EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into this
29th day of June 2007 by and among DRAGON INTERNATIONAL GROUP CORP., a Nevada
Corporation, (hereinafter referred to as "Dragon"), WELLTON INTERNATIONAL FIBER
CORP., a corporation organized under the laws of the British Virgin Islands,
(hereinafter referred to as the "Company" or "Wellton"), and YORK SMOOTH,
LIMITED, sole shareholder of the Company (hereinafter referred to as the
"Shareholder"). This agreement shall serve to supersede the stock purchase
agreement entered into by and among the parties hereto on January 16, 2007.
RECITALS
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A. The Shareholder owns 100% of the issued and outstanding shares of the capital
stock of the Company.
B. Dragon seeks to acquire 51% of the issued and outstanding capital stock of
the Company, making the Company a subsidiary of Dragon, and the Shareholder
desires to exchange 100% of the shares of the Company's capital stock for
8,186,029 shares of common stock of Dragon International Group Corp. valued at
$573,022.
C. The Company is doing business in China and related territories with an
address of
Xxxxx 0000, Xxxx X, Xxx Xxxxxxx Xxxxx,
48 Xing Yi Rd, Hong Xxxx, Xxxxxxxx, Xxxxx 000000
PHONE: 00-00-0000-0000
FAX: 00-00-0000-0000
D. The shareholder equity of Wellton as of March 31, 2007 is $1,123,572.
E. Dragon shall acquire 51% of the issued and outstanding capital stock of the
Company ("Shares") in exchange solely for 8,186,029 shares of common stock
valued $573,022. As mutually agreed upon by the parties in a stock purchase
agreement dated and entered into on January 16, 2007, the per share value of
Dragon International Group Corp. common stock is based upon the closing price of
$.07 per share on April 23, 2007. ("Dragon Shares"). The Exchange shall qualify
as a transaction in securities exempt from registration or qualification under
the Securities Act of 1933, as amended, (the "Act") and under the applicable
securities laws of the state or jurisdiction where the Shareholder resides.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
1 SECTION 1. EXCHANGE OF SHARES
1.1 Exchange of Shares. Dragon and the Shareholder hereby agree that the
Shareholder shall, on the closing date which is expected to be June 30, 2007
("Closing Date"), exchange 51% of the issued and outstanding shares of the
capital stock of the Company (the "Wellton Shares") for the Dragon Shares, par
value $.001.
1.2 Delivery of Dragon Shares. 8,186,029 shares of common stock are to be
delivered at the closing date.
1.3 Delivery of Wellton Shares. On the Closing Date, the Shareholder will
deliver to Dragon the Wellton Shares, representing 51% of the issued and
outstanding shares of the capital stock of Wellton, duly endorsed (or with
executed stock powers) so as to make Dragon the 51% owner thereof.
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1.4 Investment Intent. The newly issued shares of Dragon common stock have not
been registered under the Securities Act of 1933, as amended, and may not be
resold unless the Dragon Shares are registered under the Act or an exemption
from such registration is available. The Shareholder represents and warrants
that it is acquiring the Dragon Shares for its own account, for investment, and
not with a view to the sale or distribution of such Shares. Each certificate
representing the Dragon Shares will have a legend thereon incorporating language
as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). The shares have been acquired for investment and may
not be sold or transferred in the absence of an effective
Registration Statement for the shares under the Act unless in
the opinion of counsel satisfactory to the Company,
registration is not required under the Act."
2 SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SHAREHOLDER
2.1 The Company and the Shareholder hereby represent and warrant as follows:
2.2 Organization and Good Standing; Ownership of Shares. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the British Virgin Islands ("BVI"), and is entitled to own or lease its
properties and to carry on its business as and in the places where such
properties are now owned, leased or operated and such business is now conducted.
