EXHIBIT 10.01
AMENDED SHARE EXCHANGE AGREEMENT
THIS AMENDED SHARE EXCHANGE AGREEMENT, dated as of the [__] day of June,
2007 (the "Agreement"), by and among Digital Learning Management Corporation., a
Delaware corporation (the "Company"); Changchun Yongxin Dirui Medical Co., Ltd,
a China corporation ("Yongxin"); and all of the shareholders of Yongxin, each of
whom has executed a counterpart signature page to this Agreement (each, a
"Shareholder" and collectively, the "Shareholders"). The Company, Yongxin and
the Shareholders are collectively referred to herein as the "Parties".
W I T N E S S E T H:
WHEREAS, the Shareholders own all of the issued and outstanding capital of
Yongxin (the "Yongxin Shares"), which in turn wholly owns Jilin procinceYongxin
Chain Drugstore Ltd, a company formed under the laws of the People's Republic of
China (the "Subsidiary").
WHEREAS, the Company desires to acquire from Shareholders, and Shareholders
desire to sell to the Company, the Yongxin Shares in exchange for the issuance
by the Company of an aggregate of 21,000,000 shares of Company Common Stock and
5,000,000 shares of the Company Preferred Stock (the "Company Shares") (post
Roll Back) to the Shareholders and/or their designees on the terms and
conditions set forth herein (the "Exchange").
WHEREAS, after giving effect to the Exchange, and the Roll Back (as each is
described herein), there will be approximately 26,500,001 shares of Company
Common Stock issued and outstanding, 3,500,000 shares set aside for issuance
upon conversion of debt, 30,000,001 shares set aside for conversion of the
Series A Convertible Preferred Stock and 75,000,000 shares of Common Stock
authorized.
WHEREAS, the parties intend, by executing this Agreement, to implement a
tax-deferred exchange of property governed by Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration, of the promises and of the mutual
representations, warranties and agreements set forth herein, the parties hereto
agree as follows:
ARTICLE I
THE EXCHANGE
1.1 The Exchange. Subject to the terms and conditions of this Agreement, on
the Closing Date (as hereinafter defined):
(a) the Company shall issue and deliver to the Shareholders and/or
their designees the number of authorized but unissued shares of Company Common
Stock and Company Preferred Stock set forth opposite their and/or their
designee's names set forth on Schedule 1.1(a) hereto or pursuant to separate
instructions to be delivered prior to Closing, and
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(b) each share of Company Preferred Stock shall be convertible into
Company common shares and have the rights and preferences as set forth in the
attached Certificate of Designation, Preferences and Rights of the Terms of the
Series A Preferred Stock, and
(c) Each Yongxin Shareholder agrees to contribute, transfer, assign
and convey at Closing all of their Yongxin Shares to the Corporation, together
with all other rights, claims and interests he or she may have with respect to
Yongxin or its respective assets, and all claims he may have against its
officers and directors, including, but not limited to, all rights to unpaid
dividends and all claims and causes of action arising from or in connection with
the ownership of Yongxin Shares or its issuance, excluding any right, claim or
interest of same arising under this Agreement or in connection with the
transaction contemplated by this Agreement. Each Yongxin Shareholder shall
deliver to Yongxin all of his evidence of ownership representing the Yongxin
Shares, together with legally valid transfer authority therefore, duly executed
in blank, to be held by Yongxin for delivery at Closing.
1.2 Time and Place of Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place upon satisfaction or waiver by the
appropriate parties of all conditions precedent, at the offices of Legal &
Compliance LLC on or before [_________], 2007 (the "Closing Date") at 3:00 p.m.
Pacific Time, or at such place and time as mutually agreed upon by the parties
hereto.
1.3 Effective Time. The Exchange shall become effective (the "Effective
Time") at such time as all of the conditions to set forth in Article VII hereof
have been satisfied or waived by the Parties hereto.
1.4 Tax Consequences. It is intended by the parties hereto that for United
States income tax purposes, the contribution and transfer of the Yongxin Shares
by the Shareholders to the Company in exchange for Company Shares constitutes a
tax-deferred exchange within the meaning of Section 351 of the Code.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Yongxin and the Shareholders each of
which the Corporation represents to be true and correct on the date hereof and
(except as the Corporation may notify Yongxin in writing prior to the Closing)
shall be deemed made again as of the Closing and represented by the Corporation
to be true and correct at the time of the Closing:
2.1 Due Organization and Qualification; Due Authorization.
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its respective business
and properties and to carry on its business in the places and in the manner as
presently conducted or proposed to be conducted. The Corporation has the full
power and authority to conduct the business in which it will engage upon
completion of the transaction contemplated herein. The Company is in good
standing as a foreign corporation in each jurisdiction in which the properties
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owned, leased or operated, or the business conducted, by it requires such
qualification except for any such failure, which when taken together with all
other failures, is not likely to have a material adverse effect on the business
of the Company. Accurate, current and complete copies of the Articles of
Incorporation and Bylaws of the Corporation are attached hereto as Schedule
2.1(a).
(b) The Company does not own, directly or indirectly, any capital
stock, equity or interest in any corporation, firm, partnership, joint venture
or other entity except its subsidiaries a list of which are set forth on
Schedule 2.1(b).
(c) The Company has all requisite corporate power and authority to
execute and deliver this Agreement, and to consummate the transactions
contemplated hereby and thereby. The Company has taken all corporate action
necessary for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, and this Agreement constitutes the
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be affected by bankruptcy, insolvency,
moratoria or other similar laws affecting the enforcement of creditors' rights
generally and subject to the qualification that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefore may be brought, equitable remedies is subject to the discretion of the
court before which any proceeding therefore may be brought.
2.2 No Conflicts or Defaults. The execution and delivery of this Agreement
by the Company and the consummation of the transactions contemplated hereby do
not and shall not (a) contravene the Articles of Incorporation, as amended, or
By-laws of the Company or (b) with or without the giving of notice or the
passage of time (i) violate, conflict with, or result in a breach of, or a
default or loss of rights under, any material covenant, agreement, mortgage,
indenture, lease, instrument, permit or license to which the Company is a party
or by which the Company is bound, or any judgment, order or decree, or any law,
rule or regulation to which the Company is subject, (ii) result in the creation
of, or give any party the right to create, any lien, charge, encumbrance or any
other right or adverse interest ("Liens") upon any of the assets of the Company,
(iii) terminate or give any party the right to terminate, amend, abandon or
refuse to perform, any material agreement, arrangement or commitment to which
the Company is a party or by which the Company's assets are bound, or (iv)
accelerate or modify, or give any party the right to accelerate or modify, the
time within which, or the terms under which, the Company is to perform any
duties or obligations or receive any rights or benefits under any material
agreement, arrangement or commitment to which it is a party.
