STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (hereinafter referred to as this
"Agreement"), is entered into as of this 19th day of January, 2004, by and
among Comet Technologies, Inc., a Nevada corporation ("Comet"); Town House
Land Limited, a company organized in the Hong Kong Special Administrative
Region in The People's Republic of China ("Town House"); and the persons
listed on Schedule 1(a) to this Agreement, being all of the equity registered
capital of Town House ( the "Shareholders"), upon the following premises:
PREMISES
A. Comet is a non-operating public company which has been in existence
since 1986.
B. The Shareholders of Town House own all of the issued and outstanding
shares of Town House (the "Town House Stock") which in turn owns the entire
registered capital of Wuhan Pacific Industry Development Company Limited
("Wuhan"), a wholly-owned foreign enterprise organized in Hubei Province in
The People's Republic of China.
C. The Shareholders of Town House have agreed to sell to Comet and Comet
has agreed to purchase the Town House Stock from the Shareholders in exchange
for shares representing ninety four percent (94%) of the total outstanding
common shares of Comet after the stock exchange, pursuant to the terms and
conditions set forth in this Agreement.
D. Town House together with its wholly-owned foreign subsidiary, Wuhan,
will become a wholly-owned subsidiary of Comet after the Closing of the
Exchange.
AGREEMENT
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits
to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
PLAN OF EXCHANGE
1.1 The Exchange. At the Closing (as defined in Section 1.3 below), each
of the Shareholders of Town House hereby agree to assign, transfer, and
deliver to Comet, free and clear of all liens, pledges, encumbrances, charges,
restrictions, or known claims of any kind, nature, or description, the
certificates evidencing the Town House Stock duly endorsed for transfer to
Comet or accompanied by stock powers executed in blank by the Shareholders,
and Comet agrees to acquire such shares on such date by issuing and delivering
in exchange therefore solely shares of Comet common stock, in the amount of
13,800,667 post-split shares (subject to adjustment for fractionalized shares
as set forth below) of its common voting stock, par value $0.001 (the "Comet
Stock") to be issued to the Shareholders of Town House and their designees as
listed on Schedule 1(b) following a one-for-three (1-for-3) reverse stock
split of the presently issued and outstanding common stock of Comet, in full
satisfaction of any right or interest which each Shareholder held in the Town
House Stock. The Comet Stock will be issued to the Shareholders of Town House
and their designees with a restrictive Regulation S legend as set forth on
Schedule 1(a) and Schedule 1(b) attached hereto. Any fractional shares that
will result due to such pro rata distribution will be rounded up to the next
highest whole number. As a result of the exchange of the Town House Stock in
exchange for the Comet Stock, Town House will become a wholly-owned subsidiary
of Comet and the Shareholders of Town House and their designees will own
ninety four percent of the issued and outstanding common stock of Comet.
1.2 Anti-Dilution. For all relevant purposes of this Agreement, the
13,800,667 post-split shares of Comet Stock to be issued and delivered
pursuant to this Agreement to the Shareholders of Town House, take into
account the 1-for-3 reverse split provided for in Section 1.1 and no further
change or adjustment shall be made in connection therewith. The number of
shares of Comet Stock and all shares of stock covered by existing Town House
options shall be appropriately adjusted to take into account any other stock
split, stock dividend, reverse stock split, recapitalization, or similar
change in the Comet common stock, par value $0.001, which may occur between
the date of the execution of this Agreement and the date of delivery of such
shares.
1.3 Closing. The closing ("Closing") of the transactions contemplated by
this Agreement shall be on a date and at such time as the parties may agree
("Closing Date"), within the five-day period commencing with the last to occur
of the following: the Comet shareholders' meeting pursuant to Section 5.1;
provided however, that the Closing shall in no event be after February 28,
2004, unless extended in writing by the parties.
1.4 Closing Events. At the Closing, each of the respective parties
hereto shall execute, acknowledge, and deliver (or shall cause to be executed,
acknowledged, and delivered) any and all certificates, opinions, financial
statements, schedules, agreements, resolutions, rulings, or other instruments
required by this Agreement to be so delivered at or prior to the Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence
the transactions contemplated hereby if agreed to by the parties, the Closing
may take place through the exchange of documents by fax and/or express
courier.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF TOWN HOUSE
As an inducement to, and to obtain the reliance of, Comet, Town House
represents and warrants as follows:
2.1 Organization. Town House is a duly organized, validly existing, and
in good standing under the laws of the Hong Kong Special Administrative Region
in The People's Republic of China ("PRC"). Town House has the power and is
duly authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own all of
its properties and assets and to carry on its business in all material
respects as it is now being conducted, including qualification to do business
as a foreign corporation in the states in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not, violate any provision of Town House's and its
wholly-owned subsidiary's organizational documents. Town House has taken all
action required by laws, its articles of incorporation, its bylaws, or
otherwise to authorize the execution and delivery of this Agreement. Town
House has full power, authority, and legal right and has taken all action
required by law, its certificate of incorporation, bylaws, and otherwise to
consummate the transactions herein contemplated.
2.2 Capitalization. The authorized capitalization of Town House consists
of 500,000 shares of ordinary stock, par value HK$1, of which 500 shares are
currently issued and outstanding. All issued and outstanding shares are
legally issued, fully paid, and non-assessable and not issued in violation of
the pre-emptive or other rights of any person. Town House has not granted any
options.
2.3 Subsidiaries and Predecessor Corporations. Town House owns all of
the registered capital wholly-owned subsidiary, Wuhan, and does not own,
beneficially or of record, any shares of any other corporation.
