SHARE EXCHANGE AGREEMENT by and between Orient New Energy Investments Ltd. (“BVI”) a British Virgin Islands investments holding company and the Shareholders of BVI, on the one hand; and Xtreme Link, Inc., a Nevada corporation, on the other hand...
Exhibit
2.1
by
and between
Orient
New Energy Investments Ltd. (“BVI”)
a
British Virgin Islands investments holding company
and
the
Shareholders of BVI,
on the one hand;
and
a
Nevada corporation,
on
the other hand
September
7, 2010
This
Share Exchange Agreement, dated as of September 7, 2010 (this “Agreement”), is made
and entered into by and between Orient New Energy Investments Ltd., a British
Virgin Islands investments holding company (“BVI”), and for
certain limited purposes, the shareholders of BVI listed on attached Annex I (each such
shareholder, a “BVI
Shareholder,” and collectively, the “BVI Shareholders”),
on the one hand; and Xtreme Link, Inc., a Nevada corporation (“Pubco”), and, for
certain limited purposes, the majority stockholder of Pubco (the “Pubco Stockholder”),
on the other hand.
ARTICLE
1
1.1 The Acquisition. Upon
the terms and subject to the conditions hereof, at the Closing (as hereinafter
defined) the parties shall do the following:
(a) BVI
Shareholders will each sell, convey, assign, transfer and deliver to Pubco ten
(10) certificates representing the BVI Equity Interests held by each BVI
Shareholder as set forth in Column II of Annex I hereto, which
in the aggregate shall constitute 100% of the issued and outstanding equity
interests of BVI, each accompanied by a properly executed and authenticated
stock power, instrument of transfer or other instrument of like
tenor.
(b) As
consideration in exchange for the acquisition of the BVI Equity Interests, Pubco
will issue to each BVI Shareholder or its designees, in exchange for such BVI
Shareholder’s portion of the BVI Equity Interests, the number of shares of
common stock set forth opposite such party’s name in Column IV on Annex I attached
hereto (collectively, the “Pubco Shares”). The
Pubco Shares issued shall equal approximately 90.33% of the outstanding shares
of Pubco’s common stock at the time of Closing.
1.2 Closing Date. The
closing of the Acquisition (the “Closing”) shall take
place as soon as practicable upon signing of this Agreement, and on or prior to
September 7, 2010, or on such other date as may be mutually agreed upon in
writing by the parties. Such date is referred to herein as the
“Closing Date.”
1.3 Taking of Necessary Action;
Further Action. If, at any time after the Closing, any further action is
necessary or desirable to carry out the purposes of this Agreement, the BVI
Shareholders, BVI, and/or Pubco (as applicable) will take all such lawful and
necessary action.
1.4 Certain Definitions.
The following capitalized terms as used in this Agreement shall have the
respective definitions:
“Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.
“Contract” means any
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument.
“FINRA” means
Financial Industry Regulatory Authority.
“Knowledge” means the
actual knowledge of the officers, directors or advisors of the referenced
party.
“Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.
“Material Adverse
Effect” means a adverse effect on either referenced party or the combined
entity resulting from the consummation of the transaction contemplated by this
Agreement, or on the financial condition, results of operations or business,
before or after the consummation of the transaction contemplated in this
Agreement, which as a whole is or would be considered material to an investor in
the referenced party.
“Non-U.S. Person”
means any person who is not a U.S. Person or is deemed not to be a U.S. Person
under Rule 902(k)(2).
“Person” means any
individual, corporation, partnership, joint venture, trust, business
association, organization, governmental authority or other entity.
“Restricted Period”
shall have the meaning set forth in Section 3.4(b)(vi).
“Securities Act” means
the Securities Act of 1933, as amended.
“Subsidiary” means any
entity, whether or not capitalized, in which the referenced party, owns,
directly or indirectly, an equity interest of more than fifty percent
(50%).
“Tax Returns” means
all federal, state, local and foreign returns, estimates, information statements
and reports relating to Taxes.
“Tax” or “Taxes” means any and
all applicable central, federal, provincial, state, local, municipal and foreign
taxes, including, without limitation, gross receipts, income, profits, sales,
use, occupation, value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, assessments,
governmental charges and duties together with all interest, penalties and
additions imposed with respect to any such amounts and any obligations under any
agreements or arrangements with any other person with respect to any such
amounts and including any liability of a predecessor entity for any such
amounts.
“Trading Day” means a
day on which the principal Trading Market is open for trading.
“Trading Market” means
the following markets or exchanges on which Pubco’s common stock is listed or
quoted for trading on the date in question: the NYSE Amex Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.
“Transaction” means
the transactions contemplated by this Agreement, including the share
exchange.
“United States” means
and includes the United States of America, its territories and possessions, any
State of the United States, and the District of Columbia.
“U.S. Person” as defined in
Regulation S means: (i) a natural person resident in the United States; (ii) any
partnership or corporation organized or incorporated under the laws of the
United States; (iii) any estate of which any executor or administrator is a U.S.
Person; (iv) any trust of which any trustee is a U.S. Person; (v) any agency or
branch of a foreign entity located in the United States; (vi) any
nondiscretionary account or similar account (other than an estate or trust) held
by a dealer or other fiduciary for the benefit or account of a U.S. Person;
(vii) any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated and (if an
individual) resident in the United States; and (viii) a corporation or
partnership organized under the laws of any foreign jurisdiction and formed by a
U.S. Person principally for the purpose of investing in securities not
registered under the Securities Act, unless it is organized or incorporated,
owned, by accredited investors (as defined in Rule 501(a) under the Securities
Act) who are not natural persons, estates or trusts).
1.5 Tax
Consequences. It is intended that the terms and conditions of
this Agreement comply in all respects with Section 368(a)(1)(B) and/or Section
351 of the Code and the regulations corresponding thereto, so that the
Acquisition shall qualify as a tax-free reorganization under the
Code.
ARTICLE
2
Except as
otherwise disclosed herein or in a disclosure schedule attached hereto, BVI
hereby represents and warrants to Pubco and the Pubco Stockholder as of the date
hereof and as of the Closing Date (unless otherwise indicated) as
follows:
2.1 Organization. BVI has
been duly incorporated, validly exists as a corporation, and is in good standing
under the laws of its jurisdiction of incorporation, and has the requisite power
to carry on its business as now conducted. Set forth on Schedule 2.1 of the
disclosure schedules hereto is a list of those jurisdictions in which BVI
presently conducts its business, owns, holds and operates its properties and
assets.
2.2 Capitalization. The
authorized capital stock of BVI consists of 50,000 ordinary shares, $1.00 par
value per share, of which at the Closing, no more than 10,000 shares shall be
issued and outstanding. All of the issued and outstanding shares of
capital stock of BVI, as of the Closing, are duly authorized, validly issued,
fully paid, non-assessable and free of preemptive rights.
2.3 Subsidiaries. As of
the Closing, BVI has no direct or indirect subsidiaries, except as disclosed in
Schedule 2.3 of
the disclosure schedules hereto (collectively the “BVI Subsidiaries,”
and each a “BVI
Subsidiary”). Each BVI Subsidiary is an entity duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of formation and has the requisite corporate power and authority to
own, lease and to carry on its business as now being
conducted. Except as set forth in Schedule 2.3, BVI
owns all of the shares of each BVI Subsidiary, and there are no outstanding
options, warrants, subscriptions, conversion rights or other rights, agreements
or commitments obligating any BVI Subsidiary to issue any additional shares of
common stock or ordinary stock, as the case may be, of such Subsidiary, or any
other securities convertible into, exchangeable for or evidence the right to
subscribe for or acquire from any BVI Subsidiary any shares of such
Subsidiary.
2.4 Certain Corporate
Matters. BVI is duly qualified to do business as a corporation and is in
good standing under the laws of the British Virgin Islands, and in each other
jurisdiction in which the ownership of its property or the conduct of its
business requires it to be so qualified, except where the failure to be so
qualified would not have a Material Adverse Effect on BVI’s financial condition,
results of operations or business. BVI has full corporate power and
authority and all authorizations, licenses and permits necessary to carry on the
business in which it is engaged and to own and use the properties owned and used
by it.
2.5 Authority Relative to this
Agreement. BVI has the requisite power and authority to enter
into this Agreement and to carry out its respective obligations
hereunder. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby by BVI have been
duly authorized by BVI’s Board of Directors and no other actions on the part of
BVI are necessary to authorize this Agreement or the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by BVI
and constitutes a valid and binding agreement, enforceable against BVI in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors’ rights generally or by general principles of equity.
