SHARE EXCHANGE AGREEMENT FOR THE EXCHANGE OF COMMON STOCK AND WARRANTS TO PURCHASE COMMON STOCK OF BUYONATE, INC. FOR SECURITIES OF CHINA ELECTRONIC HOLDINGS, INC. DATED AS OF JULY 9, 2010
FOR
THE EXCHANGE OF
COMMON
STOCK
AND
WARRANTS
TO
PURCHASE COMMON STOCK
OF
BUYONATE,
INC.
FOR
SECURITIES OF
CHINA
ELECTRONIC HOLDINGS, INC.
DATED
AS OF JULY 9,
2010
This SHARE EXCHANGE AGREEMENT, dated as
of July 9, 2010 (the “Agreement”) by and among BUYONATE, INC., a Nevada
corporation (“Buyonate”), CHINA ELECTRONIC HOLDINGS, INC, a Delaware
corporation (“CEH”), and the stockholders and warrantholders of CEH whose names
are set forth on Exhibit A attached hereto (the “CEH
Stockholders”).
WHEREAS, the CEH Stockholders own (a)
100% of the issued and outstanding shares of Common Stock, par value $.00001 per
share, of CEH (the "CEH Common Shares"), (b) 100% of the issued and outstanding
shares of Series A Convertible Preferred Stock, of CEH (the “CEH Series A
Shares” and collectively with the CEH Common Shares, the “CEH Shares”), Series A
Warrants to purchase an aggregate of 1,000,000 CEH Common Shares at an exercise
price of $1.00 per share Series (“$1.00 Warrants”), Series A Warrants to
purchase an aggregate of 314,285 CEH Common Shares at an exercise price of $2.19
per share (the “Series A Warrants”) and Series B Warrants to purchase an
aggregate of 314,285 CEH Common Shares at an exercise price of $2.63 per share
(the “Series B Warrants” and collectively with the Series A Warrants and the
$1.00, the “CEH Warrants”)); and
WHEREAS, subject to the terms and
conditions of this Agreement, the CEH Stockholders believe it is in their best
interests to exchange (a) all of the CEH Common Shares for an aggregate of
13,322,152 shares of Common Stock, par value $.0001 per share of Buyonate
(“Buyonate Shares”), constituting one (1) Buyonate Share for each one CEH Common
Share exchanged, (b) all of the CEH Series A Shares for an aggregate of 343,750
Buyonate Shares, constituting one (1) Buyonate Share for each one CEH Series A
Share exchanged, (c) all of the Series A Warrants for Series A Warrants to
purchase an aggregate of 314,285 Buyonate Shares at an exercise price of $2.19
per share (the “Buyonate Series A Warrants”), (d) all of the Series B Warrants
for Series B Warrants to purchase an aggregate of 314,285 Buyonate Shares at an
exercise price of $2.63 per share (the “Buyonate Series B Warrants”) and (e) all
of the $1.00 Warrants for Warrants to purchase an aggregate of 1,000,000
Buyonate Shares at an exercise price of $.25 per share (the “Buyonate $.25
Warrants” and collectively with the Buyonate Series A Warrants and the Buyonate
Series B Warrants, the “Buyonate Warrants”);
WHEREAS, Buyonate believes it is in its
best interests to acquire the CEH Shares in exchange for Buyonate Shares and the
CEH Warrants in exchange for the Buyonate Warrants.
NOW, THEREFORE, in consideration of the
mutual terms, conditions and other agreements set forth herein, the parties
hereto hereby agree as follows:
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ARTICLE
I
EXCHANGE
OF SHARES
Section
1.1 Agreement to Exchange
Buyonate Shares for CEH Shares. On the Closing Date (as
hereinafter defined) and upon the terms and subject to the conditions set forth
in this Agreement, the CEH Stockholders shall sell, assign, transfer, convey and
deliver to Buyonate (a) the CEH Common Shares (representing 13,322,152 Shares
and 100% of the issued and outstanding shares of common stock of CEH), (b) the
CEH Series A Shares (representing 343,750 CEH Series A Shares and 100% of the
issued and outstanding shares of preferred stock of CEH), (c) Series A Warrants
to purchase an aggregate of 314,285 CEH Common Shares, (d) $.25 Warrants to
purchase an aggregate of 1,000,000 CEH Common Shares and (e) Series B Warrants
to purchase an aggregate of 314,285 CEH Common Shares, and Buyonate shall accept
such securities from the CEH Stockholders in exchange for the issuance to the
CEH Stockholders of the number of Buyonate Shares and Buyonate Warrants set
forth opposite the names of the CEH Stockholders on Exhibit A
hereto.
Section 1.2
Capitalization. On
the Closing Date, immediately before the exchange to be consummated pursuant to
this Agreement, Buyonate shall have authorized (a)
100,000,000 shares of Common Stock, $.0001 par value per share,
of which 810,000 shares shall be issued and outstanding, all of which are duly
authorized, validly issued and fully paid; and (b) 50,000,000 shares of
Preferred ▇▇▇▇▇, ▇.▇▇▇▇ par value, of which no shares are issued or
outstanding.
