EXHIBIT 10.1
AGREEMENT AND PLAN OF SHARE EXCHANGE
by and among
Teda Hotels Management Company Limited,
a British Virgin Islands Corporation,
and
Teda Travel Incorporated,
a Florida corporation,
the Sole Stockholder of Teda BVI Limited
on the one hand;
and
Acola Corp.,
a Delaware corporation
and
the Majority Stockholders of Acola Corp.,
on the other hand
March 10, 2004
AGREEMENT AND PLAN OF SHARE EXCHANGE
This Agreement and Plan of Share Exchange, dated as of March 10, 2004
(this "Agreement"), is made and entered into by and among Teda Hotels Management
Company Limited , a British Virgin Islands corporation ("Teda BVI"), and Teda
Travel Incorporated, a Florida corporation which is the sole stockholder of Teda
BVI (the "Teda Stockholder"), on the one hand, and Acola Corp., a Delaware
corporation ("Acola"), Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, individuals who own
at least a majority of Acola's outstanding capital stock (the "Acola
Stockholders"), on the other hand.
WHEREAS, the respective Boards of Directors of Teda BVI, the Teda
Stockholder and Acola have adopted resolutions approving and adopting the
proposed share exchange (the "Exchange") upon the terms and conditions
hereinafter set forth in this Agreement;
WHEREAS, the Board of Directors of Acola and the holders of a majority
of its Common Stock have adopted an amendment to its certificate of
incorporation to effect a one-for-forty reverse stock split and to reclassify
all of Acola's Class B shares of Common Stock as Class A share and to eliminate
the Class B shares so that all Acola Common Stock will have equal rights, all
effective March 8, 2004 (the "Acola Split").
WHEREAS, the Exchange shall be 95% of all the issued and outstanding
Acola common stock for the entire issued and outstanding Teda BVI common stock;
WHEREAS, the Teda Stockholder holds 100 shares of Teda BVI's common
stock (the "Teda BVI Shares"), which represent all of the issued and outstanding
capital stock of Teda BVI, and the Teda Stockholder desires to participate in
the Exchange;
WHEREAS, the Acola Stockholders hold 31,489,198 shares of Acola common
stock and 1,940,000 shares of Acola Class B common stock prior to the Acola
Split, which shall become 835,730 shares of Acola common stock after the Acola
Split (the "Acola Shares"), which represent a majority of the issued and
outstanding capital stock of Acola, and the Acola Stockholders desire to
participate in the Exchange;
WHEREAS, Teda BVI will enter into this Agreement for the purpose of
evidencing its consent to the consummation of the Exchange and for the purpose
of making certain representations, warranties, covenants and agreements;
WHEREAS, the Acola Stockholders will enter into this Agreement for the
purpose of making certain representations, warranties, covenants,
indemnifications and agreements;
WHEREAS, it is intended that the terms and conditions of this Agreement
comply in all respects with Section 368(a) of the Code and the regulations
corresponding thereto, so that the Exchange shall qualify as a tax free
reorganization under the Code;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE 1
THE EXCHANGE
1.1 The Exchange. Upon the terms and subject to the conditions hereof,
at the Closing (as hereinafter defined) the Teda Stockholder will sell, convey,
assign, transfer and deliver to Acola one or more stock certificates
representing the entire issued and outstanding capital of Teda BVI, and Acola
will issue to the Teda Stockholder, in exchange for the Teda BVI Shares, one or
more stock certificates representing an aggregate of 19,714,915 shares of Acola
common stock (the "Acola Shares"), par value $.001 per share ("Acola Common
Stock").
1.2 Closing. The closing of the Exchange (the "Closing") shall take
place on or before March 15, 2004, or on such other date as may be mutually
agreed upon by the parties. Such date is referred to herein as the "Closing
Date."
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF TEDA BVI
Teda BVI hereby represents and warrants to Acola as follows:
2.1 Organization. Teda BVI has been duly incorporated, is validly
existing 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.
2.2 Capitalization. The authorized capital stock of Teda BVI consists
of 50,000 shares of common stock, U.S. $1 par value, of which 100 shares are
issued and outstanding, and no shares of preferred stock. All of the issued and
outstanding shares of capital stock of Teda BVI are duly authorized, validly
issued, fully paid, non-assessable and free of preemptive rights. There are no
outstanding or authorized options, rights, warrants, calls, convertible
securities, rights to subscribe, conversion rights or other agreements or
commitments to which Teda BVI is a party or which are binding upon Teda BVI
providing for the issuance or transfer by Teda BVI of additional shares of its
capital stock and Teda BVI has not reserved any shares of its capital stock for
issuance, nor are there any outstanding stock option rights, phantom equity or
similar rights, contracts, arrangements or commitments which are binding upon
Teda BVI. There are no voting trusts or any other agreements or understandings
with respect to the voting of Teda BVI's capital stock.
2.3 Certain Corporate Matters. Teda BVI is duly qualified to do
business as a corporation and is in good standing in each jurisdiction in which
the ownership of its properties, the employment of its personnel 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 Teda BVI's financial
condition, results of operations or business. Teda 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.
2.4 Authority Relative to this Agreement. Teda BVI has the requisite
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by Teda BVI and the consummation by Teda BVI of the transactions contemplated
hereby have been duly authorized by the Teda Stockholder and the Board of
Directors of Teda BVI and no other actions on the part of Teda BVI are necessary
to authorize this Agreement or the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Teda BVI and
constitutes a valid and binding agreement of Teda BVI, enforceable against Teda
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.
2.5 Consents and Approvals; No Violations. Except for requirements of
applicable law, no filing with, and no permit, authorization, consent or
approval of, any third party, public body or authority is necessary for the
consummation by Teda BVI of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by Teda BVI nor the
consummation by Teda BVI of the transactions contemplated hereby, nor compliance
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by Teda BVI with any of the provisions hereof, will (a) conflict with or result
in any breach of any provisions of the organizational documents of Teda BVI, (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 Teda BVI is a party or by which it or its
properties or assets may be bound or (c) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Teda BVI, 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 Teda BVI taken
as a whole.
