no obligation to indemnify or hold
harmless any Acquiror Company Indemnified Person for any damages, claims, losses
or the like based on the diminution in value of the Acquiror Company Indemnified
Person’s common shares.
11.3 Breach
by the
Shareholders. Nothing in this Section 11 shall limit the Acquiror
Company’s right to pursue any appropriate legal or equitable remedy against any
Shareholder with respect to any damages occurring prior to the Closing Date
arising, directly or indirectly, from or in connection with: (a) any breach
by
such Shareholder of any representation or warranty made by such Shareholder
in
this Agreement or in any certificate delivered by such Shareholder pursuant
to
this Agreement or (b) any breach by such Shareholder of its covenants or
obligations in this Agreement. All claims of the Acquiror Company pursuant
to
this Section 11.3 shall be brought by the Acquiror Company on behalf of the
Acquiror Company and those Persons who were stockholders of the Acquiror Company
immediately prior to the Closing Date.
SECTION
XII.
GENERAL
PROVISIONS
12.1 Expenses.
Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the transactions
contemplated by this Agreement, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
12.2 Public
Announcements. The Acquiror Company shall promptly, but no later than
three (3) days following the effective date of this Agreement, issue a press
release disclosing the transactions contemplated hereby. The Acquiror
Company shall also file with the Commission a Form 8-K describing the material
terms of the transactions contemplated (and attaching as exhibits thereto this
Agreement and the Press Release) as soon as practicable following the Closing
Date but in no event more than four (4) business days following the Closing
Date. Prior to the Closing Date, All Parties shall consult with each other
in
issuing the Form 8-K, the press release and any other press releases or
otherwise making public statements or filings and other communications with
the
Commission or any regulatory agency or stock market or trading facility with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement, filings
or
other communications without the prior written consent of the other, which
consent shall not be unreasonably withheld or delayed, except that no prior
consent shall be required if such disclosure is required by law, in which case
the disclosing party shall provide the other party with prior notice, of no
less
than three (3) calendar days, of such public statement, filing or other
communication and shall incorporate into such public statement, filing or other
communication the reasonable comments of the other party.
12.3 Confidentiality.
12.3.1 All
Parties will maintain in confidence, and will cause their respective directors,
officers, employees, agents, and advisors to maintain in confidence, any
written, oral, or other information obtained in confidence from another party
in
connection with this Agreement or the transactions contemplated by this
Agreement, unless (a) such information is already known to such party or to
others not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any required filing with
the
Commission, or obtaining any consent or approval required for the consummation
of the transactions contemplated by this Agreement, or (c) the furnishing or
use
of such information is required by or necessary or appropriate in connection
with legal proceedings.
12.3.2 In
the event that any party is required to disclose any information of another
party pursuant to clause (b) or (c) of Section 12.3.1, the party requested
or
required to make the disclosure (the “disclosing party”) shall provide the party
that provided such information (the “providing party”) with prompt notice of any
such requirement so that the providing party may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Section 12.3. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the providing party, the disclosing party is nonetheless,
in the opinion of counsel, legally compelled to disclose the information of
the
providing party, the disclosing party may, without liability hereunder, disclose
only that portion of the providing party’s information which such counsel
advises is legally required to be disclosed, provided that the disclosing party
exercises its reasonable efforts to preserve the confidentiality of the
providing party’s information, including, without limitation, by cooperating
with the providing party to obtain an appropriate protective order or other
relief assurance that confidential treatment will be accorded the providing
party’s information.
12.3.3 If
the transactions contemplated by this Agreement are not consummated, each party
will return or destroy as much of such written information as the other party
may reasonably request.
