SHARE EXCHANGE AGREEMENT by and among FULLAND LIMITED a corporation organized and existing under the laws of the Cayman Islands and THE STOCKHOLDERS OF FULLAND LIMITED on the one hand, and MALEX INC., a Delaware corporation and THE MAJORITY...
Exhibit
2.1
by
and among
FULLAND
LIMITED
a
corporation organized and existing
under
the laws of the Cayman Islands
and
THE
STOCKHOLDERS OF
FULLAND
LIMITED
on
the one hand, and
a
Delaware corporation
and
THE
MAJORITY STOCKHOLDER OF MALEX INC.
on
the other hand
November
13, 2007
This
Share Exchange Agreement, dated as of November 13, 2007 (this “Agreement”), is
made and entered into by and among the shareholders of Fulland Limited, a Cayman
Islands corporation (“Fulland”) (each, a “Fulland Stockholder,” collectively,
the “Fulland Stockholders”), listed on Schedule
I
attached, on the one hand; and Malex Inc., a public reporting Delaware
corporation (OTCBB: MLEX.OB) (“Malex”), and Synergy Business Consulting, LLC, a
Delaware limited liability company (the “Malex Stockholder”) on the other hand.
Fulland is a party to this agreement solely to make representations and
warranties as set forth herein.
R
E C I T A L S
WHEREAS,
Fulland owns 100% of Green Power Environment Technology (Shanghai) Co., Ltd.
(“Green Power”), which is a wholly foreign-owned enterprise (“WFOE”) under the
laws of the Peoples’ Republic of China (“PRC” or “China”);
WHEREAS,
Green Power has entered into a series of contractual arrangements with Wuxi
Huayang Electrical Power Equipment Co., Ltd. (“Huayang Electrical Equipment”)
and Wuxi Huayang Dye Machine Co., Ltd. (“Huayang Dye Machine”), both of which
are limited liability companies based in, and organized under the laws of,
the
PRC;
WHEREAS,
on November 12, 2007, the Board of Directors of Malex has adopted resolutions
approving Malex’s acquisition of shares of Fulland (the “Acquisition”) by means
of a share exchange with the Fulland Stockholders, upon the terms and conditions
hereinafter set forth in this Agreement;
WHEREAS,
each Fulland Stockholder owns the number of shares of common stock of Fulland
set forth opposite such Fulland Stockholder’s name in Column I on Schedule
I
attached
hereto (collectively, the “Fulland Shares”);
WHEREAS,
the Fulland Stockholders own, collectively, a number of shares of common stock
of Fulland constituting 100% of the issued and outstanding capital stock of
Fulland, and the Fulland Stockholders desire to sell and transfer their
respective holdings of the Fulland Shares in exchange for shares of Malex
pursuant to the terms and conditions of this Agreement;
WHEREAS,
the Malex Stockholder holds an amount of shares of Malex common stock which
represents approximately 95% of the issued and outstanding capital stock of
Malex;
WHEREAS,
the
Malex
Stockholder will enter into this Agreement for the purpose of making certain
representations, warranties, covenants, indemnifications and
agreements;
WHEREAS,
upon
consummation of the transactions contemplated by this Agreement, Fulland would
become a 100% wholly-owned subsidiary of Malex, and the former Fulland
Stockholders immediately prior to closing would become the 99% owners of Malex;
and
WHEREAS,
simultaneously with the share exchange transaction under this Agreement, and
as
a condition to its consummation, Malex shall pursuant to a Securities Purchase
Agreement dated an even date herewith (“Securities purchase Agreements”) sell
and issue its convertible promissory notes (the “Notes”)
in the
aggregate principal amount of $5,525,000, which Notes are convertible into
either:
(a)
an
aggregate of (i) 14,787,135 shares of the Company’s Series A Convertible
Preferred Stock, par value $.001 per share (“Series
A Preferred Stock”),
with
each share of Series A Preferred Stock being initially convertible into one
(1)
share of the Company’s common stock, par value $.001 per share (“Common Stock”),
subject to adjustment, and (ii) common stock purchase warrants (the “Warrants”)
to purchase 11,176,504 shares of Common Stock at $0.58 per share, 5,588,252
shares of Common Stock at $0.83 per share, and 2,065,000 shares at $0.92 per
share; or
(b)
an
aggregate of (i) 14,787,135 shares of the Common Stock, subject to adjustment,
and (ii) Warrants to purchase 11,176,504 shares of Common Stock at $0.58 per
share, 5,588,252 shares of Common Stock at $0.83 per share, and 2,065,000 shares
at $0.92 per share; or
(c)
if
the Restated Certificate and the Certificate of Designation, as defined in
the
Securities Purchase Agreement, shall not have been filed as required by such
agreement and the Note, 33,616,891shares of Common Stock.
A
G R E E M E N T
NOW,
THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE
1
THE
ACQUISITION
1.1 The
Acquisition.
Upon
the terms and subject to the conditions hereof, at the Closing (as hereinafter
defined) the parties shall do the following:
(a)
The
Fulland Stockholders will sell, convey, assign, transfer and deliver to Malex
stock certificates representing the Fulland Shares held by each Fulland
Stockholder as set forth in column (1) of Schedule I hereto, which in the
aggregate shall constitute 100% of the issued and outstanding shares of Fulland,
each accompanied by a properly executed and authenticated stock power.
(b)
As
consideration for the acquisition of the Fulland Shares, Malex will issue to
each Fulland Stockholder, in exchange for such Fulland Stockholder’s pro rata
portion of the Fulland Shares, the number of shares of common stock set forth
opposite such party’s name in Column (2) on Schedule I attached hereto
(collectively, the “Malex Shares”). The Malex Shares issued shall equal 99.00%
of the outstanding shares of Malex common stock at the time of Closing. For
example, if there are 700,000 shares of Malex common stock outstanding
immediately prior to the Closing, then there shall be 69,300,000 shares of
Malex
common stock issued to the Fulland Stockholders at Closing.
3
(c)
Synergy
Business Consulting, LLC shall surrender 8,006,490 shares of Malex common stock
held by it, which shall be cancelled pursuant to Section 6.6 hereof.
(d)
The
Company shall consummate its $5,525,000 convertible note financing pursuant
to
the Securities Purchase Agreement (the “Financing”).
(e)
Immediately
following the closing of the Financing, Greenview Capital LLC shall surrender
to
the Company 2,348,827 shares of the common stock issuable to it in the share
exchange transaction under this agreement, for cancellation on the books and
records of the Company, in exchange for a cash payment from the Company of
$625,000 (out of the proceeds of the Financing), which payment shall constitute
full consideration for cancellation of such shares and in full satisfaction
of
any and all debts and/or obligations to Greenview which may include but is
not
limited to payment made or expenses or indebtedness incurred by Greenview for
(i) assistance from the Company’s accountants and/or other professionals in
connection with the preparation of pro-forma financial statements and any post
closing SEC filings; and (ii) any final SEC or tax returns that have to be
filed
that include Malex rather than Greenpower.
(f)
Immediately
following the closing of the Financing, ▇▇ ▇▇▇▇ shall surrender to the Company
2,420,204 shares of the common stock issuable to him in the share exchange
transaction under this agreement, for cancellation on the books and records
of
the Company, in exchange for a cash payment from the Company of $400,000 (out
of
the proceeds of the Financing), which payment shall be full consideration for
cancellation of such shares.
1.2 Closing
Date.
The
closing of the Acquisition (the “Closing”) shall take place as soon as
practicable upon signing of this Agreement, and prior to November 13, 2007,
or
on such other date as may be mutually agreed upon by the parties. Such date
is
referred to herein as the “Closing Date.”
1.3 Taking
of Necessary Action; Further Action.
If, at
any time after the Closing, any further action is necessary or desirable to
carry out the purposes of this Agreement, the Fulland Stockholders, Fulland,
the
Malex Stockholders, and/or Malex (as applicable) will take all such lawful
and
necessary action.
1.4 Certain
Definitions.
The
following capitalized terms as used in this Agreement shall have the respective
definitions:
“Material
Adverse Effect”
means
a
adverse effect on either referenced party or the combined entity resulting
from
the consummation of the transaction contemplated by this Agreement, or on the
financial condition, results of operations or business, before or after the
consummation of the transaction contemplated in this Agreement, which as a
whole
is or would be considered material to an investor in the securities of Malex.
4
“knowledge”
shall
mean the actual knowledge of the officers, directors or advisors of the
referenced party.
“United
States”
means
and includes the United States of America, its territories and possessions,
any
State of the United States, and the District of Columbia.
“U.S.
