SECURITIES EXCHANGE AGREEMENT
This SECURITIES EXCHANGE AGREEMENT (the
“Agreement”) is entered into as of February 11, 2011 by and among E-BAND MEDIA,
INC., a Delaware corporation (“EBM”); Xxxx Xxxxxxxxxxx (the “EBM Shareholder”)
Xxxxxxxx Xxxxxxx, Xxxxxxxx Xxxxxxx and Xxxxx Xxxxxxx (the” EBM Warrantholders);
China Green Refractories Limited, an international business company organized
under the laws of the British Virgin Islands (the “Company”); and the
shareholders of the Company who have executed this Agreement on the signature
page hereto (the “Company Shareholders”); and with respect to the following
facts:
A. Company
is a holding company which owns through various subsidiaries an operating
company engaged in the business of designing, manufacturing and selling of
medium and high level refractory materials for top combustion type, internal
combustion type, and external combustion type hot xxxx stoves in the People’s
Republic of China (“PRC”).
B. EBM
is a company whose shares of common stock are registered with the Securities and
Exchange Commission (“SEC”) and is a shell company.
C. EBM
Shareholder owns 10,000,000 shares of Common Stock of EBM, representing
approximately 89.6% of the issued and outstanding capital stock of EBM (the
“Control Shares”), and EBM Warrantholders own 5,000,000 warrants exercisable to
purchase up to 5,000,000 shares of Common Stock of EBM (the “EBM Warrants”), and
EBM Shareholder and EBM Warrantholders desire to sell its Control Shares and EBM
Warrants, respectively, to the Company Shareholders, and the Company
Shareholders desire to purchase the Control Shares and EBM Warrants from the EBM
Shareholder and Warrantholders in exchange for (i) a cash purchase price of
$250,000, and (ii) 100 shares of EBM's Series A Preferred Stock (as defined
below) to be acquired by the Company Shareholders, concurrently with the
exchange between the Company Shareholders and EBM as contemplated
herein;
D. The
Company Shareholders own all of the equity of the Company. EBM
desires to acquire all 100% of the equity ownership of the Company from the
Company Shareholders in exchange for 19,220 shares of EBM's Series A Preferred
Stock, and the Company Shareholders desire to transfer and contribute all of
their equity ownership of the Company to EBM in exchange for 19,220 shares of
EBM's Series A Preferred Stock on the terms and conditions set forth
herein.
E. As
a result of the transactions contemplated herein, it is the intent of parties
that the Company Shareholders will own, in the aggregate, 98% of the outstanding
shares of EBM's common stock subsequent to the Reverse Split (as defined
below).
F. Further,
it is the intent of the parties that the transaction contemplated herein will
occur in a tax free manner pursuant to Section 351 of the Internal Revenue
Code.
NOW, THEREFORE, in consideration of the
foregoing and the respective covenants, representations and promises set forth
herein, the parties agree as follows:
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ARTICLE
1
Securities
Exchange
1.1 Sale of Control Shares;
Agreement to Exchange Securities.
(a) Exchange Involving the
Company. Subject to the terms and upon the conditions set
forth herein, each Company Shareholder agrees to assign, transfer and deliver to
EBM, and EBM agrees to acquire from each Company Shareholder, at the Closing,
all of the shares of capital stock of the Company, consisting of ordinary shares
of capital stock, par value $1.00 per share (the “Company Shares”) owned by the
respective Company Shareholder as indicated on the signature page, in exchange
for the issuance by EBM of an aggregate of 19,220 shares of Series A Convertible
Preferred Stock, $0.0001 par value, of EBM (the “Series A Preferred
Stock”). The Company Shareholders shall immediately assign 100 shares
of Series A Preferred Stock to the EBM Shareholder pursuant to Section 1.1(b)
below.
(b)
Exchange
Involving the EBM Shareholder and Warrantholders. Subject
to the terms and upon the conditions set forth herein, the EBM Shareholder and
Warrantholders agree to assign, transfer and deliver an aggregate of 10,000,000
shares of EBM's common stock and the EBM Warrants to the Company Shareholders
and the Company Shareholders agree to (i) assign, transfer and deliver an
aggregate of 100 shares of Series A Preferred Stock to the EBM Shareholder and
Warrantholders, and (ii) pay the EBM Shareholder and Warrantholders an aggregate
cash purchase price of $250,000 (“Purchase
Price”).
(c) Allocation. The
number of Series A Preferred Stock to be delivered pursuant to Sections 1.1(a)
and (b) is set forth in Schedule A-1. The
number of shares EBM Common Stock the EBM Shareholder will deliver to the
Company Shareholders is set forth in Schedule
A-2. The Purchase Price will be allocated pursuant to
Schedule
A-3.
1.2 [Intentionally
left blank.]
1.3 Closing. The
closing (the “Closing” or the
“Closing Date”)
of the transactions contemplated by this Agreement shall occur on February 11,
2010 upon the exchange of the Company Shares and the Purchase of EBM Common
Stock as described in Section 1.1 herein. Such Closing shall take place at a
mutually agreeable time and place, and be conditioned upon all of the conditions
of the Offering being met.
At Closing, (i) all of the issued and
outstanding shares of the Company shall be held by EBM, (ii) there shall be
11,150,000 shares of EBM Common Stock issued and outstanding, of which
10,000,000 shares of EBM Common Stock shall be owned by the Company
Shareholders, (iii) there shall be 19,220 shares of Series A Preferred stock
issued outstanding of which 19,120 shares are issued to the Company Shareholders
and/or their assigns, and 100 shares are issued to EBM Shareholder,
(iv) the EBM Warrants shall be transferred to the Company
Shareholders, and immediately upon receipt such EBM Warrants of shall be
cancelled and terminated. Upon consummation of the transaction
contemplated herein, the Company Shareholders will own in the aggregate
approximately 98% of the outstanding shares of EBM's common stock subsequent to
the Reverse Split.
1.4 Deliverables at
Closing.
(a) Cash. As
part of the purchase price for their respective number of Control Shares, the
Company Shareholders shall deliver to EBM Shareholder and EBM Warrantholders via
wire transfer the aggregate amount of $250,000 pursuant to the instructions
delivered by legal counsel of EBM on behalf of the EBM Shareholder and EBM
Warrantholders.
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(b) Company
Shares. Each of the Company Shareholders shall deliver to EBM
on the Closing Date certificates for the Company Shares owned by the Company
Shareholders, or an equivalent document evidencing ownership of the Company
Shares (“Company Certificates”), along with duly executed stock powers of such
Company Certificates, in order to effectively vest in EBM all right, title and
interest in and to the Company Shares owned by the Company Shareholders. The
Company shall record and cause to be recorded the transfer of the Company Shares
on its transfer books. From time to time after the Closing Date, and
without further consideration, the Company Shareholders will execute and deliver
such other instruments of transfer and take such other actions as EBM may
reasonably request in order to effectively transfer to EBM the Company Shares
intended to be transferred hereunder.