2.6 Financial Statements. The audited consolidated balance sheets of
Teda BVI as of December 31, 2002 and consolidated statements of operations and
cash flows for the twelve months then ended (collectively, the "Teda BVI
Financial Statements") together with the unqualified auditor's report by Xxxxx
Xxxxxx & Co. are filed as Exhibit A to this Agreement.
2.7 Absence of Material Changes. Since December 31,2002, there has not
been any material adverse change in the condition (financial or otherwise) of
the properties, assets, liabilities or business of Teda BVI, except changes in
the ordinary course of business which, individually and in the aggregate, have
not been materially adverse.
2.8 Title to Assets. Teda BVI has good and marketable title to all of
the assets and properties now carried on its books including those reflected in
the most recent balance sheet contained in the Teda BVI Financial Statements,
free and clear of all liens, claims, charges, security interests or other
encumbrances, except as described in the Teda BVI Financial Statements or
arising thereafter in the ordinary course of business (none of which will be
material).
2.9 Disclosure. The representations and warranties and statements of
fact made by Teda BVI 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
REPRESENTATIONS AND WARRANTIES
OF THE TEDA STOCKHOLDER
The Teda Stockholder hereby represents and warrants to Acola and the
Acola Stockholders as follows:
3.1 Ownership of the Teda BVI Shares. The Teda Stockholder owns,
beneficially and of record, good and marketable title to the Teda BVI Shares,
free and clear of all security interests, liens, adverse claims, encumbrances,
equities, proxies, options or stockholders' agreements. At the Closing, the Teda
Stockholder will convey to Acola good and marketable title to the Teda BVI
Shares, free and clear of any security interests, liens, adverse claims,
encumbrances, equities, proxies, options, stockholders' agreements or
restrictions.
3.2 Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement by the Teda Stockholder and the consummation by
the Teda Stockholder of the transactions contemplated hereby have been duly
authorized by the Teda Stockholder, and no other actions on the part of the Teda
Stockholder are necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Teda Stockholder and constitutes a valid and binding agreement
of the Teda Stockholder, enforceable against the Teda 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.
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3.3 Consents and Approvals; No Violations. Except for requirements of
applicable laws, no filing with, and no permit, authorization, consent or
approval of, any public body or authority is necessary for the consummation by
the Teda Stockholder of the transactions contemplated by this Agreement. Neither
the execution and delivery of this Agreement by the Teda Stockholder nor the
consummation by the Teda Stockholder of the transactions contemplated hereby,
nor compliance by the Teda Stockholder with any of the provisions hereof, will
(a) 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 the Teda Stockholder is a
party or by which the Teda Stockholder or his property may be bound or (b)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Teda Stockholder, except in the case of clauses (a) and (b)
for violations, breaches or defaults which are not in the aggregate material to
the Teda Stockholder.
3.6 Restricted Securities. The Teda Stockholder acknowledges that the
Acola Shares will not be registered pursuant to the Securities Act of 1933, as
amended (the "Securities Act") or any applicable state securities laws, that the
Acola Shares will be characterized as "restricted securities" under federal
securities laws, and that under such laws and applicable regulations the Acola
Shares cannot be sold or otherwise disposed of without registration under the
Securities Act or an exemption therefrom. In this regard, the Teda Stockholder
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.
3.7 Accredited Investor. The Teda Stockholder is an "Accredited
Investor" as that term is defined in rule 501 of Regulation D promulgated under
the Securities Act. The Teda Stockholder is able to bear the economic risk of
acquiring the Acola Shares pursuant to the terms of this Agreement, including a
complete loss of the Teda Stockholder's investment in the Acola Shares.
3.7 Legend. The Teda Stockholder acknowledges that the certificate(s)
representing the Acola Shares shall each conspicuously set forth on the face or
back thereof a legend in substantially the following form:
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.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
ACOLA AND THE ACOLA STOCKHOLDER
Acola and the Acola Stockholders hereby represent and warrant, jointly
and severally, to Teda BVI and the Teda Stockholder as follows:
4.1 Organization. Acola is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and has the requisite corporate power to carry on its business as now conducted.
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4.2 Capitalization. Acola's authorized capital stock consists of
105,000,000 shares of capital stock, of which 100,000,000 shares are designated
as Common Stock, of which 41,505,065 shares are issued and outstanding and of
which 1,037,627 shares, after the Acola Split, will be issued and outstanding at
the Closing and of which 5,000,000 shares are designated as Preferred Stock, of
which no shares are and at the Closing will be issued. All issued and
outstanding shares of Acola Common Stock are duly authorized, validly issued,
fully paid, non-assessable and free of preemptive rights. When issued, the Acola
Shares will be duly authorized, validly issued, fully paid, non-assessable and
free of preemptive rights, there are no outstanding or authorized options,
rights, warrants, calls, convertible securities, rights to subscribe, conversion
rights or other agreements or commitments to which Acola is a party or which are
binding upon Acola providing for the issuance by Acola or transfer by Acola of
additional shares of Acola's capital stock and Acola has not reserved any shares
of its capital stock for issuance, nor are there any outstanding stock option
rights, phantom equity or similar rights, contracts, arrangements or commitments
to issue capital stock of Acola. There are no voting trusts or any other
agreements or understandings with respect to the voting of Acola's capital
stock.
4.3 Certain Corporate Matters. Acola is duly licensed or qualified to
do business and is in good standing as a foreign corporation in every
jurisdiction in which the character of Acola's properties or nature of Acola's
business requires it to be so licensed or qualified other than such
jurisdictions in which the failure to be so licensed or qualified does not, or
insofar as can reasonably be foreseen, in the future will not, have a material
adverse effect on its financial condition, results of operations or business.