Person” as
defined in Regulation S means: (i) a natural person resident in the United
States; (ii) any partnership or corporation organized or incorporated under
the
laws of the United States; (iii) any estate of which any executor or
administrator is a U.S. Person; (iv) any trust of which any trustee is a U.S.
Person; (v) any agency or branch of a foreign entity located in the United
States; (vi) any nondiscretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. Person; (vii) any discretionary account or similar account (other
than
an estate or trust) held by a dealer or other fiduciary organized, incorporated
and (if an individual) resident in the United States; and (viii) a corporation
or partnership organized under the laws of any foreign jurisdiction and formed
by a U.S. Person principally for the purpose of investing in securities not
registered under the Securities Act, unless it is organized or incorporated,
owned, by accredited investors (as defined in Rule 501(a) under the Securities
Act) who are not natural persons, estates or trusts).
“Non-U.S.
Person”
means
any person who is not a U.S. Person or is deemed not to be a U.S. Person under
Rule 902(k)(2).
“Restricted
Period”
shall
have the meaning set forth in Section 3.4(b)(vi).
“Transaction”
shall
mean the transactions contemplated by this Agreement, including the share
exchange.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF FULLAND
Fulland
hereby represents and warrants to Malex and the Malex Stockholder as
follows:
2.1
Organization.
Fulland
has been duly incorporated, validly exists as a corporation, and is in good
standing under the laws of its jurisdiction of incorporation, and has the
requisite power to carry on its business as now conducted.
2.2
Capitalization.
The
authorized capital stock of Fulland consists of 50,000 ordinary shares, $0.001
par value, of which at the Closing, no more than 50,000 shares shall be issued
and outstanding. All of the issued and outstanding shares of capital stock
of
Fulland, as of the Closing, are duly authorized, validly issued, fully paid,
non-assessable and free of preemptive rights. There are no voting trusts or
any
other agreements or understandings with respect to the voting of Fulland’s
capital stock. Fulland owns 100% of the issued and outstanding capital stock
of
Greenpower Environment Technology (Shanghai) Co., Ltd., a wholly foreign owned
enterprise formed in the PRC for foreign investment purposes.
5
2.3
Certain
Corporate Matters.
Fulland
is duly qualified to do business as a corporation and is in good standing under
the laws of the Cayman Islands, and in each other jurisdiction in which the
ownership of its property or the conduct of its business requires it to be
so
qualified, except where the failure to be so qualified would not have a Material
Adverse Effect on Fulland’s financial condition, results of operations or
business. Fulland has full corporate power and authority and all authorizations,
licenses and permits necessary to carry on the business in which it is engaged
and to own and use the properties owned and used by it.
2.4
Authority
Relative to this Agreement.
Fulland
has the requisite power and authority to enter into this Agreement and to carry
out its obligations hereunder. The execution, delivery and performance of this
Agreement by Fulland and the consummation by Fulland of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Fulland and no other actions on the part of Fulland are necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement has
been
duly and validly executed and delivered by Fulland and constitutes a valid
and
binding agreement of Fulland, enforceable against Fulland in accordance with
its
terms, except as such enforcement may be limited by bankruptcy, insolvency
or
other similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity.
2.5
Consents
and Approvals; No Violations.
Except
for applicable requirements of federal securities laws and state securities
or
blue-sky laws, no filing with, and no permit, authorization, consent or approval
of, any third party, public body or authority is necessary for the consummation
by Fulland of the transactions contemplated by this Agreement. Neither the
execution and delivery of this Agreement by Fulland nor the consummation by
Fulland of the transactions contemplated hereby, nor compliance by Fulland
with
any of the provisions hereof, will (a) conflict with or result in any breach
of
any provisions of the charter or Bylaws of Fulland, (b) result in a violation
or
breach of, or constitute (with or without due notice or lapse of time or both)
a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which Fulland is a party or by which they any of their respective properties
or
assets may be bound or (c) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Fulland, or any of its properties or assets,
except in the case of clauses (b) and (c) for violations, breaches or defaults
which are not in the aggregate material to Malex taken as a whole.
2.6
Books
and Records.
The
books and records of Fulland delivered to Malex prior to the Closing fully
and
fairly reflect the transactions to which Fulland is a party or by which it
or
its properties are bound and there shall be no material difference between
the
unaudited financials of Fulland given to Malex and the actual reviewed US GAAP
results of Fulland for the nine month period ended September 30, 2007.
6
2.7
Intellectual
Property.
Fulland
has no knowledge of any claim that, or inquiry as to whether, any product,
activity or operation of Fulland infringes upon or involves, or has resulted
in
the infringement of, any trademarks, trade-names, service marks, patents,
copyrights or other proprietary rights of any other person, corporation or
other
entity; and no proceedings have been instituted, are pending or are threatened.
2.8
Litigation.
Fulland
is not subject to any judgment or order of any court or quasi-judicial or
administrative agency of any jurisdiction, domestic or foreign, nor is there
any
charge, complaint, lawsuit or governmental investigation pending against
Fulland. Fulland is not a plaintiff in any action, domestic or foreign, judicial
or administrative. There are no existing actions, suits, proceedings against
or
investigations of Fulland, and Fulland knows of no basis for such actions,
suits, proceedings or investigations. There are no unsatisfied judgments,
orders, decrees or stipulations affecting Fulland or to which Fulland is a
party.
2.9
Legal
Compliance.
To the
best knowledge of Fulland, after due investigation, no claim has been filed
against Fulland alleging a violation of any applicable laws and regulations
of
foreign, federal, state and local governments and all agencies thereof. Fulland
holds all of the material permits, licenses, certificates or other
authorizations of foreign, federal, state or local governmental agencies
required for the conduct of their respective businesses as presently
conducted.
2.10 Contracts.
Fulland
has delivered to Malex copies of each and every:
|
(a)
|
Contract
or series of related contracts with the following Chinese companies:
|
(i)
Wuxi
Huayang Dye Machine Co., Ltd.; and
(ii)
Wuxi
Huayang Electric Power Co., Ltd.; and
|
(b)
|
material
agreements of Fulland not made in the ordinary course of
business.
|
All
of
the foregoing are referred to as the “Contracts.” The copies of each of the
Contracts delivered are accurate and complete. Each Contract is in full force
and effect and constitutes a legal, valid and binding obligation of, and is
legally enforceable against, the respective parties thereto. There is no
material default with respect to any such contract which will give rise to
liability in respect thereof on the part of Fulland or the other parties
thereto. No notice of default or similar notice has been given or received
by
Fulland under any of such contracts.
2.11
Disclosure.
The
representations and warranties and statements of fact made by Fulland in this
Agreement are, as applicable, accurate, correct and complete and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained herein
not
false or misleading.
7
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE FULLAND STOCKHOLDERS
The
Fulland Stockholders hereby represent and warrant to Malex as
follows:
3.1 Ownership
of the Fulland Shares.
Each
Fulland Stockholder owns, beneficially and of record, good and marketable title
to the Fulland Shares set forth opposite such Fulland Stockholder’s name in
Column (1) on Schedule
I
attached
hereto, free and clear of all security interests, liens, adverse claims,
encumbrances, equities, proxies, options or Stockholders’ agreements. Each
Fulland Stockholder represents that such person has no right or claims
whatsoever to any shares of Fulland capital stock, other than shares listed
across such Fulland Stockholder on Schedule
I
and does
not have any options, warrants or any other instruments entitling such Fulland
Stockholder to exercise to purchase or convert into shares of Fulland capital
stock. At the Closing, the Fulland Stockholders will convey to Malex good and
marketable title to the Fulland Shares, free and clear of any security
interests, liens, adverse claims, encumbrances, equities, proxies, options,
shareholders’ agreements or restrictions.
3.2
Authority
Relative to this Agreement.
This
Agreement has been duly and validly executed and delivered by each Fulland
Stockholder and constitutes a valid and binding agreement of each Fulland
Stockholder, enforceable against each Fulland Stockholder in accordance with
its
terms, except as such enforcement may be limited by bankruptcy, insolvency
or
other similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity.
3.3 Restricted
Securities.
Each
Fulland Stockholder acknowledges that the Malex Shares will not be registered
pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or any
applicable state securities laws, that the Malex Shares will be characterized
as
“restricted securities” under federal securities laws, and that under such laws
and applicable regulations the Malex Shares cannot be sold or otherwise disposed
of without registration under the Securities Act or an exemption therefrom.
In
this regard, each Fulland Stockholder is familiar with Rule 144 promulgated
under the Securities Act, as currently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
3.4 Status
of Stockholder.
Each of
the Fulland Stockholders hereby makes the representations and warranties in
either paragraph (a) or (b) of this Section 3.4, as indicated on the signature
page of such stockholder forming a part of this Agreement:
(a) Accredited
Investor Under Regulation D.
