ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the Agreement"), dated as of September 30,
1996, by and among Intermark Development Corporation, a Nevada corporation
(hereinafter called the "Company"); Kolcari Investments Limited, a British
Virgin Islands corporation (hereinafter called "Kolcari"); and the shareholders
of Kolcari (hereinafter called the "Shareholders").
RECITALS
WHEREAS, the Shareholders own or control in their respective capacity the
right to sell, transfer and exchange One Hundred (100%) percent of all of the
shares of the capital stock of Kolcari;
WHEREAS, the Company wishes to acquire all of the issued ordinary shares
of U.S.$1.00 each in the capital of Kolcari (hereinafter collectively referred
to as the "Kolcari Stock") in exchange for a total of Eight Million Eight
Hundred Thousand (8,800,000) shares of common stock of the Company, with a par
value of $0.0001(the "Common Stock") as are to equal, in the aggregate, 73.33%
of the resulting issued and outstanding capital stock of the Company
(hereinafter collectively referred to as the "Company Common Stock");
WHEREAS, the Shareholders wish to exchange their interest in the Kolcari
Stock for Company Common Stock and it is in the best interest of Kolcari for
such exchange to occur;
NOW, THEREFORE, in consideration of the premises herein contained, the
mutual covenants hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto covenant and agree as follows:
TERMS
1. Exchange of Securities. Subject to the terms and conditions
hereinafter set forth, at the time of the closing referred to in Section 7
hereof (hereinafter called the "Closing Dates"), the Company will issue and
deliver, or cause to be issued and delivered, to the Shareholders, in proportion
to their ownership of ordinary shares of Kolcari, Eight Million Eight Hundred
Thousand (8,800,000) shares of the Company Common Stock (which, in the
aggregate, shall equal 73.33% of the resulting issued and outstanding capital
stock of the Company after all conditions precedent to such issuance have been
satisfied) in exchange for which the Shareholders will deliver, or cause to be
delivered to the Company, all of the issued ordinary shares of U.S.$1.00 each in
the capital of Kolcari (hereinafter the "Exchange").
2. Representations and Warranties by Kolcari. Kolcari represents,
warrants and covenants to the Company, all of which representation and
warranties shall be true at the time of the Closing Date and shall survive the
Closing Date for a period of one (1) year therefrom, that:
a. Kolcari is duly organized, validly existing and in good standing
under the laws of the British Virgin Islands. Certified copies of the Memorandum
and Articles of Association for Kolcari have heretofore been furnished by the
directors of Kolcari to the Company and such documents are true and correct
copies of the Memorandum and Articles of Association of Kolcari and include all
amendments thereto through the date hereof;
b. Kolcari is the owner of a 70% joint venture interest in Liuzhou OVM
Construction Machinery Co., Ltd., a Sino-foreign equity joint venture ("LZ
Construction") established under the laws of the Peoples Republic of China
("PRC") and the remaining 30% joint venture interests of LZ Construction are
owned by Liuzhou OVM Joint Stock Company, Ltd., a PRC state-owned enterprise. LZ
Construction further owns Fifty (50%) percent equity interest in OVM Prestress
Co. Pte. Ltd. ("OVM Prestress"), a company incorporated in the Republic of
Singapore. OVM Prestress is primarily engaged in the business as an independent
contractor, specializing in providing engineering services related to
prestressing and construction.
c. The financial information consisting of audited consolidated
financial statements of Kolcari, for the period from May 3, 1994 (date of
incorporation) to December 31, 1995, provided to the Company by Kolcari and
prepared by Ernst & Young, Certified Public Accountants, constitute true and
correct statements of all material facts, as of such date of the financial
condition of Kolcari and of its assets, liabilities and income, and from such
date and until the Closing Date, no dividends or distributions of capital,
surplus, or profits has been paid or declared by Kolcari (in redemption of its
outstanding shares or otherwise), other than those disclosed in writing to the
Company. The audited consolidated financial statements of Kolcari provided to
the Company have been prepared in accordance with accounting standards and a
format consistent with U.S. GAAP.
d. Since December 31, 1995, Kolcari has not experienced any material
adverse changes with respect to its business condition (financial or otherwise),
results of operations, assets, contracts, liabilities or property.
e. Kolcari and LZ Construction have complied, in all material respects,
with the terms and provisions of all agreements to which they are a party and
all laws, rules, regulations and orders to which they or their assets are
subject.
f. Kolcari has not violated any law, rule, regulation or order, and is
not involved in any pending or threatened litigation, which would materially
2
adversely affect its financial condition as shown in the Kolcari financial
information referenced in Section 2.c above, which has not been provided for or
referred to in such Kolcari financial information or otherwise disclosed to the
Company.
g. Kolcari shall not, from the date hereof through the Closing Date,
engage in any transaction other than transactions in the normal course of the
operation of its business, except as specifically authorized by the Company in
writing; provided, however, the Company consents to the issuance by Kolcari of
additional ordinary shares in the capital of Kolcari to third parties from the
date hereof to the Closing Date, so long as not less than 100.0% of all such
shares are transferred to the Company on the Closing Date.
3. Representations and Warranties by the Shareholders. Each Shareholder
represents and warrants to the Company, all of which representation and
warranties shall be true at the time of the Closing Date and shall survive the
Closing Date for a period of one (1) year therefrom, that:
a. Such Shareholder has, and will have at the Closing Date, good and
marketable title to all of the shares of Kolcari Stock which it is selling,
transferring and exchanging, free and clear of any and all liens or
encumbrances.
b. Such Shareholder has the full power to exchange his or her shares in
the capital of Kolcari upon the terms provided for in this Agreement.
c. Such Shareholder understands that (i) the Company is relying upon an
exemption from registration under the Securities Act of 1933, as amended (the
"Securities Act"), as set forth in Section 4 thereof, which relate to
"transactions by an issuer not involving any public offering," and applicable
regulations promulgated by the Securities and Exchange Commission ("SEC")
thereunder or other exemption under such act; and (ii) the Company is also
relying upon the securities laws of any state on the basis that the Exchange is
a transaction exempt from the registration requirements of such laws.