Acola has full corporate power and authority and all authorizations, licenses
and permits necessary to carry on the business in which it is engaged or in
which it proposes presently to engage and to own and use the properties owned
and used by it. Acola has delivered to Teda BVI true, accurate and complete
copies of its certificate or articles of incorporation and bylaws, which reflect
all restatements of and amendments made thereto at any time prior to the date of
this Agreement. The records of meetings of the stockholders and Board of
Directors of Acola are complete and correct in all material respects. The stock
records of Acola and the stockholder lists of Acola that Acola has previously
furnished to Teda BVI are complete and correct in all material respects and
accurately reflect the record ownership and the beneficial ownership of all the
outstanding shares of Acola's capital stock and any other outstanding securities
issued by Acola. Acola is not in default under or in violation of any provision
of its certificate or articles of incorporation or bylaws in any material
respect. Acola is not in any material default or in violation of any
restriction, lien, encumbrance, indenture, contract, lease, sublease, loan
agreement, note or other obligation or liability by which it is bound or to
which any of its assets is subject.
4.4 Authority Relative to this Agreement. Acola has the requisite
corporate power and authority to enter into this Agreement and carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by Acola and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of Acola and no other actions on the
part of Acola are necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Acola and constitutes a valid and binding obligation of Acola,
enforceable 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.
4.5 Consents and Approvals; No Violations. Except for applicable
requirements of 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 Acola of
the transactions contemplated by this Agreement. Neither the execution and
delivery of this Agreement by Acola nor the consummation by Acola of the
transactions contemplated hereby, nor compliance by Acola with any of the
provisions hereof, will (a) conflict with or result in any breach of any
provisions of the charter or Bylaws of Acola, (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 Acola is a party or by which it or any of its properties or assets may be
bound or (c) violate any order, writ, injunction, decree, statute, rule or
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regulation applicable to Acola, 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 Acola taken as a whole.
4.6 SEC Documents. Acola hereby makes reference to the following
documents filed with the United States Securities and Exchange Commission (the
"SEC"), as posted on the SEC's website, XXX.XXX.XXX: (collectively, the "SEC
Documents"): (a) Annual Report on Form 10-KSB for the fiscal year ended June 30,
2003, 2002, 2001 and 2000; (b) General Form For Registration of Securities Of
Small Business Issuers on Form 10-SB12G as filed on September 3, 1999, and all
amendments thereto; and (c) Quarterly Reports on Form 10-QSB for the periods
ended December 31, 1999, 2000, 2001, 2002 and 2003 March 31, 2000, 2001, 2002
and 2003, and September 30, 2000, 2001, 2002 and 2003, and all amendments
thereto. The SEC Documents constitute all of the documents and reports that
Acola was required to file with the SEC pursuant to the Securities Exchange Act
of 1934 ("Exchange Act") and the rules and regulations promulgated thereunder by
the SEC since the effectiveness of Acola's Form 10-SB12G filed on September 3,
1999. As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder and none of the SEC Documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Acola included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles in the United States
(except, in the case of unaudited statements, as permitted by the applicable
form under the Exchange Act) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the financial position of Acola as of the dates thereof and its statements of
operations, stockholders' equity and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal and recurring year-end
audit adjustments which were and are not expected to have a material adverse
effect on Acola, its business, financial condition or results of operations).
Except as and to the extent set forth on the consolidated balance sheet of Acola
as of June 30, 2003, including the notes thereto, Acola has no liability or
obligation of any nature (whether accrued, absolute, contingent or otherwise and
whether required to be reflected on a balance sheet or not), except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practices since June 30, 2003 which in the aggregate could
not reasonably be expected to have a material adverse effect on Acola, its
business, financial condition or results of operations.
4.7 Financial Statements.
(a) Included in the SEC Documents are the audited balance
sheet of Acola as at June 30, 2003, and the related statements of income,
stockholders' equity and cash flows for the two years then ended, together with
the unqualified report thereon (except with respect to continuation as a going
concern) of Xxxxxx & Xxxxxxx Company ("Xxxxxx"), independent auditor
(collectively, "Acola's Audited Financials").
(b) Included in the SEC Documents are the unaudited balance
sheets of Acola as at December 31, 2003, and the related statements of
operations and cash flows for the six months ended December 31, 2003, as
reviewed by Xxxxxx ("Acola's Interim Financials"). The unaudited balance sheet
at December 31, 2003 included in Acola's Interim Financials is hereinafter
referred to as the "Unaudited Balance Sheet" and December 31, 2003 is
hereinafter referred to as the "Acola Balance Sheet Date".
(c) Acola's Audited Financials and Acola's Interim Financials
(collectively "Acola's Financial Statements") are (i) in accordance with the
books and records of Acola, (ii) correct and complete, (iii) fairly present the
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financial position and results of operations of Acola as of the dates indicated,
and (iv) prepared in accordance with U.S. GAAP (except that (x) unaudited
financial statements may not be in accordance with GAAP because of the absence
of footnotes normally contained therein, and (y) interim (unaudited) financials
are subject to normal year-end audit adjustments that in the aggregate will not
have a material adverse effect on Acola, its business, financial condition or
results of operations.
