AGREEMENT AND PLAN OF MERGER
Execution
Copy
This
AGREEMENT
AND PLAN OF MERGER
(this
“Agreement”)
has
been made as of August 4, 2006, by and among Supreme Realty Investments, Inc.,
a
Nevada corporation (“SRLT”),
XY Acquisition
Corporation, a Nevada corporation and a wholly-owned Subsidiary of SRLT
(“Sub”),
Home
System Group, Inc., a British Virgin Islands corporation (“HSG”),
and
the shareholders of HSG, each of whom is identified on Schedule
A
to this
Agreement (the “HSG
Shareholders”).
Whereas,
the
respective Boards of Directors of SRLT, Sub and HSG have approved the merger,
pursuant and subject to the terms and conditions of this Agreement, of Sub
with
and into HSG (the “Merger”),
whereby all of the issued and outstanding shares of the Common Stock of HSG
(the
“HSG
Common Stock”)
will be
converted into the right to receive a specified number of shares of the Common
Stock of SRLT (the “SRLT
Common Stock”);
and
the parties each desire to make certain representations, warranties and
agreements in connection with the Merger and also to prescribe various
conditions to the Merger;
Now,
Therefore,
in
consideration of the premises and the representations, warranties and covenants
herein contained, the parties agree to effect the Merger on the terms and
conditions herein provided and further agree as follows:
ARTICLE
1. definitions
1.1 Definitions.
In
addition to the other definitions contained in this Agreement, the following
terms will, when used in this Agreement, have the following respective
meanings:
“Affiliate”
means a
Person that, directly or indirectly, controls, is controlled by, or is under
common control with, the referenced party.
“Claim”
means
any
contest, claim, demand, assessment, action, suit, cause of action, complaint,
litigation, proceeding, hearing, arbitration, investigation or notice of any
of
the foregoing involving any Person.
“Closing”
means
the consummation of the Merger.
“Code”
means
the Internal Revenue Code of 1986, as amended, together with all rules and
regulations promulgated thereunder.
“Constituent
Corporations”
means
HSG and Sub, as the constituent corporations of the Merger.
“GAAP”
means
United States generally accepted accounting practices.
“GCL”
means
the
Nevada General Corporation Law.
“Person”
means
and includes any individual, partnership, corporation, trust, company,
unincorporated organization, joint venture or other entity, and any Governmental
Entity.
“Record
Holder”
means a
holder of record of HSG Common Stock as shown on the regularly maintained stock
transfer records of HSG.
“Subsidiary”
means,
with respect to any Person, any corporation, partnership, joint venture, trust
or other entity of which such Person, directly or indirectly through an
Affiliate, owns an amount of voting securities, or possesses other ownership
interests, having the power, direct or indirect, to elect a majority of the
Board of Directors or other governing body thereof.
“Surviving
Corporation” means
HSG, as the surviving corporation of the Merger.
“U.S.”
means
the
United States of America.
1.2 Interpretation.
In
this
Agreement, unless the express context otherwise requires:
(a) the
words
“herein,” “hereof”
and
“hereunder
and
words
of similar import refer to this Agreement as a whole and not to any particular
provision of this Agreement;
(b) references
to “Article”
or
“Section”
are
to
the respective Articles and Sections of this Agreement, and references to
“Exhibit”
or
“Schedule”
are to
the respective Exhibits and Schedules annexed hereto;
(c) references
to a “party”
means a
party to this Agreement and include references to such party’s successors and
permitted assigns;
(d) references
to a “third
party”
means a
Person that is neither a Party to this Agreement nor an Affiliate thereof;
(e) the
terms
“dollars”
and
“$”
means
U.S. dollars;
(f) terms
defined in the singular have a comparable meaning when used in the plural,
and
vice versa;
(g) the
masculine pronoun includes the feminine and the neuter, and vice versa, as
appropriate in the context; and
(h) wherever
the word “include,” “includes”
or
“including
is
used
in this Agreement, it will be deemed to be followed by the words “without
limitation.”
ARTICLE
2. THE
MERGER
2.1 Effective
Time of the Merger.
Subject
to the provisions of this Agreement, the Merger will be consummated by the
filing with the Secretary of State of the State of Nevada of articles of merger,
in such form as required by, and signed and attested in accordance with, the
relevant provisions of the GCL (the time of such filing or such later time
and
date as is specified in such filing being the “Effective
Time”).
2
2.2 Closing.
The
Closing will take place at 10:00 a.m., local time, on the earliest date
practicable after all of the conditions set forth in Article 9 are satisfied
or
waived by the appropriate party, but in no event later than the applicable
date
referred to in Section 10.1(d) (the “Closing
Date”),
unless
another time, date or place is agreed to in writing by the parties.
2.3 Effects
of the Merger.