d. That the Company has made available to such Shareholder and his
representative, if any, the opportunity to ask questions of and receive answers
from the Company concerning the terms and conditions of the Exchange and to
obtain any additional information desired by the Shareholder concerning the
Company.
e. That the investment by such Shareholder in the Company Common Stock
is a suitable investment for the Shareholder, given the investment goals and
objectives of the Shareholder.
f. Such Shareholder, either individually or together with his purchaser
representative, if one has been retained, has such knowledge and experience in
3
financial and business matters that he is capable of evaluating the merits and
risks of an investment in the Company Common Stock. The Shareholder understands
the effect of accepting the Exchange and the differing rights, restrictions and
obligations of a holder of Company Common Stock.
g. Such Shareholder is purchasing the Company Common Stock for his own
account, for investment purposes only, and not with a view to the sale, pledge,
hypothecation, or other distribution or disposition thereof or of any interest
therein, except as referenced in Section 3.h. below .
h. Such Shareholder understands that resale or transfer of the Company
Common Stock will be prohibited indefinitely unless either (i) the Company
causes the Company Common Stock to be registered under the Securities Act or,
(ii) an exemption from such registration is available and such resale or
transfer will not otherwise violate federal or state securities laws. Such
Shareholder further understands that a legend will be affixed to the
certificates representing the Company Common Stock setting forth the forgoing
limitations.
4. Representation and Warranties by the Company. The Company
represents, warrants and covenants to the Shareholders, all of which
representations and warranties shall be true at the time of the Closing Date and
shall survive the Closing Date for a period of one (1) year therefrom, that:
a. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada and has the corporate power
to own its properties and carry on its business as now being conducted and has
authorized capital stock consisting of 40,000,000 shares of common stock, with a
par value of $.0001, of which 3,200,000 shares of common stock are presently
issued and outstanding to shareholders. Certified copies of the Articles of
Incorporation, Amendments of the Articles of Incorporation and the By-Laws for
the Company have heretofore been furnished by the Company to the Shareholders
and Kolcari and such documents are true and correct copies of the Articles of
Incorporation and the By-Laws of the Company and include all amendments thereto
through the date hereof. No other securities of the Company, other than the
above described shares, are or will be issued, outstanding or agreed to be
issued as of the date hereof and on the Closing Date.
b. The Company has all of the necessary corporate power and authority
to execute, deliver and perform this Agreement and to issue and deliver the
Company Common Stock and any other shares of the Company's common stock required
to be delivered hereunder.
c. The audited financial statements of the Company prepared by Xxxxxxxx
X. Xxxxx, Certified Public Accountants, for the periods ended December 31, 1995
and June 30, 1996, attached hereto as Schedule 4.c, constitute true and correct
statements as of such date of the financial condition of the Company and of its
4
asset, liabilities and income, prepared in accordance with U.S.GAAP consistently
applied and that from such date and until the Closing Date, no dividends or
distributions of capital, surplus, or profits has been, or will be, paid or
declared by the Company (in redemption of its outstanding shares or otherwise)
and no additional shares have been, or will be, issued by the Company.
d. The Company has and will have on the Closing Date, good and
marketable title to all of its property and assets free and clear of any and all
liabilities, liens, encumbrances or restrictions and there are no pending or
threatened actions or claims against them of any kind, except as shown on
Schedule 4.d hereto and except for taxes and assessments due and payable after
the Closing Date and easements or minor restrictions with respect to its real
property which do not materially affect the present value or use of such real
property.
e. Schedule 4.e sets forth all of the contracts to which the Company is
a party. The Company does not have, nor will it have on the Closing Date, any
long-term contracts ("long-term" being defined as any contract other than those
cancelable by the Company without penalty on the giving of no more than ninety
(90) days notice).
f. Since June 30, 1996, neither the Company nor its affiliates, if any,
have experienced any material adverse changes with respect to their business
condition (financial or otherwise), results of operations, assets, contracts,
liabilities or property.
g. The Company has complied, in all material respects, with the terms
and provisions of all agreements to which it is a party and all laws, rules,
regulations and orders or to which it or its assets are subject.
h. The Company has not violated any law, rule, regulation or order, and
is not involved in any pending or threatened litigation, which would materially
adversely affect its financial condition as shown by its audited financial
statements, dated June 30, 1996 (Schedule 4.c hereto), which has not been
provided for on such audited financial statements, referred to in such audited
financial statements or disclosed, in writing, to Kolcari.
i. The Company shall not, from the date hereof through the Closing
Date, engage in any transaction other than transactions in the normal course of
the operation of its business, except as specifically authorized by Kolcari in
writing. Kolcari authorizes the sale, assignment and transfer of the assets of
the Company set forth on Schedule 4.i in accordance with the terms of this
Agreement.
5
j. The Company does not have a defined Non-qualified Stock Option and
Stock Appreciation Rights Plan in place, nor will it have on the Closing Date,
any pension plan, profit sharing plan, or stock-purchase plan for any of its
employees. The creation of a plan was authorized by the Board of Directors of
the Company on September 4, 1996 and approved by written consent of a majority
of the shareholder on September 5, 1996. The Board of Directors, at a future
date is authorized to instruct the Company's attorney to prepare a Non-qualified
Stock Option and Stock Appreciation Rights Plan.
k. Neither the execution or delivery of this Agreement, nor the
issuance of the Company Common Stock or other shares to be issued hereunder, nor
the performance, observance or compliance with the terms and provisions of this
Agreement, will violate any provision of law, any order of any court or other
governmental agency, the Articles of Incorporation or By-laws of the Company or
any indenture, agreement or other instrument to which the Company is a party, or
which the Company is bound or by which any of its property is bound.
l. The Company Common Stock deliverable hereunder will, upon their
delivery in accordance with the terms hereof, be duly authorized, validly
issued, fully paid and non-assessable.
m. All of the issued and outstanding shares of Company's Common Stock
and the Company's Common Stock to be issued to Kolcari, shall be duly
authorized, validly issued, fully paid and non-assessable. The Company's Common
Stock is not currently listed for trading on the NASDAQ Bulletin Board, no
application for listing on the NASDAQ Bulletin Board has been filed by the
Company as of this date and the Common Stock of the company does not presently
trade on any other recognized stock exchange.