4.8 Events Subsequent to Financial Statements. Since the Acola Balance
Sheet Date, there has not been:
(a) Any sale, lease, transfer, license or assignment of any
assets, tangible or intangible, of Acola;
(b) Any damage, destruction or property loss, whether or not
covered by insurance, affecting adversely the properties or business of Acola;
(c) Any declaration or setting aside or payment of any
dividend or distribution with respect to the shares of capital stock of Acola or
any redemption, purchase or other acquisition of any such shares;
(d) Any subjection to any lien on any of the assets, tangible
or intangible, of Acola;
(e) Any incurrence of indebtedness or liability or assumption
of obligations by Acola;
(f) Any waiver or release by Acola of any right of any
material value;
(g) Any compensation or benefits paid to officers or directors
of Acola;
(h) Any change made or authorized in the Certificate of
Incorporation or Bylaws of Acola, except for the Acola Split;
(i) Any loan to or other transaction with any officer,
director or stockholder of Acola giving rise to any claim or right of Acola
against any such person or of such person against Acola; or
(j) Any material adverse change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of Acola.
4.9 Undisclosed Liabilities. Except as otherwise disclosed in Acola's
Financial Statements, Acola has no material liability or obligation whatsoever,
either direct or indirect, matured or unmatured, accrued, absolute, contingent
or otherwise.
4.10 Tax Matters.
(a) Acola has duly filed all material federal, state, local
and foreign tax returns required to be filed by or with respect to it with the
Internal Revenue Service or other applicable taxing authority, and no extensions
with respect to such tax returns have been requested or granted;
(b) Acola has paid, or adequately reserved against in Acola's
Financial Statements, all material taxes due, or claimed by any taxing authority
to be due, from or with respect to it;
(c) To the best knowledge of Acola, there has been no material
issue raised or material adjustment proposed (and none is pending) by the
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Internal Revenue Service or any other taxing authority in connection with any of
Acola's tax returns;
(d) No waiver or extension of any statute of limitations as to
any material federal, state, local or foreign tax matter has been given by or
requested from Acola; and
(e) Acola has not filed a consent under Section 341(f) of the
Internal Revenue Code of 1986, as amended.
For the purposes of this Section 4.10, a tax is due (and must
therefore either be paid or adequately reserved against in Acola's Financial
Statements) only on the last date payment of such tax can be made without
interest or penalties, whether such payment is due in respect of estimated
taxes, withholding taxes, required tax credits or any other tax.
4.11 Real Property. Acola does not own or lease any real property.
4.12 Books and Records. The books and records of Acola delivered to the
Teda Stockholder prior to the Closing fully and fairly reflect the transactions
to which Acola is a party or by which it or its properties are bound.
4.13 Questionable Payments. Neither Acola nor any employee, agent or
representative of it has, directly or indirectly, made any bribes, kickbacks,
illegal payments or illegal political contributions using Company funds or made
any payments from Acola's funds to governmental officials for improper purposes
or made any illegal payments from Acola's funds to obtain or retain business.
4.14 Environmental Matters.
(a) Definitions. For the purpose of this Agreement, the
following terms shall have the meaning herein specified:
(i) "Governmental Authority" shall mean the United States,
each state, each county, each city and each other political
subdivision in which Acola's business is located, and any
court, political subdivision, agency or instrumentality with
jurisdiction over Acola's business.
(ii) "Environmental Laws" shall mean (A) the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C.A. 9601 et seq.
("CERCLA"), (B) the Resource Conservation and Recovery Act, as
amended by the Hazardous and Solid Waste Amendment of 1984, 42
U.S.C.A. 6901 et seq. ("RCRA"), (C) the Clean Air Act, 42
U.S.C.A. 7401 et seq., (D) the Federal Water Pollution Control
Act, as amended, 33 U.S.C.A. 1251 et seq., (E) the Toxic
Substances Control Act, 15 U.S.C.A. 2601 et seq., (F) all
applicable state laws, and (G) all other laws and ordinances
relating to municipal waste, solid waste, air pollution, water
pollution and/or the handling, discharge, disposal or recovery
of on-site or off-site hazardous substances or materials, as
each of the foregoing has been or may hereafter be amended
from time to time.
(iii) "Hazardous Materials" shall mean, among others, (A) any
"hazardous waste" as defined by RCRA, and regulations
promulgated thereunder; (B) any "hazardous substance" as
defined by CERCLA, and regulations promulgated thereunder; (C)
any "toxic pollutant" as defined in the Federal Water
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Pollution Prevention and Control Act, as amended, 33 U.S.C.
1251 et seq., (commonly known as "CWA" for "Clean Water Act"),
and any regulations thereunder; (D) any "hazardous air
pollutant" as defined in the Air Pollution Prevention and
Control Act, as amended, 42 U.S.C. 7401 et seq. (commonly
known as "CAA" for "Clean Air Act") and any regulations
thereunder; (E) asbestos; (F) polychlorinated biphenyls; (G)
any substance the presence of which at the Business Location
(as hereinafter defined) is prohibited by any Environmental
Laws; and (H) any other substance which is regulated by any
Environmental Laws.
(iv) "Hazardous Materials Contamination" shall mean the
presence of Hazardous Materials in the soil, groundwater, air
or any other media regulated by the Environmental Laws on,
under or around Acola's facilities at levels or concentration
which trigger any requirement under the Environmental Laws to
remove, remediate, mitigate, xxxxx or otherwise reduce the
level or concentration of the Hazardous Materials. The term
"Hazardous Materials Contamination" does not include the
presence of Hazardous Materials in process tanks, lines,
storage or reactor vessels, delivery trucks or any other
equipment or containers, which Hazardous Materials are used in
the manufacture, processing, distribution, use, storage, sale,
handling, transportation, recycling, reuse or disposal of the
products that were manufactured and/or distributed by Acola.
(v) "Business Location" shall mean any real property,
building, facility or structure owned, leased or occupied by
Acola at any time from its inception until the present.
(b) Representations and Warranties. Based on the foregoing, Acola and
the Acola Stockholders, jointly and severally, represent and warrant that:
(i) To the best knowledge of Acola and the Acola Stockholders,
after due investigation, there has been no material failure by
Acola to comply with all applicable requirements of
Environmental Laws relating to Acola, Acola's operations, and
Acola's manufacture, processing, distribution, use, treatment,
generation, recycling, reuses, sale, storage, handling,
transportation or disposal of any Hazardous Material and Acola
is not aware of any facts or circumstances which could
materially impair such compliance with all applicable
Environmental Laws.
