Exhibit 2.1
SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT (this "AGREEMENT"), dated as of February 8,
2010, is by and among Green Star Mining Corp., a Delaware corporation (the
"PUBCO"), Risetime Group Limited, a British Virgin Islands company ("RISETIME"),
and Nicestar International Limited, a British Virgin Islands company (the
"STOCKHOLDER"). Each of the parties to this Agreement is individually referred
to herein as a "PARTY" and collectively, as the "PARTIES".
BACKGROUND
Risetime has one ordinary share (the "RISETIME STOCK") issued and
outstanding, which is held by the Stockholder. The Stockholder is the record and
beneficial owner of the number of shares of Risetime Stock as set forth on
Exhibit A. The Stockholder has agreed to transfer its Risetime Stock in exchange
for 20,500,000 newly issued common stock, par value $.0001 per share, of the
Pubco (the "PUBCO STOCK") that will constitute approximately 62.12% of the
issued and outstanding common stock of the Pubco immediately after the Closing.
The number of shares of Pubco Stock to be received by the Stockholder is listed
opposite such Stockholder's name on Exhibit A attached to this Agreement. The
aggregate number of shares of Pubco Stock that is reflected on Exhibit A is
referred to herein as the "SHARES".
The Board of Directors of the Pubco, Risetime and the Stockholder have
determined that it is desirable to effect this plan of reorganization and share
exchange.
AGREEMENT
NOW THEREFORE, the parties agree as follows:
ARTICLE I
Exchange of Shares
SECTION 1.01. Exchange by Stockholder. At the Closing (as defined in
Section 1.02), the Stockholder shall sell, transfer, convey, assign and deliver
to Pubco its Risetime Stock free and clear of all Liens (as defined below) in
exchange for Pubco Stock listed on Exhibit A opposite such Stockholder's name.
SECTION 1.02. Closing. The closing (the "CLOSING") of the transactions
contemplated hereby (the "TRANSACTIONS") shall take place at the Beijing office
of King and Wood LLP in People's Republic of China at 11:00 a.m. local time on
the second business day following the satisfaction or waiver of all conditions
to the obligations of the parties to consummate the Transactions contemplated
hereby (other than conditions with respect to actions the respective parties
will take at the Closing itself), or such other date and time as the parties may
mutually determine (the "CLOSING DATE").
ARTICLE II
Representations and Warranties of Stockholder
The Stockholder hereby represents and warrants to Pubco with respect to
itself, as follows:
SECTION 2.01. Good Title. The Stockholder is the record and beneficial
owner, and has good title to its Risetime Stock, with the right and authority to
sell and deliver such Risetime Stock. Upon registering of Pubco as the new owner
of such Risetime Stock in the share register of members of Risetime, Pubco will
receive good title to such Risetime Stock, free and clear of all liens, security
interests, pledges, equities and claims of any kind, voting trusts, stockholder
agreements and other encumbrances (collectively, "LIENS").
SECTION 2.02. Power and Authority. This Agreement constitutes a legal,
valid and binding obligation of the Stockholder, enforceable against such
Stockholder in accordance with the terms hereof.
SECTION 2.03. No Conflicts. The execution and delivery of this Agreement by
the Stockholder and the performance by the Stockholder of its obligations
hereunder in accordance with the terms hereof: (i) will not require the consent
of any third party or any federal, state, local or foreign government or any
court of competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign ("GOVERNMENTAL
ENTITY") under any statutes, laws, ordinances, rules, regulations, orders,
writs, injunctions, judgments, or decrees (collectively, "LAWS"); (ii) will not
violate any Laws applicable to such Stockholder and (iii) will not violate or
breach any contractual obligation to which such Stockholder is a party.
SECTION 2.04. No Finder's Fee. The Stockholder has not created any
obligation for any finder's, investment banker's or broker's fee in connection
with the Transactions.
SECTION 2.05. Purchase Entirely for Own Account. Pubco Stock proposed to be
acquired by the Stockholder hereunder will be acquired for investment for its
own account, and not with a view to the resale or distribution of any part
thereof, and the Stockholder has no present intention of selling or otherwise
distributing Pubco Stock, except in compliance with applicable securities laws.
SECTION 2.06. Lock-up and Registration Rights. The Stockholder hereby
undertakes that it will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any Pubco Stock, enter into a transaction
that would have the same effect, or enter into any swap, hedge or other
arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of such Pubco Stock, whether any of these transactions
are to be settled by delivery of any such Pubco Stock, in cash or otherwise, or
publicly disclose the intention to make any offer, sale, pledge or disposition,
or to enter into any transaction, swap, hedge or other arrangement, for a period
of 24 months from the date of issuance of such Pubco Stock. After 24-month
period described above, the Stockholder shall be entitled to effect the
registration under the Securities Act of such Pubco Stock.
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SECTION 2.07. Restricted Securities. The Stockholder understands that the
Pubco Stock is characterized as "restricted securities" under the Securities Act
inasmuch as this Agreement contemplates that, if acquired by the Stockholder
pursuant hereto, the Pubco Stock would be acquired in a transaction not
involving a public offering. The Stockholder further acknowledges that if the
Pubco Stock is issued to the Stockholder in accordance with the provisions of
this Agreement, such Pubco Stock may not be resold without registration under
the Securities Act or the existence of an exemption therefrom. The Stockholder
represents that it is familiar with Rule 144 promulgated under the Securities
Act, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.
SECTION 2.08. Legends. It is understood that the Pubco Stock will bear the
following legend or one that is substantially similar to the following legend:
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON
CONVERSION OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY
SUCH SECURITIES.
SECTION 2.09. Accredited Investor. The Stockholder is an "accredited
investor" within the meaning of Rule 501 under the Securities Act.
ARTICLE III
Representations and Warranties of Risetime
Risetime represents and warrants to Pubco that, except as set forth in
Risetime Disclosure Letter (as defined below, and regardless of whether or not
Risetime Disclosure Letter is referenced below with respect to any particular
representation or warranty), which will be delivered by Risetime to Pubco
concurrently herewith (the "RISETIME DISCLOSURE LETTER"):
SECTION 3.01. Organization, Standing and Power. Each of Risetime and its
subsidiaries (the "RISETIME SUBSIDIARIES") is duly organized, validly existing
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and in good standing under the laws of the jurisdiction in which it is organized
and has the corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on Risetime, a material adverse effect on the ability of Risetime
to perform its obligations under this Agreement or on the ability of Risetime to
consummate the Transactions (a "RISETIME MATERIAL ADVERSE EFFECT"). Risetime and
each Risetime Subsidiary is duly qualified to do business in each jurisdiction
where the nature of its business or its ownership or leasing of its properties
make such qualification necessary except where the failure to so qualify would
not reasonably be expected to have a Risetime Material Adverse Effect. Risetime
has delivered to the Pubco true and complete copies of the memorandum and
articles of association of Risetime and such other constituent instruments of
Risetime as may exist, each as amended to the date of this Agreement (as so
amended, the "RISETIME CONSTITUENT INSTRUMENTS"), and the comparable charter,
organizational documents and other constituent instruments of each Risetime
Subsidiary, in each case as amended through the date of this Agreement.