n. The Company and its subsidiaries, if any, have complied with all
applicable foreign, federal and state laws, rules and regulations, including,
without limitation, the requirements of the Exchange Act and the Securities Act.
o. The Company is not required to file reports under Section 12(g) of
the Exchange Act.
p. As of the Closing Date, the Company will have paid all outstanding
obligations of the Company relating to sales tax, use tax, Social Security Tax,
Federal Income Withholding Tax, all foreign, federal and state income tax,
workmen's compensation, unemployment compensation taxes of the Company and any
other foreign, federal and state taxes incurred by the Company prior to the
Closing Date.
q. The Company hereby acknowledges that the shares of Kolcari to be
exchanged for the Company Common Stock are not registered under the Securities
Act or the laws of any other jurisdiction and are subject to restrictions on
their transfer and resale under applicable federal and state law.
6
r. The Company understands that (i) in agreeing to transfer their
Kolcari Stock to the Company in the Exchange, the Shareholders are relying upon
an exemption from registration under the Securities Act, as set forth in Section
4 thereof, which relate to private resales of restricted securities; and (ii)
the Shareholders are also relying upon the securities laws of any state on the
basis that the Exchange is a transaction exempt from the registration
requirements of such laws.
s. That Kolcari has made available to the Company the opportunity to
ask questions of and receive answers from Kolcari concerning the terms and
conditions of the Exchange and to obtain any additional information from Kolcari
or the Shareholders desired by the Company concerning Kolcari or the
Shareholders.
t. That the investment by the Company in the Kolcari Stock is a
suitable investment for the Company, given the investment goals and objectives
of the Company.
u. The Company has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Kolcari Stock. The Company understands the effect of accepting
the Exchange and the differing rights, restrictions and obligations of a holder
of Kolcari Stock.
v. The Company has had access to and has thoroughly reviewed all
documents and instruments, including but not limited to the Memorandum and
Articles of Association, of Kolcari, as amended, and have been able to obtain
such information, and has had the opportunity to ask all questions of, and
receive answers from Kolcari and the Shareholders, which it deems necessary or
relevant to an investment in the Kolcari Stock and has utilized such opportunity
to the extent deemed necessary by the Company to allow it to make a fully
informed decision to purchase the Kolcari Stock described herein.
w. The Company is purchasing the Kolcari Stock for its own account, for
investment purposes only, and not with a view to the sale, pledge,
hypothecation, or other distribution or disposition thereof or of any interest
therein.
x. The Company understands that resale or transfer of the Kolcari Stock
will be prohibited indefinitely unless the Kolcari Stock is registered under the
Act or an exemption from such registration is available and such resale or
transfer will not otherwise violate federal or state securities laws.
y. The Company is domiciled and has its principle headquarters in the
State of Nevada.
7
z. The Company has relied solely upon written materials and
investigations made by the Company in making the decision to acquire the Kolcari
Stock, and has not relied upon undocumented representations of Kolcari or the
Shareholders.
aa. Notwithstanding anything set forth in this Agreement to the
contrary, the Company acknowledges that after the acquisition of Kolcari, it is
the intention of the Company to negotiate with third parties for the possible
issuance of additional shares of common stock of the Company to acquire other
corporations by the exchange of common stock or for the sale of additional
shares of common stock to increase the operating capital of the Company.
Therefore, the Company acknowledges and consents that the number of shares
outstanding and number of shareholders of the Company may change after the date
hereof and the financial condition of Company may change to reflect the results
of any such issuances for assets or another corporation or may change to reflect
the proceeds from a future sale of common stock.
ab. Immediately prior to the closing of the acquisition of Kolcari by the
Company, the Company will take such action as required to obtain shareholder
approval by written consent, pursuant to the Nevada Revised Code, to Amend
Article I of the Articles of Incorporation and change the Company name from
Intermark Development Corporation to OVM International Holding Corporation.
5. Conditions to the Obligations of the Company. The obligations of the
Company hereunder are subject to the following conditions as of the date hereof
and the Closing Date.
a. The Company shall not have discovered any material error or
misstatement in any of the representations and warranties made by the
Shareholders or Kolcari and all of the terms and conditions of this Agreement to
be performed and complied with prior to the Closing Date have been performed and
complied with on or prior to the Closing Date.
b. Kolcari is in compliance with all covenants set forth herein.
c. There have been no substantial adverse change in the condition
(financial, business or otherwise) of Kolcari from December 31, 1995 to the
Closing Date, except for changes resulting from operations in the usual and
ordinary course of business.
d. Kolcari has received all corporate, regulatory and other third party
approvals and authorizations necessary to consummate the Exchange.
6. Conditions to the Obligations of the Shareholders and Kolcari. The
obligations of the Shareholders and Kolcari hereunder are subject to the
following conditions:
a. The Shareholders or Kolcari shall not have discovered any material
error or misstatement in any of the representations or warranties made by the
Company herein and all the terms and conditions of the Agreement to be performed
and complied with by the Company herein to the Closing Date have been performed
and complied with on or prior to the Closing Date.
b. The Company is in compliance with all covenants set forth herein.
c. There have been no material adverse change in the conditions
(financial, business or otherwise) of the Company from June 30, 1996 to the
Closing Date, except for changes resulting from operations in the usual and
ordinary course of business, except for the private placements of 2,800,000
shares of common stock at $.02 per share (post-reverse split) on September 3,
1996, this private offering was undertaken pursuant to exemptions available
under Regulation D, Rule 504 of the Securities Act.
d. As of the Closing date the Kolcari Shareholders shall have received
the opinion of Xxxxxx X. Xxxxx, counsel for the Company, to the effect and in
the form described in Schedule 6.c hereto.
e. As of the Closing date the Company shall have received all
corporate, regulatory and other third party approvals and authorizations
necessary to consummate the Exchange.
