SHARE EXCHANGE AND REORGANIZATION AGREEMENT, dated as of June 25, 2003
(the "Agreement"), between CENTRE CAPITAL CORP., a Nevada corporation
("Centre"); and GUANGZHOU GENGHAI TECHNOLOGY DEVELOPMENT CO. LTD., a People's
Republic of China ("PRC") corporation ("Genghai"), and THE SHAREHOLDERS OF
GENGHAI, each of which is identified in Schedule A hereto (the "Genghai
Shareholders").
INTRODUCTION
Centre desires to acquire all of the issued and outstanding shares of
Genghai capital stock solely in exchange for an aggregate of 30,480,000 shares
of authorized, but theretofore unissued, shares of common stock, par value
$0.001 per share (the "Centre Common Stock"), of Centre, pursuant to the
applicable laws of the State of Nevada and the People's Republic of China. The
Genghai Shareholders signatory hereto each desires to exchange all of their
respective shares of Genghai capital stock solely for shares of Centre Common
Stock in the respective amounts set forth herein.
Prior to the date hereof, the respective board of directors or
analogous governing body of each of Centre and Genghai have approved and adopted
this Agreement, and it is the intent of the parties hereto that the transactions
contemplated hereby be structured so as to qualify as a tax-free exchange under
Subchapter C of the Internal Revenue Code of 1986, as amended (the "IRC"), and
the provisions of this Agreement will be interpreted in a manner consistent with
this intent.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
ACQUISITION AND EXCHANGE OF SHARES
SECTION 1.01 THE AGREEMENT. The parties hereto hereby agree that Centre
shall acquire all of the issued and outstanding shares of capital stock of
Genghai and/or other securities representing equity ownership interests in
Genghai (the "Genghai Capital Stock") solely in exchange for an aggregate of
30,480,000 shares of authorized, but theretofore unissued, shares of Centre
Common Stock. The parties hereto agree that at the closing of the transactions
contemplated by this Agreement (the "Closing"): (i) Genghai will become a
wholly-owned subsidiary of Centre subject to the conditions and provisions of
Section 1.06 hereof; and (ii) the management and business operations of Centre
will be reorganized.
SECTION 1.02 EXCHANGE OF SHARES.
(a) At the Closing, Centre will cause to be issued and held for
delivery to the Genghai Shareholders or their designees, stock certificates
representing an aggregate of 30,480,000 shares of Centre Common Stock, in
exchange for all of the issued and outstanding shares of Genghai
Capital Stock or other equity interests in Genghai, which shares or other
interests will be delivered to Centre at the Closing.
(b) The shares of Centre Common Stock to be issued pursuant to
paragraph (a) of this Section 1.02 will be authorized, but theretofore unissued,
shares of Centre Common Stock. Such shares of Centre Common Stock will be issued
to the Genghai Shareholders in the respective amounts set forth in Schedule A
hereto and, by this reference, made a part hereof.
(c) All shares of Centre Common Stock to be issued hereunder shall be
deemed "restricted securities" as defined in paragraph (a) of Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), and each recipient
will represent in writing that he or she is acquiring said shares for investment
purposes only and without the intent to make a further distribution of the
shares. All shares of Centre Common Stock to be issued under the terms of this
Agreement shall be issued pursuant to an exemption from the registration
requirements of the Securities Act, under Section 4(2) of the Securities Act and
the rules and regulations promulgated thereunder. Certificates representing the
shares of Centre Common Stock to be issued hereunder will bear a restrictive
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE DISPOSED OF,
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
PROVISIONS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.
SECTION 1.03 CLOSING. The Closing will take place at a date and time
(the "Closing Date") and place to be mutually agreed upon by the parties hereto,
and will be subject to the provisions of Articles IV and V of this Agreement. At
the Closing:
(a) Genghai will deliver to Centre stock certificates representing all
of the issued and outstanding shares of Genghai Capital Stock, duly endorsed, so
as to make Centre the holder thereof, free and clear of all claims and
encumbrances;
(b) Centre will deliver to the Genghai Shareholders or their designees,
stock certificates representing an aggregate of 30,480,000 shares of Centre
Common Stock, which certificates will bear a standard restrictive legend in the
form customarily used with restricted securities and as set forth in Section
1.02(c) above and which shares shall represent approximately 66.6% of the
outstanding Centre Common Stock giving effect to the issuance thereof;
(c) Centre will deliver the officer's certificates described in
Sections 4.02(a), 4.02(b), and 4.02(c) hereof, dated the Closing Date, that,
among other things, all representations, warranties, covenants, and conditions
set forth herein by Centre are true and correct as of, or have been fully
performed and complied with by, the Closing Date; and
(d) Genghai and the Genghai Shareholders will deliver the officer's
certificates described in Sections 4.01(a), 4.01(b), 4.01(c), and 4.01(d)
hereof, dated the Closing Date, that,
-2-
among other things, all representations, warranties, covenants, and conditions
set forth herein by Genghai are true and correct as of, or have been fully
performed and complied with by, the Closing Date.
SECTION 1.04 RATIFICATION BY BOARD OF DIRECTORS AND BY WRITTEN CONSENT
OF SHAREHOLDERS. In anticipation of this Agreement, Centre has taken all
necessary and requisite corporate and other action, including without
limitation, actions of the Board of Directors and stockholders of Centre, in
order to:
(a) ratify this Agreement and all transactions contemplated
hereby; and
(b) ratify the proposed amendment to Centre's Articles of
Incorporation to change the corporate name to Genghai
Technology Holdings, Inc. and increase the authorized
capitalization of Centre to 100,000,000 shares of common
stock.
SECTION 1.05 CONSUMMATION OF TRANSACTION. If at the Closing, no
condition exists which would permit any of the parties to terminate this
Agreement, or a condition then exists and the party entitled to terminate
because of that condition elects not to do so, then the transactions herein
contemplated shall be consummated upon such date, and then and thereupon, Centre
will file any additional necessary documents that may be required by the State
of Nevada, the United States of America, the People's Republic of China, or
otherwise.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 REPRESENTATIONS AND WARRANTIES OF CENTRE. Centre hereby
represents and warrants to, and agrees with, Genghai and the Genghai
Shareholders:
(a) Organization and Qualification. Centre has no subsidiaries or
affiliated corporation or owns any interest in any other enterprise (whether or
not such enterprise is a corporation). Centre is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada,
with all requisite power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits of and
from, and declarations and filings with, all federal, state, local, and other
governmental authorities and all courts and other tribunals, to own, lease,
license, and use its properties and assets and to carry on the businesses in
which it is now engaged and the businesses in which it contemplates engaging.
Centre is duly qualified to transact the businesses in which it is engaged and
is in good standing as a foreign corporation in every jurisdiction in which its
ownership, leasing, licensing, or use of property or assets or the conduct of
its businesses makes such qualification necessary.
(b) Capitalization. The authorized capital stock of Centre consists of
50,000,000 shares of Centre Common Stock, of which 7,627,050 shares are
outstanding. Each of such outstanding shares of Centre Common Stock is validly
authorized, validly issued, fully paid, and nonassessable, has not been issued
and is not owned or held in violation of any preemptive or similar right of
stockholders and is owed by the owner set forth in Section A of the letter, of
even
-3-
date herewith, from Centre to Genghai and the Genghai Shareholders (the "Centre
Disclosure Letter"), which letter shall be completed and delivered to Genghai
and the Genghai Shareholders on or prior to July 15, 2003 (the "Due Diligence
Date") in each case free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements, and voting trusts. Except as
described in Section A of the Centre Disclosure Letter, there is no commitment,
plan, or arrangement to issue, and no outstanding option, warrant, or other
right calling for the issuance of, any share of capital stock of Centre or any
security or other instrument convertible into, exercisable for, or exchangeable
for capital stock of Centre. Except as described in Section A of the Centre
Disclosure Letter, there is outstanding no security or other instrument
convertible into or exchangeable for capital stock of Centre.
(c) Financial Condition. Centre has delivered, or on or prior to the
Due Diligence Date shall deliver, to Genghai and the Genghai Shareholders true
and correct copies of the following: audited balance sheet of Centre as of
September 30, 2002; unaudited balance sheet of Centre as of March 31, 2002 and
2003; audited statements of income, statements of stockholders' equity, and
statements of cash flows of Centre for the period from February 12, 2002 (the
"Bankruptcy Termination Date") through September 30, 2002; and the unaudited
statement of income, statement of stockholders' equity, and statement of cash
flows of Centre for the six months ended March 31, 2002 and 2003. Each such
balance sheet presents fairly the financial condition, assets, liabilities, and
stockholders' equity of Centre as of its respective date; each such statement of
income and statement of stockholders' equity presents fairly the results of
operations of Centre for the period indicated; and each such statement of cash
flows presents fairly the information purported to be shown therein. The
financial statements referred to in this Section 2.01(c) have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved and are in accordance with the books and records
of Centre. Since March 31, 2003:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of Centre.
(ii) Centre has not authorized, declared, paid, or effected
any dividend or liquidating or other distribution in respect of its
capital stock or any direct or indirect redemption, purchase, or other
acquisition of any stock of Centre.
(iii) The operations and businesses of Centre have been
conducted in all respects only in the ordinary course.
There is no fact known to Centre which materially adversely affects or in the
future (as far as Centre can reasonably foresee) may materially adversely affect
the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Centre; provided, however, that Centre
expresses no opinion as to political or economic matters of general
applicability. Centre has made known, or caused to be made known, to the
accountants or auditors who have prepared, reviewed, or audited the
aforementioned consolidated financial statements all material facts and
circumstances which could affect the preparation, presentation, accuracy, or
completeness thereof.
-4-
(d) Tax and Other Liabilities. Centre does not have any material
liability of any nature, accrued or contingent, including, without limitation,
liabilities for federal, state, local, or foreign taxes and penalties, interest,
and additions to tax ("Taxes"), and liabilities to customers or suppliers, other
than the following:
(i) Liabilities for which full provision has been made on the
consolidated balance sheet and the notes thereto (the "Last Centre
Balance Sheet") as of March 31, 2003 (the "Last Centre Balance Sheet
Date") referred to in Section 2.03; and
(ii) Other liabilities arising since the Last Centre Balance
Sheet Date and prior to Closing in the ordinary course of business
(which shall not include liabilities to customers on account of
defective products or services) which are not inconsistent with the
representations and warranties of Centre or any other provision of this
Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last Centre Balance Sheet are sufficient for all
known accrued and unpaid Taxes of Centre, whether or not due and payable and
whether or not disputed, under tax laws, as in effect on the Last Centre Balance
Sheet Date or now in effect, for the period ended on such date and for all
fiscal periods prior thereto. The execution, delivery, and performance of this
Agreement by Centre will not cause any Taxes to be payable other than by the
Genghai Shareholders or cause any lien, charge, or encumbrance to secure any
Taxes to be created either immediately or upon the nonpayment of any Taxes other
than on the properties or assets of the Genghai Shareholders. Since the
Bankruptcy Termination Date, a copy of the order (the "Bankruptcy Termination
Order") relating to which has been, or on or prior to the Due Diligence Date
will be, delivered to Genghai and the Genghai Shareholders, Centre has filed all
federal, state, local, and foreign tax returns required to be filed by it; has
delivered or, on or prior to the Due Diligence Date, will deliver to the Genghai
Shareholders a true and correct copy of each such returns which was filed since
the Bankruptcy Termination Date; has paid (or has established on the Last Centre
Balance Sheet a reserve for) all Taxes, assessments, and other governmental
charges payable or remittable by it or levied upon it or its properties, assets,
income, or franchises which are due and payable; and has delivered or, on or
prior to the Due Diligence Date, will deliver to the Genghai Shareholders a true
and correct copy of any report as to adjustments received by it from any taxing
authority since the Bankruptcy Termination Date and a statement as to any
litigation, governmental or other proceeding (formal or informal), or
investigation pending, threatened, or in prospect with respect to any such
report or the subject matter of such report.
