SHARE EXCHANGE AGREEMENT
EXHIBIT
10.3
SHARE
EXCHANGE AGREEMENT (this "Agreement") is made this 15th day of October 2007,
by
and between Universal Fog, Inc., a Delaware corporation (“UFOG”); Xxxxxx
Xxxxxxx, the Chief Executive Officer of UFOG (“Bontems”); Sun Xin, a citizen and
resident of the People’s Republic of China and majority shareholder of UFOG (the
“Majority Shareholder”) and 100% owner of the share capital of China Health
Industries Holdings Limited; China Health Industries Holdings Limited, a
corporation organized under the laws of the Hong Kong SAR of the People’s
Republic of China (“China Health”) and the owner of 100% of the share capital of
Harbin Humankind Biology Technology Co. Limited; and Harbin Humankind Biology
Technology Co. Limited, a corporation organized under the laws of the People’s
Republic of China (“Harbin Humankind”)(China Health and Harbin Humankind being
hereinafter referred to as the “Harbin Subsidiaries”); all of whom execute and
deliver this Agreement, based on the following:
R
e c i t a l s
WHEREAS,
UFOG wishes to acquire one hundred percent (100%) of all of the issued and
outstanding share capital of China Health from the Majority Shareholder in
an
exchange for sixty million (60,000,000) shares of common stock of UFOG in a
transaction intended to qualify as a tax-free exchange pursuant to sections
351
and 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
WHEREAS,
in furtherance thereof, the respective Boards of Directors of UFOG and the
Harbin Subsidiaries, have approved the exchange, upon the terms and subject
to
the conditions set forth in this Agreement, pursuant to which one hundred
percent (100%) of the share capital of China Health (the "China Health Share
Capital”) issued and outstanding prior to the exchange, will be exchanged by the
Majority Shareholder in the aggregate for 60,000,000 shares of common stock,
$.0001 par value, of UFOG (the "UFOG Common Stock").
WHEREAS,
neither party is seeking tax counsel or legal or accounting opinions on whether
the transaction qualifies for tax free treatment.
A
g r e e m e n t
Based
on
the stated premises, which are incorporated herein by reference, and for and
in
consideration of the mutual covenants and agreements hereinafter set forth,
the
mutual benefits to the parties to be derived herefrom, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, it is hereby agreed as follows:
ARTICLE
I
EXCHANGE
OF SHARE CAPITAL FOR STOCK
1.01
Exchange of Share Capital for Stock. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 1.05
hereof), the Majority Shareholder shall assign, transfer, and deliver to UFOG,
free and clear of all liens, pledges, encumbrances, charges, restrictions,
or
claims of any kind, nature, or description, the China Health Share Capital,
and
UFOG agrees to acquire such share capital on such date by issuing and delivering
in exchange therefore to the Majority Shareholder the UFOG Common Stock. All
shares of UFOG Common Stock to be issued and delivered pursuant to this
Agreement shall be appropriately adjusted to take into account any stock split,
stock dividend, reverse stock split, recapitalization, or similar change in
the
UFOG Common Stock which may occur between the date of the execution of this
Agreement and the Closing Date.
1.02
Delivery of China Health Share Capital by the Majority Shareholder. The transfer
of the China Health Share Capital by the Majority Shareholder shall be effected
by the delivery to UFOG at the Closing (as set forth in Section 1.05 hereof)
of
an endorsement of the share capital in the name of UFOG followed by registration
of the same in the name of UFOG with the appropriate government ministry of
China.
1.03
Operation as Wholly-Owned Subsidiary. After giving effect to the transaction
contemplated hereby, UFOG will own one hundred percent (100%) of all of the
share capital of China Health and China Health will be a wholly-owned subsidiary
of UFOG operating under the name “China Health Industries Holdings Limited”, a
corporation organized and existing under the laws of the Hong Kong SAR of the
People’s Republic of China. Harbin Humankind will become a
wholly-owned indirect subsidiary of UFOG operating under the name “Harbin
Humankind Biology Technology Co. Limited,” a corporation organized and existing
under the laws of the People’s Republic of China.
1.04
Further Assurances. At the Closing and from time to time thereafter, the
Majority Shareholder shall execute such additional instruments and take such
other action as UFOG may reasonably request, without undue cost to the Majority
Shareholder in order to more effectively sell, transfer, and assign clear title
and ownership in the China Health Share Capital to UFOG.
1.05
Closing and Parties. The Closing contemplated hereby shall be held at a mutually
agreed upon time and place on or before October 31, 2007, or on another date
to
be agreed to in writing by the parties (the "Closing Date”). The Agreement may
be closed at any time following approval by a majority of Board of Directors
of
UFOG and by a majority of the Board of Directors of the Harbin Subsidiaries
and
the approval of the Majority Shareholder. The Closing may be accomplished by
wire, express mail, overnight courier, conference telephone call or as otherwise
agreed to by the respective parties or their duly authorized
representatives.
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1.06
Closing Events.
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(a)
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UFOG
Deliveries. Subject to fulfillment or waiver of the conditions set
forth
in Article IV, UFOG shall deliver to the Majority Shareholder at
Closing
all the following:
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(i)
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(ii)
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Incumbency
and specimen signature certificates dated the Closing Date with respect
to
the officers of UFOG executing this Agreement and any other document
delivered pursuant hereto on behalf of
UFOG;
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(iii)
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Copies
of the resolutions/consents of UFOG’s board of directors and shareholder
minutes or consents authorizing the execution and performance of
this
Agreement and the contemplated transactions, certified by the secretary
or
an assistant secretary of UFOG as of the Closing
Date;
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(iv)
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The
certificate contemplated by Section 4.01, duly executed by the chief
executive officer of UFOG;
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(v)
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The
certificate contemplated by Section 4.02, dated the Closing Date,
signed
by the chief executive officer of
UFOG;
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(vi)
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Certificates
for 60,000,000 shares of UFOG Common Stock issued in the name of
the
Majority Shareholder; and
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(vii)
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In
addition to the above deliveries, UFOG shall take all steps and actions
as
the Majority Shareholder may reasonably request or as may otherwise
be
reasonably necessary to consummate the transactions contemplated
hereby.
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(b)
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China
Health Deliveries. Subject to fulfillment or waiver of the conditions
set
forth in Article V, the Harbin Subsidiaries and/or the Majority
Shareholder shall deliver to UFOG at Closing all the
following:
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(i)
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Incumbency
and specimen signature certificates dated the Closing Date with respect
to
the officers executing this Agreement and any other document delivered
pursuant;
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(ii)
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Copies
of resolutions/consents of the board of directors of China Health
authorizing the execution and performance of this Agreement and the
contemplated transactions, certified by the secretary or an assistant
secretary of China Health as of the Closing
Date;
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(iii)
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The
certificate contemplated by Section 5.01, executed by the Majority
Shareholder; and
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(iv)
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The
certificate contemplated by Section 5.02, dated the Closing Date,
signed
by the chief executive officer of Harbin
Humankind.
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(v)
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In
addition to the above deliveries, China Health and/or the Majority
Shareholder shall take all steps and actions as UFOG may reasonably
request or as may otherwise be reasonably necessary to consummate
the
transactions contemplated hereby.