2.3 Capitalization. The authorized capital stock of the Company immediately
prior to giving effect to the transactions contemplated hereby consists of
80,000,000 shares of which 75,000,000 , have been designated as Company Common
Stock $.001 par value and 5,000,000 shares have been designed as authorized
Series A Convertible Preferred stock. As of the date hereof, there are
65,862,072 shares of Company Common Stock issued and outstanding. As of the date
immediately proceeding the Exchange, and taking into account the proposed
reverse split and anticipated share issuances, there will be 5,500,001 shares of
the Company Common Stock issued and outstanding and an additional 3,500,000
shares set aside for issuance upon conversion of debt. All of the outstanding
shares of Company Common Stock are, and the Company Shares when issued in
accordance with the terms hereof, will be, duly authorized, validly issued,
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fully paid and nonassessable, and have not been or, with respect to the Company
Shares will not be issued in violation of any preemptive right of stockholders.
As of the date hereof, there are 754,000 warrants of which 704,000 are
exercisable at $0.12 per share and 50,000 are exercisable at $3.00 per share and
160,000 options of which 110,000 are exercisable at $0.388 per share and 50,000
are exercisable at $1.00 per share, outstanding. There is no outstanding voting
trust agreement or other contract, agreement, arrangement, call, commitment or
other right of any character obligating or entitling the Company to issue, sell,
redeem or repurchase any of its securities, and there is no outstanding security
of any kind convertible into or exchangeable for Company Common Stock. The
Company has not granted registration rights to any person.
2.4 Financial Statements(g) . Available for review on the Securities and
Exchange Commission, XXXXX system are the (i) balance sheet of the Company at
December 31, 2005, and the related statements of operations, stockholders'
equity (deficit) and cash flows for the fiscal year then ended, including the
notes thereto, as audited by Xxxxxx & Company, Inc., independent registered
public accounting firm and (ii) unaudited balance sheet of the Company at March
31, 2007, and the related statements of operations, and cash flows for the nine
month period then ended (the "Financial Statements"). The Financial Statements,
together with the notes thereto, have been prepared in accordance with U.S.
generally accepted accounting principles applied on a basis consistent
throughout all periods presented. The Financial Statements present fairly the
financial position of the Company as of the dates and for the periods indicated.
The books of account and other financial records of the Company have been
maintained in accordance with good business practices.
2.5 No Assets or Liabilities. Except as set forth on the Financial
Statements and as incurred in the ordinary course of business, or for those not
incurred in the ordinary course of business as set forth on Schedule 2.5 hereto,
the Company does not have any (a) assets of any kind or (b) liabilities or
obligations, whether secured or unsecured, accrued, determined, absolute or
contingent, asserted or unasserted or otherwise.
2.6 Taxes. The Company has filed all United States federal, state, county
and local returns and reports which were required to be filed on or prior to the
date hereof in respect of all income, withholding, franchise, payroll, excise,
property, sales, use, value-added or other taxes or levies, imposts, duties,
license and registration fees, charges, assessments or withholdings of any
nature whatsoever (together, "Taxes"), and has paid all Taxes (and any related
penalties, fines and interest) which have become due pursuant to such returns or
reports or pursuant to any assessment which has become payable, or, to the
extent its liability for any Taxes (and any related penalties, fines and
interest) has not been fully discharged, the same have been properly reflected
as a liability on the books and records of the Company and adequate reserves
therefore have been established.
2.7 Indebtedness; Contracts; No Defaults. Except as otherwise disclosed,
the Corporation's periodic reports available on the XXXXX filing system contain
an accurate, current and complete list and description of each contract and
agreement, whether written or oral ("Contract"), (other than this Agreement) to
which the Corporation is a party or by which the Corporation or any of its
assets are bound. An accurate, current and complete copy of each Contract has
been or will be made available to Yongxin for inspection and copying. No claim
of breach of contract, tort, product liability or other claim, contingent or
otherwise, has been asserted or threatened against the Corporation nor, to the
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best of the Corporation's knowledge, is capable of being asserted by any
employee, creditor, claimant or other person against the Corporation. No state
of facts exists or has existed, nor has any event occurred, which could give
rise to the assertion of any such claim by any person.
2.8 Offers. Other than in the normal daily operations, there are no
outstanding offers, bids, proposals or quotations made by the Corporation which,
if accepted, would create a Contract with the Corporation.
2.9 Real Property. The Company does not own or lease any real property.
2.10 Compliance with Law. The Company is in compliance with all applicable
federal, state, local and foreign laws and regulations relating to the
protection of the environment and human health. There are no claims, notices,
actions, suits, hearings, investigations, inquiries or proceedings pending or,
to the knowledge of the Company, threatened against the Company that are based
on or related to any environmental matters or the failure to have any required
environmental permits, and there are no past or present conditions that the
Company has reason to believe are likely to give rise to any material liability
or other obligations of the Company under any environmental laws. The
Corporation has not generated any hazardous wastes or engaged in activities
which are or could be interpreted to be potential violations of laws or judicial
decrees in any manner regulating the generation or disposal of hazardous waste.
There are no on-site or off-site locations where the Corporation has stored,
disposed or arranged for the disposal of chemicals, pollutants, contaminants,
wastes, toxic substances, petroleum or petroleum products; there are no
underground storage tanks located on property owned or leased by the
Corporation, and no polychlorinated biphenyls are used or stored at any property
owned or leased by the Corporation.
2.11 Permits and Licenses. The Company has all certificates of occupancy,
rights, permits, certificates, licenses, franchises, approvals and other
authorizations as are reasonably necessary to conduct its respective business
and to own, lease, use, operate and occupy its assets, at the places and in the
manner now conducted and operated, except those the absence of which would not
materially adversely affect its respective business.
2.12 Litigation. There is no claim, dispute, action, suit, proceeding or
investigation pending or, to the knowledge of the Company, threatened, against
or affecting the business of the Company, or challenging the validity or
propriety of the transactions contemplated by this Agreement, at law or in
equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to the
knowledge of the Company, has any such claim, dispute, action, suit, proceeding
or investigation been pending or threatened, during the twelve month period
preceding the date hereof. Except as disclosed on Schedule 2.12 hereto, there is
no outstanding judgment, order, writ, ruling, injunction, stipulation or decree
of any court, arbitrator or federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality, against or materially
affecting the business of the Company except as set out in schedule IV. The
Company has not received any written or verbal inquiry from any federal, state,
local, foreign or other governmental authority, board, agency, commission or
instrumentality concerning the possible violation of any law, rule or regulation
or any matter disclosed in respect of its business.
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2.13 Insurance. The Company does not currently maintain any form of
insurance.
