STOCK EXCHANGE AGREEMENT
EXBHITI
2.1
THIS STOCK EXCHANGE AGREEMENT (together
with all Schedules hereto, this “Agreement”),
dated as of November 13, 2009, is entered into by and between China Polypeptide
Group Ltd., a Nevada corporation (“CPG”),
Cantix International Ltd., a company organized under the laws of the British
Virgin Islands (“Cantix”),
and Hamptons Extreme, Inc., a Delaware corporation (the “Company”).
RECITALS:
WHEREAS, CPG is the owner of
all of the issued and outstanding capital stock of Cantix;
WHEREAS, CPG desires to sell
to the Company, and the Company desires to purchase from CPG all of the issued
and outstanding capital stock of Cantix (the “Cantix
Shares”) in exchange (the “Share
Exchange”) for 1,100,000 shares of common stock of the Company, par value
$.0001 per share (the “Common
Stock”);
WHEREAS, the Company is
subject to certain reporting requirements of the Securities and Exchange
Commission;
WHEREAS, simultaneously with
the Closing, all of the directors and officers of the Company shall resign and
be replaced by designees of Cantix;
WHEREAS, immediately following
the Closing (i) Cantix shall be a wholly owned Subsidiary of the Company and
(ii) CPG shall be a shareholder of the Company;
NOW, THEREFORE, in
consideration of the mutual covenants, representations, warranties and
agreements hereinafter set forth, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE
I.
DEFINITIONS
1.1 Definitions. When
used in this Agreement, the following terms shall have the meanings set forth
below (such meanings being equally applicable to both the singular and plural
form of the terms defined):
(a) “Business
Day” means any day other than Saturday, Sunday and any day on which
banking institutions in the United States are authorized by law or other
governmental action to close.
(b) “Closing”
shall have the meaning set forth in Section
8.1.
(c) “Closing
Date” shall have the meaning set forth in Section
8.1.
(d) “Cantix
Shares” means all of the issued and outstanding capital stock of
Cantix.
(e) “Cantix
Disclosure Letter” means the letter delivered from Cantix to the Company
concurrently herewith.
(f) “Common
Stock” means the Company’s common stock, par value $.0001per
share.
(g) “Company
Disclosure Letter” means the letter delivered from the Company to CPG and
Cantix concurrently herewith.
(h) “Company
Shares” means the 1,100,000shares of Common Stock to be issued to CPG
pursuant to this Agreement.
(i) “Contract”
means any contract, agreement, indenture, lease, conditional sales contract,
license, commitment or other arrangement, whether written or oral.
(j)
“Exchange
Act” means the Securities and Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time.
(k) “GAAP”
means generally accepted accounting principles, consistently applied, as in
effect in the United States.
(l) “Governmental
Entity” means any government or governmental or regulatory, legislative,
executive authority thereof, or commission, department or political subdivision
thereof, whether federal, state, regional, municipal, local or foreign, or any
agency, instrumentality or authority thereof, or any court or arbitrator (public
or private).
(m) “Indemnified
Party” shall have the meaning set forth in Section
9.5.
(n) “Indemnifying
Party” shall have the meaning set forth in Section
9.5.
(o) “Intellectual
Property Right” means any patent, patent right, trademark, trademark
right, trade name, trade name right, service xxxx, service xxxx right, copyright
and other proprietary intellectual property right and computer
program.
(p) “Knowledge”
or “knowledge”
means with respect to any Person, (x) such Person is actually aware of such fact
or matter or (y) such Person should reasonably have been expected to discover or
otherwise become aware of such fact or matter after reasonable investigation,
and for purposes hereof it shall be assumed that such Person has conducted a
reasonable investigation of the accuracy of the representations and warranties
set forth herein.
(q) “Law”
means any federal, state, county, or local laws, statutes, regulations, rules,
codes, ordinances, Orders, decrees, judgments or injunctions enacted, adopted,
issued or promulgated by any Governmental Entity, from time to
time.
(r) “Liability”
means any liability or obligation of whatever kind or nature (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due), including any liability for Taxes.
(s) “Lien”
means any mortgage, deed of trust, pledge, lien, claim, security interest,
covenant, restriction, easement, preemptive right, or any other encumbrance or
charge of any kind including, without limitation, any conditional sale or other
title retention agreement, any lease in the nature thereof, and any lien or
charge arising by statute or other law.
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(t) “Loss”
or “Losses”
means any and all liability, damages, fines, fees, penalties and expenses
whether or not arising out of litigation, including without limitation,
interest, reasonable expenses of investigation, court costs, reasonable
out-of-pocket fees and expenses of attorneys, accountants and other experts or
other reasonable out-of-pocket expenses of litigation or other legal
proceedings, incurred in connection with the rightful enforcement of rights
under this Agreement against any Party hereto, and whether or not arising out of
third party claims against an Indemnified Party.
(u) “Order”
means any order, injunction, judgment, decree, ruling, writ, assessment or
arbitration award (in each such case whether preliminary or final).
(v) “Party”
means CPG, Cantix or the Company individually.
(w) “Parties”
means CPG, Cantix and the Company, collectively.
(x)
“Person”
means any individual, corporation, partnership, limited liability company, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Entity or other entity.
(y)
“Purchase
Right” with respect to any Person means any security, right,
subscription, warrant, option or other Contract that gives the right to purchase
or otherwise receive or be issued any shares of capital stock or other equity
interests of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock or other equity
interests of such Person.
(z) “SEC”
means the United States Securities and Exchange Commission.
(aa) “Securities
Act” means the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the time.
(bb) “Share
Exchange” has the meaning set forth in the Recitals of this
Agreement.
(cc) “Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, association, or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a
majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof and for this purpose,
a Person or Persons own a majority ownership interest in such a business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of such business entity's gains or losses or shall be or control any
managing director or general partner of such business entity (other than a
corporation). The term “Subsidiary” shall include all Subsidiaries of such
Subsidiary.
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(dd) “Tax”
means any and all taxes, charges, fees, levies or other assessments, including,
without limitation, local and/or foreign income, net worth, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, share capital, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, service, service use, transfer,
registration, recording, ad-valorem, value-added, alternative or add-on minimum,
estimated, or other taxes, assessments or charges of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or
not.
(ee) “Tax
Return” means any return, report or similar statement required to be
filed with respect to any Tax (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
(ff) “Transaction
Documents” means this Agreement and all other agreements, documents,
instruments or certificates delivered in connection with this
Agreement.
(gg) “Transactions”
means the transactions contemplated by this Agreement and the other Transaction
Documents.
1.2 Recitals. The
above Recitals are hereby incorporated by reference into this Agreement as if
fully stated herein.
1.3 Construction and
Interpretation.
(a) Unless
the context of this Agreement otherwise requires, (i) words of any gender
include the other gender; (ii) words using the singular or plural number also
include the plural or singular number, respectively; (iii) the terms “hereof,”
“herein,”
“hereby”
and derivative or similar words refer to this entire Agreement; (iv) the terms
“Article”
or “Section”
refer to the specified Article or Section of this Agreement; (v) the word “including”
does not imply any limitation to the item or matter mentioned; and (vi) the
phrases “ordinary
course of business” and “ordinary
course of business consistent with past practice” refer to the businesses
and practices of the Company, CPG and Cantix.
(b) All
accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP.
(c) All
dollar amounts shall be in U.S. dollars.
ARTICLE
II.
SHARE
EXCHANGE; REORGANIZATION
2.1 Share
Exchange. Subject to the terms and conditions of this
Agreement, on the Closing Date:
(a) CPG
shall sell, assign, transfer, convey, and deliver to the Company, and the
Company shall purchase from CPG, the Cantix Shares; and
(b) The
Company shall issue to CPG, in exchange for the Cantix Shares, the Company
Shares.
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ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES OF CPG
CPG
represents and warrants to the Company as follows:
3.1 Ownership of Cantix
Shares. CPG holds of record and owns beneficially the Cantix
Shares free and clear of any restrictions on transfer (other than any
restrictions under applicable state or federal securities laws), Taxes, Liens,
options, warrants, Purchase Rights, contracts, commitments, equities, claims,
and demands. CPG is not a party to any option, warrant, Purchase
Right, or other contract or commitment (other than this Agreement) that could
require CPG to sell, transfer, or otherwise dispose of any Cantix Shares. CPG is
not a party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of Cantix. CPG has the
power, authority and legal capacity to sell, transfer, assign and deliver the
Cantix Shares as provided in this Agreement, and such delivery will convey to
the Company good and marketable title to the Cantix Shares, free and clear of
all Liens.
3.2 Organization, Good Standing
and Power. CPG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and has the
requisite corporate power to own, lease and operate its properties and assets
and to conduct its business as it is now being conducted. CPG is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary except for any jurisdiction(s)
(alone or in the aggregate) in which the failure to be so qualified will not
have a material adverse effect on CPG, a material adverse effect on the ability
of CPG to perform its obligations under this Agreement or the other Transaction
Documents or on the ability of CPG to consummate the Transactions (a “CPG
Material Adverse Effect”). CPG has delivered to the Company
true and complete copies of CPG’s articles of incorporation and bylaws and such
other constituent instruments of CPG as may exist, each as amended to the date
of this Agreement (as so amended, the “CPG
Constituent Instruments”).