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1.07
Director and Officer Resignations. At Closing, the current Board of Directors
of
UFOG shall appoint such director nominees as may be designated by the Majority
Shareholder to fill vacancies on the Board of Directors of UFOG, and,
thereafter, the current directors of UFOG shall resign. In addition, at closing
all officers of UFOG shall tender their resignations to the Board of Directors,
and new officers of UFOG shall be appointed by the newly appointed Board of
Directors of UFOG. All such director and officer resignations shall be in
compliance with the Securities Exchange Act of 1934, as amended, and pursuant
to
a previously filed Information Statement on Schedule 14F-1 prepared and filed
by
UFOG.
ARTICLE
II
REPRESENTATIONS,
COVENANTS AND WARRANTIES OF UFOG, ETC.
As
an
inducement to, and to obtain the reliance of the Majority Shareholder and the
Harbin Subsidiaries, UFOG and Bontems, jointly and severally, represent, promise
and warrant as follows:
2.01
Organization. UFOG is, and will be at Closing, a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware
and has the corporate power and is and will be duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances,
and
orders of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being conducted,
and
there are no other jurisdictions in which it is not so qualified in which the
character and location of the assets owned by it or the nature of the material
business transacted by it requires qualification, except where failure to do
so
would not have a material adverse effect on its business, operations,
properties, assets or condition. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate any provision
of
UFOG’s Articles of Incorporation or Bylaws, or other agreement to which it is a
party or by which it is bound.
2.02
Approval of Agreement; Enforceability. UFOG has full power, authority, and
legal
right and has taken, or will take, all action required by law, its Articles
of
Incorporation, Bylaws, and otherwise to execute and deliver this Agreement
and
to consummate the transactions herein contemplated. The board of directors
of
UFOG has authorized and approved the execution, delivery, and performance of
this Agreement. This Agreement, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of UFOG and Bontems
enforceable in accordance with its terms, except as such enforceability may
be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies.
The UFOG shareholders will not have dissenter’s rights with respect to
any of the transactions contemplated herein.
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2.03 Capitalization.
The authorized capitalization of UFOG consists of 300,000,000 shares of common
stock, $0.0001 par value, of which 44,694,634 shares were issued and outstanding
as of September 10, 2007. There are 10,000,000 authorized shares of preferred
stock, $.0001 par value, and 4,000,000 shares of convertible preferred stock
are
issued and outstanding. There are, and at the Closing, there will be no
outstanding subscriptions, options, warrants, convertible securities, calls,
rights, commitments or agreements calling for or requiring issuance or transfer,
sale or other disposition of any shares of capital stock of the Company or
calling for or requiring the issuance of any securities or rights convertible
into or exchangeable (including on a contingent basis) for shares of capital
stock. All of the outstanding shares of UFOG are duly authorized, validly
issued, fully paid and non-assessable and not issued in violation of the
preemptive or other right of any person. There are no dividends due,
to be paid or in arrears with respect to any of the capital stock of
Company.
2.04
Financial Statements.
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(i)
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UFOG
has previously delivered to China Health an audited balance sheet
of UFOG
as of December 31, 2006, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the fiscal year
ended
December 31, 2006, including the notes thereto, and an unaudited
balance
sheet of UFOG as of June 30, 2007, and the related unaudited statements
of
operations, stockholders’ equity (deficit), and cash flows for the fiscal
quarter ended June 30, 2007 (collectively the “Financial Statements”) and
the accompanying auditor’s report to the effect that such audited
financial statements contain all adjustments (all of which are normal
recurring adjustments) necessary to present fairly the results of
operations and financial position for the periods and as of the dates
indicated.
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(ii)
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(ii)
The Financial Statements of UFOG delivered pursuant to Section 2.04(i)
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved as
explained in the notes to such financial statements. The UFOG Financial
Statements present fairly, in all material respects, as of the closing
date, the financial position of UFOG. UFOG will not have, as of the
Closing Date, any liabilities, obligations or claims against it (absolute
or contingent), and all assets reflected on such financial statements
present fairly the assets of UFOG in accordance with generally accepted
accounting principles.
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(iii)
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UFOG
has filed or will file as the Closing Date its tax returns required
to be
filed for its two most recent fiscal years and will pay all taxes
due
thereon. All such returns and reports are accurate and correct in
all
material respects. UFOG has no liabilities with respect to the payment
of
any federal, state, county, local, or other taxes (including any
deficiencies, interest, or penalties) accrued for or applicable to
the
period ended on the closing date and all such dates and years and
periods
prior thereto and for which UFOG may at said date have been liable
in its
own right or as transferee of the assets of, or as successor to,
any other
corporation or entity, except for taxes accrued but not yet due and
payable, and to the best knowledge of UFOG, no deficiency assessment
or
proposed adjustment of any such tax return is pending, proposed or
contemplated. None of such income tax returns has been examined or
is
currently being examined by the Internal Revenue Service and no deficiency
assessment or proposed adjustment of any such return is pending,
proposed
or contemplated. UFOG has not made any election pursuant to the provisions
of any applicable tax laws (other than elections that relate solely
to
methods of accounting, depreciation, or amortization) that would
have a
material adverse affect on UFOG, its financial condition, its business
as
presently conducted or proposed to be conducted, or any of its respective
properties or material assets. There are no outstanding agreements
or
waivers extending the statutory period of limitation applicable to
any tax
return of UFOG.
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2.05
Information. The information concerning UFOG set forth in this Agreement is
complete and accurate in all respects and does not contain any untrue statement
of a fact or omit to state a fact required to make the statements made, in
light
of the circumstances under which they were made, not misleading. UFOG shall
cause the information delivered by it pursuant hereto to the Majority
Shareholder to be updated after the date hereof up to and including the Closing
Date.
2.06 Absence
of Certain Changes or Events. Except as set forth in this Agreement, since
the
date of the most recent UFOG balance sheet described in Section 2.04 and
included in the information referred to in Section 2.05:
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a)
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There
has not been: (i) any adverse change in the business, operations,
properties, level of inventory, assets, or condition of UFOG; or
(ii) any
damage, destruction, or loss to UFOG (whether or not covered by insurance)
adversely affecting the business, operations, properties, assets,
or
conditions of UFOG;
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b)
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UFOG
has not: (i) amended its Articles of Incorporation or Bylaws; (ii)
declared or made, or agreed to declare or make, any payment of dividends
or distributions of any assets of any kind whatsoever to stockholders
or
purchased or redeemed, or agreed to purchase or redeem, any of its
capital
stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of UFOG; (iv)
made any
material change in its method of management, operation, or accounting;
(v)
entered into any other material transactions; (vi) made any accrual
or
arrangement for or payment of bonuses or special compensation of
any kind
or any severance or termination pay to any present or former officer
or
employee; (vii) increased the rate of compensation payable or to
become
payable by it to any of its officers or directors or any of its employees
whose monthly compensation exceeds $1,000; or (viii) made any increase
in
any profit-sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement
made
to, for, or with its officers, directors, or
employees;
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c)
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UFOG
has not: (i) granted or agreed to grant any options, warrants, or
other
rights for its stocks, bonds, or other corporate securities calling
for
the issuance thereof; (ii) borrowed or agreed to borrow any funds
or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary
course of business; (iii) paid any material obligation or liability
(absolute or contingent) other than current liabilities reflected
in or
shown on the most recent UFOG balance sheet and current liabilities
incurred since that date in the ordinary course of business; (iv)
sold or
transferred, or agreed to sell or transfer, any of its material assets,
properties, or rights (except assets, properties, or rights not used
or
useful in its business which, in the aggregate have a value of less
than
$5,000 or canceled, or agreed to cancel, any debts or claims (except
debts
and claims which in the aggregate are of a value of less than $5,000);
(v)
made or permitted any amendment or termination of any contract, agreement,
or license to which it is a party if such amendment or termination
is
material, considering the business of UFOG; or (vi) issued, delivered,
or
agreed to issue or deliver any stock, bonds, or other corporate securities
including debentures (whether authorized and unissued or held as
treasury
stock); and
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d)
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UFOG
has not become subject to any law, order, investigation, inquiry,
grievance or regulation which materially and adversely affects, or
in the
future would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of
UFOG.
