SHARE EXCHANGE AGREEMENT by and among Peng Xiang Peng Fei Investments Limited (“Peng Xiang“) and the Shareholders of Peng Xiang, on the one hand; and Sino Charter Inc. (“Sino Charter”), a Nevada corporation, and the Majority Stockholders of Sino...
by
and among
Peng
Xxxxx Xxxx Fei Investments Limited (“Xxxx Xxxxx“)
and
the
Shareholders of Xxxx Xxxxx,
on the one hand;
and
Sino
Charter Inc. (“Sino Charter”),
a
Nevada corporation,
and
the
Majority Stockholders of Sino Charter,
on
the other hand
February
13, 2009
This
Share Exchange Agreement, dated as of February 13, 2009 (this “Agreement”), is
made and entered into by and among Peng Xxxxx Xxxx Fei Investments Limited, an
international business company incorporated in the British Virgin Islands
(“Xxxx Xxxxx”),
and the shareholders of Xxxx Xxxxx (“Xxxx Xxxxx
Shareholders”) listed on the Signature Pages for Xxxx Xxxxx Shareholders
that are attached hereto, on the one hand; and Sino Charter Inc., a Nevada
corporation (“Sino
Charter”), and the stockholders of Sino Charter listed on
Signature Page for Sino Charter Stockholders that is attached hereto (the “Sino Charter
Stockholders”), on the other hand.
RECITALS
WHEREAS,
on February 13, 2009, the Board of Directors of Sino Charter has adopted
resolutions approving Sino Charter’s acquisition of the equity interests of Xxxx
Xxxxx held by the Xxxx Xxxxx Stockholders (the “Acquisition”) by
means of a share exchange with the Xxxx Xxxxx Shareholders, upon the terms and
conditions hereinafter set forth in this Agreement;
WHEREAS,
the Xxxx Xxxxx Shareholders own all of the equity interest (in shares of capital
stock or otherwise) of Xxxx Xxxxx (the “Xxxx Xxxxx Equity
Interest”);
WHEREAS,
the Sino Charter Stockholders are the majority stockholders of Sino Charter
which hold, collectively, an amount of shares of Sino Charter common stock which
represents approximately 89.7% of the issued and outstanding capital stock of
Sino Charter;
WHEREAS,
the Sino Charter Stockholders will enter into this Agreement for the purpose of
making certain covenants, indemnifications and agreements;
WHEREAS,
upon consummation of the transactions contemplated by this Agreement, Xxxx Xxxxx
will become a 100% wholly-owned subsidiary of Sino Charter; and
WHEREAS,
it is intended that the terms and conditions of this Agreement comply in all
respects with Section 368(a)(1)(B) and/or Section 351 of the Code and the
regulations corresponding thereto, so that the Acquisition shall qualify as a
tax free reorganization under the Code, and that this share exchange transaction
shall qualify as a transaction in securities exempt from registration or
qualification under the Securities Act of 1933, as amended and in effect on the
date of this Agreement.
AGREEMENT
NOW,
THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE
1
THE
ACQUISITION
1.1 The Acquisition. Upon
the terms and subject to the conditions hereof, at the Closing (as hereinafter
defined) the parties shall do the following:
(a) The
Xxxx Xxxxx Shareholders will each sell, convey, assign, transfer and deliver to
Sino Charter certificates representing the Xxxx Xxxxx Equity Interest held by
each Xxxx Xxxxx Shareholder as set forth in Column II of Annex I hereto, which
in the aggregate shall constitute 100% of the issued and outstanding equity
interests of Xxxx Xxxxx, accompanied by a properly executed and authenticated
stock power or instrument of like tenor.
(b) As
consideration for the acquisition of the Xxxx Xxxxx Equity Interests, Sino
Charter will issue to each Xxxx Xxxxx Shareholder, in exchange for such Peng
Xiang’s portion of the Xxxx Xxxxx Equity Interests, the number of shares of
common stock set forth opposite such party’s name in Column IV on Annex I attached
hereto (collectively, the “Sino Charter
Shares”). The Sino Charter Shares issued shall equal
approximately 91% of the outstanding shares of Sino Charter’s common stock at
the time of Closing. For example, if there are 16,000,000 shares of
Sino Charter’s common stock outstanding immediately prior to the Closing, then
there shall be 14,560,000 shares of Sino Charter’s common stock issued to the
Xxxx Xxxxx Shareholders at Closing.
1.2 Closing Date. The
closing of the Acquisition (the “Closing”) shall take place on February 13,
2009, or on such other date as may be mutually agreed upon by the parties. Such
date is referred to herein as the “Closing Date.”
1.3 Taking of Necessary Action;
Further Action. If, at any time after the Closing, any further action is
necessary or desirable to carry out the purposes of this Agreement, the Xxxx
Xxxxx Shareholders, Xxxx Xxxxx, the Sino Charter Stockholders, and/or Sino
Charter (as applicable) will take all such lawful and necessary
action.
1.4 Certain Definitions.
The following capitalized terms as used in this Agreement shall have the
respective definitions:
“Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.
“Contract” means any
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument.
“FINRA” means
Financial Industry Regulatory Authority.
“Knowledge” means the
actual knowledge of the officers, directors or advisors of the referenced
party.
“Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.
“Material Adverse
Effect” means a adverse effect on either referenced party or the combined
entity resulting from the consummation of the transaction contemplated by this
Agreement, or on the financial condition, results of operations or business,
before or after the consummation of the transaction contemplated in this
Agreement, which as a whole is or would be considered material to an investor in
the securities of Sino Charter.
“Non-U.S. Person”
means any person who is not a U.S. Person or is deemed not to be a U.S. Person
under Rule 902(k)(2).
“Person” means any
individual, corporation, partnership, joint venture, trust, business
association, organization, governmental authority or other entity.
“Restricted Period”
shall have the meaning set forth in Section 3.4(b)(vi).
“Securities Act” means
the Securities Act of 1933, as amended.
“Tax Returns” means
all federal, state, local and foreign returns, estimates, information statements
and reports relating to Taxes.
“Tax” or “Taxes” means any and
all applicable central, federal, provincial, state, local, municipal and foreign
taxes, including, without limitation, gross receipts, income, profits, sales,
use, occupation, value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, assessments,
governmental charges and duties together with all interest, penalties and
additions imposed with respect to any such amounts and any obligations under any
agreements or arrangements with any other person with respect to any such
amounts and including any liability of a predecessor entity for any such
amounts.
“Trading Day” means a
day on which the principal Trading Market is open for trading.
“Trading Market” means
the following markets or exchanges on which Sino Charter’s common stock is
listed or quoted for trading on the date in question: the NYSE Alternext US
Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange or the OTC Bulletin
Board.
“Transaction” means
the transactions contemplated by this Agreement, including the share
exchange.
“United States” means
and includes the United States of America, its territories and possessions, any
State of the United States, and the District of Columbia.
“U.S. Person” as defined in
Regulation S means: (i) a natural person resident in the United States; (ii) any
partnership or corporation organized or incorporated under the laws of the
United States; (iii) any estate of which any executor or administrator is a U.S.
Person; (iv) any trust of which any trustee is a U.S. Person; (v) any agency or
branch of a foreign entity located in the United States; (vi) any
nondiscretionary account or similar account (other than an estate or trust) held
by a dealer or other fiduciary for the benefit or account of a U.S. Person;
(vii) any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated and (if an
individual) resident in the United States; and (viii) a corporation or
partnership organized under the laws of any foreign jurisdiction and formed by a
U.S. Person principally for the purpose of investing in securities not
registered under the Securities Act, unless it is organized or incorporated,
owned, by accredited investors (as defined in Rule 501(a) under the Securities
Act) who are not natural persons, estates or trusts).
1.5 Tax
Consequences. It is intended that the terms and conditions of
this Agreement comply in all respects with Section 368(a)(1)(B) and/or Section
351 of the Code and the regulations corresponding thereto, so that the
Acquisition shall qualify as a tax-free reorganization under the
Code.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF XXXX XXXXX
Except as
otherwise disclosed herein or in a disclosure schedule attached hereto, Xxxx
Xxxxx hereby represents and warrants to Sino Charter and the Sino Charter
Stockholders as of the date hereof and as of the Closing Date (unless otherwise
indicated) as follows:
2.1 Organization. Xxxx
Xxxxx has been duly incorporated, validly exists as a corporation, and is in
good standing under the laws of its jurisdiction of incorporation, and has the
requisite power to carry on its business as now conducted. Set forth
on Schedule 2.1 of the disclosure schedules is a list of those jurisdictions in
which Xxxx Xxxxx presently conducts its business, owns, holds and operates its
properties and assets.
2.2 Capitalization. The
authorized capital stock of Xxxx Xxxxx consists of 50,000 ordinary shares,
US$1.00 par value, of which at the Closing, no more than 10,000 shares shall be
issued and outstanding. All of the issued and outstanding shares of
capital stock of Xxxx Xxxxx, as of the Closing, are duly authorized, validly
issued, fully paid, non-assessable and free of preemptive
rights. There are no voting trusts or any other agreements or
understandings with respect to the voting of Peng Xiang’s capital
stock. Except as set forth in the preceding sentence, no other class
of capital stock or other security of Xxxx Xxxxx is authorized, issued, reserved
for issuance or outstanding. There are no authorized or outstanding
options, warrants, equity securities, calls, rights, commitments or agreements
of any character by which Xxxx Xxxxx or any of the Xxxx Xxxxx Shareholders is
obligated to issue, deliver or sell, or cause to be issued, delivered or sold,
any shares of capital stock or other securities of Xxxx Xxxxx. There
are no outstanding contractual obligations (contingent or otherwise) of Xxxx
Xxxxx to retire, repurchase, redeem or otherwise acquire any outstanding shares
of capital stock of, or other ownership interests in, Xxxx Xxxxx.
2.3 Subsidiaries. As of
the Closing, Xxxx Xxxxx has no direct or indirect subsidiaries, except as
disclosed in Schedule
2.3 of the disclosure schedules hereto (collectively the “Xxxx Xxxxx
Subsidiaries,” and each a “Xxxx Xxxxx
Subsidiary”). Each Xxxx Xxxxx Subsidiary is an entity duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of formation and has the requisite corporate power and
authority to own, lease and to carry on its business as now being
conducted. Xxxx Xxxxx owns all of the shares of each Xxxx Xxxxx
Subsidiary, and there are no outstanding options, warrants, subscriptions,
conversion rights or other rights, agreements or commitments obligating any Xxxx
Xxxxx Subsidiary to issue any additional shares of common stock or ordinary
stock, as the case may be, of such subsidiary, or any other securities
convertible into, exchangeable for or evidence the right to subscribe for or
acquire from any Xxxx Xxxxx Subsidiary any shares of such
subsidiary.