f. As of the Closing Date, (i) the Company and its assets shall have no
material liabilities (contingent or otherwise) or pending or threatened claims
against them of any kind, (ii) the Company shall provide for the satisfaction or
discharge of all existing claims, liens, choses in action and other encumbrances
or obligations of any sort whatsoever against the Company or any of its assets,
and (iii) the Company shall have paid the costs associated with the acquisition
of Kolcari by the Company.
g. The delivery to the Shareholders and Kolcari of the Due Diligence
Checklist, the form of which is attached hereto as Exhibit 8.a(7), executed by a
principal officer and each director of the Company attesting that all of the
information, documents, instruments, representations and disclosures set forth
therein or attached thereto are true, correct and complete in all material
aspects and not misleading.
h. As of the Closing Date, the delivery to the Shareholders of Kolcari
of indemnifications from those officers and directors set forth on Schedule
8.a(8) in the form attached hereto as Exhibit 8.a(8) which among other things,
sets forth their indemnification and agreement to hold the Company, Kolcari and
the Shareholders harmless from all existing claims, suits, liens, choses in
action and other encumbrances and obligations (contingent or otherwise) of
9
any sort whatsoever against the Company, Kolcari or the Shareholders or any of
their assets now existing or which may arise in the future and relate, directly
or indirectly to the activities of the Company prior to and in connection with
this Agreement and the Exchange.
7. Closing Date. The Closing Date shall take place on, or prior, to
November 15, 1996 at the offices of Atlas, Xxxxxxxx, Trop & Borkson, 000 Xxxxx
Xxx Xxxx Xxxxxxxxx, Sun Sentinel Building, Suite 1900, Ft. Xxxxxxxxxx, Xxxxxxx
00000, or at such other time and place as the parties hereto shall mutually
agree.
8. Actions at Closing. At closing, the Company and the Shareholders
will each deliver, or cause to be delivered to the other, the securities to be
exchanged in accordance with Section 1 of this Agreement, and each party shall
pay any and all taxes required to be paid in connection with the issuance and
delivery of its own securities. All share certificates shall be in the name of
the party to which the same are deliverable except the Shareholders' shares,
which will be accompanied by an instrument of transfer executed in favor of the
Company.
In addition, the following shall occur at Closing:
a. The Company will deliver to the Shareholders:
(1) Duly certified copies of all corporate resolutions and other
corporate proceedings taken by the Company to authorize the execution, delivery
and performance of this Agreement.
(2) The opinion of Xxxxxx X. Xxxxx counsel for the Company, as provided
for in Section 6.c hereof.
(3) A Certificate executed by a principal officer and each director of
the Company attesting that all of the representations and warranties of the
Company are true and correct as of the Closing Date, and that all of the
conditions to the obligations for the Shareholders to be performed by the
Company have been performed as of the Closing Date.
(4) A Certificate of Incumbency and signatures of the officers of the
Company dated as of the date of this Agreement.
(5) The written resignations of all directors and such officers and
auditors of the Company as are required by the Shareholders, which resignations
will contain an acknowledgment from each of them that they have no claims
against the Company for loss of office, unpaid compensation, or otherwise.
(6) All registration certificates, statutory books, minute books and
common seal of the Company, all accounts books and all documents and papers in
connection with the affairs of the Company and all documents of title relating
to the Company's assets (unless already in the possession of the Shareholders)
as are required by the Shareholders.
10
(7) The Due Diligence Checklist, the form of which is attached hereto as
Exhibit 8.a(7), executed by a principal officer and each director of the Company
attesting that all of the information, documents, instruments, representations
and disclosures are true, accurate, correct and complete in all material
respects and not misleading.
(8) The indemnifications described in Section 6(h) hereof.
b. The Shareholders will deliver to the Company:
(1) A Certificate of the Shareholders signed by each Shareholder that
each of the representations and warranties of the Shareholders are true and
correct as of the Closing Date and that all of the Conditions to the Obligations
of Kolcari, specified in Section 6 of of this Agreement to be performed by the
Shareholders have been performed as of the Closing Date.
c. Kolcari will deliver to the Company:
(1) A Certificate executed by a principal officer of Kolcari attesting
that all of the representations and warranties of Kolcari are true and correct
as of the Closing Date, and that all the conditions to the obligations for
Kolcari to be performed by Kolcari have been performed as of the Closing Date.
(2) The Due Diligence Checklist, the form of which is attached hereto as
Exhibit 8.c(2), executed by a principal officer and each director of Kolcari
attesting that all of the information, documents, instruments, representations
and disclosures are true, accurate, correct and complete in all material
respects and not misleading.
9. Confidential Information: Delivery; Return: NonDisclosure.
a. Delivery of Information. Until the earlier of the Closing Date or
the termination of this Agreement (such date hereinafter the "Termination
Date"), pursuant to the terms of this Agreement:
(1) Kolcari has provided and will provide the Company and its officers,
directors, employees, agents, counsel, accountants, financial advisors,
consultants and other representatives (together "Company Representatives") with
full access, upon reasonable prior notice, to all officers, employees and
accountants of Kolcari and LZ Construction and to their assets, properties,
contracts, books, records and all such other information and data concerning the
11
business and operations of Kolcari as the Company Representatives reasonably may
request in connection with such investigation, but only to the extent that such
access does not unreasonably interfere with the business and operations of
Kolcari.
(2) the Company has provided and will provide the Shareholders and
Kolcari and its officers, directors, employees, agents, counsel, accountants,
financial advisors, consultants and other representatives (together "Kolcari
Representatives") with full access, upon reasonable prior notice, to all
officers, employees and accountants of the Company and its subsidiaries and to
their assets, properties, contracts, books, records and all such other
information and data concerning the business and operations of the Company and
its subsidiaries as the Kolcari Representatives reasonably may request in
connection with such investigation.
b. Acknowledgements: definitions:
(1) The Company has been and, pursuant to the terms of this Section,
shall continue to be privy to certain proprietary and confidential information
of Kolcari and/or the Shareholders (the "Kolcari Confidential Information"). As
used herein, the term "Kolcari Confidential Information" shall include, but not
be limited to, any and all information or documentation whatsoever which has
been disclosed or made available to the Company by Kolcari, the Shareholders or
LZ Construction, regarding their products, services, techniques, manufacturing
or other processes, activities, businesses, properties, operations, clients,
customers, prospective clients, price lists, suppliers, business associates,
equipment, Trade Secrets (as defined herein), computer software, scientific
discoveries, experiments, data, equipment designs, training, devices, charts,
manuals, payroll, financial statements and improvements thereto and any other
information or materials disclosed or delivered to the Company which the
disclosing party may from time to time designate and treat as confidential,
proprietary or as a trade secret, including all information relating (directly
or indirectly) to the material set forth in the Kolcari business plan delivered
or to be delivered to the Company and all information defined as "high
technology" by applicable Nevada or other law.