SECTION 3.02. Risetime Subsidiaries; Equity Interests.
(a) The Risetime Disclosure Letter lists each Risetime Subsidiaries and its
jurisdiction of organization. Except as specified in Risetime Disclosure Letter,
all the outstanding shares of capital stock or equity investments of each
Risetime Subsidiaries have been validly issued and are fully paid and
nonassessable and are as of the date of this Agreement owned by Risetime, free
and clear of all Liens.
(b) Except for its interests in Risetime Subsidiaries, Risetime does not as
of the date of this Agreement own, directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest or other
equity interest in any person.
SECTION 3.03. Capital Structure. The authorized shares of Risetime are
50,000 ordinary shares of a single class with a par value of US$1.00 each. As of
the date of this Agreement, one ordinary share is issued and outstanding. Except
as set forth above, no shares or other voting securities of Risetime are issued,
reserved for issuance or outstanding. Except as specified in Risetime Disclosure
Letter, Risetime is the sole record and beneficial owner of all of the issued
and outstanding capital stock of each Risetime Subsidiary. All outstanding
shares of the capital stock of Risetime and each Risetime Subsidiary are duly
authorized, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the applicable corporate laws of the British Virgin Islands, Risetime
Constituent Instruments or any Contract (as defined in Section 3.05) to which
Risetime is a party or otherwise bound. There are not any bonds, debentures,
notes or other indebtedness of Risetime or any Risetime Subsidiary having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which holders of Risetime Stock or the common
stock of any Risetime Subsidiary may vote ("VOTING DEBT"). Except as set forth
above, as of the date of this Agreement, there are not any options, warrants,
rights, convertible or exchangeable securities, "phantom" stock rights, stock
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appreciation rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which Risetime or any Risetime
Subsidiary is a party or by which any of them is bound (i) obligating Risetime
or any Risetime Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other equity interests
in, or any security convertible or exercisable for or exchangeable into any
capital stock of or other equity interest in, Risetime or any Risetime
Subsidiary or any Voting Debt, (ii) obligating Risetime or any Risetime
Subsidiary to issue, grant, extend or enter into any such option, warrant, call,
right, security, commitment, Contract, arrangement or undertaking or (iii) that
give any person the right to receive any economic benefit or right similar to or
derived from the economic benefits and rights occurring to holders of the
capital stock of Risetime or of any Risetime Subsidiary. Except as set forth in
Risetime Disclosure Letter, as of the date of this Agreement, there are not any
outstanding contractual obligations of Risetime to repurchase, redeem or
otherwise acquire any shares of capital stock of Pubco.
SECTION 3.04. Authority; Execution and Delivery; Enforceability. Risetime
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions. The execution and delivery by
Risetime of this Agreement and the consummation by Risetime of the Transactions
have been duly authorized and approved by the Board of Directors of Risetime and
no other corporate proceedings on the part of Risetime are necessary to
authorize this Agreement and the Transactions. When executed and delivered, this
Agreement will be enforceable against Risetime in accordance with its terms.
SECTION 3.05. No Conflicts; Consents.
(a) Except as set forth in Risetime Disclosure Letter, the execution and
delivery by Risetime of this Agreement does not, and the consummation of the
Transactions and compliance with the terms hereof and thereof will not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any Lien upon any of the properties or assets of Risetime or
any Risetime Subsidiary under, any provision of (i) Risetime Constituent
Instruments or the comparable charter or organizational documents of any
Risetime Subsidiary, (ii) any material contract, lease, license, indenture,
note, bond, agreement, permit, concession, franchise or other instrument (a
"CONTRACT") to which Risetime or any Risetime Subsidiary is a party or by which
any of their respective properties or assets is bound or (iii) subject to the
filings and other matters referred to in Section 3.05(b), any material judgment,
order or decree ("JUDGMENT") or material Law applicable to Risetime or any
Risetime Subsidiary or their respective properties or assets, other than, in the
case of clauses (ii) and (iii) above, any such items that, individually or in
the aggregate, have not had and would not reasonably be expected to have a
Risetime Material Adverse Effect.
(b) Except as set forth in Risetime Disclosure Letter and except for
required filings with the Securities and Exchange Commission (the "SEC") and
applicable "Blue Sky" or state securities commissions, no material consent,
approval, license, permit, order or authorization ("CONSENT") of, or
registration, declaration or filing with, or permit from, any Governmental
Entity is required to be obtained or made by or with respect to Risetime or any
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Risetime Subsidiary in connection with the execution, delivery and performance
of this Agreement or the consummation of the Transactions.
SECTION 3.06. Benefit Plans. Risetime does not have or maintain any
collective bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of Risetime or any Risetime Subsidiary
(collectively, "RISETIME BENEFIT PLANS"). As of the date of this Agreement there
are not any severance or termination agreements or arrangements between Risetime
or any Risetime Subsidiary and any current or former employee, officer or
director of Risetime or any Risetime Subsidiary, nor does Risetime or any
Risetime Subsidiary have any general severance plan or policy.
SECTION 3.07. Litigation. There is no action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition) or
investigation pending or threatened in writing against or affecting Risetime,
any subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, local or foreign), stock market, stock exchange or
trading facility ("ACTION") which (i) adversely affects or challenges the
legality, validity or enforceability of any of this Agreement or the Shares or
(ii) could, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a Risetime Material
Adverse Effect. Neither Risetime nor any subsidiary, nor any director or officer
thereof (in his or her capacity as such), is or has been the subject of any
Action involving a claim or violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.
SECTION 3.08. Compliance with Applicable Laws. Risetime and Risetime
Subsidiaries are in compliance with all applicable Laws, except for instances of
noncompliance that, individually and in the aggregate, have not had and would
not reasonably be expected to have a Risetime Material Adverse Effect. Except as
set forth in Risetime Disclosure Letter, Risetime has not received any written
communication during the past two years from a Governmental Entity that alleges
that Risetime is not in compliance in any material respect with any applicable
Law.
SECTION 3.09. Brokers; Schedule of Fees and Expenses. No broker, investment
banker, financial advisor or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Risetime.