The
Fulland Stockholder is an “Accredited Investor” as that term is defined in Rule
501 of Regulation D promulgated under the Securities Act, an excerpt of which
is
included in the attached Annex A; or
(b) Non-U.S.
Person Under Regulation S.
The
Fulland Stockholder:
(i) is
not a
“U.S. person” as defined by Rule 902 of Regulation S promulgated under the
Securities Act of 1933 (the “Securities Act”), was not organized under the laws
of any U.S. jurisdiction, and was not formed for the purpose of investing in
securities not registered under the Securities Act;
8
(ii) at
the
time of Closing, the Fulland Stockholder was located outside the United
States;
(iii) no
offer
of the Malex Shares was made to the Fulland Stockholder within the United
States;
(iv) the
Fulland Stockholder is either (a) acquiring the Malex Shares for its own account
for investment purposes and not with a view towards distribution, or (b) acting
as agent for a principal that has signed this Agreement or has delivered
representations and warranties substantially similar to this Section
3.4(b);
(v) all
subsequent offers and sales of the Malex Shares by the Fulland Stockholder
will
be made outside the United States in compliance with Rule 903 of Rule 904 of
Regulation S, pursuant to registration of the Shares under the Securities Act,
or pursuant to an exemption from such registration; such Fulland Stockholder
understands the conditions of the exemption from registration afforded by
section 4(l) of the Securities Act and acknowledges that there can be no
assurance that it will be able to rely on such exemption.
(vi)
such
Fulland Stockholder will not resell the Malex Shares to U.S. Persons or within
the United States until after the end of the one (1) year period commencing
on
the date of Closing (the “Restricted Period”);
(vii) such
Fulland Stockholder shall not and hereby agrees not to enter into any short
sales with respect to the common stock of Malex at any time after the execution
of this Agreement by such Fulland Stockholder and prior to the expiration of
the
Restricted Period;
(viii)
such
Fulland Stockholder understands that the Malex Shares are being offered and
sold
to it in reliance on specific provisions of federal and state securities laws
and that the parties to this Agreement are relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understanding of such Fulland Stockholder set forth herein in order to determine
the applicability of such provisions. Accordingly, such Fulland Stockholder
agrees to notify Malex of any events which would cause the representations
and
warranties of such Fulland Stockholder to be untrue or breached at any time
after the execution of this Agreement by such Fulland Stockholder and prior
to
the expiration of the Restricted Period;
(ix) in
the
event of resale of the Malex Shares to non-U.S. Persons outside of the U.S.
during the Restricted Period, such Fulland Stockholder shall provide a written
confirmation or other written notice to any distributor, dealer, or person
receiving a selling concession, fee, or other remuneration in respect of the
Shares stating that such purchaser is subject to the same restrictions on offers
and sales that apply to the undersigned, and shall require that any such
purchase shall provide such written confirmation or other notice upon resale
during the Restricted Period;
9
(x)
such
Fulland Stockholder has not engaged, nor is it aware that any party has engaged,
and it will not engage or cause any third party to engage in any “directed
selling” efforts (as such term is defined in Regulation S) in the United States
with respect to the Malex Shares;
(xi)
such
Fulland Stockholder is not a “distributor” as such term is defined in Regulation
S, and it is not a “dealer” as such term is defined in the Securities Act;
(xii) such
Fulland Stockholder has not taken any action that would cause any of the parties
to this Agreement to be subject to any claim for commission or other or
remuneration by any broker, finder, or other person; and
(xiii)
such
Fulland Stockholder hereby represents that it has satisfied fully observed
of
the laws of the jurisdiction in which it is located or domiciled, in connection
with the acquisition of the Malex Shares or this Agreement, including (i) the
legal requirements of the such Fulland Stockholder’s jurisdiction for the
purchase and acquisition of the Malex Shares, (ii) any foreign exchange
restrictions applicable to such purchase and acquisition, (iii) any governmental
or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, which may be relevant to the purchase, holding,
redemption, sale, or transfer of the Malex Shares; and further, the Fulland
Stockholder agrees to continue to comply with such laws as long as it shall
hold
the Malex Shares.
3.5 Investment
Risk.
Each
Fulland Stockholder is able to bear the economic risk of acquiring the Malex
Shares pursuant to the terms of this Agreement, including a complete loss of
such Fulland Stockholder’s investment in the Malex Shares.
3.6 Restrictive
Legends.
Each
Fulland Stockholder acknowledges that the certificate(s) representing such
Fulland Stockholder’s pro rata portion of the Malex Shares shall each
conspicuously set forth on the face or back thereof a legend in substantially
the following form, corresponding to the stockholder’s status as set forth in
Section 3.4 and the signature pages hereto:
REGULATION
D LEGEND:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”
10
REGULATION
S LEGEND:
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION;
HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF MALEX
AND
THE MALEX STOCKHOLDER
Malex
and
the Malex Stockholder hereby represent and warrant, jointly and severally,
to
Fulland and the Fulland Stockholders as of the date hereof and as of the Closing
Date (unless otherwise indicated), as follows:
4.1
Organization.
Malex
is a corporation duly organized, validly existing and in good standing under
the
laws of the state of its incorporation, and has the requisite corporate power
to
carry on its business as now conducted.
4.2
Capitalization.
Malex’s
authorized capital stock consists of 75,000,000 shares of capital stock, all
of
which are designated as Common Stock, of which 8,416,000 shares are and shall
be
issued and outstanding immediately prior to the Closing. When issued pursuant
to
this Agreement, the Malex Shares will be duly authorized, validly issued, fully
paid, non-assessable and free of preemptive rights. There are no outstanding
or
authorized options, rights, warrants, calls, convertible securities, rights
to
subscribe, conversion rights or other agreements or commitments to which Malex
is a party or which are binding upon Malex providing for the issuance by Malex
or transfer by Malex of additional shares of Malex’s capital stock and Malex has
not reserved any shares of its capital stock for issuance, nor are there any
outstanding stock option rights, phantom equity or similar rights, contracts,
arrangements or commitments to issue capital stock of Malex. There are no voting
trusts or any other agreements or understandings with respect to the voting
of
Malex’s capital stock. There are no obligations of Malex to repurchase, redeem
or otherwise require any shares of its capital stock as of the Closing.
11
4.3
Certain
Corporate Matters.
Malex
is duly licensed or qualified to do business and is in good standing as a
foreign corporation in every jurisdiction in which the character of such
properties or nature of such business requires it to be so licensed or qualified
other than such jurisdictions in which the failure to be so licensed or
qualified does not, or insofar as can reasonably be foreseen, in the future
will
not, have a Material Adverse Effect. Malex has full corporate power and
authority and all authorizations, licenses and permits necessary to carry on
the
business in which it is engaged or in which it proposes presently to engage
and
to own and use the properties owned and used by it. Malex has delivered to
Fulland true, accurate and complete copies of its certificate or articles of
incorporation and bylaws of Malex, which reflect all restatements of and
amendments made thereto at any time prior to the date of this Agreement. The
records of meetings of the Stockholders and Board of Directors of Malex are
complete and correct in all material respects. The stock records of Malex and
the Stockholder lists of Malex that Malex has previously furnished to Fulland
are complete and correct in all material respects and accurately reflect the
record ownership and the beneficial ownership of all the outstanding shares
of
Malex’s capital stock and any other outstanding securities issued by Malex.
Malex is not in default under or in violation of any provision of its
certificate or articles of incorporation or bylaws in any material respect.
Malex is not in any material default or in violation of any restriction, lien,
encumbrance, indenture, contract, lease, sublease, loan agreement, note or
other
obligation or liability by which it is bound or to which any of its assets
is
subject.
4.4
Authority
Relative to this Agreement.
Each of
Malex and the Malex Stockholder has the requisite power and authority to enter
into this Agreement and carry out its or his obligations hereunder. The
execution, delivery and performance of this Agreement by Malex and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Malex, and no other actions on the part of Malex
are necessary to authorize this Agreement or the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Malex
and the Malex Stockholder and constitutes a valid and binding obligation of
Malex and the Malex Stockholder, enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors’ rights generally or by
general principles of equity.
4.5
Consents
and Approvals; No Violations.
Except
for applicable requirements of federal securities laws and state securities
or
blue-sky laws, no filing with, and no permit, authorization, consent or approval
of, any third party, public body or authority is necessary for the consummation
by Malex of the transactions contemplated by this Agreement. Neither the
execution and delivery of this Agreement by Malex nor the consummation by Malex
of the transactions contemplated hereby, nor compliance by Malex with any of
the
provisions hereof, will (a) conflict with or result in any breach of any
provisions of the charter or Bylaws of Malex, (b) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both)
a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which Malex is a party or by which they any of their respective properties
or
assets may be bound or (c) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Malex, or any of their respective properties
or
assets, except in the case of clauses (b) and (c) for violations, breaches
or
defaults which are not in the aggregate material to Malex taken as a
whole.
