EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement"), is
entered into as of this ____ day of March, 2000, by and among Natural Way
Technologies, Inc., (hereinafter referred to as "Natural Way" or the "Company"),
a Nevada corporation and all the shareholders (the "Shareholders") of World
Concept Development Limited, by and through their duly authorized agent Dr. Lan
Hong Bing. Natural Way and the Shareholders are referred to collectively as the
"Parties".
Premises
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Whereas, the Shareholders own 100% percent of World Concept Development Limited
(hereinafter referred to as "E-bank"), a corporation incorporated under the laws
of the British Virgin Islands;
Whereas E-bank owns 100% of Esoftbank Network Systems (Shenzhen) Co., Ltd.,
(hereinafter referred to as "Network"), a company organized under the laws of
the People's Republic of China;
Whereas Network owns 80% of Esoftbank (Beijing) Software System Co., Ltd and
52.38% of Sitech Hainan Limited, both of which are companies organized under the
laws of the People's Republic of China;
Whereas Natural Way desires to acquire, and the Shareholders wish to transfer
100% of the issued and outstanding shares of E-bank in exchange for 9,300,000
post reverse split shares of Natural Way common stock, on the terms and
conditions hereinafter provided, all for the purpose of effecting a "tax-free"
reorganization pursuant to Sections 368(a)(1)(B) as modified by Section 368(b)
of the Internal Revenue Code of 1986, as amended;
Agreement
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NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the Parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF THE SHAREHOLDERS
As an inducement to, and to obtain the reliance of Natural Way, the
Shareholders represent and warrant as follows:
Section 1.01 - Organization. E-bank is a corporation duly organized,
validly existing, and in good standing under the laws of the British Virgin
Islands and has the corporate power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances, and
orders of public authorities to own all of its properties and assets to carry on
its business, and includes qualification to do business as a foreign corporation
in the states or countries in which the character and location of the assets
owned by it or the nature of the business transacted by it required
qualification except where failure to be so qualified would not have a material
adverse effect on its business. Included in the E-bank Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation, as
amended, and bylaws (or the foreign equivalent thereof) of E-bank in effect on
the date hereof. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of E-bank's articles of incorporation or bylaws (or the foreign
equivalent thereof). E-bank has taken, or will have taken prior to Closing, all
actions required by law, its articles of incorporation, or otherwise to
authorize the execution and delivery of this Agreement. E-bank has, or will have
prior to Closing, full power, authority, and legal right and has, or will have
prior to Closing, taken all action required by law, its bylaws, articles of
incorporation, (or the foreign equivalent thereof) and otherwise to consummate
the transactions herein contemplated. (Schedule 1.01 - E-bank articles of
incorporation, as amended, and bylaws)
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Section 1.02 - Capitalization and Outstanding Shares. The authorized
capitalization of E-bank consists of _______ shares of stock, $_____ par value
which have been paid in, of which the Shareholders own all of such shares, and
which constitutes or shall constitute all of the outstanding and issued shares
of E-bank to date of closing. Such shares are legally issued, fully paid, and
non-assessable and not issued in violation of the pre-emptive or other rights of
any person. (Schedule 1.02 - none)
Section 1.03 - Ownership of E-bank Shares. The Shareholders hereby
represent and warrant with respect to himself, herself or itself that he, she or
it is the legal and beneficial owner of that number of E-bank shares set forth
opposite his, her or its name in the attached schedule (which together
constitute 100% of all of E-bank's outstanding shares), free and clear of any
claims, charges, equities, liens, security interests, and encumbrances
whatsoever, including but not limited to any marital or community property
interest) and that each has full right, power, and authority to transfer,
assign, convey, and deliver its E-bank shares; and delivery of such shares at
the closing will convey to Natural Way good and marketable title to such shares
and clear of any claims, charges, equities, liens, security interests and
encumbrances whatsoever. (Schedule 1.03 - list of shareholders and number of
shares)
Section 1.04 - Subsidiaries and Predecessor Corporations. E-bank owns 100%
of Network which owns an 80% interest in eEsoftbank (Beijing) Software System
Co., Ltd. (Schedule 1.04 - List of subsidiaries, and their corporate documents)
Section 1.05 - Financial Statements.
(a) Included in the E-bank Schedules are the audited balance sheets of
E-bank as of December 31, 1999 and December 31, 1998, and the related
audited statements of operations, stockholders' equity and cash flows for
the two fiscal years ended December 31, 1999 and December 31, 1998,
together with the notes to such statements and the opinion of an
independent certified public accountant, with respect thereto.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles. The E-bank balance sheets
present a true and fair view as of the date of such balance sheet of the
financial condition of E-bank. E-bank did not have, as of the date of such
balance sheet, except as and to the extent reflected or reserved against
therein, any liabilities or obligations (absolute or contingent) which
should be reflected in the balance sheet or the notes thereto, prepared in
accordance with generally accepted accounting principles, and all assets
reflected therein are properly reported and present fairly the financial
condition of the assets of E-bank in accordance with generally accepted
accounting principles.
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(c) E-bank has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and
payable.
(d) E-bank has filed all state, federal or local income and/or
franchise tax returns required to be filed by it from inception to the date
hereof. Each of such income tax returns reflects the taxes due for the
period covered thereby, except for amounts which, in the aggregate, are
immaterial.
(e) The books and records, financial and otherwise, of E-bank are in
all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) All of E-bank's assets are reflected on its financial statements,
and except as set forth in the E-bank Schedules or the financial statements
of E-bank or the notes thereto, E-bank has no material liabilities, direct
or indirect, matured or unmeasured, contingent or otherwise. (Schedule 1.05
- financials)
Section 1.06 - Information. The information concerning E-bank set forth in
this Agreement is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. (Schedule 1.06 - none)
Section 1.07 - Options or Warrants or Subscriptions. Except as set forth in
the E-bank Schedules, there are no existing options, warrants, calls,
subscriptions or commitments of any character relating to the authorized and
unissued E-bank common stock. (Schedule 1.07 - list of warrants and options)
Section 1.08 - Absence of Certain Changes or Events. Except as set forth in
this Agreement or the E-bank Schedules, since December 31, 1999:
(a) there has not been nor will there be to the Date of Closing (i)
any material adverse change in the business, operations, properties,
assets, or condition of E-bank; or (ii) any damage, destruction, or loss to
E-bank (whether or not covered by insurance) materially and adversely
affecting the business, operations, properties, assets, or condition of
E-bank.