12.4 Notices.
All
notices, demands, consents, requests, instructions and other communications
to
be given or delivered or permitted under or by reason of the provisions of
this
Agreement or in connection with the transactions contemplated hereby shall
be in
writing and shall be deemed to be delivered and received by the intended
recipient as follows: (i) if personally delivered, on the business day of such
delivery (as evidenced by the receipt of the personal delivery service), (ii)
if
mailed certified or registered mail return receipt requested, two (2) business
days after being mailed, (iii) if delivered by overnight courier (with all
charges having been prepaid), on the business day of such delivery (as evidenced
by the receipt of the overnight courier service of recognized standing), or
(iv)
if delivered by facsimile transmission, on the business day of such delivery
if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that
time,
on the next succeeding business day (as evidenced by the printed confirmation
of
delivery generated by the sending party’s telecopier machine). If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed address of which no notice was given (in accordance with
this Section 4), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second business day the notice is sent (as evidenced by a sworn affidavit of
the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers
as
applicable
|
If
to Acquiror Company:
Kinglake
Resources, Inc.
Xxxxx
000-000 Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX, X0X 0X0, Xxxxxx
|
With
copy to:
Xxxxxxxx
& Xxxx, LLP
000
Xxxx Xxx Xxxx Xxxx., Xxxxx 0000
Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
|
|
If
to Orient Come:
Orient
Come Holdings Limited
Xxxx
000, Xxxxx X0
Xxxxxxxx
Xxxxx, Xx. 0 Xxxxx Xx Xxxxxx
Xxxxxxx,
Xxxxx 000000
|
With
copy to:
|
|
If
to Orient Come’s Shareholder:
Orient
Come Holdings Limited
Xxxx
000, Xxxxx X0
Xxxxxxxx
Xxxxx, Xx. 0 Xxxxx Xx Xxxxxx
Xxxxxxx,
Xxxxx 000000
|
With
copy to:
|
|
If
to K’s Media:
Beijing
K's Media Advertising Ltd. Co.
Xxxx
000, Xx. 00
Xxx
Xx Xxxxxx, Xxx Xi Economic Xxxx
Xxxx
Xxx Xxxxxxxx, Xxxxxxx, Xxxxx
|
With
copy to:
|
12.5 Arbitration.
Any dispute or controversy under this Agreement shall be settled exclusively
by
arbitration in the City of Fort Lauderdale, County of Broward in accordance
with
the rules of the American Arbitration Association then in effect. Judgment
may
be entered on the arbitration award in any court having
jurisdiction.
12.6 Further
Assurances. The parties agree (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other party
may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
12.7 Waiver.
The
rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement or the documents referred to
in
this Agreement will operate as a waiver of such right, power, or privilege,
and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or
the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless
it
is in writing signed by the other party; (b) no waiver that may be given by
a
party will be applicable except in the specific instance for which it is given;
and (c) no notice to or demand on one party will be deemed to be a waiver of
any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
12.8 Entire
Agreement and
Modification. This Agreement supersedes all prior agreements between the
parties with respect to its subject matter and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement
of
the terms of the agreement between the parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement executed
by the party against whom the enforcement of such amendment is
sought.
12.9 Assignments,
Successors, and No Third-Party Rights. No party may assign any of its
rights under this Agreement without the prior consent of the other parties.
Subject to the preceding sentence, this Agreement will apply to, be binding
in
all respects upon, and inure to the benefit of and be enforceable by the
respective successors and permitted assigns of the parties. Except as set forth
in Section 11.2 and 11.3, nothing expressed or referred to in this Agreement
will be construed to give any Person other than the parties to this Agreement
any legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.
12.10 Severability.
If any provision of this Agreement is held invalid or unenforceable by any
court
of competent jurisdiction, the other provisions of this Agreement will remain
in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to
the
extent not held invalid or unenforceable.
12.11 Section
Headings,
Construction. The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to “Section” or “Sections” refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word “including” does not limit the preceding words or
terms.
12.12 Governing
Law.
This Agreement will be governed by the laws of the State of Nevada without
regard to conflicts of laws principles.
12.13 Counterparts.
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
COUNTERPART
SIGNATURE PAGE
IN
WITNESS WHEREOF, the parties have executed and delivered this Share Exchange
Agreement as of the date first written above.
|
Acquiror Company:
Kinglake
Resources, Inc.
