REORGANIZATION AND STOCK PURCHASE AGREEMENT
This REORGANIZATION AND STOCK PURCHASE AGREEMENT dated as of November 18, 1999
(this "AGREEMENT") is by and between GOUNG HEI INVESTMENT CO., LTD., a DELAWARE
Corporation ("GHIC"), shareholders of GHIC who are or will be the owners of or
otherwise represent at least SEVENTY FIVE PER CENT (75%) of all the issued and
outstanding common stock (the "SHAREHOLDERS"), Xxxxxx Xxxxxx, Inc., a New York
Corporation ("MCI"). GHIC acknowledges and agrees that the terms and provisions
of this AGREEMENT, including without limitation the shares of stock transferable
hereunder, may be assigned by MCI.
GHIC was incorporated in the state of DELAWARE. Its authorized capital consist
of 50,000,000 shares of common stock, par value $0.00001 and 10,000,000 shares
of Preferred stock, par value $0.00001. As of the effective date of this
AGREEMENT, GHIC has issued and outstanding 2,286,649 common shares (the
"OUTSTANDING SHARES"). GHIC has no shares of preferred stock outstanding and
will have no outstanding options, warrants, rights or other contractual
arrangements relating to the ability or requirement to issue any additional
shares of common or preferred stock).
The respective boards of Directors of GHIC, MCI, and the SHAREHOLDERS
deem it advisable and in the best interests of their corporations and
shareholders of their corporations that the shareholders of MCI acquire
securities of GHIC in accordance with the terms and conditions of this
AGREEMENT.
1. PLAN OF REORGANIZATION. The SHAREHOLDERS signing this agreement are the
owners of or otherwise represent not less than 75% of the OUTSTANDING SHARES of
GHIC which the SHAREHOLDERS represent is a sufficient majority to carry any vote
for approval of this AGREEMENT under the corporate law of the state of DELAWARE,
the Articles of Incorporation of GHIC, and the By-laws of GHIC. At the closing
the shareholders of MCI and or assigns shall acquire 11,637,652 common shares
(the "NEW SHARES") from treasury.
2. CONSIDERATION. Consideration for the events outlined in paragraph (1) above
shall be
(a) The exchange of all the issued and outstanding stock of MCI for the
11,637,652 NEW SHARES of GHIC thereby making MCI a wholly owned subsidiary
of GHIC.
(b) On the Closing Date (as hereinafter defined) the Board of Directors of GHIC
will deliver: (i) authorized minutes of the board authorizing this
transaction; (ii) the corporate records of GHIC.
3. CLOSING DATE; PLACE OF CLOSING;. The CLOSING DATE shall be November 18, 1999.
The CLOSING DATE can be changed by mutual agreement but in no event shall the
CLOSING DATE extend beyond 20 days from the date of signing this agreement.
PLACE OF CLOSING shall be Halter Capital Corporation, 00000 Xxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx.
4. DELIVERY OF GHIC SHARES. On or before the CLOSING DATE, GHIC and SHAREHOLDERS
will have ready for delivery certificates representing the NEW SHARES of GHIC to
be delivered to MCI and/or assigns. Delivery shall be made at such place as to
be determined by parties.
5. REPRESENTATIONS AND WARRANTIES OF GHIC: GHIC represents and warrants to MCI
as follows:
(a) As of the CLOSING DATE, the 11,637,652 shares of GHIC common stock
to be delivered to MCI shareholders will constitute duly and validly issued
shares of GHIC, and are fully paid and nonassessable, and will be legally
equivalent in all respects to the common stock issued and outstanding as of the
date thereof
(b) The officers of GHIC have the power and the authority to execute
this Agreement and to perform the obligations contemplated hereby;
(c) The authorized capital stock of GHIC consist of 50,000,000 shares
of common stock, par value $0.00001 and 10,000,000 shares of preferred stock,
par value $0.00001. As of the CLOSING GHIC will have issued and outstanding
13,924,301 common shares. GHIC has no shares of preferred stock outstanding. No
shares have otherwise been registered under state or federal securities laws. As
of the CLOSING DATE, all of the issued and outstanding shares of common stock of
GHIC are validly issued, fully paid and non-assessable and they are not and as
of the CLOSING DATE there will not be outstanding any other warrants, options or
other agreements on the part of GHIC obligating GHIC to issue any additional
shares of common or preferred stock or any of its securities of any kind;
(d) All requisite corporate and other authorizations for the execution
of the agreement and performance thereof have been obtained.