2.4 Certain Corporate
Matters. Xxxx Xxxxx is duly qualified to do business as a corporation and
is in good standing under the laws of the British Virgin Islands, and in each
other jurisdiction in which the ownership of its property or the conduct of its
business requires it to be so qualified, except where the failure to be so
qualified would not have a Material Adverse Effect on Peng Xiang’s financial
condition, results of operations or business. Xxxx Xxxxx has full
corporate power and authority and all authorizations, licenses and permits
necessary to carry on the business in which it is engaged and to own and use the
properties owned and used by it.
2.5 Authority Relative to this
Agreement. Xxxx Xxxxx has the requisite power and authority to
enter into this Agreement and to carry out its respective obligations
hereunder. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby by Xxxx Xxxxx have
been duly authorized by Peng Xiang’s Board of Directors and no other actions on
the part of Xxxx Xxxxx are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Xxxx Xxxxx and constitutes a valid and binding
agreement, enforceable against Xxxx Xxxxx in accordance with its terms, except
as such enforcement may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors’ rights generally or by general
principles of equity.
2.6 Consents and Approvals; No
Violations. Except for applicable requirements of federal securities laws
and state securities or blue-sky laws, no filing with, and no permit,
authorization, consent or approval of, any third party, public body or authority
is necessary for the consummation by Xxxx Xxxxx of the transactions contemplated
by this Agreement. Neither the execution and delivery of this Agreement by Xxxx
Xxxxx nor the consummation by Xxxx Xxxxx of the transactions contemplated
hereby, nor compliance by them with any of the provisions hereof, will (a)
conflict with or result in any breach of any provisions of the charter or bylaws
(or operating agreement) of Xxxx Xxxxx or any Xxxx Xxxxx Subsidiary, (b) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, Contract, agreement or other
instrument or obligation to which Xxxx Xxxxx or any Xxxx Xxxxx Subsidiary is a
party or by which any of their respective properties or assets may be bound, or
(c) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Xxxx Xxxxx or any Xxxx Xxxxx Subsidiary, or any of its properties
or assets, except in the case of clauses (b) and (c) for violations, breaches or
defaults which are not in the aggregate material to Xxxx Xxxxx taken as a
whole.
2.7 Books and Records.
The books and records of Xxxx Xxxxx delivered to Sino Charter prior to the
Closing fully and fairly reflect the transactions to which Xxxx Xxxxx is a party
or by which it or its properties are bound, and there shall be no material
difference between the unaudited combined financial statements of Xxxx Xxxxx
given to Sino Charter and the Sino Charter Stockholders and the actual reviewed
US GAAP results of Xxxx Xxxxx for the nine-month period ended September 30,
2008.
2.8 Intellectual
Property. Xxxx Xxxxx has no knowledge of any claim that, or inquiry as to
whether, any product, activity or operation of Xxxx Xxxxx infringes upon or
involves, or has resulted in the infringement of, any trademarks, trade-names,
service marks, patents, copyrights or other proprietary rights of any other
person, corporation or other entity; and no proceedings have been instituted,
are pending or are threatened.
2.9 Litigation. Except as
disclosed in Schedule
2.9 of the disclosure schedules hereto, there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the
Knowledge of Xxxx Xxxxx, threatened against or affecting Xxxx Xxxxx or any of
its properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of this
Agreement or the Sino Charter Shares or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither Xxxx Xxxxx nor any director or officer thereof, is or
has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the Knowledge of Xxxx
Xxxxx, there is not pending or contemplated, any investigation by the Commission
involving Xxxx Xxxxx or any current or former director or officer of Xxxx
Xxxxx.
2.10 Legal Compliance. To
the best Knowledge of Xxxx Xxxxx, after due investigation, no claim has been
filed against Xxxx Xxxxx or any of the Xxxx Xxxxx Subsidiaries alleging a
violation of any applicable laws and regulations of foreign, federal, state and
local governments and all agencies thereof. Xxxx Xxxxx and each of the Xxxx
Xxxxx Subsidiaries holds all of the material permits, licenses, certificates or
other authorizations of foreign, federal, state or local governmental agencies
required for the conduct of their respective businesses as presently
conducted.
2.11 Contracts. Except as
disclosed in Schedule
2.11 of the disclosure schedules hereto, there are no Contracts that are
material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the Xxxx
Xxxxx. Xxxx Xxxxx 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
they are a party or by which they or any of their properties or assets are
bound, except for violations or defaults that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect.
2.12 Material Changes.
Since January 1, 2009, except as disclosed in Schedule 2.12 of the
disclosures schedules hereto: (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) Xxxx Xxxxx has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice, and
(B) liabilities not required to be reflected in Peng Xiang’s financial
statements pursuant to GAAP, (iii) Xxxx Xxxxx has not altered its method of
accounting, (iv) Xxxx Xxxxx has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) Xxxx Xxxxx has not issued any equity securities to any officer,
director or Affiliate.
2.13 Labor
Relations. No labor dispute exists or, to the Knowledge of
Xxxx Xxxxx and the Xxxx Xxxxx Shareholders, is imminent with respect to any of
the employees of Xxxx Xxxxx which could reasonably be expected to result in a
Material Adverse Effect. None of Peng Xiang’s or Xxxx Xxxxx
Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with Xxxx Xxxxx or such Xxxx Xxxxx Subsidiary, and neither Xxxx
Xxxxx nor any of the Xxxx Xxxxx Subsidiaries is a party to a collective
bargaining agreement, and Xxxx Xxxxx and the Xxxx Xxxxx Subsidiaries believe
that their relationships with their employees are good. No executive
officer, to the Knowledge of Xxxx Xxxxx and the Xxxx Xxxxx Shareholders, is, or
is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such
executive officer does not subject Xxxx Xxxxx or any of the Xxxx Xxxxx
Subsidiaries to any liability with respect to any of the foregoing
matters. Xxxx Xxxxx and the Xxxx Xxxxx Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
2.14 Title to
Assets. Xxxx Xxxxx and the Xxxx Xxxxx Subsidiaries have good
and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to
the business of Xxxx Xxxxx and the Xxxx Xxxxx Subsidiaries, in each case free
and clear of all Liens, except for Liens that do not materially affect the value
of such property and do not materially interfere with the use made and proposed
to be made of such property by Xxxx Xxxxx and the Xxxx Xxxxx Subsidiaries and
Liens for the payment of Taxes, the payment of which is neither delinquent nor
subject to penalties. Any real property and facilities held under
lease by Xxxx Xxxxx and the Xxxx Xxxxx Subsidiaries are held by them under
valid, subsisting and enforceable leases with which Xxxx Xxxxx and the Xxxx
Xxxxx Subsidiaries are in compliance.
2.15 Transactions with Affiliates
and Employees. None of the officers or directors of Xxxx Xxxxx
and, to the Knowledge of Xxxx Xxxxx and the Xxxx Xxxxx Shareholders, none of the
employees of Xxxx Xxxxx is presently a party to any transaction with Xxxx Xxxxx
or any Xxxx
Xxxxx 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 Xxxx Xxxxx and the Xxxx Xxxxx
Shareholders, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner, in
each case in excess of $120,000, other than for: (i) payment of salary or
consulting fees for services rendered, (ii) reimbursement for expenses incurred
on behalf of Xxxx Xxxxx and (iii) other employee benefits.
2.17 Certain
Fees. Except as disclosed in Schedule 2.17 of the
disclosure schedules hereto, no brokerage or finder’s fees or commissions are or
will be payable by Xxxx Xxxxx to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement.
2.18 Registration
Rights. No Person has any right to cause (or any successor) to
effect the registration under the Securities Act of any securities of Xxxx Xxxxx
(or any successor).
2.19 Application of Takeover
Protections. Xxxx Xxxxx 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 Peng Xiang’s certificate of
incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable as a result of Xxxx Xxxxx
fulfilling its obligations or exercising its rights under this
Agreement.
2.20 Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, Xxxx Xxxxx and each Subsidiary has timely filed all necessary Tax
Returns and has paid or accrued all Taxes shown as due thereon, and Xxxx Xxxxx
has no Knowledge of a tax deficiency which has been asserted or threatened
against Xxxx Xxxxx or any Xxxx Xxxxx Subsidiary.
2.21 No General
Solicitation. Neither Xxxx Xxxxx nor any person acting on
behalf of Xxxx Xxxxx has offered or sold securities in connection herewith by
any form of general solicitation or general advertising.
2.22 Foreign Corrupt
Practices. Neither Xxxx Xxxxx, nor to the Knowledge of Xxxx
Xxxxx and the Xxxx Xxxxx Shareholders, any agent or other person acting on
behalf of Xxxx Xxxxx , has: (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by Xxxx Xxxxx (or made by any person acting
on its behalf of which Xxxx Xxxxx is aware) which is in violation of law or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.
2.23 Obligations of
Management. Each officer and key employee of Xxxx Xxxxx and its
Subsidiaries is currently devoting substantially all of his or her business time
to the conduct of business of Xxxx Xxxxx and its
Subsidiaries. Neither Xxxx Xxxxx nor any of its Subsidiaries is aware
that any officer or key employee of Xxxx Xxxxx or any Subsidiary is planning to
work less than full time at Xxxx Xxxxx or any Subsidiary, as applicable, in the
future. No officer or key employee is currently working or, to Peng
Xiang’s or any Xxxx Xxxxx Shareholder’s Knowledge, plans to work for a
competitive enterprise, whether or not such officer or key employee is or will
be compensated by such enterprise.
2.25 Minute Books. The
minute books of Xxxx Xxxxx and the Xxxx Xxxxx Subsidiaries made available to
Sino Charter contain a complete summary of all meetings and written consents in
lieu of meetings of directors and stockholders since the time of
incorporation.
2.26 Employee
Benefits. Except as set forth on Schedule 2.29 of the
disclosure schedules hereto, neither Xxxx Xxxxx nor any Subsidiary has (nor for
the two years preceding the date hereof has had) any plans which are subject to
ERISA. “ERISA” means the
Employee Retirement Income Security Act of 1974 or any successor law and the
regulations and rules issued pursuant to that act or any successor
law.
2.27 Money Laundering
Laws. The operations of Xxxx Xxxxx are and have been conducted
at all times in compliance with applicable financial record-keeping and
reporting requirements of the money laundering statutes of all U.S. and non-U.S.
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
governmental body (collectively, the “Money Laundering Laws”) and no action,
suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving Xxxx Xxxxx with respect to the Money Laundering
Laws is pending or, to the knowledge of Xxxx Xxxxx, threatened.
