EXHIBIT 2.4
SHARE EXCHANGE AGREEMENT
BETWEEN
LOTUS PACIFIC, INC.
AND
ARESCOM INC
March 15, 1999
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is entered into effective
as of March 15, 1999, by and between Lotus Pacific, Inc., a corporation
registrated in the State of Delaware (hereinafter "Lotus") and Arescom Inc.,
a high tech corporation of California (hereinafter "Arescom"). Each of Lotus
and Arescom is also referred to as a "Party", collectively the "Parties".
RECITALS
WHEREAS, Arescom has 33,466,667 shares of capital stock and stock option
currently issued and outstanding;
WHEREAS, Arescom desires to issue another 142,673,690 shares, which shall
constitute eighty one percent (81%) of all the capital stock of Arescom
(hereinafter the "Arescom Shares"), to Lotus in exchange for $30,000,000 worth
of the Common Stock shares of Lotus (hereinafter the "Lotus Shares");
WHEREAS, Lotus desires to acquire 81% of Arescom's equity interest with its
Common Stock shares;
WHEREAS, Lotus desires to invest additional $10,000,000 of capital in
Arescom;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1. SHARE EXCHANGE AND CAPITAL INVESTMENT
a. Share Exchange. Arescom shall issue one hundred forty two million six
hundred seventy three thousand six hundred and ninety (142,673,690) shares
of the common stock of Arescom, which shall constitute eighty one percent
(81%) of all the capital stock of Arescom, to Lotus in exchange for
$30,000,000 worth of shares of Common Stock of Lotus, which shall be issued
to Arescom's shareholders. The number of the Lotus Shares issued shall be
determined by the four-week average market closing price. The said four-week
period shall start at two two weeks before the signing of the Agreement and
end at two weeks after the signing of the Agreement.
b. Capital Investment. Lotus agrees to invest additional $10,000,000
of capital in Arescom after the signing of this Agreement.
c. The Lotus Shares. Pursuant to the Rule 145 of the Securities Act of
1933, as amended, the Lotus shares issued to Arescom shall bear a restricted
legend with a holding period of one (1) year. However, all shareholders of
Arescom agree that all the Lotus Shares issued to Arescom's shareholders
shall be restrictively held by ▇▇. ▇▇▇ ▇▇, President of Arescom Inc. and the
Representative of Arescom's shareholders, not to sell until the day that
Arescom reaches its annual sales of fifteen million ($15,000,000) US dollars
and annual net income before income tax of three million ($3,000,000) US
dollars.
d. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur upon execution and delivery of this
Agreement by the Parties together with all documents, instruments, and
agreements referred to herein by the respective parties referred to in such
documents, instruments, and agreements. The date on which the Closing
occurs shall be referred to as the "Closing Date". The Closing shall occur
at such location and at such time as the Parties shall mutually agree.
e. Deliveries at the Closing.
i. Arescom's Obligation at Closing. A the Closing, Arescom will:
(1) deliver to Lotus a stock certificate or stock certificates
representing and evidencing the Arescom Shares, endorsed in blank
or accompanied by duly executed assignment documents or stock
powers sufficient to transfer good and marketable title to the
Arescom Shares to Lotus; and
(2) execute and deliver this Agreement and all other documents,
instruments, and agreements referred to herein or contemplated
hereby.
ii. Lotus's Obligation at Closing. A the Closing, Lotus will:
(1) deliver to Arescom a corporate resolution representing and
evidencing that the Board of Directors of Lotus has authorized
to issue $30,000,000 worth of Common Stock shares of Lotus to
Arescom's shareholders, and authorized the Corpotation's stock
transfer agent to issue such number of Common Stock shares of
Lotus to Arescom's shareholders within four weeks after the
Closing based on the list provided by Arescom; and
(2) execute and deliver this Agreement and all other documents,
instruments, and agreements referred to herein or contemplated
hereby.
2. REPRESENTATIONS AND WARRANTIES
a. Representations and Warranties of Arescom. Arescom hereby
represents and warrants to Lotus that the statements contained in
this Section 2.a. are correct and complete as of the Closing Date.