(e) Except as otherwise disclosed there is no pending threatened
litigation or other legal actions, proceedings or investigations.
(f) The authorized capital stock is as set forth in this Agreement, and
all outstanding shares are duly authorized, validly issued and fully paid.
(g) GHIC has complied with all filing requirements for the Securities
and Exchange Commission and all NASD filings and that said filings conform to
the requirements of the respective agencies.
(h) That all prior actions of the corporation in connection with
filings have conformed to applicable state and federal law.
(i) Neither the execution and delivery of the AGREEMENT nor the
consummation of the transactions contemplated hereby will violate any provision
of the Articles of Incorporation or Bylaws of GHIC; will violate, conflict with
or result in the breach or termination of or otherwise give any contracting
party the right to terminate or constitute a default under the terms of any
agreement or instrument to which GHIC is a party or by which any of its property
or assets may be bound; will result in the creation of any lien, charge or
encumbrance upon the properties or assets of GHIC, will violate any judgment,
order, injunction, decree or award against or binding upon GHIC or upon its
securities, property or business;
(j) GHIC has not had any business or operations of any nature
whatsoever, has not sold any asset, provided any service for compensation or
incurred any obligation or liability except as otherwise specified in GHIC's
Financial Statements. No shareholder of GHIC has any right to cause GHIC to
register securities of GHIC with the SEC. GHIC has never had any paid employees.
(k) There are no contracts, agreements, arrangements or understandings
entered into by GHIC which cannot be terminated by GHIC upon 30 days written
notice to the other party or parties to such contracts or agreements (except the
contract by and between GHIC and Securities Transfer Corporation, Dallas, Texas,
relating to stock transfer services provided for GHIC.
6. REPRESENTATIONS AND WARRANTIES OF MCI. MCI represents and warrants as
follows:
(a) MCI has taken all necessary corporate action to authorize the
execution of this AGREEMENT and the transactions contemplated hereunder.
(b) Neither the execution and delivery of this AGREEMENT nor the
consummation of the transactions contemplated hereby will violate any provision
of the Articles of Incorporation or Bylaws of MCI; will violate, conflict with
or result in breach or termination of or otherwise give any contracting party
the right to terminate or constitute a default under the terms of any agreement
or instrument to which MCI is a party or by which any of its property or assets
may be bound; will result in the creation of any lien, charge or encumbrance
upon the properties or assets of MCI, or will violate any judgment, order,
injunction, decree or award against or binding upon MCI, or upon its securities,
property or business.
(c) All information supplied to GHIC by MCI is accurate and reliable
information. None of the information supplied contains any untrue statement of a
material fact or omits to make any statement of material fact necessary to make
the statements therein not misleading.
(d) From and after the date hereof there will not have been and prior
to the CLOSING DATE there will not be any material adverse changes in the
financial position of MCI assets as set forth in the Balance Sheet except
changes arising in the ordinary course of business;
(e) MCI is not and as of the CLOSING DATE will not be involved in any
pending litigation not in the ordinary course of business or governmental
investigation or proceeding not disclosed in writing to GHIC, and to the
knowledge of the Shareholders no litigation or governmental investigation or
proceeding beyond the ordinary course of business is threatened against MCI;
(f) As of the CLOSING DATE, MCI will be in good standing as a New YORK
corporation;
(g) Neither the execution and delivery of the AGREEMENT nor the
consummation of the transactions contemplated hereby will violate any provision
of the Articles of Incorporation or Bylaws of MCI; will violate, conflict with
or result in the breach or termination of or otherwise give any contracting
party the right to terminate or constitute a default under the terms of any
agreement or instrument to which MCI is a party or by which any of its property
or assets may be bound; will result in the creation of any lien, charge or
encumbrance upon the properties or assets of MCI, will violate any judgment,
order, injunction, decree or award against or binding upon MCI or upon its
securities, property or business;
7. PROHIBITED ACTS. GHIC agrees not to do any of the following acts prior to the
CLOSING DATE, and the GHIC SHAREHOLDERS agree that prior to the CLOSING DATE
they will not request or permit GHIC to do any of the following acts:
(a) Declare or pay any dividends or other distributions on its stock
or purchase or redeem any of its stock; or
(b) Issue any stock or other securities, including any rights or
options to purchase or otherwise acquire any of its stock, and shall not issue
any notes or other evidences of indebtedness.