3.3 Authorization;
Enforcement. CPG has the requisite corporate power and
authority to enter into and perform this Agreement and the other Transaction
Documents and to sell the Cantix Shares in accordance with the terms
hereof. The execution, delivery and performance of the Transaction
Documents by CPG and the consummation by it of the Transactions have been duly
and validly authorized by all necessary corporate action, and no further consent
or authorization of CPG or its Board of Directors or stockholders is required in
connection with the authorization of this Agreement and the other Transaction
Documents or the transactions contemplated hereby and thereby. This
Agreement and the other Transaction Documents have been duly executed and
delivered by CPG. CPG has the absolute and unrestricted right, power
and authority to execute and deliver this Agreement and the other Transaction
Documents and to perform its obligations hereunder and
thereunder. Each of the Transaction Documents constitutes a valid and
binding obligation of CPG enforceable against CPG in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor’s rights and remedies or by equitable principles of general
application.
3.4 No
Conflicts. The execution and delivery by CPG of this Agreement
and the other Transaction Documents does not, and the consummation of the
Transactions and compliance with the terms hereof and thereof will not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any Lien upon any of the properties or assets of CPG, any
provision of (i) the CPG Constituent Instruments, (ii) any Contract to which CPG
is a party or by which its properties or assets is bound, (iii) any material
Permit or any Order to which CPG is a party, or (iv) any judgment, order or
decree or Law applicable to CPG or its properties or assets.
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3.5 Actions
Pending. There is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or any other proceeding
pending or, to the knowledge of CPG, threatened against CPG which questions the
validity of this Agreement or any of the other Transaction Documents or the
Transactions or any action taken or to be taken pursuant hereto or
thereto. There is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or any other proceeding pending or, to
the knowledge of CPG, threatened, against or involving CPG, or any of its
properties or assets which, if determined adversely to CPG, is reasonably likely
to result in a CPG Material Adverse Effect. There are no outstanding
orders, judgments, injunctions, awards or decrees of any court, arbitrator or
governmental or regulatory body against CPG or any officers or directors of CPG
in their capacities as such.
3.6 Taxes. CPG
has accurately prepared and filed all material Tax Returns, has paid or made
provisions for the payment of all Taxes shown to be due and all additional
assessments, and adequate provisions have been and are reflected in the
financial statements of CPG for all current Taxes and other changes to which CPG
is subject and which are not currently due and payable. CPG has no
knowledge of any additional assessments, adjustments or contingent tax liability
(which federal or state) of any nature whatsoever, which pending or threatened
against CPG for any period, nor of any basis for such assessment, adjustment or
contingency.
3.7 Disclosure. The
representations and warranties of CPG set forth in this Agreement do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made herein or therein, in the light
of the circumstances under which they were made herein or therein, not
misleading. To CPG’s knowledge, there are no facts that materially
adversely affect, or as far as CPG can reasonably foresee, materially threaten,
CPG’s ownership of the Cantix Shares or the transfer of such Cantix Shares
pursuant to this Agreement.
3.8 Governmental
Approvals. Except for the filing of any notice prior or
subsequent to the Closing Date that may be required under applicable state
and/or Federal securities laws (which if required, shall be filed on a timely
basis), no authorization, consent, approval, license, exemption of, filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the delivery of the Cantix Shares, or for the
performance by CPG of its obligations under the Transaction
Documents.
3.9 Purchase Entirely for Own
Account. The Company Shares proposed to be acquired by CPG
hereunder will be acquired for investment for its own account, and not with a
view to the resale or distribution of any part thereof, and CPG has no present
intention of selling or otherwise distributing the Company Shares, except in
compliance with applicable securities laws.
3.10 Status of
CPG. CPG is an “accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act. CPG has knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of investing in the Company Shares. CPG is not a
broker-dealer or an affiliate of a broker-dealer. CPG’s principal
executive office is located at the address set forth in Section
11.5.
3.11 Opportunities for Additional
Information. CPG acknowledges that it has had the opportunity
to ask questions of and receive answers from, or obtain additional information
from, the executive officers of the Company concerning the financial and other
affairs of the Company.
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3.12 No General
Solicitation. CPG acknowledges that the Company Shares have
not been offered to CPG by means of any form of general or public solicitation
or general advertising, or publicly disseminated advertisements or sales
literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio, or (ii) any seminar or meeting to which CPG
was invited by any of the foregoing means of communications.
3.13 Rule
144. CPG understands that the Company Shares must be held
indefinitely unless such Company Shares are registered under the Securities Act
or an exemption from registration is available. CPG acknowledges that
it is familiar with Rule 144 of the rules and regulations of the SEC, as
amended, promulgated pursuant to the Securities Act (“Rule 144”), and that
it has been advised that Rule 144 may permit the resale of the Company Shares
only under certain circumstances. CPG understands that to the extent
that Rule 144 is not available, it will be unable to sell any Company Shares
without either registration under the Securities Act or the existence of another
exemption from such registration requirement.
3.14 Non-Registration. CPG
understands that the Company Shares have not been registered under the
Securities Act and will be transferred to CPG by reason of a specific exemption
from the registration provisions of the Securities Act which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
CPG’s representations as expressed herein.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF CANTIX
Except as
set forth by Cantix in the Cantix Disclosure Letter, Cantix hereby represents
and warrants to the Company that the statements set forth in this Article
IV are complete and
accurate as of the date of this Agreement and as of the date of the
Closing. The Cantix Disclosure Letter shall be arranged in sections
and subsections corresponding to the numbered and lettered sections and
subsections contained in this Article IV. However, notwithstanding
anything to the contrary contained in the Cantix Disclosure Letter or this
Agreement, the information and disclosures contained in each section and
subsection of the Cantix Disclosure Letter shall be deemed to be disclosed and
incorporated by reference in each of the other sections and subsections of the
Cantix Disclosure Letter where the applicability of such disclosure to such
section or subsection of the Cantix Disclosure Letter is reasonably apparent on
the face of such disclosure (whether or not a cross reference to such other
section or subsection is specifically made).
4.1 Organization, Standing and
Power. Cantix and each of its Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and has the corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a material adverse effect on Cantix, a material adverse effect
on the ability of Cantix to perform its obligations under this Agreement or on
the ability of Cantix to consummate the Transactions (a “Cantix
Material Adverse Effect”). Cantix and each of its Subsidiaries is duly
qualified to do business in each jurisdiction where the nature of its business
or its ownership or leasing of its properties make such qualification necessary
except where the failure to so qualify would not reasonably be expected to have
a Cantix Material Adverse Effect. Cantix has delivered to the Company true and
complete copies of the memorandum and articles of association of Cantix and such
other constituent instruments as may exist, each as amended to the date of this
Agreement (the “Cantix
Constituent Instruments”), and the comparable charter, organizational
documents and other constituent instruments of each of its Subsidiaries, in each
case as amended to the date of this Agreement (the “Subsidiary
Constituents Instruments”).
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4.2 Cantix Subsidiaries; Equity
Interests.
(a) The
Cantix Disclosure Letter lists each Subsidiary of Cantix and its jurisdiction of
organization. All the outstanding shares of capital stock or equity
investments of each Subsidiary have been validly issued and are fully paid and
nonassessable and are owned by Cantix, by another Subsidiary of Cantix or by
Cantix and another Subsidiary of Cantix, free and clear of all
Liens.
(b) Except
for its interests in its Subsidiaries, Cantix does not as of the date of this
Agreement own, directly or indirectly, any capital stock, membership interest,
partnership interest, joint venture interest or other equity interest in any
Person.
4.3 Capital Structure.
The authorized capital stock of Cantix consists of 50,000 ordinary shares, $1.00
par value, of which one (1) ordinary share is issued and outstanding. Except as
set forth above, no shares of capital stock or other voting securities of Cantix
are issued, reserved for issuance or outstanding. Cantix is the sole record
and/or beneficial owner of all of the issued and outstanding capital stock of
each of its Subsidiaries. All outstanding shares of the capital stock of Cantix
and each of its Subsidiaries are duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the applicable corporate laws of the
British Virgin Islands (or the applicable corporate laws governing each of the
Subsidiaries), the Cantix Constituent Instruments, the Subsidiary Constituent
Instruments or any Contract to which Cantix or any of its Subsidiaries is a
party or otherwise bound. There are not any bonds, debentures, notes or other
indebtedness of Cantix or any of its Subsidiaries having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of Cantix Shares or the capital stock of any of its
Subsidiaries may vote (“Voting
Cantix Debt”). Except as set forth above, as of the date of this
Agreement, there are not any options, warrants, rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which Cantix or any of its Subsidiaries is a party
or by which any of them is bound (a) obligating Cantix or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other equity interests in, or any
security convertible or exercisable for or exchangeable into any capital stock
of or other equity interest in, Cantix or any of its Subsidiaries or any Voting
Cantix Debt, (b) obligating Cantix or any of its Subsidiaries to issue, grant,
extend or enter into any such option, warrant, call, right, security,
commitment, Contract, arrangement or undertaking or (c) that give any Person the
right to receive any economic benefit or right similar to or derived from the
economic benefits and rights occurring to holders of the capital stock of Cantix
or of any of its Subsidiaries. As of the date of this Agreement, there are not
any outstanding contractual obligations of Cantix to repurchase, redeem or
otherwise acquire any shares of capital stock of Cantix.