(a) On or before January 31, 2004, Town House will provide to Comet
its consolidated audited balance sheets of at December 31, 2002 and 2001, and
the related audited consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 2002 and 2001, together
with notes to such statements and the opinion of Henny Wee & Co., independent
certified public accountants, with respect thereto, and its unaudited
consolidated balance sheet as of September 30, 2003 date (the "most recent
Town House balance sheet"), consolidated statement of operations, condensed
consolidated stockholders' equity, and consolidate cash flow for the nine (9)
months ended September 30, 2003, together with the notes thereto. All of these
consolidated financial statements will be included in the Town House
Schedules.
(b) All such consolidated financial statements will have been
prepared in accordance with generally accepted accounting principles in Hong
Kong. The Town House balance sheets present fairly as of their date the
consolidated financial condition of Town House. Town House and its
wholly-owned subsidiary, Wuhan, will not have, as of the date of such
consolidated balance sheets, except as and to the extent reflected or reserved
against therein, any liabilities or obligations (absolute or contingent) which
should be reflected in the consolidated balance sheets or the notes thereto,
prepared in accordance with generally accepted accounting principles in Hong
Kong, and all assets reflected therein will be properly reported and present
fairly the value of the assets of Town House and its wholly-owned subsidiary,
Wuhan, in accordance with such generally accepted accounting principles. The
consolidated statements of income, condensed consolidated stockholders'
equity, and consolidated cash flows will reflect fairly the information
required to be set forth therein by generally accepted accounting principles
in Hong Kong.
(c) Town House and its wholly-owned subsidiary, Wuhan, have filed all
local income tax returns required to be filed by them from inception to the
date hereof and all taxes have been paid. Town House and its wholly-owned
subsidiary, Wuhan, have filed all national, province, and local income tax
returns required to be filed by them from inception to the date hereof and all
taxes have been paid. None of such income tax returns have been examined or
audited in the PRC.
(d) Town House and its wholly-owned subsidiary, Wuhan, do not owe any
unpaid national, province, county, local, or other taxes (including any
deficiencies, interest, or penalties), except for taxes accrued but not yet
due and payable, for which Town House and its wholly-owned subsidiary, Wuhan,
may be liable in their own right or as a transferee of the assets of, or as a
successor to, any other corporation or entity. Furthermore, except as accruing
in the normal course of business, Town House and its wholly-owned subsidiary,
Wuhan, do not owe any accrued and unpaid taxes to the date of this Agreement.
(e) The books and records, financial and otherwise, of Town House and
its subsidiary, Wuhan, are in all material respects complete and correct and
have been maintained in accordance with good business and accounting
practices.
(f) Town House and its wholly-owned subsidiary, Wuhan, have good and
marketable title to their assets and, except as set forth in the Town House
Schedules or the consolidated financial statements of Town House or the notes
thereto, has no material contingent liabilities, direct or indirect, matured
or unmatured.
2.4 Information. The information concerning Town House set forth in this
Agreement and in the Town House Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.
2.5 Options or Warrants. There are no existing options, warrants, calls,
or commitments of any character relating to the authorized and unissued Town
House common stock, except options, warrants, calls or commitments, if any, to
which Town House is not a party and by which it is not bound.
2.6 Absence of Certain Changes or Events. Except as set forth in this
Agreement or the Town House Schedules, as of the most recent Town House
consolidated balance sheet, when received:
(a) except in the normal course of business, there will not be (i)
any material adverse change in the business, operations, properties, assets,
or condition of Town House and its wholly-owned subsidiary, Wuhan; or (ii) any
damage, destruction, or loss to Town House and its wholly-owned subsidiary,
Wuhan (whether or not covered by insurance) materially and adversely affecting
the business, operations, properties, assets, or condition of Town House and
its wholly-owned subsidiary, Wuhan;
(b) Town House and its wholly-owned subsidiary, Wuhan, will not have
(i) amended their organizational documents; (ii) declared or made, or agreed
to declare or make, any payment of dividends or distributions of any assets of
any kind whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights of value
which in the aggregate are extraordinary or material considering the business
of Town House and its wholly-owned subsidiary, Wuhan; (iv) made any material
change in its method of management, operation, or accounting; (v) entered into
any other material transaction which is not in the ordinary course of
business; (vi) made any accrual or arrangement for payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers or
directors or any of its employees whose monthly compensation exceeds $5,000;
or (viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement made to, for, or with its officers, directors, or
employees; and
(c) Town House and its wholly-owned subsidiary, Wuhan, will not have
(i) borrowed or agreed to borrow any funds or incurred, or become subject to,
any material obligation or liability (absolute or contingent) not otherwise in
the ordinary course of business, and except for capital raised by issuance of
debt or equity in a private placement or other capital raising transaction
deemed advisable by Town House; (ii) paid any material obligation or liability
not otherwise in the ordinary course of business (absolute or contingent)
other than current liabilities reflected in or shown on the most recent Town
House consolidated balance sheet, and current liabilities incurred since that
date in the ordinary course of business; (iii) sold or transferred, or agreed
to sell or transfer, any of its assets, properties, or rights not otherwise in
the ordinary course of business (except assets, properties, or rights not used
or useful in its business which, in the aggregate have a value of less than
$10,000), or canceled, or agreed to cancel, any debts or claims (except debts
or claims which in the aggregate are of a value of less than $10,000); (iv)
made or permitted any amendment or termination of any contract, agreement, or
license to which they are a party not otherwise in the ordinary course of
business if such amendment or termination is material, considering the
business of Town House and its wholly-owned subsidiary, Wuhan; or (v) issued,
delivered, or agreed to issue or deliver any stock, bonds or other corporate
securities including debentures (whether authorized and unissued or held as
treasury stock).