By
virtue
of the Merger and without the necessity of any action by or on behalf of the
Constituent Corporations, or either of them:
(a) at
the
Effective Time, (i) the separate existence of Sub will cease, and Sub will
be
merged with and into HSG, and (ii) the certificate of incorporation and bylaws
of HSG as in effect immediately prior to the Effective Time will be the
certificate of incorporation and bylaws of the Surviving Corporation until
thereafter amended; and
(b) at
and
after the Effective Time, the Surviving Corporation will possess all the rights,
privileges, powers and franchises of a public as well as of a private nature,
and be subject to all the restrictions, disabilities and duties, of each of
the
Constituent Corporations; and all property, real, personal and mixed, and all
debts due to either of the Constituent Corporations on whatever account, as
well
for stock subscriptions as all other things in action or belonging to each
of
the Constituent Corporations will be vested in the Surviving Corporation; and
all property, rights, privileges, powers and franchises, and all and every
other
interest will be thereafter as effectually be the property of the Surviving
Corporation as they were of the respective Constituent Corporations, and the
title to any real estate vested by deed or otherwise, in either of the
Constituent Corporations, will not revert or be in any way impaired; but all
rights of creditors and all liens upon any property of either of the Constituent
Corporations will be preserved unimpaired, and all debts, liabilities and duties
of the respective Constituent Corporations will thereafter attach to the
Surviving Corporation, and may be enforced against it to the same extent as
if
such debts and liabilities had been incurred or contracted by it.
ARTICLE
3. EFFECT
OF MERGER ON CAPITAL STOCK
3.1 Effect
on Capital Stock.
As
of the
Effective Time, by virtue of the Merger and without any action on the part
of
any holder of shares of HSG Common Stock or of shares of the capital stock
of
Sub:
(a) Capital
Stock of Sub. Each
issued and outstanding share of the capital stock of Sub will be converted
into
the right to receive one fully paid and non-assessable share of the capital
stock of the Surviving Corporation.
(b) Cancellation
of Treasury Stock. Shares
of
HSG Common Stock, if any, that are held by HSG as treasury stock will be
cancelled and retired and will cease to exist, and no Merger Consideration
will
be delivered in exchange therefor. Shares of Supreme Realty Investments, Inc.
Common Stock, if any, owned by HSG as of the Effective Time will remain
unaffected by the Merger.
3
(c) Exchanged
Shares; Merger
Consideration.
(i) “Exchanged
Shares”
means
all shares of HSG Common Stock issued and outstanding immediately prior to
the
Effective Time other than shares of HSG Common Stock, if any, held by HSG as
treasury stock.
(ii) The
consideration payable in the Merger will consist of an aggregate of eight
million (8,000,000) shares of Supreme Realty Investments, Inc. Common Stock,
which shall be distributed among the HSG Shareholders in accordance with
Schedule
A
hereto
(the “Stock
Merger Consideration”).
(iii) “Merger
Consideration” means
the
Stock Merger Consideration.
(d) Exchange
of Exchanged Shares for Merger Consideration.
As of
the Effective Time, by virtue of the Merger, each issued and outstanding
Exchanged Share will be converted into the right to receive the Merger
Consideration, payable, to the Record Holders of Exchanged Shares at the
Effective Time. As of the Effective Time, all
shares of HSG Common Stock will no longer be outstanding and will automatically
be cancelled and retired and will cease to exist, and each holder of a
certificate representing any such shares will cease to have any rights with
respect thereto, except the right to receive the Merger Consideration therefor,
without interest, upon the surrender of such certificate in accordance with
Section 3.2.
3.2 Exchange
of Merger Consideration for Exchanged Shares.
(a) Exchange.
On the
Closing Date, the holders of all of the HSG Common Stock shall deliver to
Supreme Realty Investments, Inc. certificates or other documents evidencing
all
of the issued and outstanding HSG Common Stock, duly endorsed in blank or with
executed power attached thereto in transferable form. In exchange for all of
the
HSG Common Stock tendered pursuant hereto, Supreme Realty Investments, Inc.
shall issue to HSG Shareholders the Stock Merger Consideration.
(b) No
Further Ownership Rights in HSG Common Stock.
All
shares of Supreme Realty Investments, Inc. Common Stock issued upon the
surrender for exchange of shares of HSG Common Stock in accordance with the
terms hereof will be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of HSG Common Stock, and there will be no
further registration of transfers of the shares of HSG Common Stock (other
than
shares held directly or indirectly by Supreme Realty Investments, Inc.) after
the Effective Time. If, after the Effective Time, Certificates are presented
to
the Surviving Corporation or its transfer agent for any reason, such
Certificates will be cancelled and exchanged as provided by this Article 3.
ARTICLE
4. REPRESENTATIONS
AND WARRANTIES OF HSG
HSG
represents and warrants to Supreme Realty Investments, Inc. and to Sub as
follows, as of the date hereof and as of the Closing Date:
4
4.1 Organization.
HSG
is a
corporation duly organized, validly existing and in good standing under the
laws
of British Virgin Island and has the corporate power and is 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, including qualification to do business as a foreign entity in the
country or states in which the character and location of the assets owned by
it
or the nature of the business transacted by it requires qualification. Included
in the attached Schedules (as hereinafter defined) are complete and correct
copies of the articles of incorporation, bylaws and amendments thereto as in
effect on the date hereof. 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 HSG’s
certificate of incorporation or bylaws. HSG has full power, authority and legal
right and has taken all action required by law, its articles of incorporation,
bylaws or otherwise to authorize the execution and delivery of this
Agreement.
4.2 Capitalization.
The
authorized capitalization of HSG consists of 50,000 shares of common stock,
no
par value and no preferred shares. As of the date hereof, there are 50,000
shares of common stock issued and outstanding. All issued and outstanding common
shares have been legally issued, fully paid, are nonassessable and not issued
in
violation of the preemptive rights of any other person. HSG has no other
securities, warrants or options authorized or issued.
4.3 Subsidiaries.
HSG
owns
100% of Oceanic International (Hong Kong) Limited, a Hong Kong, China
corporation.