2.6 Consents and Approvals; No
Violations. Except for applicable requirements of foreign and
United States federal securities laws and state securities or blue-sky laws, no
filing with, and no permit, authorization, consent or approval of, any third
party, public body or authority is necessary for the consummation by BVI of the
transactions contemplated by this Agreement. Neither the execution
and delivery of this Agreement by BVI nor the consummation by BVI of the
transactions contemplated hereby, nor compliance by them with any of the
provisions hereof, will (a) conflict with or result in any breach of any
provisions of the charter or bylaws (or operating agreement) of BVI or any BVI
Subsidiary, (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
Contract, agreement or other instrument or obligation to which BVI or any BVI
Subsidiary is a party or by which any of their respective properties or assets
may be bound or (c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to BVI or any BVI Subsidiary, or any of its properties
or assets, except in the case of clauses (b) and (c) for violations, breaches or
defaults which are not in the aggregate material to BVI taken as a
whole.
2.7 Books and Records.
The books and records of BVI delivered to Pubco prior to the Closing fully and
fairly reflect the transactions to which BVI is a party or by which it or its
properties are bound, and there shall be no material difference between the
unaudited combined financial statements of BVI given to Pubco and the actual
reviewed US GAAP results of BVI for the year ended March 31, 2010.
2.8 Intellectual
Property. BVI has no knowledge of any claim that, or inquiry as to
whether, any product, activity or operation of BVI infringes upon or involves,
or has resulted in the infringement of, any trademarks, trade-names, service
marks, patents, copyrights or other proprietary rights of any other person,
corporation or other entity; and no proceedings have been instituted, are
pending or are threatened.
2.9 Litigation. BVI and
each of the BVI Subsidiaries are not subject to any judgment or order of any
court or quasi-judicial or administrative agency of any jurisdiction, domestic
or foreign, nor is there any charge, complaint, lawsuit or governmental
investigation pending against BVI or any of the BVI Subsidiaries. BVI and each
of the BVI Subsidiaries is not a plaintiff in any action, domestic or foreign,
judicial or administrative. There are no existing actions, suits, proceedings
against or investigations of BVI or any of the BVI Subsidiaries, and BVI knows
of no basis for such actions, suits, proceedings or investigations. There are no
unsatisfied judgments, orders, decrees or stipulations affecting BVI or any of
the BVI Subsidiaries or to which BVI or any of the BVI Subsidiaries is a
party.
2.10 Legal Compliance. To
the best Knowledge of BVI, after due investigation, no claim has been filed
against BVI or any of the BVI Subsidiaries alleging a violation of any
applicable laws and regulations of foreign, federal, state and local governments
and all agencies thereof. BVI and each of the BVI Subsidiaries holds all of the
material permits, licenses, certificates or other authorizations of foreign,
federal, state or local governmental agencies required for the conduct of their
respective businesses as presently conducted.
2.11 Contracts. Except as
disclosed in Schedule
2.11 of the disclosure schedules hereto, there are no Contracts that are
material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the BVI. BVI is not
in violation of or in default under (nor does there exist any condition which
upon the passage of time or the giving of notice would cause such a violation of
or default under) any Contract to which they are a party or by which they or any
of their properties or assets are bound, except for violations or defaults that
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect. BVI has delivered to Pubco copies of each and every
Contracts of BVI and each of the BVI Subsidiaries not made in the ordinary
course of business. The copies of each of the Contracts delivered are accurate
and complete. Each Contract is in full force and effect and constitutes a legal,
valid and binding obligation of, and is legally enforceable against, the
respective parties thereto. There is no material default with respect to any
such contract which will give rise to liability in respect thereof on the part
of BVI or the other parties thereto. No notice of default or similar
notice has been given or received by BVI or any of the BVI Subsidiaries under
any of such contracts.
2.12 Material Changes.
Since June 30, 2010: (i) there has been no event, occurrence or development that
has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) BVI has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in BVI’s financial statements pursuant to GAAP, (iii)
BVI has not altered its method of accounting, (iv) BVI has not declared or made
any dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) BVI has not issued any equity securities to any
officer, director or Affiliate.
2.13 Labor
Relations. No material labor dispute exists or, to the
knowledge of BVI and the BVI Shareholders, is imminent with respect to any of
the employees of BVI which could reasonably be expected to result in a Material
Adverse Effect. None of BVI’s or BVI Subsidiaries’ employees is a
member of a union that relates to such employee’s relationship with BVI or such
BVI Subsidiary, and neither BVI nor any of the BVI Subsidiaries is a party to a
collective bargaining agreement, and BVI and the BVI Subsidiaries believe that
their relationships with their employees are good. No executive
officer, to the knowledge of BVI and the BVI Shareholders, is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such
executive officer does not subject BVI or any of the BVI Subsidiaries to any
liability with respect to any of the foregoing matters. BVI and the
BVI Subsidiaries are in compliance with all laws and regulations which they are
subject to relating to employment and employment practices, terms and conditions
of employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
2.14 Title to
Assets. BVI and the BVI Subsidiaries have good and marketable
title in fee simple to all real property owned by them and good and marketable
title in all personal property owned by them that is material to the business of
BVI and the BVI Subsidiaries, in each case free and clear of all Liens, except
for Liens that do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by BVI and the BVI Subsidiaries and Liens for the payment of Taxes, the payment
of which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by BVI and the BVI Subsidiaries are
held by them under valid, subsisting and enforceable leases with which BVI and
the BVI Subsidiaries are in compliance.
2.15 Transactions with Affiliates
and Employees. Except as disclosed in the combined financial
statements of BVI provided to Pubco, none of the officers or directors of BVI
and, to the knowledge of BVI and the BVI Shareholders, none of the employees of
BVI is presently a party to any transaction with BVI or any BVI Subsidiary
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of BVI and the BVI Shareholders, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $120,000,
other than for: (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of BVI and (iii) other
employee benefits.
2.16 Certain
Fees. No brokerage or finder’s fees or commissions are or will
be payable by BVI to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement.
2.17 Registration
Rights. No Person has any right to cause (or any successor) to
effect the registration under the Securities Act of any securities of BVI (or
any successor).
2.18 Application of Takeover
Protections. Except as disclosed in Schedule 2.18 of the
disclosure schedules hereto, BVI has taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under BVI’s certificate of
incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable as a result of BVI fulfilling
its obligations or exercising its rights under this Agreement.
2.19 Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, BVI and each BVI Subsidiary has filed all necessary Tax Returns and has
paid or accrued all Taxes shown as due thereon, and BVI has no knowledge of a
tax deficiency which has been asserted or threatened against BVI or any BVI
Subsidiary.
2.20 No General
Solicitation. Neither BVI nor any person acting on behalf of
BVI has offered or sold securities in connection herewith by any form of general
solicitation or general advertising.
2.21 Foreign Corrupt
Practices. Neither BVI, nor to the knowledge of BVI and the
BVI Shareholders, any agent or other person acting on behalf of BVI , has: (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by BVI (or made by any person acting on its behalf of which
BVI is aware) which is in violation of law or (iv) violated in any material
respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.
2.22 Obligations of
Management. Each officer and key employee of BVI and its Subsidiaries is
currently devoting substantially all of his or her business time to the conduct
of business of BVI and the BVI Subsidiaries. Neither BVI nor any of
its Subsidiaries is aware that any officer or key employee of BVI or any BVI
Subsidiary is planning to work less than full time at BVI or any BVI Subsidiary,
as applicable, in the future. No officer or key employee is currently
working or, to BVI’s or any BVI Shareholder’s knowledge, plans to work for a
competitive enterprise, whether or not such officer or key employee is or will
be compensated by such enterprise.
2.23 Minute Books. The
minute books of BVI and the BVI Subsidiaries made available to Pubco contain a
complete summary of all meetings and written consents in lieu of meetings of
directors and stockholders since the time of incorporation.
2.24 Employee
Benefits. Neither BVI nor any BVI Subsidiary has (nor for the
two years preceding the date hereof has had) any plans which are subject to
ERISA. “ERISA” means the
Employee Retirement Income Security Act of 1974 or any successor law and the
regulations and rules issued pursuant to that act or any successor
law.