SECTION 3.10. Contracts. Except as disclosed in Risetime Disclosure Letter,
there are no Contracts that are material to the business, properties, assets,
condition (financial or otherwise), results of operations or prospects of
Risetime and its subsidiaries taken as a whole. Neither Risetime nor any
Risetime Subsidiary is in violation of or in default under (nor does there exist
any condition which upon the passage of time or the giving of notice would cause
such a violation of or default under) any Contract to which it is a party or by
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which it or any of its properties or assets is bound, except for violations or
defaults that would not, individually or in the aggregate, reasonably be
expected to result in a Risetime Material Adverse Effect.
SECTION 3.11. Title to Properties. Except as set forth in the Disclosure
Letter, Risetime and Risetime Subsidiaries do not own any real property. Each of
Risetime and Risetime Subsidiaries has sufficient title to, or valid leasehold
interests in, all of its properties and assets used in the conduct of its
businesses. All such assets and properties, other than assets and properties in
which Risetime or any of Risetime Subsidiaries has leasehold interests, are free
and clear of all Liens other than those set forth in Risetime Disclosure Letter
and except for Liens that, in the aggregate, do not and will not materially
interfere with the ability of Risetime and Risetime Subsidiaries to conduct
business as currently conducted.
SECTION 3.12. Intellectual Property. Risetime and Risetime Subsidiaries
own, or are validly licensed or otherwise have the right to use, all patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service xxxx rights, copyrights and other proprietary
intellectual property rights and computer programs (collectively, "INTELLECTUAL
PROPERTY RIGHTS") which are material to the conduct of the business of Risetime
and Risetime Subsidiaries taken as a whole. The Risetime Disclosure Letter sets
forth a description of all Intellectual Property Rights which are material to
the conduct of the business of Risetime and Risetime Subsidiaries taken as a
whole. There are no claims pending or, to the knowledge of Risetime, threatened
that Risetime or any of Risetime Subsidiaries is infringing or otherwise
adversely affecting the rights of any person with regard to any Intellectual
Property Right. To the knowledge of Risetime, no person is infringing the rights
of Risetime or any of Risetime Subsidiaries with respect to any Intellectual
Property Right.
SECTION 3.13. Labor Matters. Except as set forth in Risetime Disclosure
Letter, there are no collective bargaining or other labor union agreements to
which Risetime or any of Risetime Subsidiaries is a party or by which any of
them is bound. No material labor dispute exists or, to the knowledge of
Risetime, is imminent with respect to any of the employees of Risetime.
SECTION 3.14. Financial Statements. Prior to the Closing, Risetime will
deliver to the Pubco its reviewed consolidated financial statements for the
quarter ended November 30, 2009 and its audited consolidated financial
statements for the fiscal years ended August 31, 2009 and 2008 (collectively,
the "RISETIME FINANCIAL STATEMENTS"). Upon delivery, Risetime Financial
Statements will have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated. The Risetime Financial Statements will fairly present in all material
respects the financial condition and operating results of Risetime, as of the
dates, and for the periods, indicated therein. Risetime will not have any
material liabilities or obligations, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to August 31,
2009, and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under generally accepted accounting
principles to be reflected in Risetime Financial Statements, which, in both
cases, individually and in the aggregate would not be reasonably expected to
result in a Risetime Material Adverse Effect.
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SECTION 3.15. Solvency. Based on the financial condition of Risetime as of
the closing date (and assuming that the closing shall have occurred), (i)
Risetime's fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of Risetime's existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii)
Risetime's assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by Risetime, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of Risetime, together with the proceeds Risetime would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. Risetime does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
SECTION 3.16. No Additional Agreements. Risetime does not have any
agreement or understanding with the Stockholder with respect to the transactions
contemplated by this Agreement other than as specified in this Agreement.
SECTION 3.17. Investment Company. Risetime is not, and is not an affiliate
of, and immediately following the Closing will not have become, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 3.18. Disclosure. All disclosure provided to the Stockholder
regarding Risetime, its business and the transactions contemplated hereby,
furnished by or on behalf of Risetime (including Risetime's representations and
warranties set forth in this Agreement) are true and correct and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
SECTION 3.19. Absence of Certain Changes or Events. Except as disclosed in
Risetime Financial Statements or in Risetime Disclosure Letter, from August 31,
2009 to the date of this Agreement, Risetime has conducted its business only in
the ordinary course, and during such period there has not been:
(a) any change in the assets, liabilities, financial condition or
operating results of Risetime or any Risetime Subsidiary, except changes in
the ordinary course of business that have not caused, in the aggregate, a
Risetime Material Adverse Effect;
(b) any damage, destruction or loss, whether or not covered by
insurance, that would have a Risetime Material Adverse Effect;
(c) any waiver or compromise by Risetime or any Risetime Subsidiary of
a valuable right or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or encumbrance
or payment of any obligation by Risetime or any Risetime Subsidiary, except
in the ordinary course of business and the satisfaction or discharge of
which would not have a Risetime Material Adverse Effect;
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(e) any material change to a material Contract by which Risetime or
any Risetime Subsidiary or any of its respective assets is bound or
subject;
(f) any mortgage, pledge, transfer of a security interest in, or lien,
created by Risetime or any Risetime Subsidiary, with respect to any of its
material properties or assets, except liens for taxes not yet due or
payable and liens that arise in the ordinary course of business and do not
materially impair Risetime's or such Risetime Subsidiary's ownership or use
of such property or assets;
(g) any loans or guarantees made by Risetime or any Risetime
Subsidiary to or for the benefit of its employees, officers or directors,
or any members of their immediate families, other than travel advances and
other advances made in the ordinary course of its business;
(h) any alteration of Risetime's method of accounting or the identity
of its auditors;
(i) any declaration or payment of dividend or distribution of cash or
other property to Stockholders or any purchase, redemption or agreements to
purchase or redeem any shares of Risetime Stock;
(j) any issuance of equity securities to any officer, director or
affiliate, except pursuant to existing Risetime stock option plans; or
(k) any arrangement or commitment by Risetime or any Risetime
Subsidiary to do any of the things described in this Section 3.19.
SECTION 3.20. Compliance with PRC Anti-Corruption Laws. Neither Risetime,
nor any of its subsidiaries, nor, to Risetime's knowledge, any director,
officer, agent, employee or other person acting on behalf of Risetime or any of
its subsidiaries has, in the course of its actions for, or on behalf of,
Risetime (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of applicable PRC laws; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
ARTICLE IV
Representations and Warranties of the Pubco
The Pubco represents and warrants to the Stockholder and Risetime that,
except as set forth in the reports, schedules, forms, statements and other
documents filed by Pubco with the SEC and publicly available prior to the date
of the Agreement (the "FILED PUBCO SEC DOCUMENTS") or in the letter, which will
be delivered by the Pubco to Risetime and the Stockholder concurrently herewith
(the "PUBCO DISCLOSURE LETTER"):
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SECTION 4.01. Organization, Standing and Power. Pubco is duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on Pubco, a material adverse effect on the ability of Pubco to
perform its obligations under this Agreement or on the ability of Pubco to
consummate the Transactions (a "PUBCO MATERIAL ADVERSE EFFECT"). Pubco is duly
qualified to do business in each jurisdiction where the nature of its business
or their ownership or leasing of its properties make such qualification
necessary and where the failure to so qualify would reasonably be expected to
have a Pubco Material Adverse Effect. Pubco has delivered to Risetime true and
complete copies of the certificate of incorporation of Pubco, as amended to the
date of this Agreement (as so amended, the "PUBCO CHARTER"), and the Bylaws of
Pubco, as amended to the date of this Agreement (as so amended, the "PUBCO
BYLAWS").
