SHARE EXCHANGE AGREEMENT
DATED AS AT JULY 28, 1998
AMONG:
FIRST GENEVA INVESTMENTS, INC.
AND:
ALLWIN NEWTECH LTD.
AND:
THE SHAREHOLDERS OF ALLWIN NEWTECH LTD.
Table of Contents
Section Title Page
1. PURCHASE AND SALE........................................................................................2
2. VENDORS'REPRESENTATIONS AND WARRANTIES...................................................................2
3. VENDORS'ACKNOWLEDGEMENTS.................................................................................7
4. PURCHASER'S REPRESENTATIONS AND WARRANTIES...............................................................9
5. CONDITIONS PRECEDENT....................................................................................14
6. COVENANTS OF THE PURCHASER AND THE VENDORS..............................................................16
7. CLOSING.................................................................................................18
8. PROPRIETARY INFORMATION.................................................................................18
9. INDEMNIFICATION.........................................................................................19
10. GENERAL.................................................................................................20
Schedules
The following are Schedules to this Agreement, and are incorporated herein by
reference:
SCHEDULE "A" List of Shareholders of Allwin
SCHEDULE "B" Memorandum and Articles of Association of Allwin
SCHEDULE "C" List of Allwin's Material Contracts
SCHEDULE "D" Allwin's Financial Statements
SCHEDULE "E" List of Powers of Attorney
SCHEDULE "F" First Geneva's Financial Statements
SCHEDULE "G" List of 10% Holders of First Geneva
THIS SHARE EXCHANGE AGREEMENT made and dated as of the 29th day of July, 1998,
AMONG:
FIRST GENEVA INVESTMENTS, INC., a company incorporated
pursuant to the laws of the State of Florida and having an
office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇.▇.▇.
▇▇▇▇▇
(the "Purchaser" or "First Geneva")
AND:
ALLWIN NEWTECH LIMITED, a company incorporated pursuant to
the laws of the British Virgin Islands having its registered
office at Arawak ▇▇▇▇▇▇▇▇, P.O. Box 173, Road Town, Tortola,
British Virgin Islands
(the "Company" or "Allwin")
AND:
THE SHAREHOLDERS OF THE COMPANY SET OUT IN SCHEDULE "A"
ATTACHED HERETO
(collectively, the "Vendors")
WITNESSES THAT WHEREAS:
A. The Vendors are the legal and beneficial owners of all of the issued
and outstanding shares in the capital of the Company (collectively, the
"Allwin Shares") and all of the issued and outstanding warrants to
purchase common shares in the capital of the Company (collectively, the
"Allwin Warrants");
B. The Purchaser has agreed to acquire from the Vendors, and the Vendors
have agreed to transfer to the Purchaser, the Allwin Shares and Allwin
Warrants in accordance with the terms and conditions of this Agreement;
NOW THEREFORE in consideration of the recitals, the following
agreements and the payment of $1.00 made by each party to the other,
the receipt and sufficiency of which is acknowledged by each party, the
parties agree on the following terms:
1. PURCHASE AND SALE
1.1 On the Closing Date (as defined in section 7.1 of this Agreement),
subject to the terms and conditions hereof, the Purchaser will purchase
from the Vendors and the Vendors will assign, sell and transfer to the
Purchaser the Allwin Shares and the Allwin Warrants for and in
consideration of the aggregate sum of US$3,500,000 (the "Purchase
Price").
1.2 The Purchaser will, on the Closing Date, satisfy the Purchase Price by
issuing to the Vendors, pro rata in accordance with their respective
security holdings in the Company as set out in Schedule "A", 7,000,000
common shares of the Purchaser (the "First Geneva Shares") and common
share purchase warrants (the "First Geneva Warrants") entitling the
holders thereof to purchase an aggregate of 2,000,000 common shares of
the Purchaser, on substantially the same terms as the Allwin Warrants.
1.3 In no event shall the Purchaser be required to purchase less than
90% of the Allwin Shares and Allwin Warrants.
2. VENDORS' REPRESENTATIONS AND WARRANTIES
2.1 In order to induce the Purchaser to enter into and consummate this
Agreement, Allwin represents and warrants to the Purchaser, and
acknowledges that the Purchaser is relying on such representations and
warranties in entering into this Agreement and completing the
transactions contemplated hereby, that:
(a) the Company was duly incorporated under the laws of the British Virgin
Islands and is validly subsisting and in good standing thereunder;
(b) the Memorandum and Articles of Association of the Company are as set
forth in Schedule "B" attached hereto;
(c) the authorized capital of the Company consists of 50,000,000 common
shares without par value, of which 7,000,000 common shares are, or at
the Time of Closing will be, duly and validly issued and outstanding,
as fully paid, to the parties set out in Schedule "A" attached hereto.