4.4 Tax
Matters; Books & Records
(a) The
books
and records, financial and others, of HSG are in all material respects complete
and correct and have been maintained in accordance with good business accounting
practices; and
(b) HSG
has
no liabilities with respect to the payment of any country, federal, state,
county, local or other taxes (including any deficiencies, interest or
penalties).
(c) HSG
shall
remain responsible for all debts incurred prior to the closing.
4.5 Information.
The
information concerning HSG as set forth in this Agreement and in the attached
Schedules 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.
4.6 Title
and Related Matters.
HSG
has
good and marketable title to and is the sole and exclusive owner of all of
its
properties, inventory, interests in properties and assets, real and personal
(collectively, the “Assets”) free and clear of all liens, pledges, charges or
encumbrances. Except as set forth in the Schedules attached hereto, HSG owns
free and clear of any liens, claims, encumbrances, royalty interests or other
restrictions or limitations of any nature whatsoever and all procedures,
techniques, marketing plans, business plans, methods of management or other
information utilized in connection with HSG’s business. Except as set forth in
the attached Schedules, no third party has any right to, and HSG has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
proprietary techniques, trademarks, service marks, trade names or copyrights
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a materially adverse affect on the business,
operations, financial conditions or income of HSG or any material portion of
its
properties, assets or rights.
5
4.7 Litigation
and Proceedings
There
are
no actions, suits or proceedings pending or threatened by or against or
affecting HSG, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign or before any arbitrator of
any
kind that would have a material adverse effect on the business, operations,
financial condition, income or business prospects of HSG. HSG 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.
4.8 Contracts.
On
the
Closing Date:
(a) Except
as
set forth on Schedule, there are no material contracts, agreements, franchises,
license agreements, or other commitments to which HSG is a party or by which
it
or any of its properties are bound;
(b) HSG
is
not a party to any contract, agreement, commitment or instrument or subject
to
any charter or other corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely affects, or in the
future may (as far as HSG can now foresee) materially and adversely affect,
the
business, operations, properties, assets or conditions of HSG; and
(c) HSG
is
not a party to any material oral or written: (i) contract for the employment
of
any officer or employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension, benefit or retirement plan, agreement
or
arrangement covered by Title IV of the Employee Retirement Income Security
Act,
as amended; (iii) agreement, contract or indenture relating to the borrowing
of
money; (iv) guaranty of any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties of obligations,
which, in the aggregate exceeds $1,000; (v) consulting or other contract with
an
unexpired term of more than one year or providing for payments in excess of
$10,000 in the aggregate; (vi) collective bargaining agreement; or (vii)
contract, agreement, or other commitment involving payments by it for more
than
$10,000 in the aggregate.
4.9 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 HSG is a party or to which any of its properties or operations are
subject.
6
4.10 Material
Contract Defaults.
To
the
best of HSG’s knowledge and belief, it 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 HSG, and there is no event of default in any material respect
under
any such contract, agreement, lease or other commitment in respect of which
HSG
has not taken adequate steps to prevent such a default from
occurring.
4.11
Governmental Authorizations.
To
the
best of HSG’s knowledge, HSG has all licenses, franchises, permits and other
governmental authorizations that are legally required to enable it to conduct
its business operations in all material respects as conducted on the date
hereof. Except for compliance with federal and state securities or corporation
laws, 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 HSG of the transactions
contemplated hereby.
4.12 Compliance
With Laws and Regulations.
To
the
best of HSG’s knowledge and belief, HSG has complied with all applicable
statutes and regulations of any federal, state or other governmental entity
or
agency thereof, except to the extent that noncompliance would not materially
and
adversely affect the business, operations, properties, assets or condition
of
HSG or would not result in HSG’s incurring any material liability.
4.13 Insurance.
All
of
the insurable properties of HSG are insured for HSG’s benefit under valid and
enforceable policy or policies containing substantially equivalent coverage
and
will be outstanding and in full force at the Closing Date.
4.14 Approval
of Agreement.
The
directors of HSG have authorized the execution and delivery of the Agreement
and
have approved the transactions contemplated hereby.
4.15 Material
Transactions or Affiliations.
As
of the
Closing Date, there will exist no material contract, agreement or arrangement
between HSG and any person who was at the time of such contract, agreement
or
arrangement an officer, director or person owning of record, or known by HSG
to
own beneficially, ten percent (10%) or more of the issued and outstanding Common
Shares of HSG and which is to be performed in whole or in part after the date
hereof. HSG has no commitment, whether written or oral, to lend any funds to,
borrow any money from or enter into any other material transactions with, any
such affiliated person.
7
ARTICLE
5. REPRESENTATIONS
AND WARRANTIES OF SUPREME REALTY INVESTMENTS, INC.
Supreme
Realty Investments, Inc. represents and warrants to HSG, as of the date hereof
and as of the Closing Date, as follows:
5.1 Organization.
Supreme
Realty Investments, Inc. is a corporation duly organized, validly existing,
and
in good standing under the laws of Nevada and has the corporate power and is
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, including qualification to do business as a foreign
corporation in the jurisdiction in which the character and location of the
assets owned by it or the nature of the business transacted by it requires
qualification. 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 Supreme Realty
Investments, Inc.’s articles of incorporation or bylaws. Supreme Realty
Investments, Inc. has full power, authority and legal right and has taken all
action required by law, its articles of incorporation, its bylaws or otherwise
to authorize the execution and delivery of this Agreement.