SECTION 4.02. Subsidiaries; Equity Interests. Pubco does not own, directly
or indirectly, any capital stock, membership interest, partnership interest,
joint venture interest or other equity interest in any person.
SECTION 4.03. Capital Structure. The authorized capital stock of the Pubco
consists of One Hundred Million (100,000,000) shares of Pubco Common Stock, par
value $0.0001 per share and Forty Million (40,000,000) shares of Pubco Preferred
Stock, par value $0.001 per share. As of the date hereof, 12,500,000 shares of
Pubco Common Stock are issued and outstanding. Except as set forth above, no
shares of capital stock or other voting securities of Pubco were issued,
reserved for issuance or outstanding. All outstanding shares of the capital
stock of Pubco are, and all such shares that may be issued prior to the date
hereof will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the General Corporation Law of the State of
Delaware, the Pubco Charter, the Pubco Bylaws or any Contract to which Pubco is
a party or otherwise bound. There are not any bonds, debentures, notes or other
indebtedness of Pubco having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
holders of Pubco Common Stock may vote ("VOTING PUBCO DEBT"). Except as set
forth above, as of the date of this Agreement, there are not any options,
warrants, rights, convertible or exchangeable securities, "phantom" stock
rights, stock appreciation rights, stock-based performance units, commitments,
Contracts, arrangements or undertakings of any kind to which Pubco is a party or
by which it is bound (i) obligating Pubco to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, Pubco or any Voting Pubco
Debt, (ii) obligating Pubco to issue, grant, extend or enter into any such
option, warrant, call, right, security, commitment, Contract, arrangement or
undertaking or (iii) that give any person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights
occurring to holders of the capital stock of the Pubco. As of the date of this
Agreement, there are not any outstanding contractual obligations of Pubco to
repurchase, redeem or otherwise acquire any shares of capital stock of Pubco.
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Except as set forth in Schedule 4.03, the Pubco is not a party to any agreement
granting any securityholder of the Pubco the right to cause the Pubco to
register shares of the capital stock or other securities of the Pubco held by
such securityholder under the Securities Act. The stockholder list to be
provided at closing to Risetime shall be a current shareholder list generated by
its stock transfer agent, and such list shall accurately reflect all of the
issued and outstanding shares of the Pubco's Common Stock.
SECTION 4.04. Authority; Execution and Delivery; Enforceability. The
execution and delivery by the Pubco of this Agreement and the consummation by
the Pubco of the Transactions have been duly authorized and approved by the
Board of Directors of the Pubco and no other corporate proceedings on the part
of the Pubco, except for the filing of a Certificate of Completion (as
hereinafter defined), are necessary to authorize this Agreement and the
Transactions. This Agreement constitutes a legal, valid and binding obligation
of the Pubco, enforceable against the Pubco in accordance with the terms hereof.
SECTION 4.05. No Conflicts; Consents.
(a) Except as set forth in the Pubco Disclosure Letter, the execution and
delivery by Pubco of this Agreement, does not, and the consummation of
Transactions and compliance with the terms hereof and thereof will not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or to
increased, additional, accelerated or guaranteed rights or entitlements of any
person under, or result in the creation of any Lien upon any of the properties
or assets of Pubco under, any provision of (i) Pubco Charter or Pubco Bylaws,
(ii) any material Contract to which Pubco is a party or by which any of its
properties or assets is bound or (iii) subject to the filings and other matters
referred to in Section 4.05(b), any material Judgment or material Law applicable
to Pubco or its properties or assets, other than, in the case of clauses (ii)
and (iii) above, any such items that, individually or in the aggregate, have not
had and would not reasonably be expected to have a Pubco Material Adverse
Effect.
(b) No Consent of, or registration, declaration or filing with, or permit
from, any Governmental Entity is required to be obtained or made by or with
respect to Pubco in connection with the execution, delivery and performance of
this Agreement or the consummation of the Transactions, other than the filings
under state "blue sky" laws, as may be required in connection with this
Agreement and the Transactions.
SECTION 4.06. SEC Documents; Undisclosed Liabilities.
(a) Pubco has filed all reports, schedules, forms, statements and other
documents required to be filed by Pubco with the SEC (the "PUBCO SEC
DOCUMENTS").
(b) As of its respective filing date, each Pubco SEC Document complied in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC promulgated thereunder applicable to such Pubco SEC
Document, and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
11
made, not misleading. Except to the extent that information contained in any
Pubco SEC Document has been revised or superseded by a later filed Pubco SEC
Document, none of the Pubco SEC Documents contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Pubco included in the Pubco SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with the U.S. generally accepted accounting principals
("GAAP") (except, in the case of unaudited statements, as permitted by the rules
and regulations of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of Pubco and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods shown (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
(c) Except as set forth in the Filed Pubco SEC Documents, Pubco has no
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a balance sheet of Pubco or in
the notes thereto. The Pubco Disclosure Letter sets forth all financial and
contractual obligations and liabilities (including any obligations to issue
capital stock or other securities of the Pubco) due after the date hereof. As of
the date hereof the Pubco has total liabilities of less than $1,000, all of
which liabilities shall be paid off at or prior to the Closing and shall in no
event remain liabilities of the Pubco, Risetime or the Stockholder following the
Closing.
