Share Exchange Agreement
This Agreement as of the 6th May 2002.
Xxx Xxxxx Bo, Xxxx Xxx,Xiang Xxxx Xxx business persons of Xx 000X xx 0 Xxxxx Xx.
Qixianling Industrial Base High-Tech Zone FJV PR China
Xxx Xxx businesswoman of 5 Xiao Xxx Xxxx Xx Xxxx Xxxx Xxx Dongcheng District
Beijing PRC
Xxx Xxx Rm businessman of 102# 00-0 Xxxxxxxxx Xx. Xxxxxx Xxxxxxxx Xxxxxxx XXX
Xxxxxx Xxxx businessman of 221 0000 Xxxxxxx Xxxx. Xxxxxxxxx Xxxxxxx Xxxxxxxx
Xxxxxx
Xxxxxxx Xxxx businessman of 2 0000 Xxx Xxxx. Xxxxxxxxx Xxxxxxx Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx businesswoman of 0000 Xxxx 00xx Xxx. Xxxxxxxxx Xxxxxxx Xxxxxxxx
Xxxxxx
Xxxxx Xxxxxxx businessman of 0000 Xxxxxxxxx Xxxxx Xxxxx Xxxxxxx Xxxxxxxx
Xxx Xxxxx Bo representing those persons described in schedule A
AND
Dalian Telecommunication and Electronic Technology Co Ltd with an office at Xx
000X xx 0 Xxxxx Xx.
Qixianling Industrial Base High-Tech Zone FJV PR China
(collectively called the Shareholders)
AND
Northport Investments Inc., a Nevada Company with international offices at 0000
Xxxxxxxxxx Xxxxx Xxxx # 00 Xxxxxxx Xxxxxxx Xxxxxxxx
(Pubco)
AND
ATC Systems Inc., a British Columbia Company with offices at 0000 Xxxxxxxxxx
Xxxxx Xxxx # 00 Xxxxxxx Xxxxxxx Xxxxxxxx Xxxxxx
(ATC)
WHEREAS:
A The Shareholders are the registered and beneficial shareholders of all of
the shares of ATC.
B. ATC owns 90% of DALIAN NORTHPORT INFORMATION CO LTD. (FJV), a Chinese
foreign joint venture company,
C. FJV recently acquired a system application called Xxxxx being a online tax
payment service business to collect Federal taxes in China.
X. Xxxxx is launched in Dalian and wishes to expand to other parts of China.
E. The parties hereto wish to enter into a tax free exchange of their shares
to result in PUBCO acquiring 100% of the issued and outstanding shares of
ATC in exchange for shares in PUBCO as more particularly described herein:
NOW THEREFORE this Agreement witnesses that in consideration of the premises and
the respective covenants and agreements herein contained, the parties hereto
covenant and agree as follows:
DEFINITIONS and INTERPRETATIONS
1.0 In this Agreement and the recitals hereto, unless the context otherwise
requires, the following terms shall have the meanings hereinafter set
forth:
(a) "Business Day" means a day, other than a Saturday, a Sunday or a
holiday;
(b) "Closing" or "Closing Date" means May 7th 2002;
(c) "Encumbrance" means any mortgage, or charge whether or not registered;
(d) "GAAP" means generally accepted western accounting principles:
(e) "Governmental Authority" means any national, central, federal,
provincial, state, municipal, county or regional governmental or
quasi-governmental authority, domestic or foreign;
(f) "Material Contract" means any contract, agreement or instrument to
which ATC or any of its Subsidiaries are a party which are critical to
ATC's business;
(g) "Material Indebtedness" means: any outstanding and unpaid
indebtedness, obligation or liability, for borrowed money, amounts
unpaid for real or personal property or services, taxes, fines,
judgments, wages or employment benefits in excess of $5000;
(h) "Shares" means 100% of the issued shares of ATC that are owns by the
Shareholders; and
(i) "ATC Subsidiaries" means companies of which ATC owned more than fifty
(50%) percent of the outstanding shares;
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1.1 Schedules
Attached to and forming part of this Agreement are the following Schedules:
Schedule "A" schedule of shareholders represented by Xxx Xxxxx Bo
Schedule "B" Share apportionment
Schedule "C" Schedule of ATC debt
Schedule "D" Schedule of ATC subsidiaries
2.0 PURCHASE AND SALE
2.1 Relying upon the representations contained and subject to the terms and
conditions hereof, at the Closing, PUBCO will exchange with the
Shareholders the Shares for 16,140,000 PUBCO common shares at a deemed
price of $.001 per share in accordance with Schedule "B".
