EXHIBIT 4.6
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
AGREEMENT made this 13th day of February, 2004, by and between DF China
Technolgoy Inc., a corporation incorporated in the British Virgin Islands
(hereinafter, called "DFCT") and DiChain Systems Limited (hereinafter called
"DiChain Systems"), a limited company incorporated in Hong Kong, a leading IT
solutions and service provider for the logistic and supply chain management
industry in China, Farsight Holdings Limited (hereinafter called "Farsight"), a
limited company incorporated in the British Virgin Islands and is engaged in
investment holdings activities, Squadram Limited (hereinafter called
"Squadram"), a limited company incorporated in the British Virgin Islands and is
engaged in investment holdings activities, and Xxxxxxx Investments Services
Limited (hereinafter called "Xxxxxxx"), a limited company incorporated in the
British Virgin Islands and is engaged in investment holdings activities.
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
RECITALS:
1. DiChain Software Systems (Shenzhen) Limited ("DiChain Software"), a
limited company incorporated in the People's Republic of China
("PRC") and is engaged in the business of designing, manufacturing
and selling computer software and hardware products and systems
solutions for the supply chain management and logistics computer
industry in China.
2. DiChain Systems Limited is holding 68% equity interest in DiChain
Software and it is desirous to sell all its 68% equity interest in
DiChain Software in exchange for 134,503,320 new shares of common
stock in DFCT after completion of the Agreement.
3. Farsight Holdings Limited is holding 15% equity interest in DiChain
Software and it is desirous to sell all its 15% equity interest in
DiChain Software in exchange 29,669,850 shares of common stock in
DFCT after completion of the Agreement.
4. Squadram Limited, a limited company incorporated in the British
Virgin Islands and is holding 9% equity interest in DiChain Software
and it equity interest in DiChain Software and it is desirous to
sell all its 9% equity interest in DiChain Software in exchange
17,801,910 shares of common stock in DFCT after completion of the
Agreement.
5. Xxxxxxx Investments Services Limited, a limited company incorporated
in the British Virgin Islands and is holding 8% equity interest in
DiChain Software and it equity interest in DiChain Software and it
is desirous to sell all its 68% equity interest in DiChain Software
in exchange 15,823,920 shares of common stock in DFCT after
completion of the acquisition.
6. The exchange for the shares of common stock of DFCT will be effected
by the merger of DiChain Software and DFCT which is subject to the
shareholder approval of DFCT and DFCT shall be the surviving company
of the merger.
7. DFCT shall effect a stock consolidation ("reverse stock split")
pursuant to which each shareholder of DFCT will be issued one new
share of common stock to replace each five shares of common stock
now outstanding.
8. DiChain Systems, Farsight, Squadram and Xxxxxxx are collectively
called the "Software Shareholders").
9. DFCT will issue a total of 39,559,800 reverse new post reverse split
shares (the " New Shares")
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of common stock to the Software Shareholders after completion of the
acquisition.
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES.
Subject to the terms and conditions of this Agreement, DFCT agrees:
(i) to issue to DiChain Systems, 26,900,664 new post (5 old for 1
new) reverse split shares of common stock of the DFCT, such
that DiChain Systems shall become the shareholder holding
approximately 49.82% of the then enlarged issued share capital
of the DFCT;
(ii) to issue to Farsight, 5,933,970 new post (5 old for 1 new)
reverse split shares of common stock of the DFCT, such that
DiChain Systems shall become the shareholder holding
approximately 12.90% of the then enlarged issued share capital
of the DFCT;
(iii) to issue to Squadram, 3,560,382 new post (5 old for 1 new)
reverse split shares of common stock of the DFCT, such that
DiChain Systems shall become the shareholder holding
approximately 7.25% of the then enlarged issued share capital
of the DFCT;
(iv) to issue to Xxxxxxx, 3,164,784 new post (5 old for 1 new)
reverse split shares of common stock of the DFCT, such that
DiChain Systems shall become the shareholder holding
approximately 6.45% of the then enlarged issued share capital
of the DFCT; and
2. REPRESENTATIONS AND WARRANTIES. DFCT represents and warrants to DiChain
Systems, Farsight, Squadram and Xxxxxxx the following:
i Organization. DFCT is a corporation duly organized under the laws of
British Virgin Islands and has all the necessary corporate powers to
own properties and carry on a business, and is duly qualified to do
business in China. All actions taken by the incorporators, directors
and shareholders of the DFCT have been valid and in accordance with
the laws of the British Virgin Islands.
ii Capital. The authorized capital stock of DFCT is 250,000,000 shares
of common stock without par value, of which 47,620,712 are issued
and outstanding and 50,000,000 shares of preferred stock without par
value, of which there are no issued and outstanding. All outstanding
shares are fully paid. None of the outstanding shares of the DFCT
are subject to any stock restriction agreements. All of the
shareholders of the DFCT have valid title to such shares and
acquired their shares in a lawful transaction.