(b) E-bank has not nor will have not prior to Closing (i) amended its
articles of incorporation or bylaws; (ii) declared or made, or agreed to
declare or make, any payment of dividends or distributions of any assets of
any kind whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights of
value which in the aggregate are extraordinary or material considering the
business of E-bank; (iv) made any material change in its method of
management, operation or accounting; (v) entered into any other material
transaction other than sales in the ordinary course of its business; (vi)
made any accrual or arrangement for payment of bonuses or special
compensation of any kind or any severance or termination pay to any present
or former officer or employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its officers or directors or
any of its employees whose monthly compensation exceeds $1,000; or (viii)
made any increase in any profit sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan, payment, or
arrangement made to, for, or which its officers, directors, or employees;
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(c) E-bank has not, nor will it have (i) borrowed or agreed to borrow
any funds or incurred, or become subject to, any material obligation or
liability (absolute or contingent) except as necessary in its ordinary
course of business; (ii) paid or agreed to pay any material obligations or
liability (absolute or contingent) other than current liabilities incurred
since that date in the ordinary course of business and professional and
other fees and expenses in connection with the preparation of this
agreement and the consummation of the transactions contemplated hereby;
(iii) sold or transferred, or agreed to sell or transfer, any of its
assets, properties, or rights (except assets, properties, or rights not
used or useful in its business which, is the aggregate have a value of less
than $1,000), or canceled, or agreed to cancel, any debts or claims (except
debts or claims which in the aggregate are of a value of less than $1,000);
(iv) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or
termination is material, considering the business or E-bank; or (v) issued,
delivered, or agreed to issue or deliver any stock, bonds or other
corporate securities including debentures (whether authorized and unissued
or held as treasury stock); and
(d) to the best knowledge of E-bank and the Shareholders, E-bank has
not become subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect the business, operations,
properties, assets, or condition of E-bank. (Schedule 1.08 - description of
changes since 12/31/99)
Section 1.09 - Title and Related Matters. E-bank has, or will have upon
Closing, good and marketable title to all of its properties, inventory,
interests in properties, and assets, real and personal, which are reflected in
E-bank's most recent balance sheet or acquired after that date (except
properties, interests in properties and assets sold or otherwise disposed of
since such date in the ordinary course of business) free and clear of all liens,
pledges, charges, or encumbrances except (a) statutory liens or claims not yet
delinquent; (b) such imperfections of title and easements as do not and will not
materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties and (c) as described in the
E-bank Schedules. (Schedule 1.09 - description of assets and related
encumbrances)
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Section 1.10 - Litigation and Proceedings. Except as set forth in the
E-bank Schedules, there are no actions, suits, proceedings, or investigations
pending or, to the knowledge of the Shareholders after reasonable investigation,
threatened by or against E-bank or affecting E-bank or its properties, at law or
in equity, before any court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind. The Shareholders have
no knowledge of any material default on E-bank's part with respect to any
judgment, order, injunction, decree, award, rule, or regulation or any court,
arbitrator, or governmental agency or instrumentality or of any circumstances
which, after reasonable investigation, would result in the discovery of such a
default. Additionally, there are no actions, suits, proceedings, or
investigations pending or, to the knowledge of the Shareholders after reasonable
investigation, threatened by or against the Shareholders or affecting the
Shareholders or each of their properties, at law or in equity, before any court
or other governmental agency or instrumentality, domestic or foreign, or before
any arbitrator of any kind. The Shareholders do not have any knowledge of any
material default on their part with respect to any judgment, order, injunction,
decree, award, rule, or regulation or any court, arbitrator, or governmental
agency or instrumentality or of any circumstances which, after reasonable
investigation, would result in the discovery of such a default. (Schedule 1.10 -
list of claims/litigation)
Section 1.11 - Contracts. There are no material contracts, agreements,
franchises, license agreements, or other commitments to which E-bank is a party
or by which it or any of its assets, products, licenses, or properties are bound
except as set forth in the E-bank Schedules, herein, or in the financial
statements of E-bank, or notes thereto. (Schedule 1.11 - material contracts not
disclosed in financial statement)
Section 1.12 - Material Contract Defaults. Except as set forth in the
E-bank Schedules, E-bank is not, nor will it be at the time of Closing, in
default in any material respect under the terms of any outstanding contract,
agreement, lease, or other commitment which is material to the business,
operations properties, assets or condition of E-bank and there is no event of
default in any material respect under any such contract, agreement, lease, or
other commitment in respect of which E-bank has not taken adequate steps to
prevent such a default from occurring. (Schedule 1.12 - list of material
contract defaults)
Section 1.13 - No Conflict With Other Instruments. Except as set forth in
the E-bank Schedules, the execution of this Agreement and the consummation of
the transactions contemplated by this Agreement will not result in the breach of
any term or provision of, or constitute an event of default under, any material
indenture, mortgage, deed of trust, or other material contract, agreement, or
instrument to which E-bank or the Shareholders are a party or to which any of
their properties or operations are subject. (Schedule 1.13 - list of documents
which the execution of this agreement will be conflicting with)
Section 1.14 - Governmental Authorizations and Licenses. As set forth in
the E-bank schedules, E-bank has all licenses, franchises, permits, and other
governmental authorizations that are legally required to enable it to conduct
its business in all material respects as conducted. Except for compliance with
federal and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent, or order of, or registration, declaration, or
filing with, any court or other governmental body is required in connection with
the execution and delivery by the Shareholders of this Agreement and
consummation by the Shareholders of the transaction contemplated hereby.