(e) Litigation and Claims. Except as described in Section G of the
Centre Disclosure Letter, there is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending,
to the best of Centre's knowledge, threatened, or in prospect (or any basis
therefor known to Centre) with respect to Centre or any of its businesses,
properties, or assets. Centre is not affected by any present or threatened
strike or other labor disturbance nor to the knowledge of Centre, is any union
attempting to represent any employee of Centre as collective bargaining agent.
Centre is not in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree which violation or default would have a
material adverse effect on Centre; nor is Centre required to take any action in
order to avoid such violation or default.
-5-
(f) Properties.
(i) Centre owns no real property. Centre has good title to all
personal properties and assets material to Centre and used in its
businesses or owned by it (except real and other properties and assets
material to Centre as are held pursuant to leases or licenses described
in Section B or C of the Centre Disclosure Letter), free and clear of
all liens, mortgages, security interests, pledges, charges, and
encumbrances (except such as are listed in Section H of the Centre
Disclosure Letter).
(ii) Set forth in Section B of the Centre Disclosure Letter is
a true and complete list of all tangible properties and assets owned by
Centre or leased or licensed by Centre from or to a third party
(including inventory but not including Intangibles (as hereinafter
defined)), and with respect to such properties and assets leased or
licensed by Centre from or to a third party, a description of such
lease or license. All such properties and assets (including
Intangibles) owned by Centre are reflected on the Last Centre Balance
Sheet (except for acquisitions subsequent to the Last Centre Balance
Sheet Date and prior to the Closing Date, which are either noted in
Section B or C of the Centre Disclosure Letter or are approved in
writing by Genghai). All tangible properties and assets owned by Centre
or leased or licensed by Centre from or to a third party are in good
and usable condition (reasonable wear and tear which is not such as to
affect adversely the operation of the businesses of Centre excepted).
(iii) To the best of Centre's knowledge, no real property
leased or licensed by Centre from or to a third party lies in an area
which is, or will be, subject to zoning, use, or building code
restrictions which would prohibit, and, to the best of Centre's
knowledge, no state of facts relating to the actions or inaction of
another person or entity or his or its ownership, leasing, or licensing
of any real or personal property exists or will exist which would
prevent, the continued effective ownership, leasing, or licensing of
such real property in the businesses in which Centre is now engaged or
the businesses in which it contemplates engaging.
(iv) The properties and assets (including Intangibles) owned
by Centre (other than those leased or licensed by Centre to a third
party) or leased or licensed by Centre from a third party constitute
all such properties and assets which are necessary to the businesses of
Centre as presently conducted.
(v) To the best knowledge of Centre, Centre has not caused or
permitted its businesses properties, or assets to be used to generate,
manufacture, refine, transport, treat, store, handle, dispose of,
transfer, produce, or process any Hazardous Substance (as such term is
defined in this Section 2.01(f)(v)), except in compliance with all
applicable laws, rules, regulations, orders, judgments, and decrees,
and has not caused or permitted the Release (as such term is defined in
this Section 2.01(f)(v)) of any Hazardous Substance on or off the site
of any property of Centre. The term "Hazardous Substance" shall mean
any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any hazardous
substance, as defined by 42 U.S.C. ss.9601(14), any pollutant or
contaminant, as defined by 42 U.S.C. ss.9601(33), and all toxic
substances, hazardous materials, or other chemical substances regulated
by
-6-
any other law, rule, or regulation. The term "Release" shall have the
meaning set forth in 42 U.S.C. ss.9601(22).
(g) Contracts and Other Instruments. Section D of the Centre Disclosure
Letter contains a true and correct statement of the information required to be
contained therein regarding material contracts, agreements, instruments, leases,
licenses, arrangements, or understandings with respect to Centre. Centre has
furnished, or on or prior to the Due Diligence Date will furnish, to the Genghai
Shareholders (i) the certificate of incorporation (or other charter document)
and by-laws of Centre and all amendments thereto, as presently in effect, and
(ii) the following: (A) true and correct copies of all material contracts,
agreements, and instruments referred to in Section D of the Centre Disclosure
Letter; (B) true and correct copies of all material leases and licenses referred
to in Section B or C of the Centre Disclosure Letter hereto; and (C) true and
correct written descriptions of all material supply, distribution, agency,
financing, or other arrangements or understandings referred to in Section B or C
of the Centre Disclosure Letter. To the best of Centre's knowledge, neither
Centre nor (to the knowledge of Centre) any other party to any such material
contract, agreement, instrument, lease, or license is now or expects in the
future to be in violation or breach of, or in default with respect to complying
with, any term thereof, and each such material contract, agreement, instrument,
lease, or license is in full force and is (to the best of Centre's knowledge in
the case of third parties) the legal, valid, and binding obligation of the
parties thereto and (subject to applicable bankruptcy, insolvency, and other
laws affecting the enforceability of creditors' rights generally) is enforceable
as to them in accordance with its respective terms. Each such material supply,
distribution, agency, financing, or other arrangement or understanding is a
valid and continuing arrangement or understanding; neither Centre nor any other
party to any such arrangement or understanding has given notice of termination
or taken any action inconsistent with the continuance of such arrangement or
understanding; and the execution, delivery, and performance of this Agreement
will not prejudice any such arrangement or understanding in any way. Centre
enjoys peaceful and undisturbed possession under all material leases and
licenses under which it is operating. Centre is not party to or bound by any
contract, agreement, instrument, lease, license, arrangement, or understanding,
or subject to any charter or other restriction, which has had or (to the
knowledge of Centre) may in the future have a material adverse effect on the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Centre. Centre has not engaged since the
Bankruptcy Termination Date, is not engaging in, and does not intend to engage
in any transaction with, and has not had, does not now have, and does not intend
to have any material contract, agreement, instrument, lease, license,
arrangement, or understanding with, any stockholder of Centre, any director,
officer, or employee of Centre (except for employment agreements listed in
Section D of the Centre Disclosure Letter and employment and compensation
arrangements described in Section E of the Centre Disclosure Letter), any
relative or affiliate of any stockholder of Centre or of any such director,
officer, or employee, or any other corporation or enterprise in which any
stockholder of Centre, any such director, officer, or employee, or any such
relative or affiliate then had or now has a 5% or greater equity or voting or
other substantial interest, other than those listed and so specified in Section
D of the Centre Disclosure Letter. The stock ledgers and stock transfer books
relating to all issuances and transfers of stock by Centre and the minute book
records of Centre and all proceedings of the stockholders and the Board of
Directors and committees thereof of Centre since their respective incorporation
made available to counsel to Genghai and the Genghai Shareholders
-7-
are the original stock ledgers and stock transfer books and minute book records
of Centre or exact copies thereof. Centre is not in violation or breach of, or
in default with respect to, any term of its certificate of incorporation (or
other charter document) or by-laws.
(h) Employees.
(i) Centre does not have, or contribute to, and, since the
Bankruptcy Termination Date, has not had and has not contributed to,
any pension, profit-sharing, option, other incentive plan, or any other
type of Employee Benefit Plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
or has any obligation to or customary arrangement with employees for
bonuses, incentive compensation, vacations, severance pay, sick pay,
sick leave, insurance, service award, relocation, disability, tuition
refund, or other benefits, whether oral or written, except as set forth
in Section E of the Centre Disclosure Letter. Centre has furnished to
Genghai and the Genghai Shareholders: (A) true and correct copies of
all documents evidencing plans, obligations, or arrangements referred
to in Section E of the Centre Disclosure Letter (or true and correct
written summaries, so initialed, of such plans, obligations, or
arrangements to the extent not evidenced by documents) and true and
correct copies, so initialed, of all documents evidencing trusts,
summary plan descriptions, and any other summaries or descriptions
relating to any such plans; (B) the two most recent annual reports
(Form 5500's), if any, including all schedules thereto and the most
recent annual and periodic accounting of related plan assets with
respect to each Employee Benefit Plan; (C) the two most recent
actuarial valuations with respect to each Pension Plan (as defined in
Section 3(2) of ERISA) subject to Title IV of ERISA; and (D) the most
recent determination letter issued by the Internal Revenue Service with
respect to each Pension Plan.
(ii) If any Employee Benefit Plan of Centre were to be
terminated on the day prior to Closing Date, (A) no liability under
Title IV of ERISA would be incurred by Centre or Genghai and (B) all
Accrued Benefits (as defined in this Section 2.01(h)(ii)) to such day
prior to the Closing Date (whether or not vested) would be fully funded
in accordance with the assumptions contained in the regulations of the
Pension Benefit Guaranty Corporation governing the funding of
terminated defined benefit plans. For purposes hereof, "Accrued
Benefits" shall include the value of disability, pre-retirement, death
benefits, and all supplements, subsidized, ancillary, and optional
forms of benefits. All Accrued Liabilities (for contributions or
otherwise) (as defined in this Section 2.01(h)(ii)) of Centre as of the
Closing Date to each Employee Benefit Plan and with respect to each
obligation to, or customary arrangement with, employees for bonuses,
incentive compensation, vacations, severance pay, sick pay, sick leave,
insurance, service award, relocation, disability, tuition refund, or
other benefits, whether oral or written, have been paid or accrued for
all periods ending prior to the Closing Date and no payment to any
Employee Benefit Plan or with respect to any such obligation or
arrangement since the Last Centre Balance Sheet Date has been
disproportionately large compared to prior payments. For purposes
hereof, "Accrued Liabilities" shall include a pro rata contribution to
each Employee Benefit Plan or with respect to each such obligation or
arrangement for that portion of a plan year or other applicable period
which commences prior to, and ends after, the Closing Date, and Accrued
-8-
Liabilities for any portion of a plan year or other applicable period
shall be determined by multiplying the liability for the entire such
year or period by a fraction, the numerator of which is the number of
days preceding the Closing Date in such year or period and the
denominator of which is the number of days in such year or period, as
the case may be.
(iii) There has been no violation of the reporting and
disclosure requirements imposed either under ERISA or the Code for
which a penalty has been or may be imposed with respect to any Employee
Benefit Plan of Centre. There has been no breach of fiduciary duty or
responsibility with respect to any Employee Benefit Plan of Centre. No
Employee Benefit Plan of Centre or related trust has any liability of
any nature, accrued or contingent, including without limitation
liabilities for Taxes, other than for routine payments to be made in
due course to participants and beneficiaries, except as set forth in
Section E of the Centre Disclosure Letter. Centre does not have any
formal plan or commitment, whether or not legally binding, to create
any additional or modify any existing Employee Benefit Plan or benefit
obligation or arrangement described in Section 2.01(h)(i)). Each
Employee Benefit Plan of Centre which is a group health plan within the
meaning of Section 5000(b)(1) of the Code is and has been maintained in
full compliance with the applicable requirements of Section 4980B of
the Code. Other than the health care continuation requirements of
Section 4980B of the Code, Centre does not have any obligation to
provide post-retirement medical benefits or life insurance coverage or
any deferred compensation benefits to any present or former employees.
There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, threatened,
or (to the best of Centre's knowledge) in prospect (or any basis
therefor known to Centre) with respect to any Employee Benefit Plan of
Centre or related trust or with respect to any fiduciary,
administrator, or sponsor (in its capacity as such) of any Employee
Benefit Plan. No Employee Benefit Plan of Centre or related trust and
no such obligation or arrangement is in violation of, or in default
with respect to, any law, rule, regulation, order, judgment, which
violation or default would have a material adverse effect thereon or
decree nor is Centre, any Employee Benefit Plan of Centre, or any
related trust required to take any action in order to avoid any such
violation or default. No event has occurred, or is (to the best of
Centre's knowledge) threatened or about to occur, which would
constitute a prohibited transaction under Section 406 of ERISA.