iii. Liabilities. DFCT does not have any debt, liability, or obligation
of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, which will materially and
adversely affect the financial position of DFCT. DFCT is not aware
of any pending, threatened or asserted claims, lawsuits or
contingencies involving DFCT or its common stock. There is no
dispute of any kind between the DFCT and any third party, and no
such dispute which will materially and adversely affect the
financial position of DFCT, will exist at the closing of this
Agreement.
iv. Ability to Carry out Obligation . DFCT has the right, power, and
authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by DFCT and
the performance by DFCT of its obligations hereunder will not cause,
constitute, or
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conflict with or result in (a) any breach or violation or the
provisions of, or constitute a default under any license, indenture,
mortgage, charter, instrument, articles of incorporation, bylaw, or
other agreement or instrument to which DFCT or its shareholders are
a party, or by which they may be bound, nor will any consents or
authorizations of any party other than those hereto be required, (b)
any event that would cause DFCT to be liable to any party, or (c)
any event that would result in the creation or imposition or any
lien, charge or encumbrance on any assets of the DFCT.
v. Full Disclosure. None of the representations and warranties made by
DFCT, or any certificate or memorandum furnished or to be furnished
by DFCT, contains or will contain any untrue statement of a material
fact, or omit any material fact the omission of which would be
misleading.
vi. Compliance with the Laws. DFCT has complied with, and is not in
violation of any federal, state or local statue, law, and/or
regulation pertaining to DFCT. DFCT has complied with all federal,
and state securities laws in connection with the issuance, sale and
distribution of its securities.
vii. Litigation. DFCT is not (and has not been) a party to any suit,
action, arbitration, or legal, administrative, or other proceeding,
or pending governmental investigation which will cause a material
and adverse impact on the business and financial position of DFCT.
To the best of the knowledge of DFCT, there is no basis for any such
action or proceeding and no such action or proceeding is threatened
against DFCT and DFCT is not subject to or in default with respect
to any order, writ, injunction, or decree of any federal, state,
local, or foreign court, department, agency, or instrumentality.
viii. Conduct of Business. Prior to the closing, DFCT shall conduct
business in the normal course, and shall not (a) sell, pledge, or
assign any assets, (b) save as agreed and/or to be agreed by the
Software Shareholders, amend its article of incorporation or
By-laws, (c) declare dividends, redeem or sell stock or other
securities, (d) incur any liabilities which may cause material and
adverse impact on the assets, business and financial position of
DFCT, or (e) (f) enter into any other transaction which may cause
material and adverse impact on the assets, business and financial
position of DFCT.
ix. Corporate Documents. Copies of each of the following documents,
which are true, complete and correct in all material respects, will
be open for inspection by the Software Shareholders, during office
hours at the principal business office of DFCT in China and attached
hereto and made an integral part hereof to this Agreement:
(1) Articles of Incorporation;
(2) By-laws;
(5) List of Officers and Directors;
(6) Audited financial statements as at March 31, 2003; and
(7) Stock register and stock records of DFCT and a current, accurate
list of the DFCT's shareholders.
x. Documents. All minutes, consents or other documents pertaining to
DFCT to be delivered at the closing shall be valid and in accordance
with the laws of the British Virgin Islands.
xi Title. The Shares to be issued to the Software Shareholders will be,
at the closing, free and clear of all liens, security interests,
pledges, charges, claims, encumbrances and restrictions of any kind.
None of such Shares are or will be subject to any voting trust or
agreement. No person holds or has any right to receive any proxy or
similar instrument with respect to such shares, except as provided
for in this Agreement, DFCT is not a party to any agreement which
offers or grants to
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any person the right to purchase or acquire any of the securities to
be issued to the Software Shareholders.
xiii. Shareholder Meeting. The Merger and issue of new shares of common
stock of DFCT shall be subject to the shareholder approval of DFCT
to be made at a special general meeting of DFCT shareholders as to:
(1) Approve the acquisition of the entire registered and issued
share capital from the Software Shareholders, for the issue by
DFCT the New Shares;
(2) Approve a stock consolidation ("reverse stock split") pursuant
to which each shareholder of DFCT will be issued one new share
of common stock to replace each five shares of common stock
now outstanding.
3. THE SOFTWARE SHAREHOLDERS represent and warrant to DFCT the following:
i. Organization. All actions taken by the Software Shareholders, the
directors and shareholders of the Software Shareholders have been
valid and in accordance with all laws.
ii. Counsel. Software Shareholders represent and warrant prior to the
Closing, that they are represented by independent counsel or have
had the opportunity to retain independent counsel to represent them
in this transaction.
iii. Financial Statements. Software Shareholders represent and warrant
that the financial statements as at December 31, 2003, audited by
Deloitte Touche Tohmatsu, give a true and fair view of DiChain
Software's affairs as at December 2003 and of its profit for the
year then ended.
iv. Closing. Upon closing of this transaction, the Software Shareholder
shall procure DiChain Software to complete registration works of the
entire registered and issued share capital to be in the name of DFCT
or a subsidiary company as DFCT may nominate.
