ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT is entered into as of this 17th day of October,
1999, by and among Oak Bridge Capital III, Inc., a Colorado corporation
("Acquiror"); Xxxx X. Xxxxxxxx ("Xxxxxxxx") and Xxxxxx X. Xxxxxx ("Xxxxxx")
(Xxxxxxxx and Xxxxxx are collectively called the "Principals"); Mighty Star
Holdings, Ltd, a British Virgin Islands corporation ("MSH"
or the "Company"); and Xxxxx Xxx Hong, a resident of Hong Kong, China (the
"Sole Shareholder" or the "Shareholder").
W I T N E S S E T H :
Acquiror is a Colorado corporation of which the Principals are the
controlling persons as of the date of this Agreement. The word "controlling"
as utilized herein refers to those persons who are officers, directors and/or
the record and beneficial owners of 10% or more of Acquiror's
Common Stock as of the date of this Agreement. Subject to the terms and
conditions of this Agreement, Acquiror and Principals desire Acquiror to
acquire all of the issued and outstanding stock of MSH in exchange for
9,670,500 shares of common stock, par value $.0001, of Acquiror
("Acquiror Common"). The Sole Shareholder owns all of the issued and
outstanding MSH
Common.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and conditions hereinafter set forth, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Transfer of MSH Common to Acquiror.
Subject to and upon the terms and conditions hereof, on the Closing
Date (as defined in paragraph 16 below) the Acquiror shall acquire from the
Sole Shareholder 100% of the issued and outstanding MSH Common.
2. Consideration for the Transfer of SUBS Common.
In consideration for the transfer to the Acquiror of shares of MSH
Common, the Acquiror shall issue to the Sole Shareholder tendering his MSH
shares at the closing, 9,670,500 restricted shares of Acquiror Common for all
of the MHS Common restricted Acquiror common shares. Unless otherwise
specifically indicated hereinafter the Acquiror common shares referred
to throughout this Agreement refer to restricted Acquiror common shares, which
shares shall represent 88.73% of all issued and outstanding shares of Acquiror
Common Stock when taking into consideration the fact that (a) 1,100,000 shares
of Acquiror Common Stock are currently owned by Principals; and (b) 128,000
shares of Acquiror Common Stock are currently owned by persons other than the
Principals.
2.1 Acquiror Common.
The total number of shares of Acquiror Common to be issued to the Sole
Shareholder pursuant to Section 2 shall constitute 88.73% of all issued and
outstanding Acquiror securities immediately after the Closing.. Acquiror has
no other class of capital stock.
3. No Requirement for Shareholder Approvals and Information Statement;
Statement Under Section 14(f) of the Exchange Act.
(a) Shareholder Approvals. Acquiror has, upon the advice of its
counsel, determined that no shareholder approval is required, necessary or
appropriate to consider and act upon the transactions contemplated by this
Agreement.
(b) Information Statement. Acquiror has, upon the advice of its
counsel, determined that it is not required to prepare and distribute to its
shareholders an Information Statement complying with the requirements of the
Exchange Act of 1934, as amended, ("1934 Act") and the rules and regulations
promulgated thereunder.
(c) Acquiror shall not be obligated to conclude the acquisition of
MSH Common unless there shall be delivered to it at the Closing 100% of all
outstanding MSH Shares.
(d) Acquiror shall, promptly upon the execution of this Agreement,
and within three business days, file a Schedule 14f-1 with the Commission and
distribute the same to its shareholders. Upon advice of counsel, Acquiror has
determined that no other filing is required by it under the Exchange Act or
the Securities Act to complete the transactions contemplated hereby.
4. Transfer and Exchange of Shares.
(a) It is the intention of the parties hereto that the consummation
of the transactions contemplated herein, upon the terms and conditions set
forth in this Agreement, shall result in the acquisition by the Acquiror, in
exchange solely for 9,670,500 shares of its voting common stock (its only
current issued and outstanding class of stock), 100% of the MSH stock such
that Acquiror will (a) have "control" (within the meaning of Section 368(c)
of the Internal Revenue Code of 1954, as amended (the "Code")) of MSH after the
consummation of the transactions contemplated hereby and that such transactions
will constitute a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Code and/or (b) that MSH shall become a wholly owned operating
subsidiary of Acquiror (immediately subsequent to the conclusion of the
acquisition).
(b) Restrictive Legend on Acquiror Common. Upon Closing the Sole
Shareholder shall transfer the MSH Common to Acquiror solely in exchange for
9,670,500 shares of restricted, non-registered Acquiror Common, which are
voting shares, pursuant to the terms and provisions hereof. Certificates
evidencing such shares of Acquiror Common shall bear the following restrictive
legend:
The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be sold, transferred,
pledged, hypothecated, or otherwise disposed of in the absence of (i) an
effective registration statement for such securities under such act or (ii)
an opinion of company counsel that such registration is not required.
5. Representations and Warranties of MSH. MSH makes the following
representations and warranties to Acquiror, each of which is true and correct
on the date hereof and shall be true and correct at Closing:
(a) Due Incorporation, Good Standing and Qualification. MSH is a
corporation duly organized, validly existing and in good standing under the
laws of the British
Virgin Islands, with all requisite corporate power and authority to own,
operate and lease its
properties and to carry on its business as it is now being conducted.
(b) Corporate Authority. MSH has the full corporate power and
authority to
enter into this Agreement and (subject to any requisite approval by the
Shareholders of MSH
Common) to carry out the transactions contemplated by this Agreement. The
Board of Directors
of MSH has unanimously and duly authorized the execution, delivery and
performance of this
Agreement.
(c) Capital Structure.