(c) Series A Preferred Stock and
EBM Common Stock. EBM and EBM Shareholder shall deliver to the
Company Shareholders on the Closing Date original certificates evidencing the
Series A Preferred Stock and EBM Common Stock deliverable on such date, and in
form and substance satisfactory to the Company Shareholders, in order to
effectively vest in each Company Shareholder its respective right, title and
interest in and to the Series A Preferred Stock and EBM Common Stock. From time
to time after the Closing Date, and without further consideration, EBM and EBM
Shareholder and EBM Warrantholders will execute and deliver such other
instruments and take such other actions as the Company Shareholders may
reasonably request in order to more effectively issue to them the Series A
Preferred Stock and EBM Common Stock.
1.5 Restricted
Securities. The Series A Preferred Stock and EBM Common Stock
shall be issued pursuant to exemptions from the registration requirements of the
Securities Act of 1933, as amended (“Securities Act”), and shall accordingly
bear a restrictive legend subject to existing law, as more fully described in
Section 5.3 hereof.
ARTICLE
2
Representations
and Warranties of EBM
and
EBM Shareholder
EBM and the EBM Shareholder each hereby
represents and warrants to the Company that the statements contained in this
Article 2 are true and correct, except as disclosed in the disclosure schedule
attached hereto as Exhibit A (the “EBM
Disclosure Schedule”), which is divided into sections that correspond to the
sections of this Article 2 (with the disclosures in any such section of the EBM
Disclosure Schedule qualifying both the corresponding representations and
warranties of this Article 2 and any other representations and warranties of
this Article 2 to which such disclosure would reasonably relate).
2.1 Corporate Organization;
Qualification.
(a) EBM is
a corporation duly organized, validly existing and in good standing under the
laws of Delaware with the requisite corporate power and authority to carry on
its business as it is now being conducted and to own, operate and lease its
properties and assets, and is duly qualified or licensed to do business as a
foreign corporation in good standing in every other jurisdiction in which the
character or location of the properties and assets owned, leased or operated by
it or the conduct of its business requires such qualification or licensing,
except in such jurisdictions in which the failure to be so qualified or licensed
and in good standing would not, individually or in the aggregate, have a
Material Adverse Effect on the Company taken as whole. “Material
Adverse Effect” with respect to a party shall mean a material adverse change in
or effect on the business, operations, financial condition, properties or
liabilities of the party taken as a whole, provided, however, that a Material
Adverse Effect will not be deemed to include (i) changes as a result of the
announcement of this transaction or (ii) changes in generally accepted
accounting principles.
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(b) EBM
has no subsidiaries and does not own or control any capital stock of any
corporation or any interest in any partnership, joint venture or other
entity.
(c) The
authorized capital of EBM consists of (a) 100,000,000 shares of Common Stock,
$.0001 par value, of which 11,150,000 shares are issued and outstanding, and (b)
20,000,000 shares of preferred stock, $ .0001 par value, of which 19,220 shares
have been designated as "Series A Convertible Preferred Stock" (the "Series A
Preferred Stock), and (c) warrants exercisable to purchase up to
5,000,000 shares of Common Stock. Except for the Series A Preferred
Stock contemplated pursuant to this Agreement, no shares of preferred stock are
issued and outstanding. All issued and outstanding shares of EBM
Common Stock and EBM Warrants are duly authorized, validly issued, fully paid
and nonassessable and were not issued in violation of preemptive rights, other
restrictions or any securities statute or regulation. All shares of common stock
and warrants issued and outstanding have been issued in compliance and in
accordance with and as permitted under the Chapter 11 Plan of Reorganization of
AP Corporate Services, Inc. as confirmed by the U.S. Bankruptcy Court
for the Central District of California (Case No. 1:08-bk-16944-GM) (“Plan of
Reorganization”). As of the Closing Date, no shares of EBM Common
Stock were reserved for issuance upon the exercise of outstanding options to
purchase the EBM Common Stock; (iv) no EBM Common Stock were reserved for
issuance upon the exercise of outstanding warrants to purchase EBM Common Stock
except those set forth above; (v) no shares of preferred stock were reserved for
issuance to any party; and (vi) no common shares were reserved for issuance upon
the conversion of EBM preferred stock or any outstanding convertible notes,
debentures or securities. As of the Closing Date, there is no
subscription, option, warrant, call, right, contract, agreement, commitment,
understanding or arrangement to which EBM is a party, or by which either is
bound, with respect to the issuance, sale, delivery or transfer of the capital
securities of EBM, including any right of conversion or exchange or buy-back
under any security or other instrument, other than the warrants set forth
above. There are no registration rights concerning EBM
stock.
2.2 Authorization. EBM
has all requisite corporate power and authority to enter into, execute, deliver,
and perform its obligations under this Agreement. This Agreement has been duly
and validly executed and delivered by EBM and is the valid and binding legal
obligation of EBM enforceable against EBM in accordance with its terms, subject
to bankruptcy, moratorium, principles of equity and other limitations limiting
the rights of creditors generally. The execution and delivery of this Agreement
and the related documents and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of EBM,
and no other corporate or shareholder proceedings on the part of EBM are
necessary to authorize the transactions contemplated hereby and
thereby.
2.3 Non-Contravention. Except
as set forth in the EBM Disclosure Schedule, neither the execution, delivery and
performance of this Agreement, nor the consummation of the transactions
contemplated herein will:
(a) violate,
contravene or be in conflict with any provision of the Certificate of
Incorporation and Bylaws of EBM, as amended and currently in
effect;
(b) be
in conflict with, or constitute a default, however defined (or an event which,
with the giving of due notice or lapse of time, or both, would constitute such a
default), under, or cause or permit the acceleration of the maturity of, or give
rise to any right of termination, cancellation, imposition of fees or penalties
under any debt, note, bond, lease, mortgage, indenture, license, obligation,
contract, commitment, franchise, permit, instrument or other agreement or
obligation to which EBM is a party or by which EBM or any of EBM properties or
assets is or may be bound;
(c) violate,
contravene or be in conflict with Plan of Reorganization;
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(d) result
in the creation or imposition of any pledge, lien, security interest,
restriction, option, claim or charge of any kind whatsoever (“Encumbrances”)
upon any property or assets of EBM under any debt, obligation, contract,
agreement or commitment to which EBM is a party or by which EBM or any its
assets or properties are bound; or
(e) materially
violate any statute, treaty, law, judgment, writ, injunction, decision, decree,
order, regulation, ordinance or other similar authoritative matters (referred to
herein individually as a “Law” and collectively as “Laws”) of any foreign,
federal, provincial, state or local governmental or quasi-governmental,
administrative, regulatory or judicial court, department, commission, agency,
board, bureau, instrumentality or other authority (referred to herein
individually as an “Authority” and collectively as “Authorities”).
2.4 Consents and
Approvals. No consent, approval, order or authorization of or
from, or registration, notification, declaration or filing with (“Consent”) any
individual or entity, including without limitation any Authority, is required in
connection with the execution, delivery or performance of this Agreement by EBM
or the consummation by EBM any of the transactions contemplated
herein.
2.5 No Brokers or
Finders. No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with any of the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of EBM.