(iv) Each Pension Plan maintained for the employees of Centre
has been qualified, from its inception, under Section 401(a) of the
Code and any related trust has been an exempt trust for such period
under Section 501 of the Code. Each Pension Plan has been operated in
accordance with its terms. No Pension Plan which is subject to Title IV
of ERISA has an accumulated or waived funding deficiency within the
meaning of Section 412 of the Code. No investigation or review by the
Internal Revenue Service is currently pending or (to the knowledge of
Centre) is contemplated in which the Internal Revenue Service has
asserted or may assert that any Pension Plan is not qualified under
Section 401(a) of the Code or that any related trust is not exempt
under Section 501 of the Code. Neither Centre, nor any organization to
which Centre is a successor or parent corporation, within the meaning
of Section 4069(b) of ERISA, has divested itself of any entity
maintaining or with an obligation to contribute to any Pension Plan
which had an "amount of unfunded benefit liabilities," as defined in
Section 4001(a)(18) of ERISA, at the time of
-9-
such divestiture. No assessment of any federal taxes with respect to
any Employee Benefit Plan of Centre has been made or (to the knowledge
of Centre) is contemplated against Centre, or any related trust of any
Pension Plan of Centre, and nothing has occurred which would result in
the assessment of unrelated business taxable income under the Code with
respect to any Employee Benefit Plan of Centre. Form 5500's have been
timely filed with respect to all Pension Plans of Centre. No event has
occurred or (to the knowledge of Centre) is threatened or about to
occur which would constitute a reportable event within the meaning of
Section 4043(b) of ERISA. No notice of termination has been filed by
the plan administrator pursuant to Section 4041 of ERISA or issued by
the Pension Benefit Guaranty Corporation pursuant to Section 4042 of
ERISA with respect to any Pension Plan of Centre.
(v) Centre does not currently contribute to and since
September 16, 1980 has not effectuated either a complete or partial
withdrawal from any multiemployer Pension Plan within the meaning of
Section 3(37) of ERISA.
(vi) Section E of the Centre Disclosure Letter contains a true
and correct statement of the names, relationship with Centre, present
rates of compensation (whether in the form of salary, bonuses,
commissions, or other supplemental compensation now or hereafter
payable), and aggregate compensation for the fiscal year ended December
31, 2002 of (A) each director, officer, or other employee of Centre
whose aggregate compensation for the fiscal year ended December 31,
2002 exceeded US$25,000 or whose aggregate compensation presently
exceeds the rate of US$25,000 per annum and (B) all sales agents,
dealers, or distributors of Centre. Since December 31, 2002, Centre has
not changed the rate of compensation of any of its directors, officers,
employees, agents, dealers, or distributors, nor has any Employee
Benefit Plan or program of Centre been instituted or amended to
increase benefits thereunder. There is no contract, agreement, plan,
arrangement, or understanding covering any person that, individually or
collectively, could give rise to the payment of any amount that would
not be deductible by Centre by reason of Section 280G of the Code.
(i) Patents, Trademarks, Et Cetera. Centre does not own or have
pending, and is not licensed or otherwise permitted to use, any material patent,
patent application, trademark, trademark application, service xxxx, copyright,
copyright application, franchise, trade secret, computer program (in object or
source code or otherwise), or other intangible property or asset (collectively,
"Intangibles"), other than as described in Section C of the Centre Disclosure
Letter. Each Intangible is validly issued and is currently in force and
uncontested in all jurisdictions in which it is used or in which such use is
contemplated. Section C of the Centre Disclosure Letter contains a true and
correct listing of: (i) all Intangibles which are owned (either in whole or in
part), used by, or licensed to Centre or which otherwise relate to the
businesses of Centre, and a description of each such Intangible which identifies
its owner, registrant, or applicant; (ii) all contracts, agreements,
instruments, leases, and licenses and identification of all parties thereto
under which Centre owns or uses any Intangible (whether or not under license
from third parties), together with the identification of the owner, registrant,
or applicant of each such Intangible; (iii) all contracts, agreements,
instruments, leases, and licenses and identification of all parties thereto
under which Centre grants the right to use any Intangible; (iv) all validity,
infringement,
-10-
right-to-use, or other opinions of counsel (whether in-house or outside) which
concern the validity, infringement, or enforceability of any Intangible owned or
controlled by a party other than Centre which relates to the businesses,
properties, or assets of Centre. Except as specified in Section C of the Centre
Disclosure Letter, to the knowledge of Centre: (v) Centre is the sole and
exclusive owner or licensee of, and (other than those exclusively licensed by
Centre to a third party) has the right to use, all Intangibles; (vi) no
Intangible is subject to any order, judgment, decree, contract, agreement,
instrument, lease, or license restricting the scope of the use thereof; (vii)
during the last five years, Centre has not been charged with, and has not
charged others with, unfair competition, infringement of any Intangible, or
wrongful use of confidential information, trade secrets, or secret processes;
and (viii) Centre is not using any patentable invention, confidential
information, trade secret, or secret process of others. There is no right under
any Intangible necessary to the businesses of Centre as presently conducted or
as it contemplates conducting, except such as are so designated in Section C of
the Centre Disclosure Letter. Except as described in Section C of the Centre
Disclosure Letter, Centre has not infringed, is not infringing, and has not
received notice of infringement in respect of the Intangibles or asserted
Intangibles of others, nor has Centre been advised by counsel or others that it
is infringing or may infringe the Intangibles or asserted Intangibles of others
if any currently contemplated business activity is effectuated. To the knowledge
of Centre, there is no infringement by others of Intangibles of Centre. As far
as Centre can reasonably foresee, there is no Intangible or asserted Intangible
of others that may materially adversely affect the financial condition, results
of operations, businesses, properties, assets, liabilities, or future prospects
of Centre. All material contracts, agreements, instruments, leases, and licenses
pertaining to Intangibles to which Centre is a party, or to which any of its
businesses, properties, or assets are subject, are in compliance in all material
respects with all laws, rules, regulations, orders, judgments, and decrees
binding on Centre or to which any of its businesses, properties, or assets are
subject. Centre has no xxxx, design, or name used by Centre to identify,
respectively, its products, businesses, or services. Neither any stockholder of
Centre, any director, officer, or employee of Centre, any relative or affiliate
of any stockholder of Centre, any such director, officer, or employee, nor any
other corporation or enterprise in which any stockholder of Centre, any such
director, officer, or employee, or any such relative or affiliate had or now has
a 5% or greater equity or voting or other substantial interest, possesses any
Intangible which relates to the businesses of Centre.
(j) Questionable Payments. Since the Bankruptcy Termination Date,
neither Centre, nor any director, officer, agent, employee, or other person
associated with, or acting on behalf of, Centre, nor any stockholder of Centre
has, directly or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to
political activity; made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
(k) Authority. Centre has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of
Centre have been duly taken to authorize the execution, delivery, and
performance of this Agreement thereby. This Agreement has been duly authorized,
executed, and delivered by Centre, constitutes the legal, valid, and binding
obligation of Centre, and is enforceable as to Centre in accordance with its
terms. Except
-11-
as otherwise set forth in this Agreement, no consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or any court or
other tribunal is required by Centre for the execution, delivery, or performance
of this Agreement by Centre. No consent of any party to any material contract,
agreement, instrument, lease, license, arrangement, or understanding to which
Centre is a party, or to which it or any of its businesses, properties, or
assets are subject, is required for the execution, delivery, or performance of
this Agreement (except such consents referred to in Section D of the Centre
Disclosure Letter); and the execution, delivery, and performance of this
Agreement will not (if the consents referred to in Section D of the Centre
Disclosure Letter are obtained prior to the Closing) violate, result in a breach
of, conflict with, or (with or without the giving of notice or the passage of
time or both) entitle any party to terminate or call a default under, entitle
any party to receive rights or privileges that such party was not entitled to
receive before this Agreement was executed under, or create any obligation on
the part of Centre to which it was not subject immediately before this Agreement
was executed under, any term of any such material contract, agreement,
instrument, lease, license, arrangement, or understanding, or violate or result
in a breach of any term of the certificate of incorporation (or other charter
document) or by-laws of Centre, or (if the provisions of this Agreement are
satisfied) violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree binding on Centre or to which any of its
businesses, properties, or assets are subject, which violation or breach would
have a material adverse effect on Centre. Neither Centre, nor any of its
officers, directors, employees, or agents has employed any broker or finder or
incurred any liability for any fee, commission, or other compensation payable by
any person on account of alleged employment as a broker or finder, or alleged
performance of services as a broker or finder, in connection with or as a result
of this Agreement or the transactions contemplated hereby and in connection
herewith.
(l) Status of Centre Common Stock To Be Issued. Assuming without
investigation that the shares of Genghai Capital Stock outstanding on the
Closing Date are validly authorized, validly issued, fully paid, and
nonassessable, the shares of Centre Common Stock to be issued pursuant to
Section 1.02(a) hereof are validly authorized and, when the such shares of
Centre Common Stock have been duly delivered pursuant to the terms of this
Agreement, such shares of Centre Common Stock will be validly issued, fully
paid, and nonassessable and will not have been issued, owned or held in relation
of any preemptive or similar right of stockholder.
(m) Insurance. All policies of fire and other insurance against
casualty and other losses and public liability insurance carried by Centre are
described in Section F of the Centre Disclosure Letter (including the risks
covered and limits of such policies) and are in full force and effect. A full
and complete copy of enclosed insurance policy has been, or on or prior to the
Due Diligence Date will be, provided to Genghai and the genghai Shareholders,
and such policies are summarized in Section F of the Centre Disclosure Letter.
All premiums in respect of such policies for which premium notices have been
received have been paid in full as the same become due and payable. Centre have
not failed to give any notice or present any claim under any insurance policy in
due and timely fashion. There are no actual claims or claims threatened in
writing against Centre which could come within the scope of such coverage nor
are any such policies currently threatened with cancellation. There are no
outstanding requirements or recommendations by any insurance company that issued
a policy with respect to any of the respective assets, the businesses, or
operations of Centre or by any Board of Fire Underwriters or other body
exercising similar
-12-
functions or by any governmental authority requiring or recommending any repairs
or other work to be done on, or with respect to, any of the assets of Centre or
requiring or recommending any equipment or facilities to be installed on any
premises from which the businesses of Centre is conducted or in connection with
any of the respective assets thereof. Centre does not have any knowledge of any
material proposed increase in applicable insurance rates or of any conditions or
circumstances applicable to the businesses thereof that might result in such
increases. No such policy is terminable by virtue of the transactions
contemplated by this Agreement.
(o) Trading Matters. At the date hereof and at the Closing Date:
(i) the Centre Common Stock is traded and quoted in the
over-the-counter market;
(ii) Centre has and shall have performed or satisfied all of
its undertakings to, and of its obligations and requirements with, the
SEC, provided, however, that the Centre Common Stock has not been
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since at least the Bankruptcy Termination Date;
(iii) Centre has not, and shall not have taken any action that
would preclude, or otherwise jeopardize, the inclusion of the Centre
Common Stock for quotation on the OTC Bulletin Board.
(p) Reorganization.
(i) Centre has not taken and has not agreed to take any action
(other than actions contemplated by this Agreement) that could
reasonably be expected to prevent the transactions contemplated by this
Agreement from constituting a "reorganization" under section 368(b) of
the Code or as an acquisition of in excess of 80% of the stock of a
corporation in exchange for property under Section 351 of the Code.
Centre is not aware of any agreement, plan or other circumstance that
could reasonably be expected to prevent the transactions contemplated
by this Agreement from so qualifying.
(ii) Centre has no plan or intention to reacquire, and, to
Centre's knowledge, no person related to Centre within the meaning of
Treasury Regulations Section 1.368-1 has a plan or intention to
acquire, any of the Centre Common Stock pursuant to Section 1.02(a)
hereof.
(q) Completeness of Disclosure. No representation or warranty by Centre
in this Agreement contains or, and at the Closing Date will contain, an untrue
statement of material fact or omits or, at the Closing Date, will omit to state
a material fact required to be stated therein or necessary to make the
statements made not misleading.
(r) Periodic Reporting. Centre is not required to register the Centre
Common Stock under Section 12 of the Exchange Act and Centre is not subject to
the periodic reporting requirements of Section 13 of the Exchange Act.
-13-
(s) Compliance with Law and Government Regulations. Centre is in
compliance with and is not in violation of applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business. Centre is not subject to any order,
decree, judgment or other sanction of any court, administrative agency or other
tribunal.