(i) MSH is authorized to issue 50,000 shares of Common
Stock, par value $1.00 per share, which are voting shares, one of which shares
is validly issued and outstanding, fully paid and non-assessable as of the
date hereof, and none of which shares, to
MSH's knowledge, have any liens and/or encumbrances against them.
(ii) There are no options, warrants, rights, stockholder
agreements or other agreements or instruments outstanding giving any person
the right to acquire any shares of MSH Common and there are no commitments to
issue any options, warrants or rights to acquire shares of MSH Common.
(d) Subsidiaries. MSH has no subsidiaries.
(e) Litigation. To the best of its knowledge there are no pending
or threatened
material suits, legal proceedings, claims or governmental investigations of
any kind against or
with respect to MSH, the Sole Shareholder and/or MSH's assets or any basis for
any such
material suit, legal proceeding, claim or governmental investigation which
would individually, or
in the aggregate, have a materially adverse effect on the business or
properties of MSH.
(f) Taxes. MSH has filed all applicable tax returns required to be
filed to date
in accordance with the provisions of law pertaining thereto, and has paid all
taxes, interest,
penalties and assessments (including, without limitation, income, withholding,
excise,
unemployment, Social Security, occupation, transfer, franchise, property,
sales and use taxes, and
all penalties and interest in respect thereof) required to have been paid to
date.
(g) Governmental Consent. To the best of MSH's knowledge, no
permit,
consent, approval or authorization of, or filing with, any governmental
regulatory authority or
agency is required of MSH in connection with the execution, delivery and
performance of this
Agreement or the consummation of the transactions contemplated hereby.
(h) Compliance with Laws. MSH has not received any notice that it
is not in
compliance with all material applicable existing requirements of laws,
foreign, federal, state and
local, and all existing applicable material requirements of governmental
bodies or agencies
having jurisdiction over it and to the best of its knowledge has all necessary
licenses (foreign,
federal, state and/or local) required of it in order to conduct its current
business activities.
(i) Financial Statements. (a) The internally generated financial
statements of
MSH as of October 15, 1999 ("Financial Statements") previously delivered to
Acquiror and
attached hereto as an Exhibit, have been internally generated and compiled by
Xxxx &
Associates, independent public accountants. To the best of MSH's knowledge,
such Financial
Statements have been prepared in accordance with generally accepted accounting
principles, are
correct and complete in all material respects and fairly and accurately
present the financial
condition of MSH as of the dates and for the periods stated therein, except as
set forth herein or
therein and/or in the compiling accountant's letter to the Board of Directors,
dated October 15,
1999. MSH has no material liabilities or obligations of a type which would be
included in a
balance sheet prepared in accordance with generally accepted accounting
principles, except as
and to the extent disclosed on the Financial Statements delivered hereunder.
The words
"Financial Statements" as same appear throughout this Acquisition Agreement
refer to both the
Financial Statements and all Notes to the Financial Statements in their
entirety (unless otherwise
specifically indicated). MSH has no reason to believe that Acquiror will not
be able prepare
audited financial statements of MSH to enable it to timely require such
reports as are required of
it as a company subject to the reporting requirements of Section 12(g) of the
1934 Act. As
indicated in the Financial Statements, MSH has sufficient assets, on a stand
alone basis, so that
on completion of the audit required to be performed within sixty (60) days
after the Closing its
assets would permit it to meet the financial requirements for listing on
NASDAQ SmallCap.
(j) Conflict With Documents. Neither the execution, delivery and
performance of this Agreement by MSH, nor the consummation of the transactions
contemplated
hereby, either immediately or with the passage of time or the giving of notice
or both will:
(i) conflict with or cause a breach or default under any of
the terms and
conditions of, or result in a termination or modification of, or cause any
acceleration of any
material obligations of MSH, under any contract, lease or other instrument to
which MSH is
bound; or
(ii) conflict with any material provisions of MSH's
Certificate of
Incorporation, By-laws or any other laws or regulations by which MSH is bound;
or
(iii) result in the creation or imposition of any liens,
charge or
encumbrance against MSH or any of its assets.
(k) Absence of Material Changes. Except as specifically set forth
herein or in
any Exhibit hereto or in MSH's Financial Statements since the date of the
compiling
accountant's letter (report) referred to in paragraph 5 (i) hereof:
(i) there has not been any change materially adversely
affecting the
financial condition of MSH;
(ii) MSH has operated its business in the ordinary course of
business
which includes the continual acquisition of assets in accordance with its
business plan;
(iii) MSH has maintained its books, accounts and records in
the usual,
customary and ordinary manner;
(iv) MSH has not knowingly waived any pre-existing right of
substantial
value; and
(v) MSH has not borrowed any money outside the ordinary
course of
business.
(l) Statements and Other Documents Not Misleading. No provision of
this
Agreement relating to MSH or any other document, schedule or other information
furnished by
MSH to Acquiror in connection with the execution, delivery and performance of
this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a
material fact required to be stated in order to make the statement, in light
of the circumstances in
which it is made, not misleading.
(m) Acknowledgment of Awareness of MSH of Acquiror Status as a
12(g)
Reporting Company. MSH acknowledges being advised by Acquiror that:
(i) Acquiror is currently subject to reporting requirements
under Section
13 or 15(d) of the Securities Exchange Act of 1934 because it has filed a Form
10-SB so as to
register its securities pursuant to Section 12(g) of the 1934 Act.
(ii) In order for Acquiror to comply with the foregoing
intentions, MSH
shall be required to furnish to Acquiror such information concerning MSH as
may be required by
applicable laws, rules and regulations, including but not limited to certified
financial statements
of MSH for at least its last two fiscal years (or such period of time as may
be necessary) and
unaudited financial statements for any interim periods as may be required.