(2) Kolcari and/or the Shareholders have been and, pursuant to the terms
of this Section, shall continue to be privy to certain proprietary and
confidential information of the Company (the "Company Confidential
Information"). As used herein, the term "Company Confidential Information" shall
include, but not be limited to, any and all information or documentation
whatsoever which has been disclosed or made available to Kolcari and/or the
Shareholders regarding its products, services, techniques, manufacturing or
other processes, activities, businesses, properties, operations, clients,
customers, prospective clients, price lists, suppliers, business associates,
equipment, Trade Secrets (as defined herein), computer software, scientific
12
discoveries, experiments, data, equipment designs, training devices, charts,
manuals, payroll, financial statements and improvements thereto and any other
information or materials disclosed or delivered to Kolcari and/or the
Shareholders which the disclosing party may from time to time designate and
treat as confidential, proprietary or as a trade secret.
(3) Reference to "Confidential Information" herein shall include and
relate to both Kolcari Confidential Information and the Company Confidential
Information.
(4) As used herein, the term "Trade Secret" shall mean the whole or any
portion of any formula, pattern, device, combination of devices, or compilation
of information which is for use, or is used in the operation of the other
party's businesses and which provides such party's business an advantage, or an
opportunity to obtain an advantage, over those who do not know or use it. For
purposes of interpretation hereunder the following shall apply:
Irrespective of novelty, invention, patentability, the state of the prior
art, and the level of skill in the business, art or field to which the subject
matter pertains, when the owner thereof takes measures to prevent it from
becoming available to persons other than those selected by the owner to have
access thereto for limited purposes, a trade secret is considered to be secret,
of value, for use or in use by the business, and of advantage to the business,
or providing an opportunity to obtain an advantage, over those who do not know
or use it.
In addition, a "Trade Secret" shall include information (not readily
compiled from publicly available sources) which has been made available by
Kolcari and/or the Shareholders to the Company or by the Company to Kolcari
and/or the Shareholders, as the case may be, during the course of their
involvement with each other, including but not limited to the names, addresses,
telephone numbers, qualifications, education, accomplishments, experience and
resumes of all persons who have applied or been recruited for employment, for
either or both permanent and temporary jobs, job order specifications and the
particular characteristics and requirements of persons generally hired by the
disclosing party, as well as specific job listings from companies with whom the
disclosing party does, or attempts to do, business, as well as mailing lists,
computer runoffs, financial or other information not generally available to
others.
c. Non-Disclosure: the Company:
(1) The Company, for itself, its officers, employees, directors, agents,
affiliates, subsidiaries, independent contractors, and related parties (all of
whom are to be deemed included in any reference herein to the Company) agrees
that it will not at any time during or after the termination or expiration
13
of this Agreement, except as authorized or directed herein or in writing by
Kolcari and/or the Shareholders, use for the Company's own benefit, copy,
reveal, sell, exchange or give away, disclose, divulge or make known or
available in any manner to any person, firm, corporation or other entity
(whether or not the Company receives any benefit therefrom), any Kolcari
Confidential Information.
(2) The Company will take all actions necessary to ensure that the Kolcari
Confidential Information is maintained as secret and confidential and its
disclosure shall only be made, to the extent necessary, to a limited group of
the Company's employees, officers and/or directors who are actually engaged in
the evaluation of the Kolcari Confidential Information; provided, however, the
Company acknowledges and agrees that it shall be responsible and held liable for
the actions or inactions of such employees, officers and directors (regardless
whether or not such actions or inactions are within their scope of employment)
with respect to the maintenance of the secrecy and confidentiality of the
Kolcari Confidential Information.
(3) The Company understands that if it discloses to others, use for its
own benefit (other than as part of an agreement with Kolcari and the
Shareholders, which contemplates such use) or for the benefit of any person or
entity other than Kolcari and/or the Shareholders, copies or makes notes of any
such Kolcari Confidential Information, such conduct will constitute a breach of
the confidence and trust bestowed upon the Company by Kolcari and the
Shareholders and will constitute a breach of this Agreement and render the
Company responsible for any and all damages suffered by Kolcari and/or the
Shareholders as a result thereof.
(4) Provided, however, notwithstanding the foregoing, the terms of this
subsection (c) shall not be applicable to any information which the Company is
compelled to disclose by judicial or administrative process or by other
requirements of law (including, without limitation, in connection with obtaining
the necessary approvals of the Exchange of governmental or regulatory
authorities).
d. Non-Disclosure: Kolcari and the Shareholders:
(1) Kolcari and the Shareholders, for themselves, their officers,
employees, directors, agents, affiliates, subsidiaries, independent contractors,
and related parties (all of whom are to be deemed included in any reference
herein to Kolcari and the Shareholders) agree that they will not at any time
during or after the termination or expiration of any agreement or negotiations
for an agreement with the Company, except as authorized or directed herein or in
writing by the Company, use for Kolcari and the Shareholders' own benefit, copy,
14
reveal, sell, exchange or give away, disclose, divulge or make known or
available in any manner to any person, firm, corporation or other entity
(whether or not Kolcari and the Shareholders receive any benefit therefrom), any
Company Confidential Information. The obligations and undertakings of Kolcari
and the Shareholders under Section 9.d. shall not apply to any disclosures made
by Kolcari and/or the Shareholders to their respective shareholders, investors
and/or fund managers.