(Schedule 1.14 - list of licenses)
5
Section 1.15 - Compliance With Laws and Regulations. E-bank has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of E-bank or except to the extent that noncompliance would
not result in the occurrence of any material liability for E-bank. (Schedule
1.15 - none)
Section 1.16 - Approval of Agreement. As shown in the E-bank schedules, the
board of directors of E-bank has approved this Agreement and the transactions
contemplated hereby. Furthermore, each Shareholder has authorized Dr. Lan Hong
Bing to act as his or her representative and attorney-in-fact by executing a
power of attorney in his favor and giving him the power to execute any further
documents or certificates in accordance with this agreement, including but not
limited to any documents required for Closing. (Schedule 1.16 - board consent
and power of attorneys)
Section 1.17 - E-bank Schedules. Within 10 days after execution hereof,
E-bank and the Shareholders will deliver to Natural Way the following schedules,
which are collectively referred to as the "E-bank Schedules" and which consist
of separate schedules dated as of the date of execution of this Agreement, all
certified by the Shareholders of E-bank as complete, true, and correct as of the
date of this Agreement in all material respects:
(a) Schedule 1.01 - containing complete and correct copies of the
certificate and articles of incorporation, as amended, and bylaws of E-bank
in effect as of the date of this Agreement;
(b) Schedule 1.03 - containing a list indicating the name and address of
each Shareholder of E-bank together with the number of shares owned by him,
her or it;
(c) Schedule 1.04 - containing a list of all of E-Bank's subsidiaries and
copies of their corporate documents.
(d) Schedule 1.05 - containing E-bank's audited financial statements for
the 12 months ended December 31, 1998 and December 31, 1999
(e) Schedule 1.07 - containing a list of all warrants, subscriptions and
options
(f) Schedule 1.08 - containing a description of changes since December 31,
1999
(g) Schedule 1.09 - containing a description of all assets and real
property owned by E-bank, together with a description of every mortgage,
deed of trust, pledge, lien, agreement, encumbrance, claim, or equity
interest of any nature whatsoever in such real property;
6
(h) Schedule 1.10 - containing a description of all known actual or
threatened claims or litigation against or involving E-bank;
(i) Schedule 1.11 - containing a description of material contracts not
otherwise disclosed;
(j) Schedule 1.12 - containing a description of defaults (not remedied) on
material contracts;
(k) Schedule 1.13 - containing a description of documents required to be
disclosed in section 1.13
(l) Schedule 1.14 - a list together with copies of all licenses, permits,
and other governmental authorization (or requests or applications therefor)
pursuant to which E-bank carries on or proposes to carry on its business
(except those which, in the aggregate, are immaterial to the present or
proposed business of E-bank);
(m) Schedule 1.16 - board consent approving this agreement and powers of
attorney executed by all shareholders authorizing Dr. Lan Hong Bing to act
as their representative;
(n) any other schedules setting forth any other information, together with
any required copies of documents, required to be disclosed in the E-bank
Schedules by sections 1.01 through 1.17.
(o) a Schedule 1.17(o) listing the accounts receivable and notes and other
obligations receivable of E-bank as of December 31, 1999, or thereafter
other than in the ordinary course of business of E-bank, indicating the
debtor and amount, and classifying the accounts to show in reasonable
detail the length of time, if any, overdue, and stating the nature and
amount of any refunds, set offs, reimbursements, discounts, or other
adjustments, which are in the aggregate material and due to or claimed by
such debtor; and
(p) a Schedule 1.17(p) listing the accounts payable and notes and other
obligations payable of E-bank as of December 31, 1999, or that arose
thereafter other than in the ordinary course of the business of E-bank,
indicating the creditor and amount, classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, set offs, reimbursements, discounts, or
other adjustments, which in the aggregate are material and due to or
claimed by E-bank respecting such obligations.
(q) a Schedule 1.17(q) comprising a a true and complete list of (a) all
accounts with banks, money market mutual funds or securities or other
financial institutions maintained by E-bank within the past twelve (12)
months, the account numbers thereof, and all persons authorized to sign or
act on behalf of E-bank, (b) all safe deposit boxes and other similar
custodial arrangements maintained by E-bank within the past twelve (12)
months, and (c) the names of all persons holding powers of attorney from
E-bank or who are otherwise authorized to act on behalf of E-bank with
respect to any matter, other than its officers and directors, and a summary
of the terms of such powers or authorizations.
7
The Shareholders shall cause the E-bank Schedules and the instruments and
data delivered to Natural Way hereunder to be updated after the date hereof up
to and including the Closing Date. It is understood and agreed that not all of
the schedules referred to above have been completed or are available to be
furnished by the Shareholders. The Shareholders shall have a period of thirty
(30) days after the date hereof to provide such schedules. If the Shareholders
cannot or fail to do so, or if Natural Way finds the schedules unacceptable and
after giving the Shareholders written notice of such failure or unacceptability
and a 10 day period to cure, Natural Way may terminate this agreement by giving
written notice to the Shareholders. ARTICLE II REPRESENTATIONS, COVENANTS, AND
WARRANTIES OF NATURAL WAY
As an inducement to, and to obtain the reliance of the Shareholders,
Natural Way represents and warrants as follows:
Section 2.01 - Organization. Natural Way is a corporation duly organized,
validly existing, and in good standing under the laws of the state of Nevada and
has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets, to carry on its
business in all material respects as it is now being conducted, and there is no
jurisdiction in which it is not qualified in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification. Included in the Natural Way Schedules (as hereinafter defined)
are complete and correct copies of the articles of incorporation of Natural Way
as in effect on the date hereof. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will not
violate any provision of Natural Way's articles of incorporation or bylaws.
Natural Way has taken all action required by law, its articles of incorporation,
its bylaws, or otherwise to authorize the execution and delivery of this
Agreement, and Natural Way has full power, authority, and legal right and has
taken all action required by law, it articles of incorporation, bylaws, or
otherwise to consummate the transactions herein contemplated. (Schedule 2.01 -
articles of incorporation)
Section 2.02 - Capitalization. Natural Way's authorized capitalization
currently consists of 50,000,000 shares of common stock, par value $.001, of
which 17,500,000 common shares are issued and outstanding, and 5,000,000 shares
of preferred stock of which none are issued and outstanding. Prior to Closing,
or simultaneous therewith, Natural Way shall effect a one for five and (1-for-5)
reverse stock split (the "Reverse Split"), providing that no shareholder holder
less than 100 shares shall be subject tot he Reverse Split; and shall
reauthorize its capital to 50,000,000 shares of common stock, par value $.001,
and 5,000,000 shares of preferred stock, par value $.001. All issued and
outstanding shares are legally issued, fully paid, non-assessable and not issued
in violation of the pre-emptive or other rights of any person. (Schedule 2.02 -
none)
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Section 2.03 - Subsidiaries and Predecessor Corporation. Except as shown in
the Natural Way Schedules, Natural Way owns no subsidiaries and has no
predecessor corporations. (Schedule 2.03 - list of subsidiaries and predecessor
corporations.)