(d) except as provided for in the agreement set out in Schedule "C", the
Company does not currently own, directly or indirectly, any shares or
interests in any other company or firm;
(e) the Vendors are the legal and beneficial owners of the Allwin Shares
and have the right to transfer legal and beneficial title and
ownership of the Allwin Shares to the Purchaser, free of all liens,
claims, charges, restrictions on transfer, voting agreements, voting
trusts, escrow conditions and encumbrances whatsoever;
(f) the Vendors have due and sufficient right and authority to enter into
this Agreement on the terms and conditions herein set out and all
necessary action has been taken by or on the part of the Vendors to
authorize the execution, delivery and performance of this Agreement
and all other documents contemplated hereby;
(g) this Agreement constitutes a valid and legally binding contract,
enforceable against the Vendors in accordance with its terms, subject
to equitable remedies and the rights of creditors generally;
(h) the Allwin Shares are not subject to or affected by any actual, or, to
the best of Allwin's knowledge after having made due inquiry, pending
or threatened investigation or proceeding by or before, any securities
regulatory authority, court, administrative agency or other tribunal;
(i) to the best of Allwin's knowledge, the Allwin Shares were originally
issued in full compliance with all applicable securities laws;
(j) Allwin does not have any information or knowledge of any material
facts pertaining to the Company which, if known to the Purchaser,
might reasonably be expected to deter the Purchaser from completing
the transactions contemplated hereby;
(k) other than the Allwin Shares, no person, firm or corporation has any
right, agreement or option, whether oral or in writing, or a right
capable of becoming a right, agreement or option:
(i) for the purchase of the Allwin Shares,
(ii) for the purchase, subscription or issuance of any of the unissued
shares in the capital of the Company, or
(iii)to require Allwin to purchase, redeem or otherwise acquire the
Allwin Shares,
except as set out in Schedule "A" attached hereto;
(l) the Company has the corporate capacity and power to carry on the
business presently carried on by it;
(m) the Company owns, holds, possesses or lawfully uses in the operation
of its business all material permits, approvals, waivers, licences or
similar authorizations ("Authorizations") of any governmental entity
having jurisdiction which are necessary for it to conduct its business
as presently conducted in compliance with all applicable laws. All
such Authorizations are valid, subsisting and in good standing, the
Company is not in material default or breach thereof and, to the best
of Allwin's knowledge, no proceeding is pending or threatened to
revoke or limit any Authorization. All Authorizations are renewable by
their terms or in the ordinary course of business without the need to
comply with any special rules or procedures, agree to any materially
different terms or conditions or pay any amounts other than routine
filing fees. None of the Vendors nor any affiliate thereof owns or has
any proprietary, financial or other interest (direct or indirect) in
any such Authorization;
(n) the Company is not in material breach of, and the business of the
Company is and has been conducted in material compliance with, all
applicable statutes, ordinances, bylaws, regulations, decrees or court
orders to which it is subject;
(o) the unaudited balance sheet of the Company as at July 28, 1998 and the
unaudited statement of profit and loss for the period from January 1,
1998 to July 28, 1998 (the "Company's Financial Statements"), which
are attached hereto as Schedule "D", are true and correct in every
material respect and present fairly the assets, liabilities and the
financial position of the Company as at July 28, 1998 in accordance
with United States' generally accepted accounting principles, on a
basis consistently applied;
(p) the Company has not guaranteed, or agreed to guarantee, any material
debt, liability or other obligation of any person, firm or
corporation;
(q) the Company is not indebted to the Vendors or to any affiliate of the
Company, or associate of the Vendors, other than as set forth in the
Company's Financial Statements;
(r) neither the Vendors nor any directors, officers, shareholders or
consultants of the Company are now indebted or under obligation to the
Company on any account whatsoever;
(s) no dividends or other distribution of any kind on any shares in the
capital of the Company and no distribution of assets in any form or
manner have been made, declared or authorized nor will any be
declared, paid or authorized until after the Closing Date;
(t) there are no material actions, suits, judgements, investigations or
proceedings outstanding or pending, or, to the best of the Company's'
knowledge, threatened against or affecting the Company at law or in
equity or before or by any federal, provincial, state, municipal,
county or regional government or governmental authority, domestic or
foreign, including any department, commission, bureau, board,
administrative agency or regulatory body of any of the foregoing
(individually, a "Governmental Authority");
(u) no authorization, approval, order, license, permit, consent,
certificate or registration of any Governmental Authority, court or
arbitrator, or any other party, and no registration, declaration or
filing by the Company or the Vendors with any Governmental Authority,
court or arbitrator, or any other party, is required in order for the
Company and the Vendors to execute and deliver this Agreement and all
other documents and instruments to be delivered by the Company and the