6. Title to the Shares. The Sole Shareholder shall represent and
warrant to Acquiror
that he has good and marketable title to the MSH Common delivered by him to
Acquiror, free
and clear of any liens, pledges, claims and encumbrances (other than
restriction on transfer as a
result of securities laws), and each has the right to sell, transfer and
assign the foregoing to
Acquiror.
7. Representations and Warranties of Acquiror and Principals. Acquiror
and
Principals, jointly and severally, make the following representations and
warranties to MSH and
to the Sole Shareholder each of which is true and correct on the date hereof
and shall be true and
correct at Closing.
(a) Due Incorporation, Good Standing and Qualification. Acquiror
is a
corporation duly organized, validly existing and in good standing under the
laws of the State of
Colorado, with all requisite corporate power and authority to own, operate and
lease its assets
and to carry on its business (if any) as it is now being conducted.
(b) Corporate Authority. Acquiror has the full corporate power and
authority
to enter into, execute and deliver this Agreement.
(c) Capital Structure.
(i) As of the date hereof, Acquiror has authorized common
stock
consisting of 40,000,000 shares, par value $.0001 per share, all of which are
voting shares, and of
which 1,228,000 shares are duly authorized, validly issued and outstanding,
fully paid and non-
assessable. Acquiror has authorized 10,000,000 shares of Preferred Stock,
none of which has
been issued or is outstanding. Except for the foregoing or as may be
indicated in this Agreement
there are no other outstanding securities of the Acquiror.
(ii) Except as specifically set forth herein or by Exhibit
annexed hereto
there are no pre-emptive rights, options, warrants, or other rights,
stockholder agreements or
other agreements or instruments outstanding giving any person the right to
acquire any securities
of Acquiror, nor are there any commitments to issue any options, warrants or
rights to acquire
securities of Acquiror or any obligation to issue any other form of securities
or notes of Acquiror
to anyone nor have any dividends been declared by Acquiror or shares of
Acquiror set aside for
such purposes.
(d) Status of Acquiror Common Stock to be Issued.
The shares
of Acquiror Common to be issued pursuant to this Agreement shall be, when
issued, duly and
validly authorized and issued, fully paid and non-assessable and each of such
shares shall bear
the restrictive legend as heretofore indicated in elsewhere in this Agreement
and the record and
beneficial owner of such shares shall receive good and marketable title to
such shares free and
clear of any liens and/or encumbrances.
(e) Tangible Net Worth. Information concerning the Tangible Net
Worth of
Acquiror as of June 30, 1999 appears in an attached Exhibit hereto.
(f) Litigation. There are not now nor have there been since the
inception of
Acquiror any pending or threatened suits, legal proceedings, claims or
governmental
investigations against or with respect to Acquiror or its assets or any basis
for any such suits,
legal proceedings, claims or governmental investigations.
(g) Conflict With Documents. Neither the execution, delivery and
performance of this Agreement by Acquiror nor the consummation of the
transactions
contemplated hereby, either immediately or with the passage of time or the
giving of notice or
both will:
(i) Conflict with or cause a breach or default under any of
the terms and
conditions of, or result in a termination or modification of, or cause any
acceleration of any
obligations of Acquiror under any contract, lease or other instrument to which
Acquiror is bound;
or
(ii) Conflict with or violate the provisions of Acquiror's
Certificate of
Incorporation, as and if amended, and By-laws or any other laws or regulations
by which
Acquiror is bound; or
(iii) Result in the creation or imposition of any lien, charge
or
encumbrance against Acquiror or any of its assets.
(h) Taxes. Acquiror has filed (or will promptly file) all
applicable Federal,
state, local and foreign tax returns required to be filed to date in
accordance with the provisions
of law pertaining thereto and has paid (or will promptly pay) all taxes,
interest, penalties and
assessments (including without limitation, income, withholding, excise,
unemployment, social
security, occupation, transfer, franchise, property, sales and use taxes, and
all penalties and
interest in respect thereof) required to have been paid to date; and all taxes
of all types have been
accrued on the Acquiror's books or paid as the case may be - all being
reflected on the financial
statements set forth in an Exhibit hereto.
(i) Compliance with Laws. Acquiror is in compliance with all
existing
requirements of laws and administrative rules, federal, state and local, and
all existing
requirements of governmental bodies or agencies having jurisdiction over it
and has all necessary
licenses (federal, state and/or local) required of it in order to conduct its
current business
activities.
(j) Financial Statements.
(i) The Financial Statements of Acquiror as of June 30,
1999,
attached as an Exhibit hereto, and incorporated herein, have been certified by
Xxxxxx Accounting,
independent certified public accountants. Such audited Financial Statements
have been prepared
in accordance with generally accepted accounting principles consistently
applied throughout the
periods involved, are correct and complete in all material respects and fairly
and accurately
present the assets, liabilities and, financial position of Acquiror as of the
dates and for the periods
stated therein, except as set forth herein or therein. As of June 30, 1999,
Acquiror had no
material liabilities or obligations (whether absolute, accrued, contingent or
otherwise and
whether due or to become due) of a type which would be included in a balance
sheet and/or the
notes thereto prepared in accordance with generally accepted accounting
principles, except as and
to the extent disclosed on the Financial Statements delivered hereunder. The
words "Financial
Statements" as same appear throughout this Acquisition Agreement refer to both
the Financial
Statements and all Notes to the Financial Statements in their entirety (unless
otherwise
specifically indicated).
(ii) Each of the Financial Statements is accurate and correct
in all
material respects and has been prepared in accordance with the books and
records of Acquiror as
at the dates and for the periods indicated.
(iii) The books and records of Acquiror have been and are
being
maintained in accordance with all applicable legal and accounting
requirements, fully and fairly
reflect all of the transactions of Acquiror and are correct and complete in
all material respects.