Section 2.04 - Financial Statements.
(a) Included in the Natural Way Schedules are (i) the audited balance
sheets of Natural Way as of December 31, 1999 and December 31, 1998, and
the related audited statements of operations, stockholders' equity and cash
flows for the two fiscal years ended December 31, 1999 and December 31,
1998, together with the notes to such statements and the opinion of
independent certified public accountants, with respect thereto.
(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles. The Natural Way balance sheets
present a true and fair view as of the dates of such balance sheets of the
financial condition of Natural Way. Natural Way did not have, as of the
dates of such balance sheets, except as and to the extent reflected or
reserved against therein, any liabilities or obligations (absolute or
contingent) which should be reflected in the balance sheets or the notes
thereto, prepared in accordance with generally accepted accounting
principles, and all assets reflected therein are properly reported and
present fairly the financial condition of the assets of Natural Way in
accordance with generally accepted accounting principles.
(c) Natural Way has no liabilities with respect to the payment of any
federal, state, county local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and
payable.
(d) Natural Way has filed all state, federal or local income and/or
franchise tax returns required to be filed by it from inception to the date
hereof. None of such federal income tax returns have been examined by the
Internal Revenue Service. Each of such income tax return reflects the taxes
due for the period covered thereby, except for amounts which, in the
aggregate, are immaterial.
(e) Natural Way's books and records, are in all material aspects complete,
correct and have been maintained in accordance with good business and
accounting practices. (Schedule 2.04 - Financial statements) Section 2.05 -
Information. The information concerning Natural Way set forth in this
Agreement and the Natural Way Schedules is complete and accurate in all
material respects and does not contain any untrue statements of a material
fact or omit to state a material fact required to make the statements made,
in light of the circumstances under which they were made, not misleading.
(Schedule 2.05 - none)
Section 2.06 - Opinions or Warrants. Except as disclosed in the Natural Way
Schedules, there are no existing options, warrants, calls, or commitments of any
character relating to the authorized and unissued stock of Natural Way.
(Schedule 2.06 - description of warrants/options)
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Section 2.07 - Title and Related Matters. Natural Way has good and
marketable title to all of its properties, inventory, interest in properties,
and assets, real and personal, which are reflected in Natural Way's most recent
balance sheet or acquired after that date (except properties, interest in
properties, and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all liens, pledges, charges, or
encumbrances except (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; (c) as described in the Natural Way Schedules.
(Schedule 2.07 - description of assets and related encumbrances)
Section 2.08 - Litigation and Proceedings. Except as set forth in the
Natural Way Schedules, there are no actions, suits, proceedings, or
investigations pending or, to the knowledge of Natural Way after reasonable
investigation, threatened by or against Natural Way or affecting Natural Way or
its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind. Natural Way has no knowledge of any material default on Natural Way's part
with respect to any judgment, order, injunction, decree, award, rule, or
regulation or any court, arbitrator, or governmental agency or instrumentality
or of any circumstances which, after reasonable investigation, would result in
the discovery of such a default. (Schedule 2.08 - description of
litigation/claims)
Section 2.09 - Contracts. There are no material contracts, agreements,
franchises, license agreements, or other commitments to which Natural Way is a
party or by which it or any of its assets, products, licenses, or properties are
bound except as set forth in the Natural Way Schedules, herein, or in the
financial statements of Natural Way, or notes thereto. (Schedule 2.09 - material
contracts not disclosed in financial statement)
Section 2.10 - Material Contract Defaults. Except as set forth in the
Natural Way Schedules, Natural Way is not, nor will it be at the time of
Closing, in default in any material respect under the terms of any outstanding
contract, agreement, lease, or other commitment which is material to the
business, operations properties, assets or condition of Natural Way and there is
no event of default in any material respect under any such contract, agreement,
lease, or other commitment in respect of which Natural Way has not taken
adequate steps to prevent such a default from occurring. (Schedule 2.10 - list
of material contract defaults)
Section 2.11 - No Conflict With Other Instruments. Except as set forth in
the Natural Way Schedules, the execution of this Agreement and the consummation
of the transactions contemplated by this Agreement will not result in the breach
of any term or provision of, or constitute an event of default under, any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which Natural Way is a party or to which any of its
properties or operations are subject. (Schedule 2.11 - list of documents which
the execution of this agreement will be conflicting with)
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Section 2.12 - Governmental Authorizations. As set forth in the Natural Way
schedules, Natural Way has or will have upon Closing, all licenses, franchises,
permits, and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted. Except
for compliance with federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body
is required in connection with the execution and delivery by Natural Way of this
Agreement and the consummation by Natural Way of the transaction contemplated
hereby. (Schedule 2.12 - list of licenses)
Section 2.13 - Compliance With Laws and Regulations. Natural Way has
complied with all applicable statutes and regulations of any federal, state, or
other governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of Natural Way or except to the
extent that noncompliance would not result in the occurrence of any material
liability for Natural Way. (Schedule 2.13 - none)
Section 2.14 - Approval of Agreement. As shown in the Natural Way
schedules, the board of directors of Natural Way has approved this agreement and
the transactions contemplated hereby. (Schedule 2.14 - board consent)
Section 2.15 - Absence of Certain Changes or Events. Except as set forth in
this Agreement or the Natural Way Schedules, since December 31, 1999:
(a) there has not been nor will there be to the Date of Closing (i)
any material adverse change in the business, operations, properties,
assets, or condition of Natural Way; or (ii) any damage, destruction, or
loss to Natural Way (whether or not covered by insurance) materially and
adversely affecting the business, operations, properties, assets, or
condition of Natural Way.