12
4.6 SEC
Documents.
Malex
hereby makes reference to its periodic reports on Forms 10-KSB and 10-QSB,
and
current reports of Form 8-K, including amendments thereto, as filed with the
United States Securities and Exchange Commission (the “SEC”) from and after
October 31, 2004 through and up to the Closing (collectively, the “SEC
Documents”). The SEC Documents constitute all of the documents and reports that
Malex was required to file with the SEC pursuant to the Securities Exchange
Act
of 1934 (“Exchange Act”) and the rules and regulations promulgated thereunder by
the SEC, during the period from October 31, 2007 through and up to the Closing.
As of the respective dates that each such document was filed, each of the SEC
Documents complied in all material respects with the requirements of the
Securities Act and/or the Exchange Act, as the case may require, and the rules
and regulations promulgated thereunder and none of the SEC Documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made, not misleading.
As
of the
date of Closing, except as set forth in the disclosure schedule attached hereto,
none of Malex’s filings with the SEC are under review or are the subject of
issued comments under letters from the SEC which have not been successfully
resolved with the SEC. The
consolidated financial statements of Malex included in the SEC Documents filed
with the SEC since the Majority Stockholder’s acquisition of control of Malex on
March 14, 2007, and to the best knowledge of Malex and the Majority Stockholder
all consolidated financial statements of Malex included in the SEC Documents
filed between October 31, 2007 and March 14, 2007, comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles in the United States
(except, in the case of unaudited statements, as permitted by the applicable
form under the Securities Act and/or the Exchange Act) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the financial position of Malex as of the dates
thereof and its consolidated statements of operations, Stockholders’ equity and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal and recurring year-end audit adjustments which were and
are not expected to have a Material Adverse Effect on Malex, its business,
financial condition or results of operations). Except as and to the extent
set
forth on the consolidated balance sheet of Malex as of December 31, 2006,
including the notes thereto, Malex has no liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise and whether required to
be
reflected on a balance sheet or not).
4.7 Financial
Statements.
(a) Included
in the SEC Documents are the audited consolidated balance sheet of Malex as
of
April 30, 2007 and 2006, and the related statement of operations, changes in
stockholders’ deficiency and cash flows for the two years then ended, together
with the unqualified report thereon of ▇▇▇▇▇▇▇▇ & Company, P.C. (the
“Auditor”), independent auditors (collectively, “Malex’s Audited
Financials”).
(b) Included
in the SEC Documents are the unaudited consolidated balance sheet of Malex
as at
July 31, 2007, and the related statement of operations, changes in stockholders’
deficiency and cash flows for the three months then ended, as reviewed by the
Auditor (“Malex’s Interim Financials”).
(c) To
the
best knowledge of Malex and its Majority Stockholder, Malex’s Audited Financials
and Malex’s Interim Financials (collectively “Malex’s Financial Statements”) are
(i) in accordance with the books and records of Malex, (ii) correct and
complete, (iii) fairly present the financial position and results of operations
of Malex as of the dates indicated, and (iv) prepared in accordance with U.S.
GAAP (except that (x) unaudited financial statements may not be in accordance
with GAAP because of the absence of footnotes normally contained therein, and
(y) interim (unaudited) financials are subject to normal year-end audit
adjustments that in the aggregate will not have a Material Adverse Effect on
Malex, their respective businesses, financial conditions or results of
operations.
13
4.8
Events
Subsequent to Financial Statements.
Except
as disclosed in Schedule 4.8, since April 30, 2007, there has not
been:
(a) Any
sale,
lease, transfer, license or assignment of any assets, tangible or intangible,
of
Malex;
(b)
Any
damage, destruction or property loss, whether or not covered by insurance,
affecting adversely the properties or business of Malex;
(c)
Any
declaration or setting aside or payment of any dividend or distribution with
respect to the shares of capital stock of Malex or any redemption, purchase
or
other acquisition of any such shares;
(d)
Any
subjection to any lien on any of the assets, tangible or intangible, of
Malex;
(e)
Any
incurrence of indebtedness or liability or assumption of obligations by
Malex;
(f)
Any
waiver or release by Malex of any right of any material value;
(g)
Any
compensation or benefits paid to officers or directors of Malex;
(h)
Any
change made or authorized in the Articles of Incorporation or Bylaws of Malex;
(i)
Any
loan
to or other transaction with any officer, director or Stockholder of Malex
giving rise to any claim or right of Malex against any such person or of such
person against Malex; or
(j)
Any
material adverse change in the condition (financial or otherwise) of the
respective properties, assets, liabilities or business of Malex.
4.9 Liabilities.
Except
as otherwise disclosed in Malex’s Financial Statements or incurred in the
ordinary course of business after the quarter ended July 31, 2007 (the financial
statements of which were filed with the SEC along with Malex’s quarterly report
on Form 10-QSB on September 13, 2007), Malex has no other undisclosed
liabilities whatsoever, either direct or indirect, matured or unmatured,
accrued, absolute, contingent or otherwise. In addition, Malex and the Malex
Stockholder represent that at the date of Closing, Malex shall have no
liabilities or obligations whatsoever, either direct or indirect, matured or
unmatured, accrued, absolute, contingent or otherwise.
14
4.10
Tax
Matters.
Except
as disclosed in Schedule 4.10:
(a)
Malex
has
duly filed all material federal, state, local and foreign tax returns required
to be filed (if any) by or with respect to them with the Internal Revenue
Service or other applicable taxing authority, and no extensions with respect
to
such tax returns have been requested or granted;
(b)
Malex
has
paid, or adequately reserved against in Malex’s Financial Statements, all
material taxes due, or claimed by any taxing authority to be due, from or with
respect to them (if any);
(c)
To
the
best knowledge of Malex, there has been no material issue raised or material
adjustment proposed (and none is pending) by the Internal Revenue Service or
any
other taxing authority in connection with any of Malex’s tax
returns;
(d)
No
waiver
or extension of any statute of limitations as to any material federal, state,
local or foreign tax matter has been given by or requested from Malex;
and
For
the
purposes of this Section
4.10,
a tax
is due (and must therefore either be paid or adequately reserved against in
Malex’s Financial Statements) only on the last date payment of such tax can be
made without interest or penalties, whether such payment is due in respect
of
estimated taxes, withholding taxes, required tax credits or any other
tax.
4.11
Real
Property.
Malex
does not own or lease any real property.
4.12
Books
and Records.
The
books and records of Malex delivered to the Fulland Stockholders prior to the
Closing fully and fairly reflect the transactions to which Malex is a party
or
by which they or their properties are bound.
4.13
Questionable
Payments.
Malex,
nor any employee, agent or representative of Malex has, directly or indirectly,
made any bribes, kickbacks, illegal payments or illegal political contributions
using company funds or made any payments from Malex’s funds to governmental
officials for improper purposes or made any illegal payments from Malex’s funds
to obtain or retain business.
4.14
Intellectual
Property.
Malex
does not own or use any trademarks, trade names, service marks, patents,
copyrights or any applications with respect thereto. Malex and the Malex
Stockholder have no knowledge of any claim that, or inquiry as to whether,
any
product, activity or operation of Malex infringes upon or involves, or has
resulted in the infringement of, any trademarks, trade-names, service marks,
patents, copyrights or other proprietary rights of any other person, corporation
or other entity; and no proceedings have been instituted, are pending or are
threatened.
4.15
Insurance.
Malex
has no insurance policies in effect.
15
4.16
Contracts.
Except
as set forth on Schedule
4.16,
Malex
has no material contracts, leases, arrangements or commitments (whether oral
or
written). Malex is not a party to or bound by or affected by any contract,
lease, arrangement or commitment (whether oral or written) relating to: (a)
the
employment of any person; (b) collective bargaining with, or any representation
of any employees by, any labor union or association; (c) the acquisition of
services, supplies, equipment or other personal property; (d) the purchase
or
sale of real property; (e) distribution, agency or construction; (f) lease
of
real or personal property as lessor or lessee or sublessor or sublessee; (g)
lending or advancing of funds; (h) borrowing of funds or receipt of credit;
(i)
incurring any obligation or liability; or (j) the sale of personal
property.
4.17
Litigation.
Malex
is not subject to any judgment or order of any court or quasi-judicial or
administrative agency of any jurisdiction, domestic or foreign, nor is there
any
charge, complaint, lawsuit or governmental investigation pending against Malex.