2.7 Title and Related Matters. Town House and its wholly-owned
subsidiary, Wuhan, have good and marketable title to all of their properties,
inventory, interests in properties, and assets, real and personal, which will
be reflected in the most recent Town House consolidated balance sheet or
acquired after that date (except properties, interests in properties, and
assets sold or otherwise disposed of since such date in the ordinary course of
business), free and clear of all liens, pledges, charges, or encumbrances
except
(a) as such assets may be affected by laws of the Hong Kong Special
Administrative Region and The People's Republic of China;
(b) statutory liens or claims not yet delinquent;
(c) such imperfections of title and easements as do not and will not
materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties; and
(d) except as set forth in the Town House Schedules, Town House and its
wholly-owned subsidiary, Wuhan, own, free and clear of any liens, claims,
encumbrances, royalty interests, or other restrictions or limitations of any
nature whatsoever, any and all properties it is currently constructing and all
procedures, techniques, marketing plans, business plans, methods of
management, or other information utilized in connection with Town House and
its wholly-owned subsidiary's business. Except as set forth in the Town House
Schedules, no third party has any right to, and Town House and its
wholly-owned subsidiary, Wuhan, have not received any notice of infringement
of or conflict with asserted rights of others with respect to any product,
technology, data, trade secrets, know-how, proprietary techniques, trademarks,
service marks, trade names, or copyrights which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling, or finding, would have a
materially adverse affect on the business, operations, financial condition,
income, or business prospects of Town House and its wholly-owned subsidiary,
Wuhan, or any material portion of its properties, assets, or rights.
2.8 Litigation and Proceedings. Except as set forth in the Town House
Schedules, there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of Town House after reasonable investigation, threatened
by or against Town House and its wholly-owned subsidiary, Wuhan, or affecting
Town House and its wholly-owned subsidiary, Wuhan, or their properties, at law
or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind.
Town House does not have any knowledge of any default on its part with respect
to any judgment, order, writ, injunction, decree, award, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default.
2.9 Contracts.
(a) Town House has provided, or will provide Comet on reasonable
request, copies of all material contracts, agreements, franchises, license
agreements, or other commitments to which Town House and its wholly-owned
subsidiary, Wuhan, are parties or by which they or any of their assets,
products, technology, or properties are bound;
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which Town House and its wholly-owned subsidiary, Wuhan,
are parties or by which their properties are bound and which are material to
the operations of Town House and its wholly-owned subsidiary, Wuhan, taken as
a whole are valid and enforceable by Town House and its wholly-owned
subsidiary, Wuhan, in all respects, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors generally;
and
(c) Except as described in the Town House Schedules, Town House and its
wholly-owned subsidiary, Wuhan, are not parties to or bound by, and the
properties of Town House and its wholly-owned subsidiary, Wuhan, are not
subject to, any contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment, order, writ,
injunction, decree, or award which materially and adversely affects, or in the
future may (as far as Town House or its wholly-owned subsidiary, Wuhan, can
now foresee) materially and adversely affect, the business, operations,
properties, assets, or condition of Town House and its wholly-owned
subsidiary, Wuhan.
2.10 Material Contract Defaults. Town House and its wholly-owned
subsidiary, Wuhan, are not in default in any material respect under the terms
of any outstanding contract, agreement, lease, or other commitment which is
material to the business, operations, properties, assets, or condition of Town
House and its wholly-owned subsidiary, Wuhan, and there is no event of default
in any material respect under any such contract, agreement, lease, or other
commitment in respect of which Town House and its wholly-owned subsidiary,
Wuhan, have not taken adequate steps to prevent such a default from occurring.
2.11 No Conflict With Other Instruments. The execution of this Agreement
and the consummation of the transactions contemplated by this Agreement will
not result in the breach of any term or provision of, or constitute an event
of default under, any material indenture, mortgage, deed of trust, or other
material contract, agreement, or instrument to which Town House and its
wholly-owned subsidiary, Wuhan, are parties or to which any of their
properties or operations are subject.
2.12 Compliance With Laws and Regulations. Town House and its
wholly-owned subsidiary, Wuhan, have complied with all applicable statutes and
regulations of any national, province, county, or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially
and adversely affect the business, operations, properties, assets, or
condition of Town House and its wholly-owned subsidiary, Wuhan, or except to
the extent that noncompliance would not result in the incurrence of any
material liability for Town House or its wholly-owned subsidiary, Wuhan.
2.13 Approval of Agreement. The board of directors of Town House has
authorized the execution and delivery of this Agreement by Town House, has or
will have approved the transactions contemplated hereby, and approved the
submission of this Agreement and the transactions contemplated hereby to the
Shareholders of Town House for their approval with the recommendation that the
reorganization be accepted.
2.14 Material Transactions or Affiliations. Set forth in the Town House
Schedules is a description of every material contract, agreement, or
arrangement between Town House and its wholly-owned subsidiary, Wuhan, and any
predecessor and any person who was at the time of such contract, agreement, or
arrangement an officer, director, or person owning of record, or known by town
House to own beneficially, 10% or more of the issued and outstanding common
stock of Town House and which is to be performed in whole or in part after the
date hereof or which was entered into not more than three years prior to the
date hereof. In all of such transactions, the amount paid or received, whether
in cash, in services, or in kind, is, had been during the full term thereof,
and is required to be during the unexpired portion of the term thereof, no
less favorable to Town House and its wholly-owned subsidiary, Wuhan, than
terms available from otherwise unrelated parties in arm's length transactions.
Except as disclosed in the Town House Schedules or otherwise disclosed herein,
no officer, director, or 10% shareholder of Town House has, or has had since
inception of Town House, any material interest, direct or indirect, in any
material transaction with Town House or its wholly-owned subsidiary, Wuhan.
There are no commitments by Town House and its wholly-owned subsidiary, Wuhan,
whether written or oral, to lend any funds to, borrow any money from, or enter
into any other material transaction with, any such affiliated person.