2.6 Compliance. EBM
has complied with and are not in violation of any Law or requirements of any
Authority with respect to the conduct of their business, or the ownership or
operation of their business, except for failures to comply or violations which,
individually or in the aggregate, have not had and are not reasonably likely to
have a Material Adverse Effect on EBM taken as a whole. To the knowledge of EBM,
the businesses and activities of EBM have not been and are not being conducted
in violation of any Law or requirements of any Authority. EBM is not in default
or violation of any term, condition or provision of any applicable charter
documents or contracts. No written notice of non-compliance with any
Law or Authority relating to or with respect to the business of EBM has been
received by EBM (and EBM has no knowledge of any such or notice delivered to any
other person or entity). To the knowledge of EBM, EBM is not in violation of any
material term of any contract or covenant relating to employment, patents,
proprietary information disclosure, non-competition or
non-solicitation.
2.7 SEC Filings; Financial
Statements. All statements, reports, schedules, forms and
other documents required to have been filed by EBM with the SEC (“SEC Reports”)
have been so filed and on a timely basis. As of the time it was filed with the
SEC (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing): (i) each of the SEC Reports
complied in all material respects with the applicable requirements of the
Securities Act of 1933, as amended, (“Securities Act”) or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”); and (ii) none of the SEC
Reports 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. EBM has a class of securities registered under the
Exchange Act. EBM’s fiscal year is June 30 and such fiscal
year has been determined and approved by EBM’s board of
directors. EBM has provided to the Company a correct and complete
copy of the audited financial statements (including, in each case, any related
notes thereto), on a consolidated basis, for the period from inception (April
29, 2010) to fiscal year ended June 30, 2010, and unaudited financial
statements for the three months ended September 30, 2010 prepared in accordance
with the published rules and regulations of any applicable governmental entity
and with U.S. GAAP applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto) and audited in accordance with
the auditing standards of the Public Company Accounting Oversight Board
(“PCAOB”) by an independent accountant registered with PCAOB. Such
financial statements fairly present in all material respects the financial
position of EBM, on a consolidated basis, at the respective dates thereof and
the results of its operations and cash flows for the periods indicated. The
audited financial statements and unaudited financial statements described in
this Section 2.7 are collectively referred to herein as the “U.S. GAAP Financial
Statements”.
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2.8 Assets and
Liabilities. The assets and liabilities of EBM are
all as set forth in the U.S. GAAP Financial Statements and there are no other
assets or liabilities of EBM that should have been disclosed in such U.S. GAAP
Financial Statements. Since EBM’s filing of its Form 10-Q for the
quarter ended September 30, 2010, EBM has not acquired any assets or incurred
any liability except in the ordinary course of business. There are no
amounts due to any directors, officers or related parties by EBM. EBM
will take all steps to reduce its total liabilities to less than $100 at the
Closing Date.
2.9 Books and
Records. The books of account, minute books, stock record
books, and other material records of EBM, all of which have been made available
to the Company, are complete and correct in all material respects and have been
maintained in accordance with reasonable business practices. The minute books of
EBM contain accurate and complete records of all formal meetings held, and
corporate action taken by, the members, shareholders, the managers and
committees of the managers of EBM. At the Closing, all of those books
and records will be in the possession of the Company.
2.10 Intercompany And Affiliate
Transactions; Insider Interests. Except as expressly
identified in the EBM Disclosure Schedule, since September 30, 2010, there have
been, no transactions, agreements or arrangements of any kind, direct or
indirect, between EBM, on the one hand, and any director, officer, employee,
stockholder, or affiliate of EBM, on the other hand. All intercompany
and affiliate transactions occurring prior to September 30, 2010 have been
previously disclosed in the SEC Reports.
2.12
Market
Quotation. The EBM common stock is quoted on the NASD
Over-The-Counter Electronic Bulletin Board (“OTC BB”). There is no action or
proceeding pending or, to EBM’ knowledge, threatened against EBM by FINRA with
respect to any intention by such entities to prohibit or terminate the quotation
of EBM common stock on the OTC BB.
2.13 Absence of Certain Changes
or Events. Except as set forth in EBM Disclosure Schedule, and
except for the transactions contemplated under this Agreement, since September
30, 2010 there has not been, with respect to EBM: (i) any Material Adverse
Effect, (ii) any declaration, setting aside or payment of any dividend on, or
other distribution (whether in cash, securities or property) in respect of, any
of equity securities, or any purchase, redemption or other acquisition of any of
equity securities or any options, warrants, calls or rights to acquire any
equity securities or other securities, (iii) any split, combination or
reclassification of any equity securities, (iv) any granting of any increase in
compensation or fringe benefits, except for normal increases of cash
compensation in the ordinary course of business consistent with past practice,
or any payment of any bonus, except for bonuses made in the ordinary course of
business consistent with past practice, or any granting of any increase in
severance or termination pay or any entry into any currently effective
employment, severance, termination or indemnification agreement or any agreement
the benefits of which are contingent or the terms of which are materially
altered upon the occurrence of a transaction of the nature contemplated hereby,
(v) entry into any licensing or other agreement with regard to the acquisition
or disposition of any intellectual property other than licenses in the ordinary
course of business consistent with past practice or any amendment or consent
with respect to any licensing agreement filed or required to be filed with
respect to any governmental entity or Authority, (vi) any material change in its
accounting methods, principles or practices, (vii) any change in the auditing
firm of the Company, (vii) any issuance of securities, or (viii) any revaluation
of any of their respective assets, including, without limitation, writing down
the value of capitalized inventory or writing off notes or accounts receivable
or any sale of assets other than in the ordinary course of
business.
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2.14 Litigation. There
are no claims, suits, actions or proceedings pending, or to the knowledge of
EBM, threatened against EBM, before any court, governmental department,
commission, agency, instrumentality or authority, or any arbitrator that seeks
to restrain or enjoin the consummation of the transactions contemplated by this
Agreement or which could reasonably be expected, either individually or in the
aggregate with all such claims, actions or proceedings, to have a Material
Adverse Effect on EBM or have a Material Adverse Effect on the ability of the
parties hereto to consummate the transactions discussed herein.
2.15 Employee Benefit
Plans. EBM has never had any employees and EBM
currently has no employee compensation, incentive, fringe or benefit
plans, programs, policies, commitments or other arrangements (whether or not set
forth in a written document) covering any active or former employee, director or
consultant of EBM or any employment or consulting agreement with any
stockholder, officer, director, employee or consultant of EBM.
2.16 Restrictions on Business
Activities. There is no agreement, commitment, judgment,
injunction, order or decree binding upon EBM or to which EBM is a party which
has or could reasonably be expected to have the effect of restricting,
prohibiting or impairing any business practice of EBM, or the conduct of
business by EBM as currently conducted or contemplated other than such effects,
individually or in the aggregate, which have not had and could not reasonably be
expected to have a Material Adverse Effect on EBM. In addition, EBM
has complied with the Plan of Reorganization and is not subject to or
required to take any further actions under the Plan of
Reorganization.