Malex is not a plaintiff in any action, domestic or foreign, judicial or
administrative. There are no existing actions, suits, proceedings against or
investigations of Malex, and to the best knowledge of Malex there is no basis
for any such actions, suits, proceedings or investigations. There are no
unsatisfied judgments, orders, decrees or stipulations affecting Malex or to
which Malex is a party.
4.18
Employees.
Malex
has no employees. Malex owes no compensation of any kind, deferred or otherwise,
to any current or previous employees. Malex has no written or oral employment
agreement with any officer or director of Malex. Malex is not a party to or
bound by any collective bargaining agreement. Except as set forth on
Schedule
4.18,
there
are no loans or other obligations payable or owing by Malex to any Stockholder,
officer, director or employee of Malex, nor are there any loans or debts payable
or owing by any of such persons to Malex or any guarantees by Malex of any
loan
or obligation of any nature to which any such person is a party.
4.19
Employee
Benefit Plans.
Malex
does not have any (a) non-qualified deferred or incentive compensation or
retirement plans or arrangements, (b) qualified retirement plans or
arrangements, (c) other employee compensation, severance or termination pay
or
welfare benefit plans, programs or arrangements or (d) any related trusts,
insurance contracts or other funding arrangements maintained, established or
contributed to by Malex.
4.20
Legal
Compliance.
To the
best knowledge of Malex, after reasonable investigation, no claim has been
filed
against Malex alleging a violation of any applicable laws and regulations of
foreign, federal, state and local governments and all agencies thereof. Malex
holds all of the material permits, licenses, certificates or other
authorizations of foreign, federal, state or local governmental agencies
required for the conduct of its business as presently conducted.
4.21 Subsidiaries
and Investments.
Malex
neither owns any capital stock, or has any interest of any kind nor has any
agreement or commitment to purchase any interest, whatsoever in any corporation,
partnership, or other form of business organization.
4.22
Broker’s
Fees.
Neither
Malex, nor anyone on its behalf has any liability to any broker, finder,
investment banker or agent, or has agreed to pay any brokerage fees, finder’s
fees or commissions, or to reimburse any expenses of any broker, finder,
investment banker or agent in connection with this Agreement.
16
4.23 Internal
Accounting Controls.
Malex
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets
at
reasonable intervals and appropriate action is taken with respect to any
differences.
Malex
has established disclosure controls and procedures (as defined in Exchange
Act
Rules 13a-15(e) and 15d-15(e)) for Malex and designed such disclosure controls
and procedures to ensure that material information relating to Malex is made
known to the certifying officers by others within those entities, particularly
during the period in which the Malex’s Form 10-KSB or 10-QSB, as the case may
be, is being prepared. Malex’s certifying officers have evaluated the
effectiveness of Malex’s controls and procedures as of end of the filing period
prior to the filing date of the Form 10-QSB for the quarter ended July 31,
2007
(such date, the “Evaluation
Date”).
Malex
presented in its most recently filed Form 10-KSB or Form 10-QSB the conclusions
of the certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date. Since
the
Evaluation Date, there have been no significant changes in Malex’s internal
controls (as such term is defined in Item 307(b) of Regulation S-K under the
Exchange Act) or, to Malex’s knowledge, in other factors that could
significantly affect Malex’s internal controls.
4.24 Listing
and Maintenance Requirements.
Malex’s
common stock is currently quoted on the OTC Bulletin Board and Malex has not,
in
the 12 months preceding the date hereof, received any notice from the OTC
Bulletin Board or the NASD or any trading market on which Malex’s common stock
is or has been listed or quoted to the effect that Malex is not in compliance
with the quoting, listing or maintenance requirements of the OTCBB or such
other
trading market. Malex is, and has no reason to believe that it will not, in
the
foreseeable future continue to be, in compliance with all such quoting, listing
and maintenance requirements.
4.25 Application
of Takeover Protections.
Malex
and its board of directors have taken all necessary action, if any, in order
to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under Malex’s certificate or articles of incorporation
(or similar charter documents) or the laws of its state of incorporation that
is
or could become applicable to Fulland or the Fulland Stockholders as a result
of
the Acquisition or the exercise of any rights by Fulland or the Fulland
Stockholders pursuant to this Agreement.
4.26 No
SEC
or NASD Inquiries.
Neither
Malex nor any of its past or present officers or directors is, or has ever
been,
the subject of any formal or informal inquiry or investigation by the SEC or
NASD.
4.27 Restrictions
on Business Activities.
Except
as disclosed on Schedule 4.27 hereto, there is no agreement, commitment,
judgment, injunction, order or decree binding upon Malex or to which Malex
is a
party which has or could reasonably be expected to have the effect of
prohibiting or materially impairing any business practice of Malex, any
acquisition of property by Malex or the conduct of business by Fulland or Malex
as currently conducted, other than such effects, individually or in the
aggregate, which have not had and could not reasonably be expected to have
a
Material Adverse Effect.
17
4.28 Interested
Party Transactions.
Except
as set forth in the Schedule 4.28 hereto or as reflected in the financial
statements to be delivered hereunder, no employee, officer, director or
shareholder of Malex or a member of his or her immediate family is indebted
to
Malex, nor are Malex indebted (or committed to make loans or extend or guarantee
credit) to any of them, other than (i) for payment of salary for services
rendered, (ii) reimbursement for reasonable expenses incurred on behalf of
Malex, and (iii) for other employee benefits made generally available to all
employees. Except as set forth in Schedule 4.28, to the knowledge of Malex,
no
employee, officer, director or shareholder or any member of their immediate
families is, directly or indirectly, interested in any material contract with
Malex (other than such contracts as relate to any such individual ownership
of
interests in or securities of Malex).
4.29
Disclosure.
The
representations and warranties and statements of fact made by Malex in this
Agreement are, as applicable, accurate, correct and complete and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained herein
not
false or misleading.
ARTICLE
5
INDEMNIFICATION
5.1 Malex
Stockholder Indemnification.
For a
period of one year after the Closing, the Malex Stockholder (“Indemnifying
Party”) agrees to indemnify Fulland, the Fulland Stockholders and each of the
officers, agents and directors of Fulland or the Fulland Stockholders (each
an
“Indemnified Party”) against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever) (each, a “Claim”) to which it
or they may become subject arising out of or based on either (i) any breach of
or inaccuracy in any of the representations and warranties or covenants or
conditions made by Malex and/or the Malex Stockholder herein in this Agreement;
or (ii) any and all liabilities arising out of or in connection with: (A) any
of
the assets of Malex prior to the Closing; or (B) the operations of Malex prior
to the Closing (the “Malex Stockholders Indemnification”). During the period of
the Malex Stockholders Indemnification, if Fulland or the Fulland Stockholders
shall become reasonably aware of any Claim covered by this Section 5.1, and
while such Claim is unresolved, Fulland shall have the right to issue stop
transfer instructions to its transfer agent with respect to the Malex Shares
held by the Indemnifying Party.
18
5.2 Indemnification
Procedures.
If any
action shall be brought against any Indemnified Party in respect of which
indemnity may be sought pursuant to this Agreement, such Indemnified Party
shall
promptly notify the Indemnifying Party in writing, and the Indemnifying Party
shall have the right to assume the defense thereof with counsel of its own
choosing. Any Indemnified Party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
except to the extent that the employment thereof has been specifically
authorized by the Indemnifying Party in writing, the Indemnifying Party has
failed after a reasonable period of time to assume such defense and to employ
counsel or in such action there is, in the reasonable opinion of such separate
counsel, a material conflict on any material issue between the position of
the
Indemnifying Party and the position of such Indemnified Party. The Indemnifying
Party will not be liable to any Indemnified Party under this Article 5 for
any
settlement by an Indemnified Party effected without the Indemnifying Party’s
prior written consent, which shall not be unreasonably withheld or delayed;
or
to the extent, but only to the extent that a loss, claim, damage or liability
is
attributable to any Indemnified Party’s indemnification pursuant to this Article
5.
ARTICLE
6
COVENANTS
OF THE PARTIES
6.1
Corporate
Examinations and Investigations.
Prior
to the Closing, each party shall be entitled, through its employees and
representatives, to make such investigations and examinations of the books,
records and financial condition of Fulland and Malex as each party may request.
In order that each party may have the full opportunity to do so, Fulland and
Malex, the Fulland Stockholders and the Malex Stockholder shall furnish each
party and its representatives during such period with all such information
concerning the affairs of Fulland or Malex as each party or its representatives
may reasonably request and cause Fulland or Malex and their respective officers,
employees, consultants, agents, accountants and attorneys to cooperate fully
with each party’s representatives in connection with such review and examination
and to make full disclosure of all information and documents requested by each
party and/or its representatives. Any such investigations and examinations
shall
be conducted at reasonable times and under reasonable circumstances, it being
agreed that any examination of original documents will be at each party’s
premises, with copies thereof to be provided to each party and/or its
representatives upon request.