2.25 Money Laundering
Laws. The operations of BVI are and have been conducted at all
times in compliance with applicable financial record-keeping and reporting
requirements of the money laundering statutes of all U.S. and non-U.S.
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
governmental body (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving BVI with
respect to the Money Laundering Laws is pending or, to the knowledge of BVI,
threatened.
2.26 Disclosure. The
representations and warranties and statements of fact made by BVI and its
Subsidiaries in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
ARTICLE
3
Except as
otherwise disclosed herein or in a disclosure schedule attached hereto, each BVI
Shareholder hereby represents and warrants to Pubco and the Pubco Stockholder as
of the date hereof and as of the Closing Date (unless otherwise indicated) as
follows:
3.1 Ownership of the BVI Equity
Interests. Each BVI Shareholder owns, beneficially and of
record, good and marketable title to the amount of the BVI Equity Interests set
forth opposite such BVI Shareholder’s name in Column II on Annex I attached
hereto, free and clear of all security interests, liens, adverse claims,
encumbrances, equities, proxies, options or voting agreements. Each BVI
Shareholder represents that they have no right or claims whatsoever to any
equity interests of BVI, other than the BVI Equity Interests listed opposite
such BVI Shareholder’s name in Column II on Annex I, and does not
have any options, warrants or any other instruments entitling him to exercise or
purchase or convert into additional equity interests of BVI. At the Closing, the
BVI Shareholders will convey to Pubco good and marketable title to the BVI
Equity Interests, free and clear of any security interests, liens, adverse
claims, encumbrances, equities, proxies, options, shareholders’ agreements or
restrictions.
3.2 Authority Relative to this
Agreement. This Agreement has been duly and validly executed and
delivered by the BVI Shareholders and constitutes a valid and binding agreement
of such person, enforceable against such person in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors’ rights generally or by
general principles of equity.
3.3 Purchase of Restricted
Securities for Investment. Each BVI Shareholder acknowledges that the
Pubco Shares will not be registered pursuant to the Securities Act or any
applicable state securities laws, that the Pubco Shares will be characterized as
“restricted securities” under federal securities laws, and that under such laws
and applicable regulations the Pubco Shares cannot be sold or otherwise disposed
of without registration under the Securities Act or an exemption
therefrom. In this regard, each BVI Shareholder is familiar with Rule
144 promulgated under the Securities Act, as currently in effect, and
understands the resale limitations imposed thereby and by the Securities
Act. Further, each BVI Shareholder acknowledges and agrees
that:
(a) Each
BVI Shareholder is acquiring the Pubco Shares for investment for such BVI
Shareholder’s own account and not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, and each BVI Shareholder has no
present intention of selling, granting any participation in, or otherwise
distributing the same. Each BVI Shareholder further represents that
he, she or it does not have any Contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participation to such person or to
any third person, with respect to any of the Pubco Shares.
SHARE EXCHANGE
AGREEMENT
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(b) Each
BVI Shareholder understands that the Pubco Shares are not registered under the
Securities Act on the ground that the sale and the issuance of securities
hereunder is exempt from registration under the Securities Act pursuant to
Section 4(2) thereof, and that Pubco’s reliance on such exemption is predicated
on the each BVI Shareholder’s representations set forth herein.
3.4 Status of
Stockholder. Each of the BVI Shareholders hereby makes the
representations and warranties in either paragraph (a) or (b) of this Section
3.4, as indicated on the signature page of such BVI Shareholder which is
attached and part of this Agreement:
(a) Accredited Investor Under
Regulation D. The BVI Shareholder is an “Accredited Investor” as that
term is defined in Rule 501 of Regulation D promulgated under the Securities
Act, an excerpt of which is included in the attached Annex III, and such
BVI Shareholder is not acquiring its portion of the Pubco Shares as a result of
any advertisement, article, notice or other communication regarding the Pubco
Shares published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
solicitation or general advertisement.
(b) Non-U.S. Person Under
Regulation S. The BVI Shareholder:
(i) is
not a “U.S. person” as defined by Rule 902 of Regulation S promulgated under the
Securities Act, was not organized under the laws of any U.S. jurisdiction, and
was not formed for the purpose of investing in securities not registered under
the Securities Act;
(ii) at
the time of Closing, such BVI Shareholder was located outside the United
States;
(iii)
no offer of the Pubco Shares was made to such BVI Shareholder within the United
States;
(iv) such
BVI Shareholder is either (a) acquiring the Pubco Shares for its own account for
investment purposes and not with a view towards distribution, or (b) acting as
agent for a principal that has signed this Agreement or has delivered
representations and warranties substantially similar to this Section
3.4(b);
(v) all
subsequent offers and sales of the Pubco Shares by such BVI Shareholder will be
made outside the United States in compliance with Rule 903 of Rule 904 of
Regulation S, pursuant to registration of the Pubco Shares under the Securities
Act, or pursuant to an exemption from such registration; such BVI Shareholder
understands the conditions of the exemption from registration afforded by
section 4(l) of the Securities Act and acknowledges that there can be no
assurance that it will be able to rely on such exemption.
(vi) such
BVI Shareholder will not resell the Pubco Shares to U.S. Persons or within the
United States until after the end of the one (1) year period commencing on the
date of Closing (the “Restricted
Period”);
(vii) such
BVI Shareholder shall not and hereby agrees not to enter into any short sales
with respect to the common stock of Pubco at any time after the execution of
this Agreement by such BVI Shareholder and prior to the expiration of
the Restricted Period;
SHARE EXCHANGE
AGREEMENT
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(viii) such
BVI Shareholder understands that the Pubco Shares are being offered and sold to
it in reliance on specific provisions of federal and state securities laws and
that the parties to this Agreement are relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understanding
of such BVI Shareholder set forth herein in order to determine the applicability
of such provisions. Accordingly, such BVI Shareholder agrees to
notify Pubco of any events which would cause the representations and warranties
of such BVI Shareholder to be untrue or breached at any time after the execution
of this Agreement by such BVI Shareholder and prior to the expiration of the
Restricted Period;
(ix) in
the event of resale of the Pubco Shares to non-U.S. Persons outside of the
United States during the Restricted Period, such BVI Shareholder shall provide a
written confirmation or other written notice to any distributor, dealer, or
person receiving a selling concession, fee, or other remuneration in respect of
the Pubco Shares stating that such purchaser is subject to the same restrictions
on offers and sales that apply to the undersigned, and shall require that any
such purchase shall provide such written confirmation or other notice upon
resale during the Restricted Period;
(x) such
BVI Shareholder has not engaged, nor is it aware that any party has engaged, and
it will not engage or cause any third party to engage in any “directed selling”
efforts (as such term is defined in Regulation S) in the United States with
respect to the Pubco Shares;
(xi) such
BVI Shareholder is not a “distributor” as such term is defined in Regulation S,
and it is not a “dealer” as such term is defined in the Securities
Act;
(xii) such
BVI Shareholder has not taken any action that would cause any of the parties to
this Agreement to be subject to any claim for commission or other or
remuneration by any broker, finder, or other person; and
(xiii) such
BVI Shareholder hereby represents that it has satisfied fully observed of the
laws of the jurisdiction in which it is located or domiciled, in connection with
the acquisition of the Pubco Shares or this Agreement, including (i) the legal
requirements of such BVI Shareholder’s jurisdiction for the purchase and
acquisition of the Pubco Shares, (ii) any foreign exchange restrictions
applicable to such purchase and acquisition, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, which may be relevant to the purchase, holding,
redemption, sale, or transfer of the Pubco Shares; and further, such BVI
Shareholder agrees to continue to comply with such laws as long as it shall hold
the Pubco Shares.
3.5 Investment Risk. Each
BVI Shareholder is able to bear the economic risk of acquiring the Pubco Shares
pursuant to the terms of this Agreement, including a complete loss of such BVI
Shareholder’s investment in the Pubco Shares.