(2) Kolcari and the Shareholders will take all actions necessary to
ensure that the Company Confidential Information is maintained as secret and
confidential and its disclosure shall only be made, to the extent necessary, to
a limited group of Kolcari and/or the Shareholders' own employees, officers,
directors and/or professional advisors who are actually engaged in the
evaluation of the Company Confidential Information; provided, however, Kolcari
and the Shareholders acknowledge and agree that they shall be responsible and
held liable for the actions or inactions of such employees, officers, directors
and/or professional advisors (regardless whether or not such actions or
inactions are within their scope of employment) with respect to the maintenance
of the secrecy and confidentiality of the Company Confidential Information.
(3) Kolcari and the Shareholders understand that if they disclose to
others, uses for their own benefit (other than as part of an agreement with the
Company, which contemplates such use) or for the benefit of any person or entity
other than the Company, copies or makes notes of any such Company Confidential
Information, such conduct will constitute a breach of the confidence and trust
bestowed upon Kolcari and the Shareholders by the Company and will constitute a
breach of this Agreement and render Kolcari and the Shareholders severally
responsible for any and all damages suffered by the Company as a result thereof.
(4) Provided, however, notwithstanding the foregoing, the terms of this
subsection (d) shall not be applicable to any information which Kolcari and/or
the Shareholders are compelled to disclose by judicial or administrative process
or by other requirements of law (including, without limitation, in connection
with obtaining the necessary approvals of the Exchange of governmental or
regulatory authorities).
e. Return of Information:
(1) At any time after the Termination Date, upon request of Kolcari or
any Shareholder, the Company will, and will cause the Company Representatives
to, promptly (and in no event later than five days after such request) redeliver
or cause to be redelivered to Kolcari all Kolcari Confidential Information and
destroy or cause to be destroyed all notes, memoranda, summaries, analyses,
15
compilations and other writings relating thereto or based thereon prepared by
the Company or any Company Representative. Such destruction shall be certified
in writing to Kolcari by an authorized officer supervising such destruction.
(2) At any time after the Termination Date, upon request of the Company,
the Shareholders and/or Kolcari will, and will cause the Kolcari Representatives
to, promptly (and in no event later than five days after such request) redeliver
or cause to be redelivered to the Company all Company Confidential Information
and destroy or cause to be destroyed all notes, memoranda, summaries, analyses,
compilations and other writings relating thereto or based thereon prepared by a
Shareholder, Kolcari or Kolcari Representatives. Such destruction shall be
certified in writing to the Company by an authorized officer supervising such
destruction.
10. Equitable Relief. The Company and the Shareholders agree that money
damages would not be a sufficient remedy for any breach of any provision set
forth in Sections 9, 11 or 12 by the other, and that, in addition to all other
remedies which any party hereto may have, each party will be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach. No failure or delay by any party hereto in exercising any
right, power or privilege hereunder will operate as a waiver thereof, nor will
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.
11. Conduct and Business.
a. Between the date hereof and the Closing Date, Kolcari shall conduct
its business in the same manner in which it has heretofore been conducted, and
the Shareholders will not permit Kolcari to; (l) enter into any contracts,
agreements, arraignments, etc., other than in the ordinary course of business,
or (2) declare or make any distribution of any kind to the shareholders of
Kolcari without first obtaining the written consent of the Company.
b. Between the date hereof and the Closing Date, the Company shall
conduct its business in the same manner in which it has heretofore been
conducted, and the Company will not; (1) enter into any contracts, agreements,
arraignments, etc., other than in the ordinary course of business, or (2)
declare or make any distribution of any kind to the shareholder" of the Company
without first obtaining the written consent of Kolcari. Further, also during
such time period, the Company hereby agrees that neither the Company nor any of
its affiliates or associates (as such terms are defined in Rule 12b-2 under the
Exchange Act) will, and the Company and they will not assist or encourage others
to, directly or indirectly, (l) sell or dispose of or agree, offer, seek or
propose to sell or dispose of (or request permission to do so from any person)
ownership (including, but not limited to, beneficial ownership as defined in
16
Rule 13d-3 under the Exchange Act) of (x) any of the assets or business of the
Company, (y) any securities of the Company (whether outstanding or to be issued)
or (z) any rights or options to acquire such ownership (including to or from a
person other than the Company), or (2) enter into any discussions, negotiations,
arrangements or understandings with any person or entity with respect to any of
the foregoing. The restrictions contained in the forgoing sentence shall not be
applicable to ordinary brokerage or trading transactions by a securities broker
or dealer or purchases by an institutional investor solely for investment
purposes aggregating less than 5% of the Company's outstanding voting
securities.
12. No Public Disclosure.
a. Kolcari and the Shareholders hereby acknowledge that they are aware
(and that the Kolcari Representatives who have been apprised of this Agreement
and the Shareholders' consideration of the Exchange have been, or upon becoming
so apprised will be advised) of the restrictions imposed by federal and state
securities laws on a person possessing material "non-public" information about a
company with a class of securities registered under the Exchange Act. In this
regard, each such Shareholder agrees that while it is in possession of material
non-public information with respect to the Company and its subsidiaries, the
Shareholder will not purchase or sell any securities of the Company, or
communicate such information to any third party, in violation of any such laws.
b. Without the prior written consent of the other, neither the
Shareholders or Kolcari, on the one hand, nor the Company, on the other, will,
and will each cause their respective representatives not to, make any release to
the press or other public disclosure with respect to either the fact that
discussions or negotiations are taking place concerning the Exchange, the
existence or contents of this Agreement or any prior correspondence relating to
this transaction, except for such public disclosure as may be necessary, in the
written opinion of outside counsel (reasonably satisfactory to the other party)
for the party proposing to make the disclosure not to be in violation of or
default under any applicable law, regulation or governmental order. If either
party proposes to make any disclosure based upon such an opinion, that party
will deliver a copy of such opinion to the other party, together with the text
of the proposed disclosure, as far in advance of its disclosure as is
practicable, and will in good faith consult with and consider the suggestions of
the other party concerning the nature and scope of the information it proposes
to disclose.