6.2 Cooperation;
Consents.
Prior
to the Closing, each party shall cooperate with the other parties to the end
that the parties shall (i) in a timely manner make all necessary filings with,
and conduct negotiations with, all authorities and other persons the consent
or
approval of which, or the license or permit from which is required for the
consummation of the Acquisition and (ii) provide to each other party such
information as the other party may reasonably request in order to enable it
to
prepare such filings and to conduct such negotiations.
6.3 Conduct
of Business.
Subject
to the provisions hereof, from the date hereof through the Closing, each party
hereto shall (i) conduct its business in the ordinary course and in such a
manner so that the representations and warranties contained herein shall
continue to be true and correct in all material respects as of the Closing
as if
made at and as of the Closing and (ii) not enter into any material transactions
or incur any material liability not required or specifically contemplated
hereby, without first obtaining the written consent of Fulland and the holders
of a majority of voting stock of Fulland on the one hand and Malex and the
holders of a majority of voting stock of Malex common stock on the other hand.
Without the prior written consent of Fulland, the Fulland Stockholders, Malex
or
the Malex Stockholder, except as required or specifically contemplated hereby,
each party shall not undertake or fail to undertake any action if such action
or
failure would render any of said warranties and representations untrue in any
material respect as of the Closing.
19
6.4 Litigation.
From
the date hereof through the Closing, each party hereto shall promptly notify
the
representative of the other parties of any lawsuits, claims, proceedings or
investigations which after the date hereof are threatened or commenced against
such party or any of its affiliates or any officer, director, employee,
consultant, agent or shareholder thereof, in their capacities as such, which,
if
decided adversely, could reasonably be expected to have a Material Adverse
Effect on Malex.
6.5 Notice
of Default.
From
the date hereof through the Closing, each party hereto shall give to the
representative of the other parties prompt written notice of the occurrence
or
existence of any event, condition or circumstance occurring which would
constitute a violation or breach of this Agreement by such party or which would
render inaccurate in any material respect any of such party’s representations or
warranties herein.
6.6 Share
Cancellations and Transfers.
(a)
Immediately
prior to the Closing, Synergy Business Consulting, LLC shall surrender 8,006,490
shares of Malex common stock for cancellation. In connection with such share
cancellation, Synergy Business Consulting, LLC agrees to execute and deliver
any
documents and instruments reasonably necessary to effect such cancellation,
including originally executed stock certificate(s) and stock powers, with proper
endorsements and/or medallion certified signatures as may be required by Malex’s
transfer agent.
(b)
Immediately
following the Closing, Greenview Capital, LLC shall surrender 2,348,827 shares
of Malex common stock otherwise receivable by Greenview in the share exchange
transaction, for cancellation, in exchange for the consideration set forth
in
Section 1.1(e). In connection with such share cancellation, Greenview Capital,
LLC agrees to execute and deliver any documents and instruments reasonably
necessary to effect such cancellation, including originally executed stock
certificate(s) and stock powers, with proper endorsements and/or medallion
certified signatures as may be required by Malex’s transfer agent in order to
effect the cancellation.
(c)
Immediately
following the Closing, ▇▇ ▇▇▇▇ shall surrender 2,420,204 shares of Malex common
stock otherwise receivable by ▇▇. ▇▇ in the share exchange transaction, for
cancellation, in exchange for the consideration set forth in Section 1.1(f).
In
connection with such share cancellation, ▇▇. ▇▇ agrees to execute and deliver
any documents and instruments reasonably necessary to effect such cancellation,
including originally executed stock certificate(s) and stock powers, with proper
endorsements and/or medallion certified signatures as may be required by Malex’s
transfer agent in order to effect the cancellation.
20
(d)
As
soon
as practicable after the filing by the Company of its Certificate of Amendment
to set forth the rights, preferences, privileges and limitations of its Series
A
Preferred Stock, ▇▇▇▇▇▇ Partners, LP agrees and covenants that it shall convert
$805,245 in principal amount under its Note (to be issued under the Securities
Purchase Agreement) into no less than 805,245 shares of Series A Preferred
Stock
of the Company which immediately upon issuance thereof shall be assigned and
transferred to Maxworthy International Limited. In connection with such share
transfer, ▇▇▇▇▇▇ Partners, LP agrees to execute and deliver any documents and
instruments reasonably necessary to effect such cancellation, including
originally executed stock certificate(s) and stock powers, with proper
endorsements and/or medallion certified signatures as may be required by Malex’s
transfer agent in order to effect the transfer.
6.7 Bylaws.
If
necessary, Malex shall amend its Bylaws to permit the election and/or
appointment of additional new directors to Malex’s Board of Directors as set
forth in Section 7.1(a) below.
6.8 Confidentiality;
Access to Information.
(a) Confidentiality.
Any
confidentiality agreement or letter of intent previously executed by the parties
shall be superseded in its entirety by the provisions of this Agreement. Each
party agrees to maintain in confidence any non-public information received
from
the other party, and to use such non-public information only for purposes of
consummating the transactions contemplated by this Agreement. Such
confidentiality obligations will not apply to (i) information which was known
to
the one party or their respective agents prior to receipt from the other party;
(ii) information which is or becomes generally known; (iii) information acquired
by a party or their respective agents from a third party who was not bound
to an
obligation of confidentiality; and (iv) disclosure required by law. In the
event
this Agreement is terminated as provided in Article 8 hereof, each party will
return or cause to be returned to the other all documents and other material
obtained from the other in connection with the Transaction contemplated
hereby.
(b) Access
to Information.
(i) Fulland
will afford Malex and its financial advisors, accountants, counsel and other
representatives reasonable access during normal business hours, upon reasonable
notice, to the properties, books, records and personnel of Fulland during the
period prior to the Closing to obtain all information concerning the business,
including the status of product development efforts, properties, results of
operations and personnel of Fulland, as Malex may reasonably request. No
information or knowledge obtained by Malex in any investigation pursuant to
this
Section 6.8 will affect or be deemed to modify any representation or warranty
contained herein or the conditions to the obligations of the parties to
consummate the Transaction.
21
(ii) Malex
will afford Fulland and its financial advisors, underwriters, accountants,
counsel and other representatives reasonable access during normal business
hours, upon reasonable notice, to the properties, books, records and personnel
of Malex during the period prior to the Closing to obtain all information
concerning the business, including the status of product development efforts,
properties, results of operations and personnel of Malex, as Fulland may
reasonably request. No information or knowledge obtained by Fulland in any
investigation pursuant to this Section 6.8 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Transaction.
6.9
Public
Disclosure.
Except
to the extent previously disclosed or to the extent the parties believe that
they are required by applicable law or regulation to make disclosure, prior
to
Closing, no party shall issue any statement or communication to the public
regarding the transaction contemplated herein without the consent of the other
party, which consent shall not be unreasonably withheld. To the extent a party
hereto believes it is required by law or regulation to make disclosure regarding
the Transaction, it shall, if possible, immediately notify the other party
prior
to such disclosure. Notwithstanding the foregoing, the parties hereto agree
that
Malex will prepare and file a Current Report on Form 8-K pursuant to the
Exchange Act reasonably acceptable to Fulland to report the execution of this
Agreement and that any party hereto may file any reports as required by the
Exchange Act including, without limitation, any reports on Schedule
13D.
6.10 Assistance
with Post-Closing SEC Reports and Inquiries.
Upon
the reasonable request of Fulland, after the Closing Date, each Malex
Stockholder shall use his reasonable best efforts to provide such information
available to it, including information, filings, reports, financial statements
or other circumstances of Malex occurring, reported or filed prior to the
Closing, as may be necessary or required by Malex for the preparation of the
post-Closing Date reports that Malex is required to file with the SEC to remain
in compliance and current with its reporting requirements under the Exchange
Act, or filings required to address and resolve matters as may relate to the
period prior to the Closing and any SEC comments relating thereto or any SEC
inquiry thereof.
ARTICLE
7
CONDITIONS
TO CLOSING
7.1
Conditions
to Obligations of Fulland and the Fulland Stockholders.
The
obligations of Fulland and the Fulland Stockholders under this Agreement shall
be subject to each of the following conditions:
(a) Closing
Deliveries.