2.15 Town House Schedules. Town House has delivered to Comet or will
deliver, as soon as practicable, the following schedules, which are
collectively referred to as the "Town House Schedules" and which consist of
separate schedules dated as of the date of execution of this Agreement and
instruments and data as of such date, all certified by the chief executive
officer of Town House as complete, true, and correct:
(a) a schedule containing complete and correct copies of the
organizational documents, as amended, of Town House and its wholly-owned
subsidiary, Wuhan, in effect as of the date of this Agreement;
(b) a schedule containing the consolidated financial statements of Town
House and its wholly-owned subsidiary, Wuhan, identified in paragraph 2.3(a);
(c) a schedule requested by Comet, containing true and correct copies
of all material contracts, agreements, or other instruments to which Town
House and its wholly-owned subsidiary, Wuhan, are parties or by which they or
their properties are bound, specifically including all contracts, agreements,
or arrangements referred to in Section 2.9;
(d) a schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or condition
of Town House or its wholly-owned subsidiary, Wuhan, since the date of the
most recent Town House consolidated balance sheet, required to be provided
pursuant to section 2.6 hereof; and
(e) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Town House
Schedules by sections 2.1 through 2.15. Town House shall cause the Town House
Schedules and the instruments and data delivered to Comet hereunder to be
updated after the date hereof up to and including the Closing Date.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF
SHAREHOLDERS
As an inducement to, and to obtain reliance of Comet, the Shareholders of
Town House represent and warrant as follows:
3.1 Ownership of Town House Shares. Each Town House Shareholder hereby
represents and warrants with respect to the legal and beneficial owner of the
percentage of Town House registered capital set forth on Schedule 1(a) of this
Agreement, free and clear of any claims, charges, equities, liens, security
interests, and encumbrances whatsoever, and each such Shareholder has full
right, power, and authority to transfer, assign, convey, and deliver their
Town House shares; and delivery of such registered capital at the closing will
convey to Comet good and marketable title to such shares free and clear of any
claims, charges, equities, liens, security interests, and encumbrances
whatsoever.
3.2 Knowledge of Representations. To their best knowledge and belief,
the representations of Town House in Article II, above, are true, accurate and
complete.
ARTICLE IV
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF COMET
As an inducement to, and to obtain the reliance of Town House and the
Shareholders, Comet represents and warrants as follows:
4.1 Organization. Comet is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Nevada, and has
the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, and there is
no jurisdiction in which it is not qualified in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Comet Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation and
bylaws of Comet, as in effect on the date hereof. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of Comet's articles of
incorporation or bylaws. Comet has taken all action required by law, its
articles of incorporation, its bylaws, or otherwise to authorize the execution
and delivery of this Agreement, and Comet has full power, authority, and legal
right and has taken all action required by law, its articles of incorporation,
bylaws, or otherwise to consummate the transactions herein contemplated.
4.2 Capitalization. Comet's authorized capitalization consists of
20,000,000 shares of common stock, par value $0.001, of which 3,598,000 shares
are issued and outstanding; and consists of 5,000,000 shares of preferred
stock, par value $.001, of which no shares are issued and outstanding. All
issued and outstanding shares are legally issued, fully paid, and
non-assessable and not issued in violation of the pre-emptive or other rights
of any person.
4.3 Subsidiaries. Comet does not have any subsidiaries and does not own,
beneficially or of record, any shares of any other corporation.
4.4 Financial Statements.
(a) Included in the Comet Schedules are the audited balance sheets of
Comet as of December 31, 2002 and 2001, and the related audited statements of
operations, stockholders' equity, and cash flow for the two fiscal years ended
December 31, 2002 together with the notes to such statements and the opinion
of HJ & Associates, LLC, independent certified public accountants, with
respect thereto; the unaudited balance sheet of Comet as of September 30,
2003, and the related unaudited statements of operations, stockholders'
equity, and cash flow for the nine-month period ended September 30, 2003,
together with the notes to such statements.
(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles in the United States consistently
applied throughout the periods involved. The Comet balance sheets present
fairly as of their respective dates the financial condition of Comet. Comet
did not have as of the date of any such Comet balance sheet, except as and to
the extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in a balance
sheet or the notes thereto prepared in accordance with generally accepted
accounting principles, and all assets reflected therein are properly reported
and present fairly the value of the assets of Comet, in accordance with
generally accepted accounting principles. The statements of operations,
stockholders' equity, and cash flow reflect fairly the information required to
be set forth therein by generally accepted accounting principles.
(c) Comet has no liabilities with respect to the payment of any
federal, state, county, local, or other taxes (including any deficiencies,
interest, or penalties), except for taxes accrued but not yet due and payable.
(d) Comet has filed all federal, state, or local income tax returns
required to be filed by it from inception to the date hereof. Included in the
Comet Schedules are true and correct copies of the federal income tax returns
of Comet filed since the date of inception. None of such federal income tax
returns have been examined by the Internal Revenue Service. Each of such
income tax returns reflects the taxes due for the period covered thereby,
except for amounts which, in the aggregate, are immaterial.
(e) The books and records, financial and otherwise, of Comet are in all
material respects complete and correct and have been maintained in accordance
with good business and accounting practices.
(f) Comet has good and marketable title to its assets and, except as
set forth in the Comet Schedules or the Financial Statements of Comet or the
notes thereto, has no material contingent liabilities, direct or indirect,
matured or unmatured.
4.5 Information. The information concerning Comet set forth in this
Agreement and the Comet Schedules is complete and accurate in all material
respects and does not contain any untrue statement of a material fact or omit
to state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading. All outstanding
stock options of Comet will be terminated and cancelled as of the Closing
date.
4.6 Options or Warrants. Except as set forth in Schedule 2, there are no
existing options, warrants, calls, or commitments of any character relating to
authorized and unissued stock of Comet, except options, warrants, calls, or
commitments, if any, to which Comet is not a party and by which it is not
bound. All outstanding stock options and warrants, if any, will be terminated
and cancelled as of the Closing Date.