2.28 Disclosure. The
representations and warranties and statements of fact made by Xxxx Xxxxx and its
Subsidiaries in this Agreement are, as applicable, accurate, correct and
complete 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 and
information contained herein not false or misleading.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE XXXX XXXXX SHAREHOLDERS
Except as
otherwise disclosed herein or in a disclosure schedule attached hereto, the Xxxx
Xxxxx Shareholders each hereby represent and warrant to Sino Charter as
follows:
3.1 Ownership of the Xxxx Xxxxx
Equity Interest. Xxxx Xxxxx Shareholders own, beneficially and
of record, good and marketable title to the amount of the Xxxx Xxxxx Equity
Interest, free and clear of all security interests, liens, adverse claims,
encumbrances, equities, proxies, options or voting agreements. Xxxx
Xxxxx Shareholders represent that they each have no right or claims whatsoever
to any equity interests of Xxxx Xxxxx, other than the Xxxx Xxxxx Equity Interest
and do not have any options, warrants or any other instruments entitling any of
them to exercise or purchase or convert into additional equity interests of Xxxx
Xxxxx. At the Closing, the Xxxx Xxxxx Shareholders will convey to Sino Charter
good and marketable title to the Xxxx Xxxxx Equity Interests, free and clear of
any security interests, liens, adverse claims, encumbrances, equities, proxies,
options, shareholders’ agreements or restrictions.
3.2 Authority Relative to this
Agreement. This Agreement has been duly and validly executed and
delivered by the Xxxx Xxxxx Shareholders and constitutes a valid and binding
agreement of such person, enforceable against such person in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity.
3.3 Purchase of Restricted
Securities for Investment. The Xxxx Xxxxx Shareholders each acknowledge
that the Sino Charter Shares will not be registered pursuant to the Securities
Act or any applicable state securities laws, that the Sino Charter Shares will
be characterized as “restricted securities” under federal securities laws, and
that under such laws and applicable regulations the Sino Charter Shares cannot
be sold or otherwise disposed of without registration under the Securities Act
or an exemption therefrom. In this regard, each Xxxx Xxxxx
Shareholder is familiar with Rule 144 promulgated under the Securities Act, as
currently in effect, and understands the resale limitations imposed thereby and
by the Securities Act. Further, each Xxxx Xxxxx Shareholder
acknowledges and agrees that:
SHARE EXCHANGE
AGREEMENT
Page
9
(a) Each
Xxxx Xxxxx Shareholder is acquiring the Sino Charter Shares for investment, for
such Xxxx Xxxxx Shareholder’s own account and not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and each Xxxx
Xxxxx Shareholder has no present intention of selling, granting any
participation in, or otherwise distributing the same. Each Xxxx Xxxxx
Shareholder further represents that he, she or it does not have any Contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Sino Charter Shares.
(b) Each
Xxxx Xxxxx Shareholder understands that the Sino Charter Shares are not
registered under the Securities Act on the ground that the sale and the issuance
of securities hereunder is exempt from registration under the Securities Act
pursuant to Section 4(2) thereof, and that Sino Charter’s reliance on such
exemption is predicated on the each Shareholder’s representations set forth
herein.
3.4 Status of
Stockholder. Each of the Xxxx Xxxxx Shareholders hereby makes the
representations and warranties in either paragraph (a) or (b) of this Section
3.4, as indicated on the Signature Page of Xxxx Xxxxx Shareholders which is
attached and part of this Agreement:
(a) Accredited Investor Under
Regulation D. The Xxxx Xxxxx Shareholder is an “Accredited Investor” as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act, an excerpt of which is included in the attached Annex II, and such
Xxxx Xxxxx Shareholder is not acquiring its portion of the Sino Charter Shares
as a result of any advertisement, article, notice or other communication
regarding the Sino Charter Shares published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
(b) Non-U.S. Person Under
Regulation S. The Xxxx Xxxxx Shareholder:
(i) is
not a “U.S. person” as defined by Rule 902 of Regulation S promulgated under the
Securities Act, was not organized under the laws of any U.S. jurisdiction, and
was not formed for the purpose of investing in securities not registered under
the Securities Act;
(ii) at
the time of Closing, the Xxxx Xxxxx Shareholder was located outside the United
States;
(iii) no
offer of the Sino Charter Shares was made to the Xxxx Xxxxx Shareholder within
the United States;
(iv) the
Xxxx Xxxxx Shareholder is either (a) acquiring the Sino Charter Shares for its
own account for investment purposes and not with a view towards distribution, or
(b) acting as agent for a principal that has signed this Agreement or has
delivered representations and warranties substantially similar to this Section
3.4(b);
(v) all
subsequent offers and sales of the Sino Charter Shares by the Xxxx Xxxxx
Shareholder will be made outside the United States in compliance with Rule 903
of Rule 904 of Regulation S, pursuant to registration of the Shares under the
Securities Act, or pursuant to an exemption from such registration; the Xxxx
Xxxxx Shareholder understands the conditions of the exemption from registration
afforded by section 4(l) of the Securities Act and acknowledges that there can
be no assurance that it will be able to rely on such exemption.
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(vi) the
Xxxx Xxxxx Shareholder will not resell the Sino Charter Shares to U.S. Persons
or within the United States until after the end of the one (1) year period
commencing on the date of Closing (the “Restricted Period”);
(vii) the
Xxxx Xxxxx Shareholder shall not and hereby agrees not to enter into any short
sales with respect to the common stock of Sino Charter at any time after the
execution of this Agreement by the Xxxx Xxxxx Shareholder and prior
to the expiration of the Restricted Period;
(viii) in
the event of resale of the Sino Charter Shares to non-U.S. Persons outside of
the U.S. during the Restricted Period, the Xxxx Xxxxx Shareholder shall provide
a written confirmation or other written notice to any distributor, dealer, or
person receiving a selling concession, fee, or other remuneration in respect of
the Shares stating that such purchaser is subject to the same restrictions on
offers and sales that apply to the undersigned, and shall require that any such
purchase shall provide such written confirmation or other notice upon resale
during the Restricted Period;
(ix) the
Xxxx Xxxxx Shareholder has not engaged, nor is it aware that any party has
engaged, and it will not engage or cause any third party to engage in any
“directed selling” efforts (as such term is defined in Regulation S) in the
United States with respect to the Sino Charter Shares;
(x) the
Xxxx Xxxxx Shareholder is not a “distributor” as such term is defined in
Regulation S, and it is not a “dealer” as such term is defined in the Securities
Act;
(xi) the
Xxxx Xxxxx Shareholder has not taken any action that would cause any of the
parties to this Agreement to be subject to any claim for commission or other or
remuneration by any broker, finder, or other person; and
(xii) the
Xxxx Xxxxx Shareholder hereby represents that it has satisfied fully observed of
the laws of the jurisdiction in which it is located or domiciled, in connection
with the acquisition of the Sino Charter Shares or this Agreement, including (i)
the legal requirements of the Xxxx Xxxxx Shareholder’s jurisdiction for the
purchase and acquisition of the Sino Charter Shares, (ii) any foreign exchange
restrictions applicable to such purchase and acquisition, (iii) any governmental
or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, which may be relevant to the purchase, holding,
redemption, sale, or transfer of the Sino Charter Shares; and further, the Xxxx
Xxxxx Shareholder agrees to continue to comply with such laws as long as it
shall hold the Sino Charter Shares.
(c) The
Xxxx Xxxxx Shareholder understands that the Sino Charter Shares are being
offered and sold to it in reliance on specific provisions of federal and state
securities laws and that the parties to this Agreement are relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understanding of the Xxxx Xxxxx Shareholder set forth herein
in order to determine the applicability of such
provisions. Accordingly, the Xxxx Xxxxx Shareholder agrees to notify
Sino Charter of any events which would cause the representations and warranties
of the Xxxx Xxxxx Shareholder to be untrue or breached at any time after the
execution of this Agreement by such Xxxx Xxxxx Shareholder and prior to the
expiration of the Restricted Period.
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3.5 Investment Risk. The
Xxxx Xxxxx Shareholder is able to bear the economic risk of acquiring the Sino
Charter Shares pursuant to the terms of this Agreement, including a complete
loss of such the Xxxx Xxxxx Shareholder’s investment in the Sino Charter
Shares.
3.6 Restrictive Legends.
The Xxxx Xxxxx Shareholder acknowledges that the certificate(s) representing the
Xxxx Xxxxx Shareholder’s pro rata portion of the Sino Charter Shares shall each
conspicuously set forth on the face or back thereof a legend in substantially
the following form, corresponding to the stockholder’s status as set forth in
Section 3.4 and the signature pages hereto:
REGULATION D
LEGEND:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”
REGULATION S
LEGEND:
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION;
HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
3.7 Disclosure. The
representations and warranties and statements of fact made by Xxxx Xxxxx
Shareholders in this Agreement are, as applicable, accurate, correct and
complete 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 and
information contained herein not false or misleading.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF SINO CHARTER
Except as
otherwise disclosed herein or in a disclosure schedule attached hereto, Sino
Charter hereby represents and warrants to Xxxx Xxxxx and the Xxxx Xxxxx
Shareholders as of the date hereof and as of the Closing Date (unless otherwise
indicated), as follows:
4.1 Organization and
Qualification. Sino Charter is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Sino Charter is not, to its Knowledge, in
violation nor default of any of the provisions of its certificate or articles of
incorporation, bylaws or other organizational or charter documents (collectively
the “Charter
Documents”). Sino Charter is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not have or
reasonably be expected to result in a Material Adverse Effect, and no proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or
qualification.
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4.2 Authorization;
Enforcement. Sino Charter has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations
hereunder. The execution and delivery of this Agreement by Sino
Charter and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of Sino Charter and no
further action is required by Sino Charter, the Board of Directors or Sino
Charter’s stockholders in connection therewith other than in connection with the
Required Approvals, as defined in Section 4.4. This Agreement has
been (or upon delivery will have been) duly executed by Sino Charter and, when
delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of Sino Charter enforceable against Sino Charter in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
4.3 No
Conflicts. The execution, delivery and performance by Sino
Charter of this Agreement and the consummation by Sino Charter of the other
transactions to which it is a party and as contemplated hereby do not and will
not: (i) conflict with or violate any provision of Sino Charter’s certificate or
articles of incorporation, bylaws or other organizational or charter documents,
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of Sino Charter, or give to others
any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Sino Charter debt or otherwise) or other
understanding to which Sino Charter is a party or by which any property or asset
of Sino Charter is bound or affected, or (iii) subject to the Required
Approvals, as defined by Section 4.4, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which Sino Charter is
subject (including federal and state securities laws and regulations), or by
which any property or asset of Sino Charter is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse Effect.
4.4 Filings, Consents and
Approvals. Sino Charter is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by Sino Charter of this Agreement, other than the
filing of a Current Report on Form 8-K and Form D with the Commission and such
filings as are required to be made under applicable state securities laws
(collectively, the “Required
Approvals”).
4.5 Issuance of the Sino Charter
Shares. The Sino Charter Shares are duly authorized and, when
issued and paid for in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens imposed on or
by Sino Charter other than restrictions on transfer provided for in this
Agreement.