(ii) Acola has not received notice from any Governmental
Authority or any other person of any actual or alleged
violation of any Environmental Laws, nor is any such notice
anticipated.
(iii) To the best knowledge of Acola and the Acola
Stockholders, after due investigation, Environmental Laws do
not require that any permits, licenses or similar
authorizations to construct, occupy or operate any equipment
or facilities used in the conduct of Acola's business.
(iv) No Hazardous Materials are now located at the Business
Location, and, to the best knowledge of Acola, after due
investigation, Acola has not ever caused or permitted any
Hazardous Materials to be generated, placed, stored, held,
handled, located or used at the Business Location, except
those which may lawfully be used, transported, stored, held,
handled, generated or placed at the Business Location in the
conduct of Acola's business.
(v) Acola has not received any notices, whether from a
Governmental Authority or some other third party, that
Hazardous Material Contamination exists at the Business
Location or at any other location utilized by Acola in the
conduct of its business nor is Acola aware of any
circumstances that would give rise to an allegation of such
contamination.
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(vi) To the best knowledge of Acola and the Acola
Stockholders, after due investigation, no investigation,
administrative order, consent order or agreement, litigation
or settlement with respect to Hazardous Materials or Hazardous
Materials Contamination is proposed, threatened, anticipated,
pending or otherwise in existence with respect to the Business
Location or with respect to any other site controlled or
utilized by Acola in the operation of its business. To the
best knowledge of Acola, after due investigation, the Business
Location is not currently on, and has never been on, any
federal or state "Superfund" or "Superlien" list.
4.15 Intellectual Property. Except for the Acola trademark, Acola does
not own or use any trademarks, trade names, service marks, patents, copyrights
or any applications with respect thereto. Acola and the Acola Stockholders have
no knowledge of any claim that, or inquiry as to whether, any product, activity
or operation of Acola 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.
4.16 Insurance. Acola has no insurance policies in effect.
4.17 Contracts. Acola has no material contracts, leases, arrangements
or commitments (whether oral or written). Acola is not a party to or bound by or
affected by any contract, lease, arrangement or commitment (whether oral or
written) relating to: (a) the employment of any person; (b) collective
bargaining with, or any representation of any employees by, any labor union or
association; (c) the acquisition of services, supplies, equipment or other
personal property; (d) the purchase or sale of real property; (e) distribution,
agency or construction; (f) lease of real or personal property as lessor or
lessee or sublessor or sublessee; (g) lending or advancing of funds; (h)
borrowing of funds or receipt of credit; (i) incurring any obligation or
liability; or (j) the sale of personal property.
4.18 Litigation. Except as disclosed in Acola's Interim Financials,
Acola is not subject to any judgment or order of any court or quasijudicial or
administrative agency of any jurisdiction, domestic or foreign, nor is there any
charge, complaint, lawsuit or governmental investigation pending against Acola.
Acola is not a plaintiff in any action, domestic or foreign, judicial or
administrative. There are no existing actions, suits, proceedings against or
investigations of Acola, and Acola knows of no basis for such actions, suits,
proceedings or investigations. There are no unsatisfied judgments, orders,
decrees or stipulations affecting Acola or to which Acola is a party.
4.19 Employees. Acola does not have any employees. Acola does not owe
any compensation of any kind, deferred or otherwise, to any current or previous
employees. Acola has no written or oral employment agreements with any officer
or director of Acola. Acola is not a party to or bound by any collective
bargaining agreement. There are no loans or other obligations payable or owing
by Acola to any stockholder, officer, director or employee of Acola, nor are
there any loans or debts payable or owing by any of such persons to Acola or any
guarantees by Acola of any loan or obligation of any nature to which any such
person is a party.
4.20 Employee Benefit Plans. Acola has no (a) non-qualified deferred or
incentive compensation or retirement plans or arrangements, (b) qualified
retirement plans or arrangements, (c) other employee compensation, severance or
termination pay or welfare benefit plans, programs or arrangements or (d) any
related trusts, insurance contracts or other funding arrangements maintained,
established or contributed to by Acola.
4.21 Legal Compliance. To the best knowledge of Acola, after due
investigation, no claim has been filed against Acola alleging a violation of any
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applicable laws and regulations of foreign, federal, state and local governments
and all agencies thereof. Acola holds all of the material permits, licenses,
certificates or other authorizations of foreign, federal, state or local
governmental agencies required for the conduct of its business as presently
conducted.
4.22 No Subsidiaries. Except as disclosed in Acola's Interim
Financials, Acola does not own any capital stock or have any interest in any
corporation, partnership, or other form of business organization.
4.23 Broker's Fees. Except for its agreement with Xxxxxxx Investments,
LLC, previously disclosed to Teda BVI and the Teda Stockholder, neither Acola,
nor anyone on its behalf has any liability to any broker, finder, investment
banker or agent, or has agreed to pay any brokerage fees, finder's fees or
commissions, or to reimburse any expenses of any broker, finder, investment
banker or agent in connection with this Agreement.
4.24 Internal Accounting Controls. Acola maintains a system of internal
accounting controls sufficient, based upon Acola's operations and personnel to
date, 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. Acola has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for Acola and designed such disclosure controls and procedures to
ensure that material information relating to Acola is made known to the
certifying officers by others within those entities, particularly during the
period in which the Acola's Form 10-KSB or 10-QSB, as the case may be, is being
prepared. Acola's certifying officers have evaluated the effectiveness of
Acola's controls and procedures as of end of the filing period prior to the
filing date of the Form 10-QSB for the quarter ended December 31, 2003 (such
date, the "Evaluation Date"). Acola presented in its most recently filed Form
10-KSB or Form 10-QSB 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 significant changes in Acola's internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the
Company's knowledge, in other factors that could significantly affect the
Company's internal controls.