(k) Statements and Other Documents Not Misleading. No provision of
this
Agreement relating to Acquiror or any other document, schedule or other
information furnished
by Acquiror to MSH and/or the Sole Shareholder in connection with the
execution, delivery and
performance of this Agreement, or the consummation of the transactions
contemplated hereby,
contains or will contain any untrue statement of a material fact or omit or
will omit to state a
material fact required to be stated in order to make the statement, in light
of the circumstances in
which it is made, not misleading.
(l) No Subsidiaries. Acquiror does not currently have any
subsidiaries.
(m) No Contracts. Acquiror is not a party to or bound by any
written, oral or
implied contract, agreement, lease, power of attorney, guaranty, surety
arrangement, or other
commitment, other than as may be indicated in its financial statements and
notes thereto and/or
as annexed hereto and marked as an Exhibit hereto.
(n) Actions Since Balance Sheet Date. Since the date of the
balance sheet
audited or unaudited, as the case may be, contained in the financial
statements referred to in
paragraph (j) hereof, Acquiror, except as specifically provided herein and
most specifically in
Exhibit I hereto, has not taken any action either within or without the
ordinary and usual course
of business; has not borrowed any money or become liable for any obligations
nor become
contingently liable for any obligation or liability of itself or others; has
paid all of its debts and
obligations as they have become due; has not incurred any debt, liability or
obligation of any
nature to any party except for obligations arising under this Agreement; has
not knowingly
waived any right of value; has used its best efforts to preserve its business
organization intact;
and has maintained its books, accounts and records in the usual, customary and
ordinary manner
and there have not been and will not be any material changes with respect to
such Financial
Statements from the date of the balance sheet hereof up to and through the
closing of the
acquisition transaction referred to herein.
(o) No Adverse Change. Since the date of the balance sheet in the
financial
statements referred to in paragraph (j), above, there has not been and there
is not threatened any
adverse change in the financial condition, business, prospects or affairs of
Acquiror or any
physical damage or loss to any of its assets (except as may be specifically
set forth herein).
(p) SEC Reporting Requirements. Acquiror is subject to the
reporting
requirements of the 1934 Act. Each report, as amended or supplemented, filed
by the Acquiror
pursuant to the requirement of the 1934 Act, when made, was be accurate and
complete and
contained no untrue statements of a material fact nor omitted to state a
material fact necessary in
order to make the statements made, in the light of the circumstances under
which they were
made, not misleading.
(q) Governmental Consent. To the best of Acquiror's knowledge, no
permit,
consent, approval or authorization of any governmental or regulatory authority
or agency or any
third party is required of Acquiror or any of the Principals in connection
with the execution,
delivery and performance of this Agreement or the consummation of the
transactions
contemplated hereby.
(r) Attached hereto as an Exhibit and/or if not attached hereto
nevertheless
incorporated herein by reference are true, correct and complete copies of:
Certificate of
Incorporation of Acquiror and any and all amendments thereto By-Laws of
Acquiror Acquiror's
List of Shareholders. All of the foregoing remains unchanged and in full
force and effect as of
the date hereof. All references to any of the foregoing in this Agreement,
however such
documents are named or described, will mean those documents included in such
Exhibit.
(s) The Acquiror does not now have and from the date hereof to and
through
the Closing shall not have (i) any full time employees; nor (ii) any
obligation to pay for services
rendered to or in respect of Acquiror except in connection with this Agreement
and the
transactions contemplated hereby, the aggregate cost of which shall not exceed
$15,000; and (iii)
any other obligations or liabilities, including without limitation to those in
respect to any health
insurance, pension, profit sharing, deferred salary or any other employee
benefit plan.
(t) Neither the Acquiror nor any of its officers or directors nor
any of the
Principals nor any of their respective affiliates, has employed any broker or
finder or incurred any
liability for any brokerage fees or commissions or the like in connection with
this Agreement and
the transactions contemplated hereby, and the Principals jointly and severally
shall indemnify and
hold MSH, the Acquiror and the Sole Shareholder harmless from and against any
liability for any
of the same, together with all costs of defending any claims or demands for
the same, including
but not limited to reasonable attorney fees.
(u) Upon consummation of the proposed acquisition contemplated by
this
Agreement, Acquiror will be eligible for listing in Standard and Poor's
Corporation's "Corporate
Records" of Retail Investor Services and further represents that it shall
utilize its best efforts and
fully cooperate with MSH to see to it that the necessary steps are taken for
listing of Acquiror
when deemed appropriate and what would then be its wholly owned subsidiaries
in the aforesaid
publication within a reasonable period of time subsequent to Closing of the
transactions
contemplated herein when, as aforesaid, deemed to be appropriate, necessary
and/or practicable
by Acquiror.
(v) The 250,000 shares which each of the Principals is transferring
under the
Stock Sale Agreement (the "Transfer Shares") were issued in accordance with
Rule 701
promulgated under the Securities Act of 1933, as amended. Accordingly, upon
their transfer
pursuant to the Stock Sale Agreement, the 500,000 Transfer Shares will be
tradable under and
subject to the volume limitations of Rule 144 under the 1933 Act. On the
Closing Date, the
Principals will resign as officers and directors of the Company, but shall
continue to serve the
Company as consultants under a consulting agreement for a six month period.
The Principals
know of no reason why, if the shares owned by them were registered on Form S-8
during such
period as they are consultants to the Company, that the shares would not then
be freely tradable
under the 1933 Act.
8. Mutual Covenants. The parties hereto agree to execute and deliver
all such other
documents as any party and/or their respective counsel may reasonably request
in writing from
the date hereof until Closing (and if necessary subsequent to Closing) in
order to effectuate the
transactions contemplated by this Agreement.