2.2 Shareholders' Resale Restrictions
Shareholders acknowledge that PUBCO is a public US company that is not yet
listed on any publicly trading exchange.
3.0 REPRESENTATIONS AND WARRANTIES
3.1 Representation and Warranties of ATC and the Shareholders
Shareholders and ATC represents to PUBCO and acknowledge it is relying upon
such representations to complete this Agreement:
(a) Shareholders are the true owners of the Shares which are free of any
Encumbrance;
(b) Shareholders have the authority to enter into this Agreement;
(c) the execution of this Agreement will not;
i) result in the breach of any term or provision of the rules that
govern ATC;
ii) result in the change of a Material Contract;
iii) create an Encumbrance for ATC; or
iv) violate any provision of law or regulation that could adversely
affect ATC;
(d) there are no judicial proceedings commenced against ATC to the
knowledge of the Shareholders which could reasonably be expected to
have an adverse effect on ATC's business;
(e) no approval, by any Governmental Authority or any third party is
required to execute this Agreement by ATC or by the Shareholders;
(f) the execution of this Agreement has been authorized by the board of
directors of ATC and this Agreement is binding on ATC and the
Shareholders;
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(g) The Material Debt is as described in Schedule B and ATC has no other
debt;
(h) ATC owns 90% of FJV; and
(i) FJV owns all of the assets and business associated with an online tax
system called Xxxxx that is presently operating in Dalian city of
which there are over 3000 paying subscribers.
3.2 Representations and Warranties of PUBCO
PUBCO represents;
(a) It is duly incorporated and is up-to-date with respect to all filings
required of it and no proceedings have been taken or authorized by
PUBCO with respect to the bankruptcy, insolvency, liquidation or
winding up of PUBCO.
(b) PUBCO has the authority to enter into this Agreement;
(c) the execution of this Agreement will not:
i) result in the breach of any rules governing PUBCO; or
ii) violate any administrative regulation which would have a
materially adverse effect on PUBCO;
(d) there are no actions or proceedings against PUBCO which would prevent
this Agreement or affect PUBCO's ability to fulfill this Agreement;
(e) Shareholders Purchaser Shares will, upon Closing, be validly issued as
fully paid and non-assessable shares in the capital stock of PUBCO;
(f) no exemption, consent, approval, order or authorization of, or
registration, from any governmental Authority is required by PUBCO in
connection with the execution of this Agreement; and
(g) the execution and delivery of this Agreement and the completion of the
transactions contemplated herein have been duly authorized by the
board of directors of PUBCO and this Agreement constitutes a valid and
binding obligation of PUBCO enforceable against it in accordance with
its terms; and
4.0 CONDITIONS
4.1 The parties recognize that it is a condition that the share exchange
contemplated by this agreement does NOT, in and of itself, subject the
Shareholders to any income or excise tax;
4.2 Conditions to Obligations of PUBCO
The obligations of PUBCO to complete this agreement, are subject to the
satisfaction, on or before the Closing Date of the following conditions any
of which may be waived by PUBCO without prejudice to its right to rely on
any others or others of them:
(a) The Shareholders' performance of each of its undertakings herein on or
before the Closing Date pursuant to the terms of this Agreement;
(b) Shareholders' delivery of the documents required by PUBCO pursuant to
this Agreement;
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(c) the representations of the Shareholders herein shall be true in all
material respects immediately prior to the Closing Date with the same
effect as though made at and as of such time;
(d) The Shareholders agree that ATC's board of directors immediately
following the completion of this agreement shall be: Xxx Xxxxx Bo,
Xxxx Xxx (Chairman), Gao Yao (Vice Chairman) and Xxxxxxx Xxxx; and
(e) The Shareholders shall not have breached any of the covenants
contained herein.
4.3 Conditions to Obligations of Shareholders
The obligation of Shareholders to complete this agreement is subject to the
satisfaction, on or before the Closing Date, of the following conditions,
any of which may be waived by the Shareholders without prejudice to its
right to rely on any other or others of them:
(a) each of the acts and undertakings of PUBCO to be performed on or
before the Closing Date pursuant to the terms of this Agreement shall
have been duly performed by it;
(b) PUBCO will have had delivered all of the documents required to be
delivered to it by ATC pursuant to this Agreement;
(c) the representations of PUBCO contained in Clause 3.2 hereof shall be
true in all material respects immediately prior to the Closing Date
with the same effect as though made at and as of such time;
(d) PUBCO agrees that its board of directors immediately following the
completion of this agreement shall be: Xxx Xxxxx Bo, Xxxx Xxx
(Chairman), Gao Yao, Xxx Xxx, Xiang Xxxx Xxx, Xxxxxxx Xxxx and Xxxxxxx
Xxxxxx; and
(e) PUBCO shall not have breached any of the covenants contained herein.