3.6 Restrictive Legends.
Each BVI Shareholder acknowledges that the certificate(s) representing such BVI
Shareholder’s pro rata portion of the Pubco Shares shall each conspicuously set
forth on the face or back thereof a legend in substantially the following form,
corresponding to the stockholder’s status as set forth in Section 3.4 and the
signature pages hereto:
REGULATION D
LEGEND:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”
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REGULATION S
LEGEND:
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (“SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION;
HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
3.7 Disclosure. The
representations and warranties and statements of fact made by the BVI
Shareholders in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
ARTICLE
4
Except as
otherwise disclosed herein or in a disclosure schedule attached hereto, Pubco
hereby represents and warrants, to BVI and the BVI Shareholders as of the date
hereof and as of the Closing Date (unless otherwise indicated), as
follows:
4.1 Organization and
Qualification. Pubco is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Pubco is neither in violation nor default of
any of the provisions of its certificate or articles of incorporation, bylaws or
other organizational or charter documents (collectively the “Charter
Documents”). Pubco is duly qualified to conduct business and
is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have or reasonably
be expected to result in a Material Adverse Effect, and no proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification. Pubco has no direct or indirect
Subsidiary.
4.2 Authorization;
Enforcement. Pubco has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The
execution and delivery of this Agreement by Pubco and the consummation by it of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of Pubco and no further action is required by Pubco, the
Board of Directors or Pubco’s stockholders in connection therewith other than in
connection with the Required Approvals, as defined in Section
4.4. This Agreement has been (or upon delivery will have been) duly
executed by Pubco and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of Pubco enforceable against Pubco
in accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
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4.3 No
Conflicts. The execution, delivery and performance by Pubco of
this Agreement and the consummation by Pubco of the other transactions to which
it is a party and as contemplated hereby do not and will not: (i) conflict with
or violate any provision of Pubco’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any of
the properties or assets of Pubco, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Pubco debt or otherwise) or other understanding to which Pubco is
a party or by which any property or asset of Pubco is bound or affected, or
(iii) subject to the Required Approvals, as defined by Section 4.4, conflict
with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which Pubco is subject (including federal and state securities laws and
regulations), or by which any property or asset of Pubco is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.
4.4 Filings, Consents and
Approvals. Pubco is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by Pubco of this Agreement, other than the filing of a
Current Report on Form 8-K and Form D (if applicable) with the Commission and
such filings as are required to be made under applicable state securities laws
(collectively, the “Required
Approvals”).
4.5 Issuance of the Pubco
Shares. The Pubco Shares are duly authorized and, when issued
and paid for in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens imposed on or by Pubco
other than restrictions on transfer provided for in this Agreement.
4.6 Capitalization. The
capitalization of Pubco is as set forth on Schedule 4.6 of the
disclosure schedules hereto, which Schedule 4.6 shall
also include the number of shares of Pubco’s common stock owned beneficially,
and of record, by Affiliates of Pubco as of the date hereof, if
any. Other than as set forth in Schedule 4.6, Pubco
has not issued any capital stock since its most recently filed periodic report
under the Exchange Act. No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by this Agreement. There are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Pubco’s common stock,
or Contracts, commitments, understandings or arrangements by which Pubco is or
may become bound to issue additional shares of Pubco’s common stock or Common
Stock Equivalents. The issuance of the Pubco Shares will not obligate
Pubco to issue shares of Pubco’s common stock or other securities to any Person
(other than the BVI Shareholders) and will not result in a right of any holder
of Pubco securities to adjust the exercise, conversion, exchange or reset price
under any of such securities. All of the outstanding shares of
capital stock of Pubco are validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder or Pubco’s board of directors is
required for the issuance of the Pubco Shares. There are no
stockholders agreements, voting agreements or other similar agreements with
respect to Pubco’s capital stock to which Pubco is a party or, to the Knowledge
of Pubco, between or among any of Pubco’s stockholders. “Common Stock
Equivalents” means any securities of Pubco which would entitle the holder
thereof to acquire at any time Pubco’s common stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive Pubco’s common
stock.
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4.7 SEC Reports; Financial
Statements. Pubco has filed all reports, schedules, forms,
statements and other documents required to be filed by Pubco under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as Pubco was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The financial statements of Pubco included in the SEC
Reports (the “Financial
Statements”) 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. Such financial statements
have been prepared in accordance with GAAP, except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of Pubco as of and for
the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
4.8 Material Changes.
Since the date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof or in connection herewith: (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) Pubco has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in Pubco’s financial statements
pursuant to GAAP or disclosed in filings made with the Commission, (iii) Pubco
has not altered its method of accounting, (iv) Pubco has not declared or made
any dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) Pubco has not issued any equity securities to any
officer, director or Affiliate. Pubco does not have pending before
the Commission any request for confidential treatment of
information. Except for the issuance of the Pubco Shares contemplated
by this Agreement or as set forth on Schedule 4.8 of the
disclosure schedules hereto, no event, liability or development has occurred or
exists with respect to Pubco or its business, properties, operations or
financial condition, that would be required to be disclosed by Pubco under
applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least one (1) Trading Day prior to
the date that this representation is made.
4.9 Litigation. There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the Knowledge of Pubco, threatened against or affecting Pubco or
any of its properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of this
Agreement or the Pubco Shares or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither Pubco nor any director or officer thereof, is or has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the Knowledge of Pubco, there is not
pending or contemplated, any investigation by the Commission involving Pubco or
any current or former director or officer of Pubco. The Commission
has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by Pubco under the Securities Act.
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4.10 Labor
Relations. No labor dispute exists or, to the knowledge of
Pubco, is imminent with respect to any of the employees of Pubco which could
reasonably be expected to result in a Material Adverse Effect. None
of Pubco’s employees is a member of a union that relates to such employee’s
relationship with Pubco, and Pubco is not a party to a collective bargaining
agreement, and Pubco believes that its relationships with their employees are
good. No executive officer, to the Knowledge of Pubco, is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other Contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such
executive officer does not subject Pubco to any liability with respect to any of
the foregoing matters. Pubco is in compliance with all U.S. federal,
state, local and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
4.11 Compliance. Pubco:
(i) is not in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in
a default by Pubco under), nor has Pubco received notice of a claim that it is
in default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is not in violation of any order of any court,
arbitrator or governmental body, or (iii) is not or has not been in violation of
any statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, except in each case as could not
have or reasonably be expected to result in a Material Adverse
Effect.
4.12 Regulatory
Permits. Pubco possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its business, except where the failure to
possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”),
and Pubco has not received any notice of proceedings relating to the revocation
or modification of any Material Permit.
4.13 Title to
Assets. Pubco has good and marketable title in all personal
property owned by it that is material to the business of, in each case free and
clear of all Liens, except for Liens that do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by Pubco and Liens for the payment of Taxes, the
payment of which is neither delinquent nor subject to
penalties. Pubco does not own any real property. Any real
property and facilities held under lease by Pubco, if any is held by Pubco under
valid, subsisting and enforceable leases with which Pubco is in
compliance.
4.14 Transactions with Affiliates
and Employees. Except as set forth in the SEC Reports, none of
the officers or directors of Pubco and, to the Knowledge of Pubco, none of the
employees of Pubco is presently a party to any transaction with Pubco (other
than for services as employees, officers and directors), including any Contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
Knowledge of Pubco, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000, other than for: (i) payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of Pubco and (iii) other employee benefits.
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4.15 Xxxxxxxx-Xxxxx; Internal
Accounting Controls. Pubco is in material compliance with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it as of
the Closing Date. Pubco maintains a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Pubco has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for Pubco and designed such disclosure controls and procedures to
ensure that information required to be disclosed by Pubco in the reports it
files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and
forms. Pubco’s certifying officers have evaluated the effectiveness
of Pubco’s disclosure controls and procedures as of the end of the period
covered by Pubco’s most recently filed periodic report under the Exchange Act
(such date, the “Evaluation
Date”). Pubco presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date,
there have been no changes in Pubco’s internal control over financial reporting
(as such term is defined in the Exchange Act) that has materially affected, or
is reasonably likely to materially affect, Pubco’s internal control over
financial reporting.
4.16 Certain
Fees. No brokerage or finder’s fees or commissions are or will
be payable by Pubco to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement.
4.17 Issuance of Pubco
Shares. Assuming the accuracy of the BVI Shareholders’ representations
and warranties set forth in Section 3, no registration under the Securities Act
is required for the offer and issuance of the Pubco Shares by Pubco to the BVI
Shareholders as contemplated hereby. The issuance of the Pubco Shares
hereunder does not contravene the rules and regulations of the applicable
Trading Market.
