SHARE EXCHANGE AGREEMENT
by and among
FRESH IDEAS MEDIA, INC.,
EVER AUSPICIOUS INTERNATIONAL LIMITED,
and
BRIGHT PRAISE ENTERPRISES LIMITED
Dated as November 10, 2008
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TABLE OF CONTENTS
PAGE
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF HKCO 1
Section 1.01 Organization 1
Section 1.02 Capitalization 1
Section 1.03 Subsidiaries and Predecessor Corporations 2
Section 1.04 Financial Statements. 2
Section 1.05 Information 2
Section 1.06 Options or Warrants 2
Section 1.07 Absence of Certain Changes or Events 2
Section 1.08 Litigation and Proceedings 3
Section 1.09 Contracts. 3
Section 1.10 No Conflict With Other Instruments 4
Section 1.11 Compliance With Laws and Regulations 4
Section 1.12 Approval of Agreement 4
Section 1.13 Valid Obligation 4
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF USCO 4
Section 2.01 Organization 4
Section 2.02 Capitalization 4
Section 2.03 Subsidiaries and Predecessor Corporations 4
Section 2.04 Financial Statements. 5
Section 2.05 Information 5
Section 2.06 Options or Warrants 5
Section 2.07 Absence of Certain Changes or Events 5
Section 2.08 Litigation and Proceedings 6
Section 2.09 Contracts 6
Section 2.10 No Conflict With Other Instruments 6
Section 2.11 Compliance With Laws and Regulations 6
Section 2.12 Approval of Agreement 6
Section 2.13 Material Transactions or Affiliations 6
Section 2.14 Bank Accounts; Power of Attorney 7
Section 2.15 Valid Obligation. 7
Section 2.16 Filings. 7
Section 2.17 OTCBB 7
ARTICLE III PLAN OF EXCHANGE 7
Section 3.01 The Exchange. 7
Section 3.02 Anti-Dilution 7
Section 3.03 Closing Events 7
Section 3.04 Termination 8
ARTICLE IV SPECIAL COVENANTS 8
Section 4.01 Access to Properties and Records 8
Section 4.02 Delivery of Books and Records 8
Section 4.03 Third Party Consents and Certificates 8
Section 4.04 Board Actions. 8
Section 4.05 Cancellation of Certain Shares of USCo Common
Stock. 8
Section 4.06 Designation of Directors and Officer. 9
Section 4.07 Exclusive Dealing Rights. 9
Section 4.08 Actions Prior to Closing 10
Section 4.09 Indemnification. 10
Section 4.10 The Acquisition of USCo Common Stock 11
Section 4.11 Sales of Securities Under Rule 144, If Applicable. 11
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF USCO 12
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Section 5.01 Accuracy of Representations and Performance of
Covenants 12
Section 5.02 Officer?s Certificate 12
Section 5.03 Good Standing 12
Section 5.04 No Governmental Prohibition 12
Section 5.05 Consents 12
Section 5.06 Other Items 12
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF HKCO AND THE HKCO
STOCKHOLDER 12
Section 6.01 Accuracy of Representations and Performance of
Covenants 12
Section 6.02 Officer?s Certificate 12
Section 6.03 Good Standing 13
Section 6.04 No Governmental Prohibition 13
Section 6.05 Consents 13
Section 6.06 Other Items 13
ARTICLE VII MISCELLANEOUS 13
Section 7.01 Brokers 13
Section 7.02 Governing Law 13
Section 7.03 Notices 13
Section 7.04 Attorney?s Fees 14
Section 7.05 Confidentiality 14
Section 7.06 Public Announcements and Filings 14
Section 7.07 Schedules; Knowledge 15
Section 7.08 Third Party Beneficiaries 15
Section 7.09 Expenses 15
Section 7.10 Entire Agreement 15
Section 7.11 Survival; Termination 15
Section 7.12 Counterparts 15
Section 7.13 Amendment or Waiver 15
Section 7.14 Best Efforts 15
Section 7.15 References 16
Exhibits
A. Suitability Letter
B. Investment Letter
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SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (hereinafter referred to as this ?Agreement?)
is entered into as of November 10, 2008 (the ?Closing Date?), by and between
FRESH IDEAS MEDIA, INC., a Nevada corporation (hereinafter referred to as
?USCo?), with principal offices located at 0000 Xxxxxx Xxxx Xxxxx, Xxxxxx
Xxxx, Xxxxxxxx, EVER AUSPICIOUS INTERNATIONAL LIMITED, a Hong Kong
corporation (hereinafter referred to as ?HKCo?) and BRIGHT PRAISE
ENTERPRISES LIMITED (the ?HKCo Stockholder?), a British Virgin Islands
company, upon the following premises:
Premises
WHEREAS, USCo is a publicly held corporation organized under the laws of
the State of Nevada with no significant operations;
WHEREAS, Xxxxxxx X. Xxx and Xxxx Daily (each, a ?Principal USCo Stockholder?