4.25 Listing and Maintenance Requirements. Acola is currently quoted on
the OTC Bulletin Board and Acola has not, in the 12 months preceding the date
hereof, received any notice from the OTC Bulletin Board or the NASD or any
trading market on which Acola's common stock is or has been listed or quoted to
the effect that Acola is not in compliance with the quoting, listing or
maintenance requirements of the OTCBB or such other trading market. Acola 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.
4.26 Application of Takeover Protections. Acola and its board of
directors have 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 Acola's certificate or articles of incorporation
(or similar charter documents) or the laws of its state of incorporation that is
or could become applicable to Teda BVI or the Teda Stockholders as a result of
the Exchange or the exercise of any rights by Teda BVI or the Teda Stockholders
pursuant to this Agreement.
4.27 Disclosure. The representations and warranties and statements of
fact made by Acola 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
INDEMNIFICATION
5.1 Acola Stockholders Indemnification. For a period of one year after
the Closing, each of the Acola Stockholders (each an "Indemnifying Party" with
respect to the Acola Stockholders Indemnification) jointly hereby agrees to
indemnify Teda BVI, the Teda Stockholder and each of the officers, agents and
directors of Teda BVI or the Teda Stockholder against any loss, liability,
claim, damage or expense (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever) (each an
"Indemnified Party" with respect to the Acola Stockholders Indemnification) to
which it or they may become subject arising out of or based on either (i) any
breach of or inaccuracy in any of the representations and warranties or
covenants or conditions made by Acola and/or the Acola Stockholders herein in
this Agreement; or (ii) any and all liabilities arising out of or in connection
with: (A) any of the assets of Acola prior to the Closing; or (B) the operations
of Acola prior to the Closing (the "Acola Stockholders Indemnification"). In
order to secure the payment of the Acola Stockholders Indemnification, 66% of
the shares of Acola Common Stock of each of the Acola Stockholders held by the
Acola Stockholders after the closing (approximately 526,832 shares, or 2.5% of
the outstanding) at the Closing shall be deposited and held by an escrow agent
(as defined in the Escrow Agreement) and released only in accordance with the
terms of that certain Escrow Agreement dated of even date hereof by and among
Teda BVI, the Teda Stockholder, Acola and the Acola Stockholders (the "Escrow
Agreement").
5.2 Teda BVI and Teda Stockholder Indemnification. For a period of one
year after the Closing, each of Teda BVI and the Teda Stockholder (each an
"Indemnifying Party" with respect to the Teda Indemnification) jointly hereby
agrees to indemnify Acola and each of the officers, agents and directors of
Acola against any loss, liability, claim, damage or expense (including, but not
limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever) (each an "Indemnified Party" with respect
to the Teda Indemnification) to which it or they may become subject arising out
of or based on either (i) any breach of or inaccuracy in any of the
representations and warranties or covenants or conditions made by Teda BVI
and/or the Teda Stockholder herein in this Agreement; or (ii) any and all
liabilities arising out of or in connection with: (A) any of the assets of Teda
BVI or the Teda Stockholder prior to the Closing; or (B) the operations of Teda
BVI or the Teda Stockholder prior to the Closing (the "Teda Indemnification").
5.3 Indemnification Procedures. If any action shall be brought against
any Indemnified Party in respect of which indemnity may be sought pursuant to
this Agreement, such Indemnified Party shall promptly notify the Indemnifying
Party in writing, and the Indemnifying Party shall have the right to assume the
defense thereof with counsel of its own choosing. Any Indemnified Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party except to the extent that the employment
thereof has been specifically authorized by the Indemnifying Party in writing,
the Indemnifying Party has failed after a reasonable period of time to assume
such defense and to employ counsel or in such action there is, in the reasonable
opinion of such separate counsel, a material conflict on any material issue
between the position of the Indemnifying Party and the position of such
Indemnified Party. The Indemnifying Party will not be liable to any Indemnified
Party under this Article 5 for any settlement by an Indemnified Party effected
without the Indemnifying Party's prior written consent, which shall not be
unreasonably withheld or delayed; or to the extent, but only to the extent that
a loss, claim, damage or liability is attributable to any Indemnified Party's
indemnification pursuant to this Article 5.
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ARTICLE 6
COVENANTS AND AGREEMENTS OF THE PARTIES
EFFECTIVE PRIOR TO CLOSING
6.1 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 Teda BVI (and its consolidated parent and subsidiaries) and Acola
as each party may request. In order that each party may have the full
opportunity to do so, Teda BVI and Acola, the Teda Stockholder and the Acola
Stockholders shall furnish each party and its representatives during such period
with all such information concerning the affairs of Teda BVI or Acola as each
party or its representatives may reasonably request and cause Teda BVI or Acola
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.
6.2 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 Exchange
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.
6.3 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 Teda BVI and the Teda Stockholder on the one hand and Acola
and the Acola Stockholders on the other hand. Without the prior written consent
of Teda BVI, the Stockholder, Acola or the Acola Stockholders, 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.
6.4 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 upon the condition (financial or otherwise),
assets, liabilities, business, operations or prospects of such party or any of
its subsidiaries.
6.5 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.
