SECURITIES EXCHANGE AGREEMENT
Exhibit
10.5
THIS SECURITIES EXCHANGE AGREEMENT
(hereinafter referred to as the “Agreement”), is entered into as of this
1st
day of April, 2009 (the “Closing Date”), by and among A-PLUS INTERNATIONAL,
LTD., a Nevada limited liability company (“A-Plus”), Targetek
Technology Co., Ltd, a company organized under the laws of the Republic of China
(“Targetek”) and all of the equity holders of Targetek set forth on the
signature page hereof (the “Targetek Shareholders”) collectively referred to as
the “Parties” and individually as a “Party.”)
W
I T N E S S E T H
WHEREAS, the Parties desire
that A-PLUS acquire all of the issued and outstanding capitalization of Targetek
from the Targetek Shareholders in exchange for an aggregate of 11.875%
of the total outstanding equity of A-PLUS on a fully-diluted basis (the
"Exchange Shares") and Targetek will be a wholly-owned subsidiary of
A-Plus.
WHEREAS, the Parties intend
that the transaction contemplated herein (the “Transaction”) qualify as a
reorganization and tax-free exchange under Section 368(a) of the Internal
Revenue Code of 1986, as amended.
NOW THEREFORE, on the stated
premises and for and in consideration of the foregoing recitals which are hereby
incorporated by reference, the mutual covenants and agreements hereinafter set
forth and the mutual benefits to the Parties to be derived herefrom and for
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE
I
PLAN
OF EXCHANGE
1.1 The
Exchange. Upon Closing (defined below), all of the Targetek
Shares issued and outstanding immediately prior to the Closing Date shall be
exchanged for the Exchange Shares. From and after the Closing Date, the Targetek
Shareholders shall no longer own any stock ownership interest in Targetek, and
the former Xodtec Shares shall represent the Exchange Shares issuable in
exchange therefor pursuant to this Agreement.
1.2 Closing. The closing
(“Closing”) of the transactions contemplated by this Agreement shall occur as of
the date hereof.
1.3 Closing
Events. Upon Closing, each of the respective Parties hereto
shall execute, acknowledge, and deliver (or shall cause to be executed,
acknowledged, and delivered) any and all stock certificates, membership
certificates, officers’ certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings, or other instruments required by this
Agreement to be so delivered hereunder together with such other items as may be
reasonably requested by the Parties hereto and their respective legal counsel in
order to effectuate or evidence the transactions contemplated
hereby. The Closing may take place through the exchange of documents
by fax, email and/or express courier. Upon Closing, the Exchange
Shares shall be issued to the Targetek Shareholders as set forth in Schedule B attached
hereto.
ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF A-PLUS
As an
inducement to, and to obtain the reliance of Xodtec, A-PLUS represents and
warrants as follows:
2.1 Organization. A-PLUS
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada. A-PLUS has the power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in jurisdictions in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, violate
any provision of A-PLUS’s Articles of Incorporation or By-Laws. A-PLUS has taken
all action required by law, its Articles of Incorporation, its By-Laws, or
otherwise to authorize the execution and delivery of this Agreement, and A-PLUS
has full power, authority, and legal right and has taken all action required by
law, its Articles of Incorporation, By-Laws, or otherwise to consummate the
transactions herein contemplated.
2.2 Approval
of Agreement. Board of Directors of A-PLUS have authorized the
execution and delivery of this Agreement by A-PLUS and has approved the
transactions contemplated hereby.