(b) Natural Way has not nor will have not prior to Closing except as
contemplated by this agreement (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of Natural
Way; (iv) made any material change in its method of management, operation
or accounting; (v) entered into any other material transaction other than
sales in the ordinary course of its business; (vi) made any accrual or
arrangement for payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or
employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its employees
whose monthly compensation exceeds $1,000; or (viii) made any increase in
any profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made
to, for, or which its officers, directors, or employees;
11
(c) Natural Way has not, nor will it have except as contemplated by
this agreement (i) borrowed or agreed to borrow any funds or incurred, or
become subject to, any material obligation or liability (absolute or
contingent) except as necessary in its ordinary course of business; (ii)
paid or agreed to pay any material obligations or liability (absolute or
contingent) other than current liabilities incurred since that date in the
ordinary course of business and professional and other fees and expenses in
connection with the preparation of this agreement and the consummation of
the transactions contemplated hereby; (iii) sold or transferred, or agreed
to sell or transfer, any of its assets, properties, or rights (except
assets, properties, or rights not used or useful in its business which, is
the aggregate have a value of less than $1,000), or canceled, or agreed to
cancel, any debts or claims (except debts or claims which in the aggregate
are of a value of less than $1,000); (iv) made or permitted any amendment
or termination of any contract, agreement, or license to which it is a
party if such amendment or termination is material, considering the
business or Natural Way; or (v) issued, delivered, or agreed to issue or
deliver any stock, bonds or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock); and
(d) to the best knowledge of Natural Way, Natural Way has not become
subject to any law or regulation which materially and adversely affects, or
in the future may adversely affect the business, operations, properties,
assets, or condition of Natural Way. (Schedule 2.15 - description of
changes since December 31, 1999)
Section 2.16 - Continuity of Business Enterprises. Natural Way has no
commitment or present intention to liquidate E-bank or sell or otherwise dispose
of a material portion of E-bank's business or assets following the consummation
of the transactions contemplated hereby. (Schedule 2.16 - none)
Section 2.17 - Natural Way Schedules. Natural Way has delivered to the
Shareholders the following schedules, which are collectively referred to as the
"Natural Way Schedules" and which consist of separate schedules, which are dated
the date of this Agreement, all certified by the chief executive officer of
Natural Way to be complete, true, and accurate:
(a) Schedule 2.01 - containing complete and accurate copies of the articles
of incorporation of Natural Way as in effect as of the date of this
Agreement;
(b) Schedule 2.03 - containing a list indicating the name and address of
each subsidiary;
(c) Schedule 2.04 - containing Natural Way's audited financial statements
for the 12 months ended December 31, 1998 and December 31, 1999;
12
(d) Schedule 2.06 - containing a description of all of Natural Way's
outstanding warrants and options
(e) Schedule 2.07 - containing a description of all real property and
assets owned by Natural Way, together with a description of every mortgage,
deed of trust, pledge, lien, agreement, encumbrance, claim, or equity
interest of any nature whatsoever in such real property;
(f) Schedule 2.08 - containing a description of all known actual or
threatened claims or litigation against or involving Natural Way;
(g) Schedule 2.09 - containing a description of material contracts not
otherwise disclosed;
(h) Schedule 2.10 - containing a description of defaults (not remedied) on
material contracts;
(i) Schedule 2.11 - containing a description of documents required to be
disclosed in section 2.11
(j) Schedule 2.12 - a list together with copies of all licenses, permits,
and other governmental authorization (or requests or applications therefor)
pursuant to which Natural Way carries on or proposes to carry on its
business (except those which, in the aggregate, are immaterial to the
present or proposed business of Natural Way);
(k) Schedule 2.14 - board consent approving the execution of this
agreement;
(l) any other schedules setting forth any other information, together with
any required copies of documents, required to be disclosed to the Exchange
in the Natural Way Schedules by Article II.
Natural Way shall cause the Natural Way Schedules and the instruments and
data delivered to the Shareholders hereunder to be updated after the date hereof
up to and including the Closing Date. It is understood and agreed that not all
of the schedules referred to above have been completed or are available to be
furnished by Natural Way. Natural Way shall have a period of thirty (30) days
after the date hereof to provide such schedules. If Natural Way cannot or fails
to do so, or if the Shareholders finds the schedules unacceptable, and after
giving Natural Way written notice of such failure or unacceptability and a 10
day period to cure, the Shareholders may terminate this agreement by giving
written notice to Natural Way.
13
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 - The Exchange. The Shareholders agree to assign, transfer,
and deliver to Natural Way, free and clear of all liens, pledges, encumbrances,
charges, restrictions or known claims of any kind, nature, or description,
___________ shares of common stock of E-bank, constituting 100% of the issued
and outstanding shares of common stock of E-bank, and Natural Way agrees to
acquire such shares by issuing and delivering in exchange therefor the
following:
(a) 9,300,000 post Reverse Split shares of Natural Way restricted common
stock, par value $.001 to the Shareholders in the amounts set forth
opposite each Shareholder's name in the list attached hereto as Exhibit 1
and incorporated herein; and
(b) the following warrants to Pacific Winner Development Limited:
(i) warrants to purchase from the Company 2,400,000 fully paid and
nonassessable shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company at an exercise price equal to U.S.
$3.00 for a period commencing on the Closing Date and expiring one
year from said date;
(ii) warrants to purchase from the Company 1,600,000 fully paid and
nonassessable shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company at an exercise price equal to U.S.
$4.00 for a period commencing one year after the Closing Date and
expiring one year from such date.
(iii) warrants to purchase from the Company 1,600,000 fully paid and
nonassessable shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company at an exercise price equal to U.S.
$3.00 for a period commencing two years after the Closing Date and
expiring one year from such date.
(c) the following warrants to World Concept Holding Limited:
(i) warrants to purchase from the Company 600,000 fully paid and
nonassessable shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company at an exercise price equal to U.S.
$3.00 for a period commencing on the Closing Date and expiring one
year from said date;
(ii) warrants to purchase from the Company 400,000 fully paid and
nonassessable shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company at an exercise price equal to U.S.