5.2 Capitalization.
The
authorized capitalization of Supreme Realty Investments, Inc. consists of
200,000,000 shares of common stock, $0.001 par value per share. As of the date
hereof, Supreme Realty Investments, Inc. has approximately 6,754,000 shares
of
common stock issued and outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in violation
of
the preemptive or other rights of any person.
5.3 Subsidiaries.
Supreme
Realty Investments, Inc. has no subsidiaries other than Sub.
5.4 Tax
Matters: Books and Records.
(a) The
books
and records, financial and others, of Supreme Realty Investments, Inc. are
in
all material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) Supreme
Realty Investments, Inc. has no liabilities with respect to the payment of
any
country, federal, state, county, or local taxes (including any deficiencies,
interest or penalties).
(c) Supreme
Realty Investments, Inc. shall remain responsible for all debts incurred by
Supreme Realty Investments, Inc. prior to the date of closing.
8
5.5 Litigation
and Proceedings.
There
are
no actions, suits, proceedings or investigations pending or threatened by or
against or affecting Supreme Realty Investments, Inc. 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 that would have a
material adverse affect on the business, operations, financial condition or
income of Supreme Realty Investments, Inc. Supreme Realty Investments, Inc.
is
not in default with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental agency or
instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.
5.6 Material
Contract Defaults.
Supreme
Realty Investments, Inc. 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 Supreme
Realty Investments, Inc., and there is no event of default in any material
respect under any such contract, agreement, lease or other commitment in respect
of which Supreme Realty Investments, Inc. has not taken adequate steps to
prevent such a default from occurring.
5.7 Information.
The
information concerning Supreme Realty Investments, Inc. as set forth in this
Agreement and in the attached Schedules 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.
5.8 Title
and Related Matters.
Supreme
Realty Investments, Inc. has good and marketable title to and is the sole and
exclusive owner of all of its properties, inventory, interest in properties
and
assets, real and personal (collectively, the “Assets”)
free
and clear of all liens, pledges, charges or encumbrances. Supreme Realty
Investments, Inc. owns free and clear of any liens, claims, encumbrances,
royalty interests or other restrictions or limitations of any nature whatsoever
and all procedures, techniques, marketing plans, business plans, methods of
management or other information utilized in connection with Supreme Realty
Investments, Inc.’s business. No third party has any right to, and Supreme
Realty Investments, Inc. has not received any notice of infringement of or
conflict with asserted rights of other with respect to any product, technology,
data, trade secrets, know-how, proprietary techniques, trademarks, service
marks, trade names or copyrights which, singly on in the aggregate, if the
subject of an unfavorable decision ruling or finding, would have a materially
adverse affect on the business, operations, financial conditions or income
of
Supreme Realty Investments, Inc. or any material portion of its properties,
assets or rights.
5.9 Contracts.
On
the
Closing Date:
(a) There
are
no material contracts, agreements franchises, license agreements, or other
commitments to which Supreme Realty Investments, Inc. is a party or by which
it
or any of its properties are bound;
9
(b) Supreme
Realty Investments, Inc. is not a party to any contract, agreement, commitment
or instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree or award materially and adversely
affects, or in the future may (as far as Supreme Realty Investments, Inc. can
now foresee) materially and adversely affect, the business, operations,
properties, assets or conditions of Supreme Realty Investments, Inc.;
and
(c) Supreme
Realty Investments, Inc. is not a party to any material oral or written: (i)
contract for the employment of any officer or employee; (ii) profit sharing,
bonus, deferred compensation, stock option, severance pay, pension benefit
or
retirement plan, agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv) guaranty of any obligation
for the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties, of obligations, which, in the aggregate exceeds
$1,000; (v) consulting or other contract with an unexpired term of more than
one
year or providing for payments in excess of $10,000 in the aggregate; (vi)
collective bargaining agreement; (vii) contract, agreement or other commitment
involving payments by it for more than $10,000 in the aggregate.
5.10 Compliance
With Laws and Regulations.
To
the
best of Supreme Realty Investments, Inc.’s knowledge and belief, Supreme Realty
Investments, Inc. has complied with all applicable statutes and regulations
of
any federal, state or other governmental entity or agency thereof, except to
the
extent that noncompliance would not materially and adversely affect the
business, operations, properties, assets or condition of Supreme Realty
Investments, Inc. or would not result in Supreme Realty Investments, Inc.
incurring material liability.
5.11 Insurance.
Supreme
Realty Investments, Inc. maintains no insurance policies.
5.12 Approval
of Agreement.
The
directors of Supreme Realty Investments, Inc. have authorized the execution
and
delivery of the Agreement by and have approved the transactions contemplated
hereby.
5.13 Material
Transactions or Affiliations.
There
are
no material contracts or agreements of arrangement between Supreme Realty
Investments, Inc. and any person, who was at the time of such contract,
agreement or arrangement an officer, director or person owning of record, or
known to beneficially own ten percent (10%) or more of the issued and
outstanding Common Shares of Supreme Realty Investments, Inc. and which is
to be
performed in whole or in part after the date hereof. Except as disclosed in
the
attached Schedule, Supreme Realty Investments, Inc. has no commitment, whether
written or oral, to lend any funds to, borrow any money from or enter into
material transactions with any such affiliated person.
10
5.14 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 Supreme Realty Investments, Inc. is a party or to which any of its
properties or operations are subject.
5.15 Governmental
Authorizations.