4.4 Authority; Execution and
Delivery; Enforceability. Cantix has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
Transactions. The execution and delivery by Cantix of this Agreement and the
consummation by Cantix of the Transactions have been duly authorized and
approved by the Board of Directors of Cantix and no other corporate proceedings
on the part of Cantix are necessary to authorize this Agreement and the
Transactions. When executed and delivered, this Agreement will constitute a
valid and binding obligation of Cantix enforceable against Cantix in accordance
with its terms.
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4.5 No
Conflicts. The execution and delivery by Cantix of this
Agreement does not, and the consummation of the Transactions and compliance with
the terms hereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of a material benefit under, or result in the creation of any Lien upon any
of the properties or assets of Cantix or any of its Subsidiaries under, any
provision of (i) the Cantix Constituent Instruments or the Subsidiary
Constituent Instruments, (ii) any Contract to which Cantix or any of its
Subsidiaries is a party or by which any of their respective properties or assets
is bound, (iii) any material Permit or any Order to which Cantix or any of its
Subsidiaries is a party, or (iv) any judgment, order or decree or Law applicable
to Cantix or any of its Subsidiaries or their respective properties or
assets.
4.6 Consents. No
consent, waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Entity is required
on the part of Cantix in connection with the execution and delivery of this
Agreement or the Transaction Documents, or the compliance by Cantix with any of
the provisions hereof or thereof or the consummation of the
Transactions.
4.7 Taxes.
(a) Each
of Cantix and each of its Subsidiaries has timely filed, or has caused to be
timely filed on its behalf, all Tax Returns required to be filed by it, and all
such Tax Returns are true, complete and accurate, except to the extent any
failure to file or any inaccuracies in any filed Tax Returns, individually or in
the aggregate, have not had and would not reasonably be expected to have a
Cantix Material Adverse Effect. All Taxes shown to be due on such Tax Returns,
or otherwise owed, have been timely paid. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of Cantix know of no basis for any such claim.
(b) The
Cantix Financial Statements reflect an adequate reserve for all Taxes payable by
Cantix and its Subsidiaries (in addition to any reserve for deferred Taxes to
reflect timing differences between book and Tax items) for all Taxable periods
and portions thereof through the date of such financial statements. No
deficiency with respect to any Taxes has been proposed, asserted or assessed
against Cantix or any of its Subsidiaries, and no requests for waivers of the
time to assess any such Taxes are pending.
4.8 Benefit
Plans.
(a) Except
as set forth in the Cantix Disclosure Letter, Cantix does not have or maintain
any collective bargaining agreement or any bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of Cantix or any of its Subsidiaries
(collectively, “Cantix
Benefit Plans”). As of the date of this Agreement there are not any
severance or termination agreements or arrangements between Cantix or any of its
Subsidiaries and any current or former employee, officer or director of Cantix
or any of its Subsidiaries, nor does Cantix or any of its Subsidiaries have any
general severance plan or policy.
(b) Since
December 31, 2008, there has not been any adoption or amendment in any material
respect by Cantix or any of its Subsidiaries of any Cantix Benefit
Plan.
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4.9 Litigation. There are
no actions, suits, proceedings or governmental investigations (or any
investigation of any self regulatory organization) relating to or threatened
against Cantix or any of its Subsidiaries or any of their respective assets or
properties which (a) adversely affects or challenges the legality, validity or
enforceability of any of this Agreement, the Cantix Shares or the Transactions
or (b) could, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a Cantix Material Adverse
Effect. Neither Cantix nor any of its Subsidiaries, nor any director
or officer thereof (in his or her capacity as such), is or has been the subject
of any action, suit, proceeding or governmental investigation (or any
investigation of any self regulatory organization) involving a claim or
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty.
4.10 Compliance with Applicable
Laws. Cantix and each of its Subsidiaries have conducted their business
and operations in compliance with all applicable Laws, including those relating
to occupational health and safety and the environment. Cantix has not received
any written communication during the past two years from a Governmental Entity
that alleges that Cantix is not in compliance in any material respect with any
applicable Law. Neither Cantix nor any of its Subsidiaries is in violation of
any Law, regulation, ordinance, order, injunction, decree, award or other
requirements of any Governmental Entity relating to its properties, assets or
business. This Section
4.10
does not relate to matters with respect to Taxes, which are the subject of Section
4.67.
4.11 Brokers. Except as
disclosed in the Cantix Disclosure Letter, no broker, investment banker,
financial advisor or other Person is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Cantix or any of
its Subsidiaries.
4.12 Contracts. Except as
disclosed in the Cantix Disclosure Letter, there are no Contracts that are
material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of Cantix and its Subsidiaries
taken as a whole. Neither Cantix nor any of its Subsidiaries is in violation of
or in default under (nor does there exist any condition which upon the passage
of time or the giving of notice would cause such a violation of or default
under) any Contract to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that would not,
individually or in the aggregate, reasonably be expected to result in a Cantix
Material Adverse Effect. Each Contract to which Cantix or any of its
Subsidiaries is a party or by which it or any of its properties or assets is
bound (the “Cantix
Contracts”), is in full force and effect, constitutes a valid and binding
obligation of either Cantix or any of its Subsidiaries, and is legally
enforceable in accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting the rights of creditors generally. Cantix has not received
notice from any party to any Cantix Contract to cancel, terminate or not renew
any such Cantix Contract whether in accordance with the terms of such Cantix
Contract or otherwise.
4.13 Permits and Licenses.
Each of Cantix and its Subsidiaries is in compliance in all material respects
with all requirements, standards and procedures of the federal, state, local and
foreign governmental bodies which issued such permits, licenses, orders,
franchises and approvals.
4.14 Title to Properties.
Except as set forth in the Cantix Disclosure Letter, neither Cantix nor any of
its Subsidiaries own any real property. Cantix and each of its Subsidiaries has
sufficient title to, or valid leasehold interests in, all of its properties and
assets used in the conduct of its businesses. All such assets and properties,
other than assets and properties in which Cantix or any of its Subsidiaries has
leasehold interests, are free and clear of all Liens other than those set forth
in the Cantix Disclosure Letter.
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4.15 Intellectual
Property. Cantix and each of its Subsidiaries own, or are validly
licensed or otherwise have the right to use, all Intellectual Property Rights
which are material to the conduct of the business of Cantix and its Subsidiaries
taken as a whole (the “Cantix
Intellectual Property Rights”). The Cantix Disclosure Letter sets forth a
description of all Intellectual Property Rights which are material to the
conduct of the business of Cantix and its Subsidiaries taken as a whole. There
are no claims pending or, to the knowledge of Cantix, threatened that Cantix or
any of its Subsidiaries is infringing or otherwise adversely affecting the
rights of any Person with regard to any Intellectual Property Right. To the
knowledge of Cantix, no Person is infringing the rights of Cantix or any of its
Subsidiaries with respect to any Cantix Intellectual Property
Right. Neither Cantix nor any of its Subsidiaries has or will have
upon the Closing, (i) any contractual limitation or restriction on its right to
use any Cantix Intellectual Property Right, (ii) any obligation to pay any
royalty or other fee to any Person relating to any Cantix Intellectual Property
Right, or (iii) any obligation to any other Person to register, protect or
otherwise take any action with respect to any Cantix Intellectual Property
Right. There is no Cantix Contract that grants any Person a license
in any Cantix Intellectual Property Right.
4.16 Labor Matters. There
are no collective bargaining or other labor union agreements to which Cantix or
any of its Subsidiaries is a party or by which any of them is bound. No material
labor dispute exists or to the knowledge of Cantix, is imminent with respect to
any of the employees of Cantix or any of its Subsidiaries. Neither
Cantix nor any of its Subsidiaries are delinquent in payments to any employee,
contractor or consultant. Neither Cantix nor any of its Subsidiaries
have engaged or are currently engaging in unfair labor practices.
4.17 Financial Statements.
Cantix has delivered to the Company its audited consolidated financial
statements for the fiscal years ended September 31, 2008 and 2007 (the “Audited
Financial Statements”) and its unaudited balance sheet as of June
30, 2009 and the
related statements of operations, cash flows and changes in shareholders’ equity
of Cantix for the period ending on such date (collectively, the “Unaudited
Financial Statements” and together with the Audited Financial Statements,
the “Cantix
Financial Statements”). The Cantix Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated. The Cantix Financial
Statements fairly present in all material respects the financial condition and
operating results of Cantix, as of the dates, and for the periods, indicated
therein. Cantix does not have any material liabilities or obligations,
contingent or otherwise, other than (a) liabilities incurred in the ordinary
course of business subsequent to December 31, 2008, and (b) obligations under
contracts and commitments incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected in the
Cantix Financial Statements, which, in both cases, individually and in the
aggregate, would not be reasonably expected to result in a Cantix Material
Adverse Effect.