At the
Closing, Malex and/or the Malex Stockholder shall have delivered or caused
to be
delivered to Fulland and the Fulland Stockholders the following:
(i)
written
resignations of all officers and directors of Malex in office immediately prior
to the Closing;
(ii)
resolutions
duly adopted by the Board of Directors of Malex approving the following events
or actions, as applicable:
22
|
a.
|
the
execution, delivery and performance of this
Agreement;
|
|
b.
|
the
Acquisition and the terms thereof;
|
|
c.
|
adoption
of bylaws in the form agreed by the
parties;
|
|
d.
|
fixing
the number of authorized directors on the board of directors at four
(4);
|
|
e.
|
the
appointment of ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and ▇▇ ▇▇▇▇▇▇▇ as directors
to
serve on the Malex board of directors (the “Green Power Directors”);
and
|
|
f.
|
the
appointment of the following persons as officers of Malex, with the
titles
set forth opposite his name (the “Green Power Officers”):
|
▇▇
▇▇▇▇▇▇▇ Chief
Executive Officer, Secretary and
and
Chairman of the Board
▇▇▇▇
▇▇▇▇▇▇▇▇▇ Chief
Financial Officer
(iii)
a
certificate of good standing for Malex from its jurisdiction of incorporation,
dated not earlier than five days prior to the Closing Date;
(iv) an
instruction letter signed by the President of Malex addressed to Malex’s
transfer agent of record, in a form reasonably acceptable to Fulland and
consistent with the terms of this Agreement, instructing the transfer agent
to
issue stock certificates representing the Malex Shares to be delivered pursuant
to this Agreement registered in the names set forth in Schedule
I;
(v)
evidence
satisfactory to Fulland of delivery by the Majority Stockholder of the original
share certificate representing 8,006,490 shares of common stock of Malex,
accompanied by a stock power properly authenticated in original form, to the
Malex transfer agent for cancellation;
(vi)
this
Agreement duly executed by Malex and the Malex Stockholder;
(vii) all
corporate records, agreements, seals and any other information reasonably
requested by Fulland’s representatives with respect to Malex; and
(viii)
such
other documents as Fulland and/or the Fulland Stockholders may reasonably
request in connection with the transactions contemplated hereby.
23
(b) Representations
and Warranties to be True.
The
representations and warranties of Malex and the Malex Stockholder herein
contained shall be true in all material respects at the Closing with the same
effect as though made at such time. Malex and the Malex Stockholder shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing.
(c) Transfer
of On-Going Business.
All
current assets of Malex shall have been transferred to entities owned by certain
Malex shareholders, in complete settlement of outstanding debt owed to such
shareholders. Malex and/or the Malex Stockholder shall use the proceeds of
the
purchase price hereunder to settle all other outstanding debts, payables and
liabilities of Malex on or prior to the Closing Date, and such proceeds may
be
paid out of escrow on the Closing Date. Malex shall have delivered documentary
evidence of such transfer(s) and transactions reasonably satisfactory to
Fulland.
(d) No
Assets and Liabilities.
At the
Closing, each of Malex shall have no liabilities, debts or payables (contingent
or otherwise), no tax obligations, no material assets, and except as
contemplated in this Agreement, no material changes to its business or financial
condition shall have occurred since the date of this Agreement.
(e) SEC
Filings.
At the
Closing, Malex will be current in all SEC filings required by it to be filed.
(f) Outstanding
Common Stock.
Malex
shall have at least 75,000,000 shares of its common stock authorized and shall
have no more than 409,510 shares of its common stock issued and outstanding
after cancellation of 8,006,490 shares of Malex common stock held by Synergy
Business Consulting, LLC.
(g)
Closing
of Private Placement Transaction.
The
Company shall have closed the financing transaction under the Securities
Purchase Agreement for a minimum of $5.525 million in gross proceeds to the
Company.
7.2 Conditions
to Obligations of Malex and the Malex Stockholder.
The
obligations of Malex and the Malex Stockholder under this Agreement shall be
subject to each of the following conditions:
(a) Closing
Deliveries.
On the
Closing Date, Fulland and/or the Fulland Stockholders shall have delivered
to
Malex the following:
|
(i)
|
this
Agreement duly executed by Fulland and the Fulland Stockholders;
|
|
(ii)
|
stock
certificates representing the Fulland Shares to be delivered pursuant
to
this Agreement duly endorsed or accompanied by duly executed stock
powers;
|
|
(iii)
|
such
other documents as Malex may reasonably request in connection with
the
transactions contemplated hereby.
|
24
(b) Representations
and Warranties True and Correct.
The
representations and warranties of Fulland and the Fulland Stockholders herein
contained shall be true in all material respects at the Closing with the same
effect as though made at such time. Fulland and the Fulland Stockholders shall
have performed in all material respects all obligations and complied in all
material respects with all covenants and conditions required by this Agreement
to be performed or complied with by them at or prior to the
Closing.
ARTICLE
8
SEC
FILING; TERMINATION
8.1 At
or
prior to Closing, Malex shall prepare the information statement required by
Rule
14f-1 promulgated under the Exchange Act (“14f-1 Information Statement”), and
Malex shall file the 14f-1 Information Statement with the SEC and mail the
same
to each of Malex’s shareholders of record. Prior to filing, Malex shall provide
Fulland and its counsel a reasonable opportunity to review and comment on the
14f-1 Information Statement, which shall be in a form reasonably acceptable
to
said counsel.
8.2 This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual
written agreement of Malex and Fulland;
(b) by
either
Malex or Fulland if the Transaction shall not have been consummated for any
reason by November 13, 2007; provided, however, that the right to terminate
this
Agreement under this Section 8.2(b) shall not be available to any party whose
action or failure to act has been a principal cause of or resulted in the
failure of the Transaction to occur on or before such date and such action
or
failure to act constitutes a breach of this Agreement;
(c) by
either
Malex or Fulland if a governmental entity shall have issued an order, decree
or
ruling or taken any other action, in any case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Transaction, which order,
decree, ruling or other action is final and non-appealable;
(d) by
Fulland, upon a material breach of any representation, warranty, covenant or
agreement on the part of Malex set forth in this Agreement, or if any
representation or warranty of Malex shall have become materially untrue, in
either case such that the conditions set forth in Section 7.1 would not be
satisfied as of the time of such breach or as of the time such representation
or
warranty shall have become untrue, provided, that if such inaccuracy in Malex’s
representations and warranties or breach by Malex is curable by Malex prior
to
the Closing Date, then Fulland may not terminate this Agreement under this
Section 8.2(d) for thirty (30) days after delivery of written notice from
Fulland to Malex of such breach, provided Malex continues to exercise
commercially reasonable efforts to cure such breach (it being understood that
Fulland may not terminate this Agreement pursuant to this Section 8.2(d) if
it
shall have materially breached this Agreement or if such breach by Malex is
cured during such thirty (30) day period); or
25
(e) by
Malex,
upon a material breach of any representation, warranty, covenant or agreement
on
the part of Fulland or Fulland Stockholders set forth in this Agreement, or
if
any representation or warranty of Fulland or Fulland Stockholders shall have
become materially untrue, in either case such that the conditions set forth
in
Section 7.2 would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue, provided, that
if
such inaccuracy in Fulland’s or Fulland Stockholders' representations and
warranties or breach by Fulland or Fulland Stockholders is curable by Fulland
or
Fulland Stockholders prior to the Closing Date, then Malex may not terminate
this Agreement under this Section 8.2(e) for thirty (30) days after delivery
of
written notice from Malex to Fulland and Fulland Stockholders of such breach,
provided Fulland and Fulland Stockholders continue to exercise commercially
reasonable efforts to cure such breach (it being understood that Malex may
not
terminate this Agreement pursuant to this Section 8.2(e) if it shall have
materially breached this Agreement or if such breach by Fulland or Fulland
Stockholders is cured during such thirty (30) day period).
8.3 Notice
of Termination; Effect of Termination.
Any
termination of this Agreement under Section 8.2 above will be effective
immediately upon (or, if the termination is pursuant to Section 8.2(d) or
Section 8.2(e) and the proviso therein is applicable, thirty (30) days after)
the delivery of written notice of the terminating party to the other parties
hereto. In the event of the termination of this Agreement as provided in Section
8.2, this Agreement shall be of no further force or effect and the Transaction
shall be abandoned, except as set forth in this Section 8.2, Section 8.3 and
Article 9 (General Provisions), each of which shall survive the termination
of
this Agreement.
ARTICLE
9
GENERAL
PROVISIONS
9.1
Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed by registered or certified mail (postage prepaid and return
receipt requested) to the party to whom the same is so delivered, sent or mailed
at addresses set forth on the signature pages hereof (or at such other address
for a party as shall be specified by like notice).
9.2
Interpretation.
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
References to Sections and Articles refer to sections and articles of this
Agreement unless otherwise stated.