13. Brokerage Fee. Each party hereto represents that no brokers have
been employed in this transaction for which the other party could or will become
liable. The parties acknowledge that a one-time only finders fee in the amount
of Fifty Thousand ($50,000) has been paid to Wistow Holdings Limited, by the
Company.
17
14. Agreement to Indemnify. Subject to the terms and conditions of this
Section, the Company hereby agrees for a period of One (1) year to indemnify,
defend and hold Kolcari and the Shareholders harmless from and against all
demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses, including without limitation, interest,
penalties, court costs and reasonable attorneys fees (including paralegal and
law clerk fees and other legal expenses and costs) and expenses, asserted
against, relating to, imposed upon or incurred by Kolcari or the Shareholders by
reason of or resulting from a breach of (i) any representation or warranty given
by the Company contained in or made pursuant to this Agreement, or (ii) any
provision set forth in this Agreement by the Company or the Company
Representatives.
Subject to the terms and conditions of this Section, Kolcari hereby agrees
for a period of one (1) year to indemnify, defend and hold the Company harmless
from and against all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including without limitation,
interest, penalties, court costs and reasonable attorneys' fees (including
paralegal and law clerk fees and other legal expenses and costs) and expenses,
asserted against, relating to, imposed upon or incurred by the Company by reason
of or resulting from a breach of (i) any representation or warranty given by
Kolcari contained in or made pursuant to this Agreement, or (ii) any provision
set forth in this Agreement by the Shareholders, Kolcari or the Kolcari
Representatives.
All of the foregoing are hereinafter collectively referred to
as "Claims" and singularly as a "Claim."
a. Conditions of Indemnification. The obligations and liabilities of
the Shareholders, Kolcari and the Company, with respect to Claims resulting from
the assertion of liability by third parties, shall be subject to the following
terms and conditions:
(1) The party hereto seeking indemnification (the "Indemnitee") will
give the other party hereto (the "Indemnitor") notice of any such Claim
reasonably promptly after the Indemnitee receives notice thereof, and the
Indemnitor will undertake the defense thereof by representatives of its own
choosing.
(2) In the event that the Indemnitor, within ten (10) business days
after notice of any such Claim, fails to defend such Claim, the Indemnitee will
(upon giving written notice to the Indemnitor) have the right, but not the
obligation, to undertake the defense, compromise or settlement of such Claim on
behalf of and for the account and risk of the Indemnitor, subject to the right
of the Indemnitor to assume the defense of such Claim at any time prior to
settlement, compromise or final determination thereof.
18
(3) Anything in this Section to the contrary notwithstanding, if there
is a reasonable probability that a Claim may materially and adversely affect the
Indemnitee other than as a result of money damages or other money payments, the
Indemnitee shall have the right to defend, compromise or settle such Claim, in
good faith, on behalf of and for the account and risk of the Indemnitor.
However, the Indemnitee shall not, without the Indemnitor's written consent,
settle or compromise any Claim or consent to entry of any judgment which does
not include an unconditional release from all liability in respect of such
Claim, other than liability specified in the settlement, from the claimant or
plaintiff to the Indemnitor and the Indemnitee. To the greatest extent
reasonably possible, the parties shall attempt to obtain general releases from
such plaintiff or claimant.
15. Cost and Expenses. Each party hereto shall pay its own costs and
expenses incident to the negotiation and preparation of this Agreement and to
the consummation of the transaction contemplated herein.
16. Miscellaneous.
a. Waiver: Strict Construction. No change or modification of this
Agreement shall be valid unless the same is in writing and signed by all the
parties hereto. No wavier of any provision of this Agreement shall be valid
unless in writing and signed by the person against whom sought to be enforced.
The failure of any party at any time to insist upon strict performance of any
condition, promise, agreement or understanding set forth and shall not be
construed as a waiver of relinquishment of the right to insist upon strict
performance of the same condition, promise, agreement or understanding at a
future time.
b. Entire Agreement. This Agreement, together with all schedules and
exhibits, sets forth all of the promises, agreements, conditions,
understandings, warranties and representations among the parties hereto, and
there are no promises, agreements, conditions, understandings, warranties or
representations, oral or written, express or implied, among them other than as
set forth herein. This Agreement is, and is intended by the parties to be, an
integration of any and all prior agreements or understandings, oral or written.
c. Headings. The headings in this Agreement are inserted for
convenience of reference only and are not to be used in construing or
interpreting the provisions of this Agreement.
d. Counterparts. This Agreement may be executed in two or more
identical counterparts, each of which will be deemed an original and all of
which will constitute one instrument.
19
e. Construction. Unless the context clearly otherwise requires the use
of the singular will include the plural and the use of the plural will include
the singular, and the use of any gender will include the other two genders.
f. Severability. If a covenant or provision provided in this Agreement
is deemed to be contrary to law, that covenant or provision will be deemed
separable from the remaining covenants and provisions of this Agreement, and
will not affect the validity, interpretation, or effect of the other provisions
of either this Agreement or any agreement executed pursuant to it or the
application of that covenant or provision to other circumstances not contrary to
law.
g. Computation of Time. Whenever the last day for the exercise of any
privilege or the discharge of any duty hereunder falls upon Saturday, Sunday, or
any public or legal holiday, whether Nevada or federal, the party having the
privilege or duty will have until 5:00 p.m. Pacific Standard Time on the next
succeeding regular business day to exercise the privilege or discharge the duty.
h. Interpretation. No provision of this Agreement will be construed
against or interpreted to the disadvantage of any party by any court or other
governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.
i. Governing Law. This Agreement and the obligations of the parties
hereunder will be interpreted, construed, and enforced in accordance with the
Laws of the State of Nevada, and the parties hereto specifically consent to the
jurisdiction and venue of the courts in Las Vegas, Nevada or a city determined
by mutual consent of the parties.
j. Attorneys' Fees. In the event a lawsuit is brought by either party to
enforce or interpret the terms hereof, or for any dispute arising out of this
transaction, the party prevailing in any such lawsuit shall be entitled to
recover from the non-prevailing party its costs and expenses thereof, including
its legal fees in reasonable amount and prejudgment and post-judgment interest
at the highest rate allowable under Nevada law.
k. Assignment. This Agreement shall not be assignable by either party
without the prior written consent of the other.