Vendors pursuant hereto;
(v) no material action, suit, judgement, investigation, inquiry,
assessment, reassessment, litigation, determination or administrative
or other proceeding or arbitration before or of any court, arbitrator
or Governmental Authority or dispute with any Governmental Authority
is in process or, to the best of the Company's knowledge, threatened,
against or relating to the business of the Company and, to the best of
the Company's' knowledge, no state of facts exists which could
constitute the basis therefor;
(w) there are no violations or, to the best of the Company's knowledge,
potential violations, of any material patents, trademarks, trade
names, copyrights or trade secrets or other proprietary rights of any
person which has been or may be caused by the conduct of the Company's
business in the manner in which it has heretofore been conducted;
(x) to the best of the Company's knowledge, the business of the Company
complies in all material respects with all applicable laws,
judgements, decrees, orders, injunctions, rules, statutes and
regulations of all courts, arbitrators or Governmental Authority,
including all environmental, health and safety statutes and
regulations;
(y) the business of the Company is not subject to any judicial or
administrative proceeding alleging the violation of any applicable
environmental, health or safety law, judgement, decree, order,
injunction, rule, statute or regulation;
(z) to the best of the Company's knowledge, the conduct of the business of
the Company does not infringe the rights or interests in the patents,
trade-marks, trade names, trade secrets, industrial designs,
copyrights, or any other industrial or intellectual property whether
domestic or foreign, of any other person;
(aa) all material contracts entered into by the Company (including without
limitation employment agreements, change of control agreements,
collective agreements, finders' fee agreements, agreements to pay
bonuses, agreements in respect of gifts or donations, agreements
regarding dividends or distributions or containing restrictions on
dividends or distributions, agreements with respect to borrowings,
agreements with respect to loans or advances, agreements with respect
to investments, guarantees or other financial support for the
obligations of others, management or consulting agreements, leases of
real property, leases of personal property, non-competition or
non-solicitation agreements, confidentiality agreements, and licensing
or royalty agreements relating to intellectual property) are listed in
Schedule "D" attached hereto and are in good standing and have not
been assigned or encumbered, and neither the Company nor any other
party thereto is in default thereunder in any material respect;
(bb) the Company has no employees and has not yet commenced business
operations;
(cc) neither this Agreement nor the performance of the transactions
contemplated hereby will conflict with or result in a violation of the
Memorandum or Articles of Association of the Company, any resolutions
of its directors or shareholders or of any agreement to which any of
the Vendors or the Company is a party or any law, rule or regulation,
judgement or order to which any of them are subject and will not give
any person any right to terminate or cancel any material agreement or
any right enjoyed by the Company or result in the creation or
imposition of any material lien, encumbrance or restriction of any
nature whatsoever in favour of a third party upon or against the
Allwin Shares or the assets of the Company;
(dd) neither the Company nor the Vendors have retained, employed or
introduced any broker, finder or other person who would be entitled to
a brokerage commission or finder's fee arising out of the transactions
contemplated hereby;
(ee) there are no material liabilities of the Company of any kind
whatsoever, contingent or otherwise, existing on the date hereof in
respect of which the Company has knowledge and which the Company or
the Purchaser may be liable on or after the completion of the
transactions contemplated hereby;
(ff) all material transactions of the Company have been properly recorded
in the books and records of the Company, and the minute books of the
Company contain, or at the Time of Closing will contain, records of
all material contracts and meetings and proceedings of shareholders
and directors thereof;
(gg) the directors and officers of the Company are as follows:
Name Office
-------------- ----------------------
Lonydin Liu President and Director
▇▇▇ ▇▇▇ Director
▇▇▇▇▇▇▇ ▇▇▇▇▇ Director
(hh) the Company owns or possesses all assets, rights and property
necessary to the conduct of its business after the Closing
substantially in the same manner as it was conducted prior to the
Closing, and none of the Vendors has any claim in respect thereof.
2.2 The representations and warranties of the Company contained in this
Agreement or any certificates or documents delivered pursuant to the
provisions hereof or in connection with the transactions contemplated
hereby will be true at and as of the Time of Closing as though such
representations and warranties were made at and as of such time.
Notwithstanding any investigations or inquiries made by the Purchaser prior
to the Closing or the waiver of any condition by the Purchaser, the
representations and warranties of the Company will survive the Closing Date
and, notwithstanding the Closing, will continue in full force and effect
for one year from the Closing, except those relating to tax matters which
will survive until the expiration of any statutory limitation period and
those relating to fraud or intentional misrepresentation which will survive
indefinitely.