Section
1.3 Closing. The
closing of the exchange to be made pursuant to this Agreement (the "Closing")
shall take place at 10:00 a.m. E.D.T. on the business day after which each of
the parties hereto has executed this Agreement, or at such other time and date
as the parties hereto shall agree in writing (the "Closing Date"), at the
offices of Guzov Ofsink, LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Within ten (10) business days after the Closing, the
CEH Stockholders shall deliver to Buyonate the stock certificates representing
the CEH Shares, duly endorsed in blank for transfer or accompanied by
appropriate stock powers duly executed in blank or, for shares in book entry
form, shall deliver such shares to a brokerage account designated by
Buyonate. In full consideration for the CEH Shares, Buyonate shall
issue and exchange with the CEH Stockholders 13,665,902 Buyonate Shares
representing one (1) Buyonate Share for each one CEH Common Share
exchanged and one (1) Buyonate Share for each one CEH Series A Share
exchanged. In full consideration for the Series A Warrants, Buyonate
shall issue and exchange with the CEH Stockholders Buyonate Series A warrants to
purchase an aggregate of 314,285 Buyonate Shares. In full consideration for the
$1.00 Warrants, Buyonate shall issue and exchange with the CEH Stockholders
Buyonate $.25 Warrants to purchase an aggregate of 1,000,000 Buyonate
Shares. In full consideration for the Series B Warrants, Buyonate
shall issue and exchange with the CEH Stockholders Buyonate Series B Warrants to
purchase an aggregate of 314,285 Buyonate Shares. The capitalization of Buyonate
after the foregoing share and warrant exchanges will be as set forth on Schedule
1 annexed hereto.
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ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF BUYONATE
Buyonate hereby represents, warrants
and agrees as follows:
Section
2.1 Corporate
Organization
a. Buyonate
is a corporation duly organized, validly existing and in good standing under the
laws of Nevada, and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted and is duly
qualified to do business in good standing in each jurisdiction in which the
nature of the business conducted by Buyonate or the ownership or leasing of its
properties makes such qualification and being in good standing necessary, except
where the failure to be so qualified and in good standing will not have a
material adverse effect on the business, operations, properties, assets,
condition or results of operation of Buyonate (a "Buyonate Material Adverse
Effect");
b. Copies
of the Articles of Incorporation and By-laws of Buyonate, with all amendments
thereto to the date hereof, have been furnished to CEH and the CEH Stockholders,
and such copies are accurate and complete as of the date hereof. The
minute books of Buyonate are current as required by law, contain the minutes of
all meetings of the Board of Directors and shareholders of Buyonate from its
date of incorporation to the date of this Agreement, and adequately reflect all
material actions taken by the Board of Directors and shareholders of
Buyonate.
Section 2.2 Capitalization of
Buyonate. The authorized capital stock of Buyonate consists of
(a) 100,000,000 shares of Common Stock, $.0001 par value per share, of which as
of the date of this Agreement 810,000 shares are issued and outstanding, all of
which are duly authorized, validly issued and fully paid; and (b) 50,000,000
shares of Preferred ▇▇▇▇▇, ▇.▇▇▇▇ par value, of which no shares are issued or
outstanding. The parties agree that they have been informed of the issuances of
these Buyonate Shares, and that all such issuances of Buyonate Shares pursuant
to this Agreement will be in accordance with the provisions of this
Agreement. All of the Buyonate Shares to be issued pursuant to this
Agreement have been duly authorized and will be validly issued, fully paid and
non-assessable and no personal liability will attach to the ownership
thereof. As of the Closing Date, except for the Buyonate Series A
Warrants and the Buyonate Series B Warrants to be issued on the Closing Date,
there will be, no outstanding options, warrants, agreements, commitments,
conversion rights, preemptive rights or other rights to subscribe for, purchase
or otherwise acquire any shares of capital stock or any un-issued or treasury
shares of capital stock of Buyonate.
Section
2.3 Subsidiaries and Equity
Investments. Buyonate has no subsidiaries or equity interest
in any corporation, partnership or joint venture.
Section
2.4 Authorization and Validity
of Agreements. Buyonate has all corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Buyonate and the consummation by Buyonate of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action of Buyonate, and no other corporate proceedings on the part of
Buyonate are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.
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Section 2.5 No Conflict or
Violation. The execution, delivery and performance of this
Agreement by Buyonate does not and will not violate or conflict with
any provision of its Articles of Incorporation or By-laws, and does not and will
not violate any provision of law, or any order, judgment or decree of any court
or other governmental or regulatory authority, nor violate or result in a breach
of or constitute (with due notice or lapse of time or both) a default under, or
give to any other entity any right of termination, amendment, acceleration or
cancellation of, any contract, lease, loan agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to which Buyonate is
a party or by which it is bound or to which any of their
respective properties or assets is subject, nor will it result in the
creation or imposition of any lien, charge or encumbrance of any kind whatsoever
upon any of the properties or assets of Buyonate, nor will it result in the
cancellation, modification, revocation or suspension of any of the licenses,
franchises, permits to which Buyonate is bound.