(t) Legal Proceedings and History. Centre hereby represents that,
unless otherwise disclosed herein, no officer, director or affiliate of Centre,
has been, within the five years ending on the Closing Date, a party to any
bankruptcy petition against such person or against any business of which such
person was affiliated; convicted in a criminal proceeding or subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses; subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting their
involvement in any type of business, securities or banking activities; or found
by a court of competent jurisdiction in a civil action, by the SEC or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed, suspended
or vacated.
SECTION 2.02 REPRESENTATIONS AND WARRANTIES OF GENGHAI. Genghai hereby
represents and warrants to, and agrees with, Centre:
(a) Organization and Qualification. Genghai owns no subsidiary or
affiliate corporation or owns any interest in any other enterprise (whether or
not such enterprise is a corporation). Section A of the letter, dated even date
herewith, from Genghai to Centre (the "Genghai Disclosure Letter"), which letter
shall be completed and delivered to Centre on or prior to the Due Diligence
Date, correctly sets forth as to Genghai its place of incorporation, principal
place of business, jurisdictions in which it is qualified to do business, and
the businesses which it presently conducts and which it contemplates conducting.
Genghai is a corporation duly organized, validly existing, and in good standing
under the laws of the People's Republic of China, with all requisite power and
authority, and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and declarations and filings
with, all federal, state, local, and other governmental authorities and all
courts and other tribunals, to own, lease, license, and use its properties and
assets and to carry on the businesses in which it is now engaged and the
businesses in which it contemplates engaging. Genghai is duly qualified to
transact the businesses in which it is engaged and is in good standing as a
foreign corporation in every jurisdiction in which its ownership, leasing,
licensing, or use of property or assets or the conduct of its businesses makes
such qualification necessary.
(b) Capitalization. The authorized, registered, outstanding, and paid
up capital stock of Genghai consists of RMB10,000,000 (the "Genghai Capital
Stock"). Each of the outstanding stock of Genghai Capital Stock is validly
authorized, validly issued, fully paid, and nonassessable, has not been issued
and is not owned or held in violation of any preemptive right of stockholders
and by the owner set forth in Section A of the Genghai Disclosure Letter, in
each case free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, and voting trusts. There is no
commitment, plan, or arrangement to issue, and no outstanding option, warrant,
or other right calling for the issuance of, any share of Genghai Capital Stock
or any security or other instrument convertible into, exercisable for, or
exchangeable for Genghai Capital
-14-
Stock. There is outstanding no security or other instrument convertible into or
exercisable or exchangeable for Genghai Capital Stock.
(c) Financial Condition. Genghai has delivered, or on or prior to the
Due Diligence Date will deliver, to Centre true and correct copies of the
following: audited balance sheets of Genghai as of December 31, 2002; and
audited statements of income, statements of stockholders' equity, and statements
of cash flows of Genghai for the years ended December 31, 2001 and December 31,
2002. Each such balance sheet presents fairly the financial condition, assets,
liabilities, and stockholders' equity of Genghai as of its date; each such
statement of income and consolidated statement of stockholders' equity presents
fairly the results of operations of Genghai for the period indicated; and each
such statement of cash flows presents fairly the information purported to be
shown therein. The financial statements referred to in this Section 2.02(c) have
been prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved and are in
accordance with the books and records of Genghai. Since December 31, 2002:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of Genghai.
(ii) Genghai has not authorized, declared, paid, or effected
any dividend or liquidating or other distribution in respect of its
capital stock or any direct or indirect redemption, purchase, or other
acquisition of any stock of Genghai.
(iii) The operations and businesses of Genghai have been
conducted in all respects only in the ordinary course, except for the
transactions contemplated hereby and in connection herewith.
(iv) There has been no accepted purchase order or quotation,
arrangement, or understanding for future sale of the products or
services of Genghai that Genghai expects will not be profitable.
(v) Genghai has not suffered an extraordinary loss (whether or
not covered by insurance) or waived any right of substantial value.
There is no fact known to Genghai which materially adversely affects or in the
future (as far as Genghai can foresee) may materially adversely affect the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of Genghai; provided, however, that Genghai
expresses no opinion as to political or economic matters of general
applicability. Genghai has made known, or caused to be made known, to the
accountants or auditors who have prepared, reviewed, or audited the
aforementioned consolidated financial statements all material facts and
circumstances which could affect the preparation, presentation, accuracy or
completeness thereof.
(d) Tax and Other Liabilities. Genghai does not have any material
liability of any nature, accrued or contingent, including, without limitation,
liabilities for Taxes, and liabilities to customers or suppliers, other than the
following:
-15-
(i) Liabilities for which full provision has been made on the
consolidated balance sheet and the notes thereto (the "Last Genghai
Balance Sheet") as of December 31, 2002 (the "Last Genghai Balance
Sheet Date") referred to in Section 2.02(c); and
(ii) Other liabilities arising since the Last Genghai Balance
Sheet Date and prior to the Closing Date in the ordinary course of
business (which shall not include liabilities to customers on account
of defective products or services) or in connection with the
transactions contemplated hereby or in connection herewith which are
not inconsistent with the representations and warranties of Genghai or
any other provision of this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last Genghai Balance Sheet are sufficient for all
accrued and unpaid Taxes of Genghai, whether or not due and payable and whether
or not disputed, under tax laws, as in effect on the Last Genghai Balance Sheet
Date or now in effect, for the period ended on such date and for all fiscal
periods prior thereto. The execution, delivery, and performance of this
Agreement by Genghai will not cause any Taxes to be payable other than by the
stockholders of Genghai or cause any lien, charge, or encumbrance to secure any
Taxes to be created either immediately or upon the nonpayment of any Taxes other
than on the properties or assets of the stockholders of Genghai. The Internal
Revenue Service has audited and settled or the statute of limitations has run
upon all federal income tax returns of Genghai and its predecessors for all
taxable years up to and including the taxable year ended December 31, 2002.
Genghai has filed all federal, state, local, and foreign tax returns required to
be filed by it; has delivered, or on or prior to the Due Diligence Date will
deliver, to Centre a true and correct copy of each such return which was filed
in the past three years since incorporation; has paid (or has established on the
Last Genghai Balance Sheet a reserve for) all Taxes, assessments, and other
governmental charges payable or remittable by it or levied upon it or its
properties, assets, income, or franchises which are due and payable; and has
delivered, or on or prior to the Due Diligence Date will deliver, to Centre a
true and correct copy, of any report as to adjustments received by it from any
taxing authority during the past three years since incorporation and a
statement, as to any litigation, governmental or other proceeding (formal or
informal), or investigation pending, threatened, or in prospect with respect to
any such report or the subject matter of such report.
(e) Litigation and Claims. Except as set forth in Section G of the
Genghai Disclosure Letter, there is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or, to the best of Genghai's knowledge, in prospect (or any basis
therefor known to Genghai), with respect to Genghai or any of its businesses,
properties, or assets. Genghai is not affected by any present or threatened
strike or other labor disturbance nor to the knowledge of Genghai is any union
attempting to represent any employee of Genghai as collective bargaining agent.
Genghai is not in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree which violation or default would have a
material adverse effect upon Genghai; nor is Genghai required to take any action
in order to avoid such violation or default.
-16-
(f) Properties.
(i) Genghai does not own any legal or equitable interest in
any real property. Genghai has good title to all other properties and
assets material to Genghai, used in its business or owned by it (except
real and other properties and assets as are held pursuant to leases or
licenses described in Section B or C of the Genghai Disclosure Letter),
free and clear of all liens, mortgages, security interests, pledges,
charges, and encumbrances (except such as are listed in Section H of
the Genghai Disclosure Letter).
(ii) All accounts and notes receivable reflected on the Last
Genghai Balance Sheet, or arising since the Last Genghai Balance Sheet
Date, have been collected, or are and will be good and collectible, in
each case at the aggregate recorded amounts thereof without right of
recourse, defense, deduction, return of goods, counterclaim, offset, or
set off on the part of the obligor, and, if not collected, can
reasonably be anticipated to be paid within 180 days of the date
incurred.
(iii) All inventory of raw materials and work in process of
Genghai is usable, and all inventory of finished goods is good and
marketable, on a normal basis in the existing product lines of Genghai.
In no event do such inventories represent more than a 12-month supply
measured by the volume of sales or use for the year ended December 31,
2002. All inventory is merchantable and fit for the particular purpose
for which it is intended.
(iv) Attached as Section B of the Genghai Disclosure Letter is
a true and complete list of the classes of all tangible properties and
assets owned by Genghai or leased or licensed by Genghai from or to a
third party (including inventory but not including Intangibles, as
defined in Section 2.02(i)), and with respect to such properties and
assets leased or licensed by Genghai from or to a third party, a
description of such lease or license. All such properties and assets
(including Intangibles) owned by Genghai are reflected on the Last
Genghai Balance Sheet (except for acquisitions subsequent to the Last
Genghai Balance Sheet Date and prior to the Closing Date which are
either noted in Section B or C of the Genghai Disclosure Letter or are
approved in writing by Centre). All real and other tangible properties
and assets owned by Genghai or leased or licensed by Genghai from or to
a third party are in good and usable condition (reasonable wear and
tear which is not such as to affect adversely the operation of the
business of Genghai excepted).
(v) To the best of Genghai's knowledge, no real property owned
by Genghai or leased or licensed by Genghai from or to a third party
lies in an area which is, or will be, subject to zoning, use, or
building code restrictions which would prohibit, and, to the best of
Genghai's knowledge, no state of facts relating to the actions or
inaction of another person or entity or his or its ownership, leasing,
or licensing of any real or personal property exists or will exist
which would prevent, the continued effective ownership, leasing, or
licensing of such real property in the businesses in which Genghai is
now engaged or the businesses in which it contemplates engaging.
-17-
(vi) The properties and assets (including Intangibles) owned
by Genghai (other than those leased or licensed by Genghai to a third
party) or leased or licensed by Genghai from a third party constitute
all such properties and assets which are necessary to the business of
Genghai as presently conducted or as it contemplates conducting.
(vii) Genghai has not caused or permitted its businesses
properties, or assets to be used to generate, manufacture, refine,
transport, treat, store, handle, dispose of, transfer, produce, or
process any Hazardous Substance (as such term is defined in this
Section 2.01(f)(v)) except in compliance with all applicable laws,
rules, regulations, orders, judgments, and decrees, and has not caused
or permitted the Release (as such term is defined in this Section
2.01(f)(v)) of any Hazardous Substance on or off the site of any
property of Genghai.