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2.07
Litigation and Proceedings. There are no material actions, suits, claims, or
administrative or other proceedings pending, asserted or unasserted, threatened
by or against UFOG or adversely affecting UFOG or its properties, at law or
in
equity, before any court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind. UFOG is not in
default of any judgment, order, writ, injunction, decree, award, rule, or
regulation of any court, arbitrator, or governmental agency or
instrumentality.
2.08
Compliance With Laws; Government Authorization.
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a)
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UFOG
and its officers and directors have complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to it or its
business, including federal and state securities laws. UFOG and its
officers, directors and beneficial owners are not under investigation
by
any federal, state, county or local authorities, including the Commission.
UFOG and its officers, directors and beneficial owners have not received
notification from any federal, state, county, or local authorities,
including the Commission, that it or any of its officers or directors
will
be the subject of a legal action or that the Commission’s Division of
Enforcement will be recommending to the Commission that a Federal
District
Court or Commission administrative action or any other action be
filed or
taken against UFOG and its officers, directors and beneficial
owners.
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b)
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UFOG
has all licenses, franchises, permits, and other governmental
authorizations that are legally required to enable it to conduct
its
business in all material respects as conducted on the date of this
Agreement. No authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental
body is required in connection with the execution and delivery by
UFOG of
this Agreement and the consummation by UFOG of the transactions
contemplated hereby.
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2.09
Securities and Exchange Commission Compliance of UFOG. UFOG has a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (“Exchange Act”) and has complied in all respects with
Rule 14(a) and 14(c) of the Exchange Act, and with Sections 13 and 15(d) of
the
Exchange Act, and UFOG, its management and beneficial owners have complied
in
all respects with Sections 13(d) and 16(a) of the Exchange Act.
2.10
Contract Defaults. UFOG is not in default under the terms of any outstanding
contract, agreement, lease, or other commitment, and there is no event of
default or other event which, with notice or lapse of time or both, would
constitute a default in any respect under any such contract, agreement, lease,
or other commitment.
2.11
No Conflict With Other Instruments. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, or constitute an event of default
under, any material indenture, mortgage, deed of trust, or other material
contract, agreement, or instrument to which UFOG is a party or to which any
of
its properties or operations are subject.
2.12
Subsidiary. UFOG beneficially owns all of the outstanding capital stock of
Universal Fog, Inc., an Arizona corporation, and it does not own either
beneficially or of record any equity interest in any other company. UFOG does
not have a predecessor as that term is defined under generally accepted
accounting principles or Regulation S-X promulgated by the Securities and
Exchange Commission.
2.13
UFOG Documents. UFOG has delivered to the Majority Shareholder copies of the
following documents, which are collectively referred to as the "UFOG Documents"
and which consist of the following dated as of the date of execution of this
Agreement, all certified by a duly authorized officer of UFOG as complete,
true,
and accurate:
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a)
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A
copy of the Articles of Incorporation and Bylaws of UFOG in effect
as of
the date of this Agreement;
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b)
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A
copy of resolutions adopted by the board of directors of UFOG approving
this Agreement and the transactions herein
contemplated;
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c)
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A
document setting forth a description of any material adverse change
in the
business, operations, property, inventory, assets, or condition of
UFOG
since the most recent UFOG balance sheet required to be provided
pursuant
to Section 2.04 hereof, updated to the Closing
Date;
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2.14
Quotation on the OTC Bulletin Board. UFOG’s Common Stock is quoted in good
standing on the OTC Bulletin Board under the symbol “UFOG” and UFOG will retain
such quotation and standing on the OTC Bulletin Board until the Closing of
the
transactions contemplated herein, without a penalty such as receipt of an “E” or
otherwise being penalized by NASD or the OTCBB.
2.15
Delivery of Shareholder List. Upon execution of this agreement, UFOG
shall deliver a certified shareholder list from its transfer agent setting
forth
the name of each UFOG shareholder, the number of shares held by each, dated
as
of a date within fifteen days of closing and whether such shares held are
restricted securities. In connection therewith, UFOG represents that none of
its
shareholders are nominees for any other person.
2.16
Liabilities,
Indebtedness, etc. As of the Closing Date, UFOG shall not have any liabilities
or indebtedness as such terms are defined by Generally Accepted Accounting
Principles.
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ARTICLE
III
REPRESENTATIONS,
COVENANTS, WARRANTIES OF THE MAJORITY SHAREHOLDER AND THE HARBIN
SUBSIDIARIES
As
an
inducement to, and to obtain the reliance of UFOG, the Majority Shareholder
and
the Harbin Subsidiaries, jointly and severally, represent and warrant as
follows:
3.01
Organization. China Health is, and will be on the Closing Date, a corporation
duly organized and validly existing under the laws of the Hong Kong SAR of
the
People’s Republic of China, and has the corporate power and is and will be duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects
as
it is now being conducted, and there are no other jurisdictions in which it
is
not so qualified in which the character and location of the assets owned by
it
or the nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operations, properties, assets or condition of China Health. The
execution and delivery of this Agreement does not, and the consummation of
the
transactions contemplated by this Agreement in accordance with the terms hereof
will not, violate any provision of China Health’s constituent documents, or
other material agreement to which it is a party or by which it is bound, nor
will they violate any laws, rules or policies of the government of the Hong
Kong
SAR of the People’s Republic of China.
3.02
Approval of Agreement; Enforceability. China Health has full power, authority,
and legal right and has taken, or will take, all action required by law, its
constituent documents, or otherwise to execute and deliver this Agreement and
to
consummate the transactions herein contemplated. The board of directors of
China
Health has authorized and approved the execution, delivery, and performance
of
this Agreement and the transactions contemplated hereby, subject to the approval
of the Majority Shareholder, which has been obtained, and compliance with any
laws, rules or policies of the government of the Hong Kong SAR of the People’s
Republic of China. This Agreement, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Majority
Shareholder and the Harbin Subsidiaries enforceable in accordance with its
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies.
3.03
Capitalization. The issued and outstanding share capital of China Health
consists of 1,280 USD as of July 31, 2007. Such share capital is validly issued,
fully paid, and nonassessable.
3.04
Financial Statements.