4.6 Capitalization. The
capitalization of Sino Charter is as set forth on Schedule 4.6, which
Schedule 4.6
shall also include the number of shares of Sino Charter’s common stock owned
beneficially, and of record, by Affiliates of Sino Charter as of the date
hereof, if any. Other than as set forth in Schedule 4.6, Sino Charter
has not issued any capital stock since its most recently filed periodic report
under the Exchange Act. No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by this Agreement. There are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Sino Charter’s common
stock, or Contracts, commitments, understandings or arrangements by which Sino
Charter or any Sino Charter Subsidiary is or may become bound to issue
additional shares of Sino Charter’s common stock or Common Stock
Equivalents. The issuance of the Sino Charter Shares will not
obligate Sino Charter to issue shares of Sino Charter’s common stock or other
securities to any Person (other than the Xxxx Xxxxx Shareholders) and will not
result in a right of any holder of Sino Charter securities to adjust the
exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of Sino
Charter are validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder or Sino Charter’s board of directors is
required for the issuance of the Sino Charter Shares. There are no
stockholders agreements, voting agreements or other similar agreements with
respect to Sino Charter’s capital stock to which Sino Charter is a party or, to
the Knowledge of Sino Charter, between or among any of Sino Charter’s
stockholders. “Common
Stock Equivalents” means any securities of Sino Charter or the Sino
Charter Subsidiaries which would entitle the holder thereof to acquire at any
time Sino Charter’s common stock, including, without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that is at any
time convertible into or exercisable or exchangeable for, or otherwise entitles
the holder thereof to receive Sino Charter’s common stock.
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4.7 SEC Reports; Financial
Statements. Sino Charter has filed all reports, schedules,
forms, statements and other documents required to be filed by Sino Charter under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as Sino Charter was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension. To the Knowledge of Sino Charter, as of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of
Sino Charter included in the SEC Reports (“Financial
Statements”) comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with GAAP, except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of Sino Charter as of
and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
4.8 Material Changes.
Since the date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof or in connection herewith: (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) Sino Charter has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in Sino Charter’s
financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) Sino Charter has not altered its method of accounting, (iv)
Sino Charter has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock, and (v) Sino Charter has
not issued any equity securities to any officer, director or
Affiliate. Sino Charter does not have pending before the Commission
any request for confidential treatment of information. Except for the
issuance of the Sino Charter Shares contemplated by this Agreement or as set
forth on Schedule
4.8, no event, liability or development has occurred or exists with
respect to Sino Charter or its Sino Charter Subsidiaries or their respective
business, properties, operations or financial condition, that would be required
to be disclosed by Sino Charter under applicable securities laws at the time
this representation is made or deemed made that has not been publicly disclosed
at least one (1) Trading Day prior to the date that this representation is
made.
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4.9 Litigation. There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the Knowledge of Sino Charter, threatened against or affecting
Sino Charter or any of its properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of this
Agreement or the Sino Charter Shares, or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither Sino Charter nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the Knowledge of Sino
Charter, there is not pending or contemplated, any investigation by the
Commission involving Sino Charter or any current or former director or officer
of Sino Charter. The Commission has not issued any stop order or
other order suspending the effectiveness of any registration statement filed by
Sino Charter under the Securities Act.
4.10 Labor
Relations. No labor dispute exists or, to the Knowledge of
Sino Charter, is imminent with respect to any of the employees of Sino Charter
which could reasonably be expected to result in a Material Adverse
Effect. None of Sino Charter’s employees is a member of a union that
relates to such employee’s relationship with Sino Charter, and Sino Charter is
not a party to a collective bargaining agreement, and Sino Charter believes that
its relationships with their employees are good. No executive
officer, to the Knowledge of Sino Charter, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other Contract or agreement or any restrictive covenant in favor of any
third party, and the continued employment of each such executive officer does
not subject Sino Charter to any liability with respect to any of the foregoing
matters. Sino Charter is in compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
4.11 Compliance. To
its Knowledge, Sino Charter: (i) is not in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by Sino Charter under), nor has Sino
Charter received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is not n
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws applicable to its business and all such laws that affect the
environment, except in each case as could not have or reasonably be expected to
result in a Material Adverse Effect.
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4.12 Regulatory
Permits. Sino Charter possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its business, except where
the failure to possess such permits could not reasonably be expected to result
in a Material Adverse Effect (“Material Permits”),
and Sino Charter has not received any notice of proceedings relating to the
revocation or modification of any Material Permit.
4.13 Title to
Assets. Sino Charter has good and marketable title in all
personal property owned by it that is material to the business of, in each case
free and clear of all Liens, except for Liens that do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by Sino Charter and Liens for the payment
of Taxes, the payment of which is neither delinquent nor subject to
penalties. Sino Charter does not own any real
property. Any real property and facilities held under lease by Sino
Charter, if any, is held by Sino Charter under valid, subsisting and enforceable
leases with which Sino Charter is in compliance.
4.14 Patents and
Trademarks. Sino Charter has, or has rights to use, all
patents, patent applications, trademarks, trademark applications, service marks,
trade names, trade secrets, inventions, copyrights, licenses and other
intellectual property rights and similar rights as described in the SEC Reports
as necessary or material for use in connection with their business and which the
failure to so have could have a Material Adverse Effect (collectively, the
“Intellectual Property
Rights”). Sino Charter has not received a notice (written or
otherwise) that any of the Intellectual Property Rights used by Sino Charter
violates or infringes upon the rights of any Person. To the Knowledge
of Sino Charter, all such Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the Intellectual
Property Rights. Sino Charter has taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
4.15 Transactions with Affiliates
and Employees. Except as set forth in the SEC Reports, none of
the officers or directors of Sino Charter and, to the Knowledge of Sino Charter,
none of the employees of Sino Charter is presently a party to any transaction
with Sino Charter (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 Sino Charter, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $120,000,
other than for: (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of Sino Charter and (iii)
other employee benefits.
4.16 Xxxxxxxx-Xxxxx; Internal
Accounting Controls. Sino Charter is in material compliance
with all provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it
as of the Closing Date. Sino Charter 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 GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Sino Charter has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Sino
Charter and designed such disclosure controls and procedures to ensure that
information required to be disclosed by Sino Charter in the reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and
forms. Sino Charter’s certifying officers have evaluated the
effectiveness of Sino Charter’s disclosure controls and procedures as of the end
of the period covered by Sino Charter’s most recently filed periodic report
under the Exchange Act (such date, the “Evaluation
Date”). Sino Charter presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying officer
about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date,
there have been no changes in Sino Charter’s internal control over financial
reporting (as such term is defined in the Exchange Act) that has materially
affected, or is reasonably likely to materially affect, Sino Charter’s internal
control over financial reporting.
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4.17 Certain
Fees. No brokerage or finder’s fees or commissions are or will
be payable by Sino Charter to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement.
4.18 Issuance of Sino Charter
Shares. Assuming the accuracy of the Xxxx Xxxxx Shareholders’
representations and warranties set forth in Section 3, no registration under the
Securities Act is required for the offer and issuance of the Sino Charter Shares
by Sino Charter to the Xxxx Xxxxx Shareholders as contemplated hereby. The
issuance of the Sino Charter Shares hereunder does not contravene the rules and
regulations of the applicable Trading Market.
4.19 Investment Company.
Sino Charter is not, and is not an Affiliate of, an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.
4.20 Listing and Maintenance
Requirements. Sino Charter’s common stock is currently quoted
on FINRA’s Over-the-Counter Bulletin Board Quotation Service (“OTC Bulletin Board”)
and Sino Charter has not, in the 24 months preceding the date hereof, received
any notice from the OTC Bulletin Board or FINRA or any trading market on which
Sino Charter’s common stock is or has been listed or quoted to the effect that
Sino Charter is not in compliance with the quoting, listing or maintenance
requirements of the OTCBB or such other trading market. Sino Charter
is, and has no reason to believe that it will not, in the foreseeable future
continue to be, in compliance with all such quoting, listing and maintenance
requirements.
4.21 Application of Takeover
Protections. Sino Charter 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 Sino Charter’s certificate of
incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Xxxx Xxxxx Shareholders
as a result of the Xxxx Xxxxx Shareholders and Sino Charter fulfilling their
obligations or exercising their rights under this Agreement, including without
limitation as a result of Sino Charter’s issuance of the Sino Charter Shares and
the Xxxx Xxxxx Shareholders’ ownership of the Sino Charter Shares.
4.22 No Integrated
Offering. To the Knowledge of Sino Charter and assuming the accuracy of
the Xxxx Xxxxx Shareholders’ representations and warranties set forth in Section
3, neither Sino Charter, nor any of its Affiliates, nor any Person acting on its
or their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Sino Charter Shares to be integrated with prior
offerings by Sino Charter for purposes of (i) the Securities Act which would
require the registration of any such securities under the Securities Act, or
(ii) any applicable shareholder approval provisions of any Trading Market on
which any of the securities of Sino Charter are listed or
designated.
4.23 Tax
Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, Sino Charter has filed all necessary Tax Returns and has paid or accrued
all Taxes shown as due thereon, and Sino Charter has no knowledge of a tax
deficiency which has been asserted or threatened against Sino
Charter.
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4.24 No General
Solicitation. Neither Sino Charter nor any person acting on
behalf of Sino Charter has offered or sold any of the Sino Charter Shares by any
form of general solicitation or general advertising.
4.25 Foreign Corrupt
Practices. Neither Sino Charter, nor to the Knowledge of Sino
Charter, any agent or other person acting on behalf of Sino Charter, has: (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by Sino Charter (or made by any person acting on its behalf of
which Sino Charter is aware) which is in violation of law or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.
4.26 Accountants. Sino
Charter’s accounting firm is set forth on Schedule 4.26 of the
disclosure schedules. To the Knowledge and belief of Sino Charter,
such accounting firm: (i) is a registered public accounting firm as required by
the Exchange Act and (ii) expressed its opinion with respect to the financial
statements included in Sino Charter’s Annual Report for the year ended November
31, 2007.
4.27 No Disagreements with
Accountants and Lawyers. To the Knowledge of Sino Charter,
there are no disagreements of any kind, including but not limited to any
disagreements regarding fees owed for services rendered, presently existing, or
reasonably anticipated by Sino Charter to arise, between Sino Charter and the
accountants and lawyers formerly or presently employed by Sino Charter which
could affect Sino Charter’s ability to perform any of its obligations under this
Agreement, and Sino Charter is current with respect to any fees owed to its
accountants and lawyers.
4.28 Regulation M
Compliance. Sino Charter has not, and to the Knowledge of Sino
Charter no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of
the price of any security of Sino Charter to facilitate the sale or resale of
any of the Sino Charter Shares, (ii) sold, bid for, purchased, or paid any
compensation for soliciting purchases of, any of the securities of Sino Charter,
or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of Sino Charter.
4.29 Money Laundering
Laws. The operations of Sino Charter are and have been conducted at all
times in compliance with the money laundering statutes of applicable
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
applicable governmental agency (collectively, the “Money Laundering Laws”) and
no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving Sino Charter with respect to the
Money Laundering Laws is pending or, to the best Knowledge of the Sino Charter,
threatened.