4.7 Absence of Certain Changes or Events. Except as described herein or
in the Comet Schedules, since the date of the most recent Comet balance sheet:
(a) there has not been (i) any material adverse change in the business,
operations, properties, assets, or condition of Comet (whether or not covered
by insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of Comet;
(b) Comet has not (i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make any payment of dividends
or distributions of any assets of any kind whatsoever to stockholders or
purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of Comet; (iv) made any
material change in its method of management, operation, or accounting; (v)
entered into any other material transactions; (vi) made any accrual or
arrangement for or payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or employee;
(vii) increased the rate of compensation payable or to become payable by it to
any of its officers or directors or any of its employees whose monthly
compensation exceeds $1,000; or (viii) made any increase in any profit
sharing, bonus, deferred compensation, insurance, pension, retirement, or
other employee benefit plan, payment, or arrangement, made to, for, or with
its officers, directors, or employees;
(c) Comet has not (i) granted or agreed to grant any options, warrants,
or other rights for its stocks, bonds, or other corporate securities calling
for the issuance thereof; (ii) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability (absolute
or contingent) except liabilities incurred in the ordinary course of business;
(iii) paid or agreed to pay any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Comet balance sheet and current liabilities incurred since that date in
the ordinary course of business and professional and other fees and expenses
incurred in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby; (iv) sold or
transferred, or agreed to sell or transfer, any of its assets, property, or
rights (except assets, property, or rights not used or useful in its business
which, in the aggregate have a value of less than $1,000), or canceled, or
agreed to cancel, any debts or claims (except debts or claims which in the
aggregate are of a value of less than $1,000); (v) made or permitted any
amendment or termination of any contract, agreement, or license to which it is
a party if such amendment or termination is material, considering the business
of Comet; or (vi) issued, delivered, or agreed to issue or deliver any stock,
bonds, or other corporate securities including debentures (whether authorized
and unissued or held as treasury stock), except in connection with this
Agreement; and
(d) to the best knowledge of Comet, it has not become subject to any
law or regulation which materially and adversely affects, or in the future may
adversely affect, the business, operations, properties, assets, or condition
of Comet.
4.8 Title and Related Matters. Comet has good and marketable title to
all of its properties, interest in properties, and assets, real and personal,
which are reflected in the Comet balance sheet or acquired after that date
(except properties, interest in properties, and assets sold or otherwise
disposed of since such date in the ordinary course of business), free and
clear of all liens, pledges, charges, or encumbrances except
(a) statutory liens or claims not yet delinquent;
(b) such imperfections of title and easements as do not and will not
materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties; and
(c) as described in the Comet Schedules.
4.9 Litigation and Proceedings. There are no actions, suits, or
proceedings pending or, to the knowledge of Comet, threatened by or against or
affecting Comet, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of
any kind. Comet does not have any knowledge of any default on its part with
respect to any judgment, order, writs, injunction, decree, award, rule, or
regulation of any court, arbitrator, or governmental agency or
instrumentality.
4.10 Contracts. Comet is not a party to any material contract,
agreement, or other commitment, except as specifically disclosed in its
schedules to this Agreement.
4.11 No Conflict With Other Instruments. The consummation of the
transactions contemplated by this Agreement will not result in the breach of
any term or provision of, or constitute a default under, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which
Comet is a party or to which it or any of its assets or operations are
subject.
4.12 Governmental Authorizations. Comet has all licenses, franchises,
permits, and other government authorizations, that are legally required to
enable it to conduct its business operations in all material respects as
conducted on the date hereof. Except for compliance with federal and state
securities or corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, or registration, declaration, or filing with,
any court or other governmental body is required in connection with the
execution and delivery by Comet of this Agreement and the consummation by
Comet of the transactions contemplated hereby.
4.13 Compliance With Laws and Regulations. To the best of its knowledge,
Comet has complied with all applicable statutes and regulations of any
federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets, or conditions of Comet or
except to the extent that noncompliance would not result in the incurrence of
any material liability. This compliance includes, but is not limited to, the
filing of all reports to date with the U.S. Securities and Exchange Commission
and state securities authorities.
4.14 Insurance. Comet owns no insurable properties and carries no
casualty or liability insurance.
4.15 Approval of Agreement. The board of directors of Comet has
authorized the execution and delivery of this Agreement by Comet and has
approved this Agreement and the transactions contemplated hereby.
4.16 Continuity of Business Enterprises. Comet has no commitment or
present intention to liquidate Comet or sell or otherwise dispose of a
material portion of its business or assets following the consummation of the
transactions contemplated hereby.
4.17 Material Transactions of Affiliations. Except as disclosed herein
and in the Comet Schedules, there exists no material contract, agreement, or
arrangement between Comet and any person who was at the time of such contract,
agreement, or arrangement an officer, director, or person owning of record or
known by Comet to own beneficially, 10% or more of the issued and outstanding
common stock of Comet and which is to be performed in whole or in part after
the date hereof or was entered into not more than three years prior to the
date hereof. Neither any officer, director, nor 10% shareholder of Comet has,
or has had during the last preceding full fiscal year, any known interest in
any material transaction with Comet which was material to the business of
Comet. Comet has no commitment, whether written or oral, to lend any funds to,
borrow any money from, or enter into any other material transaction with any
such affiliated person.
4.18 Employment Matters. Comet has no employees other than its executive
officers.