Signed:
/s/ XXXX XXX
[Missing
Graphic Reference]
Printed
name: Xxxx Xxx
Title:
President
|
Beijing
K’s Media Advertisement Ltd. Co.
Signed:
/s/ KUN (XXXXX) WEI
[Missing
Graphic Reference]
Printed
name: Kun (Xxxxx) Wei
[Missing
Graphic Reference]
Title: Director
and Officer
[Missing
Graphic Reference]
|
|
|
Orient
Come Holdings
Limited
Signed:
/s/ XX XXXX
[Missing
Graphic Reference]
Printed
name: Xx Xxxx
[Missing
Graphic Reference]
Title: Director
and Officer
[Missing
Graphic Reference]
|
Orient
Come’s Shareholders
Signed:
/s/ XX XXXX
[Missing
Graphic Reference]
Printed
name: Xx Xxxx
Signed:
/s/ KUN (XXXXX) WEI
[Missing
Graphic Reference]
Printed
name: Kun (Xxxxx) Wei
|
SCHEDULES
|
Schedule
4.1.5
|
Shareholder
Brokers or Finders
|
|
|
Schedule
5.1
|
Orient
Come Organization and Qualification
|
|
|
Schedule
5.11
|
Orient
Come Brokers or Finders
|
|
|
Schedule
6.1
|
K's
Media Organization and Qualification
|
|
|
Schedule
6.7.2
|
Capitalization
of K's Media
|
|
|
Schedule
6.11
|
K's
Media Brokers or Finders
|
|
|
Schedule
7.1
|
Acquiror
CompanyDisclosure Schedules
|
|
|
Schedule
7.2
|
Acquiror
Company Organization and Qualification
|
|
|
Schedule
7.4
|
Acquiror
Company Organizational Documents
|
|
|
Schedule
7.12
|
Acquiror
Company Brokers or Finders
|
|
|
Schedule
7.13
|
Acquiror
Company Absence of Undisclosed Liabilities
|
|
|
Schedule
7.14
|
Acquiror
Company Changes
|
|
|
Schedule
7.16.2
|
Acquiror
Company Employees
|
|
|
Schedule
7.17.1
|
Acquiror
Company Tax Returns and Audits
|
|
|
Schedule
7.21
|
Acquiror
Company Interested Party Transactions
|
|
|
Schedule
7.23
|
Acquiror
Company Bank Accounts and Safe Deposit Boxes
|
|
|
Schedule
7.26
|
Acquiror
Company SEC Documents; Financial Statements
|
|
|
Schedule
7.28
|
Acquiror
Company Environmental and Safety Matters
|
|
|
Schedule
7.31
|
Acquiror
Company Adverse Interest
|
EXHIBIT
A
SHARES
AND ACQUIROR COMPANY SHARES TO BE EXCHANGED
EXHIBIT
B
Definition
of “Accredited Investor”
The
term “accredited investor” means:
|
(1)
|
A
bank as defined in Section 3(a)(2) of the Securities Act, or a savings
and
loan association or other institution as defined in Section 3(a)(5)(A)
of
the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of
the
Securities Exchange Act of 1934; an insurance company as defined
in
Section 2(13) of the Securities Act; an investment company registered
under the Investment Company Act of 1940 (the “Investment Company Act”) or
a business development company as defined in Section 2(a)(48) of
the
Investment Company Act; a Small Business Investment Company licensed
by
the U.S. Small Business Administration under Section 301(c) or (d)
of the
Small Business Investment Act of 1958; a plan established and maintained
by a state, its political subdivisions or any agency or instrumentality
of
a state or its political subdivisions for the benefit of its employees,
if
such plan has total assets in excess of US $5,000,000; an employee
benefit
plan within the meaning of the Employee Retirement Income Security
Act of
1974 (“ERISA”), if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank, savings
and
loan association, insurance company, or registered investment advisor,
or
if the employee benefit plan has total assets in excess of US $5,000,000
or, if a self-directed plan, with investment decisions made solely
by
persons that are accredited investors.
|
|
(2)
|
A
private business development company as defined in Section 202(a)(22)
of
the Investment Advisers Act of 1940.