4.30 Minute Books. The
minute books of Sino Charter made available to Xxxx Xxxxx and the Xxxx Xxxxx
Shareholders contain a complete summary of all meetings and written consents in
lieu of meetings of directors and stockholders since the time of
incorporation.
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4.31 Employee
Benefits. Sino Charter has not (nor for the two years
preceding the date hereof has) had any plans which are subject to
ERISA. “ERISA” means the
Employee Retirement Income Security Act of 1974 or any successor law and the
regulations and rules issued pursuant to that act or any successor
law.
4.32 Business Records and Due
Diligence. Prior to the Closing, Sino Charter delivered to
Xxxx Xxxxx all records and documents relating to Sino Charter, which Sino
Charter and possesses, including, without limitation, books, records, government
filings, Tax Returns, Charter Documents, corporate records, stock records,
consent decrees, orders, and correspondence, director and stockholder minutes,
resolutions and written consents, stock ownership records, financial information
and records, and other documents used in or associated with Sino Charter and
Sino Charter Subsidiaries.
4.33 Contracts. Except
as set forth in Schedule 4.33 of the disclosure
schedules hereto, there are no Contracts that are material to the business,
properties, assets, condition (financial or otherwise), results of operations or
prospects of Sino Charter taken as a whole. Sino Charter 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, except for violations or defaults that would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
4.34 No Undisclosed
Liabilities. Except as otherwise disclosed in Schedule 4.34 of the
disclosure schedules, Sino Charter’s Financial Statements or incurred in the
ordinary course of business after the fiscal year ended November 30, 2008 (the
financial statements of which were filed with the SEC along with Sino Charter’s
quarterly report on Form 10-Q on October 20, 2008), Sino Charter has no other
undisclosed liabilities whatsoever, either direct or indirect, matured or
unmatured, accrued, absolute, contingent or otherwise. Sino Charter
represents that at the date of Closing, Sino Charter shall have no liabilities
or obligations whatsoever, either direct or indirect, matured or unmatured,
accrued, absolute, contingent or otherwise.
4.35 No SEC or FINRA
Inquiries. To the Knowledge of Sino Charter, neither Sino Charter nor any
of its present officers or directors is, or has ever been, the subject of any
formal or informal inquiry or investigation by the SEC or FINRA.
4.36 Shell
Company. Sino Charter is shell company with no substantial
business operations
4.37 Disclosure. The
representations and warranties and statements of fact made by Sino Charter in
this Agreement are, as applicable, accurate, correct and complete 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 and information contained herein
not false or misleading.
ARTICLE
5
INDEMNIFICATION;
SURVIVAL OF REPRESENTATIONS
5.1 Indemnification. Subject
to the provisions of this Article 5, the Sino Charter Stockholders agree to,
jointly and severally, indemnify fully in respect of, hold harmless and defend
Xxxx Xxxxx, the Xxxx Xxxxx Shareholders and each of the officers, agents and
directors of Xxxx Xxxxx or the Xxxx Xxxxx Shareholders against any damages,
liabilities, costs, claims, proceedings, investigations, penalties, judgments,
deficiencies, including taxes, expenses (including, but not limited to, any and
all interest, penalties and expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever) and losses (each, a “Claim” and
collectively “Claims”) to which it
or they may become subject arising out of or based on either (i) any breach of
or inaccuracy in any of the representations and warranties or covenants or
conditions made by Sino Charter and/or the Sino Charter Stockholders herein in
this Agreement; or (ii) any and all liabilities arising out of or in connection
with: (A) any of the assets of Sino Charter prior to the Closing; or (B) the
operations of Sino Charter prior to the Closing. Subject to the
provisions of this Article 5, Xxxx Xxxxx agrees to indemnify fully in respect
of, hold harmless and defend the Sino Charter Stockholders and each of the
officers, agents and directors of the Sino Charter Stockholders against any
Claims to which it or they may become subject arising out of or based on any
breach of or inaccuracy in any of the representations and warranties or
covenants or conditions made by Xxxx Xxxxx and/or the Xxxx Xxxxx Shareholders
herein in this Agreement. The party claiming indemnification hereunder is
hereinafter referred to as the “Indemnified Party” and the party against whom
such claims are asserted hereunder is hereinafter referred to as the
“Indemnifying Party.” For
Claims occurring prior to July 25, 2008, the Sino Charter Stockholders shall
assign all indemnification rights they have pursuant to the Stock Purchase
Agreement dated July 25, 2008 by and between Xxxxxxx Xxxxxx and MMH Group, LLC
on the one hand, and Xxxxxxx X. Xxxxxx (the “Original Stock Purchase
Agreement”), and Xxxx Xxxxx and the Xxxx Xxxxx Shareholders shall seek
indemnification from “Indemnifying Party” as defined in the Original Stock
Purchase Agreement.
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5.2 Survival of Representations and
Warranties. Notwithstanding provision in this Agreement to the
contrary, the representations and warranties given or made by Sino Charter, Sino
Charter Stockholders and Xxxx Xxxxx under this Agreement shall survive the date
hereof for a period of twenty four (24) months from and after the Closing Date
(the last day of such period is herein referred to as the “Expiration Date”),
except that any written claim for breach thereof made and delivered prior to the
Expiration Date to the party against whom such indemnification is sought shall
survive thereafter and, as to any such claim, such applicable expiration will
not effect the rights to indemnification of the party making such claim; provided, however, that any
representations and warranties that were fraudulently made shall not expire on
the Expiration Date and shall survive indefinitely, and claims with respect to
fraud by Sino Charter, the Sino Charter Stockholders or Xxxx Xxxxx may be made
at any time.
5.3 Method of Asserting Claims,
Etc. All Claims for indemnification by any Indemnified Party
under this Article V shall be asserted as follows:
(a) In
the event that any Claim or demand for which an Indemnifying Party would be
liable to an Indemnified Party hereunder is asserted against or sought to be
collected from such Indemnified Party by a third party, said Indemnified Party
shall, within ten (10) business days from the date upon which the Indemnified
Party has Knowledge of such Claim, notify the Indemnifying Party of such claim
or demand, specifying the nature of and specific basis for such claim or demand
and the amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such Claim or
demand) (the “Claim
Notice”). The Indemnified Party’s failure to so notify the
Indemnifying Party in accordance with the provisions of this Agreement shall not
relieve the Indemnifying Party of liability hereunder unless such failure
materially prejudices the Indemnifying Party’s ability to defend against the
claim or demand. The Indemnifying Party shall have 30 days from the
giving of the Claim Notice (the “Notice Period”) to
notify the Indemnified Party: (i) whether or not the Indemnifying
Party disputes the liability of the Indemnifying Party to the Indemnified Party
hereunder with respect to such Claim or demand, and (ii) whether or not the
Indemnifying Party desires, at the sole cost and expense of the Indemnifying
Party, to defend the Indemnified Party against such Claims or demand; provided,
however, that any Indemnified Party is hereby authorized prior to and during the
Notice Period to file any motion, answer or other pleading which he shall deem
necessary or appropriate to protect his interests or those of the Indemnifying
Party and not prejudicial to the Indemnifying Party. In the event
that the Indemnifying Party notifies the Indemnified Party within the Notice
Period that he does not dispute liability for indemnification under this Article
5 and that he desires to defend the Indemnified Party against such claim or
demand and except as hereinafter provided, the Indemnifying Party shall have the
right to defend by all appropriate proceedings, which proceedings shall be
promptly settled or prosecuted by him to a final conclusion. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party except to the extent
that the employment thereof has been specifically authorized by the Indemnifying
Party in writing, the Indemnifying Party has failed after a reasonable period of
time to assume such defense and to employ counsel or in such action there is, in
the reasonable opinion of such separate counsel, a material conflict on any
material issue between the position of the Indemnifying Party and the position
of such Indemnified Party (a “Material
Conflict”). If requested by the Indemnifying Party and there
is no Material Conflict, the Indemnified Party agrees to cooperate with the
Indemnifying Party and his counsel in contesting any Claim or demand which the
Indemnifying Party elects to contest or, if appropriate and related to the Claim
in question, in making any Counterclaim against the person asserting the third
party Claim or demand, or any cross-complaint against any person. No
Claim for which indemnity is sought hereunder and for which the Indemnifying
Party has acknowledged liability for indemnification under this Article 5 may be
settled without the consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed.
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(b) In
the event any Indemnified Party should have a Claim against any Indemnifying
Party hereunder which does not involve a Claim or demand being asserted against
or sought to be collected from him by a third party, the Indemnified Party shall
give a Claim Notice with respect to such Claim to the Indemnifying
Party. If, after receipt of a Claim Notice, the Indemnifying Party
does not notify the Indemnified Party within the Notice Period that he disputes
such Claim, then the Indemnifying Party shall be deemed to have admitted
liability for such Claim in the amount set forth in the Claim
Notice.
ARTICLE
6
COVENANTS
OF THE PARTIES
6.1 Corporate Examinations and
Investigations. Prior to the Closing, each party shall be entitled,
through its employees and representatives, to make such investigations and
examinations of the books, records and financial condition of Xxxx Xxxxx and
Sino Charter as each party may request. In order that each party may have the
full opportunity to do so, Xxxx Xxxxx and Sino Charter, the Xxxx Xxxxx
Shareholders and the Sino Charter Stockholders shall furnish each party and its
representatives during such period with all such information concerning the
affairs of Xxxx Xxxxx or Sino Charter as each party or its representatives may
reasonably request and cause Xxxx Xxxxx or Sino Charter and their respective
officers, employees, consultants, agents, accountants and attorneys to cooperate
fully with each party’s representatives in connection with such review and
examination and to make full disclosure of all information and documents
requested by each party and/or its representatives. Any such investigations and
examinations shall be conducted at reasonable times and under reasonable
circumstances, it being agreed that any examination of original documents will
be at each party’s premises, with copies thereof to be provided to each party
and/or its representatives upon request.
6.2 Cooperation;
Consents. Prior to the Closing, each party shall cooperate with the other
parties to the end that the parties shall (i) in a timely manner make all
necessary filings with, and conduct negotiations with, all authorities and other
persons the consent or approval of which, or the license or permit from which is
required for the consummation of the Acquisition and (ii) provide to each other
party such information as the other party may reasonably request in order to
enable it to prepare such filings and to conduct such negotiations.
6.3 Conduct of Business.
Subject to the provisions hereof, from the date hereof through the Closing, each
party hereto shall (i) conduct its business in the ordinary course and in such a
manner so that the representations and warranties contained herein shall
continue to be true and correct in all material respects as of the Closing as if
made at and as of the Closing and (ii) not enter into any material transactions
or incur any material liability not required or specifically contemplated
hereby, without first obtaining the written consent of Xxxx Xxxxx and the Xxxx
Xxxxx Shareholders on the one hand and Sino Charter and the holders of a
majority of voting stock of Sino Charter common stock on the other hand. Without
the prior written consent of Xxxx Xxxxx, the Xxxx Xxxxx Shareholders, Sino
Charter or the Sino Charter Stockholders, except as required or specifically
contemplated hereby, each party shall not undertake or fail to undertake any
action if such action or failure would render any of said warranties and
representations untrue in any material respect as of the Closing.