9.3
Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated and the parties shall negotiate in good faith to modify this
Agreement to preserve each party’s anticipated benefits under this
Agreement.
26
9.4
Miscellaneous.
This
Agreement (together with all other documents and instruments referred to
herein): (a) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof; (b) except as expressly set forth herein,
is not intended to confer upon any other person any rights or remedies hereunder
and (c) shall not be assigned by operation of law or otherwise, except as may
be
mutually agreed upon by the parties hereto.
9.5 Separate
Counsel.
Each
party hereby expressly acknowledges that it has been advised to seek its own
separate legal counsel for advice with respect to this Agreement, and that
no
counsel to any party hereto has acted or is acting as counsel to any other
party
hereto in connection with this Agreement.
9.6
Governing
Law.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware.
9.7
Counterparts
and Facsimile Signatures.
This
Agreement may be executed in two or more counterparts, which together shall
constitute a single agreement. This Agreement and any documents relating to
it
may be executed and transmitted to any other party by facsimile, which facsimile
shall be deemed to be, and utilized in all respects as, an original, wet-inked
manually executed document.
9.8 Amendment.
This
Agreement may be amended, modified or supplemented only by an instrument in
writing executed by Fulland, Malex, and holders of a majority of outstanding
voting stock of Fulland and the holders of a majority of outstanding voting
stock of Malex; provided that, the consent of any Fulland or Malex shareholder
that is a party to this Agreement shall be required if the amendment or
modification would disproportionately affect such shareholder (other than by
virtue of their ownership of Fulland or Malex shares, as
applicable).
9.9 Parties
In Interest.
Except
as otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto.
9.10 Waiver.
No
waiver by any party of any default or breach by another party of any
representation, warranty, covenant or condition contained in this Agreement
shall be deemed to be a waiver of any subsequent default or breach by such
party
of the same or any other representation, warranty, covenant or condition. No
act, delay, omission or course of dealing on the part of any party in exercising
any right, power or remedy under this Agreement or at law or in equity shall
operate as a waiver thereof or otherwise prejudice any of such party’s rights,
powers and remedies. All remedies, whether at law or in equity, shall be
cumulative and the election of any one or more shall not constitute a waiver
of
the right to pursue other available remedies.
27
9.11 Expenses.
At or
prior to the Closing, the parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
[Remainder
of Page Left Blank Intentionally]
28
IN
WITNESS WHEREOF, the parties have executed this Share Exchange Agreement as
of
the date first written above.
MALEX:
By:
__________________________
▇▇▇▇▇▇
▇▇▇▇▇▇▇
Chief
Executive Officer, President
Address
for Notices:
_______________________________
_______________________________
_______________________________
Fax:
___________________________
MALEX
STOCKHOLDER:
SYNERGY
BUSINESS CONSULTING, LLC
________________________________
▇▇▇▇▇▇
▇▇▇▇▇▇▇, Managing Member
Address
for Notices:
_______________________________
_______________________________
_______________________________
Fax:
___________________________
29
FULLAND
LIMITED:
FULLAND
LIMITED, a corporation organized
and
existing under the laws of the Cayman Islands
By:
____________________________________
Name:
Title:
Address
for Notices:
__________________________________
__________________________________
__________________________________
Fax:
______________________________
30
SIGNATURE
PAGE OF FULLAND STOCKHOLDERS
FULLAND
STOCKHOLDERS:
_________________________________________
(Name
of
Fulland Stockholder)
_________________________________________
(Signature)
_________________________________________
(Name
of
Authorized Representative, if applicable)
_________________________________________
(Title
of
Authorized Representative, if applicable)
Stockholder
Address
for
Notices:
______________________________________
______________________________________
______________________________________
Fax:
__________________________________
Check
One:
The
Fulland Stockholder hereby certifies that it is:
|
o
|
an
“Accredited Investor” under Regulation D of the Securities Act (see
Section 3.4 and Annex A of this Agreement;
or
|
|
o
|
a
Non-U.S. Person, that hereby confirms that the representations and
warranties in Section 3.4(b) of this Agreement are true and correct
as to
such Fulland Stockholder, and hereby accepts and agrees to comply
with the
covenants in Section 3.4(b).
|
31
SCHEDULE
I
STOCKHOLDERS
|
Name of Fulland Stockholder
|
(1)
Fulland Shares
Transferred to
Malex
|
Percentage of
Outstanding
Fulland
Shares
|
(2)
Malex Shares
Issued to
Fulland
Stockholders
|
Percentage of
Outstanding
Malex Shares
Post-
Transaction
|
|||||||||
|
Maxworthy
International Limited
|
21,717
|
43.43
|
%
|
17,608,930
|
43.00
|
%
|
|||||||
|
Ren
Yunxia
|
10,101
|
20.20
|
%
|
8,190,200
|
20.00
|
%
|
|||||||
|
Wu
Haoyang
|
2,525
|
5.05
|
%
|
2,047,550
|
5.00
|
%
|
|||||||
|
Sun
Liqun
|
1,010
|
2.02
|
%
|
819,020
|
2.00
|
%
|
|||||||
|
Sun
Zhuming
|
505
|
1.01
|
%
|
409,510
|
1.00
|
%
|
|||||||
|
Pacific
Rim Consultants, Inc. as trustee
|
3,811
|
7.62
|
%
|
3,089,753
|
7.54
|
%
|
|||||||
|
▇▇▇▇
▇▇▇▇
|
1,515
|
3.03
|
%
|
1,228,530
|
3.00
|
%
|
|||||||
|
Cawston
Enterprises Ltd.
|
2,295
|
4.59
|
%
|
1,861,223
|
4.54
|
%
|
|||||||
|
Greenview
Capital
|
3,535
|
7.07
|
%
|
2,866,570*
|
7.00
|
%
|
|||||||
|
▇▇
▇▇▇▇
|
2,985
|
5.97
|
%
|
2,420,204*
|
5.91
|
%
|
|||||||
|
TOTAL:
|
49,999
|
100
|
%
|
40,541,490
|
99.00
|
%
|
|||||||
In
connection with the issuance contemplated herein, Synergy Law Group Holdings
II
and Synergy Business Consulting, LLC will be issued 291,529 shares of common
stock of Malex, Inc. Thus, post-transaction, Synergy Business Consulting, LLC
will hold 247,800 shares of common stock of Malex, Inc. and Synergy Law Group
Holdings II will hold 43,729 shares of common stock of Malex, Inc.
*
Subject
to agreement to cancel shares pursuant to the Agreement.
32
ANNEX
A
ACCREDITED
INVESTOR DEFINITION
|
Category
A
|
The
undersigned is an individual (not a partnership, corporation, etc.)
whose
individual net worth, or joint net worth with his or her spouse,
presently
exceeds $1,000,000.
|
|
Category
B
|
The
undersigned is an individual (not a partnership, corporation, etc.)
who
had an income in excess of $200,000 in each of the two most recent
years,
or joint income with his or her spouse in excess of $300,000 in
each of
those years (in each case including foreign income, tax exempt
income and
full amount of capital gains and losses but excluding any income
of other
family members and any unrealized capital appreciation) and has
a
reasonable expectation of reaching the same income level in the
current
year.
|
|
Category
C
|
The
undersigned is a director or executive officer of the Company which
is
issuing and selling the securities.
|
|
Category
D
|
The
undersigned is a bank; a savings and loan association; insurance
company;
registered investment company; registered business development
company;
licensed small business investment company (“SBIC”); or employee benefit
plan within the meaning of Title 1 of ERISA and (a) the investment
decision is made by a plan fiduciary which is either a bank, savings
and
loan association, insurance company or registered investment advisor,
or
(b) the plan has total assets in excess of $5,000,000 or (c) is
a self
directed plan with investment decisions made solely by persons
that are
accredited investors.
|
|
Category
E
|
The
undersigned is a private business development company as defined
in
section 202(a)(22) of the Investment Advisors Act of 1940.
|
|
Category
F
|
The
undersigned is either a corporation, partnership, Massachusetts
business
trust, or non-profit organization within the meaning of Section
501(c)(3)
of the Internal Revenue Code, in each case not formed for the specific
purpose of acquiring the Securities and with total assets in excess
of
$5,000,000.
|
|
Category
G
|
The
undersigned is a trust with total assets in excess of $5,000,000,
not
formed for the specific purpose of acquiring the Securities, where
the
purchase is directed by a “sophisticated investor“ as defined in
Regulation 506(b)(2)(ii) under the Act.
|
|
Category
H
|
The
undersigned is an entity (other than a trust) in which all of the
equity
owners are “accredited investors” within one or more of the above
categories. If relying upon this Category alone, each equity owner
must
complete a separate copy of this
Agreement.
|
33