4.18 Insurance. Except as
set forth in the Cantix Disclosure Letter, Cantix and each of its Subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which Cantix and its Subsidiaries are engaged and in the
geographic areas where they engage in such businesses. Cantix has no reason to
believe that it will not be able to renew its and its Subsidiaries’ existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business on
terms consistent with market for Cantix’s and such Subsidiaries’ respective
lines of business.
4.19 Transactions with Affiliates
and Employees. Except as set forth in the Cantix Disclosure Letter and
the Cantix Financial Statements, none of the officers or directors of Cantix
and, to the knowledge of Cantix, none of the employees of Cantix is presently a
party to any transaction with Cantix or any of its Subsidiaries (other than for
services as employees, officers and directors), including any Contract or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from. or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of
Cantix, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or
partner.
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4.20 Application of Takeover
Protections. Cantix has taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Cantix Constituent Instruments or the laws of
its jurisdiction of organization that is or could become applicable to CPG as a
result of CPG and Cantix fulfilling their obligations or exercising their rights
under this Agreement.
4.21 No Additional
Agreements. Except as set forth in the Cantix Disclosure Letter, Cantix
does not have any agreement or understanding with CPG or any of its Subsidiaries
with respect to the Transactions other than as specified in this
Agreement.
4.22 Investment Company.
Cantix is not, and is not an affiliate of, and immediately following the Closing
will not have become, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
4.23 Disclosure. All
disclosure provided to the Company regarding Cantix, its business and the
Transactions, furnished by or on behalf of Cantix (including Cantix’s
representations and warranties set forth in this Agreement) is true and correct
and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading. To Cantix’s knowledge, there are no facts that materially
adversely affect, or as far as Cantix can reasonably foresee, materially
threaten, CPG’s ownership of the Cantix Shares or the transfer of such Cantix
Shares pursuant to this Agreement.
4.24 Absence of Certain Changes
or Events. Except as disclosed in the Cantix Financial Statements or in
the Cantix Disclosure Letter, from the date of the most recent audited Cantix
Financial Statements to the date of this Agreement, Cantix has conducted its
business only in the ordinary course, and during such period there has not
been:
(a) any
change, event or condition that has had, or could reasonably be expected to
have, a Cantix Material Adverse Effect;
(b) any
change in the assets, liabilities, financial condition or operating results of
Cantix or any of its Subsidiaries, except changes in the ordinary course of
business that have not caused, in the aggregate, a Cantix Material Adverse
Effect;
(c) any
damage, destruction or loss, whether or not covered by insurance, that has had
or could reasonably be expected to have, a Cantix Material Adverse
Effect;
(d) any
waiver or compromise by Cantix or any of its Subsidiaries of a valuable right or
of a material debt owed to it;
(e) any
satisfaction or discharge of any lien, claim, or encumbrance or payment of any
obligation by Cantix or any of its Subsidiaries, except in the ordinary course
of business and the satisfaction or discharge of which would not have a Cantix
Material Adverse Effect;
(f) any
material change to a Contract by which Cantix or any of its Subsidiaries or any
of its respective assets is bound or subject;
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(g) any
mortgage, pledge, transfer of a security interest in, or lien, created by Cantix
or any of its Subsidiaries, with respect to any of its properties or assets,
except liens for taxes not yet due or payable and liens that arise in the
ordinary course of business and do not materially impair Cantix’s or its
Subsidiaries’ ownership or use of such property or assets;
(h) any
loans or guarantees made by Cantix or any of its Subsidiaries to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(i) any
alteration of Cantix’s method of accounting or the identity of its
auditors;
(j) any
declaration or payment of dividend or distribution of cash or other property to
any shareholder of Cantix or any purchase, redemption or agreements to purchase
or redeem any Cantix Shares;
(k) any
issuance of equity securities to any officer, director or affiliate, except
pursuant to existing Cantix stock option plans; or
(l) any
arrangement or commitment by Cantix or any of its Subsidiaries to do any of the
things described in this Section
4.24.
4.25 Foreign Corrupt
Practices. Neither Cantix, nor any of its Subsidiaries, nor, to Cantix’s
knowledge, any director, officer, agent, employee or other Person acting on
behalf of Cantix or any of its Subsidiaries has, in the course of its actions
for, or on behalf of, Cantix (a) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (b) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (c)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
4.26 Bank
Default. Neither Cantix nor any of its Subsidiaries is in
default under any loan facilities to which it is a party, including, but not
limited to, facility bank loans with Agriculture Bank of China, Wuhan Finance
Bureau and Wuhan Pan-Asian.
ARTICLE
V.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except as
set forth by the Company in the Company Disclosure Letter, the Company hereby
represents and warrants to CPG and Cantix that the statements set forth in this
Article V are
complete and accurate as of the date of this Agreement and as of the date of the
Closing. The Company Disclosure Letter shall be arranged in sections
and subsections corresponding to the numbered and lettered sections and
subsections contained in this Article V. However, notwithstanding
anything to the contrary contained in the Company Disclosure Letter or this
Agreement, the information and disclosures contained in each section and
subsection of the Company Disclosure Letter shall be deemed to be disclosed and
incorporated by reference in each of the other sections and subsections of the
Company Disclosure Letter where the applicability of such disclosure to such
section or subsection of the Company Disclosure Letter is reasonably apparent on
the face of such disclosure (whether or not a cross reference to such other
section or subsection is specifically made).
13
5.1 Organization, Good Standing
and Power. The Company is duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease, use and operate its properties and
assets and to carry on its business as and in the jurisdictions such properties
and assets are owned, leased, used and operated and as such business is
presently conducted. The Company is duly qualified, licensed,
authorized or admitted to do business and is in good standing under the laws of
each jurisdiction in which the ownership, use, operation or leasing of its
properties and assets, or the conduct or nature of its business, requires such
qualification, licensing, authorization or admission. The Company has
delivered to Cantix true and complete copies of the Company’s certificate of
incorporation and bylaws and such other constituent instruments of the Company
as may exist, each as amended to the date of this Agreement (as so amended, the
“Company
Constituent Instruments”).
5.2 Authority;
Enforceability. The Company has full corporate power,
authority and legal capacity to enter into this Agreement and the other
Transaction Documents and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement
and the other Transaction Documents and the consummation of the Transactions
have been duly and validly authorized and approved by all required actions of
the Company’s board of directors and stockholders and no other actions on the
part of the Company’s board of directors or stockholders are necessary to
authorize and approve this Agreement and the other Transaction Documents and the
Transactions. This Agreement and the other Transaction Documents have
been duly executed and delivered by the Company and constitute valid and binding
obligations of the Company, enforceable against it in accordance with their
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor’s rights and remedies or by equitable principles of general
application. At Closing, all other Transaction Documents to be executed and
delivered by the Company shall have been duly executed and delivered by the
Company. All other Transaction Documents executed and delivered by
the Company shall constitute valid and binding obligations of the Company
enforceable against it in accordance with their terms except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by equitable principles of general
application.
5.3 Capitalization. As of
November 13, 2009, the authorized capital stock of the Company consists solely
of (i) 120,000,000 shares of Common Stock and (ii) 1,000,000 shares of preferred
stock, par value $.0001 per share. As of such date, (i) 150,000 shares of Common Stock
are issued and outstanding (after giving effect to the cancellation of 887,000
shares of Common Stock (the “Cancellation”)
held by the Company’s Chief Executive Officer), (ii) no shares of preferred
stock are issued and outstanding, and (iii) no shares of Common Stock are held
by the Company in its treasury. After giving effect to the
Cancellation and the issuance of the Company Shares to CPG, the Company shall
have 1,250,000 shares of Common Stock issued and outstanding and the Company
Shares owned by CPG shall represent 88% of such shares of Common Stock. As of
the date hereof, the shares of the Common Stock issued and outstanding are owned
by the shareholders of record set forth in the Company Disclosure Letter (which
list will be updated as of the Closing Date by a faxed certified shareholder
list from the Company’s transfer agent). All of the outstanding
shares of the Common Stock have been duly and validly authorized and are fully
paid and nonassessable. None of the Company’s capital stock is
subject to preemptive rights. Except as described in the SEC Reports,
there are no outstanding options, warrants, scrip, rights to subscribe to, call
or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company. Except
as described in the SEC Reports, there are no contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the
Company. Except as described in the SEC Reports, the
Company is not a party to any agreement granting registration or anti-dilution
rights to any person with respect to any of its equity or debt
securities. The Company is not a party to, and it has no knowledge
of, any agreement restricting the voting of any shares of the capital stock of
the Company, or restricting the transfer of the Company’s capital
stock. The offer and sale of all capital stock, convertible
securities, rights, warrants, or options of the Company issued prior to the
Closing complied with all applicable Federal and state securities laws, and no
stockholder has a right of rescission or claim for damages with respect
thereto.
14
5.4 Subsidiaries. As
of the date hereof, the Company has no Subsidiaries.
5.5 Real
Property. As of the date hereof, the Company owns no real
property.