$4.00 for a period commencing one year after the Closing Date and
expiring one year from such date.
(iii) warrants to purchase from the Company 400,000 fully paid and
nonassessable shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company at an exercise price equal to U.S.
$3.00 for a period commencing two years after the Closing Date and
expiring one year from such date.
14
Section 3.02 - Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time and place as
the parties may mutually agree ("Closing Date".)
Section 3.03 - Closing Events. At the Closing, each of the respective
Parties hereto shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, ruling or deeds or
other instruments required by this Agreement to be so delivered at or prior to
the Closing, together with such other items as may be reasonably requested by
the Parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby. The Shareholders must each have
executed a power of attorney authorizing Dr. Lan Hong Bing to act of each of
their behalf.
Section 3.04 - Finder's Fees. The Shareholders and Natural Way acknowledge
that no brokers were used in this transaction and no finder's fee are due as a
result of this transaction.
Section 3.05 - Termination.
(a) This Agreement may be terminated by the board of directors of Natural
Way or by the Shareholders at any time prior to the Closing Date if:
(i) there shall be any additional, i.e. actual or threatened action or
proceeding before any court or any governmental body which has not
been disclosed in this agreement and which shall seek to restrain,
prohibit, or invalidate the transactions contemplated by this
Agreement and which, in the judgment of such board of directors, made
in good faith and based upon the advice of its legal counsel, makes it
inadvisable to proceed with the exchange contemplated by this
Agreement;
(ii) any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to consummate such
transactions or in the judgment of such party, made in good faith and
based on the advice of counsel, there is substantial likelihood that
any such approval will not be obtained or will be obtained only on a
condition or conditions which would be unduly burdensome, making it
inadvisable to proceed with the exchange; or
(iii) there shall have been any change in the latest balance sheets of
E-bank or Natural Way, or in their respective assets, properties,
business, or financial condition which could have a materially adverse
affect on the value of each such business, except any changes
disclosed in the Parties' Schedules, as the case may be, dated as of
the date of the execution of this Agreement; or
15
(iv) the Board of Directors of Natural Way, or the Shareholders
determine in good faith that a condition to closing has not occurred.
In the event of termination pursuant to this paragraph (a) of Section 3.05,
no obligation, right or liability shall arise hereunder, and each party
shall bear all of the expenses incurred by it in connection with the
negotiation, drafting, and execution of this Agreement and the transactions
herein contemplated.
(b) This Agreement may be terminated at any time prior to the Closing by
action of the Shareholders if in their sole and reasonable judgment they
determine that Natural Way shall have failed to comply in any material
respect with any of their covenants or agreements contained in this
Agreement or if any of the representations or warranties of Natural Way
contained herein shall be inaccurate in any material respect. If this
Agreement is terminated pursuant to this paragraph (b) of Section 3.05,
this Agreement shall be of no further force or effect, and no obligation,
right or liability shall arise hereunder, except that Natural Way shall
bear their own costs as well as the reasonable costs of the Shareholders in
connection with the negotiations, preparation, and execution of this
Agreement, and matters connected therewith.
(c) The Board of Directors of Natural Way may terminate this contract if in
their sole and reasonable judgment the Shareholders shall fail to comply in
any material respect with any of their covenants or agreements contained in
this Agreement or if any of the representations or warranties of the
Shareholders contained herein shall be inaccurate in any material respect.
If this Agreement is terminated pursuant to this paragraph (c) of Section
3.05, this Agreement shall be of no further force or effect, and no
obligation, right or liability shall arise hereunder, except that the
Shareholders shall bear their own costs as well as the reasonable costs of
Natural Way incurred in connection with the negotiation, preparation and
execution of this Agreement.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 - Delivery of Books and Records. At the Closing, the
Shareholders shall deliver to Natural Way the originals of the corporate minute
books, books of account, contracts, records, and all other books or documents of
E-bank now in the possession of E-bank or its representatives.
Section 4.02 - Special Covenants and Representations Regarding the
Exchanged Natural Way Stock and Warrants. The consummation of this Agreement and
the transactions herein contemplated, including the issuance of the Exchanged
Stock and warrants set forth in section 3.01 (the "Warrants") to the
Shareholders contemplated hereby, constitute the offer and sale of securities
under the Securities and Exchange Act and applicable state statutes. The
Shareholders acknowledge that the shares of Natural Way to be delivered to each
pursuant to this Agreement have not been registered under the Securities Act of
1993 as amended, referred to in this Agreement as the "Securities Act," or the
laws of any other jurisdiction, and that therefore the stock is not fully
transferable except as permitted under various exemptions, if any contained in
the Securities Act and the rules of the Securities and Exchange Commission
interpreting the act. Under US law, Natural Way common stock cannot be sold or
transferred by the Shareholders unless they are subsequently registered under
applicable law or an exemption from registration is available. Natural Way is
not required to register or assist in the registration of the Natural Way Common
Stock or to make any exemption from registration available. The provisions
contained in this paragraph are intended to ensure compliance with the
Securities Act. The Shareholders represent and warrant to Natural Way that each
is acquiring the shares of Natural Way common stock under this Agreement for
their own account for investment, and not for the purpose of resale or any other
distribution of such shares. The Shareholders also represent and warrant that
each has no present intention of disposing of all or any part of such shares at
any particular time, for any particular price or on the happening of any
particular circumstances. The Shareholders further represent that each has such
knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of an investment in Natural Way. The
Shareholders acknowledge that Natural Way is relying on the truth and accuracy
of these warranties and representations in issuing the shares without first
registering the shares under the Securities Act. The Shareholders covenant and
represent that none of the shares of Natural Way capital stock to be issued to
them pursuant to this Agreement, will be offered, sold, assigned, pledged,
transferred, or otherwise disposed of except after full compliance with all of
the applicable provisions of the Securities Act and the rules and regulations of
the Securities and Exchange Commission under the 1933 act. Therefore the
Shareholders agree not to sell or otherwise dispose of any of the shares of
Natural Way common stock received pursuant to this agreement unless such
Shareholder: 1. has delivered to Natural Way a written legal opinion in form and
substance satisfactory to counsel for Natural Way to the effect that the
disposition is permissible under the terms of the Securities Act and regulations
interpreting the act; 2. has complied with the registration and prospectus
requirements of the 1933 act relating to such disposition; or 3. has presented
Natural Way satisfactory evidence that such a disposition is exempt from
registration under the act. Natural Way shall place a stop transfer order
against transfers of shares until one of the conditions set forth in this
paragraph have been met. Furthermore the Shareholders agree that the
certificates evidencing the shares and/or Warrants that each will receive under
this agreement will contain the following legend or one substantially similar:
16
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION STATEMENT UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED IS IN EFFECT FOR THE SECURITIES, OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS IN FACT
APPLICABLE TO SUCH OFFER OR SALE, AND SUCH EXEMPTION IS EVIDENCED BY AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER.