2.14 Patents; Trademarks and Intellectual Property Rights. The Company does
not own or possess any patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, Internet web site(s) or
proprietary rights of any nature.
2.15 Securities Law Compliance. The Company has complied with all of the
applicable requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the Securities Act of 1933, as amended (the "Securities
Act"), and has complied with all applicable blue sky laws.
2.16 Officers, Directors, Agents, etc. Xxxxx X Xxxxx, Xxxxxxx Xxxxxx,
Xxxxxx Xxxxxx, Al Jinnah and Xxxxx Xxxxxxxx are the sole officers and directors
of the Corporation. Xxxxx Xxxxx and Xxxxx Xxxxxxxx have employment agreements.
2.17 Labor Matters. The Corporation is not a party to: (i) any profit
sharing, pension, retirement, deferred compensation, bonus, stock option, stock
purchase, retainer, consulting, health, welfare or incentive plan or agreement
or other employee benefit plan, whether legally binding or not; or (ii) any plan
providing for "fringe benefits" to its employees, including, but not limited to,
vacation, disability, sick leave, medical, hospitalization and life insurance
and other insurance plans, or related benefits; or (iii) any employment
agreements other than those particular employment agreements with Xxxxx Xxxxx
and Xxxxx Xxxxxxxx. No person or party (including, but not limited to,
governmental agencies of any kind) has any claim or basis for any action or
proceeding against the Corporation arising out of any statute, ordinance or
regulation relating to discrimination in employment or to employment practices
or occupational safety and health standards.
2.18 Books and Records. The Corporation's books and records are and have
been properly prepared and maintained in form and substance adequate for
preparing audited financial statements in accordance with generally accepted
accounting principles, and fairly and accurately reflect all of the
Corporation's assets, obligations and accruals, and all transactions (normally
reflected in books and records in accordance with generally accepted accounting
principles) to which the Corporation is or was a party or by which the
Corporation or any of its assets are or were affected.
2.19 Consents. The execution, delivery and performance by the Corporation
of this Agreement and the consummation by the Corporation of the transactions
contemplated hereby do not require any consent that has not been received prior
to the date hereof.
2.20 Improper Payments. Neither the Corporation, nor any of its current or
former shareholders, directors, officers or employees or agents, nor any person
acting on behalf of the Corporation, has, directly or indirectly, made any
bribe, kickback or other payment of a similar or comparable nature, whether
lawful or not, to any person, public or private, regardless of form, whether in
money, property or services, to obtain favorable treatment for business secured
or special concessions already obtained. No funds or assets of the Corporation
were donated, lent or made available directly or indirectly for the benefit of,
or for the purpose of supporting or opposing, any government or subdivision
thereof, political party, candidate or committee, either domestic or foreign.
The Corporation has not maintained and does not maintain a bank account, or any
other account of any kind, whether domestic or foreign, which account was not or
is not reflected in the Corporation's books and records, or which account was
not listed, titled or identified in the name of the Corporation.
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2.21 Full Disclosure. All the representations and warranties made by the
Corporation herein or in any Schedule, and all of the statements, documents or
other information pertaining to the transaction contemplated herein made or
given by the Corporation, its agents or representatives, are complete and
accurate, and do not omit any information required to make the statements and
information provided, in light of the transaction contemplated herein,
non-misleading, accurate and meaningful.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF YONGXIN
Yongxin and the Shareholders severally represent and warrant to the Company
each of which Yongxin and the Shareholders represents to be true and correct on
the date hereof and (except as Yongxin and the Shareholders may notify the
Corporation in writing prior to the Closing) shall be deemed made again as of
the Closing and represented by Yongxin and the Shareholders to be true and
correct at the time of the Closing:
3.1 Due Organization and Qualification; Subsidiaries, Due Authorization.
(a) Yongxin is a corporation duly incorporated, validly existing and
in good standing under the laws of the China, with full corporate power and
authority to own, lease and operate its business and properties and to carry on
its business in the places and in the manner as presently conducted or proposed
to be conducted. Yongxin is in good standing as a foreign corporation in each
jurisdiction in which the properties owned, leased or operated, or the business
conducted, by it requires such qualification except for any such failure, which
when taken together with all other failures, is not likely to have a material
adverse effect on the business of Yongxin. Yongxin has the full power and
authority to conduct the business in which it will engage upon completion of the
transaction contemplated herein.
(b) Yongxin does not own, directly or indirectly, any capital stock,
equity or interest in any corporation, firm, partnership, joint venture or other
entity, other than the Subsidiary. The Subsidiary is wholly owned by Yongxin ,
free and clear of all liens. There is no contract, agreement, arrangement,
option, warrant, call, commitment or other right of any character obligating or
entitling Yongxin to issue, sell, redeem or repurchase any of its securities,
and there is no outstanding security of any kind convertible into or
exchangeable for securities of Yongxin or the Subsidiary.
(c) Yongxin has all requisite power and authority to execute and
deliver this Agreement, and to consummate the transactions contemplated hereby
and thereby. Yongxin has taken all corporate action necessary for the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, and this Agreement constitutes the valid and binding
obligation of Yongxin, enforceable against Yongxin in accordance with its terms,
except as may be affected by bankruptcy, insolvency, moratoria or other similar
laws affecting the enforcement of creditors' rights generally and subject to the
qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefore may be brought.
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3.2 No Conflicts or Defaults. The execution and delivery of this Agreement
by Yongxin and the consummation of the transactions contemplated hereby do not
and shall not (a) contravene the governing documents of Yongxin or any of the
Subsidiaries, or (b) with or without the giving of notice or the passage of
time, (i) violate, conflict with, or result in a breach of, or a default or loss
of rights under, any material covenant, agreement, mortgage, indenture, lease,
instrument, permit or license to which Yongxin or any of the Subsidiaries is a
party or by which Yongxin or any of the Subsidiaries or any of their respective
assets are bound, or any judgment, order or decree, or any law, rule or
regulation to which their assets are subject, (ii) result in the creation of, or
give any party the right to create, any lien upon any of the assets of Yongxin
or any of the Subsidiaries, (iii) terminate or give any parry the right to
terminate, amend, abandon or refuse to perform any material agreement,
arrangement or commitment to which Yongxin is a party or by which Yongxin or any
of its assets are bound, or (iv) accelerate or modify, or give any party the
right to accelerate or modify, the time within which, or the terms under which
Yongxin is to perform any duties or obligations or receive any rights or
benefits under any material agreement, arrangement or commitment to which it is
a party.