5.6 No
Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, and the performance by the Company of its
obligations contemplated herein and therein do not and will not (i) violate any
provision of the Company’s Constituent Instruments, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company is a party or by which it or its properties or assets are
bound, (iii) create or impose a lien, mortgage, security interest, charge or
encumbrance of any nature on any property of the Company under any agreement or
any commitment to which the Company is a party or by which the Company is bound
or by which any of its respective properties or assets are bound, or (iv) result
in a violation of any federal, state, local or foreign statute, rule,
regulation, order, judgment or decree (including Federal and state securities
laws and regulations) applicable to the Company or by which any property or
asset of the Company are bound or affected, except, in cases other than
violations pursuant to clause (i) above, for such conflicts, defaults,
terminations, amendments, accelerations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect (defined
below). The business of the Company and its Subsidiaries is not being
conducted in violation of any laws, ordinances or regulations of any
governmental entity, except for violations which singularly or in the aggregate
do not or will not have a Material Adverse Effect. The Company is not
required under Federal, state or local law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under the Transaction Documents, or issue the Common Shares
to CPG in accordance with the terms hereof (other than any filings which may be
required to be made by the Company with the Commission or state securities
administrators subsequent to the Closing). For the purposes of this
Agreement, “Material
Adverse Effect” means any material adverse effect on the business,
properties, assets, operations, results of operations or condition (financial or
otherwise) of the Company, or on the ability of the Company to consummate the
Transactions.
5.7 SEC Reports. The
Company has filed in a timely manner with the SEC all reports required to be
filed pursuant to the Exchange Act and is current in its reporting
obligations. As of their respective dates, all reports required to
filed pursuant to the Exchange Act, and all SEC filings by the Company pursuant
to the Securities Act (collectively, the “SEC Reports”) comply
in all material respects with requirements of the Securities Act and Exchange
Act and the rules and regulations promulgated thereunder and none of the SEC
Reports contained an untrue statement of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
has delivered to CPG and Cantix or made available through the SEC’s XXXXX filing
system true and complete copies of the Company’s audited financial statements
for the fiscal year ended December 31, 2008 (the “Audited Financial Statements
Date”) and unaudited financial statements for the quarter ended June 30, 2009
((the “Quarterly Financial Statements Date”). Such audited financial
statements, are referred to as the “Financial Statements.” The
Financial Statements complied in all material respects with the requirements of
the Exchange Act, and the rules and regulations of the Commission promulgated
thereunder. Such Financial Statements have been prepared in accordance with
accounting principles generally accepted in the United States (“GAAP”) applied
on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements), and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
15
5.8 No Material Adverse
Change. Since the Quarterly Financial Statements Date,
the Company has not experienced or suffered any Material Adverse Effect or any
event that is reasonably likely, through the passage of time or otherwise, to
result in a Material Adverse Effect.
5.9 No Undisclosed Events or
Circumstances. No event or circumstance has occurred or exists
with respect to the Company or its business, properties, prospects, operations
or financial condition, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but which has not been
so publicly announced or disclosed.
5.10 Title to
Assets. Except as described in the SEC Reports, the Company
has good and marketable title to all of its owned real and personal property
whether tangible or intangible (collectively, the “Assets”), free and
clear of any mortgages, pledges, charges, liens, security interests, claim,
community property interest, condition, equitable interest or other
encumbrances, license, option, right of first refusal or restriction of any
kind, including any restriction on use, voting, transfer, receipt of income or
exercise of any other attribute of ownership (“Liens”). To
the Company’s knowledge, all leases of the Company are valid and subsisting and
in full force and effect and neither this Agreement nor the transactions
contemplated hereby will give any party to such leases any right to terminate or
modify the leases.
5.11 Compliance with
Law. The business of the Company has been and is presently
being conducted in accordance with all applicable federal, state and local
governmental laws, rules, regulations and ordinances, except for such
noncompliance that, individually or in the aggregate, would not cause a Material
Adverse Effect. The Company has all franchises, permits, licenses,
consents and other governmental or regulatory authorizations and approvals
necessary for the conduct of its business as now being conducted by it unless
the failure to possess such franchises, permits, licenses, consents and other
governmental or regulatory authorizations and approvals, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.12 Taxes. The
Company and each of the Subsidiaries has accurately prepared and filed all
material foreign, federal, state income and all other Tax Returns, reports and
declarations required by law to be paid or filed by it by any jurisdiction to
which the Company is subject, has paid or made provisions for the payment of all
Taxes shown to be due and all additional assessments, and adequate provisions
have been and are reflected in the financial statements of the Company for all
current Taxes and other charges to which the Company is subject and which are
not currently due and payable. None of the federal income Tax Returns
of the Company have been audited by the Internal Revenue Service. The
Company has no knowledge of any additional assessments, adjustments or
contingent Tax liability (whether federal or state) of any nature whatsoever,
whether pending or threatened against the Company for any period, nor of any
basis for any such assessment, adjustment or contingency. The Company
has complied in all material respects with all applicable legal requirements
relating to the payment and withholding of Taxes and, within the time and in the
manner prescribed by law, has withheld from wages, fees and other payments, and
paid over to the proper governments or regulatory authorities, all amounts
required.
16
5.13 Disclosure. The
representations and warranties of the Company set forth in this Agreement do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made herein or therein, in the light
of the circumstances under which they were made herein or therein, not
misleading.
5.14 Books and Records Internal
Accounting Controls. The books and records of the Company
accurately reflect in all material respects the information relating to the
business of the Company, the location and collection of its Assets, and the
nature of all transactions giving rise to the obligations or accounts receivable
of the Company to the extent required to be contained therein. The
Company maintains a system of internal accounting controls sufficient, in the
judgment of the Company, to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
actions is taken with respect to any differences.
5.15 Governmental
Approvals. Except for the filing of any notice prior or
subsequent to the Closing Date that may be required under applicable state
and/or Federal securities laws (which if required, shall be filed on a timely
basis), including the filing of a Form D, no authorization, consent, approval,
license, exemption of, filing or registration with any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, is or will be necessary for, or in connection with, the delivery of the
Common Shares, or for the performance by the Company of its obligations under
the Transaction Documents.
5.16 Investment Company Act
Status. The Company is not, and as a result of and immediately
upon the Closing will not be, an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended.
5.17 Foreign Corrupt
Practices. Neither the Company, nor, to the Company’s
knowledge, any director, officer, agent, employee or other person acting on
behalf of the Company has, in the course of its actions for, or on behalf of,
the Company (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.
5.18 Listing
Requirements. The Company’s common stock is currently quoted
on OTCC BB under the symbol
“HMEX”.
5.19 No Commission or FINRA
Inquiries. To the best of the Company’s knowledge, the Company
is not, and has never been, the subject of any formal or informal inquiry or
investigation by the Commission or FINRA.
5.20 Anti-takeover
Device. The Company does not have any outstanding shareholder
rights plan or “poison pill” or any similar arrangement. There are no
provisions of any anti-takeover or business combination statute applicable to
the Company’s Constituent Instruments which would preclude the issuance and sale
of the Shares or the Warrants, and the consummation of the other transactions
contemplated by this Agreement.
17
5.21 Consents. No
consent, waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Entity is required
on the part of the Company in connection with the execution and delivery of this
Agreement or the Transaction Documents, or the compliance by the Company with
any of the provisions hereof or thereof or the consummation of the
Transactions.
5.22 Litigation, Compliance with
Law. There are no actions, suits, proceedings, or governmental
investigations (or any investigation of any self regulatory organization)
relating to the Company, its securities or to any of its properties, assets or
business pending or, to the best of its knowledge, threatened, or any order,
injunction, award or decree outstanding against the Company or against or
relating to any of its properties, assets or business. The Company is not, to
the best of its knowledge, in violation of any law, regulation, ordinance,
order, injunction, decree, award or other requirements of any Governmental
Entity relating to its properties, assets or business.
5.23 Agreements and Obligations;
Performance. The Company is not a party to, or bound by any:
(i) Contract, arrangement, commitment or understanding which involves aggregate
payments or receipts in excess of $5,000; (ii) contractual obligation or
contractual liability of any kind to any Company stockholder; (iii) Contract,
arrangement, commitment or understanding with its customers or any officer,
employee, stockholder, director, representative or agent thereof for the
repurchase of products, sharing of fees, the rebating of charges to such
customers, bribes, kickbacks from such customers or other similar arrangements;
(iv) contract for the purchase or sale of any materials, products or supplies
which contain, or which commits or will commit it for a fixed term; (v) contract
of employment with any officer or employee not terminable at will without
penalty or premium or any continuing obligation of liability; (vi) deferred
compensation, bonus or incentive plan or agreement not cancelable at will
without penalty or premium or any continuing obligation or liability: (vii)
management or consulting agreement not terminable at will without penalty or
premium or any continuing obligation or liability; (viii) lease for real or
personal property (including borrowings thereon), license or royalty agreement;
(ix) union or other collective bargaining agreement; (x) agreement, commitment
or understanding relating to the indebtedness for borrowed money; (xi) contract
involving aggregate payments or receipts of $5,000 or more which, by its terms,
requires the consent of any party thereto to the consummation of the
Transactions; (xii) contract containing covenants limiting the freedom of the
Company to engage or compete in any line of business or with any Person in any
geographic area; (xiii) contract or opinion relating to the acquisition or sale
of any business; (xiv) voting trust agreement or similar stockholders’
agreement; (xiv) other contract, agreement, commitment or understanding which
materially affects any of its properties, assets or business, whether directly
or indirectly, or which was entered into other than in the ordinary course of
business.