2.17 Governmental
Actions/Filings; Approvals. The Company holds, has made and/or
obtained all Governmental Actions/Filings and Approvals necessary for the
conduct by the Company of its business (as presently conducted and to be
conducted following the Closing), except with respect to any Governmental
Actions/Filings and Approvals the failure of which to hold or make would not
reasonably be likely to have a Material Adverse Effect on the Company. For
purposes of this Agreement, the term “Governmental Action/Filing” shall mean any
franchise, license, certificate of compliance, authorization, consent, order,
permit, approval, consent or other action of, or any filing, registration or
qualification with, any federal, state, municipal, foreign or other
governmental, administrative or judicial body, agency or authority.
2.18 Taxes.
(a) For
purposes of this Agreement, “Tax” or “Taxes” refers to any and all applicable
central, federal, provincial, state, local, municipal and foreign taxes,
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.
(b) To
the knowledge of EBM:
(i) EBM
has timely filed all the returns, estimates, information statements and reports
relating to Taxes required to be filed with any Tax Authority prior to the date
hereof. All such filings are true, correct and complete in all material
respects. EBM has paid all Taxes shown to be due on such
filings.
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(ii) All
Taxes that EBM is required by law to withhold or collect have been duly withheld
or collected, and has been timely paid over to the proper Authority to the
extent due and payable.
(iii) No
audit or other examination of any Tax return filed by EBM by any Tax Authority
is presently in progress, nor has EBM been notified of any request for such an
audit or other examination.
(iv) EBM
has no liability for any unpaid Taxes which have not been accrued for or
reserved on EBM’ balance sheets included in the U.S. GAAP Financial Statements
for the most recent fiscal year, other than any liability for unpaid Taxes that
may have accrued since the end of the most recent fiscal year in connection with
operation of EBM business.
2.19 Agreements. EBM
is not a party to any agreement, whether written or verbal, that results in the
creation or continuation of any contractual obligations.
ARTICLE
3
Additional
and Separate Representations and Warranties of EBM Shareholder
EBM Shareholder warrants and covenants
to Company Shareholders that the statements contained in this Article 3 are true
and correct.
3.1 Authorization. EBM
Shareholder has all the authority to enter into this Agreement and to deliver,
perform and otherwise carry out the transactions contemplated herein. This
Agreement is the valid and binding legal obligation of EBM Shareholder
enforceable against him in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws that affect creditors’ rights
generally.
3.2 Ownership. No
person other than EBM Shareholder has a beneficial interest in or right to the
Control Shares or of any part thereof. No other party has rights to
vote or control any shares of the Control Shares or of any part
thereof.
3.3 Rights. EBM
Shareholder has no options, warrants, or other rights to purchase any of the
capital stock of EBM.
3.4 Title. EBM
Shareholder has good, absolute, and marketable title to all of the Control
Shares, free and clear of all liens, claims, equities, encumbrances, and
restrictions of every kind, and has full, complete, and unrestricted legal
right, power, and authority to assign, transfer, and deliver the Shares pursuant
to this Agreement; and the delivery of the Control Shares to Company
Shareholders will vest in Control Shareholders good, absolute, and marketable
title thereto, free and clear of all liens, encumbrances, community rights, and
restrictions of every kind whatsoever.
ARTICLE
4
Representations
and Warranties of the Company
The Company represents and warrants to
EBM and the EBM Shareholder, that the statements contained in the Article 4 are
true and correct, except as disclosed in the disclosure schedule attached hereto
as Exhibit C
(the “Company Disclosure Schedule”), which are divided into sections that
correspond to the sections of this Article 4 (with the disclosures in any such
section of the Company Disclosure Schedule qualifying both the corresponding
representations and warranties of this Article 4 and any other representations
and warranties of this Article 4 to which such disclosure would reasonably
relate).
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4.1 Corporate Organization,
Standing and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of British
Virgin Islands. The Company has all corporate power and authority to
own its properties and to carry on its business as now being conducted and is
duly qualified to do business and is in good standing in each jurisdiction in
which it is required to be duly qualified and in good standing.
4.2 Authorization. The
Company has all the requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated herein. The Board of
Directors of Company has taken all action required by law, its Memorandum and
Articles of Association, or otherwise to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein. This Agreement is the valid and binding legal obligation of
the Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws that affect creditors’ rights
generally.
4.3 Capitalization. The
authorized capital of the Company consists of 50,000 shares of one class with a
$1.00 par value each. As of the date of this Agreement, there are 102
shares outstanding. All issued and outstanding shares of the Company
shares are duly authorized, validly issued, fully paid and nonassessable and
were not issued in violation of preemptive rights, other restrictions or any
securities statute or regulation. Other than as contemplated by this Agreement,
there is no subscription, option, warrant, call, right, contract, agreement,
commitment, understanding or arrangement to which the Company is a party, or by
which either is bound, with respect to the issuance, sale, delivery or transfer
of the capital securities of the Company, including any right of conversion or
exchange or buy-back under any security or other instrument. There
are no registration rights concerning the Company capital stock.
4.4 Financial
Statements. The Company has provided to EBM a correct and
complete copy of the audited consolidated financial statements for Zhenghou
Annec Industrial Co., Ltd. for the years ended December 31, 2008 and 2009, and
unaudited consolidated financial statements for the nine months ended September
30, 2009 and 2010 prepared in accordance with the published rules and
regulations of any applicable governmental entity and with U.S. GAAP applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto) and audited in accordance with the auditing standards of
the PCAOB by an independent accountant registered with PCAOB. Such
financial statements fairly present in all material respects the financial
position of the Company, on a consolidated basis, at the respective dates
thereof and the results of its operations and cash flows for the periods
indicated.
4.5 Non-Contravention. Neither
the execution, delivery and performance of this Agreement nor the consummation
of the transactions contemplated herein will:
(a) violate
any provision of the charter documents of the Company;
(b) be
in conflict with, or constitute a default, however defined (or an event which,
with the giving of due notice or lapse of time, or both, would constitute such a
default), under, or cause or permit the acceleration of the maturity of, or give
rise to, any right of termination, cancellation, imposition of fees or penalties
under, any debt, note, bond, lease, mortgage, indenture, license, obligation,
contract, commitment, franchise, permit, instrument or other agreement or
obligation to which the Company is a party or by which the Company or any of
their respective properties or assets is or may be bound;
9
(c) result
in the creation or imposition of any encumbrance upon any property or assets of
the Company under any debt, obligation, contract, agreement or commitment to
which the Company is a party or by which the Company or any of its respective
assets or properties is or may be bound; or
(d) violate
any Law of any Authority.
4.6 Consents and
Approvals. No consent is required by any person or entity,
including without limitation any Authority, in connection with the execution,
delivery and performance by the Company of this Agreement, or the consummation
of the transactions contemplated herein.
ARTICLE
5
Separate
Representations and Warranties of the Company Shareholders
Each Company Shareholder, severally and
jointly, represents, warrants and covenants to EBM with respect to such
shareholder that the statements contained in this Article 5 are true and
correct.