The Company is duly licensed or qualified and in good standing as a BVI company
where the character of the properties owned by it or the nature of the business
transacted by it make such licenses or qualifications necessary. There are no
outstanding subscriptions, rights, options, warrants or other agreements
obligating either the Company or the Shareholder to issue, sell or transfer any
stock or other securities of the Company.
2.3 Ownership of Capital Stock. The Shareholder is the beneficial owner of
record and beneficially of all of the shares of capital stock of the Company,
all of which shares are free and clear of all rights, claims, liens and
encumbrances, and have not been sold, pledged, assigned or otherwise transferred
except pursuant to this Agreement.
2.4 Financial Statements, Books and Records. There has been previously delivered
to Dragon the audited balance sheet of the Company as of December 31, 2005 and
December 31, 2006 as well as the unaudited balance sheet as of March 31, 2007
(the "Balance Sheets"). These Balance Sheets are true and accurate and fairly
represent the financial position of the Company as of such dates, and has been
prepared in accordance with generally accepted accounting principles
consistently applied.
2.5 No Material Adverse Changes. Since the date of the balance sheet at March
31, 2007 there has not been:
2.5.1 any material adverse change in the assets, operations, condition
(financial or otherwise) or prospective business of the Company;
2.5.2 any damage, destruction or loss materially affecting the assets,
prospective business, operations or condition (financial or otherwise) of the
Company, whether or not covered by insurance;
2.5.3 any declaration, setting aside or payment of any dividend or
distribution with respect to any redemption or repurchase of the Company's
capital stock;
2.5.4 any sale of an asset (other than in the ordinary course of business)
or any mortgage or pledge by the Company of any properties or assets; or
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2.5.5 adoption of any pension, profit sharing, retirement, stock bonus,
stock option or similar plan or arrangement.
2.6 Taxes. The Company has prepared and filed all appropriate tax returns for
all periods prior to and through the date hereof for which any such returns have
been required to be filed by it and has paid all taxes shown to be due by said
returns or on any assessments received by it or has made adequate provision for
the payment thereof.
2.7 Compliance with Laws. The Company has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would materially and adversely affect the business of the
Company.
2.8 No Breach. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not:
2.8.1 violate any provision of the Articles of Incorporation or By-Laws of
the Company;
2.8.2 violate, conflict with or result in the breach of any of the terms
of, result in a material modification of, otherwise give any other contracting
party the right to terminate, or constitute (or with notice or lapse of time or
both constitute) a default under, any contract or other agreement to which the
Company is a party or by or to which it or any of its assets or properties may
be bound or subject;
2.8.3 violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding upon,
the Company, or upon the properties or business of the Company; or
2.8.4 violate any statute, law or regulation of any jurisdiction
applicable to the transactions contemplated herein which could have a materially
adverse effect on the business or operations of the Company.
2.9 Actions and Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving the Company.
2.10 Tangible Assets. The Company has full title and interest in all machinery,
equipment, furniture, leasehold improvements, fixtures, vehicles, structures,
owned or leased by the Company, any related capitalized items or other tangible
property material to the business of the Company (the "Tangible Assets"). The
Company holds all rights, title and interest in all the Tangible Assets owned by
it on the Balance Sheet or acquired by it after the date of the Balance Sheet,
free and clear of all liens, pledges, mortgages, security interests, conditional
sales contracts or any other encumbrances. All of the Tangible Assets are in
good operating condition and repair taking into account the age of the tangible
assets and subject to fair wear and tear, and are usable in the ordinary course
of business of the Company and conform to all applicable laws, ordinances and
governmental orders, rules and regulations relating to their construction and
operation.
2.11 Liabilities. The Company does not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured,
accrued or absolute, contingent or otherwise, including, without limitation, any
liability on account of taxes, any other governmental charge or lawsuit (all of
the foregoing collectively defined to as "Liabilities"), which were not fully,
fairly and adequately reflected on the Balance Sheet. As of the Closing Date,
the Company will not have any Liabilities, other than Liabilities fully and
adequately reflected on the Balance Sheet, except for Liabilities incurred in
the ordinary course of business.