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a)
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Harbin
Humankind has previously delivered to UFOG a copy of an audited balance
sheet of Harbin Humankind as of June 30, 2007 and the related audited
statements of operations, cash flows, and share capital for the years
ended June 30, 2007 and 2006, including the notes thereto to the
effect
that such financial statements contain all adjustments (all of which
are
normal recurring adjustments) necessary to present fairly the results
of
operations and financial position for the periods and as of the dates
indicated.
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China
Health has previously delivered to UFOG a copy of an audited balance sheet
of
China Health as of July 31, 2007 and the related audited statements of
operations, cash flows, and share capital for the period from July 20, 2007
(Inception) through July 31, 2007, including the notes thereto to the effect
that such financial statements contain all adjustments (all of which are normal
recurring adjustments) necessary to present fairly the results of operations
and
financial position for the periods and as of the dates indicated.
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b)
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The
audited financial statements delivered pursuant to Section 3.04(a)
have
been prepared in accordance with generally accepted accounting principles
consistently applied in the United States, throughout the periods
involved. The financial statements of Harbin Humankind and China
Health,
respectively, present fairly, as of their respective dates, the financial
position of Harbin Humankind and China Health, respectively. Harbin
Humankind and China Health, respectively, did not have, as of the
date of
any such balance sheets, except as and to the extent reflected or
reserved
against therein, any liabilities or obligations (absolute or contingent)
which should be reflected in any financial statements or the notes
thereto
prepared in accordance with generally accepted accounting principles
in
the United States, and all assets reflected therein present fairly
the
assets of Harbin Humankind and China Health, respectively, in accordance
with generally accepted accounting principles in the United States.
The
statements of revenue and expenses and cash flows present fairly
the
financial position and results of operations of Harbin Humankind
and China
Health, respectively, as of their respective dates and for the respective
periods covered thereby.
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3.05
Outstanding Warrants and Options. China Health has no issued warrants or
options, calls, or commitments of any nature relating to the China Health Share
Capital, except as previously disclosed in writing to UFOG.
3.06
Information. The information concerning the Harbin Subsidiaries set forth in
this Agreement is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material
fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. The Harbin Subsidiaries shall cause the
information required to be delivered by them pursuant to this Agreement to
UFOG
to be updated after the date hereof up to and including the Closing
Date.
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3.07
Absence of Certain Changes or Events. Except as set forth in this Agreement,
since the date of the most recent Harbin Humankind balance sheet described
in
Section 3.04 and included in the information referred to in Section
3.06:
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a)
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There
has not been: (i) any material adverse change in the business, operations,
properties, level of inventory, assets, or condition of Harbin Humankind;
or (ii) any damage, destruction, or loss to Harbin Humankind materially
and adversely affecting the business, operations, properties, assets,
or
conditions of Harbin Humankind;
|
|
b)
|
Harbin
Humankind has not: (i) amended its constituent documents; (ii) declared
or
made, or agreed to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to holders of
share
capital or purchased or redeemed, or agreed to purchase or redeem,
any of
its share capital; (iii) waived any rights of value which in the
aggregate
are extraordinary and material considering the business of Harbin
Humankind; (iv) made any material change in its method of accounting;
(v)
entered into any other material transactions other than those contemplated
by this Agreement; (vi) made any material accrual or material arrangement
for or payment of bonuses or special compensation of any kind or
any
severance or termination pay to any present or former officer or
employee;
or (vii) made any material increase in any profit-sharing, bonus,
deferred
compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement made to, for, or with their officers,
directors, or employees;
|
|
c)
|
Harbin
Humankind has not (i) granted or agreed to grant any options, warrants,
or
other rights for its share capital, bonds, or other corporate securities
calling for the issuance thereof, except as previously disclosed
in
writing to UFOG; (ii) borrowed or agreed to borrow any funds or incurred,
or become subject to, any material obligation or liability (absolute
or
contingent) except liabilities incurred in the ordinary course of
business; (iii) paid any material obligation or liability (absolute
or
contingent) other than current liabilities reflected in or shown
on the
most recent Harbin Humankind balance sheet and current liabilities
incurred since that date in the ordinary course of business; (iv)
sold or
transferred, or agreed to sell or transfer, any of its material assets,
properties, or rights, or agreed to cancel any material debts or
claims;
(v) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or
termination is material, considering the business of Harbin Humankind;
or
(vi) issued, delivered, or agreed to issue or deliver any share capital,
bonds, or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock);
and
|
|
d)
|
To
the best knowledge of Harbin Humankind, it has not become subject
to any
law or regulation which materially and adversely affects, or in the
future
would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of Harbin
Humankind.
|
3.08
Litigation and Proceedings. There are no material actions, suits, or proceedings
pending or, to the knowledge of Harbin Humankind, threatened by or against
Harbin Humankind or adversely affecting Harbin Humankind, at law or in equity,
before any court or other governmental agency or instrumentality, domestic
or
foreign, or before any arbitrator of any kind. Harbin Humankind does
not have any knowledge of any default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule, or regulation of any court,
arbitrator, or governmental agency or instrumentality.
3.09
Material Contract Defaults. Harbin Humankind is not in default in any material
respect under the terms of any outstanding contract, agreement, lease, or other
commitment which is material to the business, operations, properties, assets,
or
condition of Harbin Humankind, and there is no event of default or other event
which, with notice or lapse of time or both, would constitute a default in
any
material respect under any such contract, agreement, lease, or other commitment
in respect of which Harbin Humankind has not taken adequate steps to prevent
such a default from occurring.
3.10
No Conflict With Other Instruments. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, or constitute an event of default
under, any material indenture, mortgage, deed of trust or other material
contract, agreement, or instrument to which Harbin Humankind is a party or
to
which any of its properties or operations are subject.
3.11
Governmental Authorizations. Harbin Humankind has all licenses, franchises,
permits, and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on
the
date of this Agreement. No authorization, approval, consent, or order
of, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and delivery
by
Harbin Humankind of this Agreement and the consummation by Harbin Humankind
of
the transactions contemplated hereby.
3.12
Compliance With Laws and Regulations. Harbin Humankind has complied with all
applicable statutes and regulations of any governmental entity or agency thereof
having jurisdiction over Harbin Humankind, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of Harbin Humankind or except
to
the extent that noncompliance would not result in the occurrence of any material
liability for Harbin Humankind. The consummation of this transaction
will comply with all applicable laws, rules and policies of the government
of
the People’s Republic of China.
3.13 Subsidiaries.
Harbin Humankind does not own beneficially or of record equity securities in
any
subsidiary that has not been previously disclosed to UFOG.