Notwithstanding Lotus' due diligence investigation of Arescom,
Arescom may rely on the representations and warranties contained in
this Section 2.a.
i. Authorization to Issue Shares of Common Stock. Arescom has
currently 33,466,667 shares of capital stock and stock option
issued and outstanding, and Arescom is duly authorized to issue
142,673,690 shares of its capital stock shares, which shall
constitute eighty one percent (81%) of all the capital stock of
Arescom, to consummate the transaction contemplated hereby.
ii. Authorization of Transaction. Arescom has full power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder.
iii. Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (a) violate any governing law or other restrictions
of any governmental authority to which Arescom is subject, or
(b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any person the
right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, permit,
governmental approval, certificate, instrument, or other
arrangement to which he is a party or by which he is bound or to
which any of his assets or properties is subject.
iv. Broker's Fees. Arescom has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for which
Arescom could become liable or obligated.
v. Disclosure. The representations and warranties contained in
this Section 2.a. do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements and information contained in this Section 2.a. not
misleading.
b. Representations and Warranties of Lotus. Lotus hereby represents
and warrants to Arescom that the statements contained in this Section
2.b are correct and complete as of the Closing Date. Moreover,
notwithstanding Arescom's due diligence investigation of Lotus, Arescom
may rely on the representations and warranties contained in this
Section 2.b.
i. Organization of Lotus. Lotus is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
incorporation.
ii. Authorization of Transaction. Lotus has full power and authority
to execute and deliver this Agreement and to perform its
obligations hereunder.
iii. Authorization to Issue Shares of Common Stock. Lotus is duly
authorized to issue $30,000,000 worth of shares of common stock to
consummate the transaction contemplated hereby.
iv. Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (a) violate any governing law or other restrictions
of any governmental authority to which Lotus is subject, or any
provision of its charter or bylaws, or (b) conflict with, result
in a breach of, constitute a default under, result in the
acceleration of, create in any person the right to accelerate,
terminate, modify, or cancel, or require any notice under any
aggrements, contract, lease, license, permit, governmental
approval, certificate, instrument, or other arrangement to which
it is a party or by which it is bound or to which any of its assets
or properties is subject.
v. Broker's Fees. Lotus has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for which Lotus
could become liable or obligated.
vi. Disclosure. The representations and warranties contained in this
Section 2.b. do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements and information contained in this Section 2.b. not
misleading.
3. MISCELLANEOUS
a. Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations
by or between the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
b. Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their
respective successors and assigns. No Party may assign this
Agreement or any of its rights, interests, or obligations hereunder
without the prior written consent of the other; provided, however,
that such consent shall not be unreasonably withheld.
c. Counterparts. This Agreement may be executed by facsimile signature
and in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same
instrument.
d. Headings. The section headings contained herein are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
e. Notices. All Notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed
duly given if (and then five (5) business days after) it is sent
by air mail, postage prepaid, and address to the intended recipient
as set forth below:
Lotus Pacific, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Arescom Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the addresses
set forth above using any other means (including personal delivery,
recognized overnight or international courier, messenger service,
confirmed telecopy, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the
intended recipient or receipt is confirmed by a third party or by
electronic means. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are
to be delivered by giving the other Party notice in the manner
herein set forth.
f. Applicable Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Delaware,
U.S.A., without giving effect to any choice or conflict of law
provision or rule (whether of the State of Delaware or any other
state or jurisdiction) that would cause the application of the laws
of any state or jurisdiction other than the State of Delaware.
g. Amendments and Waivers. No amendments of any provision of this
Agreement shall be valid unless the same shall be in writing and
signed by the Parties. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenants hereunder,
whether intentional or not, shall be deemed to extend to any prior
or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder to affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.
h. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any state or
jurisdiction shall not affect the validity or enforceability of
the remaining terms and provision hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other state or jurisdiction.
i. Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.
j. Construction: Official Version. The Parties have participated
jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the
Parties and no presumption or burden of proof shall arise favoring
or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement.
k. Specific Performance. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly,
each of the Parties agrees that the other Party shall be entitled
to an injunction or injunctions to prevent breach of the provisions
of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any
court of the U.S.A. or any state thereof having jurisdiction over
the Parties and the matter, in addition to any other remedy to
which they may be entitled, at law or equity.
IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement
on the date first above written.
LOTUS PACIFIC, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
________________________________
▇▇▇▇▇ ▇▇▇
Title: Chairman of Lotus Pacific, Inc.
ARESCOM INC
Representative of Shareholders of Arescom Inc.
By: /s/ ▇▇▇ ▇▇
______________________________
▇▇▇ ▇▇
Title: President of Arescom Inc. and
Representative of Shareholders of Arescom Inc.