Section
2.6 Consents and
Approvals. No consent, waiver, authorization or approval of
any governmental or regulatory authority, domestic or foreign, or of any other
person, firm or corporation, is required in connection with the execution and
delivery of this Agreement by Buyonate or the performance by Buyonate of its
obligations hereunder.
Section
2.7 Absence of Certain Changes
or Events. Since its inception:
a. Buyonate
has operated in the ordinary course of business consistent with past practice
and there has not been any material adverse change in the assets, properties,
business, operations, prospects, net income or condition, financial or otherwise
of Buyonate. As of the date of this Agreement,
Buyonate does not know or have reason to know of any
event, condition, circumstance or prospective development which threatens or may
threaten to have a material adverse effect on the assets, properties,
operations, prospects, net income or financial condition of
Buyonate;
b. there
has not been any declaration, setting aside or payment of dividends or
distributions with respect to shares of capital stock of Buyonate or any
redemption, purchase or other acquisition of any capital stock of Buyonate or
any other of Buyonate’s securities; and
c. there
has not been an increase in the compensation payable or to become payable to any
director or officer of Buyonate.
Section
2.8 Disclosure. This
Agreement and any certificate attached hereto or delivered in accordance with
the terms hereby by or on behalf of Buyonate in connection with the transactions
contemplated by this Agreement, when taken together, do not contain any untrue
statement of a material fact or omit any material fact necessary in order to
make the statements contained herein and/or therein not misleading.
Section
2.9 Survival. Each
of the representations and warranties set forth in this Article II shall be
deemed represented and made by Buyonate at the Closing as if made at such time
and shall survive the Closing for a period terminating on the second anniversary
of the date of this Agreement.
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ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF CEH AND THE CEH STOCKHOLDERS
CEH and
each of the CEH Stockholders, severally, represent, warrant and agree as
follows:
Section 3.1
Corporate
Organization.
a. CEH
is duly organized, validly existing and in good standing under the laws of the
state of Delaware and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted and is duly
qualified to do business in good standing in each jurisdiction in where the
nature of the business conducted by CEH or the ownership or leasing of its
properties makes such qualification and being in good standing necessary, except
where the failure to be so qualified and in good standing will not have a
material adverse effect on the business, operations, properties, assets,
condition or results of operation of CEH (a "CEH Material Adverse
Effect").
b. Copies of
the Certificate of Incorporation and By-laws of CEH, with all amendments thereto
to the date hereof, have been furnished to Buyonate, and such copies are
accurate and complete as of the date hereof. The minute books of CEH
are current as required by law, contain the minutes of all meetings of the Board
of Directors and stockholders of CEH, and committees of the Board of Directors
of CEH from the date of incorporation to the date of this Agreement, and
adequately reflect all material actions taken by the Board of Directors,
shareholders and committees of the Board of Directors of CEH.
Section
3.2 Capitalization of CEH; Title
to the CEH Shares. On the Closing Date, immediately before the
transactions to be consummated pursuant to this Agreement, CEH shall have
authorized 50,000,000 shares of Common Stock, par value $.00001 per share, of
which 13,322,152 shares will be issued and outstanding and 500,000 shares of
Preferred Stock, par value $.00001 per share of which 343,750 shares have been
designated as Series A Convertible Preferred Stock and of which 343,750 shares
of Series A Convertible Preferred Stock are issued and outstanding. Except for
the Series A Warrants, the $1.00 Warrants and the Series B Warrants, there are
no outstanding options, warrants, agreements, commitments, conversion rights,
preemptive rights or other rights to subscribe for, purchase or otherwise
acquire any shares of capital stock or any un-issued or treasury shares of
capital stock of CEH.
Section
3.3 Subsidiaries and Equity
Investments; Assets. Except as set forth on Schedule 3.3
attached hereto, as of the date hereof and on the Closing Date, CEH does not and
will not directly or indirectly, own any shares of capital stock or any other
equity interest in any entity or any right to acquire any shares or other equity
interest in any entity and CEH does not and will not have any assets or
liabilities.
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Section
3.4 Authorization and Validity
of Agreements. CEH has all corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by CEH and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of CEH are necessary to authorize
this Agreement or to consummate the transactions contemplated
hereby. No CEH stockholder approvals are required to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by each CEH Stockholder which is not a natural person (“Entity Shareholder”) and
the consummation of the transactions contemplated hereby by each Entity
Shareholder have been duly authorized by all necessary action by the Entity
Shareholder and no other proceedings on the part of CEH or any CEH Stockholder
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby.