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6.4 Litigation. From the
date hereof through the Closing, each party hereto shall promptly notify the
representative of the other parties of any lawsuits, claims, proceedings or
investigations which after the date hereof are threatened or commenced against
such party or any of its affiliates or any officer, director, employee,
consultant, agent or shareholder thereof, in their capacities as such, which, if
decided adversely, could reasonably be expected to have a Material Adverse
Effect on Sino Charter.
6.5 Notice of Default.
From the date hereof through the Closing, each party hereto shall give to the
representative of the other parties prompt written notice of the occurrence or
existence of any event, condition or circumstance occurring which would
constitute a violation or breach of this Agreement by such party or which would
render inaccurate in any material respect any of such party’s representations or
warranties herein.
6.6 Bylaws. If necessary,
Sino Charter shall amend its bylaws to permit the election and/or appointment of
additional new directors to Sino Charter’s Board of Directors as set forth in
Section 7.1(a) below.
6.7 Confidentiality; Access to
Information.
(a) Confidentiality. Any
confidentiality agreement or letter of intent previously executed by the parties
shall be superseded in its entirety by the provisions of this Agreement. Each
party agrees to maintain in confidence any non-public information received from
the other party, and to use such non-public information only for purposes of
consummating the transactions contemplated by this Agreement. Such
confidentiality obligations will not apply to (i) information which was known to
the one party or their respective agents prior to receipt from the other party;
(ii) information which is or becomes generally known; (iii) information acquired
by a party or their respective agents from a third party who was not bound to an
obligation of confidentiality; and (iv) disclosure required by law. In the event
this Agreement is terminated as provided in Article 8 hereof, each party will
return or cause to be returned to the other all documents and other material
obtained from the other in connection with the Transaction contemplated
hereby.
(b) Access to
Information.
(i) Xxxx
Xxxxx will afford Sino Charter and its financial advisors, accountants, counsel
and other representatives reasonable access during normal business hours, upon
reasonable notice, to the properties, books, records and personnel of Xxxx Xxxxx
during the period prior to the Closing to obtain all information concerning the
business, including the status of product development efforts, properties,
results of operations and personnel of Xxxx Xxxxx, as Sino Charter may
reasonably request. No information or Knowledge obtained by Sino Charter in any
investigation pursuant to this Section 6.8 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Transaction.
(ii) Sino
Charter will afford Xxxx Xxxxx and its financial advisors, underwriters,
accountants, counsel and other representatives reasonable access during normal
business hours, upon reasonable notice, to the properties, books, records and
personnel of Sino Charter during the period prior to the Closing to obtain all
information concerning the business, including the status of product development
efforts, properties, results of operations and personnel of Sino Charter, as
Xxxx Xxxxx may reasonably request. No information or knowledge obtained by Xxxx
Xxxxx in any investigation pursuant to this Section 6.8 will affect or be deemed
to modify any representation or warranty contained herein or the conditions to
the obligations of the parties to consummate the Transaction.
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6.9 Public Disclosure.
Except to the extent previously disclosed or to the extent the parties believe
that they are required by applicable law or regulation to make disclosure, prior
to Closing, no party shall issue any statement or communication to the public
regarding the transaction contemplated herein without the consent of the other
party, which consent shall not be unreasonably withheld. To the extent a party
hereto believes it is required by law or regulation to make disclosure regarding
the Transaction, it shall, if possible, immediately notify the other party prior
to such disclosure. Notwithstanding the foregoing, the parties hereto agree that
Xxxx Xxxxx will prepare and file a Current Report on Form 8-K pursuant to the
Exchange Act to report the execution of this Agreement.
6.10 Information Statement for
Change in Majority of Directors. As directed by Xxxx Xxxxx,
Sino Charter and Sino Charter Stockholders will use their best efforts to ensure
that Sino Charter’s current sole director will remain a director of Sino Charter
until the expiration of the 10-day period beginning on the date of the filing of
the information statement relating to a change in majority of directors of Sino
Charter with the SEC pursuant to Rule 14f-1 promulgated under the Exchange Act
(“Information
Statement”), which Information Statement shall be prepared by Xxxx Xxxxx
and filed by the Xxxx Xxxxx Officers on behalf of Sino Charter after the
Closing.
6.11 Assistance with Post-Closing
SEC Reports and Inquiries. Upon the reasonable request of Xxxx Xxxxx,
after the Closing Date, each Sino Charter Stockholder shall use its, his or her
reasonable best efforts to provide such information available to it, including
information, filings, reports, financial statements or other circumstances of
Sino Charter occurring, reported or filed prior to the Closing, as may be
necessary or required by Sino Charter for the preparation of the post-Closing
Date reports that Sino Charter is required to file with the SEC to remain in
compliance and current with its reporting requirements under the Securities Act,
or filings required to address and resolve matters as may relate to the period
prior to the Closing and any SEC comments relating thereto or any SEC inquiry
thereof.
6.12 Payment of Sino Charter
Liabilities. Xxxxxxx Xxxxxx hereby agrees to pay all of the
liabilities of Sino Charter listed in Schedule 4.34 of the disclosures schedules
attached hereto in their entirety on or before the expiration of the fourteen
(14) day period after the Closing Date.
ARTICLE
7
CONDITIONS
TO CLOSING
7.1 Conditions to Obligations of
Xxxx Xxxxx and the Xxxx Xxxxx Shareholders. The obligations of Xxxx Xxxxx
and the Xxxx Xxxxx Shareholders under this Agreement shall be subject to each of
the following conditions:
(a) Closing Deliveries.
At the Closing, Sino Charter and/or the Sino Charter Stockholders shall have
delivered or caused to be delivered to Xxxx Xxxxx and the Xxxx Xxxxx
Shareholders the following:
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(i) this
Agreement duly executed by Sino Charter and the Sino Charter
Stockholders;
(ii) letter
of resignation from Sino Charter’s current sole officer, with his resignation as
to all of the offices he currently holds with Sino Charter to be effective on
February 18, 2009 or immediately following the filing of the Corporation’s
Annual Report on Form 10-K for the fiscal year ended November 30, 2008,
whichever is earlier, and confirming that he has no claim against Sino
Charter in respect of any outstanding remuneration or fees of whatever nature as
of the Closing;
(iii) letter
of resignation of Sino Charter’s current sole director, with the resignation of
such director to take effect on the expiration of the 10 calendar day period
following the date of the delivery of the Information Statement to the Sino
Charter stockholders;
(iv) resolutions
duly adopted by the Board of Directors of Sino Charter approving the following
events or actions, as applicable:
|
|
a.
|
the
execution, delivery and performance of this
Agreement;
|
|
|
b.
|
the
Acquisition and the terms thereof;
|
|
|
c.
|
adoption
of bylaws in the form agreed by the
parties;
|
|
|
d.
|
fixing
the number of authorized directors on the board of directors at four
(4);
|
|
|
e.
|
the
appointment of Xxxxxxxx Xx as Chairman of the board of directors to serve
on the Sino Charter board of directors, effective on February 18, 2009 or
immediately following the filing of the Corporation’s Annual Report on
Form 10-K for the fiscal year ended November 30, 2008, whichever is
earlier, and the appointment of Xxxxxxx Xxxx, Xxxxxx Xx, and Xxxxxx Xx as
additional directors to serve on Sino Charter’s board of directors on the
date the resignation of Sino Charter’s current sole director becomes
effective;
|
|
|
f.
|
the
appointment of the following persons as officers of Sino Charter,
effective on February 18, 2009 or immediately following the filing of the
Corporation’s Annual Report on Form 10-K for the fiscal year ended
November 30, 2008, whichever is earlier with the titles set forth opposite
his name (the “Xxxx Xxxxx
Officers”):
|
|
|
Xxxxxxxx
Xx
|
Chief
Executive Officer, Chief Operating Officer, President, Secretary and
Chairman of the Board
|
| Xxxxxx Xxxxx | Chief Financial Officer and Treasurer |
|
|
g.
|
the
change of the Sino Charter’s fiscal year end from November 30th to
December 31st.
|
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(v) a
certificate of good standing for Sino Charter from its jurisdiction of
incorporation, dated not earlier than five (5) days prior to the Closing
Date;
(vi) an
instruction letter signed by the President of Sino Charter addressed to Sino
Charter’s transfer agent of record, in a form reasonably acceptable to Xxxx
Xxxxx and consistent with the terms of this Agreement, instructing the transfer
agent to issue stock certificates representing the Sino Charter Shares to be
delivered pursuant to this Agreement registered in the names of the Xxxx Xxxxx
Shareholders as set forth in Annex I;
(vii) a
shareholder list of Sino Charter as certified by the Sino Charter’s Secretary or
transfer agent, dated within ten (10) days of the Closing Date;
(xiii) a
certificate of the Secretary of the Sino Charter, dated as of the Closing Date,
certifying as to (i) the incumbency of officers of the Sino Charter executing
this Agreement and all exhibits and schedules hereto and all other documents,
instruments and writings required pursuant to this Agreement (the “Transaction
Documents”), (ii) a copy of the Certificate of Incorporation and By-Laws of the
Sino Charter, as in effect on and as of the Closing Date, and (iii) a copy of
the resolutions of the Board of Directors of the Sino Charter authorizing and
approving the Sino Charter’s execution, delivery and performance of the
Transaction Documents, all matters in connection with the Transaction Documents,
and the transactions contemplated thereby;
(ix) all
corporate records, board minutes and resolutions, tax and financial records,
agreements, seals and any other information or documents reasonably requested by
Peng Xiang’s representatives with respect to Sino Charter; and
(x) such
other documents as Xxxx Xxxxx and/or the Xxxx Xxxxx Shareholders may reasonably
request in connection with the transactions contemplated hereby.
(b) Representations and
Warranties to be True. The representations and warranties of Sino Charter
herein contained shall be true in all material respects at the Closing with the
same effect as though made at such time. Sino Charter and the Sino Charter
Stockholders shall have performed in all material respects all obligations and
complied in all material respects with all covenants and conditions required by
this Agreement to be performed or complied with by them at or prior to the
Closing.
(c) No Assets and
Liabilities. At the Closing, Sino Charter shall have no liabilities,
debts or payables (contingent or otherwise) other than those liabilities listed
in Schedule 4.34 of the disclosure schedules hereto, no tax obligations, no
material assets, and except as contemplated in this Agreement, no material
changes to its business or financial condition shall have occurred since the
date of this Agreement.
(d) SEC Filings. At the
Closing, Sino Charter will be current in all SEC filings required by it to be
filed.
(e) Outstanding Common
Stock. Sino Charter shall have at least 100,000,000 shares of its common
stock authorized and shall have no more than [16,000,000] shares of
its common stock issued and outstanding in the aggregate at the
Closing.