Supreme
Realty Investments, Inc. has all licenses, franchises, permits or other
governmental authorizations legally required to enable it to conduct its
business in all material respects as conducted on the date hereof. Except for
compliance with federal and state securities and corporation laws, as
hereinafter provided, 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 Supreme Realty
Investments, Inc. of this Agreement and the consummation of the transactions
contemplated hereby.
ARTICLE
6. SPECIAL
COVENANTS
6.1 Access
to Properties and Records.
Prior
to
closing, Supreme Realty Investments, Inc. and HSG will each afford to the
officers and authorized representatives of the other full access to the
properties, books and records of each other, in order that each may have full
opportunity to make such reasonable investigation as it shall desire to make
of
the affairs of the other and each will furnish the other with such additional
financial and operating data and other information as to the business and
properties of each other, as the other shall from time to time reasonably
request.
6.2 Availability
of Rule 144.
Supreme
Realty Investments, Inc. and HSG Shareholders holding “restricted securities, “
as that term is defined in Rule 144 promulgated pursuant to the Securities
Act
will remain as “restricted securities”. Supreme Realty Investments, Inc. is
under no obligation to register such shares under the Securities Act, or
otherwise. The stockholders of Supreme Realty Investments, Inc. and HSG holding
restricted securities of Supreme Realty Investments, Inc. and HSG as of the
date
of this Agreement and their respective heirs, administrators, personal
representatives, successors and assigns, are intended third party beneficiaries
of the provisions set forth herein. The covenants set forth in this Section
6.2
shall survive the Closing and the consummation of the transactions herein
contemplated.
6.3 The
Stock Merger Consideration.
The
consummation of this Agreement, including the issuance of the Supreme Realty
Investments, Inc. Common Shares to the HSG Shareholders as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act, and
applicable state statutes. Such transaction shall be consummated in reliance
on
exemptions from the registration and prospectus delivery requirements of such
statutes that depend, inter alia, upon the circumstances under which the HSG
Shareholders acquire such securities.
11
6.4 Third
Party Consents.
Supreme
Realty Investments, Inc. and HSG agree to cooperate with each other in order
to
obtain any required third party consents to this Agreement and the transactions
herein contemplated.
6.5 Actions
Prior and Subsequent to Closing.
(a) From
and
after the date of this Agreement until the Closing Date, except as permitted
or
contemplated by this Agreement, Supreme Realty Investments, Inc. and HSG will
each use its best efforts to:
(i) maintain
and keep its properties in states of good repair and condition as at present,
except for depreciation due to ordinary wear and tear and damage due to
casualty;
(ii) maintain
in full force and effect insurance comparable in amount and in scope of coverage
to that now maintained by it; and
(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.
(b) From
and
after the date of this Agreement until the Closing Date, Supreme Realty
Investments, Inc. will not, without the prior consent of HSG:
(i) except
as
otherwise specifically set forth herein, make any change in its articles of
incorporation or bylaws;
(ii) declare
or pay any dividend on its outstanding Common Shares, except as may otherwise
be
required by law, or effect any stock split or otherwise change its
capitalization, except as provided herein;
(iii) enter
into or amend any employment, severance or agreements or arrangements with
any
directors or officers;
(iv) grant,
confer or award any options, warrants, conversion rights or other rights not
existing on the date hereof to acquire any Common Shares; or
(v) purchase
or redeem any Common Shares.
6.6 Indemnification.
(a) Supreme
Realty Investments, Inc. hereby agrees to indemnify HSG, each of the officers,
agents and directors and current shareholders of HSG as of the Closing Date
against any loss, liability, claim, damage or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened or any
claim whatsoever), to which it or they may become subject to or rising out
of or
based on any inaccuracy appearing in or misrepresentation made in this
Agreement. The indemnification provided for in this paragraph shall survive
the
Closing and consummation of the transactions contemplated hereby and termination
of this Agreement; and
12
(b) HSG
hereby agrees to indemnify Supreme Realty Investments, Inc., each of the
officers, agents, directors and current shareholders of Supreme Realty
Investments, Inc. as of the Closing Date against any loss, liability, claim,
damage or expense (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy appearing
in
or misrepresentation made in this Agreement. The indemnification provided for
in
this paragraph shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
6.7 HSG
Shareholder Representations.
Each of
the HSG Shareholders represents and warrants as follows:
(a)
as
of the
date of this Agreement each of the HSG Shareholders was, and at the Closing
Date
it is, an “accredited investor” as defined in Rule 501(a) under the Securities
Act. Such HSG Shareholder has not been formed solely for the purpose of
acquiring the SRLT Common Stock. Each HSG Shareholder is not a registered
broker-dealer under Section 15 of the Exchange Act.
(b)
each of
the HSG Shareholders are knowledgeable and experienced in finance and business
matters and thus they are able to evaluate the risks and merits of acquiring
the
shares of Common Stock of Supreme Realty Investments, Inc.;
(c)
each
of
the HSG Shareholders are able to bear the economic risk of purchasing the
Supreme Realty Investments, Inc. common stock;
(d)
Supreme
Realty Investments, Inc. has provided the HSG Shareholders with access to the
type of information normally provided in a prospectus;
(e)
Supreme
Realty Investments, Inc. did not use any form of public solicitation or general
advertising in connection with the issuance of the shares;
(f) as
to the
following HSG Shareholders (Xxxxx Xxxxx, Xxxxx Lv, Xxxxxxxx Xxxx, Xxxxxxxxxx
Xxx, Simple (Hongkong) Investment & Management Company Limited, First
Capital Limited and Shenzhen Dingyi Investment & Consulting Limited,
collectively the “Offshore
HSG Shareholders”) the
offer
of such securities was not made to a person in the United States and either
(A)
at the time the buy order was originated, each of the Offshore HSG Shareholders
was outside the United States (in China), or Supreme Realty Investments, Inc.