2.3 Absence
of Certain Changes or Events. Except
as described herein:
(a) except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of A-PLUS;
or (ii) any damage, destruction, or loss to A-PLUS (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of A-PLUS;
(b) A-PLUS
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business; (ii) paid any material obligation
or liability not otherwise in the ordinary course of business (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent A-PLUS consolidated balance sheet, and current liabilities incurred since
that date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights not
otherwise in the ordinary course of business; (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which they
are a party not otherwise in the ordinary course of business if such amendment
or termination is material, considering the business of A-PLUS; or (v) issued,
delivered, or agreed to issue or deliver to any third party any membership
interests, bonds or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock);
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(c) neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which A-PLUS is a party or by which it is bound or to which any of its assets
is subject; and
(d) no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of A-PLUS threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
ARTICLE
III
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF
XODTEC
As an
inducement to, and to obtain the reliance of A-PLUS, Xodtec represents and
warrants as follows:
3.1 Organization. Xodtec
is a corporation duly organized, validly existing, and in good standing under
the laws of the Country of Poland, and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there is no jurisdiction in which it is not
qualified in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Xodtec’s
Articles of Incorporation or Bylaws. Xodtec has taken all action required by
law, its Articles of Incorporation, its Bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and Xodtec has full power, authority,
and legal right and has taken all action required by law, its Articles of
Incorporation, Bylaws, or otherwise to consummate the transactions herein
contemplated.
3.2 Capitalization. Xodtec’s
authorized capitalization consists of _______ (____) shares of stock, of which
all are issued and outstanding as of Closing. All issued and
outstanding shares are legally issued, fully paid, and non-assessable and not
issued in violation of the pre-emptive or other rights of any
person.
3.3 Absence
of Certain Changes or Events. Except
as described herein:
(a) except
in the normal course of business, there has not been (i) any material adverse
change in the business, operations, properties, assets, or condition of Xodtec;
or (ii) any damage, destruction, or loss to Xodtec (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of Xodtec;
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(b) Xodtec
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) not
otherwise in the ordinary course of business; (ii) paid any material obligation
or liability not otherwise in the ordinary course of business (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Xodtec consolidated balance sheet, and current liabilities incurred since
that date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights not
otherwise in the ordinary course of business; (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which they
are a party not otherwise in the ordinary course of business if such amendment
or termination is material, considering the business of Xodtec; or (v) issued,
delivered, or agreed to issue or deliver to any third party any stock, bonds or
other corporate securities including debentures (whether authorized and unissued
or held as treasury stock);
(c) neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Xodtec is a party or by which it is bound or to which any of its assets
is subject; and
(d) no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of Xodtec threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
3.4 Approval
of Agreement. The Board of Directors of Xodtec (the “Xodtec
Board”) and the Xodtec Shareholders have authorized the execution and delivery
of this Agreement by Xodtec and have approved this Agreement and the
transactions contemplated hereby.
3.5 Ownership of Xodtec
Shares. The Xodtec Shareholders are the only legal and
beneficial owners of the Xodtec Shares, free and clear of any claims, charges,
equities, liens, security interests, and encumbrances whatsoever, and the Xodtec
Shareholders have full right, power, and authority to transfer, assign, convey,
and deliver the Xodtec Shares; and delivery of such stock upon Closing will
convey to A-PLUS good and marketable title to such shares free and clear of any
claims, charges, equities, liens, security interests, and encumbrances except
for any such claims, charges, equities, liens, security interests, and
encumbrances arising out of such shares being held by Xodtec.
ARTICLE
IV
SPECIAL
COVENANTS
4.1 Actions of Xodtec
Shareholders. Prior to the Closing, Xodtec shall cause the
following actions to be taken by the written consent of the Xodtec
Shareholders:
(a) the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
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(b) such
other actions as the directors of Xodtec may determine are necessary or
appropriate.
4.2 Actions of A-PLUS
Members. At or prior to Closing, A-PLUS shall cause the
following actions to be taken by the written consent of all the members of
A-PLUS:
(a) the
approval of this Agreement and the transactions contemplated hereby and thereby;
and
(b) such
other actions as the Managers of A-PLUS may determine are necessary or
appropriate.
4.3 Access to Properties and
Records. Xodtec and A-PLUS have each afforded the officers and
authorized representatives of the other reasonable access to the properties,
books, and records of Xodtec or A-PLUS in order that each may have full
opportunity to make such reasonable investigation as it shall desire to make of
the affairs of the other, and each has furnished the other with such additional
financial and operating data and other information as to the business and
properties of Xodtec or A-PLUS as the other has reasonably
requested.