(f) No Adverse
Effect. The business and operations of Sino Charter will not
have suffered any Material Adverse Effect.
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7.2 Conditions to Obligations of
Sino Charter and the Sino Charter Stockholders. The obligations of Sino
Charter and the Sino Charter Stockholders under this Agreement shall be subject
to each of the following conditions:
(a) Closing Deliveries.
On the Closing Date, Xxxx Xxxxx and/or the Xxxx Xxxxx Shareholders shall have
delivered to Sino Charter the following:
(i) this
Agreement duly executed by Xxxx Xxxxx and the Xxxx Xxxxx
Shareholders;
(ii) resolutions
duly adopted by the Board of Directors of Xxxx Xxxxx authorizing and approving
the execution, delivery and performance of this Agreement;
(iii) certificates
representing the Xxxx Xxxxx Equity Interests to be delivered pursuant to this
Agreement duly endorsed or accompanied by duly executed stock powers or
instruments of like tenor; and
(iv) such
other documents as Sino Charter may reasonably request in connection with the
transactions contemplated hereby.
(b) Representations and
Warranties True and Correct. The representations and warranties of Xxxx
Xxxxx and the Xxxx Xxxxx Shareholders herein contained shall be true in all
material respects at the Closing with the same effect as though made at such
time. Xxxx Xxxxx and the Xxxx Xxxxx Shareholders shall have performed in all
material respects all obligations and complied in all material respects with all
covenants and conditions required by this Agreement to be performed or complied
with by them at or prior to the Closing.
(c) No Adverse
Effect. The business and operations of Xxxx Xxxxx will not
have suffered any Material Adverse Effect.
ARTICLE
8
SEC
FILING; TERMINATION
8.1 This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written agreement of Sino Charter and the Xxxx Xxxxx
Shareholders;
(b) by
either Sino Charter or the Xxxx Xxxxx Shareholders if the Transaction shall not
have been consummated for any reason by February 13, 2009; provided, however,
that the right to terminate this Agreement under this Section 8.1(b) shall not
be available to any party whose action or failure to act has been a principal
cause of or resulted in the failure of the Transaction to occur on or before
such date and such action or failure to act constitutes a breach of this
Agreement;
(c) by
either Sino Charter or the Xxxx Xxxxx Shareholders if a governmental entity
shall have issued an order, decree or ruling or taken any other action, in any
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Transaction, which order, decree, ruling or other action is
final and non-appealable;
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(d) by
the Xxxx Xxxxx Shareholders, upon a material breach of any representation,
warranty, covenant or agreement on the part of Sino Charter or the Sino Charter
Stockholders set forth in this Agreement, or if any representation or warranty
of Sino Charter shall have become materially untrue, in either case such that
the conditions set forth in Section 7.1 would not be satisfied as of the time of
such breach or as of the time such representation or warranty shall have become
untrue, provided, that if such inaccuracy in Sino Charter’s representations and
warranties or breach by Sino Charter or the Sino Charter Stockholders is curable
by Sino Charter or the Sino Charter Stockholders prior to the Closing Date, then
the Xxxx Xxxxx Shareholders may not terminate this Agreement under this Section
8.1(d) for thirty (30) days after delivery of written notice from the Xxxx Xxxxx
Shareholders to Sino Charter and the Sino Charter Stockholders of such breach,
provided Sino Charter and the Sino Charter Stockholders continue to exercise
commercially reasonable efforts to cure such breach (it being understood that
the Xxxx Xxxxx Shareholders may not terminate this Agreement pursuant to this
Section 8.1(d) if they shall have materially breached this Agreement or if such
breach by Sino Charter or the Sino Charter Stockholders is cured during such
thirty (30) day period);
(e) by
Sino Charter, upon a material breach of any representation, warranty, covenant
or agreement on the part of Xxxx Xxxxx or the Xxxx Xxxxx Shareholders set forth
in this Agreement, or if any representation or warranty of Xxxx Xxxxx or the
Xxxx Xxxxx Shareholders shall have become materially untrue, in either case such
that the conditions set forth in Section 7.2 would not be satisfied as of the
time of such breach or as of the time such representation or warranty shall have
become untrue, provided, that if such inaccuracy in Peng Xiang’s or the Xxxx
Xxxxx Shareholders’ representations and warranties or breach by Xxxx Xxxxx or
the Xxxx Xxxxx Shareholders is curable by Xxxx Xxxxx or the Xxxx Xxxxx
Shareholders prior to the Closing Date, then Sino Charter may not terminate this
Agreement under this Section 8.1(e) for thirty (30) days after delivery of
written notice from Sino Charter to Xxxx Xxxxx and the Xxxx Xxxxx Shareholders
of such breach, provided Xxxx Xxxxx and the Xxxx Xxxxx Shareholders continue to
exercise commercially reasonable efforts to cure such breach (it being
understood that Sino Charter may not terminate this Agreement pursuant to this
Section 8.1(e) if it shall have materially breached this Agreement or if such
breach by Xxxx Xxxxx or the Xxxx Xxxxx Shareholders is cured during such thirty
(30) day period); or
(f) by
Sino Charter Stockholders, upon a material breach of any representation,
warranty, covenant or agreement on the part of Xxxx Xxxxx or the Xxxx Xxxxx
Shareholders set forth in this Agreement, or if any representation or warranty
of Xxxx Xxxxx or the Xxxx Xxxxx Shareholders shall have become materially
untrue, in either case such that the conditions set forth in Section 7.2 would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Peng Xiang’s or the Xxxx Xxxxx Shareholders’ representations and
warranties or breach by Xxxx Xxxxx or the Xxxx Xxxxx Shareholders is curable by
Xxxx Xxxxx or the Xxxx Xxxxx Shareholders prior to the Closing Date, then Sino
Charter Stockholders may not terminate this Agreement under this Section 8.1(f)
for thirty (30) days after delivery of written notice from Sino Charter
Stockholders to Xxxx Xxxxx and the Xxxx Xxxxx Shareholders of such breach,
provided Xxxx Xxxxx and the Xxxx Xxxxx Shareholders continue to exercise
commercially reasonable efforts to cure such breach (it being understood that
Sino Charter Stockholders may not terminate this Agreement pursuant to this
Section 8.1(f) if it shall have materially breached this Agreement or if such
breach by Xxxx Xxxxx or the Xxxx Xxxxx Shareholders is cured during such thirty
(30) day period).
8.2 Notice of Termination;
Effect of Termination. Any termination of this Agreement under Section
8.1 above will be effective immediately upon (or, if the termination is pursuant
to Section 8.1(d), Section 8.1(e) or Section 8.1(f) and the proviso therein is
applicable, thirty (30) days after) the delivery of written notice of the
terminating party to the other parties hereto. In the event of the termination
of this Agreement as provided in Section 8.1, this Agreement shall be of no
further force or effect and the Transaction shall be abandoned, except as set
forth in Section 8.1, Section 8.2 and Article 9 (General Provisions), each of
which shall survive the termination of this Agreement.
SHARE EXCHANGE
AGREEMENT
Page
27
ARTICLE
9
GENERAL
PROVISIONS
9.1 Notices. Any and all
notices and other communications hereunder shall be in writing and shall be
deemed duly given to the party to whom the same is so delivered, sent or mailed
at addresses and contact information set forth on the signature pages hereof (or
at such other address for a party as shall be specified by like notice) Any and
all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of: (a) on the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (Pacific Standard Time)
on a business day, (b) on the next business day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
business day or later than 5:30 p.m. (Pacific Standard Time) on any business
day, (c) on the second business day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service or (d) upon actual receipt
by the party to whom such notice is required to be given.
9.2 Interpretation. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
References to Sections and Articles refer to sections and articles of this
Agreement unless otherwise stated.
9.3 Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated and the parties shall negotiate in good faith to modify this
Agreement to preserve each party’s anticipated benefits under this
Agreement.
9.4 Miscellaneous. This
Agreement (together with all other documents and instruments referred to
herein): (a) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof; (b) except as expressly set forth herein,
is not intended to confer upon any other person any rights or remedies hereunder
and (c) shall not be assigned by operation of law or otherwise, except as may be
mutually agreed upon by the parties hereto.
9.5 Separate Counsel.
Each party hereby expressly acknowledges that it has been advised to seek its
own separate legal counsel for advice with respect to this Agreement, and that
no counsel to any party hereto has acted or is acting as counsel to any other
party hereto in connection with this Agreement.
9.6 Governing Law. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of California. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of Los
Angeles. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Los Angeles,
County of Los Angeles for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the Agreement), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or is
an inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law. If either party shall commence an action or
proceeding to enforce any provisions of the Agreement, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.
SHARE EXCHANGE
AGREEMENT
Page
28
9.7 Counterparts and Facsimile
Signatures. This Agreement may be executed in two or more counterparts,
which together shall constitute a single agreement. This Agreement and any
documents relating to it may be executed and transmitted to any other party by
facsimile, which facsimile shall be deemed to be, and utilized in all respects
as, an original, wet-inked manually executed document.
9.8 Amendment. This
Agreement may be amended, modified or supplemented only by an instrument in
writing executed by Xxxx Xxxxx, Sino Charter, and holders of a majority of the
equity interests of Xxxx Xxxxx and the holders of a majority of outstanding
voting stock of Sino Charter; provided that, the consent of any Xxxx Xxxxx or
Sino Charter shareholder that is a party to this Agreement shall be required if
the amendment or modification would disproportionately affect such shareholder
(other than by virtue of their ownership of Xxxx Xxxxx or Sino Charter shares,
as applicable).
9.9 Parties In Interest.
Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto.
9.10 Waiver. No waiver by
any party of any default or breach by another party of any representation,
warranty, covenant or condition contained in this Agreement shall be deemed to
be a waiver of any subsequent default or breach by such party of the same or any
other representation, warranty, covenant or condition. No act, delay, omission
or course of dealing on the part of any party in exercising any right, power or
remedy under this Agreement or at law or in equity shall operate as a waiver
thereof or otherwise prejudice any of such party’s rights, powers and remedies.
All remedies, whether at law or in equity, shall be cumulative and the election
of any one or more shall not constitute a waiver of the right to pursue other
available remedies.
9.11 Expenses. At or prior
to the Closing, the parties hereto shall pay all of their own expenses relating
to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
[Remainder of Page Left Blank
Intentionally]
SHARE EXCHANGE
AGREEMENT
Page
29
IN
WITNESS WHEREOF, the parties have executed this Share Exchange Agreement as of
the date first written above.