SECTION 4.07. Absence of Certain Changes or Events. Except as disclosed in
the Filed Pubco SEC Documents or in the Pubco Disclosure Letter, from the date
of the most recent audited financial statements included in the Filed Pubco SEC
Documents to the date of this Agreement, Pubco has conducted its business only
in the ordinary course, and during such period there has not been:
(a) any change in the assets, liabilities, financial condition or
operating results of the Pubco from that reflected in the Pubco SEC
Documents, except changes in the ordinary course of business that have not
caused, in the aggregate, a Pubco Material Adverse Effect;
(b) any damage, destruction or loss, whether or not covered by
insurance, that would have a Pubco Material Adverse Effect;
(c) any waiver or compromise by the Pubco of a valuable right or of a
material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or encumbrance
or payment of any obligation by the Pubco, except in the ordinary course of
business and the satisfaction or discharge of which would not have a Pubco
Material Adverse Effect;
(e) any material change to a material Contract by which the Pubco or
any of its assets is bound or subject;
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(f) any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder;
(g) any resignation or termination of employment of any officer of the
Pubco;
(h) any mortgage, pledge, transfer of a security interest in, or lien,
created by the Pubco, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable and liens that arise
in the ordinary course of business and do not materially impair the Pubco's
ownership or use of such property or assets;
(i) any loans or guarantees made by the Pubco to or for the benefit of
its employees, officers or directors, or any members of their immediate
families, other than travel advances and other advances made in the
ordinary course of its business;
(j) any declaration, setting aside or payment or other distribution in
respect of any of the Pubco's capital stock, or any direct or indirect
redemption, purchase, or other acquisition of any of such stock by the
Pubco;
(k) any alteration of the Pubco's method of accounting or the identity
of its auditors;
(l) any issuance of equity securities to any officer, director or
affiliate, except pursuant to existing Pubco stock option plans; or
(m) any arrangement or commitment by the Pubco to do any of the things
described in this Section 4.07.
SECTION 4.08. Taxes.
(a) Pubco has timely filed, or has caused to be timely filed on its behalf,
all Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and accurate, except to the extent any failure to file or any
inaccuracies in any filed Tax Returns, individually or in the aggregate, have
not had and would not reasonably be expected to have a Pubco Material Adverse
Effect. All Taxes shown to be due on such Tax Returns, or otherwise owed, has
been timely paid, except to the extent that any failure to pay, individually or
in the aggregate, has not had and would not reasonably be expected to have a
Pubco Material Adverse Effect.
(b) The most recent financial statements contained in the Filed Pubco SEC
Documents reflect an adequate reserve for all Taxes payable by Pubco (in
addition to any reserve for deferred Taxes to reflect timing differences between
book and Tax items) for all Taxable periods and portions thereof through the
date of such financial statements. No deficiency with respect to any Taxes has
been proposed, asserted or assessed against Pubco, and no requests for waivers
of the time to assess any such Taxes are pending, except to the extent any such
deficiency or request for waiver, individually or in the aggregate, has not had
and would not reasonably be expected to have a Pubco Material Adverse Effect.
(c) There are no Liens for Taxes (other than for current Taxes not yet due
and payable) on the assets of Pubco. Pubco is not bound by any agreement with
respect to Taxes.
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SECTION 4.09. Absence of Changes in Benefit Plans. From the date of the
most recent audited financial statements included in the Filed Pubco SEC
Documents to the date of this Agreement, there has not been any adoption or
amendment in any material respect by Pubco of any collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding (whether or
not legally binding) providing benefits to any current or former employee,
officer or director of Pubco (collectively, "PUBCO BENEFIT PLANS"). As of the
date of this Agreement there are not any employment, consulting,
indemnification, severance or termination agreements or arrangements between the
Pubco and any current or former employee, officer or director of the Pubco, nor
does the Pubco have any general severance plan or policy.
SECTION 4.10. ERISA Compliance; Excess Parachute Payments. The Pubco does
not, and since its inception never has, maintained, or contributed to any
"employee pension benefit plans" (as defined in Section 3(2) of ERISA),
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA) or any
other Pubco Benefit Plan for the benefit of any current or former employees,
consultants, officers or directors of Pubco.
SECTION 4.11. Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of this Agreement or
the Shares or (ii) could, if there were an unfavorable decision, individually or
in the aggregate, have or reasonably be expected to result in a Pubco Material
Adverse Effect. Neither the Pubco nor any subsidiary, nor any director or
officer thereof (in his or her capacity as such), is or has been the subject of
any Action involving a claim or violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.
SECTION 4.12. Compliance with Applicable Laws. Pubco is in compliance with
all applicable Laws, including those relating to occupational health and safety
and the environment, except for instances of noncompliance that, individually
and in the aggregate, have not had and would not reasonably be expected to have
a Pubco Material Adverse Effect. Except as set forth in the Filed Pubco SEC
Documents or in the Pubco Disclosure Letter, Pubco has not received any written
communication during the past two years from a Governmental Entity that alleges
that Pubco is not in compliance in any material respect with any applicable Law.
The Pubco is in compliance with all effective requirements of the Xxxxxxxx-Xxxxx
Act of 2002, as amended, and the rules and regulations thereunder, that are
applicable to it, except where such noncompliance could not have or reasonably
be expected to result in a Pubco Material Adverse Effect. This Section 4.12 does
not relate to matters with respect to Taxes, which are the subject of Section
4.08.
SECTION 4.13. Contracts. Except as disclosed in the Pubco Filed SEC
Documents, there are no Contracts that are material to the business, properties,
assets, condition (financial or otherwise), results of operations or prospects
of the Pubco taken as a whole. Pubco is not in violation of or in default under
(nor does there exist any condition which upon the passage of time or the giving
of notice would cause such a violation of or default under) any Contract to
which it is a party or by which it or any of its properties or assets is bound,
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except for violations or defaults that would not, individually or in the
aggregate, reasonably be expected to result in a Pubco Material Adverse Effect.
SECTION 4.14. Title to Properties. Pubco has good title to, or valid
leasehold interests in, all of its properties and assets used in the conduct of
its businesses. All such assets and properties, other than assets and properties
in which the Pubco has leasehold interests, are free and clear of all Liens
other than those set forth in the Pubco Disclosure Letter and except for Liens
that, in the aggregate, do not and will not materially interfere with the
ability of the Pubco to conduct business as currently conducted. Pubco has
complied in all material respects with the terms of all material leases to which
it is a party and under which it is in occupancy, and all such leases are in
full force and effect. Pubco enjoys peaceful and undisturbed possession under
all such material leases.
SECTION 4.15. Intellectual Property. Pubco owns, or is validly licensed or
otherwise has the right to use, all Intellectual Property Rights which are
material to the conduct of the business of the Pubco taken as a whole. The Pubco
Disclosure Letter sets forth a description of all Intellectual Property Rights
which are material to the conduct of the business of the Pubco taken as a whole.
Except as set forth in the Pubco Disclosure Letter no claims are pending or, to
the knowledge of the Pubco, threatened that the Pubco is infringing or otherwise
adversely affecting the rights of any person with regard to any Intellectual
Property Right. To the knowledge of the Pubco, no person is infringing the
rights of the Pubco with respect to any Intellectual Property Right.
SECTION 4.16. Labor Matters. There are no collective bargaining or other
labor union agreements to which the Pubco is a party or by which it is bound. No
material labor dispute exists or, to the knowledge of the Pubco, is imminent
with respect to any of the employees of the Pubco.