3.3 Capitalization. The authorized capital stock of Yongxin immediately
prior to giving effect to the transactions contemplated hereby consists of
$1,827,805 registered capital. Except as set forth herein, all of the registered
capital of Yongxin is duly authorized, validly issued, fully paid and
nonassessable, and have not been or, with respect to Yongxin Shares, will not be
transferred in violation of any rights of third parties. The Yongxin Shares are
not subject to any preemptive or subscription right, any voting trust agreement
or other contract, agreement, arrangement, option, warrant, call, commitment or
other right of any character obligating or entitling Yongxin to issue, sell,
redeem or repurchase any of its securities, and there is no outstanding security
of any kind convertible into or exchangeable for common shares. All of the
Yongxin Shares are owned of record and beneficially by the Shareholders free and
clear of any liens, claims, encumbrances, or restrictions of any kind.
3.4 Taxes. Yongxin has filed all returns and reports which were required to
be filed on or prior to the date hereof, and has paid all Taxes (and any related
penalties, fines and interest) which have become due pursuant to such returns or
reports or pursuant to any assessment which has become payable, or, to the
extent its liability for any Taxes (and any related penalties, fines and
interest) has not been fully discharged, the same have been properly reflected
as a liability on the books and records of Yongxin and adequate reserves
therefore have been established. All such returns and reports filed on or prior
to the date hereof have been properly prepared and are true, correct (and to the
extent such returns reflect judgments made by Yongxin such judgments were
reasonable under the circumstances) and complete in all material respects.
Except as indicated in 3.4 of the Disclosure Schedule, no extension for the
filing of any such return or report is currently in effect. Except as indicated
in Item 3.4 of the Disclosure Schedule, no tax return or tax return liability of
Yongxin has been audited or, presently under audit. All taxes and any penalties,
fines and interest which have been asserted to be payable as a result of any
audits have been paid. Except as indicated in Item 3.4 of the Disclosure
Schedule, Yongxin has not given or been requested to give waivers of any statute
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of limitations relating to the payment of any Taxes (or any related penalties,
fines and interest). There are no claims pending for past due Taxes. Except as
indicated in Item 3.4 of the Disclosure Statement, all payments for withholding
taxes, unemployment insurance and other amounts required to be paid for periods
prior to the date hereof to any governmental authority in respect of employment
obligations of Yongxin have been paid or shall be paid prior to the Closing and
have been duly provided for on the books and records of Yongxin and in the
Yongxin Financial Statements.
3.5 Financial Statements. Item 3.5 of the Disclosure Schedule to this
Agreement, includes copies the (i) balance sheet of the Company at December 31,
2006, and the related statements of operations, stockholders' equity (deficit)
and cash flows for the fiscal year then ended, including the notes thereto, as
audited by Xxxxxx & Company, independent registered public accounting firm (the
"Financial Statements"). The Financial Statements, together with the notes
thereto, have been prepared in accordance with U.S. generally accepted
accounting principles applied on a basis consistent throughout all periods
presented. The Financial Statements present fairly the financial position of the
Company as of the dates and for the periods indicated. The books of account and
other financial records of the Company have been maintained in accordance with
good business practices.
3.6 Conduct Since Date of Balance Sheet. Except as otherwise set forth
herein), none of the following has occurred since the date of the Balance Sheet:
(a) Any material adverse change in the financial condition,
obligations, capitalization, business, prospects or operations of Yongxin, nor
are there any circumstances known to Yongxin which might result in such a
material adverse change or such an effect;
(b) Any increase of indebtedness of Yongxin other than in the ordinary
course of business;
(c) Any settlement or other resolution of any dispute or proceeding
other than in the ordinary course of business;
(d) Any cancellation by Yongxin, without payment in full, of any
obligation to Yongxin of any shareholder, director, officer or employee of
Yongxin (or any member of their respective families), or any entity in which any
shareholder, director or officer of Yongxin (or any member of their respective
families) has any direct or indirect interests;
(e) Any obligation incurred by Yongxin other than in the ordinary
course of business;
(f) Any payment, discharge or satisfaction of any obligation or
judgment, other than in the ordinary course of business; or
(i) Any agreement obligating Yongxin to do or take any of the actions
referred to in this Section 3.5 outside the ordinary course of business.
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3.7 Compliance with Law. Yongxin and the Subsidiary are conducting their
respective businesses in material compliance with all applicable law, ordinance,
rule, regulation, court or administrative order, decree or process, or any
requirement of insurance carriers material to its business. Neither Yongxin nor
the Subsidiary has received any notice of violation or claimed violation of any
such law, ordinance, rule, regulation, order, decree, process or requirement.
Yongxin has not generated any hazardous wastes or engaged in activities which
are or could be interpreted to be potential violations of laws or judicial
decrees in any manner regulating the generation or disposal of hazardous waste.
There are no on-site or off-site locations where Yongxin has stored, disposed or
arranged for the disposal of chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum or petroleum products; there are no underground storage
tanks located on property owned or leased by Yongxin.
3.8 Litigation.
(a) There is no claim, dispute, action, suit, proceeding or
investigation pending or threatened, against or affecting Yongxin or any of the
Subsidiary or challenging the validity or propriety of the transactions
contemplated by this Agreement, at law or in equity or admiralty or before any
federal, state, local, foreign or other governmental authority, board, agency,
commission or instrumentality, has any such claim, dispute, action, suit,
proceeding or investigation been pending or threatened, during the 12-month
period preceding the date hereof;
(b) there is no outstanding judgment, order, writ, ruling, injunction,
stipulation or decree of any court, arbitrator or federal, state, local, foreign
or other governmental authority, board, agency, commission or instrumentality,
against or materially affecting Yongxin or any of the Subsidiaries; and
(c) neither Yongxin nor the Subsidiary has received any written or
verbal inquiry from any federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality concerning the possible
violation of any law, rule or regulation or any matter disclosed in respect of
its business.
3.9 Consents. The execution, delivery and performance by Yongxin of this
Agreement and the consummation by Yongxin of the transactions contemplated
hereby do not require any consent that has not been received prior to the date
hereof.
3.10 Contracts. An accurate, current and complete copy of each material
Contract has been furnished to the Corporation.
3.11 Offers. There are no outstanding offers, bids, proposals or quotations
made by Yongxin which, if accepted, would create a Contract with Yongxin.
3.12 Officers, Directors, Agents, etc. Xxxxxxx Xxx, Xxxxxxx Xxx, Fan Wenbo
and Xxxxxxx Xxxx are the sole officers and directors of Yongxin.