SINO
CHARTER:
a Nevada
corporation
By:
___________________________
Xxxxxxx
Xxxxxx
Chief
Executive Officer and President
Address
for Notices:
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
SHARE EXCHANGE
AGREEMENT
Page
30
SIGNATURE PAGE OF SINO
CHARTER STOCKHOLDERS
SINO
CHARTER STOCKHOLDERS:
|
Name
|
Address, Telephone, and
FacsimileNumber for
Notice:
|
Signature:
|
|
Xxxxxxx
Xxxxxx
|
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
|
|
|
Ancora
Greater China Fund, LP
|
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
|
By:
_________________________
Name:
_______________________
Title:
________________________
|
SHARE EXCHANGE
AGREEMENT
Page
31
SIGNATURE PAGE OF XXXX
XXXXX
XXXX
XXXXX:
PENG
XXXXX XXXX FEI INVESTMENTS LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Peng
Xxxxx Xxxx Fei Investments Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
SHARE EXCHANGE
AGREEMENT
Page
32
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS
XXXX
XXXXX SHAREHOLDERS:
BESTGRAIN
LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Bestgrain
Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
33
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
KEENCHARM
LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Keencharm
Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
34
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
ORIENT
TIME LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Orient
Time Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
35
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
MIGHTY
SWIM LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Mighty
Swim Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
36
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
RIGHTEAST
LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Righteast
Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
37
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
FLYING
GOOD LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Flying
Good Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
38
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
GOLDUP
HOLDINGS LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Goldup
Holdings Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
39
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
LOFTY
TIME LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Lofty
Time Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
40
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
ELLENICA
LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Ellenica
Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
41
SIGNATURE PAGES OF XXXX
XXXXX SHAREHOLDERS (continued)
KEY
ROLE CONSULTANTS LIMITED
By:
_____________________________
Name: _____________________________
Title:
_____________________________
Address
for Notices:
Key
Role Consultants Limited
Address:
______________________
_____________________
_____________________
Tel: _____________________
Fax: _____________________
Please Check
One:
The Xxxx
Xxxxx Shareholder hereby certifies that it is:
|
____
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex II of this Agreement);
or
|
|
____
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct as to
such Xxxx Xxxxx Shareholder, and hereby accepts and agrees to comply with
the covenants in Section 3.4(b).
|
SHARE EXCHANGE
AGREEMENT
Page
42
ANNEX
I
|
(I)
|
(II)
|
(III)
|
|
Name
of
Xxxx
Xxxxx Shareholders
|
Xxxx
Xxxxx Equity
Interests
Transferred to
Sino
Charter
|
Sino
Charter
Shares
Issued to
Xxxx
Xxxxx Shareholders
(or
Designees)
|
|
Bestgrain
Limited
|
6,591
|
9,596,496
|
|
Keencharm
Limited
|
350
|
509,600
|
|
Orient
Time Limited
|
350
|
509,600
|
|
Mighty
Swim Limited
|
400
|
582,400
|
|
Righteast
Limited
|
400
|
582,400
|
|
Flying
Good Limited
|
400
|
582,400
|
|
Goldup
Holdings Limited
|
400
|
582,400
|
|
Lofty
Time Limited
|
409
|
595,504
|
|
Ellenica
Limited
|
500
|
728,000
|
|
Key
Role Consultants Limited
|
200
|
291,200
|
|
Total
|
10,000
|
14,560,000
|
SHARE EXCHANGE
AGREEMENT
Page
43
ANNEX
II
ACCREDITED
INVESTOR DEFINITION
|
Category
A
|
The
undersigned is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000.
|
|
Category
B
|
The
undersigned is an individual (not a partnership, corporation, etc.) who
had an income in excess of $200,000 in each of the two most recent years,
or joint income with his or her spouse in excess of $300,000 in each of
those years (in each case including foreign income, tax exempt income and
full amount of capital gains and losses but excluding any income of other
family members and any unrealized capital appreciation) and has a
reasonable expectation of reaching the same income level in the current
year.
|
|
Category
C
|
The
undersigned is a director or executive officer of Sino Charter which is
issuing and selling the securities.
|
|
Category
D
|
The
undersigned is a bank; a savings and loan association; insurance company;
registered investment company; registered business development company;
licensed small business investment company (“SBIC”); or employee benefit
plan within the meaning of Title 1 of ERISA and (a) the investment
decision is made by a plan fiduciary which is either a bank, savings and
loan association, insurance company or registered investment advisor, or
(b) the plan has total assets in excess of $5,000,000 or (c) is a self
directed plan with investment decisions made solely by persons that are
accredited investors.
|
|
Category
E
|
The
undersigned is a private business development company as defined in
section 202(a)(22) of the Investment Advisors Act of
1940.
|
|
Category
F
|
The
undersigned is either a corporation, partnership, Massachusetts business
trust, or non-profit organization within the meaning of Section 501(c)(3)
of the Internal Revenue Code, in each case not formed for the specific
purpose of acquiring the Securities and with total assets in excess of
$5,000,000.
|
|
Category
G
|
The
undersigned is a trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities, where the
purchase is directed by a “sophisticated investor“ as defined in
Regulation 506(b)(2)(ii) under the Act.
|
|
Category
H
|
The
undersigned is an entity (other than a trust) in which all of the equity
owners are “accredited investors” within one or more of the above
categories. If relying upon this Category alone, each equity owner must
complete a separate copy of this
Agreement.
|
SHARE EXCHANGE
AGREEMENT
Page
44
DISCLOSURE
SCHEDULES
TO
SHARE
EXCHANGE AGREEMENT
SCHEDULE
2.1
(List of
Business Jurisdictions)
1. Hong
Kong
2. People’s
Republic of China
3. British
Virgin Islands
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-1
SCHEDULE
2.3
(Subsidiaries)
Korea
Jinduren (Int’l) Dress Limited (Hong Kong)
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-2
SCHEDULE
2.9
(Litigation)
None.
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-3
SCHEDULE
2.11
(Contracts)
All of
the following agreements have been entered into by and between Korea Jinduren
(Int’l) Dress Limited and Jinjiang Yinglin Jinduren Dress Co. Ltd. on December
28, 2005:
|
|
1)
|
Consulting
Services Agreement
|
|
|
2)
|
Operating
Agreement
|
|
|
3)
|
Voting
Rights Proxy Agreement
|
|
|
4)
|
Equity
Pledge Agreement
|
|
|
5)
|
Option
Agreement
|
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-4
SCHEDULE
2.12
(Material
Changes)
On
January 6, 2009, Xxxx Xxxxx issued 9,000 shares of common stock to its members,
as follows:
|
Entities
|
Issued
Shares
|
|
Bestgrain
Limited
|
5,811
shares
|
|
Keencharm
Limited
|
315
shares
|
|
Orient
Time Limited
|
315
shares
|
|
Mighty
Swim Limited
|
360
shares
|
|
Righteast
Limited
|
360
shares
|
|
Flying
Good Limited
|
400
shares
|
|
Goldup
Holdings Limited
|
400
shares
|
|
Lofty
Time Limited
|
409
shares
|
|
Ellenica
Limited
|
450
shares
|
|
Key
Role Consultants Limited
|
180
shares
|
|
TOTAL:
|
9,000
SHARES
|
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-5
SCHEDULE
2.17
(Certain
Fees)
None.
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-6
SCHEDULE
2.26
(Employee
Benefit Plans)
None.
DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-7
SCHEDULE
4.6
(Sino
Charter Stock Issuances)
Other
than the issuances of Sino Charter’s restricted common stock to the Xxxx Xxxxx
Shareholders at the Closing in connection with this Share Exchange Agreement,
the following are descriptions of stock issuances for Sino Charter since its
most recently filed periodic report under the Exchange Act:
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1.
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In
connection with the Securities Purchase Agreements entered into by and
between Sino Charter and MMH Group, LLC (“MMH”) dated February 12, 2009,
MMH purchased 102,800 shares of Sino Charter’s restricted common stock
from Sino Charter.
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2.
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In
connection with the Securities Purchase Agreement entered into by and
between Sino Charter and Xxxx Investments II, LLC (“Xxxx”) dated February
12, 2009, Xxxx purchased 287,840 shares of Sino Charter’s restricted
common stock from Sino Charter.
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3.
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In
connection with the Securities Purchase Agreement entered into by and
between Sino Charter and Ancora Greater China Fund, L.P. (“Ancora”) dated
February 12, 2009, Ancora purchased 123,360 shares of Sino Charter’s
restricted common stock from Sino
Charter.
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4.
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In
connection with the Securities Purchase Agreement entered into by and
between Sino Charter and Xxxxxxxxxx & Xxxxx LLP (“R&P”) dated
February 13, 2009, R&P purchased 334,500 shares of Sino Charter’s
restricted common stock from Sino
Charter.
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5.
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In
connection with the Securities Purchase Agreements entered into by and
between Sino Charter and Causeway Bay Capital, LLC (“Causeway”) dated
February 13, 2009, Causeway purchased 160,000 shares of Sino Charter’s
restricted common stock from Sino
Charter.
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6.
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In
connection with the Securities Purchase Agreement entered into by and
between Sino Charter and High Able Limited (“High Able”) dated February
13, 2009, High Able purchased 160,000 shares of Sino Charter’s restricted
common stock from Sino Charter.
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7.
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In
connection with the Securities Purchase Agreement entered into by and
between Sino Charter and Suzhou Capital Advisors, LLC (“Suzhou”) dated
February 13, 2009, Suzhou purchased 160,000 shares of Sino Charter’s
restricted common stock from Sino
Charter.
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DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-8
SCHEDULE
4.8
(Sino
Charter Stock Issuances to Officers, Directors and/or Affiliates)
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1.
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In
connection with the Securities Purchase Agreements dated February 12, 2009
and entered into by and between Sino Charter and MMH Group, LLC (“MMH”), a
limited liability company wholly owned by Xxxxxxx Xxxxxx, Sino Charter’s
current Chief Executive Officer and Sole Director, MMH purchased 102,800
shares of Sino Charter’s restricted common stock from Sino
Charter.
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2.
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In
connection with the Securities Purchase Agreement dated February 12, 2009
and entered into by and between Sino Charter and Xxxx Investments II, LLC
(“Xxxx”), a “more than 10% owner” of Sino Charter’s total issued and
outstanding common stock prior to the Closing, Xxxx purchased 287,840
shares of Sino Charter’s restricted common stock from Sino
Charter.
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3.
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In
connection with the Securities Purchase Agreement dated February 12, 2009
and entered into by and between Sino Charter and Ancora Greater China
Fund, L.P (“Ancora”), a “more than 10% owner” of Sino Charter’s total
issued and outstanding common stock prior to the Closing, Ancora purchased
123.360 shares of Sino Charter’s restricted common stock from Sino
Charter.
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DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-9
SCHEDULE
4.34
(Sino
Charter’s Schedule of Liabilities)
PENDING
LIABILITIES
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·
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Upon
completion of the Fiscal 2008 Audit for the year ending November 30, 2008
Sino Charter will owe Xxxxxx & Xxxxxx, CPA $3,000 in fees
earned.
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·
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Upon
completion of the 10K filing to complement the audit Sino Charter will owe
Xxxxxx Financial Services approximately
$1,500.
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DISCLOSURE
SCHEDULES TO THE
SHARE
EXCHANGE AGREEMENT
D-10