(g) Contracts and Other Instruments. Section D of the Genghai
Disclosure Letter contains a true and correct statement of the information
required to be contained therein regarding material contracts, agreements,
instruments, leases, licenses, arrangements, or understandings with respect to
Genghai. Genghai has furnished, or on or prior to the Due Diligence Date will
furnish, to Centre: (i) the certificate of incorporation and by-laws of Genghai
(or, in each case, the comparable charter documents, if any, under applicable
law) and all amendments thereto, as presently in effect, certified by the
Secretary or an authorized signatory of Genghai and (ii) the following: (A) true
and correct copies of all material contracts, agreements, and instruments
referred to in Section D of the Genghai Disclosure Letter; (B) true and correct
copies of all material leases and licenses referred to in Section B or C of the
Genghai Disclosure Letter; and (C) true and correct written descriptions of all
material supply, distribution, agency, financing, or other arrangements or
understandings referred to in Section D of the Genghai Disclosure Letter. Except
as set forth in Section D of the Genghai Disclosure Letter, Genghai is not party
to any employment agreement with any employee thereof. To the best of Genghai's
knowledge, none of Genghai or any other party to any such contract, agreement,
instrument, lease, or license is now or expects in the future to be in violation
or breach of, or in default with respect to complying with, any term thereof,
and each such material contract, agreement, instrument, lease, or license is in
full force and is (to the best of Genghai's knowledge in the case of third
parties) the legal, valid, and binding obligation of the parties thereto and
(subject to applicable bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally) is enforceable as to them in
accordance with its terms. Each such material supply, distribution, agency,
financing, or other arrangement or understanding is a valid and continuing
arrangement or understanding; none of Genghai or any other party to any such
arrangement or understanding has given notice of termination or taken any action
inconsistent with the continuance of such arrangement or understanding; and the
execution, delivery, and performance of this Agreement will not prejudice any
such arrangement or understanding in any way. Genghai enjoys peaceful and
undisturbed possession under all leases and licenses under which it is
operating. Genghai is not party to or bound by any contract, agreement,
instrument, lease, license, arrangement, or understanding, or subject to any
charter or other restriction, which has had or, to the best of Genghai's
knowledge, may in the future have a material adverse effect on the financial
condition, results of operations, businesses, properties, assets, liabilities,
or future prospects of Genghai and, following the consummation of the
transactions contemplated hereby, Centre. Genghai has not engaged within the
last five years in, is engaging in, or intends to engage in any transaction
with, or has had within the last five years, now
-18-
has, or intends to have any contract, agreement, instrument, lease, license,
arrangement, or understanding with, any stockholder of Genghai, any director,
officer, or employee of Genghai (except for employment agreements listed in
Section D of the Genghai Disclosure Letter and employment and compensation
arrangements described in Section E of the Genghai Disclosure Letter), any
relative or affiliate of any stockholder of Genghai, any such director, officer,
or employee, or any other corporation or enterprise in which any stockholder of
Genghai, any such director, officer, or employee, or any such relative or
affiliate then had or now has a 5% or greater equity or voting or other
substantial interest, other than those listed and so specified in Section D of
the Genghai Disclosure Letter. The stock ledgers and stock transfer books and
the minute book records of Genghai relating to all issuances and transfers of
stock by Genghai and all proceedings of the stockholders and the Board of
Directors and committees thereof of Genghai since their respective
incorporations made available to Centre are the original stock ledgers and stock
transfer books and minute book records of Genghai or exact copies thereof.
Genghai is not in violation or breach of, or in default with respect to, any
term of its certificate of incorporation or by-laws (or, in each case, the
comparable charter document, if any, under applicable law).
(h) Employees.
(i) Genghai does not have, or contribute to, and has not had
and has not contributed to, any pension, profit-sharing, option, other
incentive plan, or any other type of Employee Benefit Plan or has any
obligation to or customary arrangement with employees for bonuses,
incentive compensation, vacations, severance pay, sick pay, sick leave,
insurance, service award, relocation, disability, tuition refund, or
other benefits, whether oral or written.
(ii) Section E of the Genghai Disclosure Letter contains a
true and correct statement of the names, relationship with Genghai,
present rates of compensation (whether in the form of salary, bonuses,
commissions, or other supplemental compensation now or hereafter
payable), and aggregate compensation for the fiscal year ended December
31, 2002 of (A) each director, officer, or other employee of Genghai
whose aggregate compensation for the fiscal year ended December 31,
2002 exceeded US$50,000 or whose aggregate compensation presently
exceeds the rate of US$50,000 per annum and (B) all sales agents,
dealers, or distributors of Genghai. Since December 31, 2002, Genghai
has not changed the rate of compensation of any of its directors,
officers, employees, agents, dealers, or distributors, nor has any
Employee Benefit Plan or program of Genghai been instituted or amended
to increase benefits thereunder.
(i) Patents, Trademarks, Et Cetera. Genghai does not own or have
pending, and is not licensed or otherwise permitted to use, any Intangibles,
other than as described in Section C of the Genghai Disclosure Letter. Each
Intangible is validly issued and is currently in force and uncontested in all
jurisdictions in which it is used or in which such use is contemplated. Section
C of the Genghai Disclosure Letter contains a true and correct listing of: (i)
all Intangibles which are owned (either in whole or in part), used by, or
licensed to Genghai or which otherwise relate to the businesses of Genghai, and
a description of each such Intangible which identifies its owner, registrant, or
applicant; (ii) all contracts, agreements, instruments, leases, and licenses and
identification of all parties thereto under which Genghai owns or uses any
Intangible (whether or
-19-
not under license from third parties), together with the identification of the
owner, registrant, or applicant of each such Intangible; (iii) all contracts,
agreements, instruments, leases, and licenses and identification of all parties
thereto under which Genghai grants the right to use any Intangible; and (iv) all
validity, infringement, right-to-use, or other opinions of counsel (whether
in-house or outside) which concern the validity, infringement, or enforceability
of any Intangible owned or controlled by a party other than Genghai which
relates to the businesses, properties, or assets of Genghai. Except as specified
in Section C of the Genghai Disclosure Letter: (v) Genghai is the sole and
exclusive owner or licensee of, and (other than those licensed by Genghai to a
third party) has the right to use, all Intangibles; (vi) no Intangible is
subject to any order, judgment, decree, contract, agreement, instrument, lease,
or license restricting the scope of the use thereof; (vii) during the last five
years, Genghai has not been charged with, and has not charged others with,
unfair competition, infringement of any Intangible, or wrongful use of
confidential information, trade secrets, or secret processes; and (viii) Genghai
is not using any patentable invention, confidential information, trade secret,
or secret process of others. There is no right under any Intangible necessary to
the businesses of Genghai as presently conducted or as it contemplates
conducting, except such as are so designated in Section C of the Genghai
Disclosure Letter. Genghai has not infringed, is not infringing, and has not
received notice of infringement in respect of the Intangibles or asserted
Intangibles of others, nor has Genghai been advised by counsel or others that it
is infringing or may infringe the Intangibles or asserted Intangibles of others
if any currently contemplated business activity is effectuated. To the knowledge
of Genghai, there is no infringement by others of Intangibles of Genghai. As far
as Genghai can foresee, there is no Intangible or asserted Intangible of others
that may materially adversely affect the financial condition, results of
operations, businesses, properties, assets, liabilities, or future prospects of
Genghai. All contracts, agreements, instruments, leases, and licenses pertaining
to Intangibles to which Genghai is a party, or to which any of its businesses,
properties, or assets are subject, are in compliance with all laws, rules,
regulations, orders, judgments, and decrees binding on Genghai or to which any
of its businesses, properties, or assets are subject. IPTS-2000 is the xxxx,
design, or name used by Genghai to identify, respectively, its products,
businesses, or services, and each of the foregoing that is a trademark or a
service xxxx is protected by validly issued and existing registrations in the
name of Genghai on the principal register in the PRC, by rights accorded Genghai
by virtue of the common law in the PRC if such trademark or service xxxx is used
in the PRC, and by rights accorded Genghai by virtue of common or civil law in
all foreign jurisdictions in which such trademark or service xxxx is used or
such use is contemplated. Neither any stockholder of Genghai, any director,
officer, or employee of Genghai, any relative or affiliate of any stockholder of
Genghai or any such director, officer, or employee, nor any other corporation or
enterprise in which any stockholder of Genghai, any such director, officer, or
employee, or any such relative or affiliate had or now has a 5% or greater
equity or voting or other substantial interest, possesses any Intangible which
relates to the businesses of Genghai.
(j) Questionable Payments. Neither Genghai, nor any director, officer,
agent, employee, or other person associated with, or acting on behalf of,
Genghai, nor any stockholder of Genghai, has, directly or indirectly: used any
corporate funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated any provision of
the Foreign Corrupt
-20-
Practices Act of 1977, as amended; or made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment.
(k) Authority. Genghai has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Genghai have been duly taken to authorize the execution,
delivery, and performance of this Agreement by Genghai. This Agreement has been
duly authorized, executed, and delivered by Genghai, constitutes the legal,
valid, and binding obligation of Genghai, and is enforceable as to Genghai in
accordance with its terms. Except as otherwise set forth in this Agreement, no
consent, authorization, approval, order, license, certificate, or permit of or
from, or declaration or filing with, any federal, state, local, or other
governmental authority or any court or other tribunal is required by Genghai for
the execution, delivery, or performance of this Agreement by Genghai. No consent
of any party to any material contract, agreement, instrument, lease, license,
arrangement, or understanding to which Genghai is a party, or to which its or
any of its businesses, properties, or assets are subject, is required for the
execution, delivery, or performance of this Agreement (except such consents
referred to in Section D of the Genghai Disclosure Letter); and the execution,
delivery, and performance of this Agreement will not (if the consents referred
to in Section D of the Genghai Disclosure Letter are obtained prior to the
Closing) violate, result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any party to terminate
or call a default under, entitle any party to receive rights or privileges that
such party was not entitled to receive immediately before this Agreement was
executed under, or create any obligation on the part of Genghai or Centre to
which it was not subject immediately before this Agreement was executed under,
any term of any such material contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a breach of any term of
the certificate of incorporation or by-laws of Genghai (or, in each case, the
comparable charter documents, if any, under applicable law), or (if the
provisions of this Agreement are satisfied) violate, result in a breach of, or
conflict with any law, rule, regulation, order, judgment, or decree binding on
Genghai or to which any of its businesses, properties, or assets are subject.
Except as set forth in Section I of the Genghai Disclosure Letter, neither
Genghai nor any of its officers, directors, employees, or agents has employed
any broker or finder or incurred any liability for any fee, commission, or other
compensation payable by any person on account of alleged employment as a broker
or finder, or alleged performance of services as a broker or finder, in
connection with or as a result of this Agreement or the other transactions
contemplated hereby and in connection herewith.
(l) Insurance. All policies of fire and other insurance against
casualty and other losses and public liability insurance carried by Genghai are
described in Section F of the Genghai Disclosure Letter (including the risks
covered and limits of such policies) and are in full force and effect. A full
and complete copy of each such insurance policy has been, or on or prior to the
Due Diligence Date will be, provided to Centre, and such policies are summarized
in Section F of the Genghai Disclosure Letter. All premiums in respect of such
policies for which premium notices have been received have been paid in full as
the same become due and payable. Genghai have not failed to give any notice or
present any claim under any insurance policy in due and timely fashion. There
are no actual claims or claims threatened in writing against Genghai which could
come within the scope of such coverage nor are any such policies currently
threatened with cancellation. There are no outstanding requirements or
recommendations by any insurance company that issued a policy with respect to
any of the respective assets, the businesses, or operations of Genghai or by
-21-
any Board of Fire Underwriters or other body exercising similar functions or by
any governmental authority requiring or recommending any repairs or other work
to be done on, or with respect to, any of the respective assets of Genghai or
requiring or recommending any equipment or facilities to be installed on any
premises from which the respective businesses of Genghai is conducted or in
connection with any of the respective assets thereof. Genghai does not have any
knowledge of any material proposed increase in applicable insurance rates or of
any conditions or circumstances applicable to the respective businesses thereof
that might result in such increases. No such policy is terminable by virtue of
the transactions contemplated by this Agreement.
(m) Business Conducted in No Other Name. Subject to the next sentence,
all business of Genghai has been conducted in its and for their benefit and
there are no parties related or affiliated with Genghai, either directly or
indirectly, which are competing for the business of Genghai. Genghai conducts
business in the following names: Guangzhou Genghai Technology Development Co.,
Ltd.
(n) Customers and Suppliers. There has been no termination or
cancellation of any relationship between Genghai and any material supplier, or
any customer or group of customers which, individually or in the aggregate,
represented more than five percent of the gross revenues of Genghai taken as a
whole during the fiscal year ended December 31, 2002, nor is there any reason to
believe that any such terminations of such magnitudes are pending or threatened.
(o) Completeness of Disclosure. No representation or warranty by
Genghai in this Agreement contains, or at the Closing Date will contain, an
untrue statement of material fact or omits or at the Closing Date will omit to
state a material fact required to be stated therein or necessary to make the
statements made not misleading.
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE GENGHAI
SHAREHOLDERS. Each of the Genghai Shareholders, severally, but not jointly,
hereby represents and warrants to, and agrees with, Centre as follows:
(a) Representations and Warranties of Genghai. To the knowledge of such
Genghai Shareholder, the representations and warranties of Genghai set forth in
Section 2.02 hereof are true and correct in all material respects. Nothing has
come to the attention of such Genghai Shareholder that would lead such Genghai
Shareholder to believe that any representation or warranty of Genghai set forth
on Section 2.02 hereof is untrue or incorrect in any material respect.