5.1 Power and
Authority. The Company Shareholder has all requisite power and
authority to enter into and to carry out all of the terms of this Agreement and
all other documents executed and delivered by such shareholder in connection
herewith. All action on the part of the Company Shareholder necessary
for the authorization, execution, delivery and performance of the Agreement by
the Company Shareholder has been taken and no further authorization on the part
of the Company Shareholder is required to consummate the transactions provided
for in this Agreement. When executed and delivered by the Company
Shareholder, this Agreement shall constitute the valid and legally binding
obligation of the Company Shareholder enforceable in accordance with their
respective terms, subject to bankruptcy, moratorium, principles of equity, and
other limitations limiting the rights of creditors generally.
5.2 Ownership of and Title to
Securities. The number of shares reflected on the Company
Shareholder signature page accurately and completely sets forth all of the
Company Shares owned by such Company Shareholder as of the date hereof. The
Company Shareholder has good and marketable title to the Company Shares which
such shareholder owns, free and clear of all pledges, security interests,
mortgages, liens, claims, charges, restrictions or encumbrances, except for any
restrictions imposed by federal or state securities laws.
5.3 Investment and Related
Representations.
(a) Securities Laws
Compliance. The Company Shareholder is aware that the offer or
sale of the shares of Series A Preferred Stock to the Company Shareholder has
not been registered under the Securities Act, or under any state securities law.
The Company Shareholder understands that the shares of Series A Preferred Stock
and the underlying EBM Common Stock will be characterized as “restricted
securities” under US federal securities laws and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. The Company
Shareholder agrees that the Company Shareholder will not sell all or any portion
of the shares of Series A Preferred Stock and the underlying Common Stock except
pursuant to registration under the Securities Act or pursuant to an available
exemption from registration under the Securities Act. The Company Shareholder
understands that each certificate for the shares of Series A Preferred Stock and
underlying EBM Common Stock issued to the Company Shareholder or to any
subsequent transferee shall be stamped or otherwise imprinted with the legend
set forth below summarizing the restrictions described in this Section 5.3 and
that EBM shall refuse to transfer the EBM common stock except in accordance with
such restrictions:
10
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”). THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WITH RESPECT TO SUCH SHARES, OR AN OPINION OF THE ISSUER’S
COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES
ACT.
(b) Investment
Representation. This Agreement is made with EBM in reliance
upon the Company Shareholder’s representation, that the shares of Series A
Preferred Stock and underlying EBM Common Stock to be received by the Company
Shareholder are being acquired pursuant to this Agreement for investment and not
with a view to the public resale or distribution thereof, except pursuant to an
effective registration statement or exemption under the Securities
Act.
(c) No Public
Solicitation. The Company Shareholder is acquiring the shares
of Series A Preferred Stock and underlying EBM Common Stock after private
negotiation and has not been attracted to the acquisition of the shares of
Series A Preferred Stock and underlying EBM Common Stock by any press release,
advertising or publication.
(d) Access to
Information. The Company Shareholder acknowledges having
received and reviewed the reports filed by EBM with the SEC and acknowledges
that any information contained therein is deemed disclosed by EBM for purposes
of the EBM Disclosure Schedule as well as any other disclosures required
hereunder.
(e) Investor Solicitation and
Ability to Bear Risk to Loss. The Company Shareholder, if a
corporation or a partnership, has not been organized for the purpose of
acquiring the Series A Preferred Stock and underlying EBM Common Stock. The
Company Shareholder acknowledges that it is able to protect its interests in
connection with the acquisition of the Series A Preferred Stock and underlying
EBM Common Stock and can bear the economic risk of investment in such securities
without producing a material adverse change in the Company Shareholder’s
financial condition. The Company Shareholder otherwise has such knowledge and
experience in financial or business matters that the Company Shareholder is
capable of evaluating the merits and risks of the investment in the EBM common
stock.
(f) Investor
Status. The Company Shareholder either (i) is an “accredited
investor” as that term is defined in Regulation D promulgated under the
Securities Act, or (ii) is not a U.S. Person (as defined in Regulation S
promulgated under the Securities Act), is not an affiliate of EBM, and at the
time of the origination of contact concerning this share exchange and at the
date of execution and delivery of this Agreement was not within the United
States, its territories and possessions.
11
ARTICLE
6
Covenants
of the Parties
6.1 Full
Access. Through the period prior to the Closing, each party
will afford to the other and its directors, officers, employees, counsel,
accountants, investment advisors and other authorized representatives and
agents, reasonable access to the facilities, properties, books and records of
the party in order that the other may have full opportunity to make such
investigations as it will desire to make of the affairs of the disclosing party.
Each party will furnish such additional financial and operating data and other
information as the other will, from time to time, reasonably request, including
without limitation access to the working papers of its independent certified
public accountants; provided, however, that any such investigation will not
affect or otherwise diminish or obviate in any respect any of the
representations and warranties of the disclosing party.
6.2
Confidentiality. Each
of the parties hereto agrees that it will not use, or permit the use of, any of
the information relating to any other party hereto furnished to it in connection
with the transactions contemplated herein (“Information”)in a manner or for a
purpose detrimental to such other party or otherwise than in connection with the
transaction, and that they will not disclose, divulge, provide or make
accessible, or permit the disclosure of, any of the Information to any person or
entity, other than their respective directors, officers, employees, investment
advisors, accountants, counsel and other authorized representatives and agents,
except as may be required by judicial or administrative process or, in the
opinion of such party’s counsel, by other requirements of Law; provided,
however, that prior to any disclosure of any Information permitted hereunder,
the disclosing party will first seek to obtain the recipients’ undertaking to
comply with the provisions of this Section with respect to such information. The
term “Information” as used herein will not include any information relating to a
party that the party disclosing such information can show: (i) to have been in
its possession prior to its receipt from another party hereto without breach of
any other confidentiality agreement; (ii) to be generally available to the
public through no fault of the disclosing party; (iii) to have been available to
the public at the time of its receipt by the disclosing party without breach of
any confidentiality agreement; (iv) to have been received separately by the
disclosing party in an unrestricted manner from a person entitled to disclose
such information; or (v) to have been developed independently by the disclosing
party without regard to any information received in connection with this
transaction. Each party hereto also agrees to promptly return to the party from
whom it originally received such information all original and duplicate copies
of written materials containing Information should the transactions contemplated
herein not occur. A party hereto will be deemed to have satisfied its
obligations to hold the Information confidential if it exercises the same care
as it takes with respect to its own similar information.
6.3 Further Assurances;
Cooperation; Notification.
(a) Each
party hereto will, before, at and after Closing, execute and deliver such
instruments and take such other actions as the other party or parties, as the
case may be, may reasonably require in order to carry out the intent of this
Agreement. Without limiting the generality of the foregoing, at any time after
the Closing, at the reasonable request of either party and without further
consideration, the party that is the subject of the request will execute and
deliver such instruments of sale, transfer, conveyance, assignment and
confirmation and take such action as the requesting party may reasonably deem
necessary or desirable in order to more effectively consummate the transactions
contemplated hereby. In addition, EMB Shareholder hereby agrees to cooperate and
provide assistance in preparation of the required filings for periods ending
prior to the Closing.