9. Covenants of MSH.
(a). From the date hereof until the Closing Date, both MSH and the
Sole
Shareholder shall use their best efforts to cause MSH to:
(i) Conduct its business activities and affairs in the
ordinary course of
business (including the acquisition of agricultural properties in the United
States and the
importation of agricultural products, principally pistachios and cashews into
China all as set forth
in MSH's plan of operations);
(ii) Use its best efforts to preserve its business organization
intact, to
keep available the services of those current employees that MSH, in its
discretion, feels should be
retained and to preserve its relationship with customers to the extent
practicable and all others
with whom it deals similarly to the extent practicable and/or reasonable;
(iii) Properly give Acquiror notice of any material adverse
change in its
financial condition, business or affairs;
(iv) Not mortgage, pledge, transfer or assign any of its assets
other than
in the ordinary course of business and in a manner consistent with past
practices so long as such
practices are not prejudicial to MSH except that MSH may enter into leasing
and financing
arrangements, agreements and guarantees in order to continue to conduct its
business activities in
the ordinary course of business (and/or in a manner consistent with its past
business practices as
may be indicated in the Notes to its Financial Statements).
(v) Maintain its books and records in a manner consistent with
past
practices;
(vi) Not enter into any employment agreements except in the
ordinary
course of business and/or except with respect to any other employment
agreements that
management of MSH deem to be reasonable and/or advisable for the conduct of
its business.
(vii) Make available for inspection all books and records
which
Acquiror may reasonably request from time to time as Acquiror deems necessary
or appropriate
to evaluate the business affairs and financial condition of MSH.
(viii) Furnish Acquiror with such information, financial or
otherwise,
concerning MSH, the Sole Shareholder, officers and directors, as is available
to MSH and as
Acquiror is required to furnish pursuant to reporting requirements applicable
to Acquiror and in
particular pursuant (but not limited to) the Form 10 Registration Statement.
(b) Notwithstanding anything to the contrary that may be contained
in
paragraph 9(a) hereof, Acquiror acknowledges that MSH has made no
representation whatsoever
regarding its business activities other than as contained herein and/or by
Exhibits and/or
Schedules annexed hereto including, but not limited to its certified financial
statements and notes
thereto; MSH understanding that Acquiror is fully relying on the
representations contained in
such documents and would not entertain the acquisition contemplated herein
absent such
documents being wholly accurate and complete in all material respects.
10. Covenants of Acquiror and Principals. From the date hereof until
the Closing
Date, Acquiror shall and Principals shall cause Acquiror to:
(a) Conduct its business activities and affairs in the ordinary
course of
business, which shall mean that it shall conduct no activity other than
activities preparatory to the
closing hereunder;
(b) Use its best efforts to preserve its business organization
intact;
(c) Properly and promptly give MSH notice of any change in its
financial
condition, business or affairs;
(d) Not mortgage, pledge, transfer or assign any of its asset, nor
dissolve,
liquidate, cease to do business as a going concern or merge with any other
entity;
(e) Maintain its books and records in a manner consistent with past
practices;
(f) Not incur any liabilities or contingent liabilities; and not
enter into any
agreements (except as may be indicated in this Acquisition Agreement);
(g) Make available for inspection all books and records or other
information
which MSH or the Sole Shareholder may reasonably request from time to time as
MSH or the
Sole Shareholder deem necessary or appropriate to evaluate the business,
affairs and financial
condition of Acquiror;
(h) Acquiror and Principals shall and Principals shall cause
Acquiror and their
respective representatives to: (i) retain as confidential and not to reveal to
any others for any
reason whatsoever all information furnished by MSH or at its request,
concerning MSH, its
present and proposed business, its financial condition, and its officers,
directors and Sole
Shareholder; and (ii) not, directly or indirectly, use any such information to
compete in any way
with any present or presently contemplated business of MSH excepting for all
disclosure as may
be required by applicable federal, state and local laws as well as (but by no
means limited to)
applicable SEC rules and regulations.
(j) Acquiror shall not issue any public statements, cause any press
releases to
be issued or cause any mailings to its stockholders to be made regarding any
of the transactions
contemplated herein without first providing Sole Shareholder's counsel with
the proposed
written statements or releases and without first obtaining Sole Shareholder's
counsel's written
consent regarding publication of such statements, which consent shall not be
unreasonably
withheld.
10.1 Covenants of MSH, Acquiror and Principals. From the date hereof
until the
Closing, MSH and Acquiror each shall and Principals shall cause Acquiror to:
(a) Not authorize nor make any change or amendment in their
respective
Certificates of Incorporation, By-Laws, or any other document governing either
of them;
excepting for such amendment to Acquiror's Certificate of Incorporation as may
be necessary to
effectuate the transactions contemplated herein.
(b) Not authorize or issue or in any way obligate either of them to
issue any of
their respective securities or options or any other rights to acquire any such
securities.
10.2 Further Covenants of MSH and Acquiror and Principals
(a) Acquiror, its principals and MSH acknowledge and understand
that this
Agreement indicates various intentions, which intentions if consummated would
result in (a)
changes in control of the Acquiror, (b) acquisition of assets by Acquiror and
(c) acceptance of
tendered resignations of Acquiror's current directors and the nomination and
election to
Acquiror's Board of Directors of new directors as more fully set forth herein.