SECTION 4.17. Market Makers. The Pubco has at least two market makers for
its common shares and such market makers have obtained all permits and made all
filings necessary in order for such market makers to continue as market makers
of the Pubco.
SECTION 4.18. Transactions With Affiliates and Employees. Except as set
forth in the Filed Pubco SEC Documents and Pubco Disclosure Letter, none of the
officers or directors of the Pubco and, to the knowledge of the Pubco, none of
the employees of the Pubco is presently a party to any transaction with the
Pubco or any subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Pubco, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
SECTION 4.19. Internal Accounting Controls. The Pubco maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
15
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Pubco has established disclosure controls and
procedures for the Pubco and designed such disclosure controls and procedures to
ensure that material information relating to the Pubco is made known to the
officers by others within those entities. The Pubco's officers have evaluated
the effectiveness of the Pubco's controls and procedures. Since November 30,
2009, there have been no significant changes in the Pubco's internal controls
or, to the Pubco's knowledge, in other factors that could significantly affect
the Pubco's internal controls.
SECTION 4.20. Solvency. Based on the financial condition of the Pubco as of
the closing date (and assuming that the closing shall have occurred), (i) the
Pubco's fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Pubco's existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the
Pubco's assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Pubco, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of the Pubco, together with the proceeds the Pubco would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Pubco does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
SECTION 4.21. Application of Takeover Protections. The Pubco has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Pubco's
charter documents or the laws of its state of incorporation that is or could
become applicable to the Stockholder as a result of the Stockholder and the
Pubco fulfilling their obligations or exercising their rights under this
Agreement, including, without limitation, the issuance of the Shares and the
Stockholder's ownership of the Shares.
SECTION 4.22. No Additional Agreements. The Pubco does not have any
agreement or understanding with the Stockholder with respect to the transactions
contemplated by this Agreement other than as specified in this Agreement.
SECTION 4.23. Investment Company. The Pubco is not, and is not an affiliate
of, and immediately following the Closing will not have become, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.24. Disclosure. All disclosure provided to the Stockholder
regarding the Pubco, its business and the transactions contemplated hereby,
furnished by or on behalf of the Pubco (including the Pubco's representations
and warranties set forth in this Agreement) are true and correct and do not
contain any untrue statement of a material fact or omit to state any material
16
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. SECTION 4.25. Certain
Registration Matters. Except as specified in the Pubco Disclosure Letter and
Filed Pubco SEC Documents, the Pubco has not granted or agreed to grant to any
person any rights (including "piggy-back" registration rights) to have any
securities of the Pubco registered with the SEC or any other governmental
authority that have not been satisfied.
SECTION 4.26. Listing and Maintenance Requirements. The Pubco is, and has
no reason to believe that it will not in the foreseeable future continue to be,
in compliance with the listing and maintenance requirements for continued
listing of the Pubco Stock on the trading market on which the Pubco Stock are
currently listed or quoted. The issuance and sale of the Shares under this
Agreement does not contravene the rules and regulations of the trading market on
which the Pubco Stock are currently listed or quoted, and no approval of the
stockholders of the Pubco is required for the Pubco to issue and deliver to the
Stockholder the Shares contemplated by this Agreement.
SECTION 4.27. No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or
exists, or is contemplated to occur with respect to the Pubco, its subsidiaries
or their respective business, properties, prospects, operations or financial
condition, that would be required to be disclosed by the Pubco under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Pubco of its Common Stock and which has
not been publicly announced.
SECTION 4.28. Foreign Corrupt Practices. Neither the Pubco, nor any of its
subsidiaries, nor, to the Pubco's knowledge, any director, officer, agent,
employee or other person acting on behalf of the Pubco or any of its
subsidiaries has, in the course of its actions for, or on behalf of, the Pubco
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
ARTICLE V
Deliveries
SECTION 5.01. Deliveries of the Stockholder.
(a) Concurrently herewith the Stockholder is delivering to the Pubco this
Agreement executed by the Stockholder.
(b) On Closing date, the Stockholder shall deliver to the Pubco:
(i) certificates representing its Risetime Stock; and
17
(ii) duly executed instruments of transfer by the Stockholder of its
Risetime Stock to the Pubco.
SECTION 5.02. Deliveries of the Pubco.
(a) Concurrently herewith, the Pubco is delivering:
(i) to the Stockholder and to Risetime, a copy of this Agreement
executed by Pubco;
(ii) to Risetime, a certificate from the Pubco, signed by its
Secretary or Assistant Secretary certifying that the attached
copies of the Pubco Charter, Pubco Bylaws and resolutions of the
Board of Directors of the Pubco approving the Agreement and the
Transactions, are all true, complete and correct and remain in
full force and effect;
(b) At or prior to the Closing, the Pubco shall deliver:
(i) to Risetime, a letter of resignation of Xx Xxxx from all offices
he holds with the Pubco effective upon the Closing and from his
position as a director of the Pubco; and
(ii) to Risetime, evidence of the election (A) of five directors to
the board of directors of the Pubco and (B) of the executive
officers of Risetime as executive officers of the Pubco effective
upon the Closing.
(c) On Closing date, the Pubco shall deliver:
to the Stockholder, certificates representing the new shares of Pubco
Stock issued to the Stockholder as set forth on Exhibit A.
SECTION 5.03. Deliveries of Risetime.
Concurrently herewith, Risetime is delivering to the Pubco this Agreement
executed by Risetime
ARTICLE VI
Conditions to Closing
SECTION 6.01. Stockholder and Risetime Conditions Precedent. The
obligations of the Stockholder and Risetime to enter into and complete the
Closing is subject, at the option of the Stockholder and Risetime, to the
fulfillment on or prior to the Closing Date of the following conditions:
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(a) Representations and Covenants. The representations and warranties
of the Pubco contained in this Agreement shall be true in all material
respects on and as of the Closing Date with the same force and effect as
though made on and as of the Closing Date. The Pubco shall have performed
and complied in all material respects with all covenants and agreements
required by this Agreement to be performed or complied with by the Pubco on
or prior to the Closing Date.
(b) Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or
instituted or threatened by any governmental or regulatory body to
restrain, modify or prevent the carrying out of the Transactions or to seek
damages or a discovery order in connection with such Transactions, or which
has or may have, in the reasonable opinion of Risetime or the Stockholder,
a materially adverse effect on the assets, properties, business, operations
or condition (financial or otherwise) of the Pubco or Risetime.
(c) No Material Adverse Change. There shall not have been any
occurrence, event, incident, action, failure to act, or transaction since
November 30, 2009 which has had or is reasonably likely to cause a Pubco
Material Adverse Effect.
(d) Post-Closing Capitalization. At, and immediately after, the
Closing, the authorized capitalization, and the number of issued and
outstanding shares of the capital stock of Risetime and the Pubco, on a
fully-diluted basis, as indicated on a schedule to be delivered by the
Parties at or prior to the Closing, shall be acceptable to the Stockholder
in its sole and absolute discretion.