5.24 Permits and Licenses.
The Company is in compliance in all material respects with all requirements,
standards and procedures of the federal, state, local and foreign governmental
bodies which issued such permits, licenses, orders, franchises and
approvals.
5.25 Employees; Employee Benefit
Plans. The Company has no employees. the Company does not
maintain any employee benefit plans and is not required to make contributions to
any “pension” and “welfare” benefit plans (within the respective meanings of
Section 4(2) and Section 4(1) of the Employee Retirement Income Security Act of
1974, as amended).
5.26 Officers and
Directors. Set forth on the Company Disclosure Letter is a true and
complete list of the officers and directors of the Company.
5.27 Undisclosed
Liabilities.
18
5.28 The
Company has no Liabilities (and there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any Liability).
5.29 Absence of Certain
Events. Since its inception, the Company has been conducted solely in the
usual and ordinary course. Without limiting the generality of the foregoing, the
Company has not:
(a) waived
any right or rights of substantial value or paid, directly or indirectly, any
Liability before such Liability became due in accordance with its
terms;
(b) other
than in the ordinary and usual course of business, created any Liability
(whether absolute or contingent and whether or not currently due and payable),
or entered into or assumed any contract, agreement, arrangement, lease (as
lessor or lessee), license or other commitment otherwise than in the ordinary
and usual course of business; or
(c) purchased,
sold or transferred any assets other than in the ordinary and usual course of
the operations of the Company; granted any security interest or other lien or
encumbrance affecting any of its assets or properties other than in the ordinary
and usual course of business and in amounts not material; or amended any
agreement or contract to which the Company is a party or by which its assets and
properties are bound.
5.30 Adverse Developments.
Since the date of the Quarterly Financial Statements Date there has been no
material adverse change in the business, operations or condition (financial or
otherwise) of the Company; nor has there been since such date, any damage,
destruction or loss, whether covered by insurance or not, materially or
adversely affecting the business, properties or operations of the
Company.
5.31 Actions and
Proceedings. The Company is not subject to any outstanding orders, writs,
injunctions or decrees of any court or arbitration tribunal or any governmental
department, commission, board, agency or instrumentality, domestic or foreign,
against, involving or affecting the business, properties or employees of the
Company’s right to enter into, execute and perform this Agreement (or any of the
Transactions). There are no actions, suits, claims or legal, administrative or
arbitration proceedings or investigations, including any warranty or product
liability claims (whether or not the defense thereof or liabilities in respect
thereof are covered by policies of insurance) relating to or arising out of the
business, properties or employees of the Company pending or, to the best
knowledge of the Company, threatened against or affecting the
Company.
5.32 Bank Accounts and Credit
Cards. Set forth on the Company’s Disclosure Letter is a true, complete
and accurate list of all bank accounts, safe deposit boxes, and credit or charge
cards maintained by the Company.
5.33 Company Shares. The
Company Shares to be issued pursuant to this Agreement will be duly authorized
and reserved for issuance and when issued in accordance with this Agreement,
will be validly issued and outstanding, fully paid and non assessable and vest
in the holder thereof free and clear of any restrictions on transfer (other than
any restrictions under applicable state or federal securities laws), Taxes,
Liens, options, warrants, Purchase Rights, contracts, commitments, equities,
claims, and demands and will not be subject to any pre-emptive or other similar
rights.
5.34 Over-the-Counter Bulletin
Board. The Company’s Common Stock is eligible for quotation on the
Over-the-Counter Bulletin Board (the “Bulletin
Board”) under the symbol “HMEX.”
19
5.35 Due Diligence. All
documents and other materials relating to the Company and provided to CPG and
Cantix in connection with this Agreement are true and correct in all material
respects and do not contain any misstatement and/or omission.
5.36 No Registration
Rights. No security holder of Company securities has any
registration and/or similar rights at any time or under any circumstances which
would require the Company to register the Common Stock, or any other securities
of the Company, for sale under the Federal securities laws.
5.37 Prior Sales of
Securities. All prior sales of securities by the Company were either
properly registered under the Federal and/or State Securities laws or issued
pursuant to an exemption therefrom and all such sales were all done in
accordance with all laws, rules and regulations and no Person/entity has any
rescission and/or similar rights with respect to any Company
Shares.
5.38 No
Brokers. Except as set forth in the Company Disclosure Letter,
the Company has not employed any broker, finder or similar agent that would
cause any brokerage, finder’s or placement fee or any similar compensation in
connection with this Agreement or any transaction contemplated
hereby.
5.39 Purchase Entirely for Own
Account. The Cantix Shares proposed to be acquired by the
Company hereunder will be acquired for investment for its own account, and not
with a view to the resale or distribution of any part thereof, and the Company
has no present intention of selling or otherwise distributing Cantix Shares,
except in compliance with applicable securities laws.
5.40 Non-Registration. The
Company understands that the Cantix Shares have not been registered under the
Securities Act and will be transferred to the Company by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of the Company’s representations as expressed herein.
5.41 Non-Applicability of
California Law. No provision of California law, including, but
not limited to, Section 2115 of the California Corporations Code (“Section
2115”) is applicable to the Company and/or the Transactions set forth
herein.
ARTICLE
VI.
PRE
AND POST CLOSING COVENANTS
6.1 Pre-Closing
Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing:
(a) General. Each of the
Parties will use his, her, or its best efforts to take all actions and to do all
things necessary, proper, or advisable in order to consummate and make effective
the Transactions (including satisfaction of the Closing conditions set forth in
Article
VI below).
(b) Preservation of
Business. From the date of this Agreement until the Closing Date, each of
the Parties shall operate their respective business only in the ordinary and
usual course of business consistent with past practice (provided, however, that
the Company shall not issue any securities without the prior written consent of
CPG and the Company shall complete the Debt Conversion), and shall use
reasonable commercial efforts to (a) preserve intact their respective business
organization, (b) preserve the good will and advantageous relationships with
customers, suppliers, independent contractors, employees and other Persons
material to the operation of their respective businesses, and (c) not permit any
action or omission which would cause any of their respective representations or
warranties contained herein to become inaccurate or any of their respective
covenants to be breached in any material respect.
20
(c) Full Access. The
Company will permit representatives of CPG (including legal counsel and
accountants) to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Company, to all
premises, properties, personnel, books, records (including tax records),
contracts, and documents of or pertaining to the Company.
(d) Public
Announcements. The Parties will consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Agreement and the
Transactions and shall not issue any such press release or make any such public
statement without the prior written consent of the other Parties, except as may
be required under applicable Law; provided, however, with respect
to the Company’s Current Reports on Form 8-K filed with the SEC disclosing the
Company’s entry into this Agreement, the Parties will consult with each other
before filing such Form 8-K’s and provide each other the opportunity to review
and comment upon, such Form 8-K’s and the Company shall not file such Form 8-K’s
with the SEC without CPG’s prior written consent which shall not be unreasonably
withheld.
(e) Fees and Expenses.
All fees and expenses incurred in connection with this Agreement shall be paid
by the Party incurring such fees or expenses, whether or not this Agreement is
consummated.
(f) Form 8-K
Information. Cantix shall provide the Company with such
audited annual and unaudited interim financial information, pro-forma financial
information and all footnotes thereto and auditor’s letters relating to the
business of CPG as may be requested by the Company in order for the Company to
comply with its reporting and disclosure obligations under the rules and
regulations of the SEC, including, but not limited to Regulation S-X and Form
8-K (the “Form 8-K
Financial Information”), in connection with the Company’s preparation of
its Current Report on Form 8-K, and any amendments thereto, regarding the
Closing (the “Form
8-K”). Cantix shall provide such Form 8-K Financial
Information promptly so as to allow the Company and its regularly retained
accounting firm (the “Company’s
Accountant”) to: (i) review all financial statements relating to Cantix
as shall be required to be included in said Form 8-K, and (ii) timely file the
Form 8-K. Cantix shall in a prompt and timely manner provide the
Company’s Accountant with such management representations as may be requested by
the Company’s Accountant in connection with its preparation of any financial
statements for Cantix relating to such Form 8-K. In addition, CPG shall also
provide to the Company such additional information regarding Cantix that would
be required if the Company were filing a general registration of securities on
Form 10 under the Exchange Act (the “Form 8-K
Business Disclosures”) as may be requested by the Company.
(g) Appointment of Officers and
Directors. The Company shall take all action necessary to have
Xxxxxxxxx Xxxx, Xxxxxxxx Xxx and Xxxxxx Xx appointed to the Company’s board of
directors and to have Xxxxxxxxx Xxxx appointed as the Company’s Chief Executive
Officer, Shengan Yen appointed as the Company’s Chief Financial Officer and Xx
Xxx as the Company’s Secretary, which shall be effective immediately upon the
Closing.
21
6.2 Post-Closing
Covenants.
(a) Filing of Current Report on
Form 8-K and Press Release. The Company shall no later than one (1)
Business Day after the Closing file the Form 8-K with the SEC.
(b) Blue Sky
Laws. The Company shall take any action (other than qualifying
to do business in any jurisdiction in which it is not now so qualified) required
to be taken under any applicable state securities laws in connection with the
issuance of the Company Shares in connection with this Agreement.