and any person acting on its behalf reasonably believed that each Offshore
HSG
Shareholders was outside the United States, or (B) the transaction was not
executed on or through the facilities of the Over the Counter Bulletin Board
and
neither Supreme Realty Investments, Inc. nor any person acting on its behalf
knows that the transaction has been prearranged with a person in the United
States;
(g)
the
transactions contemplated hereby are bona fide and not for the purpose of
“washing off’ the resale restrictions imposed because the securities are
“restricted securities” (as that term is defined in Rule 144(a)(3) under the
0000 Xxx);
13
(h)
each of
the HSG Shareholders understands and acknowledges that none of the SRLT Common
Stock has been registered under the Securities Act. Each HSG Shareholder is
acquiring the SRLT Common Stock as principal for its own account and not with
a
view to or for distributing or reselling such securities or any part thereof,
without prejudice, however, to such HSG Shareholder's right, subject to the
provisions of this Agreement, at all times to sell or otherwise dispose of
all
or any part of such securities pursuant to an effective registration statement
under the Securities Act or under an exemption from such registration and in
compliance with applicable federal and state securities laws. Nothing contained
herein shall be deemed a representation or warranty by such HSG Shareholder
to
hold the securities for any period of time. Such HSG Shareholder is acquiring
the SRLT Common Stock hereunder in the ordinary course of its business. Such
HSG
Shareholders does not have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the SRLT Common Stock.
ARTICLE
7. CONDITIONS
PRECEDENT TO THE OBLIGATIONS
OF
SUPREME REALTY INVESTMENTS, INC. AND SUB
The
obligations of Supreme Realty Investments, Inc. and Sub under this Agreement
are
subject to the satisfaction, at or before the Closing Date, of the following
conditions:
7.1 Accuracy
of Representations.
The
representations and warranties made by HSG 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 the Closing Date (except for changes
therein permitted by this Agreement), and HSG shall have performed or compiled
with all covenants and conditions required by this Agreement to be performed
or
complied with by HSG prior to or at the Closing HSG shall be furnished with
a
certificate, signed by a duly authorized officer of HSG and dated the Closing
Date, to the foregoing effect.
7.2 Director
Approval.
The
Board
of Directors of Supreme Realty Investments, Inc. shall have approved this
Agreement and the transactions contemplated herein.
7.3 Officer’s
Certificate.
Supreme
Realty Investments, Inc. shall have been furnished with a certificate dated
the
Closing Date and signed by a duly authorized officer of HSG to the effect that:
(a) the representations and warranties of HSG set forth in the Agreement and
in
all exhibits, schedules and other documents furnished in connection herewith
are
in all material respects true and correct as if made on the Effective Date;
(b)
HSG has performed all covenants, satisfied all conditions, and complied with
all
other terms and provisions of this Agreement to be performed, satisfied or
complied with by it as of the Effective Date; (c) since such date and other
than
as previously disclosed to Supreme Realty Investments, Inc., HSG has not entered
into any material transaction other than transactions which are usual and in
the
ordinary course if its business; and (d) no litigation, proceeding,
investigation or inquiry is pending or, to the best knowledge of HSG,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the HSG Schedules, by or against HSG which might result
in any material adverse change in any of the assets, properties, business or
operations of HSG.
14
7.4 No
Material Adverse Change.
Prior
to
the Closing Date, there shall not have occurred any material adverse change
in
the financial condition, business or operations of nor shall any event have
occurred which, with the lapse of time or the giving of notice, may cause or
create any material adverse change in the financial condition, business or
operations of HSG.
7.5 Other
Items.
Supreme
Realty Investments, Inc. shall have received such further documents,
certificates or instruments relating to the transactions contemplated hereby
as
Supreme Realty Investments, Inc. may reasonably request.
ARTICLE
8. CONDITIONS
PRECEDENT TO THE OBLIGATIONS
OF
HSG AND THE HSG SHAREHOLDERS
The
obligations of HSG and the HSG Shareholders under this Agreement are subject
to
the satisfaction, at or before the Closing date (unless otherwise indicated
herein), of the following conditions:
8.1 Accuracy
of Representations.
The
representations and warranties made by Supreme Realty Investments, Inc. in
this
Agreement were true when made and shall be true as of the Closing Date (except
for changes therein permitted by this Agreement) with the same force and effect
as if such representations and warranties were made at and as of the Closing
Date, and Supreme Realty Investments, Inc. shall have performed and complied
with all covenants and conditions required by this Agreement to be performed
or
complied with by Supreme Realty Investments, Inc. prior to or at the Closing.
HSG shall have been furnished with a certificate, signed by a duly authorized
executive officer of Supreme Realty Investments, Inc. and dated the Closing
Date, to the foregoing effect.
8.2 Director
Approval.
The
Board
of Directors of HSG shall have approved this Agreement and the transactions
contemplated herein.
8.3 No
Material Adverse Change.
Prior
to
the Closing Date, there shall not have occurred any material adverse change
in
the financial condition, business or operations of nor shall any event have
occurred which, with the lapse of time or the giving of notice, may cause or
create any material adverse change in the financial condition, business or
operations of Supreme Realty Investments, Inc.