(b) At
all times from the date hereof until the Closing, each party will promptly
notify the other in writing of the occurrence of any event which it reasonably
believes will or may result in a failure by such party to satisfy the covenants
specified in this Article 6.
12
6.4 Satisfaction of Conditions
Precedent. Each party will use commercially reasonable efforts
to satisfy or cause to be satisfied all the conditions precedent that are
applicable to them, and to cause the transactions contemplated by this Agreement
to be consummated, and, without limiting the generality of the foregoing, to
obtain all material consents and authorizations of third parties and to make
filings with, and give all notices to, third parties that may be necessary or
reasonably required on its part in order to effect the transactions contemplated
hereby.
6.5 Resignation of
Directors. At the Closing (i) Xx. Xxxxxxxxx Xxxxx shall resign
as a director, effective immediately, (ii) Xx. Xxxx Xxxxxxxxxxx shall
resign as directors of EBM, effective on the tenth day following the
mailing by EBM of an information statement, or the Information Statement, to
EBM's stockholders that complies with the requirements of Section 14(f) of the
Exchange Act ("Section 14(f) Effective Date"), (iii) Xx. Xxxx Xxxxxxxxxxx, as
sole director, shall increase the Board of Directors to four (4) and appoint Xx.
XX Fuchao as Chairman to the EBM board of directors to fill the vacancy created
by the resignation of Xx. Xxxxx, and appoint LI Jiantao, Sun Zhaoqing, and XXXXX
Xxxx, to fill the vacancy created by the resignation of Xx. Xxxxxxxxxxx and the
increase Board size. Such appointment of Messrs. Li Jiantao and Sun Zhaoqing,
and Ms. Xxxxx Xxxx will become effective on the Section 14(f)
Effective Date.
6.6 Designation of
Officers. After the Closing Date, all present officers of EBM
shall resign from all their officer positions of EBM and the persons as set
forth below shall be appointed as officers of EBM:
Name
|
Position
|
|
Li
Jiantao
|
Chief
Executive Officer, President and Chief Financial
Officer
|
|
Sun Zhaoqing
|
Vice
President
|
|
Xx
Xxxxxxx
|
Chief
Technology Officer
|
ARTICLE
7
Conditions
to the Obligations of EBM and the EBM Shareholders
Notwithstanding any other provision of
this Agreement to the contrary, the obligation of EBM and the EBM Shareholder to
effect the transactions contemplated herein will be subject to the satisfaction
at or prior to the Closing, or waiver by EBM and the EBM Shareholder, of each of
the following conditions:
7.1 Representations and
Warranties True. The representations and warranties of the
Company and the Company Shareholders contained in this Agreement, including
without limitation in the Company Disclosure Schedule delivered to EBM as Exhibit B, will be
true, complete and accurate in all material respects as of the date when made
and as of the Closing Date as though such representations and warranties were
made at and as of such time, except for changes specifically permitted or
contemplated by this Agreement, and except insofar as the representations and
warranties relate expressly and solely to a particular date or period, in which
case they will be true and correct at the Closing with respect to such date or
period.
7.2 Performance. The
Company and the Company Shareholders will have performed and complied in all
material respects with all agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by the Company and
the Company Shareholders on or prior to the Closing.
13
7.3 Required Approvals and
Consents.
(a) All
action required by law and otherwise to be taken by the members of the board of
directors of the Company to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby will
have been duly and validly taken.
(b) All
Consents of or from all Authorities required hereunder to consummate the
transactions contemplated herein, will have been delivered, made or obtained,
and EBM will have received copies thereof.
(c) EBM
will have received written verification of good standing of the Company, as of
the most recent practicable date.
7.4 No Proceeding or
Litigation. No suit, action, investigation, inquiry or other
proceeding by any Authority or other person or entity will have been instituted
or threatened which delays or questions the validity or legality of the
transactions contemplated hereby or which, if successfully asserted, would, in
the reasonable judgment of EBM, individually or in the aggregate, otherwise have
a Material Adverse Effect on the Company’s business, financial condition,
prospects, assets or operations or prevent or delay the consummation of the
transactions contemplated by this Agreement.
7.5 Legislation. No
Law will have been enacted which prohibits, restricts or delays the consummation
of the transactions contemplated hereby or any of the conditions to the
consummation of such transaction including any pre-approval requirement for
foreign listings.
7.6 Appropriate
Documentation. EBM will have received, in a form and substance
reasonably satisfactory to EBM, dated the Closing Date, all certificates and
other documents, instruments and writings to evidence the fulfillment of the
conditions set forth in this Article 7 as EBM may reasonably
request.
ARTICLE
8
Conditions
to Obligations of the Company and the Company Shareholders
Notwithstanding anything in this
Agreement to the contrary, the obligations of the Company and Company
Shareholders to effect the transactions contemplated herein will be subject to
the satisfaction at or prior to the Closing, or waiver by all the Company
Shareholders, of each of the following conditions:
8.1 Representations and
Warranties True. The representations and warranties of EBM and the EBM
Shareholder and contained in this Agreement will be true, complete and accurate
in all material respects as of the date when made and at and as of the Closing,
as though such representations and warranties were made at and as of such time,
except for changes permitted or contemplated in this Agreement, and except
insofar as the representations and warranties relate expressly and solely to a
particular date or period, in which case they will be true and correct at the
Closing with respect to such date or period.
8.2 Performance. EBM
and the EBM Shareholder will have performed and complied in all material
respects with all agreements, covenants, obligations and conditions required by
this Agreement to be performed or complied with by EBM or the EBM Shareholder at
or prior to the Closing.
14
8.3 Required Approvals and
Consents.
(a) All
action required by law and otherwise to be taken by the directors and
shareholders of the EBM to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby will
have been duly and validly taken.
(b) All
Consents of or from all Authorities required hereunder to consummate the
transactions contemplated herein, will have been delivered, made or obtained,
and the Company will have received copies thereof.
8.4 Agreements and
Documents. The Company will have received the following
agreements and documents, each of which will be in full force and
effect:
(a) a
certificate executed on behalf of EBM by its Chief Executive Officer confirming
that the conditions set forth in Sections 8.1, 8.2, and 8.3 have been duly
satisfied;
(b)
resolutions of the board of directors of EBM, certified by the secretary of EBM,
approving the transactions contemplated by this Agreement, including the
issuance of the EBM common stock and the matters referred to in Section 8.3 of
this Agreement;
(c)
delivery of original stock
certificate representing the Control Shares and either (i) endorsed to transfer
the Control Shares as indicated in Section 1.1(a) or (ii) accompanied by an
executed irrevocable stock power for the Control Shares completed to
effect the transfer of the Control Shares to the Company
Shareholders;
(d) certificates
or document representing that the EBM common stock is registered in the names of
the Company Shareholders in accordance with Section 1.1(b);
(e) a
certificate of good standing of EBM from the State of Delaware and any other
states where EBM is qualified to do business, as of the most recent practicable
date;
(f)
letter of resignations by Xx. Xxxx Xxxxxxxxxxx and Xx. Xxxxxxxxx Xxxxx,
resigning as Chief Executive Officer, President, Chief Financial Officer,
Treasurer, and Secretary, respectively, and any other positions they may hold
with EBM;
(g) irrevocable
letter of resignation by Xx. Xxxxxxxxx Xxxxx effective as of Closing, and Xx.