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6
-
3.14
Harbin Humankind Documents. Harbin Humankind has delivered to UFOG the following
documents, which are collectively referred to as the "Harbin Humankind
Documents" and which consist of the following dated as of the date of execution
of this Agreement, all certified by the Chief Executive Officer of Harbin
Humankind as complete, true, and accurate:
|
a)
|
A
copy of all of Harbin Humankind’s constituent documents and all amendments
thereto in effect as of the date of this
Agreement;
|
|
b)
|
Copies
of resolutions adopted by the board of directors of Harbin Humankind
approving this Agreement and the transactions herein
contemplated;
|
|
c)
|
A
document setting forth a description of any material adverse change
in the
business, operations, property, inventory, assets, or condition of
Harbin
Humankind since the most recent Harbin Humankind balance sheet required
to
be provided pursuant to Section 3.04 hereof, updated to the Closing
Date;
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ARTICLE
IV
CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE MAJORITY SHAREHOLDER AND THE HARBIN
SUBSIDIARIES
The
obligations of the Majority Shareholder and the Harbin Subsidiaries under this
Agreement are subject to the satisfaction or waiver, at or before the Closing
Date, of the following conditions:
4.01
Accuracy of Representations. The representations and warranties made by UFOG
in
this Agreement were true when made and shall be true at the Closing Date with
the same force and effect as if such representations and warranties were made
at
and as of the Closing Date, and UFOG shall have performed or complied with
all
covenants and conditions required by this Agreement to be performed or complied
with by UFOG prior to or at the Closing. The Majority Shareholder
shall be furnished with a certificate, signed by a duly authorized officer
of
UFOG and dated the Closing Date, to the foregoing effect.
4.02
Officer's Certificate. The Majority Shareholder shall have been furnished with
a
certificate dated the Closing Date and signed by the duly authorized Chief
Executive Officer of UFOG to the effect that to such officer's best knowledge
no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of UFOG threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement.
Furthermore, based on a certificate of good standing, and UFOG’s own documents
and information, the certificate shall represent, to the best knowledge of
the
officer, that:
|
a)
|
This
Agreement has been duly approved by UFOG’s board of directors and has been
duly executed and delivered in the name and on behalf of UFOG by
its duly
authorized officer pursuant to, and in compliance with, authority
granted
by the board of directors of UFOG pursuant to a majority
consent;
|
|
b)
|
There
have been no adverse changes in UFOG up to and including the date
of the
certificate;
|
|
c)
|
All
conditions required by this Agreement have been met, satisfied, or
performed by UFOG;
|
|
d)
|
All
authorizations, consents, approvals, registrations, reports, schedules
and/or filings with any governmental body including the Securities
and
Exchange Commission, agency, or court have been obtained or will
be
obtained by UFOG and all of the documents obtained by UFOG are in
full
force and effect or, if not required to have been obtained, will
be in
full force and effect by such time as may be required;
and
|
|
e)
|
There
is no claim action, suit, proceeding, inquiry, or investigation at
law or
in equity by any public board or body pending or threatened against
UFOG,
wherein an unfavorable decision, ruling, or finding could have an
adverse
effect on the financial condition of UFOG, the operation of UFOG,
or the
transactions contemplated herein, or any agreement or instrument
by which
UFOG is bound or in any way contests the existence of
UFOG.
|
4.03
No Litigation. As of the Closing, there shall not be pending any litigation
to
which UFOG, the Majority Shareholder, or the Harbin Subsidiaries is a party
and
which is reasonably likely to have a material adverse effect on the business
of
UFOG or the contemplated transactions.
4.04
Results of Due Diligence Investigation. The Majority Shareholder shall be
satisfied with the results of his due diligence investigation of UFOG, in his
sole discretion.
4.05
UFOG Shall Have No Liabilities as of Closing. As of the Closing, UFOG shall
have
no liabilities as such term is defined by U.S. generally accepted accounting
principles.
4.06
UFOG’s Outstanding Capital Stock at Closing. As of the Closing, the total
outstanding capital stock of UFOG shall consist of 62,234,732 shares of common
stock, after giving effect to the 60,000,000 share issuance contemplated hereby,
and there shall be no options, warrants, employee compensation or other rights
to issue common stock or preferred stock issued or outstanding.
-
7
-
4.07
UFOG Shall Have Filed and Mailed a Schedule 14F-1. UFOG shall have filed with
the Commission and mailed to its shareholders of record an Information Statement
on Schedule 14F-1, and ten days shall have passed since the date on which it
was
mailed to shareholders of record.
4.08
Consummation of the 1:20 Reverse Stock Split. Prior to the Closing, the 1:20
Reverse Stock Split shall have been consummated by filing an Information
Statement on Schedule 14C which shall have been filed and mailed to shareholders
of record, and twenty (20) days thereafter shall have elapsed.
4.09
No Material Adverse Change. There shall not be any change in, or effect on,
either of Harbin Humankind’s or UFOG’s assets, financial condition, operating
results, customer and employee relations, or business prospects or the financial
statements previously supplied by Harbin Humankind or UFOG which is, or may
reasonably be expected to be, materially adverse to the business, operations
(as
now conducted), assets, prospects or condition (financial or otherwise), of
Harbin Humankind or UFOG or to the contemplated transactions.
4.10
UFOG’s Over-The-Counter Bulletin Board Quotation. As of the Closing, the common
stock of UFOG shall be quoted on NASD’s Over-The-Counter Bulletin Board, and
shall be in good standing without an “E” or any other penalty being imposed by
NASD or the OTCBB.
4.11
Good Standing. The Majority Shareholder shall have received a certificate of
good standing from the appropriate authority, dated as of the date within five
days prior to the Closing Date, certifying that UFOG is in good standing as
a
corporation in the State of Delaware.
4.12
Other Items. The Majority Shareholder shall have received from UFOG such other
documents, legal opinions, certificates, or instruments relating to the
transactions contemplated hereby as the Majority Shareholder may reasonably
request.
ARTICLE
V
CONDITIONS
PRECEDENT TO OBLIGATIONS OF UFOG
The
obligations of UFOG under this Agreement are subject to the satisfaction, at
or
before the Closing Date, of the following conditions:
5.01
Accuracy of Representations. The representations and warranties made by the
Majority Shareholder and the Harbin Subsidiaries in this Agreement were true
when made and shall be true at the Closing Date with the same force and affect
as if such representations and warranties were made at and as of the Closing
Date (except for changes therein permitted by this Agreement), and the Majority
Shareholder and/or the Harbin Subsidiaries shall have performed or complied
with
all covenants and conditions required by this Agreement to be performed or
complied with by them prior to or at the Closing. UFOG shall be furnished with
a
certificate, signed by the Majority Shareholder and dated the Closing Date,
to
the foregoing effect.
5.02
Officer's Certificate. UFOG shall have been furnished with a certificate dated
the Closing Date and signed by the duly authorized Chief Executive Officer
of
Harbin Humankind to the effect that no litigation, proceeding, investigation,
or
inquiry is pending or, to the best knowledge of Harbin Humankind, threatened,
which might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement. Furthermore, based on
Harbin Humankind’s own documents, the certificate shall represent, to the best
knowledge of the officer, that:
|
a)
|
This
agreement has been duly approved by Harbin Humankind’s board of directors
and stockholders and has been duly executed and delivered in the
name and
on behalf of Harbin Humankind by its duly authorized officer pursuant
to,
and in compliance with, authority granted by the board of directors
of
Harbin Humankind;
|
|
b)
|
Except
as provided or permitted herein, there have been no material adverse
changes in Harbin Humankind up to and including the date of the
certificate;
|
|
c)
|
All
material conditions required by this Agreement have been met, satisfied,
or performed by Harbin Humankind and/or the Majority
Shareholder;
|
|
d)
|
All
authorizations, consents, approvals, registrations, and/or filings
with
any governmental body, agency, or court required in connection with
the
execution and delivery of the documents by Harbin Humankind and/or
the
Majority Shareholder have been obtained and are in full force and
effect
or, if not required to have been obtained will be in full force and
effect
by such time as may be required;
and
|
|
e)
|
There
is no material action, suit, proceeding, inquiry, or investigation
at law
or in equity by any public board or body pending or threatened against
Harbin Humankind, wherein an unfavorable decision, ruling, or finding
would have a material adverse affect on the financial condition of
Harbin
Humankind, the operation of Harbin Humankind, for the transactions
contemplated herein, or any material agreement or instrument by which
Harbin Humankind is bound or would in any way contest the existence
of
Harbin Humankind.