15
ARTICLE
9. TERMINATION
9.1 Termination
Rights.
(a) This
Agreement may be terminated by the board of directors or majority interest
of
Shareholders of either Supreme Realty Investments, Inc. or HSG, respectively,
at
any time prior to the Closing Date if:
(i) there
shall be any action or proceeding before any court or any governmental body
which shall seek to restrain, prohibit or invalidate the transactions
contemplated by this Agreement and which, in the judgment of such board of
directors, made in good faith and based on the advice of its legal counsel,
makes it inadvisable to proceed with the exchange contemplated by this
Agreement; or
(ii) any
of
the transactions contemplated hereby are disapproved by any regulatory authority
whose approval is required to consummate such transactions.
In
the
event of termination pursuant to this paragraph (a), no obligation, right,
or
liability shall arise hereunder and each party shall bear all of the expenses
incurred by it in connection with the negotiation, drafting and execution of
this Agreement and the transactions herein contemplated.
(b) This
Agreement may be terminated at any time prior to the Closing Date by action
of
the board of directors of Supreme Realty Investments, Inc. if HSG shall fail
to
comply in any material respect with any of its covenants or agreements contained
in this Agreement or if any of the representations or warranties of HSG
contained herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days written notice thereof
is
given to HSG. If this Agreement is terminated pursuant to this paragraph (b),
this Agreement shall be of no further force or effect and no obligation, right
or liability shall arise hereunder.
(c) This
Agreement may be terminated at any time prior to the Closing Date by action
of
the board of directors of HSG if Supreme Realty Investments, Inc. shall fail
to
comply in any material respect with any of its covenants or agreements contained
in this Agreement or if any of the representations or warranties of Supreme
Realty Investments, Inc. contained herein shall be inaccurate in any material
respect, which noncompliance or inaccuracy is not cured after 20 days written
notice thereof is given to Supreme Realty Investments, Inc. If this Agreement
is
terminated pursuant to this paragraph (d), this Agreement shall be of no further
force or effect and no obligation, right or liability shall arise
hereunder.
(d) In
the
event of termination pursuant to paragraph (b) and (c) hereof, the breaching
party shall bear all of the expenses incurred by the other party in connection
with the negotiation, drafting and execution of this Agreement and the
transactions herein contemplated.
16
ARTICLE
10. MISCELLANEOUS
10.1 Brokers
and Finders.
Each
party hereto hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the bringing
of
the parties together in the negotiation, execution, or consummation of this
Agreement. The parties each agree to indemnify the other against any claim
by
any third person for any commission, brokerage or finder’s fee or other payment
with respect to this Agreement or the transactions contemplated hereby based
on
any alleged agreement or understanding between the indemnifying party and such
third person, whether express or implied from the actions of the indemnifying
party.
10.2 Law,
Forum and Jurisdiction.
This
Agreement shall be construed and interpreted in accordance with the laws of
the
State of New York, United States of America, except for applicable provisions
of
the Nevada General Corporation Law, which shall control to the extent
applicable.
10.3 Notices.
Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail
or
certified mail, postage prepaid, or by prepaid telegram addressed as
follows:
If
to
Supreme Realty Investments, Inc.: 00000 Xxxxxxxx Xxxx Xxxxx 0000, Xxx Xxxxxxx,
XX 00000
If
to
HSG: Xx. 000-000 Xxxxxxxx Xxxx, Xxxxxxx Center Suite 1905, Quanwan Xingjie,
Hong
Kong
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, mailed or
telegraphed.
10.4 Attorneys’
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.
10.5 Confidentiality.
Each
party hereto agrees with the other party that, unless and until the transactions
contemplated by this Agreement have been consummated, they and their
representatives will hold in strict confidence all data and information obtained
with respect to another party or any subsidiary thereof from any representative,
officer, director or employee, or from any books or records or from personal
inspection, of such other party, and shall not use such data or information
or
disclose the same to others, except: (i) to the extent such data is a matter
of
public knowledge or is required by law to be published; and (ii) to the extent
that such data or information must be used or disclosed in order to consummate
the transactions contemplated by this Agreement.
17
10.6 Schedules;
Knowledge.
Each
party is presumed to have full knowledge of all information set forth in the
other party’s schedules delivered pursuant to this Agreement.
10.7 Third
Party Beneficiaries.
This
contract is solely among the parties hereto and except as specifically provided,
no director, officer, stockholder, employee, agent, independent contractor
or
any other person or entity shall be deemed to be a third party beneficiary
of
this Agreement.
10.8 Entire
Agreement.
This
Agreement represents the entire agreement between the parties relating to the
subject matter hereof. 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, understanding, agreements, representations or
warranties, written or oral, except as set forth herein. This Agreement may
not
be amended or modified, except by a written agreement signed by all parties
hereto.
10.9 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 18 months.
10.10 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.
10.11 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 may be enforced
concurrently herewith, 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 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 hereof
may
be extended by the party or parties for whose benefit the provision is
intended.
10.12 Expenses.
Each
party herein shall bear all of their respective cost s and expenses incurred
in
connection with the negotiation of this Agreement and in the consummation of
the
transactions provided for herein and the preparation thereof.
18
10.13 Headings;
Context.
The
headings of the sections and paragraphs contained in this Agreement are for
convenience of reference only and do not form a part hereof and in no way
modify, interpret or construe the meaning of this Agreement.