and collectively, the ?Principal USCo Stockholders?) are currently the
principal stockholders of USCo, with (a) Xxxxxxx X. Xxx owning, directly
or indirectly, 1,800,000 shares of USCo Common Stock (as defined below),
representing approximately 23.89% of the issued and outstanding USCo Common
Stock as of the date hereof, and (b) Xxxx Daily owning, 1,250,000 shares
of USCo Common Stock, representing approximately 16.59% of the issued and
outstanding USCo Common Stock as of the date hereof;
WHEREAS, HKCo is a privately held corporation organized under the laws of
Hong Kong;
WHEREAS, USCo agrees to acquire 100% of the issued and outstanding capital
stock of HKCo in exchange for the issuance of certain shares of USCo Common
Stock (the ?Exchange?) and the HKCo Stockholder agrees to exchange its shares
of HKCo on the terms described herein; and
WHEREAS, the parties hereto intend for this transaction to constitute a
tax-free reorganization pursuant to the provisions of Section 368(a)(1)(B)
of the Internal Revenue Code of 1986, as amended.
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, and intending to be legally
bound hereby, it is hereby agreed as follows:
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF HKCO
As an inducement to, and to obtain the reliance of, USCo, and except as set
forth in the corresponding disclosure schedules delivered by HKCo in
connection with this Agreement (the ?HKCo Schedules?), HKCo represents and
warrants, as of the date hereof and as of the Closing Date, as defined below,
as follows:
Organization . HKCo is a corporation duly organized, validly existing, and
in good standing under the laws of Hong Kong and has the corporate power
and is duly authorized under all applicable laws, regulations, ordinances,
and orders of public authorities to carry on its business in all material
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respects as it is now being conducted. Included in Schedule 1.01 of the
HKCo Schedules are complete and correct copies of the articles of association
(such documents, or other equivalent corporate organizational documents,
the ?Organizational Documents?) of HKCo as in effect on the date hereof.
The execution and delivery of this Agreement does not, and the consummation
of the transactions contemplated hereby, including the transactions
contemplated in Sections 4.04 and 4.05 (collectively, the ?Contemplated
Transactions?) will not, violate any provision of HKCo?s Organizational
Documents. HKCo has full power, authority, and legal right and has taken
all action required by law, its Organizational Documents, or otherwise to
authorize the execution and delivery of this Agreement and to consummate
the Contemplated Transactions.
Capitalization . The authorized capital stock of HKCo consists of ten
thousand (10,000) shares of ordinary shares, par value of HK$1.00 per share
(the ?HKCo Common Stock?), all of which are currently issued and outstanding.
All 10,000 shares of HKCo Common Stock are legally issued, fully paid, and
non-assessable and not issued in violation of the preemptive or other rights
of any person.
Subsidiaries and Predecessor Corporations . Except as set forth on Schedule
1.03, HKCo does not have any predecessor corporation(s) or subsidiaries,
and does not own, beneficially or of record, any shares of any other
corporation. For purposes hereinafter, the term ?HKCo? also includes those
subsidiaries set forth in Schedule 1.03 of the HKCo Schedules.
Financial Statements.
Included in Schedule 1.04 of the HKCo Schedules are (a) the audited balance
sheets of Tianjin Seashore New District Shisheng Business Trading Group Co.
Ltd. (?Shisheng?), the wholly owned subsidiary of HKCo, as of December 31,
2006 and December 31, 2007 and the related audited statements of operations,
stockholders? equity and cash flows for the fiscal years ended December 31,
2005, December 31, 2006, December 31, 2007, together with the notes to such
statements and the opinion of Stonefield Xxxxxxxxx, Inc., independent
certified public accountants, and (b) the unaudited balance sheet of
Shisheng as of June 30, 2008 (together with the balance sheets of Shisheng
as of December 31, 2006 and 2007, the ?Shisheng Balance Sheets?) and the
related unaudited statements of operations, stockholders? equity and cash
flows for the six-month period ended June 30, 2008 (the financial statements
referred to in (a) and (b) collectively, the ?Shisheng Financial
Statements?).
The Shisheng Financial Statements have been prepared in accordance with
United States generally accepted accounting principles (?GAAP?)
consistently applied throughout the periods involved. The Shisheng Balance
Sheets are true and accurate and fairly present as of their respective dates
the financial condition of Shisheng. As of the respective dates of the
Shisheng Balance Sheets, except as and to the extent reflected or reserved
against therein, Shisheng had no liabilities or obligations (absolute or
contingent) which should be reflected in the Shisheng Balance Sheets or the
notes thereto prepared in accordance with GAAP, and all assets reflected
therein are properly reported and fairly present the value of the assets
of Shisheng, in accordance with GAAP. The statements of operations,