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ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Teda BVI and the Teda Stockholder. The
obligations of Teda BVI and the Teda Stockholder under this Agreement shall be
subject to each of the following conditions:
(a) Closing Deliveries. At the Closing, Acola and/or the Acola
Stockholders shall have delivered or caused to be delivered to Teda BVI and the
Teda Stockholder the following:
(i) resolutions duly adopted by the Board of
Directors of Acola authorizing and approving the Exchange and
the execution, delivery and performance of this Agreement;
(ii) a certificate of good standing for Acola from
the Secretary of State of the State of Delaware, dated not
earlier than five days prior to the Closing Date;
(iii) subject to compliance with Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder, written resignations
of all officers and directors of Acola in office immediately
prior to the Closing, and board resolutions electing the
following individuals to the positions with Acola listed
opposite their names below:
Zhi-xxxx XXXXX Chairwoman of the Board
Xxxxxxx Xxxx-xxxx XXX Director and CEO
Hon-Xxxx XXXX Director and
Chief Financial Office
(iv) certificate representing the Acola Shares
bearing the name of the Teda Stockholder or as otherwise
instructed by the counsel of Teda Stockholder;
(v) certificates representing 380,950 shares of Acola
common stock bearing the name of Xxxxxx X. Xxxxxx and 145,882
shares of Acola common stock bearing the name of Xxxxx X.
Xxxxxx to be held in escrow pursuant to Section 5.1 hereof;
(vi) proof satisfactory to Teda Stockholer's counsel
that an appropriate legend was attached to certificates
representing 798,230 shares with respect to the Lock Up set
forth in Section 8.1 hereof;
(vii) this Agreement and the Escrow Agreement duly
executed by Acola and the Acola Stockholders;
(viii) that certain Lock Up Agreement dated of even
date hereof (the "Lock Up Agreement") duly executed by all the
parties to such Lock Up Agreement;
(ix) the Amended and Restated Charter documents of
Acola; and
(x) such other documents as Teda BVI and/or the Teda
Stockholder may reasonably request in connection with the
transactions contemplated hereby.
(b) Representations and Warranties to be True. The
representations and warranties of Acola and the Acola Stockholders herein
contained shall be true in all material respects at the Closing with the same
effect as though made at such time. Acola and the Acola Stockholders shall have
15
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) Assets and Liabilities and Current on SEC Filings. At the
Closing, Acola shall have no material assets or liabilities, contingent or
otherwise, will be current on all SEC filings and tax obligations and will have
had no material changes to its business or financial condition.
7.2 Conditions to Obligations of Acola and the Acola Stockholders. The
obligations of Acola and the Acola Stockholders under this Agreement shall be
subject to each of the following conditions:
(a) Closing Deliveries. On the Closing Date, Teda BVI and/or
the Teda Stockholder shall have delivered to Acola the following:
(i) one or more certificates representing the Teda
BVI Shares to be delivered pursuant to this Agreement duly
endorsed or accompanied by duly executed stock power;
(ii) this Agreement and the Escrow Agreement duly
executed by Teda and the Teda Stockholder;
(iii) the Lock Up Agreement duly executed by all the
parties to such Lock Up Agreement; and
(iv) such other documents as Acola may reasonably
request in connection with the transactions contemplated
hereby.
(b) Representations and Warranties to be True. The
representations and warranties of Teda BVI and the Teda Stockholder herein
contained shall be true in all material respects at the Closing with the same
effect as though made at such time. Teda BVI and the Teda 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.
ARTICLE 8
OTHER COVENANTS AND AGREEMENTS
8.1 Lock Up Agreement.
(a) Lock Up. Following the Closing, and subject to the escrow
set forth in Section 5.1, in no event shall the Acola Stockholders, acting as a
group, Transfer: (i) any shares of unrestricted Acola common stock within 180
days after the Closing; (ii) more than 33.33% of the shares owned by them at the
Closing during the period commencing on the 181st day after the Closing Date and
ending on the 365th day after the Closing Date; (iii) more than 66.66% of such
shares during the period commencing on the 366th day after the Closing Date and
ending on the 545th day after the Closing. The number of shares subject to this
Section 8.1 shall be adjusted accordingly in the event a reverse stock split or
other recapitalization is effected during a period covered hereby (the "Lock
Up"). Notwithstanding the foregoing Lock Up provisions, if after the Closing,
(i) Acola's common stock trades at any time with a volume of over $100,000 worth
of shares on any given day (calculated based on the closing price of such day);
or (ii) Acola's common stock is traded, on any given day, at a closing price of
at least $3.00/share (adjusted for any reverse stock split or other
recapitalization of Acola's common stock), the Acola Stockholders may request
Acola to release, at Acola's sole discretion, the Acola Stockholders from the
Lock Up. For purposes of this Section 8.1, "Transfer" shall mean transfer, sell,
assign, pledge, hypothecate, give, create a security interest in or lien on,
place in trust (voting trust or otherwise), or in any other way encumber or
dispose of, directly or indirectly and whether or not voluntarily.
16
(b) Injunctive Relief. The Parties agree that a breach of this
Section 8.1 may cause Acola irreparable harm for which monetary damages are not
adequate. In addition to all other available legal remedies, Acola shall have
the right to injunctive relief to enforce this Agreement.
(c) Legends. In addition to any other legends required to be
placed on each outstanding certificate representing the shares subject to the
lock up provision of Section 8.1(a) hereof, at the Closing, the Acola
Stockholders, shall deliver to Acola's stock transfer agent one or more stock
certificates collectively representing 798,230 shares of Acola common stock with
instructions to place the following legend on such certificate(s):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN LOCKUP TERMS AND CONDITIONS SET FORTH IN A SHARE
EXCHANGE AGREEMENT, DATED AS OF MARCH 10, 2004, COPIES OF
WHICH MAY BE OBTAINED FROM THE ISSUER OR FROM THE HOLDER OF
THIS SECURITY. NO TRANSFER OF SUCH SECURITIES WILL BE MADE ON
THE BOOKS OF THE ISSUER UNLESS ACCOMPANIED BY EVIDENCE OF
COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT."