Section 4.03 Short Positions Prohibited. For a period beginning from the
closing date and ending on the second anniversary of the closing date neither
the Shareholders nor any of their affiliates, subsidiaries, officers, directors
or agents, shall directly or indirectly maintain, or assist in maintaining any
short position in the securities of Natural Way.
17
Section 4.04 - Third Party Consents and Certificates. The Parties agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein and therein contemplated.
Section 4.05 - Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date and
except as set forth in the attached Schedules or as permitted or
contemplated by this Agreement, Natural Way, and the Shareholders (for and
on behalf of E-bank) , respectively, will each:
(i) carry on their business in substantially the same manner as they
had heretofore;
(ii) maintain and keep their properties in states of good repair and
condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii)maintain in full force and effect insurance comparable in amount
and in scope of coverage to that now maintained by them;
(iv) perform in all material respects all of their obligations under
material contracts, leases, and instruments relating to or
affecting their assets, properties, and business;
(v) use their best efforts to maintain and preserve their business
organization intact, to retain their key employees, and to
maintain their relationship with material suppliers and
customers; and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on them by all federal and state
laws and all rules, regulations, and orders imposed by federal or
state governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
neither Natural Way, nor the Shareholders, on behalf of E-bank will:
(i) make any changes in their articles of incorporation or bylaws
except as contemplated by this Agreement;
(ii) declare or make, or agree to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or
redeem, any of its capital stock;
18
(iii) waive any rights of value which in the aggregate are
extraordinary or material considering the business of either Natural
Way or E-bank respectively;
(iv) make any material change in their method of management, operation
or accounting;
(v) enter into any other material transaction other than in the
ordinary course of either parties' respective business;
(vi) make any accrual or arrangement for payment of bonuses or special
compensation of any kind or any severance or termination pay to any
present or former officer or employee;
(vii) increase the rate of compensation payable or to become payable
by it to any of its officers or directors or any of its employees
whose monthly compensation exceeds $1,000; or
(viii) make any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee
benefit plan, payment, or arrangement made to, for, or which its
officers, directors, or employees;
(ix) borrow or agree to borrow any funds or incur, or become subject
to, any material obligation or liability (absolute or contingent)
except as necessary in its ordinary course of business;
(x) pay or agree to pay any material obligations or liability
(absolute or contingent) other than current liabilities incurred in
the ordinary course of business and professional and other fees and
expenses in connection with the preparation of this agreement and the
consummation of the transactions contemplated hereby;
(xi) sell or transfer, or agree to sell or transfer, any of their
assets, properties, or rights (except assets, properties, or rights
not used or useful in their respective business which, is the
aggregate have a value of less than $1,000), or cancel, or agree to
cancel, any debts or claims (except debts or claims which in the
aggregate are of a value of less than $1,000);
(xii) make or permit any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or
termination is material, considering their respective business; or
(xiii) issue, deliver or agree to issue or deliver any stock, bonds or
other corporate securities including debentures (whether authorized
and unissued or held as treasury stock)
Section 4.06 - Indemnification.
(a) The Shareholders hereby agree to indemnify Natural Way and its
officers, agents and directors as of the date of execution of this
Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing, or defending against
any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any
inaccuracy appearing in or misrepresentations made under Article I of
this Agreement. The indemnification provided for in this paragraph
shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
(b) Natural Way hereby agrees to indemnify the Shareholders against
any loss, liability, claim, damage, or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they
may become subject arising out of or based on any inaccuracy appearing
in or misrepresentation made under Article II of this Agreement. The
indemnification provided for in this paragraph shall survive the
Closing and consummation of the interactions contemplated hereby and
termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF NATURAL WAY
The obligations of Natural Way under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 - Accuracy of Representations. The representations and
warranties made by the Shareholders in this Agreement were true when made and
shall be true at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing Date (except
for changes therein permitted by this Agreement), and the Shareholders shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by them prior to or at the Closing.
Natural Way shall have been furnished with a certificate, signed by the
Shareholders and dated the Closing Date, to the foregoing effect.
Section 5.02 - Officer's Certificate. Natural Way shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
representative of E-bank to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best of his knowledge against
E-bank, which might result in an action to enjoin or prevent the consummation of
the transactions contemplated by this Agreement, or, to the extent not disclosed
in the E-bank Schedules, by or against E-bank, which might result in any
material adverse change in any of the assets, properties, business, or
operations of E-bank.
20
Section 5.03 - No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business, or operations of E-bank nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of E-bank.
Section 5.04 - Good Standing. Natural Way shall have received a certificate
of good standing from the appropriate governmental official, dated as of a date
within ten days prior to the Closing Date certifying that E-bank is in good
standing as a corporation in its state or country of incorporation.
Section 5.05 -- Other Items.
(a) Natural Way shall have received a Shareholder list of E-bank containing
the name, address, and number of shares held by each Shareholder, certified
by an executive officer of E-bank as being true, complete and accurate, and
a designation of how many shares of the Exchanged Natural Way Stock each is
to receive pursuant to this Agreement.
(b) Natural Way shall have received a copy of each Power of Attorney duly
signed and notarized by each of the Shareholders authorizing Dr. Lan Hong
Bing to act on their behalf.