(b) Authority. Genghai and Genghai Shareholders holding of record and
beneficially representing all of the issued and outstanding Genghai Capital
Stock have approved this Agreement and duly authorized the execution and
delivery hereof. Each of the Genghai Shareholders is an individual residing in
the People's Republic of China with full power and authority under the laws
thereof to execute, deliver, and perform this Agreement and the transactions
contemplated hereby and in connection herewith. Such Genghai Shareholder has
reached the age of majority under applicable law.
(c) Ownership of Shares. Such Genghai Shareholder owns beneficially and
of record the Genghai Capital Stock set forth opposite his or her respective
name in Schedule A hereto. Such
-22-
Genghai Shareholder has full power and authority to transfer such Genghai
Capital Stock to Centre under, pursuant to, and in accordance with, this
Agreement, have full power and authority to transfer such shares of Genghai
capital stock to Centre hereunder, and such shares are free and clear of any
liens, charges, mortgages, pledges or encumbrances and such shares are not
subject to any claims as to the ownership thereof, or any rights, powers or
interest therein, by any third party and are not subject to any preemptive or
similar rights of stockholders.
(d) Investment Representations and Covenants.
(i) Such Genghai Shareholder represents that he or she is
acquiring the shares of Common Stock to be issued pursuant to Section
1.02(a) hereof for his or her own account and for investment only and
not with a view to distribution or resale thereof within the meaning of
such phrase as defined under the Securities Act. Such Genghai
Shareholder shall not dispose of any part or all of such shares of
Centre Common Stock in violation of the provisions of the Securities
Act and the rules and regulations promulgated under the Securities Act
by the SEC and all applicable provisions of State securities laws and
regulations.
(ii) The certificate or certificates representing the Centre
Shares shall bear a legend in substantially the form set forth in
Section 1.02(c) hereof.
(iii) Such Genghai Shareholder acknowledges being informed
that the shares of Centre Common Stock to be issued pursuant to Section
1.02(a) hereof shall be unregistered, shall be "restricted securities"
as defined in paragraph (a) of Rule 144 under the Securities Act, and
must be held indefinitely unless they (a) are subsequently registered
under the Securities Act, or (b) an exemption from such registration is
available, and (c) Centre will not have an obligation to currently
register such securities for the account of Genghai Shareholders.
(iv) Such Genghai Shareholder acknowledges that he or she has
been afforded access to all material information which they have
requested relevant to such Genghai Shareholder's decision to acquire
the shares of Centre Common Stock and to ask questions of Centre's
management and that, except as set forth herein, neither Centre nor
anyone acting on behalf of Centre has made any representations or
warranties to such Genghai Shareholder which have induced, persuaded,
or stimulated such Genghai Shareholder to acquire such shares of Centre
Common Stock.
(v) Either alone, or together with their investment
advisor(s), such Genghai Shareholder has the knowledge and experience
in financial and business matters to be capable of evaluating the
merits and risks of the prospective investment in the shares of Centre
Common Stock, and such Genghai Shareholder is and will be able to bear
the economic risk of the investment in such shares of Centre Common
Stock.
-23-
ARTICLE III
COVENANTS
SECTION 3.01 COVENANTS OF CENTRE. Centre covenants and agrees that,
after the date hereof and through the earlier of the Closing or the date of the
termination of this Agreement pursuant to Article IV or V hereof (the earlier of
such times, the "Release Time"), unless Genghai will otherwise approve in
writing, which approval will not be unreasonably withheld:
(a) (i) Until the Release Time, no dividend or liquidating or other
distribution or stock split shall be authorized, declared, paid, or effected by
Centre in respect of the outstanding shares of Centre Common Stock.
(ii) Until the Release Time, no share of capital stock of
Centre or warrant for any such share, right to subscribe to or purchase
any such share, or security convertible into, or exchangeable or
exercisable for, any such share (other than stock options), shall be
issued or sold by Centre.
(b) Until the Release Time, Centre will afford the officers, directors,
employees, counsel, agents, investment bankers, accountants, and other
representatives of Genghai and the Genghai Shareholders free and full access to
the plants, properties, books, and records of Centre. Centre will permit them to
make extracts from and copies of such books and records, and will from time to
time furnish Genghai and the Genghai Shareholders with such additional financial
and operating data and other information as to the financial condition, results
of operations, businesses, properties, assets, liabilities, or future prospects
of Centre as Genghai or the Genghai Shareholders from time to time may request.
Until the Release Time, Centre will cause the independent certified public
accountants of Centre to make available to Genghai, its independent certified
public accountants, and the Genghai Shareholders, the work papers relating to
the audits of Centre referred to in Section 2.01(c) of this Agreement.
(c) Until the Release Time, Centre will conduct its affairs, so that on
the Closing Date no representation or warranty of Centre will be inaccurate, no
covenant or agreement of Centre will be breached, and no condition in this
Agreement will remain unfulfilled by reason of the actions or omissions of
Centre. Except as otherwise consented to by Genghai in writing, until the
Release Time, Centre will conduct its affairs in all respects only in the
ordinary course.
(d) Until the Release Time, Centre will immediately advise Genghai in a
detailed written notice of any material fact or occurrence or any pending or
threatened material occurrence of which it obtains knowledge and which (if
existing and known at the date of the execution of this Agreement) would have
been required to be set forth or disclosed in or pursuant to this Agreement or
in the Centre Disclosure Letter, which (if existing and known at any time prior
to or at the Closing) would make the performance by any party of a covenant
contained in this Agreement impossible or make such performance materially more
difficult than in the absence of such fact or occurrence, or which (if existing
and known at the time of the Closing) would cause a condition to any party's
obligations under this Agreement not to be fully satisfied.
-24-
(e) Centre shall use its commercially reasonable efforts to insure that
all confidential information which Centre or any of its officers, directors,
employees, counsel, agents, investment bankers, or accountants may now possess
or may hereafter create or obtain relating to the financial condition, results
of operations, businesses, properties, assets, liabilities, or future prospects
of Genghai, any affiliate of Genghai, or any customer or supplier of or any such
affiliate shall not be published, disclosed, or made accessible by any of them
to any other person or entity without the prior written consent of Genghai,
which written consent shall not be unreasonably withheld; provided, however,
that the restrictions of this sentence shall not apply (i) after the Closing,
(ii) as may otherwise be required by law, (iii) as may be necessary or
appropriate in connection with the enforcement of this Agreement, or (iv) to the
extent the information shall have otherwise become publicly available. Centre
shall, and shall cause all other such persons and entities to, deliver to
Genghai all tangible evidence of the confidential information relating to
Genghai, any affiliate of Genghai, or (insofar as such confidential information
was provided by, or on behalf of, Genghai, or any such affiliate of Genghai) any
customer or supplier of any of them or any such affiliate to which the
restrictions of the foregoing sentence apply immediately after the termination
of this Agreement pursuant to Article IV or V hereof.
(f) Before Centre releases any information concerning this Agreement or
any of the other transactions contemplated hereby or in connection herewith
which is intended for or may result in public dissemination thereof, Centre
shall cooperate with Genghai, shall furnish drafts of all documents or proposed
oral statements to Genghai for comment, and shall not release any such
information without the written consent of Genghai. Nothing contained herein
shall prevent Centre from releasing any information if required to do so by law.
(g) Centre shall not make any agreement or reach any understanding not
approved in writing by Genghai as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit required for the
consummation of the transactions contemplated by this Agreement.
(h) Centre shall promptly prepare all required or, in the reasonable
opinion of the parties hereto, appropriate periodic reports and applications
under the Exchange Act ("Periodic Reports") and other regulatory filings
relating to this Agreement and the transactions contemplated hereby and in
connection herewith. Centre shall furnish or cause to be furnished, for
inclusion in the Periodic Reports, such information about Centre, and Centre's
security holders as may be required or as may be reasonably requested by
Genghai, and shall continue to furnish or cause to be furnished such information
as is necessary to keep such information correct and complete in all material
respect until the Release Time. Centre represents and warrants that the
information that it has furnished to date, taken as a whole, does not now, and
will not at any time prior to the Release Time, (i) contain an untrue statement
of a material fact or (ii) omit to state a material fact required to be stated
therein or necessary to make the statements therein not false or misleading.
Centre shall take any action required to be taken by it under state "blue-sky,"
securities, or take-over laws in connection with the issuance of Centre Common
Stock pursuant to the transactions contemplated hereby and in connection
herewith.
(i) If, prior to the Release Time, Centre Common Stock shall be
recapitalized or reclassified or Centre shall effect any stock dividend, stock
split, or reverse stock split of Centre
-25-
Common Stock, then the shares of Centre Common Stock to be delivered under this
Agreement or upon exercise, conversion, or exchange of any security to be
delivered under this Agreement or assumed by Centre as contemplated by this
Agreement shall be appropriately and equitably adjusted to the kind and amount
of shares of stock and other securities and property to which the holders of
such shares of Centre Common Stock or such other security would have been
entitled to receive had such stock or such other security been issued and
outstanding as of the record date for determining stockholders entitled to
participate in such corporate event.
(j) Centre shall timely prepare and file any declaration or filing
necessary to comply with any transfer tax statutes that require any such filing
before the Closing.
(k) Until the Release Time, Centre shall not, and shall not authorize
or permit any officer, director, employee, counsel, agent, investment banker,
accountant, or other representative of Centre, directly or indirectly, to
contemplate or enter into any transaction the effect of which may be to
prohibit, restrict, or delay the consummation of the transactions contemplated
by this Agreement or impair the contemplated benefits to Centre's stockholders
of the transactions contemplated by this Agreement.
(l) (i) Following the consummation of the transactions contemplated
hereby and in connection herewith, Centre will cause Genghai to continue its
historic business or to use a significant portion of Genghai's historic business
assets in a business, in each case within the meaning of section 1.368-1(d) of
the Treasury Regulations, assuming that the assets of, and the business
conducted by, Genghai at the Closing Date constitute Genghai's historic business
assets and historic business, respectively.
(ii) Following the consummation of the transactions
contemplated hereby and in connection herewith, Centre will not permit
Genghai to issue additional shares that would result in Centre losing
control of Genghai within the meaning of section 368(c) of the Code.
(m) Centre shall use best efforts to file, within 30 days following the
Effective Time, with the National Association of Securities Dealers, Inc., or
its affiliates, all information required by Rule 15c2-11 under the Exchange Act.
(n) As soon as is reasonably practicable following the Closing, Centre
shall consider and act resolutions adopted by the Board of Directors of Centre
to change the domicile of Centre to the State of Delaware and its name to
"Genghai Technology Holdings, Inc.," or such other state and such other name as
shall be selected by resolutions of the newly designated and elected Board of
Directors of Centre.
(o) At or prior to the Closing, Centre shall apply with the Department
of Commerce of the State of Nevada for a "dba" to do business under the assumed
name of "Genghai Technology Holdings, Inc."
(p) Effective at the Closing, each member of the Board of Directors of
Centre shall tender his or her respective resignation therefrom and shall
appoint the following individuals as the sole directors of Centre: Xx. Xxxxxxx
XX, Xx. Xx GE, Mr. Yuanping JI and Mr. Hongzhong
-26-
HU. Effective at the Closing, each officer of Centre shall tender his or her
respective resignation therefrom.
(q) On or prior to the Due Diligence Date, Centre shall deliver to
Genghai and the Genghai Shareholders the completed Centre Disclosure Letter,
which letter shall be correct and complete in all material respects.
(r) In addition to the shares of Centre Common Stock to be delivered
pursuant to Sections 1.02(a) and 1.03(a) hereof, 7,692,950 newly issued shares
of Centre Common Stock shall be issued and delivered in certificated form at the
Closing to, or to the order of, Orient Financial Services Limited, a Hong Kong
incorporated company.