Xxxx Xxxxxxxxxxx resigning as directors of EBM to be effective as of
the Section 14f-1 Effective Date as set forth under Section 6.5;
and
(h) certificates
representing the EBM Warrants and assignments of the EBM
Warrants duly executed by the Warrantholders.
8.5 Legislation. No
Law will have been enacted which prohibits, restricts or delays the consummation
of the transactions contemplated hereby or any of the conditions to the
consummation of such transaction.
8.6 Appropriate
Documentation. The Company will have received, in a form and
substance reasonably satisfactory to Company, dated the Closing Date, all
certificates and other documents, instruments and writings to evidence the
fulfillment of the conditions set forth in this Article 8 as the Company may
reasonably request.
15
8.7 Readiness to File Form
8-K. The Company shall have confirmed, in consultation with
the auditors and counsel to Company, that EBM is prepared to file a Form 8-K
within the time allotted by Form 8-K and that the draft of the Form 8-K complies
as to form with the requirements of Form 8-K.
8.8 Reduction in
Liabilities. As of the Closing Date, the amount of EBM’s
outstanding liabilities will not exceed $100.
8.9 Filing of Certificate of
Designation. EBM shall have filed with the Secretary of State
of the State of Delaware a Certificate of Designation setting forth the voting
powers, designations, preferences and relative, participating, optional or other
rights and the qualifications, limitations and restrictions of the Series A
Preferred Stock, in form and substance mutually agreed upon by the Company
Shareholders.
ARTICLE
9
Post
Closing Covenants
9.1 Reverse
Split. Subsequent to Closing, the new management of EBM will
effect a 1-for-14.375 reverse stock split of our outstanding shares
of common stock (the “Reverse Split”). Immediately subsequent to the
Reverse Split, all of the issued and outstanding shares of Series A Preferred
Stock shall automatically be converted into 19,220,000 shares of EBM Common
Stock (“Converted A Common Shares”) in accordance with the Certificate of
Designation of the Series A Convertible Preferred Stock.
9.2 Schedule 14f-1 with
SEC. EBM shall cause to be filed with Schedule 14f-1 with the
SEC to effectively appoint Messrs. Li Jiantao and Sun Zhaoqing and Ms. Xxxxx
Xxxx to EBM’s board of directors in compliance with Section 14(f) of
the Exchange Act. Upon the effective date of their appointment, Xx.
Xxxx Xxxxxxxxxxx shall resign from the EBM board of directors.
ARTICLE
10
Termination
and Abandonment
10.1 Termination by Mutual
Consent. This Agreement may be terminated at any time prior to
the Closing by the written consent of the Company and EBM.
10.2 Termination by either the
Company or EBM. This Agreement may be terminated by either the
Company or EBM if the Closing is not consummated by February 11, 2011 (provided
that the right to terminate this Agreement under this Section 10.2 will not be
available to any party whose failure to fulfill any material obligation under
this Agreement has been the cause of or resulted in the failure of the Closing
to occur on or before such date). This Agreement may be terminated by
the Company for a material breach of any representation, warranty, or covenant
of EBM or any EBM Shareholder or the failure of any of the Company’s conditions
to closing to be satisfied. This Agreement may be terminated by EBM
for a material breach of any representation, warranty, or covenant of the
Company or any Company Shareholder or the failure of any of EBM’ conditions to
Closing to be satisfied.
10.3 Procedure and Effect of
Termination. In the event of termination of this Agreement and
abandonment of the transactions contemplated hereby by the Company or EBM
pursuant to this Article 10, written notice thereof will be given to all other
parties and this Agreement will terminate and the transactions contemplated
hereby will be abandoned, without further action by any of the parties
hereto. If this Agreement is terminated as provided
herein:
16
(a) Each
of the parties will, upon request, redeliver all documents and other material of
the other parties relating to the transactions contemplated hereby, whether
obtained before or after the execution hereof, to the party furnishing the
same;
(b) No
party will have any liability for a breach of any representation, warranty,
agreement, covenant or the provision of this Agreement, unless such breach was
due to a willful or bad faith action or omission of such party or any
representative, agent, employee or independent contractor thereof;
and
(c) All
filings, applications and other submissions made pursuant to the terms of this
Agreement will, to the extent practicable, be withdrawn from the agency or other
person to which made.
ARTICLE
11
Miscellaneous
Provisions
11.1 Survival of Representations,
Warranties and Covenants. All of the representations,
warranties and covenants in this Agreement shall survive the
Closing.
11.2 Expenses. Except
as set forth in the following sentence, EBM, the EBM Shareholder, the EBM
Warrantholders, the Company, and the Company Shareholders will each bear their
own costs and expenses relating to the transactions contemplated hereby,
including without limitation, fees and expenses of legal counsel, accountants,
investment bankers, brokers or finders, printers, copiers, consultants or other
representatives for the services used, hired or connected with the transactions
contemplated hereby.
11.3 Amendment and
Modification. This Agreement may be amended or modified only
by the EBM, the EBM Shareholder, the Company, and the Company
Shareholders. All such amendments and modifications to this Agreement
must be in writing duly executed by all of the parties hereto.
11.4 Waiver of Compliance;
Consents. Any failure of a party to comply with any
obligation, covenant, agreement or condition herein may be expressly waived in
writing by EBM and the EBM Shareholder, on the one hand, and the Company and the
Company Shareholders, on the other, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition will
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. No single or partial exercise of a right or remedy will
preclude any other or further exercise thereof or of any other right or remedy
hereunder. Whenever this Agreement requires or permits the consent by
or on behalf of a party, such consent will be given in writing in the same
manner as for waivers of compliance.
11.5 Indemnification Obligations
in favor of EBM. From and after the Closing Date, the EBM
Shareholder shall reimburse, indemnify and hold harmless EBM, the Company, and
the Company Shareholders, and the executive officers, directors, and employees
of EBM and the Company in office after the Closing (each such person and his
heirs, executors, administrators, agents, successors and assigns is referred to
herein as a “Company Indemnified Party”) against and in respect of any and all
damages, losses, settlement payments, in respect of deficiencies, liabilities,
costs, expenses and claims suffered, sustained, incurred or required to be paid
by any Company Indemnified Party, and any and all actions, suits, claims, or
legal, administrative, arbitration, governmental or other procedures or
investigation against any Indemnified Party, in respect of any breach of any
representation, warranty, covenant, or other agreement made by EBM or a EBM
Shareholder.
17
11.6 Third Party
Beneficiaries. Nothing in this Agreement will entitle any person or
entity other than a party hereto and his, her or its respective successors and
assigns permitted hereby to rely upon any of the representations or warranties
contained herein or to any claim, cause of action, remedy or right of any
kind.