Section
3.5 No Conflict or
Violation. The execution, delivery and performance of this
Agreement by CEH or any CEH Stockholder does not and will not violate or
conflict with any provision of the constituent documents of CEH, and does not
and will not violate any provision of law, or any order, judgment or decree of
any court or other governmental or regulatory authority, nor violate, result in
a breach of or constitute (with due notice or lapse of time or both) a default
under or give to any other entity any right of termination, amendment,
acceleration or cancellation of any contract, lease, loan agreement, mortgage,
security agreement, trust indenture or other agreement or instrument to which
CEH or any CEH Stockholder is a party or by which it is bound or to which any of
its respective properties or assets is subject, nor result in the creation or
imposition of any lien, charge or encumbrance of any kind whatsoever upon any of
the properties or assets of CEH or any CEH Stockholder, nor result in the
cancellation, modification, revocation or suspension of any of the licenses,
franchises, permits to which CEH or any CEH Stockholder is
bound.
Section
3.6 Investment
Representations.
a. The
Buyonate Shares and Buyonate Warrants will be acquired hereunder solely for the
account of the CEH Stockholders, for investment, and not with a view to the
resale or distribution thereof. Each CEH Stockholder understands and is able to
bear any economic risks associated with such CEH Stockholder’s investment in the
Buyonate Shares and Buyonate Warrants. Each CEH Stockholder has had full access
to all the information such CEH Stockholder considers necessary or appropriate
to make an informed investment decision with respect to the Buyonate Shares and
Buyonate Warrants to be acquired under this Agreement. Each CEH
Stockholder further has had an opportunity to ask questions and receive answers
from Buyonate’s management regarding Buyonate and to obtain additional
information (to the extent Buyonate’s management possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify any
information furnished to such CEH Stockholder or to which such CEH Stockholder
had access.
7
b. To
the best knowledge of each of the CEH Stockholders, this Agreement and the
transactions contemplated herein are not part of a plan or scheme to evade the
registration provisions of the Securities Act, and the Buyonate Shares and
Buyonate Warrants are being acquired by the CEH Stockholders for investment
purposes.
Section
3.7 Brokers’ Fees. No CEH Stockholder has
any liability to pay any fees or commissions or other consideration to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement.
Section
3.8 Disclosure. This
Agreement, the schedules hereto and any certificate attached hereto or delivered
in accordance with the terms hereby by or on behalf of CEH or the CEH
Stockholders in connection with the transactions contemplated by this Agreement,
when taken together, do not contain any untrue statement of a material fact or
omit any material fact necessary in order to make the statements contained
herein and/or therein not misleading.
Section
3.9 Survival. Each
of the representations and warranties set forth in this Article III shall be
deemed represented and made by CEH and the CEH Stockholders at the
Closing as if made at such time and shall survive the Closing for a period
terminating on the second anniversary of the date of this
Agreement.
ARTICLE
IV
COVENANTS
Section 4.1
Certain Changes and Conduct
of Business.
a. From and
after the date of this Agreement and until the Closing Date, Buyonate shall
conduct its business solely in the ordinary course consistent with past
practices and, in a manner consistent with all representations, warranties or
covenants of Buyonate, and without the prior written consent of CEH will not,
except as required or permitted pursuant to the terms hereof:
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i.
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make
any material change in the conduct of its businesses and/or operations or
enter into any transaction other than in the ordinary course of business
consistent with past practices;
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ii.
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make
any change in its Articles of Incorporation or By-laws; issue any
additional shares of capital stock or equity securities or grant any
option, warrant or right to acquire any capital stock or equity securities
or issue any security convertible into or exchangeable for its capital
stock or alter in any material term of any of its outstanding securities
or make any change in its outstanding shares of capital stock or its
capitalization, whether by reason of a reclassification, recapitalization,
stock split or combination, exchange or readjustment of shares, stock
dividend or otherwise;
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iii.
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A.
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incur,
assume or guarantee any indebtedness for borrowed money, issue any notes,
bonds, debentures or other corporate securities or grant any option,
warrant or right to purchase any thereof, except pursuant to transactions
in the ordinary course of business consistent with past practices;
or
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B.
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issue
any securities convertible or exchangeable for debt or equity securities
of Buyonate;
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iv.
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make
any sale, assignment, transfer, abandonment or other conveyance of any of
its assets or any part thereof, except pursuant to transactions in the
ordinary course of business consistent with past
practice;
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v.
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subject
any of its assets, or any part thereof, to any lien or suffer such to be
imposed other than such liens as may arise in the ordinary course of
business consistent with past practices by operation of law which will not
have an Buyonate Material Adverse
Effect;
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vi.
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acquire
any assets, raw materials or properties, or enter into any other
transaction, other than in the ordinary course of business consistent with
past practices;
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vii.
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enter
into any new (or amend any existing) employee benefit plan, program or
arrangement or any new (or amend any existing) employment, severance or
consulting agreement, grant any general increase in the compensation of
officers or employees (including any such increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment) or grant any increase
in the compensation payable or to become payable to any employee, except
in accordance with pre-existing contractual provisions or consistent with
past practices;
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viii.
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make
or commit to make any material capital
expenditures;
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ix.