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5.03
No Litigation. As of the Closing, there shall not be pending any litigation
to
which UFOG, any of the Majority Shareholder or the Harbin Subsidiaries is a
party and which is reasonably likely to have a material adverse effect on the
business of Harbin Humankind or the contemplated transactions.
5.04
Results of Due Diligence Investigation. UFOG shall be satisfied with the results
of its due diligence investigation of Harbin Humankind, in its sole
discretion.
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8
-
5.05
No Material Adverse Change. There shall not be any change in, or effect on,
Harbin Humankind’s or UFOG’s assets, financial condition, operating results,
customer and employee relations, or business prospects or the financial
statements previously supplied by Harbin Humankind or UFOG which is, or may
reasonably be expected to be, materially adverse to the business, operations
(as
now conducted), assets, prospects or condition (financial or otherwise), of
the
Majority Shareholder or the Harbin Subsidiaries or to the contemplated
transactions.
5.06
Consummation
of the 1:20 Reverse Stock Split. Prior to the Closing, the 1:20 Reverse Stock
Split shall have been consummated by filing an Information Statement on Schedule
14C which shall have been filed and mailed to shareholders of record, and twenty
(20) days thereafter shall have elapsed.
5.07
Other Items. UFOG shall have received from the Majority Shareholder and/or
the
Harbin Subsidiaries such other documents, legal opinions, certificates, or
instruments relating to the transactions contemplated hereby as UFOG may
reasonably request.
ARTICLE
VI
SPECIAL
COVENANTS
6.01
Activities of UFOG and Harbin Humankind
|
a)
|
From
and after the date of this Agreement until the Closing Date and except
as
set forth in the respective documents to be delivered by UFOG and
Harbin
Humankind pursuant hereto or as permitted or contemplated by this
Agreement, UFOG and Harbin Humankind will
each:
|
|
i
|
Carry
on its business in substantially the same manner as it has
heretofore;
|
|
ii
|
Maintain
in full force and effect insurance, if any, comparable in amount
and in
scope of coverage to that now maintained by
it;
|
|
iii
|
Perform
in all material respects all of its obligations under material contracts,
leases, and instruments relating to or affecting its assets, properties,
and business;
|
|
iv
|
Use
its best efforts to maintain and preserve its business organization
intact, to retain its key employees, and to maintain its relationships
with its material suppliers and
customers;
|
|
v
|
Duly
and timely file for all taxable periods ending on or prior to the
Closing
Date all tax returns required to be filed by or on behalf of such
entity
or for which such entity may be held responsible and shall pay, or
cause
to pay, all taxes required to be shown as due and payable on such
returns,
as well as all installments of tax due and payable during the period
commencing on the date of this Agreement and ending on the Closing
Date;
and
|
|
vi
|
Fully
comply with and perform in all material respects all obligations
and
duties imposed on it by all laws and all rules, regulations, and
orders
imposed by governmental
authorities.
|
|
b)
|
From
and after the date of this Agreement and except as provided herein
until
the Closing Date, UFOG and Harbin Humankind will each
not:
|
|
i
|
Make
any change in its Articles of Incorporation, Bylaws or constituent
documents;
|
|
ii
|
Enter
into or amend any material contract, agreement, or other instrument
of any
of the types described in such party's documents, except that a party
may
enter into or amend any contract, agreement, or other instrument
in the
ordinary course of business; and
|
|
iii
|
Enter
into any agreement for the sale of UFOG securities or a merger or
sale of
substantially all of the assets of UFOG without the prior written
approval
of Harbin Humankind. The provisions governing such exclusivity are
set
forth in that certain Letter of Intent dated August 6, 2007, between
Harbin Humankind and UFOG (the “Letter of
Intent”).
|
6.02
Access to Properties and Records. Until the Closing Date, Harbin Humankind
and
UFOG will afford to the other party's officers and authorized representatives
and attorneys full access to the properties, books, and records of the other
party in order that each party may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of Harbin Humankind
or
UFOG and will furnish the other party with such additional financial and other
information as to the business and properties of Harbin Humankind or UFOG as
each party shall from time to time reasonably request. Additional provisions
governing such business review are set forth in paragraph 5 of the Letter of
Intent.
6.03
Indemnification by Harbin Humankind and the Majority Shareholder.
|
x.
|
Xxxxxx
Humankind will indemnify and hold harmless UFOG and its directors
and
officers, and each person, if any, who controls UFOG within the meaning
of
the Securities Act from and against any and all losses, claims, damages,
expenses, liabilities, or other actions to which any of them may
become
subject under applicable law (including the Securities Act and the
Securities Exchange Act) and will reimburse them for any legal or
other
expenses reasonably incurred by them in connection with investigating
or
defending any claims or actions, whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or
actions
arise out of or are based upon: (i) any untrue statement or alleged
untrue
statement of a material fact contained in any of the representations,
covenants and warranties set forth herein; or (ii) the breach of
any
covenant or agreement set forth herein. The indemnity set forth herein
shall survive the consummation of the transactions herein for a period
of
one year.
|
|
b.
|
The
Majority Shareholder will indemnify and hold harmless UFOG, its directors
and officers, and each person, if any, who controls UFOG within the
meaning of the Securities Act from and against any and all losses,
claims,
damages, expenses, liabilities, or other actions to which any of
them may
become subject under applicable law (including the Securities Act
and the
Securities Exchange Act) and will reimburse them for any legal or
other
expenses reasonably incurred by them in connection with investigating
or
defending any claims or actions, whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or
actions
arise out of or are based upon: (i) any untrue statement or alleged
untrue
statement of a material fact contained in any of the representations,
covenants and warranties set forth herein; or (ii) the breach of
any
covenant or agreement set forth herein. The indemnity set forth herein
shall survive the consummation of the transactions herein for a period
of
one year.
|
-
9
-
6.04
Indemnification by UFOG and Bontems.
|
a.
|
UFOG
will indemnify and hold harmless Harbin Humankind, the Majority
Shareholder, and Harbin Humankind’s directors and officers, and each
person, if any, who controls Harbin Humankind within the meaning
of the
Securities Act from and against any and all losses, claims, damages,
expenses, liabilities, or actions to which any of them may become
subject
under applicable law (including the Securities Act and the Securities
Exchange Act) and will reimburse them for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any claims or actions, whether or not resulting in liability, insofar
as
such losses, claims, damages, expenses, liabilities, or actions arise
out
of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact contained in any of the
representations, covenants and warranties set forth herein; or (ii)
the
breach of any covenant or agreement set forth herein. The indemnity
set
forth herein shall survive the consummation of the transactions herein
for
a period of one year.