4.18 Investment Company.
Pubco is not, and is not an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
4.19 Listing and Maintenance
Requirements. Pubco’s common stock is currently quoted on
FINRA’s Over-the-Counter Bulletin Board Quotation Service (“OTC Bulletin Board”)
and Pubco has not, in the twenty four (24) months preceding the date hereof,
received any notice from the OTC Bulletin Board or FINRA or any trading market
on which Pubco’s common stock is or has been listed or quoted to the effect that
Pubco is not in compliance with the quoting, listing or maintenance requirements
of the OTCBB or such other trading market. Pubco is, and has no reason to
believe that it will not, in the foreseeable future continue to be, in
compliance with all such quoting, listing and maintenance
requirements.
4.20 Application of Takeover
Protections. Pubco has taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under Pubco’s certificate of
incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the BVI Shareholders as a
result of the BVI Shareholders and Pubco fulfilling their obligations or
exercising their rights under this Agreement, including without limitation as a
result of Pubco’s issuance of the Pubco Shares and the BVI Shareholders’
ownership of the Pubco Shares.
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4.21 No Integrated
Offering. Assuming the accuracy of the BVI Shareholders’ representations
and warranties set forth in Section 3, neither Pubco, nor any of its Affiliates,
nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Pubco Shares to be
integrated with prior offerings by Pubco for purposes of (i) the Securities Act
which would require the registration of any such securities under the Securities
Act, or (ii) any applicable shareholder approval provisions of any Trading
Market on which any of the securities of Pubco are listed or
designated.
4.22 Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, Pubco has timely filed all necessary Tax Returns and has paid or accrued
all Taxes shown as due thereon, and Pubco has no Knowledge of a tax deficiency
which has been asserted or threatened against Pubco.
4.23 No General
Solicitation. Neither Pubco nor any Person acting on behalf of
Pubco has offered or sold any of the Pubco Shares by any form of general
solicitation or general advertising.
4.24 Foreign Corrupt
Practices. Neither Pubco, nor to the Knowledge of Pubco, any
agent or other person acting on behalf of Pubco, has: (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by Pubco
(or made by any person acting on its behalf of which Pubco is aware) which is in
violation of law or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended.
4.25 Accountants. Pubco’s
accounting firm is set forth on Schedule 4.25 of the
disclosure schedules hereto. To the Knowledge of Pubco, such
accounting firm: (i) is a registered public accounting firm as required by the
Exchange Act and (ii) expressed its opinion with respect to the financial
statements included in Pubco’s Annual Report for the year ended May 31,
2010.
4.26 No Disagreements with
Accountants and Lawyers. There are no disagreements of any
kind, including but not limited to any disagreements regarding fees owed for
services rendered, presently existing, or reasonably anticipated by Pubco to
arise, between Pubco and the accountants and lawyers formerly or presently
employed by Pubco which could affect Pubco’s ability to perform any of its
obligations under this Agreement, and Pubco is current with respect to any fees
owed to its accountants and lawyers.
4.27 Regulation M
Compliance. Pubco has not, and to the Knowledge of Pubco no Person
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of Pubco to facilitate the sale or resale of any of the Pubco Shares,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the securities of Pubco, or (iii) paid or agreed to pay to any Person
any compensation for soliciting another to purchase any other securities of
Pubco.
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4.28 Money Laundering
Laws. The operations of Pubco are and have been conducted at
all times in compliance with applicable financial record-keeping and reporting
requirements of the money laundering statutes of all U.S. and non-U.S.
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
governmental body (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving Pubco with
respect to the Money Laundering Laws is pending or, to the Knowledge of Pubco,
threatened.
4.29 Minute Books. The
minute books of Pubco made available to BVI and the BVI Shareholders contain a
complete summary of all meetings and written consents in lieu of meetings of
directors and stockholders since the time of incorporation.
4.30 Employee
Benefits. Pubco has not (nor for the two years preceding the
date hereof has) had any plans which are subject to ERISA. “ERISA” means the
Employee Retirement Income Security Act of 1974 or any successor law and the
regulations and rules issued pursuant to that act or any successor
law.
4.31 Business Records and Due
Diligence. Prior to the Closing, Pubco delivered to BVI all
records and documents relating to Pubco, which Pubco and possesses, including,
without limitation, books, records, government filings, Tax Returns, Charter
Documents, corporate records, stock records, consent decrees, orders, and
correspondence, director and stockholder minutes, resolutions and written
consents, stock ownership records, financial information and records, and other
documents used in or associated with Pubco.
4.32 Contracts. Except
as set forth in the SEC Reports, there are no Contracts that are material
to the business, properties, assets, condition (financial or otherwise), results
of operations or prospects of Pubco taken as a whole. Pubco is not in
violation of or in default under (nor does there exist any condition which upon
the passage of time or the giving of notice would cause such a violation of or
default under) any Contract to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
4.33 No Undisclosed
Liabilities. Except as otherwise disclosed in
Pubco’s Financial Statements (the financial statements of which were filed with
the SEC along with Pubco’s quarterly report on Form 10-Q filed on September 1,
2010), and except for those liabilities incurred by Pubco in the ordinary course
of business after August 31, 2010, none of which have had or will have a
Material Adverse Effect on the financial condition of Pubco, Pubco has no other
undisclosed liabilities whatsoever, either direct or indirect, matured or
unmatured, accrued, absolute, contingent or otherwise. Pubco
represents that at the Closing Date, Pubco shall have no liabilities or
obligations whatsoever, either direct or indirect, matured or unmatured,
accrued, absolute, contingent or otherwise.
4.34 No SEC or FINRA
Inquiries. Neither Pubco nor any of its past or present officers or
directors is, or has ever been, the subject of any formal or informal inquiry or
investigation by the SEC or FINRA.
4.35 Disclosure. The
representations and warranties and statements of fact made by Pubco in this
Agreement are, as applicable, accurate, correct and complete and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained herein not
false or misleading.
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ARTICLE
5
The Pubco
Stockholder hereby represents and warrants to BVI and the BVI Shareholders as of
the date hereof and as of the Closing Date (unless otherwise indicated), as
follows:
5.1 Ownership of Pubco Capital
Stock. The Pubco Stockholder owns, beneficially and of record,
good and marketable title to the shares of Pubco capital stock set forth
opposite its name in Annex II attached
hereto, free and clear of any security interests, liens, adverse claims,
encumbrances, equities, proxies, options or shareholders’ agreements, and has no
right or claims whatsoever to any other shares of Pubco capital stock and does
not have any options, warrants or any other instruments entitling it to exercise
to purchase or convert into shares of Pubco capital stock, other than in
connection with the concurrent financing. On or prior to Closing, the
Pubco Stockholder will transfer the number of shares of Pubco common stock set
forth opposite its name in Column III on Annex II attached
hereto to Pubco for cancellation.
5.2 Authority Relative to this
Agreement. This Agreement has been duly and validly executed
and delivered by the Pubco Stockholder and constitutes a valid and binding
agreement of it, enforceable against the Pubco Stockholder in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditors’ rights generally
or by general principles of equity.
5.3 Disclosure. The
representations and warranties and statements of fact made by the Pubco
Stockholder in this Agreement are, as applicable, accurate, correct and complete
and do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained herein not false or misleading.
ARTICLE
6
6.1 Survival of Representations
and Warranties of the Parties. The representations and
warranties of the parties made in Sections 2, 3, 4 and 5 of this Agreement shall
survive six (6) months beyond the Closing Date. This Article 6 shall
not limit any claim for fraud based on such representations and
warranties. Nothing in this Article 6 shall impair or alter any
covenant or agreement of the parties which by its terms contemplates performance
after the Closing Date.
ARTICLE
7
7.1 Corporate Examinations and
Investigations. Prior to the Closing, each party shall be entitled,
through its employees and representatives, to make such investigations and
examinations of the books, records and financial condition of BVI and Pubco as
each party may request. In order that each party may have the full opportunity
to do so, BVI, Pubco, the BVI Shareholders and the Pubco Stockholder shall
furnish each party and its representatives during such period with all such
information concerning the affairs of BVI or Pubco as each party or its
representatives may reasonably request and cause BVI or Pubco and their
respective officers, employees, consultants, agents, accountants and attorneys
to cooperate fully with each party’s representatives in connection with such
review and examination and to make full disclosure of all information and
documents requested by each party and/or its representatives. Any such
investigations and examinations shall be conducted at reasonable times and under
reasonable circumstances, it being agreed that any examination of original
documents will be at each party’s premises, with copies thereof to be provided
to each party and/or its representatives upon request.