8. REVERSE SPLIT PROHIBITED. GHIC and MCI agree that GHIC shall not authorize or
perform any reverse stock splits for 18 months from the CLOSING DATE.
9. NATURE AND SURVIVAL OF REPRESENTATIONS: All representations, warranties and
covenants made by any party in this agreement shall survive the closing
hereunder for so long as the applicable statute of limitations shall remain
open. Each of the parties hereto is executing and carrying out the provisions of
this agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this agreement or at the closing of the
transactions herein provided for and not upon any investigation which it might
have made or any representations, warranty, agreement, promise or information,
written or oral, made by the other party or any other person other than as
specifically set forth herein.
10. RESIGNATIONS AND APPOINTMENT OF OFFICERS AND DIRECTORS.
(a) Upon the closing date the officers and directors of GHIC shall
resign after the appointment of the following new directors:
DIRECTORS: (1) Xxxxxx Xxxxxx
(2) Xxxxxx Xxxxxx
PRESIDENT: Xxxxxx Xxxxxx
VICE PRESIDENT: Xxxxxx Xxxxxx
SECRETARY: Xxxxxx Xxxxxx
TREASURER: Xxxxxx Xxxxxx
11. NOTICES. Any notices which any of the parties hereto may desire to serve
upon any of the parties hereto shall be in writing and shall be conclusively
deemed to have been received by the parties at its address, if mailed, postage
prepaid, United States mail, registered, return receipt requested, to the
following addresses:
If to current GHIC management or the GHIC SHAREHOLDERS:
Xx. Xxxxx Xxxxxx, Xx.
Halter Capital Corporation
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
With a copy to:
Xxxxxx X. Xxxx, Esq.
00000 Xxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
If to MCI management or MCI:
000 Xxxx 00xx Xxxxxx #0000
Xxx Xxxx, XX 00000
12. PUBLICITY. Each party hereto agrees not to issue any press release or make
any public statement (Except as required by law) with respect to the
transactions contemplated hereby without the consent of the other party, and in
no event shall any press release be made prior to the Closing Date hereunder.
13. SUCCESSORS. This agreement shall be binding upon and inure to the benefit of
the heirs, personal representatives and successors and assigns of parties.
14. CHOICE OF LAW. This AGREEMENT shall be construed and enforced in accordance
with the laws of the State of Texas.
15. COUNTERPARTS. This AGREEMENT may be executed in one or more counterparts,
each of which shall be deemed an original but all of which taken together shall
constitute but one and the same document. For purposes of executing this
AGREEMENT, a document signed and transmitted by facsimile machine or telecopier
is to be treated as an original document.
16. MISCELLANEOUS:
(a) Further Assurance: At any time, and from time to time, after the
effective date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this agreement.
(b) Waiver: Any failure on the part of any party hereto to comply with any
of its obligations, agreements or conditions hereunder may be waived in writing
by the party to whom such compliance is owed.
(c) Time: Time is of the essence.
(d) Severability: If any part of this agreement is deemed to be
unenforceable, the balance of the agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS agreement as of the
date first above written.
GOUNG HEI INVESTMENT CO., LTD., XXXXXX XXXXXX, INC.
a DELAWARE Corporation a New York Corporation
By:_______________________________ By:_________________________________
Xxxxx Xxxxxx, Xx., PRESIDENT Xxxxxx Xxxxxx, President
SHAREHOLDERS (OWNING NOT LESS THAN A MAJORITY OF THE SHARES OF GHIC)
HALTER CAPITAL CORPORATION
By:_____________________________________
Xxxxx Xxxxxx, President
SECURITIES TRANSFER CORPORATION
By:_____________________________________
Xxxxx Xxxxxx, Xx., President
_____________________________________
XXXXXXXX XXXXXX
_____________________________________
XXXX XXXXXXX
X. X. XXXXXX FAMILY LIMITED PARTNERSHIP
By:_____________________________________
Xxxxx Xxxxxx, Xx., General Partner
_____________________________________
XXXXX XXXXXX, XX.
SHAREHOLDERS (OWNING NOT LESS THAN A MAJORITY OF THE SHARES OF MCI)
Xxxxxx Xxxxxx (5,060,000 SHARES 55.8%)
Xxxxxx Xxxxxx (2,000,000 SHARES 22.1%)
Xxxx Xxxx Hua (400,000 SHARES 4.4%)
S.M.P. Financial Consultants, Inc. (1,500,000 SHARES 16.6%)