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(3)
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An
organization described in Section 501(c)(3) of the Internal Revenue
Code,
corporation, Massachusetts or similar business trust, or partnership,
not
formed for the specific purpose of acquiring the securities offered,
with
total assets in excess of US $5,000,000.
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(4)
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A
director or executive officer of the Acquiror Company.
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(5)
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A
natural person whose individual net worth, or joint net worth with
that
person’s spouse, at the time of his or her purchase exceeds US
$1,000,000.
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(6)
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A
natural person who had an individual income in excess of US $200,000
in
each of the two most recent years or joint income with that person’s
spouse in excess of US $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year.
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(7)
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A
trust, with total assets in excess of US $5,000,000, not formed for
the
specific purpose of acquiring the securities offered, whose purchase
is
directed by a sophisticated person as described in Rule 506(b)(2)(ii)
(i.e., a person who has such knowledge and experience in financial
and
business matters that he is capable of evaluating the merits and
risks of
the prospective investment).
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(8)
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An
entity in which all of the equity owners are accredited investors.
(If
this alternative is checked, the Shareholder must identify each equity
owner and provide statements signed by each demonstrating how each
is
qualified as an accredited investor.)
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EXHIBIT
C
Definition
of “U.S. Person”
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(1)
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“U.S.
person” (as defined in Regulation S) means:
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(i)
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Any
natural person resident in the United States;
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(ii)
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Any
partnership or corporation organized or incorporated under the laws
of the
United States;
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(iii)
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Any
estate of which any executor or administrator is a U.S. person;
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(iv)
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Any
trust of which any trustee is a U.S. person;
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(v)
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Any
agency or branch of a foreign entity located in the United States;
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(vi)
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Any
non-discretionary 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;
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(vii)
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Any
discretionary account or similar account (other than an estate or
trust)
held by a dealer or other fiduciary organized, incorporated, or (if
an
individual) resident in the United States; and
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(viii)
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Any
partnership or corporation if: (A) organized or incorporated under
the
laws of any foreign jurisdiction; and (B) 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,
and
owned, by accredited investors (as defined in Rule 501(a)) who are
not
natural persons, estates or trusts.
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(2)
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Notwithstanding
paragraph (1) above, any discretionary account or similar account
(other
than an estate or trust) held for the benefit or account of a non-U.S.
person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States
shall
not be deemed a “U.S. person.”
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(3)
|
Notwithstanding
paragraph (1), any estate of which any professional fiduciary acting
as
executor or administrator is a U.S. person shall not be deemed a
U.S.
person if:
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(i)
|
An
executor or administrator of the estate who is not a U.S. person
has sole
or shared investment discretion with respect to the assets of the
estate;
and
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(ii)
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The
estate is governed by foreign law.
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(4)
|
Notwithstanding
paragraph (1), any trust of which any professional fiduciary acting
as
trustee is a U.S. person shall not be deemed a U.S. person if a trustee
who is not a U.S. person has sole or shared investment discretion
with
respect to the trust assets, and no beneficiary of the trust (and
no
settler if the trust is revocable) is a U.S. person.
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(5)
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Notwithstanding
paragraph (1), an employee benefit plan established and administered
in
accordance with the law of a country other than the United States
and
customary practices and documentation of such country shall not be
deemed
a U.S. person.
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(6)
|
Notwithstanding
paragraph (1), any agency or branch of a U.S. person located outside
the
United States shall not be deemed a “U.S. person” if:
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(i)
|
The
agency or branch operates for valid business reasons; and
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(ii)
|
The
agency or branch is engaged in the business of insurance or banking
and is
subject to substantive insurance or banking regulation, respectively,
in
the jurisdiction where located.
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(7)
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The
International Monetary Fund, the International Bank for Reconstruction
and
Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and pension
plans
shall not be deemed “U.S. persons.”