5.0 Deliveries by the Shareholders
The Closing will be on or before May 7th 2002 at which time the
Shareholders will deliver the following to PUBCO:
(a) certified copies of the resolutions of the respective boards of
directors of ATC approving this Agreement;
(b) an instrument of assignment duly executed by ATC and Shareholders
providing for the assignment of the Shares; and
(c) certified copies of such resolutions or consents of the board of
directors of ATC;
5.1 Deliveries by PUBCO
At Closing, PUBCO will deliver the following to the Shareholders:
(a) a certified copy of the resolution of the board of directors of PUBCO
approving this Agreement;
(b) one or more share certificates representing the PUBCO shares
registered in the name of the Shareholders in accordance with Schedule
"B";
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(c) a certificate of an officer of PUBCO that all of the representations
of PUBCO contained herein are correct;
6.0 GENERAL
6.1 Notices
All notices which may or are required to be given pursuant to any provision
of this Agreement shall be given in writing and shall be delivered
personally or by telecopy, and addressed to the parties whose addresses are
hereinbefore setforth or such other address or facsimile number of which a
party may, from time to time, advise the other parties hereto by notice in
writing given in accordance with the foregoing.
6.2 Binding Effect
This Agreement shall be binding upon and shall enure to the benefit of the
parties hereto and their respective successors and permitted assigns.
6.3 Waiver
Any waiver or release of any of the provisions of this Agreement, to be
effective, must be in writing executed by the party granting the same.
6.4 Further Assurances
Each of the parties, upon the request of any other party, shall do or sign
any further acts or deeds, documents, assignments, transfers, conveyances
and assurances as may be reasonably necessary to complete this Agreement.
6.5 Entire Agreement
This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements, understandings whether oral or written,
between the parties.
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6.6 Governing Law
This Agreement shall be governed by the Province of British Columbia.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.
By
/s/ Xxx Xxxxx Bo
----------------------------------
/s/ Xxxx Xxx
----------------------------------
/s/ Xiang Xxxx Xxx
----------------------------------
/s/ Xxxxxx Xxxx
----------------------------------
/s/ Xxxxxxx Xxxx
----------------------------------
/s/ Xxxxx Xxxxxx
----------------------------------
/s/ Xxxxx Xxxxxxx
----------------------------------
Dalian Telecommunication and Electronic Technology Co Ltd
Witnessed by
/s/ Jia Znong Bo
----------------------------------
(director)
Northport Investments Inc.
Witnessed by
/s/ Xxxxxxx Xxxx
----------------------------------
Xxxxxxx Xxxx (director)
/s/ Xxxx Xxx
----------------------------------
Xxxx Xxx (director)
ATC Systems Inc.
Witnessed by
/s/ Xxxx Xxx
----------------------------------
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Schedule A
--- --------------- ------------------------------------------------------- --------------
NO. Name Address Occupation
--- --------------- ------------------------------------------------------- --------------
1 Xxxxxx Xx 00 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxx, Xxxxx Businesswoman
--- --------------- ------------------------------------------------------- --------------
2 Xxxxxx Xxx 02-4-1, 32 Garden Street, Xigang District, Dalian, Engineer
Liaoning, China
--- --------------- ------------------------------------------------------- --------------
3 Xxxx Xxx 3-8, Xxxxxxxx 0, Xxxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxxx
Xxxxxxx, Xxxxx
--- --------------- ------------------------------------------------------- --------------
4 Xxxxxxx Xxxxx Room 401, Building 3, Hupan Garden, Zhongshan Businesswoman
Distric, Dalian, Liaoning, China
--- --------------- ------------------------------------------------------- --------------
0 Xxxxxxx Xxxx 0 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, Xxxxx Businessman
--- --------------- ------------------------------------------------------- --------------
6 Xxxxxx Xx 00 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, Xxxxx Businessman
