EXHIBIT 99.1
RESCISSION AGREEMENT
THIS RESCISSION AGREEMENT ("Agreement") is entered into on December 31,
2003 by and between XX XXXXXXXXX GROUP, a Nevada corporation ("XX Xxxxxxxxx"),
and XXXXXXX XXXXX ("Xx. Xxxxx").
R E C I T A L S
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A. On January 15, 2003, XX Xxxxxxxxx and Xx. Xxxxx entered into that
certain Purchase Agreement ("Purchase Agreement") dated January 15, 2003
pursuant to which Xx. Xxxxx transferred to XX Xxxxxxxxx 10,000 shares ("AP
Ventures Shares") of the common stock of AP Ventures, a Nevada corporation ("AP
Ventures"), in exchange for XX Xxxxxxxxx'x issuance of 5,625,000 shares ("XX
Xxxxxxxxx Shares") of common stock of XX Xxxxxxxxx to Xx. Xxxxx (such
transaction referred to herein as the "Reorganization").
B. AP Ventures was organized on December 31, 2002 for the purpose of
acquiring all of the capital shares of Jingbo Chemical (Bo Xing) Co., Ltd.
("Jingbo"), a Chinese foreign direct investment enterprise wholly-owned by Xx.
Xxxxx. On December 31, 2002, Xx. Xxxxx transferred all of the capital shares of
Jingbo to AP Ventures in exchange for AP Ventures' issuance of a total of 10,000
common shares of AP Ventures (defined above as the "AP Venture Shares").
C. Jingbo was formed by Xx. Xxxxx in 2002 for the purpose of acquiring
certain operating assets and liabilities (the "Jingbo Assets") "of Shandong
Jingbo Petrochemical Company Limited, Shandong Jingbo Agrochemical Company
Limited and Shandong Boxing Lu Nong Chemical Company Limited, which together had
been engaged in the business of owning and operating a petrochemical refinery
and agrochemical manufacturing company in the People's Republic of China
("PRC"). Xx. Xxxxx had acquired the Jingbo Assets from certain unrelated private
investors in the PRC in early 2002 in exchange for cash consideration. Xx. Xxxxx
contributed the Jingbo Assets to Jingbo on December 31, 2002, immediately prior
to AP Ventures' acquisition of the capital shares of Jingbo.
D. Subsequent to the Reorganization, Xx. Xxxxx has become aware of
certain material misrepresentations that were made to him by certain parties in
connection with his acquisition of the Jingbo Assets. In addition, XX Xxxxxxxxx
and Xx. Xxxxx have encountered frequent material acts of insubordination and
recklessness by senior management of Jingbo. These circumstances create
significant doubt as to the viability of the business of Jingbo and the Jingbo
Assets.
E. Based on the foregoing, the Board of Directors of XX Xxxxxxxxx has
determined that it is not in the best interests of XX Xxxxxxxxx to continue to
own and operate Jingbo and that it is in the best interests of the shareholders
of XX Xxxxxxxxx to rescind the Reorganization and the transactions underlying
the Purchase Agreement, subject to the terms and upon the conditions set forth
below.
A G R E E M E N T
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It is agreed as follows:
1. RESCISSION.
1.1 AGREEMENT TO RESCIND. Subject to the terms and upon the
conditions set forth herein, XX Xxxxxxxxx and Xx. Xxxxx agree to rescind the
Reorganization and the transactions underlying the Purchase Agreement. Xx. Xxxxx
agrees to return, reassign, transfer and deliver to XX Xxxxxxxxx, and XX
Xxxxxxxxx agrees to receive from Xx. Xxxxx, at the Closing, the XX Xxxxxxxxx
Shares, and XX Xxxxxxxxx agrees to return, reassign, transfer and deliver to Xx.
Xxxxx, and Xx. Xxxxx agrees to receive from XX Xxxxxxxxx, at the Closing, the AP
Ventures Shares.
1.2 INSTRUMENTS OF TRANSFER.
(a) XX XXXXXXXXX SHARES. The Xx. Xxxxx hereby
endorses, assigns and transfers to XX Xxxxxxxxx all of his right and interest in
and to the XX Xxxxxxxxx Shares. From time to time after the Closing Date, and
without further consideration, the Xx. Xxxxx will execute and deliver such other
instruments of transfer and take such other actions as XX Xxxxxxxxx may
reasonably request in order to more effectively transfer to XX Xxxxxxxxx the XX
Xxxxxxxxx Shares.