4. INVESTMENT INTENT. The Software Shareholders agree that the Shares being
issued pursuant to this Agreement may be sold, pledged, assigned,
hypothecated or otherwise transferred, with or without consideration
(hereinafter called a "Transfer"), only pursuant to an effective
registration statement under the 1933 Act, or pursuant to an exemption
from registration under the 1933 Act, the availability of which is to be
established to the satisfaction of DFCT.
5. CLOSING. The closing of this transaction shall take place at the offices
of DFCT at Xxxxx 0000-00, Xxxx Xxxxx, Xxxx Tak Centre, Connaught Road
Central, Hong Kong, upon receipt or exchange or confirmation by the
relevant parties, as the case may be of the items referenced in Section 6,
below. Closing date will be set for the latest, Wednesday, March 31, 2004
at 5:00 p.m. (Hong Kong time). Unless otherwise mutually agreed by the
parties hereto, if closing does not occur by 5:00 p.m. (Hong Kong time),
Wednesday, March 31, 2004, then this agreement will become null and void.
6. DOCUMENTATION TO BE DELIVERED AT CLOSING.
i. By the DFCT
(1) Completion of the Plan or Reorganization whereby the following
will be completed:
i) Reverse Stock Spit 5 old shares to 1 new share
ii) Name Change of DFCT
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(2) Board of Directors Minutes authorizing the issuance of a
certificate or certificates for total of 39,559,000 new post
reverse spit shares including consultants, registered in the
names of the Software Shareholders respectively.
(3) A Board of Directors resolution appointing such person as
DiChain Systems designate as a director of DFCT.
(4) Such other minutes of DFCT's shareholders or directors as may
reasonably be required by the Software Shareholders.
(5) Consents signed by DiChain Systems consenting to the terms of
this Agreement.
7. REMEDIES.
i. Arbitration. Any controversy or claim arising out of, or relating
to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Hong Kong in accordance
with the Rules of the Hong Kong Arbitration Association then
existing, and judgment on the arbitration award may be entered in
any court having jurisdiction over the subject matter of the
controversy.
8. MISCELLANEOUS.
i. Captions and Headings. The Article and paragraph headings throughout
this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any
provision of this Agreement.
ii. No Oral Change. The Agreement and any provision hereof, may not be
waived, changes, modified, or discharged orally, but only by
agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, or discharge is sought.
iii. Non Waiver. Except as otherwise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by
the party against whom such waiver is charged; and (i) the failure
of any party to insist in any one or more cases upon the performance
of any of the provisions, covenants, or conditions of this Agreement
or to exercise any option herein contained shall not be construed as
a waiver or relinquishment for the future of any such provisions,
covenants, or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge
of the breach or failure of a covenant, condition or provision
hereof shall not be deemed a waiver of such breach or failure, and
(iii) no waiver by any party of one breach by another party shall be
construed as a waiver with respect to any other or subsequent
breach.
iv. Time of Essence. Time is of the essence of the Agreement and of each
and every provision hereof.
V. Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vi. Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed as original, but
all of which together shall constitute one and the same instrument.
vii. Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have
been duly given on the date of service if served personally
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on the party to whom the notice is to be given, or the third day
after mailing if mailed to the party to whom notice is to be given,
by first class mail, registered or certified, postage prepaid, and
properly address, and by fax, as follows:
AS WITNESS whereof this Agreement has been entered into the day and year first
before written.
SIGNED by Mr. Xxx XXXX, director )
for and on behalf of )
DICHAIN SYSTEMS LIMITED ) (signed by Xxx XXXX)
)
in the presence of: (signed by Xxxx Xx) )
SIGNED by Xx. Xx Xinggui, director )
for and on behalf of )
FARSIGHT HOLDINGS LIMITED ) (signed by Li Xinggui)
)
in the presence of: (signed by Xxxx Xx) )
SIGNED by Xx. Xxxx Hui, director )
for and on behalf of )
SQUADRAM LIMITED ) (signed by Xxxx Xxx)
)
in the presence of: (signed by Xxxx Xx) )
SIGNED by Miss Xx Xx, authorized person )
for and on behalf of )
XXXXXXX INVESTMENTS SERVICES LIMITED ) (signed by Xx Xx)
)
in the presence of: (signed by Xxxx Xx) )
SIGNED by Xx. Xxxxx Xxx Xiaojun, director )
for and on behalf of )
DF CHINA TECHNOLOGY INC. ) (signed by Xxxxx Xxx Xiaojun)
)
in the presence of: (signed by Xxxx Xx) )
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