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pay,
loan or advance any amount to, or sell, transfer or lease any properties
or assets to, or enter into any agreement or arrangement with, any of its
affiliates;
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x.
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guarantee
any indebtedness for borrowed money or any other obligation of any other
person;
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xi.
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fail
to keep in full force and effect insurance comparable in amount and scope
to coverage maintained by it (or on behalf of it) on the date
hereof;
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xii.
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take
any other action that would cause any of the representations and
warranties made by it in this Agreement not to remain true and correct in
all material aspect;
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xiii.
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make
any material loan, advance or capital contribution to or investment in any
person;
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xiv.
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make
any material change in any method of accounting or accounting principle,
method, estimate or practice;
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xv.
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settle,
release or forgive any claim or litigation or waive any
right;
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xvi.
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commit
itself to do any of the foregoing.
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b. From
and after the date of this Agreement, CEH will:
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1.
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continue
to maintain, in all material respects, its properties in accordance with
present practices in a condition suitable for its current
use;
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2.
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file,
when due or required, federal, state, foreign and other tax returns and
other reports required to be filed and pay when due all taxes,
assessments, fees and other charges lawfully levied or assessed against
it, unless the validity thereof is contested in good faith and by
appropriate proceedings diligently
conducted;
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3.
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continue
to conduct its business in the ordinary course consistent with past
practices;
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4.
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keep
its books of account, records and files in the ordinary course and in
accordance with existing practices;
and
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5.
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continue
to maintain existing business relationships with
suppliers.
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Section
4.2 Access to Properties and
Records. CEH shall afford Buyonate’s accountants,
counsel and authorized representatives, and Buyonate shall afford to CEH's
accountants, counsel and authorized representatives full access during normal
business hours throughout the period prior to the Closing Date (or the earlier
termination of this Agreement) to all of such parties’ properties, books,
contracts, commitments and records and, during such period, shall furnish
promptly to the requesting party all other information concerning the other
party's business, properties and personnel as the requesting party may
reasonably request, provided that no investigation or receipt of information
pursuant to this Section 4.2 shall affect any representation or warranty of or
the conditions to the obligations of any party.
Section
4.3 Negotiations. From
and after the date hereof until the earlier of the Closing or the termination of
this Agreement, no party to this Agreement nor its officers or directors
(subject to such director's fiduciary duties) nor anyone acting on behalf of any
party or other persons shall, directly or indirectly, encourage, solicit, engage
in discussions or negotiations with, or provide any information to, any person,
firm, or other entity or group concerning any merger, sale of substantial
assets, purchase or sale of shares of capital stock or similar transaction
involving any party. A party shall promptly communicate to any other
party any inquiries or communications concerning any such transaction which they
may receive or of which they may become aware of.
Section
4.4 Consents and
Approvals. The parties shall:
a. use
their reasonable commercial efforts to obtain all necessary consents, waivers,
authorizations and approvals of all governmental and regulatory authorities,
domestic and foreign, and of all other persons, firms or corporations required
in connection with the execution, delivery and performance by them of this
Agreement; and
b. diligently
assist and cooperate with each party in preparing and filing all documents
required to be submitted by a party to any governmental or regulatory authority,
domestic or foreign, in connection with such transactions and in obtaining any
governmental consents, waivers, authorizations or approvals which may be
required to be obtained connection in with such transactions.
Section
4.5 Public
Announcement. Unless otherwise required by applicable law, the
parties hereto shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement and shall
not issue any such press release or make any such public statement prior to such
consultation.
Section
4.6 Stock
Issuance. From and after the date of this Agreement until the
Closing Date, neither Buyonate nor CEH shall issue any additional shares of its
capital stock.
Section
4.7 Notwithstanding anything to the
contrary contained herein, it is herewith understood and agreed that both CEH
and Buyonate may enter into and conclude agreements and/or financing
transactions as same relate to and/or are contemplated by any separate written
agreements either: (a) annexed hereto as exhibits; or (b) entered into by
Buyonate with CEH executed by both parties subsequent to the date
hereof. These Agreements shall become, immediately upon execution,
part of this Agreement and subject to all warranties, representations and
conditions contained herein.
11
ARTICLE
V
CONDITIONS
TO OBLIGATIONS OF CEH AND CEH STOCKHOLDERS
The
obligations of CEH and the CEH Stockholders to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by both CEH and the CEH Stockholders in their sole
discretion:
Section
5.1 Representations and
Warranties of Buyonate. All representations and warranties made by
Buyonate in this Agreement shall be true and correct on and as of the Closing
Date as if again made by Buyonate as of such date.
Section
5.2 Agreements and
Covenants. Buyonate shall have performed and complied in all
material respects to all agreements and covenants required by this Agreement to
be performed or complied with by it on or prior to the Closing
Date.
Section
5.3 Consents and
Approvals. Consents, waivers, authorizations and approvals of
any governmental or regulatory authority, domestic or foreign, and of any other
person, firm or corporation, required in connection with the execution, delivery
and performance of this Agreement shall be in full force and effect on the
Closing Date.