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EXHIBIT
D
ACCREDITED
INVESTOR REPRESENTATIONS
Each
of the Shareholders indicating that it is an Accredited Investor, severally
and
not jointly, further represents and warrants to the Acquiror Company as
follows:
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1.
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Such
person or entity qualifies as an Accredited Investor on the basis
set
forth on its signature page to this Agreement.
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2.
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Such
person or entity has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to
protect
such Shareholder’s interests in connection with the transactions
contemplated by this Agreement.
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3.
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Such
person or entity has consulted, to the extent that it has deemed
necessary, with its tax, legal, accounting and financial advisors
concerning its investment in the Acquiror Company Shares.
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4.
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Such
person or entity understands the various risks of an investment in
the
Acquiror Company Shares and can afford to bear such risks for an
indefinite period of time, including, without limitation, the risk
of
losing its entire investment in the Acquiror Company Shares.
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5.
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Such
person or entity has had access to the Acquiror Company’s publicly filed
reports with the SEC.
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6.
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Such
person or entity has been furnished during the course of the transactions
contemplated by this Agreement with all other public information
regarding
the Acquiror Company that such person or entity has requested and
all such
public information is sufficient for such person or entity to evaluate
the
risks of investing in the Acquiror Company Shares.
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7.
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Such
person or entity has been afforded the opportunity to ask questions
of and
receive answers concerning the Acquiror Company and the terms and
conditions of the issuance of the Acquiror Company Shares.
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8.
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Such
person or entity is not relying on any representations and warranties
concerning the Acquiror Company made by the Acquiror Company or any
officer, employee or agent of the Acquiror Company, other than those
contained in this Agreement.
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9.
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Such
person or entity is acquiring the Acquiror Company Shares for such
person’s or entity’s, as the case may be, own account, for investment and
not for distribution or resale to others.
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10.
|
Such
person or entity will not sell or otherwise transfer the Acquiror
Company
Shares, unless either (a) the transfer of such securities is registered
under the Securities Act or (b) an exemption from registration of
such
securities is available.
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11.
|
Such
person or entity understands and acknowledges that the Acquiror Company
is
under no obligation to register the Acquiror Company Shares for sale
under
the Securities Act.
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12.
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Such
person or entity consents to the placement of a legend on any certificate
or other document evidencing the Acquiror Company Shares substantially
in
the form set forth in Section 4.2.5(a).
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13.
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Such
person or entity represents that the address furnished on its signature
page to this Agreement and in Exhibit
A is the principal residence if he is an individual or its
principal business address if it is a corporation or other entity.
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14.
|
Such
person or entity understands and acknowledges that the Acquiror Company
Shares have not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing authorities
have
not confirmed the accuracy or determined the adequacy of any information
concerning the Acquiror Company that has been supplied to such person
or
entity and that any representation to the contrary is a criminal
offense.
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15.
|
Such
person or entity acknowledges that the representations, warranties
and
agreements made by such person or entity herein shall survive the
execution and delivery of this Agreement and the purchase of the
Acquiror
Company Shares.
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EXHIBIT
E
NON
U.S. PERSON REPRESENTATIONS
Each
Shareholder indicating that it is not a U.S. person, severally and not jointly,
further represents and warrants to the Acquiror Company as follows:
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1.
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At
the time of (a) the offer by the Acquiror Company and (b) the acceptance
of the offer by such person or entity, of the Acquiror Company Shares,
such person or entity was outside the United States.
|
|
2.
|
No
offer to acquire the Acquiror Company Shares or otherwise to participate
in the transactions contemplated by this Agreement was made to such
person
or entity or its representatives inside the United States.
|
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3.
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Such
person or entity is not purchasing the Acquiror Company Shares for
the
account or benefit of any U.S. person, or with a view towards distribution
to any U.S. person, in violation of the registration requirements
of the
Securities Act.
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4.