(e) SEC Reports. The Pubco shall have filed all reports and other
documents required to be filed by Pubco under the U.S. federal securities
laws through the Closing Date.
(f) OTCBB Quotation. The Pubco shall have maintained its status as a
company whose common stock is quoted on the Over-the-Counter Bulletin Board
and no reason shall exist as to why such status shall not continue
immediately following the Closing.
(g) Deliveries. The deliveries specified in Section 5.02 shall have
been made by the Pubco.
(h) No Suspensions of Trading in Pubco Stock; Listing. Trading in the
Pubco Stock shall not have been suspended by the SEC or any trading market
(except for any suspensions of trading of not more than one trading day
solely to permit dissemination of material information regarding the Pubco)
at any time since the date of execution of this Agreement, and the Pubco
Stock shall have been at all times since such date listed for trading on a
trading market.
(i) Satisfactory Completion of Due Diligence. Risetime and the
Stockholder shall have completed their legal, accounting and business due
diligence of the Pubco and the results thereof shall be satisfactory to
Risetime and the Stockholder in their sole and absolute discretion.
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SECTION 6.02. Pubco Conditions Precedent. The obligations of the Pubco to
enter into and complete the Closing is subject, at the option of the Pubco, to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived by the Pubco in writing.
(a) Representations and Covenants. The representations and warranties
of the Stockholder and Risetime contained in this Agreement shall be true
in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of the Closing Date. The Stockholder
and Risetime shall have performed and complied in all material respects
with all covenants and agreements required by this Agreement to be
performed or complied with by the Stockholder and Risetime on or prior to
the Closing Date. Risetime shall have delivered to the Pubco, if requested,
a certificate, dated the Closing Date, to the foregoing effect.
(b) Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or
instituted or threatened by any governmental or regulatory body to
restrain, modify or prevent the carrying out of the Transactions or to seek
damages or a discovery order in connection with such Transactions, or which
has or may have, in the reasonable opinion of the Pubco, a materially
adverse effect on the assets, properties, business, operations or condition
(financial or otherwise) of the Pubco.
(c) No Material Adverse Change. There shall not have been any
occurrence, event, incident, action, failure to act, or transaction since
November 30, 2009 which has had or is reasonably likely to cause a Risetime
Material Adverse Effect.
(d) Deliveries. The deliveries specified in Section 5.01 and Section
5.03 shall have been made by the Stockholder and Risetime, respectively.
(e) Post-Closing Capitalization. At, and immediately after, the
Closing, the authorized capitalization, and the number of issued and
outstanding shares of the capital stock of Risetime and the Pubco, on a
fully-diluted basis, as indicated on a schedule to be delivered by the
Parties at or prior to the Closing, shall be acceptable to the Pubco in its
sole and absolute discretion.
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ARTICLE VII
Covenants
SECTION 7.01. Blue Sky Laws. Pubco shall take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified) required to be taken under any applicable state securities laws in
connection with the issuance of Pubco Stock in connection with this Agreement.
SECTION 7.02. Fees and Expenses. All fees and expenses incurred in
connection with this Agreement shall be paid by the Party incurring such fees or
expenses, whether or not this Agreement is consummated.
SECTION 7.03. Continued Efforts. Each Party shall use commercially
reasonable efforts to (a) take all action reasonably necessary to consummate the
Transactions, and (b) take such steps and do such acts as may be necessary to
keep all of its representations and warranties true and correct as of the
Closing Date with the same effect as if the same had been made, and this
Agreement had been dated, as of the Closing Date.
SECTION 7.04. Conduct of Business. During the period from the date hereof
through the Closing Date, Pubco and Risetime shall carry on their respective
businesses in the ordinary and usual course consistent with past practice.
SECTION 7.05. Exclusivity. The Pubco shall not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any person relating to
the acquisition of any capital stock or other voting securities of the Pubco, or
any assets of the Pubco (including any acquisition structured as a merger,
consolidation, share exchange or other business combination), (ii) participate
in any discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any person to do or seek any of the foregoing, or (iii)
take any other action that is inconsistent with the Transactions and that has
the effect of avoiding the Closing contemplated hereby. The Pubco shall notify
Risetime immediately if any person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
SECTION 7.06. Filing of 8-K. As soon as practicable following the Closing
Date, Risetime shall provide the Pubco and the Stockholder with a draft of the
current report on Form 8-K that is reasonably acceptable to the Pubco and the
Stockholder that the Pubco shall file, within four business days of the Closing
Date and attaching as exhibits all relevant agreements with the SEC disclosing
the terms of this Agreement and other requisite disclosure regarding the
Transactions and including the requisite audited consolidated financial
statements of Risetime.
SECTION 7.07. Access. Each Party shall permit representatives of each other
Party to have full access to all premises, properties, personnel, books, records
(including Tax records), contracts, and documents of or pertaining to such
Party.
SECTION 7.08. Preservation of Business. From the date of this Agreement
until the Closing Date, each of Risetime and the Pubco shall operate only in the
ordinary and usual course of business consistent with past practice (provided,
however, that Pubco shall not issue any securities without the prior written
21
consent of Risetime), and shall use reasonable commercial efforts to (a)
preserve intact its respective business organization, (b) preserve the good will
and advantageous relationships with customers, suppliers, independent
contractors, employees and other Persons material to the operation of its
respective business, and (c) not permit any action or omission which would cause
any of its respective representations or warranties contained herein to become
inaccurate or any of its respective covenants to be breached in any material
respect.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given upon receipt by the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):
If to the Pubco, to:
Room 42, 0xx Xxxxx, Xxx Xxxxx Xxxxx,
00 Xxx Xxxxxx, Xxxxxxx, Xxxx Xxxx
Tel: 00852 0000 0000
Fax: 00852 0000 0000
Attn: Xx Xxxx
If to Risetime, to:
Changsha Huanqiu Vocational Secondary School,
Yutan Town, Ningxiang County, Hunan Province, P. R. China
Tel: (00 000) 0000 0000
Fax: (00 000) 0000 0000
Attn: Guangwen He
If to the Stockholder, to:
Room 42, 0xx Xxxxx, Xxx Xxxxx Xxxxx,
00 Xxx Xxxxxx, Xxxxxxx, Xxxx Xxxx
Tel: (000) 0000 0000
Fax: (000) 0000 0000
Attn: Guangwen He
with a copy to:
King & Wood
40th Floor, Office Tower A, Beijing Fortune Plaza 7 Dongsanhuan Zhonglu,
00
Xxxxxxxx Xxxxxxxx Xxxxxxx 000000, Xxxxx.