(b) The parties hereto further acknowledge that the Agreement
contains a
significant number of material conditions precedent to the consummation of the
proposed
transaction and indicates that if Acquiror's and MSH' intention to consummate
the transaction
materializes that Acquiror shall issue a significant number of restricted
shares of its Common
Stock to MSH's current stockholder in exchange for all of MSH's then issued
and outstanding
securities (so that MSH will be wholly a owned subsidiary of Acquiror upon
consummation of
the proposed transaction). Accordingly, upon conclusion of the proposed
transaction MSH's
Sole Stockholder will own 88.73% of all outstanding shares of Acquiror. The
parties further
acknowledge that it is a condition of Closing that all of the Acquiror's
existing officer's and
directors resign, enter into six month consulting agreements with the Acquiror
and, immediately
prior to their resignations, elect the following officers and directors : the
Sole Shareholder (Xxx
Xxxx Xxxxx - Chief Executive Officer, Chairman of the Board and a Director;
Xxx Xxxx Xxxxx
- Director; Kam Xxx Xxxxx - Vice President, Secretary and a Director; Xxx
Xxxxxx Xxxxx -
Vice President, North American Operations and a Director; Xxxxxxx Xxxxxxx -
Director
(collectively the "New Management").
11. Continuation and Survival of Representations, Warranties and
Covenants. All
representations, warranties and covenants made in this Agreement shall
continue to be true and
correct at and as of the Closing Date and shall survive the Closing and the
consummation of the
transactions contemplated by this Agreement for two years from the closing
date hereof unless
otherwise expressly provided herein.
12. Conditions Precedent to the Obligation of Acquiror. The obligations
of Acquiror
under this Agreement are subject to the satisfaction of the following
conditions on or before the
Closing Date:
(a) Accuracy of Representations and Warranties. The
representations and
warranties of MSH under paragraph 5 hereof, and Sole Shareholder under
paragraph 6 hereof,
herein contained shall have been true and correct in all material respects
when made, and, in
addition, shall be true and correct in all material respects on and as of the
Closing Date with the
same force and effect as though made on the Closing Date.
(b) Performance of Agreements. MSH and Sole Shareholder shall have
in all
material respects performed all obligations, agreements, covenants and
conditions contained in
this Agreement to be performed and complied with by them on or prior to the
Closing Date.
(c) Corporate Approvals. All necessary corporate action on the
part of the
directors and holders of MSH Common approving the transactions contemplated by
this
Agreement shall have been taken.
(d) Opinion of Counsel to MSH. Acquiror shall receive an opinion
of Xxxxx X.
Xxxxxxx, Esq., counsel to MSH, to the effect that:
(i) MSH is a corporation duly organized, validly existing
and in good
standing under the laws of the British Virgin Islands, and has all requisite
corporate power under
the laws of such jurisdiction to carry on its business as then being conducted
and to consummate
the transactions contemplated hereby ;
(ii) All necessary corporate proceedings of the Board of
Directors of
MSH and holder of MSH Common to authorize the execution and delivery of this
Agreement
and the consummation of the transactions contemplated hereby have been duly
and validly taken;
(iii) This Agreement has been duly authorized, executed and
delivered by
MSH and constitutes its legal, valid and binding obligation, enforceable
against it in accordance
with its terms except as the enforcement thereof may be limited by bankruptcy,
insolvency and
other similar laws relating to or affecting the enforcement of creditors'
rights generally, and
except for established equitable defenses;
(iv) Such counsel (who need not make inquiry of others for
such purpose)
knows of no actions, suits or proceedings pending or threatened against or
affecting MSH, which
would result in a breach of the representations and warranties set forth in
this Agreement, except
as disclosed herein;
(v) The MSH Common to be delivered to Acquiror on the
closing date in
accordance with the terms of this Agreement, shall vest in Acquiror all right,
title and interest in
100% of the then issued and outstanding shares of MSH Common and said shares
are duly and
validly issued, fully paid and non-assessable.
In rendering the foregoing opinions, Xxxxx X. Xxxxxxx may rely, where
appropriate, solely
upon the opinion of counsel admitted to practice in the British Virgin Islands
who is reasonably
satisfactory to the Acquiror and its counsel.
(e) Satisfactory to Counsel. All proceedings taken by MSH and all
instruments executed and delivered by MSH on or prior to the Closing Date in
connection with
the transactions contemplated hereby shall be reasonably satisfactory in form
and substance to
counsel for Acquiror.
(f) Absence of Prohibitions. No court order prohibiting the
acquisition by
Acquiror of the MSH Common set forth herein shall be in effect.
13. Conditions Precedent to the Obligations of MSH and Sole
Shareholder. The
obligations of MSH and Sole Shareholder, under this Agreement are subject to
the satisfaction of
the following conditions on or before the Closing Date:
(a) Accuracy of Representations and Warranties. The
representations and
warranties of Acquiror and Principals herein contained shall have been true
and correct in all
respects when made, and, in addition, shall be true and correct in all
respects on and as of the
Closing Date with the same force and effect as though made on the Closing
Date.
(b) Performance of Agreements. Acquiror shall have performed all
obligations and agreements and complied with all covenants and conditions
contained in this
Agreement to be performed and complied with by it on or prior to the Closing
Date.
(c) Corporate Approval. All necessary corporate action on the part
of the
Board of Directors and shareholders of Acquiror approving the transactions
contemplated by this
Agreement shall have been taken (including, but not limited to the resignation
of existing
management, the election of New Management and the execution of the consulting
agreements
referred to herein.
(d) Cash of Acquiror. As of the time of the Closing, the Acquiror
shall not
have liabilities (fixed or contingent) in excess of $15,000 excepting for
legal and/or accounting
expenses relating to the transactions contemplated herein and in Section 5 (m)
hereto.