SECTION 3.02 COVENANTS OF GENGHAI. Genghai covenants and agrees that,
after the date hereof and through the Release Time, unless Centre will otherwise
approve in writing, which approval will not be unreasonably withheld:
(a) Until the earlier of the Release Time, no amendment will be made in
the certificate of incorporation or by-laws (or, in each case, the comparable
charter documents, if any, under applicable law) of Genghai.
(b) Until the Release Time, no share of capital stock of Genghai,
option or warrant for any such share, right to subscribe to or purchase any such
share, or security convertible into, or exchangeable or exercisable for, any
such share, shall be issued or sold by Genghai, otherwise than as contemplated
by, or in connection with, this Agreement.
(c) Until the Release Time, no dividend or liquidating or other
distribution or stock split shall be authorized, declared, paid, or effected by
Genghai in respect of the outstanding Genghai Capital Stock. Until the Release
Time, no direct or indirect redemption, purchase, or other acquisition shall be
made by Genghai of Genghai Capital Stock.
(d) Until the Release Time, Genghai shall not borrow money, guarantee
the borrowing of money, engage in any transaction, or enter into any material
agreement other than in connection with the transactions contemplated hereby or
in connection herewith or otherwise pursuant to any currently outstanding credit
line of Genghai. For purposes of this Agreement, references to "material", as
well as correlative terms (e.g., materially, materiality, etc.) shall be deemed
to refer to amounts of US$100,000 or more or effects or consequences of
US$100,000 or more.
(e) Until the Release Time, Genghai will afford the officers,
directors, employees, counsel, agents, investment bankers, accountants, and
other representatives of Centre and lenders, investors, and prospective lenders
and investors free and full access to the plants, properties, books, and records
of Genghai, will permit them to make extracts from and copies of such books and
records, and will from time to time furnish Centre with such additional
financial and operating data and other information as to the financial
condition, results of operations, businesses, properties, assets, liabilities,
or future prospects of Genghai as Centre from time to time may
-27-
request. Until the Release Time, Genghai will cause the independent certified
public accountants of Genghai to make available to Centre and its independent
certified public accountants the work papers relating to the audits of Genghai
referred to in Section 2.02(c) of this Agreement.
(f) Until the Release Time, Genghai will conduct its affairs so that at
the Closing no representation or warranty of Genghai will be inaccurate in any
material respect, no covenant or agreement of Genghai will be breached, and no
condition in this Agreement will remain unfulfilled by reason of the actions or
omissions of Genghai. Except as otherwise consented to by Centre in writing,
until the Release Time, Genghai will use its best efforts to preserve the
business operations of Genghai intact, to keep available the services of its
present personnel, to preserve in full force and effect the contracts,
agreements, instruments, leases, licenses, arrangements, and understandings of
Genghai, and to preserve the good will of its suppliers, customers, and others
having business relations with any of them. Until the Release Time, Genghai will
conduct its affairs in all respects only in the ordinary course, other than in
connection with the matters referenced herein.
(g) Until the Release Time, Genghai will immediately advise Centre in a
detailed written notice of any material fact or occurrence or any pending or
threatened material occurrence of which it obtains knowledge and which (if
existing and known at the date of the execution of this Agreement) would have
been required to be set forth or disclosed in or pursuant to this Agreement or
the Genghai Disclosure Letter, which (if existing and known at any time prior to
or at the Closing) would make the performance by any party of a covenant
contained in this Agreement impossible or make such performance materially more
difficult than in the absence of such fact or occurrence, or which (if existing
and known at the time of the Closing) would cause a condition to any party's
obligations under this Agreement not to be fully satisfied.
(h) Genghai shall use its commercially reasonable efforts to insure
that all confidential information which Genghai or any of its respective
officers, directors, employees, counsel, agents, investment bankers, or
accountants may now possess or may hereafter create or obtain relating to the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Centre, any affiliate thereof, or any
customer or supplier thereof or of any such affiliate shall not be published,
disclosed, or made accessible by any of them to any other person or entity at
any time or used by any of them except in the ordinary course of business and
for the benefit of Genghai; provided, however, that the restrictions of this
sentence shall not apply (A) after this Agreement is terminated pursuant to
Article IV or V hereof or otherwise, (B) as may otherwise be required by law,
(C) as may be necessary or appropriate in connection with the enforcement of
this Agreement, or (D) to the extent the information shall have otherwise become
publicly available.
(i) Before Genghai releases any information concerning this Agreement
or any of the transactions contemplated by this Agreement which is intended for,
or may result in, public dissemination thereof, Genghai shall cooperate with
Centre, shall furnish drafts of all documents or proposed oral statements to
Centre for comment, and shall not release any such information without the
written consent of Centre, which consent shall not be unreasonably withheld.
Nothing contained herein shall prevent Genghai from releasing any information if
required to do so by law.
-28-
(j) Genghai shall not make any agreement or reach any understanding not
approved in writing by Centre as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit required for the
consummation of the transactions contemplated by this Agreement.
(k) Genghai shall furnish, or cause to be furnished, for inclusion in
the Periodic Reports to be filed pursuant to the Exchange Act in connection with
the transactions contemplated by this Agreement, or for inclusion in Centre's
filings under state "blue-sky," securities, or take-over laws, such information
about Genghai or the Genghai Shareholders as may be required or as may be
reasonably requested by Centre, and shall continue to furnish or cause to be
furnished such information as is necessary to keep such information correct and
complete in all material respect until the Release Time. Genghai represents and
warrants that the information that it has furnished to date, taken as a whole,
does not now, and will not at any time prior to the Release Time, (i) contain an
untrue statement of a material fact or (ii) omit to state a material fact
required to be stated therein or necessary to make the statements therein not
false or misleading.
(l) Transfer Taxes. Genghai shall timely prepare and file any
declaration or filing necessary to comply with any transfer tax statutes that
require any such filing before the Closing.
(m) On or prior to the Due Diligence Date, Genghai shall deliver to
Centre the Genghai Disclosure Letter, which letter shall be correct and complete
in all material respects.
SECTION 3.02 COVENANTS OF THE GENGHAI SHAREHOLDERS. Each Genghai
Shareholder, severally, but not jointly, covenants and agrees that, after the
date hereof and through the Release Time, unless Centre will otherwise approve
in writing, which approval will not be unreasonably withheld, as follows:
(a) Such Genghai Shareholder will use best efforts to cause Genghai to
perform each covenant thereof set forth herein on a timely basis.
(b) Until the earlier of the Release Time, such Genghai Shareholder
shall take no action the result of which shall be to cause Genghai to make any
amendment in the certificate of incorporation or by-laws (or, in each case, the
comparable charter documents, if any, under applicable law) thereof.
(c) Before such Genghai Shareholder releases any information concerning
this Agreement or any of the transactions contemplated by this Agreement which
is intended for, or may result in, public dissemination thereof, such Genghai
Shareholder shall cooperate with Centre, shall furnish drafts of all documents
or proposed oral statements to Centre for comment, and shall not release any
such information without the written consent of Centre, which consent shall not
be unreasonably withheld. Nothing contained herein shall prevent such Genghai
Shareholder from releasing any information if required to do so by law.
(d) Such Genghai Shareholder shall furnish, or cause to be furnished,
for inclusion in the Periodic Reports to be filed pursuant to the Exchange Act
in connection with the transactions contemplated by this Agreement, or for
inclusion in Centre's filings under state "blue-sky,"
-29-
securities, or take-over laws, such information about Genghai or the Genghai
Shareholders as may be required or as may be reasonably requested by Centre, and
shall continue to furnish or cause to be furnished such information as is
necessary to keep such information correct and complete in all material respect
until the Release Time. Such Genghai Shareholder represents and warrants that
the information in writing that it has furnished to date regarding himself or
herself, taken as a whole, does not now, and will not at any time prior to the
Release Time, (i) contain an untrue statement of a material fact or (ii) omit to
state a material fact required to be stated therein or necessary to make the
statements therein not false or misleading.
ARTICLE IV
CONDITIONS; ABANDONMENT AND TERMINATION
SECTION 4.01 RIGHT OF CENTRE TO ABANDON. Centre's Board of Directors
shall have the right to abandon or terminate this Agreement if any of the
following conditions shall not be true or shall not have occurred, as the case
may be, as of the specified date or dates:
(a) All representations and warranties of Genghai and each Genghai
Shareholder contained in this Agreement shall be accurate when made and, in
addition, shall be accurate as of the Closing Date as though such
representations and warranties were then made in exactly the same language by
Genghai or the Genghai Shareholders, as applicable, and regardless of knowledge
or lack thereof on the part of Genghai or the Genghai Shareholders (as
applicable) or changes beyond its control; as of the Closing Date, Genghai and
each Genghai Shareholder shall have performed and complied with all covenants
and agreements and satisfied all conditions required to be performed and
complied with by it at or before the Closing Date, respectively, by this
Agreement; and Centre shall have received a certificate executed by the chief
executive officer and the chief financial officer of Genghai and each Genghai
Shareholder, dated the Closing Date, to that effect.
(b) Centre shall have received at the Closing Date certificates
executed by the chief executive officer and the chief financial officer of
Genghai and of each Genghai Shareholder as of such dates, to the effect that
they have carefully examined the financial statements of Genghai delivered to
Centre pursuant hereto, as well as the Genghai Disclosure Letter, and, to the
best of their knowledge, (i) neither such financial statements, nor the Genghai
Disclosure Letter (A) contains an untrue statement of a material fact or (B)
omits to state a material fact required to be stated therein or necessary to
make the statements therein not false or misleading, provided in each case that
such untrue statement or omission relates to information furnished by or on
behalf of, or pertaining to, Genghai or any Genghai security holder, (ii) since
the date hereof, no event with respect to Genghai or any Genghai security holder
has occurred which should have been set forth in an amendment to either such
financial statements or the Genghai Disclosure Letter, which has not been set
forth in such an amendment or supplement, and (iii) any contract, agreement,
instrument, lease, or license regarding Genghai required to be included in the
Genghai Disclosure Letter.
(c) Genghai and each Genghai Shareholder shall have delivered to Centre
at or prior to the Closing Date such other documents (including certificates of
officers of Genghai) as Centre may reasonably request in order to enable Centre
to determine whether the conditions to their
-30-
obligations under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
(d) All actions, proceedings, instruments, and documents required by
Genghai and the Genghai Shareholders to carry out this Agreement or incidental
thereto and all other related legal matters shall be subject to the reasonable
approval of counsel to Centre, and Genghai and the Genghai Shareholders shall
have furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.
(e) At the Closing, there shall not be pending any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of,
the transactions contemplated by this Agreement, or to obtain substantial
damages with respect thereto.
(f) There shall not have been any action taken, or any law, rule,
regulation, order, judgment, or decree proposed, promulgated, enacted, entered,
enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of Centre, (i) makes this
Agreement or any of the transactions contemplated by this Agreement illegal,
(ii) results in a delay in the ability of Genghai or Centre to consummate the
transactions contemplated by this Agreement beyond July 15, 2003 (the "Drop Dead
Date"), (iii) requires the divestiture by Centre of a material portion of the
business of either Centre or of Genghai, (iv) imposes material limitations on
the ability of Centre effectively to exercise full rights of ownership of shares
of Genghai including the right to vote such shares on all matters properly
presented to the stockholders of Genghai, or (v) otherwise prohibits, restricts,
or delays consummation of the transactions contemplated by this Agreement or
impairs the contemplated benefits to Centre of this Agreement or any of the
other transactions contemplated by this Agreement.
(g) The parties to this Agreement shall have obtained at or prior to
the Closing Date all unconditional written approval to this Agreement and to the
execution, delivery, and performance of this Agreement by each of them of
relevant governmental authorities having jurisdiction over Centre or Genghai or
the subject matter of this Agreement.
(h) At or prior to the Closing Date, Centre shall have made all
filings, and taken all actions, necessary to comply with all applicable
"blue-sky" laws with regard to the issuance of Centre Common Stock as
contemplated by this Agreement other than the filing of Form D up to 15 days
following the Closing. Without limiting the generality of the foregoing, any
prescribed periods within which a "blue-sky" or securities law administrator may
disallow Centre's notice of reliance on an exemption from such state's
requirements, shall have elapsed at or prior to the Closing.