(c) Exchange Act
Filings. For a period of three years following the Closing,
the Company shall use its best efforts to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company pursuant to the Exchange Act.
(d) Internal Controls and
Procedures. As soon as reasonably practicable after the
Closing, the Company and Cantix will cooperate in good faith and use
commercially reasonable efforts to design, and the Company will implement,
maintain, adhere to and enforce, a system of internal accounting and disclosure
controls and procedures that are effective in providing assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with GAAP, including policies and procedures that (i) require
the maintenance of records that in reasonable detail accurately and fairly
reflect the Transactions and dispositions of the assets of the Company,
(ii) provide assurance that Transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
receipts and expenditures of the Company are being made only in accordance with
appropriate authorizations of management and the Company’s board of directors,
and (iii) provide assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the assets of the
Company.
ARTICLE
VII.
CONDITIONS
PRECEDENT TO CLOSING
7.1 CPG’s Conditions to
Closing. The obligations of CPG to consummate the Transactions
are subject to the satisfaction of the following conditions on or before the
Closing Date:
(a) Representations, Warranties
and Covenants. The representations and warranties of the
Company in this Agreement shall be true and correct on the Closing Date, and the
Company shall have duly performed and complied with all covenants and required
by this Agreement to be performed or complied with by it on or prior to the
Closing.
(b) Absence of
Litigation. No action or proceeding shall be pending or threatened by or
before any court or other governmental body or agency seeking to restrain,
prohibit or invalidate the Transactions or which would adversely affect the
right of CPG to own the Company Shares.
(c) Consents and
Approvals. All (a) consents, (b) licenses, and (c) other orders or
notifications of, or registrations, declarations or filings with, or expiration
of waiting periods imposed by, any applicable governmental or judicial
authority, all as required in connection with consummation of the Transactions,
shall have been made or obtained or shall have occurred.
(d) Form
8-K. The Company shall have prepared and be ready to timely
file the Form 8-K.
22
(e) Deliveries. The
closing deliveries specified in Section
8.2
shall have been made by the Company.
7.2 The Company Conditions to
Close. The obligations of the Company to consummate the
transaction contemplated by this Agreement are subject to the satisfaction of
each of the following conditions on or before the Closing Date:
(a) Representations, Warranties
and Covenants. All of CPG’s and Cantix’s representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), shall have been
accurate in all material respects as of the date of this Agreement, and shall be
accurate in all material respects as of the time of the Closing as if then made;
(ii) each of the representations and warranties in Sections
3.1, 3.3,
4.2,
4.3
and 4.4,
and each of the representations and warranties in this Agreement that contains
an express materiality qualification, shall have been accurate in all respects
as of the date of this Agreement, and shall be accurate in all respects as of
the time of the Closing as if then made, and (iii) CPG shall have duly performed
and complied with all covenants and obligations required by this Agreement to be
performed or complied with by it on or before the Closing Date.
(b) Absence of
Litigation. No action or proceeding shall be pending by or
before any court or other governmental body or agency seeking to restrain,
prohibit or invalidate the Transactions.
(c) Consents and
Approvals. All (a) consents, (b) licenses, or (c) other orders
or notifications of, or registrations, declarations or filings with, or
expiration of waiting periods imposed by, any applicable governmental or
judicial authority, all as required in connection with consummation of the
Transactions, shall have been made or obtained or shall have
occurred.
(d) Deliveries. The
closing deliveries specified in Section
8.3
shall have been made by CPG.
ARTICLE
VIII.
CLOSING
8.1 Closing. The delivery
of the Cantix Shares to the Company and the delivery of the Company Shares to
CPG, and the consummation of the other respective obligations of the Parties
contemplated by this Agreement will take place at a closing (the “Closing”),
which will be held at the offices of Gusrae, Xxxxxx, Xxxxx & Xxxxxxx PLLC,
000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000 on November 13, 2009, or another date (the “Closing
Date”) and location as mutually agreed upon by the Parties.
8.2 Deliveries by the
Company. At the Closing, the Company will deliver or cause to be
delivered, unless waived by CPG, the following to CPG:
(a) this
Agreement duly executed by the Company;
(b) certificates
from an appropriate governmental official to the effect that the Company is in
good standing in its jurisdiction of incorporation;
(c) certificates
from an appropriate governmental official in each jurisdiction in which the
Company is qualified or admitted to do business as a foreign corporation to the
effect that the Company duly qualified or admitted in good standing in such
jurisdiction, all of such certificates to be dated within ten (10) days before
the Closing Date;
23
(d) executed
certificates of the secretary or other appropriate officer of the Company, dated
the Closing Date, in form and substance reasonably satisfactory to CPG,
certifying (i) the Company Constituent Documents, (ii) the resolutions of the
board of directors of the Company authorizing the execution and performance of
this Agreement and the other Transaction Documents and the Transactions,
certifying that such resolutions have not been rescinded or amended; (iii) as to
the incumbency of the officers of the Company executing this Agreement, and/or
any related agreement, and including specimen signatures; (iv) that no vote,
approval or consent of any holder of capital stock of the Company is required or
necessary to consummate the Transactions;
(e) certificates
representing the Company Shares;
(f) the
corporate minute books and capital stock records of the Company;
(g) the
Tax Returns of the Company;
(h) letter
of resignation pursuant to which all of its officers and directors shall resign
as officers and directors of the Company, effective immediately upon the
Closing;
(i) the
other Transaction Documents duly executed by the Company;
(j) an
opinion of the Company’s Delaware counsel, dated the Closing Date, addressed to
CPG with respect to any other items under Delaware law, due authorization, valid
issuance and non-assessability of the Company Shares and the Company’s authority
to enter into this Agreement;
(k) a
certificate executed by a duly authorized executive officer of the Company
certifying completion of each of the matters listed in Section
7.1(a) through (d) hereof; and
(l)
a stock certificate or certificates, representing 887,000
shares of Common Stock owned of record and beneficially by the Company’s Chief
Executive Officer which shall be submitted to the Company’s transfer agent for
cancellation.
8.3 Deliveries by CPG. At
the Closing, CPG will deliver or cause to be delivered, unless waived by the
Company, the following:
(a) this
Agreement duly executed by CPG and Cantix;
(b) the
other Transaction Documents duly executed by CPG and Cantix;
(c) certificates
representing the Cantix Shares duly endorsed for transfer or accompanied by
executed stock powers;
(d) opinions
of counsel from CPG’s BVI Counsel, PRC Counsel and Hong Kong legal counsel,
dated the Closing Date with respect to, among other items under the applicable
laws of BVI, Hong Kong and/or the Peoples Republic of China, CPG’s authority to
enter into this Agreement and the other Transaction Documents; the due
authorization of the Cantix Shares; CPG’s ownership of the Cantix Shares; and
Cantix’ good standing, in form and substance to satisfactory to the Company and
its legal counsel;
24
(e) an
executed amendment to CPG’s amended and restated articles of incorporation,
ready for filing with the Nevada Secretary of State changing CPG’s name from
China Polypeptide Group Ltd. to CPG Holdings, Inc.;
(f) a
certificate executed by a duly authorized executive officer of CPG certifying
completion of each of the matters listed in Section
7.2(a) through (c) hereof;
ARTICLE
IX.
INDEMNIFICATION
9.1 Indemnification by the
Company. The Company shall indemnify, defend and hold harmless
CPG, its Subsidiaries and their respective officers, directors, and Affiliates
in respect of, and hold each of them harmless from, against, and with respect to
any and all Losses suffered, incurred or sustained by any of them, or to which
any of them becomes subject, to the extent resulting from, arising out of or
relating to any of the following:
(a) any
and all violations of Laws by the Company direct or indirect, fixed, contingent,
legal, statutory or contractual, which exist at or as of the Closing Date or
which arise after the Closing Date but which are directly and primarily caused
by acts, failures to act, transactions, services or state of facts which
occurred or existed on or before the Closing Date, whether or not then known,
due or payable;
(b) any
breach, in any material respect, or default, in any material respect, in the
performance by the Company of any covenant or agreement set forth in this
Agreement;
(c) any
breach, in any material respect, by the Company of any of the representations or
warranties made by any of them in this Agreement; and
(d) any
broker’s or finder’s fee or any similar fee, charge or commission incurred by
the Company prior to or in connection with this Agreement, or any of the
Transactions.
9.2 Indemnification by
CPG. CPG shall indemnify, defend and hold harmless the Company
and the Company’s officers, directors, and Affiliates in respect of, and hold
each of them harmless from, against, and with respect to any and all Losses
suffered, incurred or sustained by any of them, or to which any of them becomes
subject, to the extent resulting from, arising out of or relating to any of the
following:
(a) any
and all violations of Laws by CPG, Cantix or Cantix’s Subsidiaries, direct or
indirect, fixed, contingent, legal, statutory or contractual, which exist at or
as of the Closing Date or which arise after the Closing Date but which are
directly and primarily caused by acts, failures to act, transactions, services
or state of facts which occurred or existed on or before the Closing Date,
whether or not then known, due or payable;
(b) any
breach, in any material respect, or default, in any material respect, in the
performance by CPG or Cantix of any covenant or agreement set forth in this
Agreement; and
(c) any
breach, in any material respect, by CPG or Cantix of any of the representations
or warranties made by either of them in this Agreement.