3.13 Labor Matters. Yongxin is not and has never been a party to: (i) any
profit sharing, pension, retirement, deferred compensation, bonus, stock option,
stock purchase, retainer, consulting, health, welfare or incentive plan or
agreement or other employee benefit plan, whether legally binding or not; or
(ii) any plan providing for "fringe benefits" to its employees, including, but
not limited to, vacation, disability, sick leave, Yongxin, hospitalization and
10
life insurance and other insurance plans, or related benefits; or (iii) any
employment agreement. No former employee of Yongxin has any claim against
Yongxin (whether under federal or state law, any employment agreement or
otherwise) on account of or for: (i) overtime pay; (ii) wages or salary for any
period; (iii) vacation, time-off or pay in lieu of vacation or time-off; or (iv)
any violation of any statute, ordinance or regulation relating to minimum wages
or maximum hours of work. No person or party (including, but not limited to,
governmental agencies of any kind) has any claim or basis for any action or
proceeding against Yongxin arising out of any statute, ordinance or regulation
relating to discrimination in employment or to employment practices or
occupational safety and health standards.
3.14 Books and Records. Yongxin's books and records are and have been
properly prepared and maintained in form and substance adequate for preparing
audited financial statements in accordance with generally accepted accounting
principles, and fairly and accurately reflect all of Yongxin's assets,
obligations and accruals, and all transactions (normally reflected in books and
records in accordance with generally accepted accounting principles) to which
Yongxin is or was a party or by which Yongxin or any of its assets are or were
affected.
3.15 Other Liabilities. No claim of breach of contract, tort, product
liability or other claim (whether arising from Yongxin's business operations or
otherwise), contingent or otherwise, has been asserted or threatened against
Yongxin nor, to the best of Yongxin's knowledge, is capable of being asserted by
any employee, creditor, claimant or other person against Yongxin. No state of
facts exists or has existed, nor has any event occurred, which could give rise
to the assertion of any such claim by any person.
3.16 Consents. The execution, delivery and performance by Yongxin of this
Agreement and the consummation by Yongxin of the transactions contemplated
hereby do not require any consent that has not been received prior to the date
hereof.
3.17 Judgments. There is no outstanding judgment against Yongxin. There is
no health or safety problem involving or affecting Yongxin. There are no open
workers compensation claims against Yongxin, or any other obligation, fact or
circumstance which would give rise to any right of indemnification on the part
of any current or former shareholder, partner, director, officer, employee or
agent of Yongxin, or any heir or personal representative thereof, against
Yongxin or any successor to the business of Yongxin.
3.18 Improper Payments. Neither Yongxin, nor any of its current or former
shareholders, partners, directors, officers or employees or agents, nor any
person acting on behalf of Yongxin, has, directly or indirectly, made any bribe,
kickback or other payment of a similar or comparable nature, whether lawful or
not, to any person, public or private, regardless of form, whether in money,
property or services, to obtain favorable treatment for business secured or
special concessions already obtained. No funds or assets of Yongxin were
donated, lent or made available directly or indirectly for the benefit of, or
for the purpose of supporting or opposing, any government or subdivision
thereof, political party, candidate or committee, either domestic or foreign.
Yongxin has not maintained and does not maintain a bank account, or any other
account of any kind, whether domestic or foreign, which account was not or is
not reflected in the Yongxin corporate books and records, or which account was
not listed, titled or identified in the name of Yongxin.
11
3.19 Full Disclosure. All the representations and warranties made by
Yongxin herein or in any Schedule hereto, and all of the statements, documents
or other information pertaining to the transaction contemplated herein made or
given by Yongxin, its agents or representatives are complete and accurate, and
do not omit any information required to make the statements and information
provided, in light of the transaction contemplated herein, non-misleading,
accurate and meaningful.
ARTICLE IV
REPRESENTATION AND WARRANTIES OF THE SHAREHOLDERS
Each Shareholder for himself, herself or itself only, and not with respect
to any other Shareholder, hereby severally represents and warrants to the
Company that now and/or as of the Closing:
4.1 Title to Shares. Each of the Shareholders is the legal and beneficial
owner of the Yongxin Shares to be transferred to the Company by such
Shareholders as set forth opposite each Shareholder's name in Schedule 4.1
hereto, and upon consummation of the exchange contemplated herein, the Company
will acquire from each of the Shareholders good and marketable title to the
Yongxin Shares, free and clear of all liens excepting only such restrictions
upon future transfers by the Company, if any, as maybe imposed by applicable
law. The information set forth on Schedule 4.1 with respect to each Shareholder
is accurate and complete.
4.2 Due Authorization. Each of the Shareholders has all requisite power and
authority to execute and deliver this Agreement, and to consummate the
transactions contemplated hereby and thereby. This Agreement constitutes the
valid and binding obligation of each of the Shareholders, enforceable against
such Shareholders in accordance with its terms, except as may be affected by
bankruptcy, insolvency, moratoria or other similar laws affecting the
enforcement of creditors' rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
4.3 Purchase for Investment.
(a) Each of the Shareholders is acquiring the Company Shares for
investment for each of the Shareholders' own account and not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and such Shareholders has no present intention of selling, granting any
participation in, or otherwise distributing the same. Each of the Shareholders
further represents that he, she or it does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Company Shares.
(b) Each of the Shareholders understands that the Company Shares are
not registered under the Securities Act on the ground that the sale and the
issuance of securities hereunder is exempt from registration under the Act
pursuant to Section 4(2) thereof, and that the Company's reliance on such
exemption is predicated on each of the Shareholders' representations set forth
herein.
12
4.4 Investment Experience. Each of the Shareholders acknowledges that he,
she or it can bear the economic risk of his or her investment, and has such
knowledge and experience in financial and business matters that he, she or it is
capable of evaluating the merits and risks of the investment in the Company
Shares.
4.5 Information. Each of the Shareholders has carefully reviewed such
information as such Shareholders deemed necessary to evaluate an investment in
the Company Shares. To the full satisfaction of each of the Shareholders, he,
she or it has been furnished all materials that he, she or it has requested
relating to the Company and the issuance of the Company Shares hereunder, and
each Shareholder has been afforded the opportunity to ask questions of
representatives of the Company to obtain any information necessary to verify the
accuracy of any representations or information made or given to the
Shareholders. Notwithstanding the foregoing, nothing herein shall derogate from
or otherwise modify the representations and warranties of the Company set forth
in this Agreement, on which the Shareholders has relied in making an exchange of
the Yongxin Shares for the Company Shares.
4.6 Restricted Securities. Each of the Shareholders understands that the
Company Shares may not be sold, transferred, or otherwise disposed of without
registration under the Act or an exemption there from, and that in the absence
of an effective registration statement covering the Company Shares or any
available exemption from registration under the Act, the Company Shares must be
held indefinitely. Each of the Shareholders is aware that the Company Shares may
not be sold pursuant to Rule 144 promulgated under the Securities Act unless all
of the conditions of that Rule are met. Among the conditions for use of Rule 144
may be the availability of current information to the public about the Company.
4.7 Exempt Issuance. Each of the Shareholders acknowledges that he, she or
it must assure the Company that the offer and sale of the Company Shares to such
Shareholder qualifies for an exemption from the registration requirements
imposed by the Securities Act and from applicable securities laws of any state
of the United States. Each of the Shareholders agrees that he meets the criteria
established in one or more of subsections (a) or (b), below.