1. Notices. All notices, requests, instructions or other documents to
be given hereunder shall be in writing and sent by registered mail:
20
If to Kolcari, then:
Kolcari Investments Limited
x/x Xxxx Xxxxxxx Xxxxxxx
Xx 0000, 20/F Universal Trade Xxxxxx
0-0X Xxxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Attn: Xxxx Xxx
with copies to:
Xxxxx Xxxxxxxxx, Esq.
Atlas, Xxxxxxxx, Trop, & Borkson
000 Xxxxx Xxx Xxxx Xxxx.
Sun Sentinel Building, Suite 1900
Ft. Xxxxxxxxxx, Xxxxxxx 00000;
and
Ching Lung Xx
Xxxxxx Xxxxxxxxxx Xxxxxxxx, 00/X
00-00 Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx, Xxxx Xxxx
If to the Company, then:
Xxxxxxx Xxxxx, President
Intermark Development Corporation
c/o Xxxxxx Xxxxx, Esq.
West 000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
with copies to:
Xxxxxx X. Xxxxx, Esq.
West 000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
If to the Shareholders then:
To the names and addresses of the Shareholders set out on the signature
page of this Agreement.
m. Benefit and Burden. This Agreement shall inure to the benefit of,
and shall be binding upon, the parties hereto and their legatees, distributees,
estates, executors or administrators, successors and assigns, and personal and
legal representatives.
n. Execution in Counterpart. This Agreement may be signed in
counterpart.
21
IN WITNESS WHEREOF, on the date first written above, the parties hereto
have duly executed this Agreement and the Company and Kolcari have caused their
corporate seal to be affixed hereto as of the date and year first above written,
except that the minority shareholders of Kolcari (the "Minority Shareholders"
i.e. Nomura/Jafco East Asia Growth Fund, NJI No. 1 (A) Investment Fund and NJI
No.1 (B) Investment Fund) which have executed this Agreement on November 4,
1996.
Intermark Development Corporation, a Nevada corporation
By: __________________________
Xxxxxxx X. Xxxxx
Its: President
ATTEST: __________________________
Xxxxx X. Xxxxx
Its: Secretary
Kolcari Investments Limited, a British Virgin Islands corporation
By: __________________________
Ching Lung Po
Its: Chairman
ATTEST: __________________________
Wan Xxxx Xxx
Its: Secretary
MAJORITY SHAREHOLDER OF KOLCARI INVESTMENTS LIMITED:
Hoi Wai Investments Limited
x/x Xxxx Xxxxxxx Xxxxxxx
Xxxx 0000, 20/F., Universal Trade Center,
0-0X Xxxxxxxxx Xxxx, Xxxxxxx,
Xxxx Xxxx
By: __________________________
Ching Lung Po
Its: Managing Director
ATTEST: __________________________
Wan Xxxx Xxx
Its: Secretary
22
MINORITY SHAREHOLDERS OF KOLCARI INVESTMENTS LIMITED
Nomura/Jafco East Asia Growth Fund
0 Xxxxxxx Xxxx #00-00
Xxxxxxxxx, 000000
Xxxxxxxx xx Xxxxxxxxx
By: __________________________
Xxxxxxxxx Xxxxxxx, Agent
NJI Xx. 0 (X) Xxxxxxxxxx Xxxx
x/x Xxxxxx/Xxxxx Xxxxxxxxxx (Xxxx) Ltd
0 Xxxxxxx Xxxx #00-00
Xxxxxxxxx, 000000
Republic of Singapore
By: __________________________
Xxxxxxxxx Xxxxxxx, Agent
NJI Xx. 0 (X) Xxxxxxxxxx Xxxx
x/x Xxxxxx/Xxxxx Xxxxxxxxxx (Xxxx) Ltd
0 Xxxxxxx Xxxx #00-00
Xxxxxxxxx, 000000
Republic of Singapore
By: __________________________
Xxxxxxxxx Xxxxxxx, Agent
23
LIST OF SCHEDULES
SCHEDULE 4.c
Audited financial statements prepared by Xxxxxxxx X. Xxxxx, C.P.A., for
the periods ending December 31, 1995 and June 30, 1996.
SCHEDULE 4.d
Description of exception for all assets.
SCHEDULE 4.e
List of material contracts the company is a party to.
SCHEDULE 4.i
Description of assets authorized by Kolcari to be sold by the Company.
SCHEDULE 6.c
Legal opinion letter from Xxxxxx X. Xxxxx.
SCHEDULE 8.a(3)
A Certificate executed by a principal officer and each director of the
Company.
SCHEDULE 8.a(7)
Due diligence checklist executed by a principal officer and each director
of the Company.
SCHEDULE 8.a(8)
Indemnification letter executed by a principal officer and each director
of the Company.
SCHEDULE 8.c(1)
A Certificate executed by a principal officer and each director of
Kolcari.
SCHEDULE 8.c(2)
Due diligence checklist executed by a principal officer and each director
of Kolcari.
24
SCHEDULE 4.d
Description of exception for all assets.
NONE
25
SCHEDULE 4.e
List of material contracts the company is a party to.
1. Agreement between INTERMARK DEVELOPMENT CORPORATION and
CJB Transfer Services, Inc. (independent stock transfer
agent)
26
SCHEDULE 4.i
Description of assets authorized by Kolcari to be sold.
NONE
27
SCHEDULE 6.c
Legal opinion letter from Xxxxxx X. Xxxxx.
28
SCHEDULE 8(a)3
A Certificate executed by a principal officer and each director of the
Company.
29
SCHEDULE 8.a(7)
Due diligence checklist executed by a principal officer and each director
of the Company.
30
SCHEDULE 8.a(8)
Indemnification letter executed by a principal officer and each director
of the Company .
SCHEDULE 8c(1)
A Certificate executed by a principal officer and each director of
Kolcari.
32
SCHEDULE 8c(2)
Due diligence checklist executed by a principal officer and
each director of Kolcari
33