4.19 Comet Schedules. Comet has delivered to Town House, or will deliver
as soon as practicable at Town House's request, the following schedules, which
are collectively referred to as the "Comet Schedules," which are dated the
date of this Agreement, all certified by an officer to be complete, true, and
accurate:
(a) a schedule containing complete and accurate copies of the articles
of incorporation and bylaws of Comet as in effect as of the date of this
Agreement;
(b) a schedule containing any filings with the U.S. Securities and
Exchange Commission (the "SEC"), not available on ▇▇▇▇▇;
(c) a schedule containing a copy of the federal income tax returns of
Comet identified in paragraph 4.4(d);
(d) a schedule setting forth the description of any material adverse
change in the business, operations, property, assets, or condition of Comet
since the date of the most recent Comet balance sheet, required to be provided
pursuant to section 4.7 hereof; and
(e) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Comet Schedules
by sections 4.1 through 4.19. Comet shall cause the Comet Schedules and the
instruments and data delivered to Town House hereunder to be updated after the
date hereof up to and including the Closing Date.
ARTICLE V
SPECIAL COVENANTS
5.1 Stockholders' Meeting of Comet. As soon as practicable following the
execution of this Agreement, and prior to the Closing, Comet shall call a
special meeting, or obtain a consent, of its shareholders, in accordance with
Nevada State laws and the proxy rules of the Securities Exchange Act of 1934,
to approve the following proposals:
(a) the election of ▇▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇ Min, ▇▇. ▇▇▇▇ Hui, ▇▇. ▇▇▇
▇▇▇ ▇▇▇▇, and ▇▇. ▇▇▇▇ Wei Jun as directors of Comet;
(b) a 1-for-3 reverse split or consolidation of the outstanding common
stock of Comet;
(c) the amendment to the articles of incorporation of Comet to change
its name to "Wuhan Development Corporation," or such other name to be
determined by Town House (the "New Name"), and to increase the authorized
number of shares of Comet from 20,000,000 to 50,000,000 shares;
(d) the approval of the "2004 Stock Option, SAR and Stock Bonus Plan"
of Comet covering 1,000,000 shares of common stock, attached as Schedule 3
hereto;
(e) approve the appointment of Murrell, Hall, ▇▇▇▇▇▇▇▇ & Co., PLLP as
the independent auditors of Comet for its fiscal year ended December 31, 2004;
(f) to take such other actions as the directors may determine are
necessary or appropriate, including (if necessary) the approval of this
Agreement and the transactions contemplated herein.
5.2 Consulting Agreement. At Closing, Comet will enter into a Consulting
Agreement with Belair Consulting, LC, an affiliate of ▇▇▇▇ ▇▇▇▇▇▇▇, Secretary,
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President of Comet, in a form acceptable to the parties.
5.3 Access to Properties and Records. Comet and Town House will each
afford to the officers and authorized representatives of the other full access
to the properties, books, and records of Comet or Town House and its
wholly-owned subsidiary, Wuhan, as the case may be, in order that each may
have full opportunity to make such reasonable investigation as it shall desire
to make of the affairs of the other, and each will furnish the other with such
additional financial and operating data and other information as to the
business and properties of Comet or Town House and its wholly-owned
subsidiary, Wuhan, as the case may be, as the other shall from time to time
reasonably request.
5.4 Delivery of Books and Records. At the Closing, Comet shall deliver
to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq., legal counsel of Town House, the originals of
the corporate minute books, books of account, contracts, records, and all
other books or documents of Comet now in the possession or control of Comet or
its representatives and agents.
5.5 Special Covenants and Representations Regarding the Comet Stock. The
consummation of this Agreement and the transactions herein contemplated,
including the issuance of the Comet Stock to the Shareholders of Town House as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act of 1933 and any applicable state statutes. Such transactions
shall be consummated in reliance on Regulation S and other exemptions from the
registration requirements of such statutes, which depend, inter alias, upon
the circumstances under which the Town House Shareholders acquire such
securities. In connection with reliance upon exemptions from the registration
requirements for such transactions, at the Closing, Town House shall cause to
be delivered, and the Shareholders shall deliver to Comet, letters of
representation in the form attached hereto as Schedule 4.
5.6 Audited Financial Statements. As soon as reasonably practicable,
Town House will prepare and complete audited financial statements for the
fiscal year ended December 31, 2003, including an audited balance sheet as of
December 31, 2003; and audited statements of operations, stockholders equity,
and cash flows for the year ended December 31, 2003 (" 2003 Financial
Statements"). The 2003 Financial Statements will be prepared in accordance
with generally accredited accounting principles consistently applied and
Regulation S-X. The statement of operations included in the 2003 Financial
Statements will reflect net income, after taxes, of at least $2,600,000.
5.7 NASDAQ Listing. As soon as reasonably practicable following the
closing, the consolidated company and its new management will undertake their
best efforts to prepare and file such documentation as required to obtain a
NASDAQ listing for the consolidated company; provided, however, that such
efforts will not be required until such time as the consolidated company
satisfies the eligibility requirements of NASDAQ.
5.8 Third Party Consents and Certificates. Comet and Town House agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein and therein contemplated.
5.9 Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the Comet or Town House Schedules or as permitted
or contemplated by this Agreement, Comet and Town House and its wholly-owned
subsidiary, Wuhan, respectively, will each: (i) carry on its business in
substantially the same manner as it has heretofore; (ii) maintain and keep its
properties in states of good repair and condition as at present, except for
depreciation due to ordinary wear and tear and damage due to casualty; (iii)
maintain in full force and effect insurance comparable in amount and in scope
of coverage to that now maintained by it; (iv) perform in all material
respects all of its obligation under material contracts, leases, and
instruments relating to or affecting its assets, properties, and business; (v)
use its best efforts to maintain and preserve its business organization
intact, to retain its key employees, and to maintain its relationship with its
material suppliers and customers; and (vi) fully comply with and perform in
all material respects all obligations and duties imposed on it by all federal
and state laws and all rules, regulations, and orders imposed by federal or
state governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
neither Comet nor Town House and its wholly-owned subsidiary, Wuhan will: (i)
make any change in their organizational documents, articles of incorporation
or bylaws; (ii) take any action described in section 2.7 in the case of Town
House and its wholly-owned subsidiary, Wuhan, or in section 3.7, in the case
of Comet (all except as permitted therein or as disclosed in the applicable
party's schedules); or (iii) enter into or amend any contract, agreement, or
other instrument of any of the types described in such party's schedules,
except that a party may enter into or amend any contract, agreement, or other
instrument in the ordinary course of business involving the sale of goods or
services.