--- --------------- ------------------------------------------------------- --------------
0 Xxxxx Xxxx 00-0-0 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx, Xxxxx Chief-Engineer
--- --------------- ------------------------------------------------------- --------------
0 Xxxxxx Xxx 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, Xxxxx Businessman
--- --------------- ------------------------------------------------------- --------------
0 Xxxxxxxxx Xxxxx 0 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, Xxxxx Businesswoman
--- --------------- ------------------------------------------------------- --------------
10 Xxxxxxx Xxx Room 7, Xxxx 0, X. Xxxxxxxx 00, X. Xxxxxxxx, Xxxxxxxx General
District, Beijing, China Manager
--- --------------- ------------------------------------------------------- --------------
11 Xxxxxxx Xxxx 0 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx Businesswoman
--- --------------- ------------------------------------------------------- --------------
12 Xxx Xxxxx 000 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx, Xxxxx Vice-General
Manager
--- --------------- ------------------------------------------------------- --------------
00 Xxxxxxxx Xxxx 00 Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx Businessman
--- --------------- ------------------------------------------------------- --------------
14 Xxxxx Xxx Room 703, Building 311, Jinsong 0xx Xxxx, Xxxxxxxx Xxxxxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
--- --------------- ------------------------------------------------------- --------------
15 Xxxxxxx Xxxxx 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, Xxxxx Businesswoman
--- --------------- ------------------------------------------------------- --------------
16 Xxxxxxx Xx 7-2 Building 316, Changchun Road, Xigang District, Businesswoman
Dalian, Liaoning, China
--- --------------- ------------------------------------------------------- --------------
17 Xxxx Xxxxx 0 Xxxxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, Businesswoman
china
--- --------------- ------------------------------------------------------- --------------
18 Xxxxxx Xxx 2 Longfeng Street, Longfeng District, Daqing, Businessman
Heilongjiang, China
--- --------------- ------------------------------------------------------- --------------
19 Hui Xxx Xxx 0000 Xxx Xxxxxxxx #0, Xxxxxxxxx, X.X. Businessman
--- --------------- ------------------------------------------------------- --------------
20 Xxxxxxx Xxxxx 5 Xxxx Xxx Xxxx, Xxx Street, Beijing, 100005 Businesswomen
--- --------------- ------------------------------------------------------- --------------
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Schedule B Share apportionment
Pubco ATC
---------- ----------
1 Jai Xxxxx Xx 1,000,000 1,000,000
2 Xxxx Xxx 3,000,000 3,000,000
3 Xiang Xxxx Xxx 1,000,000 1,000,000
4 Xxx Xxx 1,000,000 1,000,000
5 Gao Yao 1,000,000 1,000,000
6 Xxxxxxx Xxxx 1,000,000 1,000,000
7 Xxxxxx Xxxx 1,000,000 1,000,000
8 Xxxxx Xxxxxxx 1,000,000 1,000,000
9 Xxxxx Xxxxxx 1,000,000 1,000,000
10 Xxxxxx Xx 220,000 220,000
11 Xxxxxx Xxx 100,000 100,000
12 Xxxx Xxx 100,000 100,000
13 Xxxxxxx Xxxxx 100,000 100,000
14 Xxxxxxx Xxxx 50,000 50,000
15 Xxxxxx Xx 50,000 50,000
16 Xxxxx Xxxx 60,000 60,000
17 Xxxxxx Xxx 50,000 50,000
18 Xxxxxxxxx Xxxxx 250,000 250,000
19 Xxxxxxx Xxx 80,000 80,000
20 Xxxxxxx Xxxx 80,000 80,000
21 Xxx Xxxxx 20,000 20,000
22 Xxxxxxxx Xxxx 50,000 50,000
23 Xxxxx Xxx 20,000 20,000
24 Xxxxxxx Xxxxx 50,000 50,000
25 Xxxxxxx Xx 70,000 70,000
26 Xxxx Xxxxx 30,000 30,000
27 Xxxxxx Xxx 30,000 30,000
28 Hui Xxx Xxx 10,000 10,000
29 Xxxxxxx Xxxxx 30,000 30,000
30 Dalian Telecommunication
&Electronic Technology Co 3,690,000 3,690,000
16,140,000 16,140,000
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SCHEDULE C
DEBT OF CONSOLIDATED ATC IN EXCESS OF $5000 US
Debt of FJV:
1. Communication Bank of China (Dalian head branch) 3,400,000 rmb (interest @
5.3% due April 03)
2. Private Loan held in trust for 2,000,000 rmb due Sept 15th 2002
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SCHEDULE D
List of ATC's Subsidiaries
1. 90% equity interest in Dalian Northport Information Development Co. Ltd.
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