|
|
x.
|
Xxxxxxx
will indemnify and hold harmless Harbin Humankind, the Majority
Shareholder, and Harbin Humankind’s directors and officers, and
each person, if any, who controls Harbin Humankind within the meaning
of
the Securities Act from and against any and all losses, claims, damages,
expenses, liabilities, or other actions to which any of them may
become
subject under applicable law (including the Securities Act and the
Securities Exchange Act) and will reimburse them for any legal or
other
expenses reasonably incurred by them in connection with investigating
or
defending any claims or actions, whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or
actions
arise out of or are based upon: (i) any untrue statement or alleged
untrue
statement of a material fact contained in any of the representations,
covenants and warranties set forth herein; or (ii) the breach of
any
covenant or agreement set forth herein. The indemnity set forth herein
shall survive the consummation of the transactions herein for a period
of
one year.
|
6.05
The Issuance of UFOG Common Stock. UFOG and the Majority Shareholder understand
and agree that the consummation of this Agreement, including the issuance of
the
UFOG Common Stock to the Majority Shareholder as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act and
applicable state statutes. UFOG and the Majority Shareholder agree that such
transactions shall be consummated in reliance on an exemption from registration
pursuant to the Securities Act of 1933, as amended (the “Act”), provided by
Regulation S. Such exemption is based on the following representations,
warranties and covenants made by the Majority Shareholder.
|
a)
|
Regulation
S Representations, Warranties and
Covenants.
|
The
Majority Shareholder represents and warrants to, and covenants with, UFOG as
follows:
|
(1)
|
The
Majority Shareholder is not a U.S. person and is not acquiring the
shares
of common stock of UFOG for the account or for the benefit of any
U.S.
person and is not a U.S. person who purchased the shares of common
stock
in a transaction that did not require registration under the
Act.
|
|
(2)
|
The
Majority Shareholder agrees to resell such common stock only in accordance
with the provisions of Regulation S, pursuant to registration under
the
Act, or pursuant to an available exemption from
registration.
|
|
(3)
|
The
Majority Shareholder agrees not to engage in hedging transactions
with
regard to such securities unless in compliance with the
Act.
|
|
(4)
|
The
Majority Shareholder consents to the certificate for the shares of
common
stock of UFOG to contain a legend to the effect that transfer is
prohibited except in accordance with the provisions of Regulation
S,
pursuant to registration under the Act, or pursuant to an available
exemption from registration, and that hedging transactions involving
the
shares of common stock may not be conducted unless in compliance
with the
Act.
|
|
(5)
|
The
Majority Shareholder acknowledges that UFOG has agreed to refuse
to
register any transfer of the shares of common stock not made in accordance
with the provisions of Regulation S, pursuant to registration under
the
Act, or pursuant to an available exemption from
registration.
|
|
(6)
|
The
Majority Shareholder covenants and represents and warrants in favor
of
UFOG that all of the representations and warranties set forth herein
shall
be true and correct at the time of Closing as if made on that
date.
|
|
b)
|
In
connection with the transaction contemplated by this Agreement, UFOG
shall
file, with its counsel, such notices, applications, reports, or other
instruments as may be deemed necessary or appropriate in an effort
to
document reliance on such exemptions, and the appropriate regulatory
authority in the countries where the Majority Shareholder resides
unless
an exemption requiring no filing is available in such jurisdictions,
all
to the extent and in the manner as may be deemed by such Parties
to be
appropriate.
|
6.06
Securities Filings. UFOG shall be responsible for the preparation and filing
of
all Securities Act and Exchange Act filings that may result from the
transactions contemplated in this Agreement, although counsel for the Majority
Shareholder may assist with the preparation and filing.
6.07
Sales of Securities under Rule 144, If Applicable.
|
a.
|
UFOG
will use its best efforts to at all times satisfy the current public
information requirements of Rule 144 promulgated under the
Act.
|
|
b.
|
If
any certificate representing any such restricted stock is presented
to
UFOG’s transfer agent for registration or transfer in connection with
any
sales theretofore made under Rule 144, provided such certificate
is duly
endorsed for transfer by the appropriate person(s) or accompanied
by a
separate stock power duly executed by the appropriate person(s) in
each
case with reasonable assurances that such endorsements are genuine
and
effective, and is accompanied by an opinion of counsel satisfactory
to
UFOG and its counsel that such transfer has complied with the requirements
of Rule 144, as the case may be, UFOG will promptly instruct its
transfer
agent to allow such transfer and to issue one or more new certificates
representing such shares to the transferee and, if appropriate under
the
provisions of Rule 144, as the case may be, free of any stop transfer
order or restrictive legend.
|
-
10
-
|
c.
|
Other
Representations, Warranties and
Covenants.
|
|
1)
|
The
Majority Shareholder has been furnished with and has carefully read
the
periodic reports on Forms 10-KSB, 10-QSB and 8-K filed by UFOG with
the
Securities and Exchange Commission during the preceding three years.
With
respect to individual or partnership tax and other economic considerations
involved in this investment, the Majority Shareholder confirms that
he is
not relying on UFOG (or any agent or representative of UFOG). The
Majority
Shareholder has carefully considered and has, to the extent such
person
believes such discussion necessary, discussed with his own legal,
tax,
accounting and financial advisers the suitability of an investment
in the
common stock for such particular tax and financial
situation.
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2)
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The
Majority Shareholder acknowledges that UFOG is a “shell company” with no
operations and no significant assets and that, as a result, the
consideration for the Shares far exceeds the value of the Shares
under any
recognized criteria of value. The Majority Shareholder further
acknowledges that he is aware of the quoted prices for UFOG’s common stock
on the OTC Bulletin Board but understands there is no active trading
market for such shares, quotations on the OTCBB represent inter-dealer
prices without retail xxxx-up, xxxx-down, or commission, and may
not
represent actual transactions, and there is no liquid trading market
for
UFOG’s common stock. As a result, there can be no assurance that the
Majority Shareholder will be able to sell the common
stock.
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3)
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The
Majority Shareholder has had an opportunity to inspect relevant documents
relating to the organization and business of UFOG. The Majority
Shareholder acknowledges that all documents, records and books pertaining
to this investment which such Majority Shareholder has requested
has been
made available for inspection by such Majority Shareholder and his
respective attorney, accountant or other
adviser(s).
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4)
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The
Majority Shareholder and/or his respective advisor(s) has/have had
a
reasonable opportunity to ask questions of, and receive answers and
request additional relevant information from, the officers of UFOG
concerning the transactions contemplated by this
Agreement.
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5)
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The
Majority Shareholder confirms that he is not acquiring the common
stock as
a result of or subsequent to any advertisement, article, notice or
other
communication published in any newspaper, magazine or similar media
or
broadcast over television or radio or presented at any
seminar.
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6)
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The
Majority Shareholder, by reason of such person’s business or financial
experience, has the capacity to protect his own interests in connection
with the transactions contemplated by this
Agreement.
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7)
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Except
as set forth in this Agreement, the Majority Shareholder represents
that
no representations or warranties have been made to him by UFOG, any
officer director, agent, employee, or affiliate of UFOG, and such
Majority
Shareholder has not relied on any oral representation by UFOG or
by any of
its officers, directors or agents in connection with his decision
to
acquire the common stock.