(a) Accredited Investor, Section 4(2) of the Securities Act and/or
Rule 506 of Regulation D. The Shareholder qualifies as an "accredited investor",
as that term is defined in Rule 501 of Regulation D, promulgated under the
Securities Act.
(b) Offshore Investor, Rule 903 of Regulation S. The Shareholder is
not a U.S. Person, as defined in Rule 901 of Regulation S, promulgated under the
Securities Act, and the Shareholder, severally but not jointly, represents and
warrants to the Company that:
(i) The Shareholder is not acquiring the Company Shares as a
result of, and such Shareholder covenants that e, she or it will not engage in
any "directed selling efforts" (as defined in Regulation S under the Securities
Act) in the United States in respect of the Company Shares which would include
any activities undertaken for the purpose of, or that could reasonably be
expected to have the effect of, conditioning the market in the United States for
the resale of any of the Company Shares;
13
(ii) The Shareholder is not acquiring the Company Shares for the
account or benefit of, directly or indirectly, any U.S. Person;
(iii) The Shareholder is a resident of the People's Republic of
China;
(iv) the offer and the sale of the Company Shares to such
Shareholder as contemplated in this Agreement complies with or is exempt from
the applicable securities legislation of the People's Republic of China;
(v) the Shareholder is outside the United States when receiving
and executing this Agreement and that the Shareholder will be outside the United
States when acquiring the Company Shares,
(vi) and the Shareholder covenants with Company that:
(1) offers and sales of any of the Company Shares prior to
the expiration of a period of one year after the date
of original issuance of the Company Shares (the one
year period hereinafter referred to as the
"Distribution Compliance Period") shall only be made in
compliance with the safe harbor provisions set forth in
Regulation S, pursuant to the registration provisions
of the Securities Act or an exemption therefrom, and
that all offers and sales after the Distribution
Compliance Period shall be made only in compliance with
the registration provisions of the Securities Act or an
exemption therefrom and in each case only in accordance
with applicable state securities laws; and
(2) The Shareholder will not engage in hedging transactions
with respect to the Company Shares until after the
expiration of the Distribution Compliance Period.
ARTICLE V
COVENANTS
5.1 Further Assurances. Each of the Parties shall use its reasonable
commercial efforts to proceed promptly with the transactions contemplated
herein, to fulfill the conditions precedent for such parry's benefit or to cause
the same to be fulfilled and to execute such further documents and other papers
and perform such further acts as may be reasonably required or desirable to
carry out the provisions of this Agreement and to consummate the transactions
contemplated herein.
14
ARTICLE VI
DELIVERIES
6.1 Items to be delivered to the Shareholders prior to or at Closing by the
Company.
(a) Articles of Incorporation and amendments thereto, By-laws and
amendments thereto, and a certificate of good standing in the Company's state of
incorporation;
(b) all applicable schedules hereto;
(c) all minutes and resolutions of board of director and shareholder
meetings in possession of the Company;
(d) shareholder list;
(e) all financial statements and all tax returns in possession of the
Company;
(f) resolution from the Company's Board appointing the designees of
the Shareholders to the Company's Board of Directors;
(g) resolution from the Company's Board, and if applicable,
shareholder resolutions approving this transaction and authorizing the issuances
of the shares hereto;
(h) letters of resignation from the Company's current officers and
directors to be effective upon Closing and after the appointments described in
Section 6.1(f);
(i) certificates representing shares of the Company Shares issued in
the denominations as set forth opposite the name of the Shareholders and/or its
designees on Schedule I to this Agreement;
(j) any other document reasonably requested by the Shareholders that
it deems necessary for the consummation of this transaction.
6.2 Items to be delivered to the Company prior to or at Closing by Yongxin
and the Shareholders.
(a) all applicable schedules hereto;
(b) instructions from Yongxin appointing its designees to the
Company's Board of Directors;
(c) share certificates and duly executed stock powers from the
Shareholders transferring the Yongxin Shares to the Company;
(d) resolutions from the Board of Directors of Yongxin, if applicable,
and shareholder resolutions approving the transactions contemplated hereby; and
(e) any other document reasonably requested by the Company that it
deems necessary for the consummation of this transaction.
15
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions Precedent to Closing. The obligations of the Parties under
this Agreement shall be and are subject to fulfillment, prior to or at the
Closing, of each of the following conditions:
(a) That each of the representations and warranties of the Parties
contained herein shall be true and correct at the time of the Closing date as if
such representations and warranties were made at such time except for changes
permitted or contemplated by this Agreement.
(b) That the Parties shall have performed or complied with all
agreements, terms and conditions required by this Agreement to be performed or
complied with by them prior to or at the time of the Closing;
(c) Yongxin and the Subsidiary shall have received, and delivered
documentation of, the approvals required, if any, from the Ministry of Commerce
of the People's Republic of China, the China Securities Regulatory Commission,
the State Administration of Foreign Exchange, or any other Chinese governmental
agency regulating the ownership of business operations in China by non-Chinese
nationals and/or the ownership of offshore companies doing business in China by
Chinese nationals.
(d) The Company will effectuate an approximate 12 for 1 reverse split
of the Company Common Stocks of the Company prior to the time of closing.
(e) That the Company shall have settled, paid or otherwise resolved
the Convertible Notes payable in the principal amount of $3,000,000 plus accrued
interest in the approximate total amount of $1,202,217.
(f) Absence of Litigation. No litigation shall have been instituted on
or before the time of the Closing by any person, the result of which did or
could prevent or make illegal the consummation of the transaction contemplated
by this Agreement, or which had or could have a material adverse effect on the
business of the Corporation.
7.2 Conditions to Obligations of Shareholders. The obligations of
Shareholders shall be subject to fulfillment prior to or at the Closing, of each
of the following conditions:
(a) The Company shall have received all of the regulatory, shareholder
and other third party consents, permits, approvals and authorizations necessary
to consummate the transactions contemplated by this Agreement; and
(b) The Company shall have complied with Rule 14(f)(1) of the Exchange
Act, if required.
7.3 Conditions to Obligations of the Company. The obligations of the
Company shall be subject to fulfillment at or prior to or at the Closing, of
each of the following conditions:
16
(a) Yongxin and the Shareholders shall have received all of the
regulatory, shareholder and other third party consents, permits, approvals and
authorizations necessary to consummate the transactions contemplated by this
Agreement; and
(b) The Shareholders shall have delivered to the Company the share
certificates and duly executed stock powers from the Shareholders transferring
the Yongxin Shares to the Company.