(i) The parties to this Agreement shall have obtained at or prior to
the Closing Date all consents required for the consummation of the transactions
contemplated by this Agreement from any unrelated third party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
any of them is a party, or to which any of them or any of their respective
businesses, properties, or assets are subject.
-31-
(j) There shall not have been any material adverse change in the
condition (financial or otherwise), operations, business, assets, liabilities,
earnings or prospects of Genghai since the date hereof.
(k) Centre shall conduct a due diligence review of Genghai and the
Genghai Shareholders, including, without limitation, a review of the Genghai
Disclosure Letter and the documents referenced therein delivered prior to the
Closing Date, and shall be reasonably satisfied with the result of such review.
SECTION 4.02 RIGHT OF GENGHAI AND THE GENGHAI SHAREHOLDERS TO ABANDON.
By the election of a majority in interest in Genghai held by the Genghai
Shareholders (the "Majority Genghai Shareholders"), the Genghai Shareholders or,
otherwise, Genghai's Board of Directors shall have the right to abandon or
terminate this Agreement if any of the following conditions shall not be true or
shall not have occurred, as the case may be, as of the specified date or dates:
(a) All representations and warranties of Centre contained in this
Agreement shall be accurate when made and, in addition, shall be accurate as of
the Closing Date as though such representations and warranties were then made in
exactly the same language by Centre and regardless of knowledge or lack thereof
on the part of Centre or changes beyond its control; as of the Closing Date,
Centre shall have performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with by them at
or before the Closing Date by this Agreement; and Genghai shall have received
certificates executed by the chief executive officer and the chief financial
officer of Centre, dated the Closing Date, to that effect.
(b) Centre shall have delivered to Genghai and the Genghai Shareholders
at or prior to the Closing such documents (including certificates of officers of
Centre) as Genghai and the Genghai Shareholders may reasonably request in order
to enable Genghai and the Genghai Shareholders to determine whether the
conditions to Centre's obligations under this Agreement have been met and
otherwise to carry out the provisions of this Agreement.
(c) All actions, proceedings, instruments, and documents required by
Centre to carry out this Agreement or incidental thereto and all other related
legal matters shall be subject to the reasonable approval of counsel to Genghai
and the Genghai Shareholders, and Centre shall have furnished such counsel such
documents as such counsel may have reasonably requested for the purpose of
enabling them to pass upon such matters.
(d) At the Closing Date, there shall not be pending any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(e) There shall not have been any action taken, or any law, rule,
regulation, order, judgment, or decree proposed, promulgated, enacted, entered,
enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of Genghai or the Genghai
Shareholders, (i) makes this Agreement or any of the transactions contemplated
by this Agreement illegal, (ii) results in a
-32-
delay in the ability of Centre or Genghai to consummate any of the transactions
contemplated by this Agreement beyond the Drop Dead Date, or (iii) otherwise
prohibits, restricts, or delays consummation of the other transactions
contemplated by this Agreement or impairs the contemplated benefits to the
Genghai Shareholders of this Agreement or any of the transactions contemplated
by this Agreement.
(f) The parties to this Agreement shall have obtained at or prior to
the Closing Date all unconditional written approval to this Agreement and to the
execution, delivery, and performance of this Agreement by each of them of
relevant governmental authorities having jurisdiction over Centre or Genghai or
the subject matter of this Agreement.
(g) At or prior to the Closing Date, Centre shall have made all
filings, and taken all actions, necessary to comply with all applicable
"blue-sky" laws with regard to the issuance of Centre Common Stock as
contemplated by this Agreement other than the filing of Form D up to 15 days
following the Closing. Without limiting the generality of the foregoing, any
prescribed periods within which a "blue sky" or securities law administrator may
disallow Centre's notice of reliance on an exemption from such state's
requirements, shall have elapsed at or prior to the Closing Date.
(h) The parties to this Agreement shall have obtained at or prior to
the Closing Date all consents required for the consummation of the transactions
contemplated by this Agreement from any unrelated third party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
any of them is a party, or to which any of them or any of their respective
businesses, properties, or assets are subject.
(i) Genghai and the Genghai Shareholders shall conduct a due diligence
review of Centre, including, without limitation, a review of the Centre
Disclosure Letter and the documents referenced therein delivered prior to the
Closing Date, and same shall be satisfactory in the reasonable opinion of
Genghai and the Genghai Shareholders.
ARTICLE V
ADDITIONAL TERMS OF ABANDONMENT
SECTION 5.01 OPTIONAL ABANDONMENT. In addition to the provisions of
Article IV, the transactions contemplated by this Agreement may be abandoned or
terminated at or before the Closing notwithstanding adoption and approval of
this Agreement and the transactions contemplated hereby by the stockholders of
the parties hereto:
(a) by mutual agreement of the Boards of Directors of Centre and
Genghai;
(b) at the option of Centre's Board of Directors or Genghai's Board of
Directors, if the Closing Date shall not have occurred on or before the Drop
Dead Date;
-33-
(c) at the option of Centre's Board of Directors, if facts exist which
render impossible compliance with one or more of the conditions set forth in
Section 4.01 and such are not waived by Centre; and
(d) at the option of Genghai's Board of Directors or by the election of
the Majority Genghai Shareholders if facts exist which render impossible
compliance with one or more of the conditions set forth in Section 4.02 and such
are not waived by Genghai.
SECTION 5.02 EFFECT OF ABANDONMENT. If the transactions contemplated by
this Agreement are abandoned or terminated as provided for in Article IV or in
this Article V, except for Sections 3.01(e), 3.02(h) and Article VI, this
Agreement shall forthwith become wholly void and of no further force or effect
without liability on the part of either party to this Agreement or on the part
of any officer, director, controlling person (if any), employee, counsel, agent,
or stockholder thereof; provided, however, that nothing in this Section 5.02
shall release Centre or Genghai or any officer, director, controlling person (if
any), employee, counsel, agent, or stockholder thereof from liability for a
willful failure to carry out its respective obligations under this Agreement.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby, will be paid by
the party incurring such expense or as otherwise agreed to herein.
SECTION 6.02 BROKERS AND FINDERS. Each of the parties hereto
represents, as to itself, that no agent, broker, investment banker or firm or
person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except as may be otherwise set forth herein or
by separate document.
SECTION 6.03 NECESSARY ACTIONS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the Closing, any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper executive
officers and/or directors of Centre or Genghai, as the case may be, or the
relevant Genghai Shareholder or Genghai Shareholders will take all such
necessary action.
-34-
SECTION 6.04 EXTENSION OF TIME; WAIVERS. At any time prior to the
Closing Date:
(a) Centre may (i) extend the time for the performance of any of the
obligations or other acts of Genghai or any Genghai Shareholder or Genghai
Shareholders, (ii) waive any inaccuracies in the representations and warranties
of Genghai or any Genghai Shareholder or Genghai Shareholders, or contained
herein or in any document delivered pursuant hereto by Genghai or any Genghai
Shareholder or Genghai Shareholders, and (iii) waive compliance with any of the
agreements or conditions contained herein to be performed by Genghai or any
Genghai Shareholder or Genghai Shareholders. Any agreement on the part of Centre
to any such extension or waiver will be valid only if set forth in an
instrument, in writing, signed on behalf of Centre.
(b) Genghai and the Genghai Shareholder (by action of the Majority
Genghai Shareholders), may (i) extend the time for the performance of any of the
obligations or other acts of Centre, (ii) waive any inaccuracies in the
representations and warranties of Centre contained herein or in any document
delivered pursuant hereto by Centre and (iii) waive compliance with any of the
agreements or conditions contained herein to be performed by Centre. Any
agreement on the part of Genghai and to any such extension or waiver will be
valid only if set forth in an instrument, in writing, signed on behalf of
Genghai.
SECTION 6.05 NOTICES. Any notice to any party hereto pursuant to this
Agreement will be in writing and given by Certified or Registered Mail or by
facsimile, addressed as follows:
Centre Capital Corp. Guangzhou Genghai Technology
285 Silver Birch Avenue Development Co., Ltd.
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 Xx. 0000 Xxxxxxx Xxxxxxxx
00, 0 Xxxx, Xx Xx,
Xxxxxxxxx PRC
Fax: (00) 00-00000000
Xxxxxx Xxxxxx Xxxxx
Reitler Xxxxx LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Additional notices are to be given as to each party, at such other
address as should be designated in writing complying as to delivery with the
terms of this Section 6.05. All such notices will be effective when received.
SECTION 6.06 PARTIES IN INTEREST. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the respective successors
and assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
-35-
SECTION 6.07 COUNTERPART. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all together will
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement will be deemed to be an original and will have the full force and
effect of an original executed copy.
SECTION 6.08 SEVERABILITY. The provisions of this Agreement will be
deemed severable and the invalidity or unenforceability of any provision hereof
will not affect the validity or enforceability of any of the other provisions
hereof. If any provisions of this Agreement, or the application thereof to any
person or any circumstance, is illegal, invalid or unenforceable, (a) a suitable
and equitable provision will be substituted therefor in order to carry out, so
far as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision, and (b) the remainder of this Agreement and the
application of such provision to other persons or circumstances will not be
affected by such invalidity or unenforceability, nor will such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
SECTION 6.09 HEADINGS. The Article and Section headings are provided
herein for convenience of reference only and do not constitute a part of this
Agreement and will not be deemed to limit or otherwise affect any of the
provisions hereof.
SECTION 6.10 GOVERNING LAW. This Agreement will be deemed to be made in
and in all respects will be interpreted, construed and governed by and in
accordance with the law of the State of New York, without regard to the conflict
of law principles thereof.
SECTION 6.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All terms,
conditions, representations and warranties set forth in this Agreement or in any
instrument, certificate, opinion, or other writing providing for in it, will
survive the Closing and the delivery of the shares of Centre Common Stock to be
issued hereunder at the Closing for a period of two years after Closing,
regardless of any investigation made by or on behalf of any of the parties
hereto.
SECTION 6.12 ASSIGNABILITY. This Agreement will not be assignable by
operation of law or otherwise and any attempted assignment of this Agreement in
violation of this subsection will be void ab initio.
SECTION 6.13 AMENDMENT. This Agreement may be amended with the approval
of the Majority Genghai Shareholders and the boards of directors of each of
Centre and Genghai at any time. This Agreement may not be amended except by an
instrument, in writing, signed on behalf of each of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
-36-
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of the date first above
written.
CENTRE CAPITAL CORP.
BY
------------------------------
NAME: XXXXX XXXXXXXXX
TITLE: PRESIDENT
WITNESS:
------------------------------
NAME:
GUANHZHOU GENGHAI TECHNOLOGY
DEVELOPMENT CO. LTD.
BY
------------------------------
NAME: XXXXXXX XX
TITLE: DIRECTOR
ATTEST:
------------------------------
NAME: XX XX
TITLE: DIRECTOR
-37-
GENGHAI SHAREHOLDERS:
------------------------------
NAME: XXXXXXX XX
------------------------------
NAME: XX XX
------------------------------
NAME: LUOFENG WANG
------------------------------
NAME: XIUJIAN XXXXX
-38-
SCHEDULE A
NAME AND ADDRESS PERCENTAGE OF GENGHAI SHARES OF CENTRE COMMON
---------------- --------------------- -----------------------
HELD STOCK
---- -----
Xxxxxxx Xx 46.75% 14,249,400
Aowo Loding house, Shennanzhonglu ,Shenzhen ,Guangdong, PRC
Xx Xx 43.80% 13,350,240
Xx. 00-000 Xxxxxxxxxxxx, Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxx, XXX
Luofeng Wang 3.60% 1,097,280
Xx.0-0 Xxxxxx Xxxxxxxx, Xxxxxxxx, Xxxxxx, XXX
Xxxxxxx Xxxxx 5.85% 1,783,080
Xx. 00 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxx, Xxxxxxxxx, Xxxxxxxxx, XXX