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8)
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The
Majority Shareholder represents that neither he nor any of his affiliates
is subject to any of the events described in Section 262(b) of Regulation
A promulgated under the Act.
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9)
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The
Majority Shareholder has adequate means for providing for his current
financial needs and contingencies, is able to bear the substantial
economic risks of an investment in the UFOG common stock for an indefinite
period of time, has no need for liquidity in such investment and,
at the
present time, could afford a complete loss of such
investment.
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10)
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The
Majority Shareholder has such knowledge and experience in financial,
tax
and business matters so as to enable him to use the information made
available to him in connection with the transaction to evaluate the
merits
and risks of an investment in the UFOG common stock and to make an
informed investment decision with respect
thereto.
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11)
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The
Majority Shareholder understands that the UFOG common stock constitutes
“restricted securities” that have not been registered under the Securities
Act or any applicable state securities law and he is acquiring the
same as
principal for his own account for investment purposes and not for
distribution. The Majority Shareholder acknowledges that the common
stock
has not been registered under the Act or under any the securities
act of
any state or country. The Majority Shareholder understands further
that in
absence of an effective registration statement, the common stock
can only
be sold pursuant to some exemption from
registration.
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12)
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The
Majority Shareholder recognizes that investment in the UFOG common
stock
involves substantial risks. The Majority Shareholder acknowledges
that he
has reviewed the risk factors identified in the periodic reports
filed by
UFOG with the Securities and Exchange Commission. The Majority Shareholder
further confirms that he is aware that no federal or state agencies
have
passed upon this transaction or made any finding or determination
as to
the fairness of this investment.
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13)
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The
Majority Shareholder acknowledges that each stock certificate representing
the common stock shall contain a legend substantially in the following
form:
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THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”) PURSUANT TO AN EXEMPTION FROM REGISTRATION AFFORDED BY
REGULATION S AND HAVE NOT BEEN REGISTERED UNDER APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR
PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT THE
PURCHASER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL (WHICH OPINION AND
COUNSEL ARE REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY
OF SUCH EXEMPTION. THE HOLDER AGREES TO REFRAIN FROM HEDGING TRANSACTIONS
PURSUANT TO THE REQUIREMENTS OF REGULATION S.
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4.06
Securities Filings. The Majority Shareholder, as the controlling shareholder
of
UFOG following Closing, shall cause UFOG to timely prepare and file all
Securities Act and Exchange Act filings that may result from or be required
in
connection with the transactions contemplated in this Agreement.
ARTICLE
VII
MISCELLANEOUS
7.01
Brokers. No broker’s or finder’s fee will be paid in connection with the
transaction contemplated by this Agreement, except for the payment of fees
to
Xxxxxx Xxxxx, which is the responsibility of Harbin Humankind.
7.02
No Representation Regarding Tax Treatment. No representation or warranty is
being made by any party to any other party regarding the treatment of this
transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding the
treatment of this transaction for federal and state income taxes and on no
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03
Governing Law. This Agreement shall be governed by, enforced and construed
under
and in accordance with the laws of the State of Delaware without giving effect
to principles of conflicts of law thereunder. All controversies, disputes or
claims arising out of or relating to this Agreement shall be resolved by binding
arbitration. The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. Each
arbitrator shall possess such experience in, and knowledge of, the subject
area
of the controversy or claim so as to qualify as an “expert” with respect to such
subject matter. The prevailing party shall be entitled to receive its reasonable
attorney’s fees and all costs relating to the arbitration. Any award rendered by
arbitration shall be final and binding on the Parties, and judgment thereon
may
be entered in any court of competent jurisdiction.
7.04
Notices. Any notices or other communications required or permitted hereunder
shall be sufficiently given if personally delivered, if sent by facsimile or
telecopy transmission or other electronic communication confirmed by registered
or certified mail, postage prepaid, or if sent by prepaid overnight courier
addressed as follows:
If
to
Universal Fog, Inc., to:
0000
Xxxxx 0xx
Xxxxxx
Xxxxxxx,
XX 00000
If
to
Harbin Humankind, to:
000
Xxxxxx Xxxxxx
Songbei
District, Harbin City
Heilongjiang
Province, People’s Republic of China
or
such
other addresses as shall be furnished in writing by any party in the manner
for
giving notices, hereunder, and any such notice or communication shall be deemed
to have been given as of the date so delivered or sent by facsimile or telecopy
transmission or other electronic communication, or one day after the date so
sent by overnight courier.
7.05
Attorney's Fees. In the event that any party institutes any action or suit
to
enforce this Agreement or to secure relief from any default hereunder or breach
hereof, the breaching party or parties shall reimburse the non-breaching party
or parties for all costs, including reasonable attorneys' fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
7.06
Document; Knowledge. Whenever, in any section of this Agreement, reference
is
made to information set forth in the documents provided by UFOG or the Majority
Shareholder, such reference is to information specifically set forth in such
documents and clearly marked to identify the section of this Agreement to which
the information relates. Whenever any representation is made to the "knowledge"
of any party, it shall be deemed to be a representation that no officer or
director of such party, after reasonable investigation, has any knowledge of
such matters.
7.07
Entire Agreement. This Agreement represents the entire agreement between the
Parties relating to the subject matter hereof. All previous agreements between
the Parties, whether written or oral, have been merged into this Agreement.
This
Agreement alone fully and completely expresses the agreement of the Parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
7.08
Survival, Termination. The representations, warranties, and covenants of the
respective Parties shall survive the Closing Date and the consummation of the
transactions herein contemplated for a period of one year from the Closing
Date,
unless otherwise provided herein.
7.09
Counterparts. This Agreement may be executed in multiple counterparts, each
of
which shall be deemed an original and all of which taken together shall be
but a
single instrument. In addition, facsimile or electronic signatures shall have
the same legally binding effect as original signatures.
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12
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7.10
Amendment or Waiver. Every right and remedy provided herein shall be cumulative
with every other right and remedy, whether conferred herein, at law, or in
equity, and such remedies may be enforced concurrently, and no waiver by any
party of the performance of any obligation by the other shall be construed
as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement
may
be amended by a writing signed by all Parties hereto, with respect to any of
the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance thereof may be extended by a writing signed
by the party or parties for whose benefit the provision is
intended.
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as
of the date first above written.
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UNIVERSAL
FOG, INC.
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HARBIN
HUMANKIND BIOLOGY TECHNOLOGY CO. LIMITED
|
|
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By
/s/ Xxxxxx Xxxxxxx
|
By
/s/ Sun Xin
|
|
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Xxxxxx
Xxxxxxx
|
Sun
Xin
|
|
|
Chief
Executive Officer
|
Chairman
and CEO
|
|
|
XXXXXX
XXXXXXX
|
SUN
XIN
|
|
| /s/ Xxxxxx Xxxxxxx | /s/ Sun Xin | |
|
(In
His Individual Capacity)
|
(In
His Individual Capacity)
|
|
|
CHINA
HEALTH INDUSTRIES HOLDINGS LTD.
|
||
|
By
/s/ Sun Xin
|
||
|
Name:
Sun Xin
|
||
|
Title:
Chairman
|
||
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