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Such
person or entity will make all subsequent offers and sales of the
Acquiror
Company Shares either (x) outside of the United States in compliance
with
Regulation S; (y) pursuant to a registration under the Securities
Act; or
(z) pursuant to an available exemption from registration under the
Securities Act. Specifically, such person or entity will not resell
the
Acquiror Company Shares to any U.S. person or within the United States
prior to the expiration of a period commencing on the Closing Date
and
ending on the date that is one year thereafter (the “Distribution
Compliance Period”), except pursuant to registration under the Securities
Act or an exemption from registration under the Securities Act.
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|
5.
|
Such
person or entity is acquiring the Acquiror Company Shares for such
Shareholder’s own account, for investment and not for distribution or
resale to others.
|
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6.
|
Such
person or entity has no present plan or intention to sell the Acquiror
Company Shares in the United States or to a U.S. person at any
predetermined time, has made no predetermined arrangements to sell
the
Acquiror Company Shares and is not acting as a Distributor of such
securities.
|
|
7.
|
Neither
such person or entity, its Affiliates nor any Person acting on behalf
of
such person or entity, has entered into, has the intention of entering
into, or will enter into any put option, short position or other
similar
instrument or position in the U.S. with respect to the Acquiror Company
Shares at any time after the Closing Date through the Distribution
Compliance Period except in compliance with the Securities Act.
|
|
8.
|
Such
person or entity consents to the placement of a legend on any certificate
or other document evidencing the Acquiror Company Shares substantially
in
the form set forth in Section 4.2.5(b).
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|
9.
|
Such
person or entity is not acquiring the Acquiror Company Shares in
a
transaction (or an element of a series of transactions) that is part
of
any plan or scheme to evade the registration provisions of the Securities
Act.
|
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10.
|
Such
person or entity has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to
protect
such person’s or entity’s interests in connection with the transactions
contemplated by this Agreement.
|
|
11.
|
Such
person or entity has consulted, to the extent that it has deemed
necessary, with its tax, legal, accounting and financial advisors
concerning its investment in the Acquiror Company Shares.
|
|
12.
|
Such
person or entity understands the various risks of an investment in
the
Acquiror Company Shares and can afford to bear such risks for an
indefinite period of time, including, without limitation, the risk
of
losing its entire investment in the Acquiror Company Shares.
|
|
13.
|
Such
person or entity has had access to the Acquiror Company’s publicly filed
reports with the SEC.
|
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14.
|
Such
person or entity has been furnished during the course of the transactions
contemplated by this Agreement with all other public information
regarding
the Acquiror Company that such person or entity has requested and
all such
public information is sufficient for such person or entity to evaluate
the
risks of investing in the Acquiror Company Shares.
|
|
15.
|
Such
person or entity has been afforded the opportunity to ask questions
of and
receive answers concerning the Acquiror Company and the terms and
conditions of the issuance of the Acquiror Company Shares.
|
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16.
|
Such
person or entity is not relying on any representations and warranties
concerning the Acquiror Company made by the Acquiror Company or any
officer, employee or agent of the Acquiror Company, other than those
contained in this Agreement.
|
|
17.
|
Such
person or entity will not sell or otherwise transfer the Acquiror
Company
Shares, unless either (A) the transfer of such securities is registered
under the Securities Act or (B) an exemption from registration of
such
securities is available.
|
|
18.
|
Such
person or entity understands and acknowledges that the Acquiror Company
is
under no obligation to register the Acquiror Company Shares for sale
under
the Securities Act.
|
|
19.
|
Such
person or entity represents that the address furnished on its signature
page to this Agreement and in Exhibit
A is the principal residence if he is an individual or its
principal business address if it is a corporation or other entity.
|
|
20.
|
Such
person or entity understands and acknowledges that the Acquiror Company
Shares have not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing authorities
have
not confirmed the accuracy or determined the adequacy of any information
concerning the Acquiror Company that has been supplied to such person
or
entity and that any representation to the contrary is a criminal
offense.
|
|
21.
|
Such
person or entity acknowledges that the representations, warranties
and
agreements made by such person or entity herein shall survive the
execution and delivery of this Agreement and the purchase of the
Acquiror
Company Shares.
|