(d) Termination of Restrictive Legends. Whenever the
restrictions set forth in Section 8.1(a) shall cease and terminate as to any
shares of Acola common stock held by the Acola Stockholders, the Acola
Stockholder holding such shares shall be entitled to receive from Acola, in
exchange for such legended certificates, without expense, new certificates for a
like number of shares not bearing the legend set forth in Section 8.1(c).
(e) Copy of Agreement. A copy of this Agreement shall be filed
with the corporate secretary of Acola and shall be kept with the records of
Acola and shall be made available for inspection by any shareholders of Acola.
(f) Recordation. Acola shall not record upon its books any
Transfer to any person except transfers in accordance with this Agreement.
(g) Specific Performance. The Acola Stockholders acknowledge
that there would be no adequate remedy at law if any of the Acola Stockholders
fails to perform any of its obligations hereunder, and accordingly agree that
Acola, in addition to any other remedy to which it may be entitled at law or in
equity, shall be entitled to compel specific performance of the obligations of
any of the Acola Stockholders under this Agreement in accordance with the terms
and conditions of this Agreement. Any remedy under this Section 8.1 is subject
to certain equitable defenses and to the discretion of the court before which
any proceedings therefor may be brought.
(h) Recapitalizations and Exchanges Affecting Shares. The
provisions of this Section 8.1 shall apply, to the full extent set forth herein
with respect to the shares of Acola common stock subject to Section 8.1(a), to
any and all shares of capital stock or equity securities of Acola which may be
issued by reason of any stock dividend, stock split, reverse stock split,
combination, recapitalization, reclassification or otherwise.
8.2 Anti-Dilution. From the date of the Closing until 18 months after
the Closing, Acola shall not, without the prior written consent from one of the
Acola Stockholders, issue an amount of shares of Acola's common stock in excess
17
of 10% of the issued and outstanding common stock of Acola as of the date of the
Closing to any person; provided, however, this provision shall not apply to the
following issuances: (i) common stock issued in connection with a public or
private offering of Acola's common stock for the purpose of raising capital;
(ii) common stock issued in connection with a merger or acquisition consistent
with its plan of operations; or (iii) common stock issued in connection with any
recapitalization of Acola's common stock.
8.3 Legend Removal. Acola stockholders shall be entitled to receive
from Acola, in exchange for legended certificates, new certificates for a like
number of shares not bearing certain applicable legends if such shares of Acola
are eligible for sale under Rule 144(k) and the removal of such applicable
legends is in compliance with the Securities Exchange Act of 1934, as amended
and applicable state securities laws.
ARTICLE 9
GENERAL PROVISIONS
9.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
sent by overnight courier or mailed by registered or certified mail (postage
prepaid and return receipt requested) to the party to whom the same is so
delivered, sent or mailed at addresses set forth on the signature page hereof
(or at such other address for a party as shall be specified by like notice).
9.2 Termination. This Share Exchange Agreement may be terminated and
the Transaction abandoned at any time before Closing:
(a) by the joint written consent of Acola Stockholders and
Teda Stockholders;
(b) by Teda Stockholders, if there has been a material
misrepresentation in this Share Exchange Agreement by Acola, or a
material breach by Acola of any of its warranties or covenants set
forth herein, or a failure of any condition to which the obligations of
Teda Stockholders hereunder are subject to;
(c) by Acola Stockholders, if there has been a material
misrepresentation in this Share Exchange Agreement by Teda BVI, or a
material breach by Teda BVI of any of its warranties or covenants set
forth herein, or a failure of any condition to which the obligations of
Acola hereunder are subject to; and
(d) by Teda Stockholders, if the Board of Directors of Acola
(i) fails to make or withdraws or modifies its recommendation to the
shareholders of Acola to vote in favor of the Share Exchange and the
offer transactions contemplated hereby, or (ii) recommends to Acola's
shareholders approval or acceptance of a Competing Transaction.
9.3 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.
9.4 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.
9.5 Miscellaneous. This Agreement (together with all other documents
and instruments referred to herein): (a) constitutes the entire agreement and
18
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.
9.6 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, and that no counsel to any party hereto has acted or is
acting as counsel to any other party hereto in connection with this Agreement.
9.7 Governing Law; Venue. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
U.S.A. Any and all actions brought under this Agreement shall be brought in the
state and/or federal courts of the United States sitting in the City of Los
Angeles, California and each party hereby waives any right to object to the
convenience of such venue.
9.8 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 document.
9.9 Amendment. This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by all parties hereto.
9.10 Parties In Interest: No Third Party Beneficiaries. 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. This Agreement
shall not be deemed to confer upon any person not a party hereto any rights or
remedies hereunder.
9.11 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.
9.12 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.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TEDA BVI: ACOLA:
Teda Hotels Management Company Limited, Acola Corp.,
a British Virgin Islands corporation a Delaware corporation
By: /s/ Xxxxxxx Xxx Xxxx Xxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------------- -----------------------
Name: Xxxxxxx Xxx Xxxx Xxxx Name: Xxxxx X. Xxxxxx
Title: Director Title: President
Address: Chinachem Century Tower Address: 0000 Xxxxxxx Xxxxxx
Xxxxx 0000 Xxxxxxx, Xxxxx 00000
000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Xxxxx
TEDA STOCKHOLDER: ACOLA STOCKHOLDERS:
Teda Travel Incorporated, /s/ Xxxxx X. Xxxxxx
a Florida corporation ---------------------------
Xxxxx X. Xxxxxx
By: /s/ Xxxxxxx Xxx Xxxx Xxxx
-------------------------------
Name: Xxxxxxx Xxx Xxxx Xxxx
Title: Chief Executive Officer
Address: Chinachem Century Tower
Suite 2102 /s/ Xxxxxx X. Xxxxxx
178 Gloucester Road ---------------------------
Wanchai, Hong Kong Xxxxxx X. Xxxxxx
China
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