25
9.3 Other Remedies. The
foregoing indemnification provisions are in addition to, and not in derogation
of, any statutory, equitable or common law remedy any party may have as a result
of a Loss.
9.4 Survival of
Representations. All representations and warranties of the Parties hereto
contained in this Agreement or otherwise made in writing in connection with the
Transactions shall survive the execution and delivery of this Agreement and the
Closing and shall continue through and including the date one (1) year from the
date of the Closing Date.
9.5 Notice and Opportunity to
Defend. Promptly after the receipt by a Party of notice of any
action, proceeding, claim or potential claim (any of which is hereinafter
individually referred to as a “Claim”)
which could give rise to a right to indemnification under Section
9.1
or Section
9.2, the party receiving such notice (an “Indemnified
Party”) shall give prompt written notice to the party or parties who may
become obligated to provide indemnification hereunder (the “Indemnifying
Party”). Such notice shall specify in reasonable detail the basis and
amount, if ascertainable, of any claim that would be based upon the Claim. The
failure to give such notice promptly shall relieve the Indemnifying Party of its
indemnification obligations under this Agreement, unless the Indemnified Party
establishes that the Indemnifying Party either had knowledge of the Claim or was
not prejudiced by the failure to give notice of the Claim. The
Indemnifying Party shall have the right, at its option, to compromise or defend
the claim, at its own expense and by its own counsel, and otherwise control any
such matter involving the asserted liability of the Indemnified Party, provided
that any such compromise or control shall be subject to obtaining the prior
written consent of the Indemnified Party which shall not be unreasonably
withheld, conditioned or delayed. If any Indemnifying Party undertakes to
compromise or defend any asserted liability, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party agrees to
cooperate fully with the Indemnifying Party and its counsel in the compromise of
or defense against any such asserted liability. All costs and expenses incurred
in connection with such cooperation shall be borne by the Indemnifying Party. In
any event, the Indemnified Party shall have the right at its own expense to
participate in the defense of an asserted liability.
ARTICLE
X.
TERMINATION
10.1 This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written agreement of Parties;
(b) by
CPG if the Closing has not occurred by November 30, 2009 (the “Termination
Date”);
(c) by
any Party hereto if any Governmental Entity shall have issued an order, decree
or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the Transactions and such order, decree, ruling or other
action shall have become final and nonappealable.
10.2 Effect of
Termination. Upon termination of this Agreement pursuant to this Article
X, this Agreement shall be void and of no effect and shall result in no
obligation of or liability to any Party or their respective directors, officers,
members, managers, employees, agents or stockholders for damages, penalties or
liquidated damages; provided that if this Agreement is terminated as a result of
an intentional breach of any representation, warranty or covenant in this
Agreement, the Party who breached the representation, warranty or covenant shall
be liable to the other Parties for actual damages, including all costs and
expenses incurred in connection with the preparation, negotiation, execution and
performance of this Agreement. If any Party hereto shall terminate this
Agreement pursuant to the provisions hereof, such termination shall be effected
by notice to the other Parties specifying the provision hereof pursuant to which
such termination is made. In no event shall any party be entitled to
consequential damages, lost profits or special or punitive damages as a result
of the termination of this Agreement.
26
ARTICLE
XI.
MISCELLANEOUS
11.1 Assignment. Neither
this Agreement nor any right created hereby shall be assignable by any Party
hereto.
11.2 Non-Waiver. The
failure in any one or more instances of a Party to insist upon performance of
any of the terms, covenants or conditions of this Agreement, to exercise any
right or privilege in this Agreement conferred, or the waiver by said Party of
any breach of any of the terms, covenants or conditions of this Agreement, shall
not be construed as a subsequent waiver of any such terms, covenants,
conditions, rights or privileges, but the same shall continue and remain in full
force and effect as if no such forbearance or waiver had occurred. No waiver
shall be effective unless it is in writing and signed by an authorized
representative of the waiving Party. A breach of any representation, warranty or
covenant shall not be affected by the fact that a more general or more specific
representation, warranty or covenant was not also breached.
11.3 Binding Effect;
Benefit. This Agreement shall inure to the benefit of and be binding upon
the Parties hereto, and their successors and permitted assigns. Nothing in this
Agreement, express or implied, shall confer on any Person other than the parties
hereto, and their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.
11.4 Notices. Any notice
or communication must be in writing and will be deemed given: (i) when delivered
if delivered personally (including by courier); (ii) on the third Business Day
after mailing, if mailed, postage prepaid, by registered or certified mail
(return receipt requested); (iii) on the day after mailing if sent by a
nationally recognized overnight delivery service which maintains records of the
time, place, and recipient of delivery; or (iv) upon receipt of a confirmed
transmission, if sent by telecopy or facsimile transmission. For purposes of
notice, the addresses of the parties shall be:
If
to CPG:
|
|
China
Polypeptide Group, Ltd.
|
|
Xx.
00 Xxxxxxx Xxxx
|
|
Xxxxxxxx
Economical Development Xxxx
|
|
000000
Xxxxx, X.X. Xxxxx
|
|
Attention:
Xx Xxx, Corporate Secretary
|
|
Telephone:
00 00 000 000 00
|
|
Telecopy:
86 27 835 199 07
|
|
With
a copy to:
|
|
Gusrae,
Xxxxxx, Xxxxx & Xxxxxxx PLLC
|
|
000
Xxxx Xxxxxx
|
|
Xxx
Xxxx, XX 00000
|
|
Attention:
Xxxxxxxx Xxxxxxx
|
|
Telephone
(000) 000-0000
|
|
Telecopy: (000)
000-0000
|
27
If
to the Company
|
|
000
X. Xxx Xxxxxxxx Xxxxxx
|
|
Xxxxxxx,
Xxxxxxxxxx 00000
|
|
Attention: Mr.
Xxxx Xxxxxxx, President
|
|
Telephone:
(000) 000-0000
|
|
With
a copy to:
|
|
Xxxxx
X. Xxxxxxx, Esq.
|
|
0000
Xxxxx Xxxxx Xxxx
|
|
Xxxxx
Xxxxxx, Xxx Xxxx 00000
|
|
Telephone:
(000) 000-0000
|
|
Telecopy: (000)
000-0000
|
11.5 Governing Law,
Venue. This Agreement shall be governed solely and
exclusively by and construed in accordance with the internal laws of the State
of New York without regard to the conflicts of laws principles
thereof. The parties hereto hereby expressly and irrevocably agree
that any suit or proceeding arising directly and/or indirectly pursuant to or
under this Agreement shall be brought solely in a federal or state court located
in the City, County and State of New York. By its execution hereof, the parties
hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto expressly and
irrevocably waive any claim that any such jurisdiction is not a convenient forum
for any such suit or proceeding and any defense or lack of in personam jurisdiction with
respect thereto. In the event of any such action or proceeding, the party
prevailing therein shall be entitled to payment from the other party hereto of
its reasonable counsel fees and disbursements.
11.6 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
11.7 Facsimile Transmissions. This
Agreement, the other Transaction Documents and all agreements, documents and
certificates delivered pursuant to this Agreement and/or the other Transaction
Documents or in connection with the Transactions may be executed by any Party
and transmitted by such Party to any other Party or Parties by facsimile, and
any such document shall be deemed to have full force and effect as if the
facsimile signature or signatures on such documents were original.
11.8 Third Party
Beneficiaries. None of the provisions of this Agreement or any
document contemplated hereby is intended to grant any right or benefit to any
Person or entity which is not a party to this Agreement.
11.9 Headings. The
article and section headings contained in this Agreement are solely for the
purpose of reference, are not part of this Agreement and shall not in any way
affect the meaning or interpretation of this Agreement.
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11.10 Severability. In
the event that any provision in this Agreement shall be determined to be
invalid, illegal or unenforceable in any respect, the remaining provisions of
this Agreement shall not be in any way impaired, and the illegal, invalid or
unenforceable provision shall be fully severed from this Agreement and there
shall be automatically added in lieu thereof a provision as similar in terms and
intent to such severed provision as may be legal, valid and
enforceable.
11.11 Entire
Agreement. This Agreement and the other Transaction Documents,
constitute the entire contract between the Parties hereto pertaining to the
subject matter hereof, and supersede all prior and contemporaneous agreements
and understandings between the Parties with respect to such subject
matter.
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IN
WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be duly
signed as of the date first above written.
CHINA
POLYPEPTIDE GROUP LTD.
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By:
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/s/ Xxxxxxxxx
Xxxx
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Name:
Xxxxxxxxx Xxxx
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Title:
Chairman and Chief Executive Officer
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By:
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/s/ Xxxx Xxxxxxx
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Name:
Xxxx Xxxxxxx
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||
Title:
Chief Executive Officer
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||
CANTIX
INTERNATIONAL LTD.
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By:
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/s/ Xxxxxxxxx Xxxx
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Name:
Xxxxxxxxx Xxxx
|
||
Title:
Chairman and Chief Executive
Officer
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Signature
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