(c) Natural Way shall have received such further documents, certificates or
instruments relating to the transactions contemplated hereby as Natural Way
may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS
The obligations of the Shareholders under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 - Accuracy of Representations. The representations and
warranties made by Natural Way in this Agreement were true when made and shall
be true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Natural Way shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Natural Way prior to or at the
Closing, and the Shareholders shall have been furnished with a certificate,
signed by a duly authorized executive officer of Natural Way and dated the
Closing Date, to the foregoing effect.
Section 6.02 - Officer's Certificate. The Shareholders shall have been
furnished with a certificate dated the Closing Date and signed by a duly
authorized executive officer of Natural Way, to the effect that no litigation,
proceeding, investigation or inquiry is pending, other than those disclosed
herein, or to the best knowledge of Natural Way threatened, which might result
in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement.
21
Section 6.03 - No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business, or operations of Natural Way nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of Natural
Way.
Section 6.04 - Good Standing. The Shareholders shall have received a
certificate of good standing from the appropriate governmental official, dated
as of a date within ten days prior to the Closing Date certifying that Natural
Way is in good standing as a corporation in Nevada.
ARTICLE VII.
ACCESS TO THE PROPERTIES AND BOOKS
7.01 Natural Way's rights. The Shareholders hereby grant to Natural Way and
its duly authorized representatives, the right of full and complete access to
the properties of E-bank and full opportunity to examine such entities' books
and records, during normal business hours between the date hereof and the
Closing Date.
7.02 Shareholder' rights. A similar access to Natural Way' properties,
books and records in likewise granted to the Shareholders, and their duly
authorized representatives.
ARTICLE VIII.
OFFICERS AND DIRECTORS , NAME CHANGE
8.01 Directors. At Closing, the current directors of Natural Way shall
nominate, and agree to vote in favor of the election of the persons listed below
to the board. Thereafter, the other remaining board members agree to tender
their written resignations.
Nominees to the Board
-----------------------
Hong Bing Lan
Xin ▇▇▇ ▇▇▇
Fading LIU
8.02 Name Change. At or before Closing, Natural Way shall take those steps
necessary to effect a name change to ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. or some other
substantially similar name.
22
ARTICLE IX.
MISCELLANEOUS
9.01 - Brokers. The Shareholders and Natural Way agree that there were no
finders or brokers involved in bringing the parties together or who were
instrumental in the negotiation, execution or consummation of this Agreement.
9.02 - Governing Law. This Agreement shall be governed by, enforce, and
construed under and in accordance with the laws of the United States of America
and, with respect to the matters of state law, with the laws of Nevada.
9.03 - Notices. Any notice or other communications required or permitted
hereunder shall be sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by prepaid telegram
addressed as follows:
If to Natural Way: ▇▇▇▇ ▇▇▇ ▇▇▇
▇▇ ▇▇▇▇-▇▇▇▇ Science and Technology Building 1001
Shangbuzlong Road, Fution District
Shenzhen, PRC
With copies to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vanderkam & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to the Shareholders: Dr. Lan Hong Bing
Rm 707 Bab COFCO Plaza, No. 8
Jianguomennei, Dajie, ▇▇▇▇ ▇▇▇▇▇ District
Beijing, PRC 100005
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
9.04 - Attorney's Fees. In the event that any party institutes any action
or suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorney's
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
9.05 - Confidentiality. Each party hereto agrees with the other party that,
unless and until the transactions contemplated by this Agreement have been
consummated, each and each of such representatives will hold in strict
confidence all data and information obtained with respect to the other party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, and shall not use or
disclosure data or information or disclose the same to others, except (i) to the
extent such data or information is published, is a matter of public knowledge,
or is required by law to be published; and (ii) to the extent that such
disclosure data or information must be used or disclosed in order to consummate
the transactions contemplated by this Agreement. In the event of the termination
of this Agreement, each party shall return to the other party all documents and
other materials obtained by it or on its behalf and shall destroy all copies,
digests, workpapers, abstracts or other materials relating thereto, and each
party will continue to comply with the confidentiality provisions set forth
herein.
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9.06 - Schedules; Knowledge. Each party is presumed to have full knowledge
of all information set forth in the other party's schedules delivered pursuant
to this Agreement.
9.07 - Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter thereof.
9.08 - Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of three
months. All rights and obligations under this entire agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators and
assigns of the parties.
9.09 - Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument. For purposes of this Agreement,
facsimile signatures may be deemed originals.
9.10 - Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law,
or in equity, and may enforced concurrently herewith, and no waiver by any party
of the performance of any obligation by the other shall be construed as a waiver
of the same of any other default then, theretofore, or thereafter occurring or
existing. At any time prior to the Closing Date, this Agreement may by amended
by a writing signed by all parties hereto, with respect to any of the terms
contained herein, and say term or condition of this Agreement may be waived or
the time for performance may be extended by a writing signed by the party or
parties for whose benefit the provision in intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be extended by their respective officers, hereunto duly authorized, as of the
date first-above written.
ATTEST: NATURAL WAY TECHNOLOGIES, INC.
/s/
--------------------------------
Secretary or Assistant Secretary By: /s/ ▇▇▇▇ ▇▇▇ Hua
--------------------
▇▇▇▇ ▇▇▇ Hua
President
THE SHAREHOLDERS
/s/ Dr. Lan Hong Bing
-----------------------
Dr. Lan Hong Bing
for and on behalf of all Shareholders by and
through Power of Attorney
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, for the above
stated purposes by ▇▇▇▇ ▇▇▇ Hua, the President of Natural Way Technologies,
Inc., to certify which witness my hand and seal of office on this the 27th of
March , 2000.
/s/
----------------------------
Notary Public in and for the
State of New York
State of New York
County of New York
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, for the above
stated purposes by Dr. Lan Hong Bing, who after being duly sworn did state under
oath that he was the duly authorized representative of the Shareholders and that
he had executed the foregoing document with their consent and authority, and
under power of attorney, on this the of , 2000.
/s/
----------------------------
Notary Public in and for the
State of New York
25
Exhibit 1
List of E-bank Shareholders and the number of shares of Natural Way stock each
is to receive pursuant to this agreement:
Shareholder: Number of Natural Way shares
___________________ ________________
___________________ ________________
___________________ ________________
___________________ ________________
___________________ ________________
___________________ ________________
___________________ ________________
___________________ ________________
___________________ ________________
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