SHARE EXCHANGE
AGREEMENT
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19
7.2 Cooperation;
Consents. Prior to the Closing, each party shall cooperate with the other
parties to the end that the parties shall (i) in a timely manner make all
necessary filings with, and conduct negotiations with, all authorities and other
persons the consent or approval of which, or the license or permit from which is
required for the consummation of the Acquisition and (ii) provide to each other
party such information as the other party may reasonably request in order to
enable it to prepare such filings and to conduct such negotiations.
7.3 Conduct of Business.
Subject to the provisions hereof, from the date hereof through the Closing, each
party hereto shall (i) conduct its business in the ordinary course and in such a
manner so that the representations and warranties contained herein shall
continue to be true and correct in all material respects as of the Closing as if
made at and as of the Closing and (ii) not enter into any material transactions
or incur any material liability not required or specifically contemplated
hereby, without first obtaining the written consent of BVI and the BVI
Shareholders on the one hand and Pubco and the Pubco Stockholder on the other
hand. Without the prior written consent of BVI, the BVI Shareholders, Pubco or
the Pubco Stockholder, except as required or specifically contemplated hereby,
each party shall not undertake or fail to undertake any action if such action or
failure would render any of said warranties and representations untrue in any
material respect as of the Closing.
7.4 Litigation. From the
date hereof through the Closing, each party hereto shall promptly notify the
representative of the other parties of any lawsuits, claims, proceedings or
investigations which after the date hereof are threatened or commenced against
such party or any of its affiliates or any officer, director, employee,
consultant, agent or shareholder thereof, in their capacities as such, which, if
decided adversely, could reasonably be expected to have a Material Adverse
Effect on such party.
7.5 Notice of Default.
From the date hereof through the Closing, each party hereto shall give to the
representative of the other parties prompt written notice of the occurrence or
existence of any event, condition or circumstance occurring which would
constitute a violation or breach of this Agreement by such party or which would
render inaccurate in any material respect any of such party’s representations or
warranties herein.
7.6 Share Cancellations and
Transfers. Immediately prior to the Closing, the Pubco Stockholder shall
surrender the number of shares of Pubco common stock set forth opposite its name
in Column III on Annex
II attached hereto for cancellation. In connection with such share
cancellation, the Pubco Stockholder agrees to execute and deliver any documents
and instruments reasonably necessary to effect such cancellation, including
originally executed certificate(s) and stock powers, with proper endorsements
and/or medallion certified signatures as may be required by Pubco’s transfer
agent.
7.7 Bylaws. If necessary,
Pubco shall amend its bylaws to permit the election and/or appointment of
additional new directors to Pubco’s Board of Directors as set forth in Section
8.1(a) below.
(a) Confidentiality. Any
confidentiality agreement or letter of intent previously executed by the parties
shall be superseded in its entirety by the provisions of this Agreement. Each
party agrees to maintain in confidence any non-public information received from
the other party, and to use such non-public information only for purposes of
consummating the transactions contemplated by this Agreement. Such
confidentiality obligations will not apply to (i) information which was known to
the one party or their respective agents prior to receipt from the other party;
(ii) information which is or becomes generally known; (iii) information acquired
by a party or their respective agents from a third party who was not bound to an
obligation of confidentiality; and (iv) disclosure required by
law. In the event this Agreement is terminated as provided in Article
8 hereof, each party will return or cause to be returned to the other all
documents and other material obtained from the other in connection with the
Transaction contemplated hereby.
SHARE EXCHANGE
AGREEMENT
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20
(i) BVI
will afford Pubco and its financial advisors, accountants, counsel and other
representatives reasonable access during normal business hours, upon reasonable
notice, to the properties, books, records and personnel of BVI during the period
prior to the Closing to obtain all information concerning the business,
including the status of product development efforts, properties, results of
operations and personnel of BVI, as Pubco may reasonably request. No
information or knowledge obtained by Pubco in any investigation pursuant to this
Section 7.8 will affect or be deemed to modify any representation or warranty
contained herein or the conditions to the obligations of the parties to
consummate the Transaction.
(ii) Pubco
will afford BVI and its financial advisors, underwriters, accountants, counsel
and other representatives reasonable access during normal business hours, upon
reasonable notice, to the properties, books, records and personnel of Pubco
during the period prior to the Closing to obtain all information concerning the
business, including the status of product development efforts, properties,
results of operations and personnel of Pubco, as BVI may reasonably
request. No information or Knowledge obtained by BVI in any
investigation pursuant to this Section 7.8 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Transaction.
7.9 Public Disclosure.
Except to the extent previously disclosed or to the extent the parties believe
that they are required by applicable law or regulation to make disclosure, prior
to Closing, no party shall issue any statement or communication to the public
regarding the transaction contemplated herein without the consent of the other
party, which consent shall not be unreasonably withheld. To the extent a party
hereto believes it is required by law or regulation to make disclosure regarding
the Transaction, it shall, if possible, immediately notify the other party prior
to such disclosure. Notwithstanding the foregoing, the parties hereto agree that
BVI will prepare and file a Current Report on Form 8-K pursuant to the Exchange
Act to report the execution of this Agreement.
7.10 Assistance with Post-Closing
SEC Reports and Inquiries. Upon the reasonable request of BVI, after the
Closing Date, the Pubco Stockholder shall use its reasonable best efforts to
provide such information available to it, including information, filings,
reports, financial statements or other circumstances of Pubco occurring,
reported or filed prior to the Closing, as may be necessary or required by Pubco
for the preparation of the post-Closing Date reports that Pubco is required to
file with the SEC to remain in compliance and current with its reporting
requirements under the Securities Act, or filings required to address and
resolve matters as may relate to the period prior to the Closing and any SEC
comments relating thereto or any SEC inquiry thereof.
ARTICLE
8
8.1 Conditions to Obligations of
BVI and the BVI Shareholders. The obligations of BVI and the BVI
Shareholders under this Agreement shall be subject to each of the following
conditions:
(a) Closing Deliveries.
At the Closing, Pubco shall have delivered or caused to be delivered to BVI and
the BVI Shareholders the following:
SHARE EXCHANGE
AGREEMENT
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21
(i) this
Agreement duly executed by Pubco’s duly authorized signatory;
(ii) letter
of resignation from Pubco’s current sole executive officer, with his resignation
as to all of the offices he currently holds with Pubco to be effective on the
Closing Date, and confirming that he has no claim against Pubco in respect of
any outstanding remuneration or fees of whatever nature as of the Closing
Date;
(iii) letter
of resignation of Pubco’s current sole director, with the resignation of such
director to be effective on the Closing Date, and confirming that he has no
claim against Pubco in respect of any outstanding remuneration or fees of
whatever nature as of the Closing Date;
(iv) resolutions
duly adopted by the Board of Directors of Pubco approving the following events
or actions, as applicable:
|
a.
|
the
execution, delivery and performance of this
Agreement;
|
|
b.
|
the
Acquisition and the terms thereof;
|
|
c.
|
the
change of Pubco’s fiscal year end from May 31 to March
31;
|
|
d.
|
fixing
the number of authorized directors on Pubco’s board of directors at two
(2);
|
|
e.
|
the
appointment of Anping Yao as Chairman of the board of directors to serve
on the Pubco board of directors, effective on the Closing Date, and the
appointment of Xxx Xxxx as an additional director to serve on Pubco’s
board of directors effective on the Closing Date;
and
|
|
f.
|
the
appointment of the following persons as officers of Pubco, with the titles
set forth opposite his name (the “BVI Officers”),
effective on the Closing Date:
|
|
Anping
Yao
|
Chief
Executive Officer, President
|
|
Xxx
Xx
|
Chief
Financial Officer and Treasurer
|
|
Xxx
Xx
|
Secretary
|
(v) a
certificate of good standing for Pubco from its jurisdiction of incorporation,
dated not earlier than five (5) days prior to the Closing Date;
(vi) an
instruction letter signed by the President of Pubco addressed to Pubco’s
transfer agent of record, in a form reasonably acceptable to BVI and consistent
with the terms of this Agreement, instructing the transfer agent to issue stock
certificates representing the Pubco Shares to be delivered pursuant to this
Agreement registered in the names set forth in Annex I;
SHARE EXCHANGE
AGREEMENT
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22
(vii) evidence
satisfactory to BVI of delivery by the Pubco Stockholder of the original share
certificate(s) representing an aggregate 13,250,000 shares of common stock of
Pubco, accompanied by a stock powers properly authenticated in original form, to
the Pubco’s transfer agent for cancellation;
(viii) a
certificate of the Secretary of the Pubco, dated as of the Closing Date,
certifying as to (i) the incumbency of officers of the Pubco executing this
Agreement and all exhibits and schedules hereto and all other documents,
instruments and writings required pursuant to this Agreement (the “Transaction
Documents”), (ii) a copy of the Articles of Incorporation and Bylaws of
the Pubco, as in effect on and as of the Closing Date, and (iii) a copy of the
resolutions of the Board of Directors of Pubco authorizing and approving the
Pubco’s execution, delivery and performance of the Transaction Documents, all
matters in connection with the Transaction Documents, and the transactions
contemplated thereby;
(ix) all
corporate records, agreements, seals and any other information reasonably
requested by BVI’s representatives with respect to Pubco; and
(x) such
other documents as BVI and/or the BVI Shareholders may reasonably request in
connection with the transactions contemplated hereby.