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2.12 Operations of the Company. From the date of the balance sheet on March 31,
2007 and through the Closing Date the Company has not and will not have:
2.12.1 incurred any indebtedness for borrowed money;
2.12.2 declared or paid any dividend or declared or made any distribution
of any kind to any shareholder, or made any direct or indirect redemption,
retirement, purchase or other acquisition of any shares in its capital stock;
2.12.3 made any loan or advance to any shareholder, officer, director,
employee, consultant, agent or other representative or made any other loan or
advance otherwise than in the ordinary course of business;
2.12.4 except in the ordinary course of business, incurred or assumed any
indebtedness or liability (whether or not currently due and payable);
2.12.5 disposed of any assets of the Company except in the ordinary course
of business; or
2.12.6 materially increased the annual rate of compensation of any
executive employee of the Company;
2.12.7 increased, terminated, amended or otherwise modified any plan for
the benefit of employees of the Company;
2.12.8 issued any equity securities or rights to acquire such equity
securities; or
2.12.9 except in the ordinary course of business, entered into or modified
any contract, agreement or transaction.
2.13 Full Disclosure. No representation or warranty by the Company or the
Shareholder in this Agreement or in any document or schedule to be delivered by
them pursuant hereto, and no written statement, certificate or instrument
furnished or to be furnished to pursuant hereto or in connection with the
negotiation, execution or performance of this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any fact necessary to make any statement herein or therein not materially
misleading or necessary to a complete and correct presentation of all material
aspects of the businesses of the Company.
2.14 Representations and Warranties on Closing Date. The representations and
warranties contained in this Section 2 shall be true and complete on the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date.
3 SECTION 3. REPRESENTATIONS AND WARRANTIES OF DRAGON
3.1 Dragon hereby represents and warrants to the Company and the Shareholder as
follows:
3.2 Organization and Good Standing. Dragon is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
is entitled to own or lease its properties and to carry on its business as and
in the places where such properties are now owned, leased, or operated and such
business is now conducted. The authorized capital stock of Dragon consists of
200,000,000 shares of Common Stock (Par Value $0.001), of which 96,363,982
shares are presently issued and outstanding and 25,000,000 shares of preferred
stock, of which none is issued and outstanding as of the date of this Agreement.
4 SECTION 4. COVENANTS OF COMPANY AND SHAREHOLDER
4.1 The Company and the Shareholder covenant to Dragon as follows:
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4.2 Conduct of Business. From March 31, 2007 through the Closing Date, the
Shareholder and the Company shall conduct its business in the ordinary course.
4.3 Preservation of Business. From March 31, 2007 through the Closing Date, the
Shareholder and the Company shall use its best efforts to preserve its business
organization intact, keep available the services of its present employees,
consultants and agents, maintain its present suppliers and customers and
preserve its goodwill.
4.4 Litigation. The Company shall promptly notify Dragon of any lawsuits,
claims, proceedings or investigations which after the date hereof are threatened
or commenced against the Company or against any officer, director, employee,
consultant, agent, shareholder or other representative with respect to the
affairs of the Company.
4.5 Continued Effectiveness of Representations and Warranties. From the date
hereof through the Closing Date, the Shareholder and the Company shall conduct
its business in such a manner so that the representations and warranties
contained in Section 2 shall continue to be true and correct on and as of the
Closing Date and as if made on and as of the Closing Date, and shall:
4.5.1 promptly give notice to of any event, condition or circumstance
occurring from the date hereof through the Closing Date which would render any
of the representations or warranties materially untrue, incomplete, insufficient
or constitute a violation or breach of this Agreement; and
4.5.2 supplement the information contained herein in order that the
information contained herein is kept current, complete and accurate in all
material respects.