(c) All representations and warranties made by Yongxin and the Yongxin
Shareholders contained in this Agreement and the Schedules hereto shall be true
and correct in all respects on the date hereof, and shall be true and correct in
all respects at the time of the Closing as though such representations were
again made, without exception or deviation, at the time of the Closing.
(d) Yongxin and the Yongxin Shareholders shall have duly performed or
complied with all of the covenants and obligations under this Agreement to be
performed or complied with by them on or prior to the Closing.
(e) No litigation shall have been instituted on or before the time of
the Closing by any person, the result of which did or could prevent or make
illegal the consummation of the transaction contemplated by this Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnity of the Company. The Company agrees as to defend, indemnify
and hold harmless the Shareholders from and against, and to reimburse the
Shareholders with respect to, all liabilities, losses, costs and expenses,
including, without limitation, reasonable attorneys' fees and disbursements
(collectively the "Losses") asserted against or incurred by the Shareholders by
reason of, arising out of, or in connection with any material breach of any
representation or warranty contained in this Agreement made by the Company or in
any document or certificate delivered by the Company pursuant to the provisions
of this Agreement or in connection with the transactions contemplated thereby.
8.2 Indemnity of the Shareholders. The Shareholders, joint and severally,
agree to defend, indemnify and hold harmless the Company from and against, and
to reimburse the Company with respect to, all losses, including, without
limitation, reasonable attorneys' fees and disbursements, asserted against or
incurred by the Company by reason of, arising out of, or in connection with any
material breach of any representation or warranty contained in this Agreement
and made by the Shareholders or in any document or certificate delivered by the
Shareholders pursuant to the provisions of this Agreement or in connection with
the transactions contemplated thereby, it being understood that the Shareholders
shall have responsibility hereunder only for the representations and warranties
made by the Shareholders.
8.3 Indemnification Procedure. A party (an "Indemnified Party") seeking
indemnification shall give prompt notice to the other party (the "Indemnifying
Party") of any claim for indemnification arising under this Article VIII. The
Indemnifying Party shall have the right to assume and to control the defense of
any such claim with counsel reasonably acceptable to such Indemnified Party, at
the Indemnifying Party's own cost and expense, including the cost and expense of
17
reasonable attorneys' fees and disbursements in connection with such defense, in
which event the Indemnifying Party shall not be obligated to pay the fees and
disbursements of separate counsel for such in such action. In the event,
however, that such Indemnified Party's legal counsel shall determine that
defenses may be available to such Indemnified Party that are different from or
in addition to those available to the Indemnifying Party, in that there could
reasonably be expected to be a conflict of interest if such Indemnifying Party
and the Indemnified Party have common counsel in any such proceeding, or if the
Indemnified Party has not assumed the defense of the action or proceedings, then
such Indemnifying Party may employ separate counsel to represent or defend such
Indemnified Party, and the Indemnifying Party shall pay the reasonable fees and
disbursements of counsel for such Indemnified Party. No settlement of any such
claim or payment in connection with any such settlement shall be made without
the prior consent of the Indemnifying Parry which consent shall not be
unreasonably withheld.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated at any time before or, at
Closing, by:
(a) The mutual agreement of the Parties;
(b) Either the Corporation or Yongxin, but not by a Shareholder if-
(i) Any provision of this Agreement applicable to a party shall
be materially untrue or fail to be accomplished; or
(ii) Any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the consummation of this
Agreement;
(c) Upon termination of this Agreement for any reason, in accordance
with the terms and conditions set forth in this paragraph, each said party shall
bear all costs and expenses as each party has incurred.
ARTICLE X
COVENANTS SUBSEQUENT TO CLOSING
10.1 Subsequent SEC Filings. The Chief Executive Officer and Chief
Financial Officer, or other principal administrative and financial officers, of
the Company shall cooperate with and assist Yongxin with the preparation of the
first Quarterly or Annual Report, as applicable, to be filed with the Commission
subsequent to the Closing to the extent disclosure is required regarding the
prior operations, financial condition, or actions of, or other information
pertaining to, the Company for the period(s) ended prior to the Closing. Such
cooperation and assistance shall include, but not be limited to, provision of
subcertifications regarding the disclosures controls and procedures and internal
control over financial reporting of the Company, provision of and participation
in review of interim financial statements, and review and provision of feedback
on a draft of the required Report.
18
10.2 Xxxxx Xxxxx shall assist the Company in negotiating and resolving
outstanding debts.
ARTICLE XI
MISCELLANEOUS
11.1 Survival of Representations, Warranties and Agreements. Each of the
parties hereto is executing and carrying out the provisions of this Agreement in
reliance upon the representations, warranties and covenants and agreements
contained in this agreement or at the closing of the transactions herein
provided for and not upon any investigation which it might have made or any
representations, warranty, agreement, promise or information, written or oral,
made by the other party or any other person other than as specifically set forth
herein. Except as specifically set forth in this Agreement, representations and
warranties and statements made by a party to in this Agreement or in any
document or certificate delivered pursuant hereto shall not survive the Closing
Date, and no claims made by virtue of such representations, warranties,
agreements and covenants shall be made or commenced by any party hereto from and
after the Closing Date. Each warranty and representation made by a party in this
Agreement or pursuant hereto is independent of all other warranties and
representations made by the same party in this Agreement or pursuant hereto
(whether or not covering identical, related or similar matters) and must be
independently and separately satisfied. Exceptions or qualifications to any such
warranty or representation shall not be construed as exceptions or
qualifications to any other warranty or representation.
11.2 Access to Books and Records. During the course of this transaction
through Closing, each party agrees to make available for inspection all
corporate books, records and assets, and otherwise afford to each other and
their respective representatives, reasonable access to all documentation and
other information concerning the business, financial and legal conditions of
each other for the purpose of conducting a due diligence investigation thereof.
Such due diligence investigation shall be for the purpose of satisfying each
party as to the business, financial and legal condition of each other for the
purpose of determining the desirability of consummating the proposed
transaction. The Parties further agree to keep confidential and not use for
their own benefit, except in accordance with this Agreement any information or
documentation obtained in connection with any such investigation.
11.3 Further Assurances. If, at any time after the Closing, the parties
shall consider or be advised that any further deeds, assignments or assurances
in law or that any other things are necessary, desirable or proper to complete
the merger in accordance with the terms of this agreement or to vest, perfect or
confirm, of record or otherwise, the title to any property or rights of the
parties hereto, the Parties agree that their proper officers and directors shall
execute and deliver all such proper deeds, assignments and assurances in law and
do all things necessary, desirable or proper to vest, perfect or confirm title
to such property or rights and otherwise to carry out the purpose of this
Agreement, and that the proper officers and directors the parties are fully
authorized to take any and all such action.