Attention: Xxxxxxx Law
Tel: 0000-00000000
Fax:0000-00000000
SECTION 8.02. Amendments; Waivers; No Additional Consideration. No
provision of this Agreement may be waived or amended except in a written
instrument signed by Risetime, Pubco and the Stockholder holding a majority of
the Shares. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either Party
to exercise any right hereunder in any manner impair the exercise of any such
right. No consideration shall be offered or paid to the Stockholder to amend or
consent to a waiver or modification of any provision of any transaction document
unless the same consideration is also offered to all Stockholders who then hold
Shares.
SECTION 8.03. Termination.
(a) Termination of Agreement. Risetime, the Stockholder and the Pubco may
terminate this Agreement by mutual written consent at any time prior to the
Closing;
(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 8.03(a) above, all rights and obligations of the Parties hereunder
shall terminate without any Liability of any Party to any other Party to
consummate its obligations hereunder or to complete the transactions
contemplated by this Agreement, except for any Liability of any Party then in
breach.
SECTION 8.04. Power of Attorney. The Stockholder hereby irrevocably
constitutes and appoints Risetime and any officer or agent of Risetime, with
full power of substitution, as its true and lawful attorneys-in-fact with full
irrevocable power and authority in the place and stead of the Stockholder or in
Risetime's own name, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or useful to accomplish the
purposes of this Agreement and, without limiting the generality of the
foregoing, hereby gives said attorneys the power and right, on behalf of the
Stockholder, without notice to or assent by the Stockholder to transfer any
future shares acquired by the Stockholder and any purchase option, call option,
right of first refusal, preemptive right, subscription right or any similar
right granted to the Stockholder relating to transactions on or before the date
hereof.
SECTION 8.05. Replacement of Securities. If any certificate or instrument
evidencing any Shares is mutilated, lost, stolen or destroyed, the Pubco shall
issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Pubco of such loss, theft or destruction and customary and reasonable indemnity,
if requested. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Shares. If a replacement certificate or
instrument evidencing any Shares is requested due to a mutilation thereof, the
23
Pubco may require delivery of such mutilated certificate or instrument as a
condition precedent to any issuance of a replacement.
SECTION 8.06. Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, the
Stockholder, Pubco and Risetime will be entitled to specific performance under
this Agreement. The Parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
SECTION 8.07. Independent Nature of Stockholders' Obligations and Rights.
The obligations of each Stockholder under this Agreement are several and not
joint with the obligations of any other Stockholder, and no Stockholder shall be
responsible in any way for the performance of the obligations of any other
Stockholder under this Agreement. The decision of each Stockholder to acquire
Shares pursuant to this Agreement has been made by such Stockholder
independently of any other Stockholder. Nothing contained herein, and no action
taken by any Stockholder pursuant hereto, shall be deemed to constitute the
Stockholder as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Stockholder are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated herein. Each Stockholder acknowledges that no other Stockholder has
acted as agent for such Stockholder in connection with making its investment
hereunder and that no Stockholder will be acting as agent of such Stockholder in
connection with monitoring its investment in the Shares or enforcing its rights
under this Agreement. Each Stockholder shall be entitled to independently
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Stockholder
to be joined as an additional party in any proceeding for such purpose. Each of
Risetime and Pubco acknowledge that the Stockholder has been provided with this
same Agreement for the purpose of closing a transaction with multiple
Stockholders and not because it was required or requested to do so by any
Stockholder.
SECTION 8.08. Limitation of Liability. Notwithstanding anything herein to
the contrary, each of the Pubco and Risetime acknowledge and agree that the
liability of a Stockholder arising directly or indirectly, under any transaction
document of any and every nature whatsoever shall be satisfied solely out of the
assets of such Stockholder, and that no trustee, officer, other investment
vehicle or any other affiliate of such Stockholder or any investor, shareholder
or holder of shares of beneficial interest of such Stockholder shall be
personally liable for any liabilities of such Stockholder.
SECTION 8.09. Interpretation. When a reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation".
SECTION 8.10. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
24
substance of the Transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that Transactions contemplated hereby are fulfilled to the extent possible.
SECTION 8.11. Counterparts; Facsimile Execution. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the Parties and delivered to the other Parties. Facsimile
execution and delivery of this Agreement is legal, valid and binding for all
purposes.
SECTION 8.12. Entire Agreement; Third Party Beneficiaries. This Agreement,
taken together with Risetime Disclosure Letter and the Pubco Disclosure Letter,
(a) constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the Parties with respect to the
Transactions and (b) are not intended to confer upon any person other than the
Parties any rights or remedies.
SECTION 8.13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. Each of the parties hereto agrees (a) that this Agreement involves
at least $100,000.00, and (b) that this Agreement has been entered into by the
parties hereto in express reliance upon 6 Del. C. ss. 2708. Each of the parties
hereto hereby irrevocably and unconditionally agrees (i) that it is and shall
continue to be subject to the jurisdiction of the courts of the State of
Delaware and of the federal courts sitting in the State of Delaware, and (ii)(A)
to the extent that such party is not otherwise subject to service of process in
the State of Delaware, to appoint and maintain an agent in the State of Delaware
as such party's agent for acceptance of legal process and notify the other
parties hereto of the name and address of such agent, and (B) to the fullest
extent permitted by law, that service of process may also be made on such party
by prepaid certified mail with a proof of mailing receipt validated by the U.S.
Postal Service constituting evidence of valid service, and that, to the fullest
extent permitted by applicable law, service made pursuant to (ii)(A) or (B)
above shall have the same legal force and effect as if served upon such party
personally within the State of Delaware.
SECTION 8.14. Assignment. To the fullest extent permitted by law, neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the Parties without the prior written consent of the other
Parties. Any purported assignment without such consent shall be void. Subject to
the preceding sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the Parties and their respective successors
and assigns.
[Signature Page Follows]
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The Parties hereto have executed and delivered this Share Exchange
Agreement as of the date first above written.
The Pubco:
GREEN STAR MINING CORP.
By: /s/ Xx Xxxx
-----------------------------------
Name: Xx Xxxx
Title: President
Risetime:
RISETIME GROUP LIMITED
By: /s/ CLD Nominee Limited
-----------------------------------
Name: CLD Nominee Limited
Title: Director
The Stockholder:
NICESTAR INTERNATIONAL LIMITED
By: /s/ Guangwen He
-----------------------------------
Name: Guangwen He
Title: Director
26
EXHIBIT A
Number of Percentage of Total Number of Shares of
Shares of Company Shares Pubco Stock to be
Risetime Stock Represented By Shares Received by
Name and Address of Stockholder Being Exchanged Being Exchanged Stockholder
------------------------------- --------------- --------------- -----------
Nicestar International Limited 1 62.12% 20,500,000