Section
5.4 No Violation of
Orders. No preliminary or permanent injunction or other order
issued by any court or governmental or regulatory authority, domestic or
foreign, nor any statute, rule, regulation, decree or executive order
promulgated or enacted by any government or governmental or regulatory
authority, which declares this Agreement invalid in any respect or prevents the
consummation of the transactions contemplated hereby, or which materially and
adversely affects the assets, properties, operations, prospects, net income or
financial condition of Buyonate shall be in effect; and no action or proceeding
before any court or governmental or regulatory authority, domestic or foreign,
shall have been instituted or threatened by any government or governmental or
regulatory authority, domestic or foreign, or by any other person, or entity
which seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement.
Section
5.5 Other Closing
Documents. CEH shall have received such other certificates,
instruments and documents in confirmation of the representations and warranties
of Buyonate or in furtherance of the transactions contemplated by this Agreement
as CEH or its counsel may reasonably request.
12
ARTICLE
VI
CONDITIONS
TO OBLIGATIONS OF BUYONATE
The
obligations of Buyonate to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing Date, of the
following conditions, any one or more of which may be waived by
Buyonate in its sole discretion:
Section
6.1 Representations and
Warranties of CEH. All representations and warranties made by
CEH in this Agreement shall be true and correct on and as of the Closing Date as
if again made by CEH on and as of such date.
Section
6.2 Agreements and
Covenants. CEH shall have performed and complied in
all material respects to all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing
Date.
Section
6.3 Consents and
Approvals. All consents, waivers, authorizations and approvals
of any governmental or regulatory authority, domestic or foreign, and of any
other person, firm or corporation, required in connection with the execution,
delivery and performance of this Agreement, shall have been duly obtained and
shall be in full force and effect on the Closing Date.
Section
6.4 No Violation of
Orders. No preliminary or permanent injunction or other order
issued by any court or other governmental or regulatory authority, domestic or
foreign, nor any statute, rule, regulation, decree or executive order
promulgated or enacted by any government or governmental or regulatory
authority, domestic or foreign, that declares this Agreement invalid or
unenforceable in any respect or which prevents the consummation of the
transactions contemplated hereby, or which materially and adversely affects the
assets, properties, operations, prospects, net income or financial condition of
Buyonate, taken as a whole, shall be in effect; and no action or proceeding
before any court or government or regulatory authority, domestic or foreign,
shall have been instituted or threatened by any government or governmental or
regulatory authority, domestic or foreign, or by any other person, or entity
which seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement.
Section
6.5. Other Closing
Documents. Buyonate shall have received such other
certificates, instruments and documents in confirmation of the representations
and warranties of CEH or in furtherance of the transactions
contemplated by this Agreement as Buyonate or its counsel may reasonably
request.
ARTICLE
VII
TERMINATION
AND ABANDONMENT
SECTION
7.1 Methods of
Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time before the
Closing:
13
a. By
the mutual written consent of CEH Stockholders, CEH and Buyonate;
b. By
Buyonate, upon a material breach of any representation, warranty, covenant or
agreement on the part of CEH or the CEH Stockholders
set forth in this Agreement, or if any representation or warranty of
CEH or the CEH Stockholders shall become untrue, in either case such that any of
the conditions set forth in Article VI hereof would not be satisfied (a
"CEH Breach"), and such breach shall, if capable of cure, has not
been cured within ten (10) days after receipt by the party in breach of a notice
from the non-breaching party setting forth in detail the nature of such
breach;
c. By
CEH or any CEH Stockholder, upon a material breach of any representation,
warranty, covenant or agreement on the part of Buyonate set forth in this
Agreement, or, if any representation or warranty of Buyonate shall become
untrue, in either case such that any of the conditions set forth in Article V
hereof would not be satisfied (a "Buyonate Breach"), and such breach shall, if
capable of cure, not have been cured within ten (10) days after receipt by the
party in breach of a written notice from the non-breaching party setting forth
in detail the nature of such breach;
d. By
any party, if the Closing shall not have consummated before ninety (90) days
after the date hereof; provided, however, that this
Agreement may be extended by written notice of either CEH or
Buyonate, if the Closing shall not have been consummated as a result of Buyonate
or CEH having failed to receive all required regulatory approvals or consents
with respect to this transaction or as the result of the entering of an order as
described in this Agreement; and further provided, however, that the right to
terminate this Agreement under this Section 7.1(d) shall not be available to any
party whose failure to fulfill any obligations under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before this
date.
e. By
any party if a court of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action (which order, decree or ruling the parties hereto
shall use its best efforts to lift), which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this
Agreement.
Section 7.2
Procedure Upon
Termination. In the event of termination and abandonment of
this Agreement by any party pursuant to Section 7.1, written notice thereof
shall forthwith be given to the other parties and this Agreement shall terminate
and the transactions contemplated hereby shall be abandoned, without further
action. If this Agreement is terminated as provided herein, no party
to this Agreement shall have any liability or further obligation to any other
party to this Agreement; provided, however, that no
termination of this Agreement pursuant to this Article VII shall relieve any
party of liability for a breach of any provision of this Agreement occurring
before such termination.