5.10 Sales Under Rules 144 or 145, If Applicable.
(a) Comet will use its best efforts to at all times comply with the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including timely filing all periodic reports required under
the provisions of the Securities Exchange Act of 1934 (the "Exchange Act") and
the rules and regulations promulgated thereunder.
(b) Upon being informed in writing by any person holding restricted
stock of Comet as of the date of this Agreement that such person intends to
sell any shares under Rule 144 or Rule 145 promulgated under the Securities
Act (including any rule adopted in substitution or replacement thereof), Comet
will certify in writing to such person that it has filed all of the reports
required to be filed by it under the Exchange Act to enable such person to
sell such person's restricted stock under Rule 144 or 145, as may be
applicable in the circumstances, or will inform such person in writing that it
has not filed any such report or reports.
(c) If any certificate representing any such restricted stock is
presented to Comet's transfer agent for registration of transfer in connection
with any sale theretofore made under Rule 144 or 145, provided such
certificate is duly endorsed for transfer by the appropriate person(s) or
accompanied by a separate stock power duly executed by the appropriate
person(s) in each case with reasonable assurances that such endorsements are
genuine and effective, and is accompanied by an opinion of counsel
satisfactory to Comet and its counsel that such transfer has complied with the
requirements of Rule 144 or 145, as the cases may be, Comet will promptly
instruct its transfer agent to register such transfer and to issue one or more
new certificates representing such shares to the transferee and, if
appropriate under the provisions of Rule 144 or 145, as the case may be, free
of any stop transfer order or restrictive legend. The provisions of this
Section 5.9 shall survive the Closing and the consummation of the transactions
contemplated by this Agreement.
5.11 Indemnification.
(a) Town House and the Shareholders hereby agree to indemnify Comet and
each of the officers, agents and directors of Comet as of the date of
execution of this Agreement against any loss, liability, claim, damage, or
expense (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy appearing in
or misrepresentation made under Article II of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and termination of this
Agreement.
(b) Comet hereby agrees to indemnify Town House and each of the
officers, agents and directors of Town House as of the date of execution of
this Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article IV of this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and consummation of
the transactions contemplated hereby and termination of this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF COMET
The obligations of Comet under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
6.1 Accuracy of Representations. The representations and warranties made
by Town House and the Shareholders in this Agreement were true when made and
shall be true at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing Date (except
for changes therein permitted by this Agreement), and Town House and the
Shareholders shall have performed or complied with all covenants and
conditions required by this Agreement to be performed or complied with by Town
House and the Shareholders prior to or at the Closing. Comet shall be
furnished with a certificate, signed by a duly authorized officer of Town
House and dated the Closing Date, to the foregoing effect.
6.2 Officer's Certificates. Comet shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
Town House to the effect that no litigation, proceeding, investigation, or
inquiry is pending or, to the best knowledge of Town House threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement, or, to the extent not disclosed
in the Town House Schedules, by or against Town House which might result in
any material adverse change in any of the assets, properties, business, or
operations of Town House and its wholly-owned subsidiary, Wuhan.
6.3 No Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business, or operations of Town House and its wholly-owned subsidiary, Wuhan,
nor shall any event have occurred which, with the lapse of time or the giving
of notice, may cause or create any material adverse change in the financial
condition, business, or operations of Town House and its wholly-owned
subsidiary, Wuhan.
6.4 Officer and Director Questionnaires. Comet shall have received
officer and director questionnaires completed and signed by each executive
officer and director of Town House in form and substance reasonably
satisfactory to Comet and its counsel which shall contain information for use
by Comet in reporting the transaction contemplated hereby on Form 8-K to be
filed with the Securities and Exchange Commission.
6.5 Other Items.
(a) Comet shall have received a shareholders list of Town House
containing the name, address, and number of shares held by each Town House
Shareholder as of the date of Closing certified by an executive officer of
Town House as being true, complete, and accurate.
(b) Comet shall have received such further documents, certificates, or
instruments relating to the transactions contemplated hereby as Comet may
reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF
TOWN HOUSE AND THE SHAREHOLDERS
The obligations of Town House and the Shareholders under this Agreement
are subject to the satisfaction, at or before the Closing Date, of the
following conditions:
7.1 Accuracy of Representations. The representations and warranties made
by Comet in this Agreement were true when made and shall be true as of the
Closing Date (except for changes therein permitted by this Agreement) with the
same force and effect as if such representations and warranties were made at
and as of the Closing Date, and Comet shall have performed and complied with
all covenants and conditions required by this Agreement to be performed or
complied with by Comet prior to or at the Closing. Town House shall have been
furnished with a certificate, signed by a duly authorized executive officer of
Comet and dated the Closing Date, to the foregoing effect.
7.2 Stockholder Approval. The stockholders of Comet shall have approved
this Agreement, the transactions contemplated hereby, and the other matters
described in Section 5.1.
7.3 Officer's Certificate. Town House shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized executive
officer of Comet to the effect that no litigation, proceeding, investigation,
or inquiry is pending or, to the best knowledge of Comet threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement.
7.4 No Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business, or operations of Comet nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of Comet.
7.5 Good Standing. Comet shall have received a certificate of good
standing from the Secretary of State of the state of Nevada or other
appropriate office, dated as of a date within ten days prior to the Closing
Date certifying that Comet is in good standing as a corporation in the State
of Nevada and has filed all tax returns required to have been filed by it to
date and has paid all taxes reported as due thereon.