11.4 Notice. All communications, notices, requests, consents or demands
given or required under this Agreement shall be in writing and shall be deemed
to have been duly given when delivered to, or received by prepaid registered or
certified mail or recognized overnight courier addressed to, or upon receipt of
a facsimile sent to, the party for whom intended, as follows, or to such other
address or facsimile number as may be furnished by such party by notice in the
manner provided herein:
19
Attention:
If to the Shareholders and Yongxin:
Yongxin Medical Group, Ltd.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxx Xxxx, China
Attention:
With a copy to:
Xxxxx X. Xxxxxxx, Esquire
Legal & Compliance, LLC
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
Office: 000-000-0000
Fax: 000-000-0000
If to the Company:
Digital Learning Management Corporation
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Chairman
Fax:
With a copy to:
Xxxxxx Xxx
Xxxxxxx Xxx Xxxx & Xxxxxxxx
000 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000-0000
Fax: 000-000-0000
11.5 Entire Agreement. This Agreement, the Disclosure Schedules and any
instruments and agreements to be executed pursuant to this Agreement, sets forth
the entire understanding of the parties hereto with respect to its subject
matter, merges and supersedes all prior and contemporaneous understandings with
respect to its subject matter and may not be waived or modified, in whole or in
part, except by a writing signed by each of the parties hereto. No waiver of any
provision of this Agreement in any instance shall be deemed to be a waiver of
the same or any other provision in any other instance. Failure of any party to
enforce any provision of this Agreement shall not be construed as a waiver of
its rights under such provision.
20
11.6 Successors and Assigns. This Agreement shall be binding upon,
enforceable against and inure to the benefit of, the parties hereto and their
respective heirs, administrators, executors, personal representatives,
successors and assigns, and nothing herein is intended to confer any right,
remedy or benefit upon any other person. This Agreement may not be assigned by
any party hereto except with the prior written consent of the other parties,
which consent shall not be unreasonably withheld.
11.7 Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Delaware are applicable to
agreements made and fully to be performed in such state, without giving effect
to conflicts of law principles.
11.8 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11.9 Construction. Headings contained in this Agreement are for convenience
only and shall not be used in the interpretation of this Agreement. References
herein to Articles, Sections and Exhibits are to the articles, sections and
exhibits, respectively, of this Agreement. The Disclosure Schedule is hereby
incorporated herein by reference and made a part of this Agreement. As used
herein, the singular includes the plural, and the masculine, feminine and neuter
gender each includes the others where the context so indicates.
11.10 Severability. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, this Agreement
shall be interpreted and enforceable as if such provision were severed or
limited, but only to the extent necessary to render such provision and this
Agreement enforceable.
11.11 Litigation. If any party hereto is required to engage in litigation
or arbitration against any other party hereto, either as plaintiff or as
defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment in favor of such
party (the "Prevailing Party"), then the party or parties against whom said
final judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing Party in so enforcing
or defending its or his rights hereunder, including, but not limited to, all
attorneys' fees, paralegals' fees, court costs and other expenses incurred
throughout all negotiations, trials or appeals undertaken in order to enforce
the Prevailing Party's rights hereunder.
21
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the date first set forth above.
DIGITAL LEARNING MANAGEMENT CORPORATION.
By:_____________________________
Name: Xxxxx Xxxxx
Title: Chairman
YONGXIN MEDICAL GROUP, LTD.
By:_____________________________
Name:
Title: Chief Executive Officer
[SIGNATURE PAGES FOR SHAREHOLDERS FOLLOW]
22
YONGXIN MEDICAL GROUP, LTD.
SHAREHOLDERS' SIGNATURE PAGE TO
SHARE EXCHANGE AGREEMENT
Dated [________], 2007
Among Digital Learning Management Corporation.,
Yongxin Medical Group, Ltd., and
The Shareholders of Yongxin Medical Group, Ltd.
The undersigned Shareholder hereby executes and delivers the Share Exchange
Agreement (the "Agreement") to which this Signature Page is attached, which,
together with all counterparts of the Agreement and Signature Pages of the other
parties named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
------------------------------------------------------------------------
(Signature)
------------------------------------------------------------------------
(Type or print name)
------------------------------------------------------------------------
------------------------------------------------------------------------
(Type or print name as it should appear on certificate, if different)
Address: _____________________________________________________________
_____________________________________________________________
Telephone: (___)___________________________
Facsimile: (___)___________________________
Number of Yongxin Shares Held: ___________
SCHEDULE 1.1(a)
---------------
-------------------------------------------------------------------------------------------------------------
Name Number of Common Stock Number of Preferred Stock
-------------------------------------------------------------------------------------------------------------
1. Misala Holdings Inc. BVI 600,000.00 3,000,000.00
-------------------------------------------------------------------------------------------------------------
2. Boom Day Investments Ltd. BVI 5,400,000.00 2,000,000.00
-------------------------------------------------------------------------------------------------------------
3. Accord Success Ltd., BVI 5,400,000.00
-------------------------------------------------------------------------------------------------------------
4. Perfect Sum Investment Ltd. BVI 1,200,000.00
-------------------------------------------------------------------------------------------------------------
5. Full Spring Group Ltd. BVI 1,800,000.00
-------------------------------------------------------------------------------------------------------------
6. Grand Opus Co. Ltd., BVI 2,400,000.00
-------------------------------------------------------------------------------------------------------------
7. Master Power Holdings Coup Ltd. BVI 4,200,000.00
=============================================================================================================
TOTAL 21,000,000.00 5,000,000.00
-------------------------------------------------------------------------------------------------------------
i
SCHEDULE 2.1(a)
DIGITAL LEARNING MANAGEMENT, INC. ARTICLES AND BYLAWS
-ii-
SCHEDULE 2.1(b)
DIGITAL LEARNING MANAGEMENT, INC. SUBSIDIARIES
Digital Learning Institute Inc., a Delaware corporation.
In addition, Digital Learning Institute has the following subsidiaries:
Software Education of America, a California corporation
Xxxxxxxx Education Services, a California corporation
Digital Knowledge Works, a Delaware corporation
Coursemate, a California corporation
- iii -
SCHEDULE 2.5
SHEDULE OF ADJUSTMENT TO DIGITAL LEARNING FINANCIAL STATEMENTS
Since the date of the last financial statements, the Company has incurred debts
in the ordinary course of business in the approximate amount of $120,000.00.
- iv -
SCHEDULE 2.12
LITIGATION
- v -
SCHEDULE 3.5
YONGXIN FINANCIAL STATEMENTS
- vi -
SCHEDULE 4.1
YONGXIN CAPITAL OWNERSHIP SCHEDULE
Name % of Yongxin owned
1. Xxxxxxx Xxx 51%
2. Xxxxxxx Xxx 49%
TOTAL 100%
- vii -