10.14 Benefit.
This
Agreement shall be binding upon and shall inure only to the benefit of the
parties hereto, and their permitted assigns hereunder. This Agreement shall
not
be assigned by any party without the prior written consent of the other party.
10.15 Public
Announcements.
Except
as
may be required by law, neither party shall make any public announcement or
filing with respect to the transactions provided for herein without the prior
consent of the other party hereto.
10.16 Severability.
In
the
event that any particular provision or provisions of this Agreement or the
other
agreements contained herein shall for any reason hereafter be determined to
be
unenforceable, or in violation of any law, governmental order or regulation,
such unenforceability or violation shall not affect the remaining provisions
of
such agreements, which shall continue in full force and effect and be binding
upon the respective parties hereto.
10.17 Failure
of Conditions; Termination.
In
the
event of any of the conditions specified in this Agreement shall not be
fulfilled on or before the Closing Date, either of the parties have the right
either to proceed or, upon prompt written notice to the other, to terminate
and
rescind this Agreement. In such event, the party that has failed to fulfill
the
conditions specified in this Agreement will liable for the other parties legal
fees. The election to proceed shall not affect the right of such electing party
reasonably to require the other party to continue to use its efforts to fulfill
the unmet conditions.
10.18 No
Strict Construction.
The
language of this Agreement shall be construed as a whole, according to its
fair
meaning and intendment, and not strictly for or against either party hereto,
regardless of who drafted or was principally responsible for drafting the
Agreement or terms or conditions hereof.
10.19 Execution
Knowing and Voluntary.
In
executing this Agreement, the parties severally acknowledge and represent that
each: (a) has fully and carefully read and considered this Agreement; (b) has
been or has had the opportunity to be fully apprized by its attorneys of the
legal effect and meaning of this document and all terms and conditions hereof;
(c) is executing this Agreement voluntarily, free from any influence, coercion
or duress of any kind.
19
10.20 Amendment.
At
any
time after the Closing Date, this Agreement may be amended by both parties,
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 hereof may be extended
by
the party or parties for whose benefit the provision is intended.
[Signature
page follows]
20
In
Witness Whereof,
Supreme
Realty Investments, Inc., Sub and HSG, each pursuant to the approval and
authority duly given, as well as the HSG Shareholders, have caused this
Agreement and Plan of Merger to be executed as of the date first above
written.
Supreme
Realty Investments, Inc.
|
|||
By:
|
/s/
Xxxxx Xx
|
||
Xxxxx
Xx
Its
Chairman of the Board and Chief Executive Officer
|
|||
XY
Acquisition Corporation
|
|||
By:
|
/s/
Xxxxx Xx
|
||
Xxxxx
Xx
Its
Chairman of the Board and Chief Executive Officer
|
|||
Home
System Group, Inc.
|
|||
By:
|
/s/
Xxxxxx Xxx Xxx
|
||
Xxxxxx
Xxx Xxx
Its
President
|
|||
HSG
Shareholders
|
|||
/s/
Ye
Xx Xxxx
|
|||
Ye
Xx Xxxx
|
|||
/s/
Li Shu Xx
|
|||
Xx
Xxx Xx
|
|||
/s/
Xxxxx
Xxxx Xxx
|
|||
Xxxxx
Xxxx Xxx
|
|||
/s/
Xxxxxx
Xxx Xxx
|
|||
Xxxxxx
Xxx Xxx
|
|||
/s/
Xx
Xxx Qiu
|
|||
Xx
Xxx Qiu
|
21
Simple
(Hong Kong) Investment & Management Company Limited
|
|||
By:
|
/s/
Xxxxxxxx Xx
|
||
Name:
|
Xxxxxxxx
Xx
|
||
Title:
|
President
|
||
First
Capital Limited
|
|||
By:
|
/s/
Xx Xx Rong
|
||
Name:
|
Xx
Xx Xxxx
|
||
Title:
|
President
|
||
Shenzhen
Dingyi Investment Company Limited
|
|||
By:
|
/s/
Hongyan Sun
|
||
Name:
|
Hongyan
Sun
|
||
Title:
|
President
|
||
China
US Bridge Capital Limited
|
|||
By:
|
/s/
Xxxxxxx Xxx
|
||
Name:
|
Xxxxxxx
Xxx
|
||
Title:
|
President
|
||
Value
Global International Limited
|
|||
By:
|
/s/
Xxxxxxx Xx
|
||
Name:
|
Xxxxxxx
Xx
|
||
Title:
|
President
|
22
SCHEDULE
A
HSG
SHAREHOLDERS
Name
of HSG
Shareholder
|
HSG
Common Stock
Ownership
%
|
Shares
of HSG
|
Shares
of Supreme Realty
Investments,
Inc. Common Stock
|
Xxxxxx
Xxx Wai
Xx
Xxx Xxx
Xx
Xx Xxxx
Xx
Xxx Xx
Xxxxx
Xxxx Xxx
|
20%
26%
6.5%
6%
6.5%
|
10,000
13,000
3,250
3,000
3,250
|
1,600,000
2,080,000
520,000
480,000
520,000
|
Value
Global International Limited
|
6%
|
3,000
|
480,000
|
Simple
(Hong Kong) Investment & Management Company Limited
|
4%
|
2,000
|
320,000
|
First
Capital Limited
|
8%
|
4,000
|
640,000
|
Shenzhen
Dingyi Investment Company Limited
|
7%
|
3,500
|
560,000
|
China
US Bridge Capital Limited
|
10%
|
5,000
|
800,000
|
23