14
ARTICLE
VIII
POST-CLOSING
AGREEMENTS
Section
8.1 Consistency in
Reporting. Each party hereto agrees that if the
characterization of any transaction contemplated in this agreement or any
ancillary or collateral transaction is challenged, each party hereto will
testify, affirm and ratify that the characterization contemplated in such
agreement was the characterization intended by the party; provided, however, that nothing
herein shall be construed as giving rise to any obligation if the reporting
position is determined to be incorrect by final decision of a court of competent
jurisdiction.
ARTICLE
IX
MISCELLANEOUS
PROVISIONS
Section 9.1
Survival
of Provisions. The respective representations, warranties,
covenants and agreements of each of the parties to this Agreement (except
covenants and agreements which are expressly required to be performed and are
performed in full on or before the Closing Date) shall survive the Closing Date
and the consummation of the transactions contemplated by this Agreement, subject
to Sections 2.9 and 3.9. In the event of a breach of any of such
representations, warranties or covenants, the party to whom such
representations, warranties or covenants have been made shall have all rights
and remedies for such breach available to it under the provisions of this
Agreement or otherwise, whether at law or in equity, regardless of any
disclosure to, or investigation made by or on behalf of such party on or before
the Closing Date.
Section
9.2 Publicity. No
party shall cause the publication of any press release or other announcement
with respect to this Agreement or the transactions contemplated hereby without
the consent of the other parties, unless a press release or announcement is
required by law. If any such announcement or other disclosure is
required by law, the disclosing party agrees to give the non-disclosing parties
prior notice and an opportunity to comment on the proposed
disclosure.
Section
9.3 Successors and
Assigns. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns;
provided, however, that no party shall assign or delegate any of the obligations
created under this Agreement without the prior written consent of the other
parties.
Section
9.4 Fees and
Expenses. Except as otherwise expressly provided in this
Agreement, all legal and other fees, costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees, costs or expenses.
15
Section
9.5 Notices. All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been given or made if in writing and
delivered personally or sent by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following
addresses:
If to CEH
or the CEH Stockholders, to:
China Electronic Holdings,
Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇,
President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a
copy to:
Guzov Ofsink, LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to
Buyonate, to:
Buyonate,
Inc.
#▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, CEO
or to
such other persons or at such other addresses as shall be furnished by any party
by like notice to the others, and such notice or communication shall be deemed
to have been given or made as of the date so delivered or mailed. No change in
any of such addresses shall be effective insofar as notices under this Section
9.5 are concerned unless such changed address is located in the United States of
America and notice of such change shall have been given to such other party
hereto as provided in this Section 9.5.
Section
9.6 Entire
Agreement. This Agreement, together with the exhibits hereto,
represents the entire agreement and understanding of the parties with reference
to the transactions set forth herein and no representations or warranties have
been made in connection with this Agreement other than those expressly set forth
herein or in the exhibits, certificates and other documents delivered in
accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings and
agreements between the parties relating to the subject matter of this Agreement
and all prior drafts of this Agreement, all of which are merged into this
Agreement. No prior drafts of this Agreement and no words or phrases
from any such prior drafts shall be admissible into evidence in any action or
suit involving this Agreement.
16
Section
9.7 Severability. This
Agreement shall be deemed severable, and the invalidity or unenforceability of
any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties
hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be
possible so as to be valid and enforceable.
Section
9.8 Titles and
Headings. The Article and Section headings contained in this
Agreement are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or of any term or provision
hereof.
Section
9.9 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall be considered one and the
same agreement.
Section
9.10 Convenience of Forum;
Consent to Jurisdiction. The parties to this Agreement, acting
for themselves and for their respective successors and assigns, without regard
to domicile, citizenship or residence, hereby expressly and irrevocably elect as
the sole judicial forum for the adjudication of any matters arising under or in
connection with this Agreement, and consent and subject themselves to the
jurisdiction of, the courts of the State of New York located in County of New
York, and/or the United States District Court for the Southern District of New
York, in respect of any matter arising under this Agreement. Service of process,
notices and demands of such courts may be made upon any party to this Agreement
by personal service at any place where it may be found or giving notice to such
party as provided in Section 9.5.
Section
9.11 Enforcement of the
Agreement. The parties hereto agree that irreparable damage
would occur if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereto, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section
9.12 Governing
Law. This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of New York without giving
effect to the choice of law provisions thereof.