(b) AP VENTURES SHARES. XX Xxxxxxxxx hereby endorses,
assigns and transfers to Xx. Xxxxx all of its right and interest in and to the
AP Ventures Shares. From time to time after the Closing Date, and without
further consideration, XX Xxxxxxxxx will execute and deliver such other
instruments and take such other actions as the Xx. Xxxxx may reasonably request
in order to more effectively transfer to him AP Ventures Shares.
1.3 CLOSING. The closing ("Closing") of the transactions
contemplated by Section 1.1 of this Agreement shall take place at the offices of
XX Xxxxxxxxx, located at 000 Xxxxxxxx Xxxx. Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, at 10:00 a.m., local time, on December __, 2003, or at such other time
and place as may be agreed to by the Xx. Xxxxx and XX Xxxxxxxxx ("Closing
Date").
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Xx. Xxxxx hereby
represents, warrants and covenants to and with XX Xxxxxxxxx, and XX Xxxxxxxxx
hereby represents, warrants and covenants to and with Xx. Xxxxx as follows:
2.1 POWER AND AUTHORITY. The party has all requisite
individual power and authority to enter into and to carry out all of the terms
of this Agreement and all other documents executed and delivered in connection
herewith (collectively, the "Documents"). All individual or corporate action on
the part of the party necessary for the authorization, execution, delivery and
performance of the Documents by the party has been taken and no further
authorization on the part of the party is required to consummate the
transactions provided for in the Documents. When executed and delivered by the
party, the Documents shall constitute the valid and legally binding obligation
of the party enforceable in accordance with their respective terms.
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2.2 OWNERSHIP OF AND TITLE TO SECURITIES. The party represents
that he or it is the sole owner of all of the securities to be transferred to
the other party hereunder. The party represents that it has and will transfer to
the other party good and marketable title to the securities to be transferred to
the other party hereunder, free and clear of all pledges, security interests,
mortgages, liens, claims, charges, restrictions or encumbrances.
2.3 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. The
party represents that, to his or its best knowledge, no order of any court or
administrative agency is in effect which restrains or prohibits the party from
consummating the transactions contemplated hereby, and no suit, action,
investigation, inquiry or proceeding by any governmental body or other person or
legal or administrative proceeding has been instituted or threatened which
questions the validity or legality of the party's consummation of the
transactions contemplated hereby.
2.4 APPROVALS AND CONSENTS. The party represents that, to his
or its best knowledge, there are no permits, consents, mandates or approvals of
public authorities, either Chinese or foreign, federal, state or local, or of
any third party necessary for the party's consummation of the transactions
contemplated hereby.
2.5 TERMINATION OF PURCHASE AGREEMENT. The party agrees that
the Purchase Agreement, and the party's rights and the other party's obligations
thereunder, shall be terminated effective as of the Closing and that the party
hereby waives all claims that it may have against the other party that arises
under or relates to the Purchase Agreement or the transactions contemplated
thereby.
3. MISCELLANEOUS.
3.1 CUMULATIVE REMEDIES. Any person having any rights under
any provision of this Agreement will be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement, and to exercise all other rights granted by law, which rights
may be exercised cumulative and not alternatively.
3.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
3.3 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement or the other documents.
3.4 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts when taken together will constitute one and
the same agreement.
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3.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the subject matter
thereof, and supersedes all prior and contemporaneous agreements and
understandings.
3.6 GOVERNING LAW. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of California
applicable to contracts made and to be performed in California. In the event of
any dispute under this Agreement, the parties agree that the jurisdiction for
the resolution of any such dispute will be any appropriate court located in Los
Angeles, California.
IN WITNESS WHEREOF, each of the parties to this Agreement has executed
or caused this Agreement to be executed as of the date first above written.
"XX Xxxxxxxxx"
XX XXXXXXXXX GROUP,
a Nevada corporation
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx,
President and Chief Executive Officer
"Xx. Xxxxx"
:/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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