(b) Representations and
Warranties to be True. The representations and warranties of Pubco and
the Pubco Stockholder herein contained shall be true in all material respects at
the Closing with the same effect as though made at such time. Pubco
and the Pubco Stockholder shall have performed in all material respects all
obligations and complied in all material respects with all covenants and
conditions required by this Agreement to be performed or complied with by them
at or prior to the Closing.
(c) No Assets and
Liabilities. At the Closing, Pubco shall have no liabilities, debts or
payables (contingent or otherwise), no tax obligations, no material assets, and
except as contemplated in this Agreement, no material changes to its business or
financial condition shall have occurred since the date of this
Agreement.
(d) SEC Filings. At the
Closing, Pubco will be current in all SEC filings that Pubco is required to
file.
(e) Outstanding Capital
Stock. Pubco shall have at least 75,000,000 shares of its common stock
authorized and shall have no more than 16,150,000 shares of its common stock
issued and outstanding immediately prior to the Closing, and shall have no more
than 2,900,000 shares of its common stock issued and outstanding after
cancellation of 13,250,000 shares of Pubco’s common stock held by the Pubco
Stockholder.
(f) No Adverse
Effect. The business and operations of Pubco will not have
suffered any Material Adverse Effect.
8.2 Conditions to Obligations of
Pubco. The obligations of Pubco and the Pubco Stockholder under this
Agreement shall be subject to each of the following conditions:
(a) Closing Deliveries.
On the Closing Date, BVI and/or the BVI Shareholders shall have delivered to
Pubco the following:
(i) this
Agreement duly executed by BVI and the BVI Shareholders;
SHARE EXCHANGE
AGREEMENT
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23
(ii) resolutions
duly adopted by the Board of Directors of BVI authorizing and approving the
execution, delivery and performance of this Agreement;
(iii) certificates
representing the BVI Equity Interests to be delivered pursuant to this Agreement
duly endorsed or accompanied by duly executed stock powers, instruments of
transfer or other executed instruments of like tenor; and
(iv) such
other documents as Pubco may reasonably request in connection with the
transactions contemplated hereby.
(b) Representations and
Warranties True and Correct. The representations and warranties of BVI
and the BVI Shareholders herein contained shall be true in all material respects
at the Closing with the same effect as though made at such time. BVI and the BVI
Shareholders shall have performed in all material respects all obligations and
complied in all material respects with all covenants and conditions required by
this Agreement to be performed or complied with by them at or prior to the
Closing.
(c) No Adverse
Effect. The business and operations of BVI will not have
suffered any Material Adverse Effect.
ARTICLE
9
9.1 This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written agreement of Pubco and the BVI Shareholders;
(b) by
either Pubco or the BVI Shareholders if the Transaction shall not have been
consummated for any reason by September 30, 2010; provided, however, that the
right to terminate this Agreement under this Section 9.1(b) shall not be
available to any party whose action or failure to act has been a principal cause
of or resulted in the failure of the Transaction to occur on or before such date
and such action or failure to act constitutes a breach of this
Agreement;
(c) by
either Pubco or the BVI Shareholders if a governmental entity shall have issued
an order, decree or ruling or taken any other action, in any case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Transaction, which order, decree, ruling or other action is final and
non-appealable;
(d) by
the BVI Shareholders, upon a material breach of any representation, warranty,
covenant or agreement on the part of Pubco set forth in this Agreement, or if
any representation or warranty of Pubco or the Pubco Stockholder shall have
become materially untrue, in either case such that the conditions set forth in
Section 8.1 would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue, provided, that if
such inaccuracy in Pubco’s or the Pubco Stockholder’s representations and
warranties or breach by Pubco or the Pubco Stockholder is curable by Pubco or
the Pubco Stockholder prior to the Closing Date, then the BVI Shareholders may
not terminate this Agreement under this Section 9.1(d) for thirty (30) days
after delivery of written notice from the BVI Shareholders to Pubco and the
Pubco Stockholder of such breach, provided Pubco and the Pubco Stockholder
continue to exercise commercially reasonable efforts to cure such breach (it
being understood that BVI or the BVI Shareholders may not terminate this
Agreement pursuant to this Section 9.1(d) if they shall have materially breached
this Agreement or if such breach by Pubco or the Pubco Stockholder is cured
during such thirty (30) day period); or
SHARE EXCHANGE
AGREEMENT
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24
(e) by
Pubco, upon a material breach of any representation, warranty, covenant or
agreement on the part of BVI or the BVI Shareholders set forth in this
Agreement, or if any representation or warranty of BVI or the BVI Shareholders
shall have become materially untrue, in either case such that the conditions set
forth in Section 8.2 would not be satisfied as of the time of such breach or as
of the time such representation or warranty shall have become untrue, provided,
that if such inaccuracy in BVI’s or the BVI Shareholders’ representations and
warranties or breach by BVI or the BVI Shareholders is curable by BVI or the BVI
Shareholders prior to the Closing Date, then Pubco may not terminate this
Agreement under this Section 9.1(e) for thirty (30) days after delivery of
written notice from Pubco to BVI and the BVI Shareholders of such breach,
provided BVI and the BVI Shareholders continue to exercise commercially
reasonable efforts to cure such breach (it being understood that Pubco may not
terminate this Agreement pursuant to this Section 9.1(e) if it shall have
materially breached this Agreement or if such breach by BVI or the BVI
Shareholders is cured during such thirty (30) day period).
9.2 Notice of Termination;
Effect of Termination. Any termination of this Agreement under Section
9.1 above will be effective immediately upon (or, if the termination is pursuant
to Section 9.1(d) or Section 9.1(e) and the proviso therein is applicable,
thirty (30) days after) the delivery of written notice of the terminating party
to the other parties hereto. In the event of the termination of this Agreement
as provided in Section 9.1, this Agreement shall be of no further force or
effect and the Transaction shall be abandoned, except as set forth in Section
9.1, Section 9.2 and Article 10 (General Provisions), each of which shall
survive the termination of this Agreement.
ARTICLE
10
10.1 Notices. Any
and all notices and other communications hereunder shall be in writing and shall
be deemed duly given to the party to whom the same is so delivered, sent or
mailed at addresses and contact information set forth on the signature pages
hereof (or at such other address for a party as shall be specified by like
notice). Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) on the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto prior to 5:30 p.m.
(Pacific Standard Time) on a business day, (b) on the next business day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached
hereto on a day that is not a business day or later than 5:30 p.m. (Pacific
Standard Time) on any business day, (c) on the second business day following the
date of mailing, if sent by U.S. nationally recognized overnight courier service
or (d) upon actual receipt by the party to whom such notice is required to be
given.
10.2 Interpretation. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement. References to Sections and Articles refer to sections and
articles of this Agreement unless otherwise stated.
10.3 Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated and the parties shall negotiate in good faith to modify this
Agreement to preserve each party’s anticipated benefits under this
Agreement.
SHARE EXCHANGE
AGREEMENT
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25
10.4 Miscellaneous. This
Agreement (together with all other documents and instruments referred to
herein): (a) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof; (b) except as expressly set forth herein,
is not intended to confer upon any other person any rights or remedies hereunder
and (c) shall not be assigned by operation of law or otherwise, except as may be
mutually agreed upon by the parties hereto.