7.6 Other Items.
(a) Town House shall have received a shareholders' list of Comet from
its transfer agent, current at least ten (10) days prior to Closing,
containing the name, address and number of shares held by each such Comet
Shareholder certified by an executive officer of Comet as being true, complete
and accurate.
(b) Town House shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby
as Town House may reasonably request.
ARTICLE VIII
TERMINATION
8.1 Termination.
(a) This Agreement may be terminated by the board of directors of
either Comet or Town House at any time prior to the Closing Date if: (i) there
shall be any actual or threatened action or proceeding before any court or any
governmental body which shall seek to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement and which, in the judgment of such
board of directors, made in good faith and based on the advice of its legal
counsel, makes it inadvisable to proceed with the exchange contemplated by
this Agreement; (ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required to
consummate such transactions or in the judgment of such board of directors,
made in good faith and based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will be obtained
only on a condition or conditions which would be unduly burdensome, making it
inadvisable to proceed with the exchange; or (iii) there shall have been any
change after the date of the latest balance sheets of Comet and Town House,
respectively, in the assets, properties, business, or financial condition of
Comet and Town House, which could have a materially adverse affect on the
value of the business of Comet and Town House respectively, except any changes
disclosed in the Comet and Town House Schedules, as the case may be, dated as
of the date of execution of this Agreement. In the event of termination
pursuant to this paragraph (a) of section 8.1, no obligation, right, or
liability shall arise hereunder, and each party shall bear all of the expenses
incurred by it in connection with the negotiation, drafting, and execution of
this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated at any time prior to the Closing
by action of the board of directors of Comet if Town House shall fail to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or warranties of
Town House contained herein shall be inaccurate in any material respect. If
this Agreement is terminated pursuant to this paragraph (b) of section 8.1,
this Agreement shall be of no further force or effect, and no obligation,
right, or liability shall arise hereunder, except that Town House shall bear
its own costs as well as the costs incurred by Comet in connection with the
negotiation, preparation, and execution of this Agreement and qualifying the
offer and sale of securities contemplated hereby for exemption from the
registration requirements of state and federal securities laws.
(c) This Agreement may be terminated at any time prior to the Closing
by action of the board of directors of Town House if Comet shall fail to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or warranties of
Comet contained herein shall be inaccurate in any material respect. If this
Agreement is terminated pursuant to this paragraph (c) of section 8.1, this
Agreement shall be of no further force or effect, and no obligation, right, or
liability shall arise hereunder, except that Comet shall bear its own costs as
well as the costs of Town House incurred in connection with the negotiation,
preparation, and execution of this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 Brokers. Comet and Town House agree that there were no finders or
brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution, or consummation of this Agreement. Comet and Town
House each agree to indemnify the other against any claim by any third person
for any commission, brokerage, or finders' fee arising from the transactions
contemplated hereby based on any alleged agreement or understanding between
the indemnifying party and such third person, whether express or implied from
the actions of the indemnifying party.
9.2 Governing Law. This Agreement shall be governed by, enforced, and
construed under and in accordance with the laws of the United States of
America and, with respect to matters of state law, with the laws of Nevada.
Any dispute arising under or in any way related to this Agreement will be
submitted to binding arbitration before a single arbitrator by the American
Arbitration Association in accordance with the Association's commercial rules
then in effect. The arbitration will be conducted in Salt Lake City, Utah. The
decision of the arbitrator will set forth in reasonable detail the basis for
the decision and will be binding on the parties. The arbitration award may be
confirmed by any court of competent jurisdiction.
9.3 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by prepaid telegram
addressed as follows:
If to Comet, to: Comet Technologies, Inc.
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Town House, to: Town House Land Limited
c/o American Eastern Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., P.C.
2440 Bank One Center
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Shareholders
of Town House, to: c/o ▇▇▇▇▇▇▇ ▇▇▇▇
American Eastern Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed, or
telegraphed.
9.4 Attorney's Fees. In the event that any party institutes any action
or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
9.5 Confidentiality. Each party hereto agrees with the other parties
that, unless and until the transactions contemplated by this Agreement have
been consummated, and representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary
thereof from any representative, officer, director, or employee, or from any
books or records or from personal inspection, or such other party, and shall
not use such data or information or disclose the same to others, except (i) to
the extent such data or information is published, is a matter of public
knowledge, or is required by law to be published; and (ii) to the extent that
such data or information must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.
9.6 Expenses of Stock Exchange. Comet and Town House agree that they
will each bear their own costs and expenses in negotiating and closing the
transactions contemplated by this Agreement, including but not limited to,
attorneys' fees, accounting fees, due diligence expenses, travel, printing,
copying, mail, telephone and other related expenses.
9.7 Schedules; Knowledge. Each party is presumed to have full knowledge
of all information set forth in the other party's schedules delivered pursuant
to this Agreement.
9.8 Third Party Beneficiaries. This contract is solely between Comet and
Town House, and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor, or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
9.9 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof, including this
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
9.10 Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated.
9.11 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
9.12 Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and may be enforced concurrently herewith, and no waiver by
any party of the performance of any obligation by the other shall be construed
as a waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement
may be amended by a writing signed by all parties hereto, with respect to any
of the terms contained herein, and any term or condition of this Agreement may
be waived or the time for performance hereof may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first above-written.
COMET TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
ATTEST: -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
TOWN HOUSE LAND LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇, President
TOWN HOUSE SHAREHOLDERS: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇
/s/ Hu Min
-------------------------------------
Hu Min
/s/ ▇▇▇▇ ▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇
/s/ ▇▇▇▇ ▇▇▇ Jun
-------------------------------------
▇▇▇▇ ▇▇▇
/s/ Luo ▇▇▇ ▇▇▇▇
-------------------------------------
Luo ▇▇▇ ▇▇▇▇
/s/ Fang ▇▇▇ ▇▇▇▇
-------------------------------------
Fang ▇▇▇ ▇▇▇▇