(e) Opinion of Counsel to Acquiror and Principals. MSH and Sole
Shareholder shall have received an opinion of Xxxx X. Xxxxxxxx, Esq., counsel
to Acquiror and
Principals, to the effect that:
(i) Acquiror is a corporation duly organized, validly
existing and in good
standing under the laws of the State of Colorado, and has all requisite power
under the laws of its
state of incorporation to carry on its business as then being conducted and to
consummate the
transactions contemplated hereby;
(ii) All necessary corporate proceedings of the Board of
Directors and
Shareholders and Principals of Acquiror to authorize the execution and
delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and
validly taken;
(iii) This Agreement has been duly authorized, executed and
delivered by
Acquiror and Principals and constitutes its legal and valid binding obligation
of Acquiror and
Principals, enforceable against them in accordance with its terms, except as
the enforcement
thereof may be limited by bankruptcy, insolvency and other similar laws
relating to or affecting
the enforcement of creditors' rights, generally;
(iv) Such counsel (who need not make inquiry of others for
such purpose)
knows of no actions, suits or proceedings pending or threatened against or
affecting Acquiror or
Principals which would result in a breach of the representations and
warranties set forth in this
Agreement, except as disclosed herein and/or enumerated in an Exhibit
hereto;
(v) The shares of Acquiror Common to be issued to the Sole
Shareholder
on the Closing Date in accordance with this Agreement shall vest in him all
right, title and
interest in and to said shares and said shares when issued shall be duly and
validly issued, fully
paid and non-assessable; and
(vi) Acquiror has the legal right to consummate the
transaction
enumerated in this Agreement.
(vii) The Transfer Shares are free trading shares by reason
of Rule 701
under the Securities Act of 1933, as amended.
(g) Proceedings Satisfactory to Counsel. All proceedings taken by
Acquiror
and all instruments executed and delivered by Acquiror on or prior to the
Closing Date in
connection with the transactions contemplated hereby shall be reasonably
satisfactory in form
and substance to counsel for MSH.
(h) Directors and Officers. Acquiror and Principals shall cause
all of
Acquiror's Directors and Officers to resign, elect New management and to
execute consulting
agreements.
(i) No Obligations, etc. The Sole Shareholder shall have received
documentation establishing to their reasonable satisfaction and that of their
counsel that Acquiror
has no further obligations in respect of prior dealings with anyone or any
firm except as disclosed
in its aforesaid financial statements and/or as disclosed herein.
(j) Tax Treatment. MSH shall have received (as a result of its
independent
retention of such persons as it deemed necessary) such advice confirming the
tax treatment
specified in Section 4 hereof as it shall reasonably require.
14. Deliveries to Acquiror on the Closing Date. On the Closing Date,
MSH and Sole
Shareholder shall deliver to Acquiror the following:
(a) Two certificates (i) one of which is executed by the President
of MSH
confirming that the representations and warranties made pursuant to paragraph
5 of this
Agreement, and (ii) the second of which is executed by Sole Shareholder
confirming that the
representations and warranties made pursuant to paragraph 6 of this Agreement,
are true and
correct in all material respects when first made and on the Closing Date.
(b) Certified copies of resolutions duly adopted by the Board of
Directors of
MSH authorizing the execution, delivery and performance of this Agreement, the
consulting
agreements, the election of New Management and the resignations of existing
management. and
the consummation of the transactions contemplated hereby.
(c) Good Standing Certificate or its equivalent issued by the
appropriate
jurisdiction of incorporation authorities and dated within a reasonable date
of the Closing Date.
(d) Opinion of counsel to MSH in the form provided in subparagraph
12(e).
(e) An Investment Letter executed by the Sole Shareholder in the
form of
presented as an Exhibit attached hereto.
(f) Certificates for all issued and outstanding shares of MSH
Common, in
form satisfactory for transfer.
15. Deliveries to MSH on the Closing Date. On the Closing Date,
Acquiror shall
deliver to MSH the following:
(a) Certificate executed by the President and Principals of
Acquiror
confirming that the representations and warranties made pursuant to the Agreemen
t are true and
correct when first made and on the Closing Date and confirming compliance with
the provisions
of Section 13 hereof.
(b) Certified copies of resolutions duly adopted by the Board of
Directors of
Acquiror authorizing the execution, delivery and performance of this Agreement
and the
consummation of the transactions contemplated hereby.
(c) Good Standing Certificate issued by the Secretary of State of
the State of
Colorado and a no-tax lien certificate issued by the proper agency of the
State of Colorado, and
dated within a reasonable date of the Closing Date.
(d) Opinion of special counsel of Acquiror in the form provided in
subparagraph 13(e).
(e) Stock certificates evidencing ownership of Acquiror Common
registered
in the names of the Sole Shareholder pursuant to Section 2 hereof.
(f) Resignations of the present officers of Acquiror, and such
other documents
as counsel for MSH shall reasonably request in writing.
16. Closing. The parties hereto agree that the closing hereunder
("Closing") and the
Closing Date hereunder shall be held on or before November 15, 1999, (but not
later than 30
days after the execution of this formal Acquisition Agreement, unless the
parties shall otherwise
unanimously agree in writing to either an earlier or later date). In the
event this transaction has
not closed by such date as is indicated in this paragraph 16, it may be
abandoned by either party
pursuant to paragraph 18 hereof.
17. Indemnification. Within the period provided in paragraph 11 hereof
and in
accordance with the terms thereof, each party to this Agreement, jointly and
severally, shall
indemnify and hold harmless each other party to whom a duty is owed hereunder
by such party
against and in respect to any liability, damage or deficiency in all actions,
suits, proceedings,
demands, assessments, judgments, cost and expenses, including attorneys' fees
incident to any of
the foregoing, resulting from any misrepresentation, breach of covenant or
warranty or other non-
fulfillment of any agreement on the part of any such party under this
Agreement or from any
misrepresentations or omissions from any document furnished or to be furnished
to a party
hereunder. After the Closing, any indemnification obligation of the Acquiror
shall be the joint
and several obligation of the principals. After the Closing, any
indemnification obligation of
MSH shall be the obligation of the Sole Shareholder, who may satisfy the same
by reducing the
number of Acquiror share which he owns. MSH as well as Acquiror Principals
and the Sole
Shareholder, jointly and severally, hereby (a) agree to the venue and
jurisdiction of or in the state
and federal courts of New York in connection with any actions commenced under
this paragraph
17, and the enforcement of any settlements, orders, decrees and judgments
arising therefrom or
related thereto, and (b) irrevocably appoint the attorney who is listed as
receiving a copy of the
notices to it, to accept and receive any and all notices, service, orders,
decrees, summons,
pleadings and other documents relating thereto.