10.5 Separate Counsel.
Each party hereby expressly acknowledges that it has been advised to seek its
own separate legal counsel for advice with respect to this
Agreement.
10.6 Governing
Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of California, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of Los Angeles. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of Los Angeles, County of Los Angeles for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of the Agreement), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law. If
either party shall commence an action or proceeding to enforce any provisions of
the Agreement, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.
10.7 Counterparts and Facsimile
Signatures. This Agreement may be executed in two or more counterparts,
which together shall constitute a single agreement. This Agreement and any
documents relating to it may be executed and transmitted to any other party by
facsimile, which facsimile shall be deemed to be, and utilized in all respects
as, an original, wet-inked manually executed document.
10.8 Amendment. This
Agreement may be amended, modified or supplemented only by an instrument in
writing executed by BVI, Pubco and holders of a majority of the equity interests
of BVI and the holders of a majority of outstanding voting stock of Pubco;
provided that, the consent of any BVI Shareholder or Pubco Stockholder that is a
party to this Agreement shall be required if the amendment or modification would
disproportionately affect such shareholder (other than by virtue of their
ownership of BVI or Pubco shares, as applicable).
10.9 Parties In Interest.
Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto.
SHARE EXCHANGE
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10.10 Waiver. No waiver by
any party of any default or breach by another party of any representation,
warranty, covenant or condition contained in this Agreement shall be deemed to
be a waiver of any subsequent default or breach by such party of the same or any
other representation, warranty, covenant or condition. No act, delay, omission
or course of dealing on the part of any party in exercising any right, power or
remedy under this Agreement or at law or in equity shall operate as a waiver
thereof or otherwise prejudice any of such party’s rights, powers and remedies.
All remedies, whether at law or in equity, shall be cumulative and the election
of any one or more shall not constitute a waiver of the right to pursue other
available remedies.
10.11 Expenses. At or prior
to the Closing, the parties hereto shall pay all of their own expenses relating
to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
[Remainder of Page Left Blank
Intentionally]
SHARE EXCHANGE
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PUBCO:
a
corporation incorporated and existing under the laws of the State of
Nevada
By:
|
/s/ Xxxxx Xxxx
|
|
Xxxxx
Xxxx
|
||
Chief
Executive Officer and President
|
Address
for Notices:
|
00-00000
Xxxxxx Xxxxxx
|
Xxxxxxxx,
Xxxxxxx
|
|
X0X
0X0, Xxxxxx
|
SHARE EXCHANGE
AGREEMENT
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28
SIGNATURE PAGE OF PUBCO
STOCKHOLDER
PUBCO
STOCKHOLDER:
XXXX
XXX
/s/ Xxxx Xxx
|
|
Xxxx
Xxx
|
Address
for Notices:
Xxxxx
000, Xxxxxxxx 00, Xxxxxxxxxxxxx
Xxxxxxxx
Xxxxxxxx, Xxxxxxx
People’s
Republic of China
SHARE EXCHANGE
AGREEMENT
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29
SIGNATURE PAGE OF
BVI
BVI:
ORIENT
NEW ENERGY INVESTMENTS LTD.
an
investments holding company incorporated and existing under the laws of British
Virgin Islands
By:
|
/s/
Xxx Xxxxxxx Yao
|
|
Name:
Xxx Xxxxxxx Yao
|
||
Title:
Director
|
Address
for Notices:
|
Xxxxx
XX, 00/X, Xxxxx Xxxxxxx
|
|
No.
1 Xingqing Middle Road
|
|
Xi’an,
People’s Republic of China 710048
|
SHARE EXCHANGE
AGREEMENT
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30
SIGNATURE PAGES OF BVI
SHAREHOLDERS
BVI
SHAREHOLDERS:
CHALLENGER
CITY LIMITED
By:
|
/s/ Xx Xxx
|
|
Name: Xx Xxx | ||
Title: Director |
Address
for Notices:
|
Room
9A4, Green Mansion
|
|
No.
1 Xingqing Middle Road
|
|
Xi’an,
People’s Republic of China 710048
|
Check
One:
This BVI
Shareholder hereby certifies that it is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
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31
SIGNATURE PAGES OF BVI
SHAREHOLDERS (continued)
DIGITAL
TREASURE LIMITED
By:
|
/s/ Xxxxx Xxxx
|
|
Name:
Xxxxx Xxxx
|
||
Title:
Director
|
Address
for Notices:
|
Room
9B5, Green Mansion
|
|
No.
1 Xingqing Middle Road
|
|
Xi’an,
People’s Republic of China 710048
|
Check
One:
This BVI
Shareholder hereby certifies that he/she is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
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32
SIGNATURE PAGES OF BVI
SHAREHOLDERS (continued)
DYNASTY
WISDOM LIMITED
By:
|
/s/ Na Shao
|
|
Name:
Na Shao
|
||
Title: Director
|
Address
for Notices:
|
Room
AB, 22/F Cuiting Mansion
|
|
Xingqing
Road Xxxxx Xxxx
|
|
Xi’an,
People’s Republic of China 710048
|
Check
One:
This BVI
Shareholder hereby certifies that he/she is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
33
SIGNATURE PAGES OF BVI
SHAREHOLDERS (continued)
ELLENICA
LIMITED
By:
|
/s/ Xxxxx Xxxx
|
|
Name:
Xxxxx Xxxx
|
||
Title: Director
|
Address
for Notices:
|
18A
Man Hing Xxxxxxxx
|
|
00
Xxxxx’x Xxxx Xxxxxxx
|
|
Xxxx
Xxxx
|
Check
One:
This BVI
Shareholder hereby certifies that he/she is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
34
SIGNATURE PAGES OF BVI
SHAREHOLDERS (continued)
GREAT
COMMANDER INVESTMENTS LIMITED
By:
|
/s/ Tingrong Guo
|
|
Name:
Tingrong Guo
|
||
Title: Director
|
Address
for Notices:
|
Room
9M3, Green Mansion
|
|
No.
1 Xingqing Middle Road
|
|
Xi’an,
People’s Republic of China 710048
|
Check
One:
This BVI
Shareholder hereby certifies that he/she is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
35
SIGNATURE PAGES OF BVI
SHAREHOLDERS (continued)
NEW
TROPHY HOLDINGS LIMITED
By:
|
/s/ Xxxxxxxx Xxx
|
|
Name:
Xxxxxxxx Xxx
|
||
Title: Director
|
Address
for Notices:
|
Room
9B7, Green Mansion
|
|
No.
1 Xingqing Middle Road
|
|
Xi’an,
People’s Republic of China 710048
|
Check
One:
This BVI
Shareholder hereby certifies that he/she is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
36
SIGNATURE PAGES OF BVI
SHAREHOLDERS (continued)
OPAL
TREASURE LIMITED
By:
|
/s/ Xxx Xxxx
|
|
Name:
Xxx Xxxx
|
||
Title: Director
|
Address
for Notices:
|
Room
AB, 22/F Cuiting Mansion
|
|
Xingqing
Road Xxxxx Xxxx
|
|
Xi’an,
People’s Republic of China 710048
|
Check
One:
This BVI
Shareholder hereby certifies that he/she is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
37
SIGNATURE PAGES OF BVI
SHAREHOLDERS (continued)
PACIFIC
DAY LIMITED
By:
|
/s/ Xxxxxxx Xxxxx
|
|
Name:
Xxxxxxx Xxxxx
|
||
Title: Director
|
Address
for Notices:
|
Room
9M2, Green Mansion
|
|
No.
1 Xingqing Middle Road
|
|
Xi’an,
People’s Republic of China 710048
|
Check
One:
This BVI
Shareholder hereby certifies that he/she is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
38
SIGNATURE PAGES OF BVI
SHAREHOLDERS (continued)
ULTIMATE
SINO HOLDINGS LIMITED
By:
|
/s/ Xxx Xxxxxxx Yao
|
|
Name:
Xxx Xxxxxxx Yao
|
||
Title:
Director
|
Address
for Notices:
|
Room
AB, 22/F Cuiting Mansion
|
|
Xingqing
Road Xxxxx Xxxx
|
|
Xi’an,
People’s Republic of China 710048
|
Check
One:
This BVI
Shareholder hereby certifies that he/she is:
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
x
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such BVI Shareholder, and hereby accepts and agrees to comply with the
covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
39
DISCLOSURE
SCHEDULES
TO
SHARE
EXCHANGE AGREEMENT
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-1