Section
9.13 Amendments and
Waivers. No amendment of
any provision of this Agreement shall be valid unless the same shall be in
writing and signed by all of the parties hereto.. No waiver by any
party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
17
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
CHINA
ELECTRONIC HOLDINGS, INC.
|
By:
|
Name:
Title:
BUYONATE,
INC.
|
By:
|
Name:
Title:
18
EXHIBIT
A
PROFESSIONAL
CAPITAL PARTNERS, LTD.
|
By:
|
Name:
Title:
Number of
CEH Series A Shares Being Exchanged: 343,750
Number of
Buyonate Shares to be Received: 343,750
Number of
$1.00 Warrants Being Exchanged: 1,000,000
Number of
Buyonate $.25 Warrants to be Received: 1,000,000
|
Name:
▇▇▇▇▇▇ ▇▇
|
Number of
CEH Common Shares Being Exchanged*: 11,556,288
Number of
Buyonate Shares to be Received*: 11,556,288
* Such
shares are subject to a Call Option Agreement with ▇▇▇ ▇▇▇▇▇▇▇
MAXSUN
INVESTMENT
|
By:
|
Name:
Title:
Number of
CEH Common Shares Being Exchanged: 25,000
Number of
Buyonate Shares to be Received: 25,000
19
WAN
XUESHENG, INC.
|
By:
|
Name:
Title:
Number of
CEH Common Shares Being Exchanged: 533,539
Number of
Buyonate Shares to be Received: 533,539
JIN
HAI FU, INC.
|
By:
|
Name:
Title:
Number of
CEH Common Shares Being Exchanged: 500,000
Number of
Buyonate Shares to be Received: 500,000
CHINA
FINANCIAL SERVICES
|
By:
|
Name:
Title:
Number of
CEH Common Shares Being Exchanged: 393,039
Number of
Buyonate Shares to be Received: 393,039
THE
▇▇▇▇▇ FAMILY TRUST
|
By:
|
Name:
Title:
Number of
CEH Common Shares Being Exchanged: 28,571
20
Number of
Buyonate Shares to be Received: 28,571
Number of
Series A Warrants Being Exchanged:28,571
Number of
Buyonate Series A Warrants Being Received:28,571
Number of
Series B Warrants Being Exchanged: 28,571
Number of
Buyonate Series B Warrants Being Received:28,571
SILVER
ROCK II LIMITED
|
By:
|
Name:
Title:
Number of
CEH Common Shares Being Exchanged: 142,857
Number of
Buyonate Shares to be Received: 142,857
Number of
Series A Warrants Being Exchanged: 142,857
Number of
Buyonate Series A Warrants Being Received: 142,857
Number of
Series B Warrants Being Exchanged: 142,857
Number of
Buyonate Series B Warrants Being Received: 142,857
THE
BOSPHOROUS GROUP, INC.
|
By:
|
Name:
Title:
Number of
CEH Common Shares Being Exchanged: 28,571
Number of
Buyonate Shares to be Received: 28,571
Number of
Series A Warrants Being Exchanged: 28,571
21
Number of
Buyonate Series A Warrants Being Received: 28,571
Number of
Series B Warrants Being Exchanged: 28,571
Number of
Buyonate Series B Warrants Being Received: 28,571
JAYHAWK
PRIVATE EQUITY FUND II, L.P.
|
By:
|
Name:
Title:
Number of
CEH Common Shares Being Exchanged: 114,286
Number of
Buyonate Shares to be Received: 114,286
Number of
Series A Warrants Being Exchanged: 114,286
Number of
Buyonate Series A Warrants Being Received: 114,286
Number of
Series B Warrants Being Exchanged: 114,286
Number of
Buyonate Series B Warrants Being Received: 114,286
22
Schedule
1
POST-EXCHANGE
CAP TABLE OF BUYONATE, INC.
|
Common Stock
|
Warrants
Series E
|
Warrants
Series A
|
Warrants
Series B
|
|||||||||||||
|
Insiders
|
||||||||||||||||
|
▇▇▇,
▇▇▇▇▇▇▇
|
11,556,288 | |||||||||||||||
|
Wan
Xuesheng, Inc.
|
533,539 | |||||||||||||||
|
Jin
Hai Fu, Inc.
|
500,000 | |||||||||||||||
|
China
Financial Services
|
393,039 | |||||||||||||||
|
Maxsun
Investment
|
25,000 | |||||||||||||||
|
Bridge
Investors II
|
||||||||||||||||
|
The
▇▇▇▇▇ Family Trust
|
28,571 | 0 | 28,571 | 28,571 | ||||||||||||
|
Silver
Rock II Limited
|
142,857 | 0 | 142,857 | 142,857 | ||||||||||||
|
The
Bosphorous Group, Inc.
|
28,571 | 0 | 28,571 | 28,571 | ||||||||||||
|
Jayhawk
Private Equity Fund II, L.P.
|
114,286 | 0 | 114,286 | 114,286 | ||||||||||||
|
Bridge
Investors I
|
||||||||||||||||
|
Professional
Capital Partners, Ltd.
|
463,750 | 1,000,000 | 0 | 0 | ||||||||||||
|
Shell
|
810,000 | 0 | 0 | 0 | ||||||||||||
|
Existing
Shareholders
|
810,000 | 0 | 0 | 0 | ||||||||||||
|
Reserved
Shares
|
16,988 | |||||||||||||||
i