4.4 Delivery
of Books and Records. Upon Closing, Xodtec shall deliver to
A-PLUS, the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of Xodtec now in the
possession or control of Xodtec or its representatives and
agents.
4.5 Indemnification.
(a) A-PLUS
hereby agrees to indemnify Xodtec and each of the officers, agents and directors
of Xodtec as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in Article II.
(b) Xodtec
hereby agrees to indemnify A-PLUS and each of the officers, agents and directors
of A-PLUS as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made under Article III.
ARTICLE
V
MISCELLANEOUS
5.1 Governing
Law. This Agreement shall be governed by, enforced, and
construed under and in accordance with the laws of the United States of America
and, with respect to matters of state law, with the laws of
Nevada. Any dispute arising under or in any way related to this
Agreement will be submitted to binding arbitration before a single arbitrator by
the American Arbitration Association in accordance with the Association’s
commercial rules then in effect. The arbitration will be conducted in New York,
New York. The decision of the arbitrator will set forth in reasonable detail the
basis for the decision and will be binding on the parties. The arbitration award
may be confirmed by any court of competent jurisdiction.
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5.2 Notices. Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail or
certified mail, postage prepaid, or by prepaid telegram and any such notice or
communication shall be deemed to have been given as of the date so delivered,
mailed, or telegraphed.
5.3 Attorney’s
Fees. In the event that any party institutes any action or suit to
enforce this Agreement or to secure relief from any default hereunder or breach
hereof, the breaching party or parties shall reimburse the non-breaching party
or parties for all costs, including reasonable attorneys’ fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
5.4 Confidentiality.
A-PLUS, on the one hand, and Xodtec and the Xodtec Shareholders, on the other
hand, will keep confidential all information and materials regarding the other
Party designated by such Party as confidential. The provisions of
this Section 5.4 shall not apply to any information which is or shall become
part of the public domain through no fault of the Party subject to the
obligation from a third party with a right to disclose such information free of
obligation of confidentiality. Xodtec and A-PLUS agree that no public disclosure
will be made by either Party of the existence of the Transaction or the letter
of intent or any of its terms without first advising the other Party and
obtaining its prior written consent to the proposed disclosure, unless such
disclosure is required by law, regulation or stock exchange
rule.
5.5 Expenses. Except
as otherwise set forth herein, each Party shall bear its own costs and expenses
associated with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, all
costs and expenses incurred by A-PLUS and Xodtec after the Closing shall be
borne by the surviving entity.
5.6 Schedules;
Knowledge. Each Party is presumed to have full knowledge of
all information set forth in the information disclosed and delivered by the
other Party pursuant to this Agreement.
5.7 Third
Party Beneficiaries. This Agreement is solely between A-PLUS,
Xodtec and the Xodtec Shareholders, and, except as specifically provided, no
director, officer, stockholder, employee, agent, independent contractor, or any
other person or entity shall be deemed to be a third party beneficiary of this
Agreement.
5.8 Entire
Agreement. This Agreement represents the entire agreement
between the Parties relating to the Transaction. There are no other courses of
dealing, understandings, agreements, representations, or warranties, written or
oral, except as set forth herein.
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5.9
Survival. The
representations and warranties of the respective Parties shall survive the
Closing Date and the consummation of the transactions herein
contemplated.
5.10 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be deemed
an original and all of which taken together shall be but a single
instrument.
5.11
Amendment
or Waiver. Every
right and remedy provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or any other
default then, theretofore, or thereafter occurring or existing. This
Agreement may only be amended by a writing signed by all Parties hereto, with
respect to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the Party or Parties for whose benefit the provision is
intended.
(The
rest of this page left intentionally blank.)
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IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be duly authorized and executed as
of the date first above-written.
|
A-PLUS
INTERNATIONAL, LTD.
|
TARGETEK TECHNOLOGY
CO., LTD.,
|
|||
|
By:
|
/s/ Su, Yao-Ting |
By:
|
/s/ Su, Yao-Ting | |
|
Name:
|
Yao-Ting Su |
Name:
|
Yao-Ting Su | |
|
Title:
|
Manager |
Title:
|
Chairman | |
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