5 SECTION 5. COVENANTS
5.1 Corporate Examinations and Investigations. Prior to the Closing Date, the
parties acknowledge that they have been entitled, through their employees and
representatives, to make such investigation of the assets, properties, business
and operations, books, records and financial condition of the other as they each
may reasonably require. No investigation by a party hereto shall, however,
diminish or waive in any way any of the representations, warranties, covenants
or agreements of the other party under this Agreement.
5.2 Expenses. Each party hereto agrees to pay its own costs and expenses
incurred in negotiating this Agreement and consummating the transactions
described herein.
5.3 Further Assurances. The parties shall execute such documents and other
papers and take such further actions as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated hereby.
Each such party shall use its best efforts to fulfill or obtain the fulfillment
of the conditions to the Agreement, including, without limitation, the execution
and delivery of any documents or other papers, the execution and delivery of
which are necessary or appropriate to the Agreement.
6 SECTION 6. INDEMNIFICATION
6.1 Obligation of the Company and the Shareholder to Indemnify. Subject to the
limitations on the survival of representations and warranties contained herein,
the Company and the Shareholder agree to indemnify, defend and hold harmless
Dragon from and against any Loss, based upon, arising out of or otherwise due to
any inaccuracy in or any breach of any representation, warranty, covenant or
agreement made by any of them and contained in this Agreement or in any document
or other writing delivered pursuant to this Agreement.
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7 SECTION 7. THE CLOSING
7.1 The Closing shall take place not later than June 30, 2007. At the Closing,
the parties shall provide each other with such documents as may be necessary or
appropriate in order to consummate the transactions contemplated hereby
including evidence of due authorization of the Agreement and the transactions
contemplated hereby.
8 SECTION 8. MISCELLANEOUS
8.1 Waivers. The waiver of a breach of this Agreement or the failure of any
party hereto to exercise any right under this Agreement shall in no event
constitute waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
8.2 Amendment. This Agreement may be amended or modified only by an instrument
of equal formality signed by the parties or the duly authorized representatives
of the respective parties.
8.3 Assignment. This Agreement is not assignable except by operation of law.
8.4 Notices. Until otherwise specified in writing, the mailing addresses of both
parties of this Agreement shall be as follows:
Dragon: Xx. 000, Xxxxxxxxx Xxxx, Xxxxxxxx X,
Investment Pioneering Park Jiangbei
Xxxxxx, Xxxxx 000000
Tel: 00-000-00000000
Fax: 00-000-00000000
Wellton & Shareholder: Xxxxx 0000, Xxxx X, Xxx Xxxxxxx Xxxxx,
48 Xing Yi Rd, Hong Xxxx, Xxxxxxxx, Xxxxx 000000
PHONE: 00-00-0000-0000
FAX: 00-00-0000-0000
Any notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address that shall have been furnished in
writing to the addressor.
8.5 Governing Law. This Agreement shall be construed, and the legal relations be
the parties determined, in accordance with the laws of the State of Nevada,
thereby precluding any choice of law rules which may direct the applicable of
the laws of any other jurisdiction.
8.6 Entire Agreement. This Agreement and the transactions contemplated herein
contain the entire agreement among the parties with respect to the issuance of
the Dragon Shares and the Shares and related transactions, and supersede all
prior agreements, written or oral, with respect thereto.
8.7 Headings. The headings in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.
8.8 Severability of Provisions. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or other provision
of this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
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8.9 Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed, shall constitute an original copy hereof, but
all of which together shall consider but one and the same document.
8.10 Option for buy-back: The shareholder has the option to purchase 51%of
Wellton back per stock re-purchase agreement as determined otherwise within
three years if bot sides do not satisfy performance each other.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
DRAGON INTERNATIONAL GROUP CORP. WELLTON INTERNATIONAL FIBER CORP
By: /s/ XXXXX XX By: /s/ Kung Xxxx XXX
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Name: XXXXX XX, CEO Name: Kung Xxxx XXX
YORK SMOOTH, LIMITED
By: /s/ XXXXX XXXX LING
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Name: XXXXX XXXX LING
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