11.7 Notices. All
notices, requests, demands and other communications required or permitted
hereunder prior to the Closing will be made in writing and will be deemed to
have been duly given and effective: (i) on the date of delivery, if delivered
personally; or (ii) on the date of transmission, if sent by facsimile, telecopy,
telegraph, telex or other similar telegraphic communications equipment, or to
such other person or address as a party will furnish to the other parties hereto
in writing in accordance with this subsection.
If to the
Company and the Company Shareholders:
3901#,
39/F Office Tower A Beijing Fortune Plaza
7
Dongsanhuan Xxxxx Xxxx
Xxxxxxxx
Xxxxxxxx
Xxxxxxx
000000, XXX
Tel: (00)00-00000000
Fax: (00)00-00000000
or to
such other person or address as the Company will furnish to the other parties
hereto in writing in accordance with this subsection.
If to the
EBM and the EBM Shareholder:
c/o Law
Office of Xxxxxx X. Xxxxxxx
P. O. Xxx
00
Xx Xxxxx,
XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
or to
such other person or address as EBM will furnish to the other parties hereto in
writing in accordance with this subsection.
11.8 Assignment. This
Agreement and all of the provisions hereof will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned (whether voluntarily, involuntarily, by
operation of law or otherwise) by any of the parties hereto without the prior
written consent of the other parties.
11.9 Counterparts. This
Agreement may be executed simultaneously in one or more counterparts, including
facsimile transmissions, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
11.10 Headings. The
headings of the sections and subsections of this Agreement are inserted for
convenience only and will not constitute a part hereof.
18
11.11 Entire
Agreement. This Agreement, the schedules, the Disclosure
Schedules and the exhibits and other writings referred to in this Agreement or
in the Disclosure Schedules or any such exhibit or other writing are part of
this Agreement, together they embody the entire Agreement and understanding of
the parties hereto in respect of the transactions contemplated by this Agreement
and together they are referred to as this “Agreement” or the
“Agreement.” There are no restrictions, promises, warranties,
agreements, covenants or undertakings, other than those expressly set forth or
referred to in this Agreement. This Agreement supersedes all prior agreements
and understandings between the parties with respect to the transaction or
transactions contemplated by this Agreement. Provisions of this
Agreement will be interpreted to be valid and enforceable under applicable Law
to the extent that such interpretation does not materially alter this Agreement,
provided, however, that if any such provision becomes invalid or unenforceable
under applicable Law such provision will be stricken to the extent necessary and
the remainder of such provisions and the remainder of this Agreement will
continue in full force and effect.
11.12 Remedies and Injunctive
Relief. It is expressly agreed among the parties hereto that
monetary damages would be inadequate to compensate a party hereto for any breach
by any other party of its covenants in Articles 6 and 8 hereof. Accordingly, the
parties agree and acknowledge that any such violation or threatened violation
will cause irreparable injury to the other and that, in addition to any other
remedies which may be available, such party will be entitled to injunctive
relief against the threatened breach of Article 6 hereof or the continuation of
any such breach without the necessity of proving actual damages and may seek to
specifically enforce the terms thereof.
11.13 Governing
Law. This Agreement shall be governed and construed in
accordance with the laws of the California without regard to principles of
conflicts of law. Each of the parties consents to the exclusive jurisdiction of
the federal courts whose districts encompass any part of the Northern District
of California or the state courts of the State of California sitting in the
County and City of San Francisco in connection with any dispute arising under
this Agreement or any of the other related transaction agreements and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens, to the bringing of any such proceeding
in such jurisdictions or to any claim that such venue of the suit, action or
proceeding is improper.
[Balance
of Page Intentionally Left Blank]
19
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed as of the day and year first
above written.
CHINA
GREEN REFRACTORIES LIMITED
|
||||
By:
|
/s/ |
By:
|
/s/ | |
Xxxx
Kontstantine
President
and Chief Executive Officer
|
Li
Fuchao, Chairman
|
|||
EBM
SHAREHOLDER
|
||||
/s/ | ||||
Xxxx
Kontstantin
|
||||
EBM WARRANTHOLDERS
|
||||
/s/
|
||||
Xxxxxxxx
Xxxxxxx
|
||||
/s/
|
||||
Xxxxxxxx
Xxxxxxx
|
||||
/s/
|
||||
Xxxxx
Xxxxxxx
|
Signature
Page to Securities Exchange Agreement
20
CHINA
GREEN REFRACTORIES LIMITED
|
||||
HIGH-SKY
ASSETS MANAGEMENT LIMITED
|
NEW-SOURCE
GROUP LIMITED
|
|||
By:
|
/s/ |
By:
|
/s/ | |
Xx.
Xx Ling, Sole Shareholder and Director
10
Shares Owned
|
Xx.
Xx Fu Chao, Director
|
|||
By:
|
/s/ | |||
Xx.
Xx Ling, Sole Shareholder
80
Shares Owned
|
||||
JOINT
RISE INVESTMENTS LIMITED
|
GIANT
HARVEST INVESTMENTS LIMITED
|
|||
By:
|
/s/ |
By:
|
/s/ | |
Xx.
Xxx Hon Wah, Sole Shareholder and Director
5
Shares Owned
|
Xx.
Xxxxxx Yin Nai Xxxxx, Sole Shareholder and
Director
5
Shares Owned
|
|||
QIAN
YUNTING
|
||||
/s/ | ||||
2
Shares Owned
|
Company
Shareholders Signature Page to Securities Exchange Agreement
21
Schedule
A-1
Series
A Preferred Stock To Be Issued
Name
|
Number of Series A
Preferred Stock |
|||
High-Sky
Assets Management Limited
|
1,853 | |||
New-Source
Group Limited
|
14,824 | |||
Giant
Harvest Investments Limited
|
000 | |||
Xxxxx
Xxxx Investment Limited
|
926 | |||
Qian
Yunting
|
371 | |||
Xxxx
Xxxxxxxxxxx
|
5 | |||
Xxxxxxxx
Xxxxxxx
|
80 | |||
Xxxxxxxx
Xxxxxxx
|
10 | |||
Xxxxx
Xxxxxxx
|
5 | |||
To be assigned by the Company Shareholders at Closing | 220 | |||
Total
|
19,220 |
22
Schedule
A-2
Allocation
of EBM Common Stock From EBM Shareholder
Name
of Company Shareholder
|
Number of EBM Common Stock
|
|||
High-Sky
Assets Management Limited
|
980,392 | |||
New-Source
Group Limited
|
7,843,138 | |||
Giant
Harvest Investments Limited
|
490,196 | |||
Joint
Rise Investment Limited
|
490,196 | |||
Qian
Yunting
|
196,078 | |||
Total
|
10,000,000 |
23
Schedule
A-3
Allocation
of Purchase Price
Xxxx
Xxxxxxxxxxx
|
$ | 10,000 | ||
Xxxxxxxx
Xxxxxxx
|
$ | 200,000 | ||
Xxxxxxxx
Xxxxxxx
|
$ | 10,000 | ||
Xxxxx
Xxxxxxx
|
$ | 30,000 | ||
Total
|
$ | 250,000 |
24
Exhibit
A
EBM
Disclosure Schedule
None
25
Exhibit
B
Company
Disclosure Schedule
None
26