18. Waiver, Modification, Abandonment.
(a) Waivers. The failure of Acquiror or the Principals to comply
with any of
their obligations, agreements or conditions as set forth herein may be waived
expressly in writing
by MSH, by action of its Board of Directors without the requirement of a vote
of holders of MSH
Common. The failure of MSH and/or the Sole Shareholder to comply with any of
their
obligations, agreements or conditions as set forth herein may be waived
expressly in writing by
Acquiror, by action of its Board of Directors, without the requirement of a
vote of Acquiror
shareholders.
(b) Modification. This Agreement may be modified (only in writing)
at any
time in any respect by the unanimous consent of all of the parties hereto.
(c) Abandonment. The transactions contemplated by this Agreement
may be
abandoned on or before the Closing Date, notwithstanding approval of this
Agreement by the
shareholders of any party but only:
(i) By the mutual agreement of the Boards of Directors of
Acquiror and
MSH;
(ii) By the Board of Directors of Acquiror if any of the
conditions
provided in paragraph 12 or paragraph 14 shall not have been satisfied,
complied with or
performed in any material respect, and the Board of Directors of Acquiror
shall not have waived
in writing such failure of satisfaction, non-compliance or non-performance; or
(iii) By the Board of Directors of MSH, if any of the
conditions provided
in paragraph 13 or paragraph 15 shall not have been satisfied, complied with
or performed in any
material respect, and the Board of Directors of MSH shall not have waived in
writing such failure
of satisfaction, non-compliance or non-performance.
(d) Effect of Abandonment. If the transactions contemplated by
this
Agreement are abandoned as provided for in paragraph 18 hereof, (i) this
Agreement shall
forthwith become wholly void and shall have no effect without liability to any
party to this
Agreement (except as heretofore indicated in paragraph (c) above) or to the
directors, officers,
representatives and agents of any such parties and (ii) each party shall pay
its own fees and
expenses incident to the negotiation, preparation, and execution of this
Agreement and the
obtaining of the necessary approvals thereof, including fees and expenses of
its counsel,
accountants, and experts, if any.
19. Execution. This Agreement shall become binding and legally
effective when it has been executed by Acquiror, the Principals, MSH and
Sole Shareholder.
20. Miscellaneous.
(a) Finders. Except as may be specifically set forth herein or in
Exhibit G hereto, the parties acknowledge that there are no persons entitled
to receive any finder's fee, brokerage or similar commission or fee in
connection with the transactions contemplated by this
Agreement and each party hereto indemnifies and holds the other parties
harmless against any
claim for any such finder's fee based on the alleged retention of a finder.
(b) Controlling Law. This Agreement shall be governed by and
construed in
accordance with the laws of the State of New York as they are applied to
agreements executed,
delivered and to be performed entirely within the State of New York.
(c) Notices. All notices, requests, demands and other
communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been
duly given, made and received when delivered against receipt or when deposited
in the United
States mails, first class postage prepaid, or by recognized overnight courier,
addressed as set
forth below:
(i) If to Acquiror:
c/o Xxxx X. Xxxxxxxx, Esq.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxx 00000
with a copy, given in the manner
prescribed above to:
Xxxx Xxxxxxxx, Esq.
Xxxxxx & Xxxxxxx
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
(ii) If to MSH and Sole Shareholder:
J.OK International (Hong Kong) Ltd.
Room 3203 Western Tower
Shun Tak Centre
000-000 Xxxxxxxx Xxxx Xxxxxxx
Xxxx Xxxx
Attn.: Xxxxx Xxx Hong
with a copy, given in the manner
prescribed above to:
Xxxxx X. Xxxxxxx, Esq.
0000 Xxxxx Xxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Any party may alter the address to which communications are to be sent by
giving written notice
of such change and address by conformity with the provisions of this paragraph
of the giving of
notice.
(d) Binding Nature of Agreements; No Assignment. This Agreement
shall be
binding upon and inure to the benefit of the parties hereto, and their
respective successors and
assigns, except that no party may assign or transfer its rights or obligations
under this Agreement
without the prior written consent of the other parties hereto.
(e) Entire Agreement; Amendment. This Agreement contains the
entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes
all prior and contemporaneous agreements and understandings, inducements or
conditions,
express or implied, oral or written, except as herein contained. This
Agreement may not be
modified or amended other than by an agreement in writing.
(f) Further Assurances. At any time, and from time to time, after
the Closing
Date, each party will execute such additional instruments and take such
actions as may be
reasonably requested by any other party to carry out the intended purposes of
this Agreement.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose
signature appears thereon, and all of which shall together constitute one and
the same instrument.
This Agreement shall become binding when one or more counterparts hereof,
individually or
taken together, shall bear the signatures of all of the parties reflected
hereon as the signatories.
{Balance of page intentionally left blank.}
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
PRINCIPALS OAK BROOK CAPITAL III, INC.
By:
Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx, President
Attest:
Xxxxxx X. Xxxxxx,
Secretary
MIGHTY STAR HOLDINGS, LTD.
SOLE SHAREHOLDER
By:
Xxxxx Xxx Hong, Xxxxx Xxx Hong
President
Attest:
Xxxxx Xxx Hong,
Secretary