3. VENDORS' ACKNOWLEDGEMENTS
3.1 In order to induce the Purchaser to enter into and consummate this
Agreement, the Vendors acknowledge, knowing that the Purchaser is
relying on such acknowledgements in entering into this Agreement and
completing the transactions contemplated hereby, that:
(a) the Vendors are resident in the jurisdictions set out under their
respective names in Schedule "A" to this Agreement;
(b) the First Geneva Shares, First Geneva Warrants and common shares
issuable upon exercise of the First Geneva Warrants (collective, the
"First Geneva Securities") are subject to restrictions on resale and
may not be resold by the Vendors until all applicable hold periods
have elapsed, except in compliance with all applicable securities laws
and stock exchange requirements;
(c) no prospectus will be filed by the Purchaser with any securities
regulatory authority in connection with the distribution of the First
Geneva Securities and, as a result:
(i) the Vendors are restricted from using most of the civil remedies
available under applicable securities laws;
(ii) the Vendors may not receive information that would otherwise be
required to be provided to them under applicable securities laws;
and
(iii)the Purchaser is relieved from certain obligations that would
otherwise apply under applicable securities laws;
(d) First Geneva has no current intention of becoming a reporting issuer
under applicable securities laws in any province of Canada and,
accordingly, any Vendor resident in those jurisdictions will be
required to hold the First Geneva Securities for an indefinite period
of time;
(e) this Agreement is made with the Vendors in reliance upon the Vendors'
representations to the Purchaser, which by the Vendors' execution of
this Agreement, the Vendors hereby confirm that the First Geneva
Shares to be purchased by Vendors will be acquired for investment
purposes for the Vendors' own accounts and not with a view to the
resale or distribution of any part thereof in violation of the
applicable United States federal and state securities laws;
(f) the Vendors represent that they are experienced in evaluating and
investing in securities of companies in the development stage and
acknowledge that they are able to fend for themselves, can bear the
economic risk of the investment, and have such knowledge and
experience in financial and business matters that they are capable of
evaluating the merits and risks of the investment in the First Geneva
Shares and First Geneva Warrants;
(g) the Vendors represent that they have not been organized solely for the
purpose of acquiring the First Geneva Shares and First Geneva
Warrants;
(h) each of the Vendors represents that:
(i) if a resident of the United States, it is an "accredited
investor" as that term is defined in SEC Rule 501(a) of
Regulation D; or
(ii) if not a resident of the United States, (1) that is not a U.S.
Person as defined in Rule 902(o) of Regulation S, that it is not
acquiring the First Geneva Shares and First Geneva Warrants for
the account or benefit of any U.S. person, and that the exchange
is occurring in an "Offshore Transaction" as defined in Rule
902(i) of Regulation S; (2) that it agrees to resell the First
Geneva Securities only in accordance with the provisions of
Regulation S; and (3) that it understands that Purchaser has the
right to refuse to register any transfer of the First Geneva
Securities not made in accordance with the provisions of
Regulation S;
(i) the Vendors understand that the First Geneva Securities have not
been registered under the Securities Act of 1933 ("Securities
Act") on the grounds that the transactions contemplated by this
Agreement and the issuance of the securities hereunder is exempt
from registration under the Securities Act pursuant to Regulation
D and S promulgated thereunder, and that the Purchaser's reliance
on such exemption is predicated on the Vendors' representations
set forth herein;
(j) the Vendors understand that the First Geneva Securities issued,
or to be issued, hereunder may not be sold, transferred, or
otherwise disposed of without registration under the Securities
Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the First Geneva
Security, or an available exemption from registration under the
Securities Act, the First Geneva Securities must be held
indefinitely. In particular, the Vendors are aware that the First
Geneva Securities may not be sold pursuant to Securities Act Rule
144 unless all of the conditions of that Rule are met;
(k) the Vendors understand, to the extent applicable, that each
certificate or other document evidencing the First Geneva
Securities shall be endorsed with a legend disclosing that the
common stock and warrants have not been registered under the
Securities Act and may not be sold, transferred, assigned,
pledged or hypothecated absent registration under the Securities
Act or an exemption therefrom;
(l) the Vendors understand that the First Geneva Securities shall not
be transferable unless the transfer is registered with the
Securities and Exchange Commission or unless, in the opinion of
First Geneva's counsel, that there is an exemption available from
registration. The Vendors will cause any successor or proposed
transferee of their First Geneva Securities to agree to take and
hold such shares or common stock and warrants subject to such
restrictions. The Vendors acknowledge the restrictions upon their
right to transfer the First Geneva Securities.
(m) The Vendors understand that each certificate representing the
First Geneva Securities shall (unless otherwise permitted or
unless the securities evidenced by such certificate shall have
been registered under the Securities Act) be stamped or otherwise
imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
4. PURCHASER'S REPRESENTATIONS AND WARRANTIES
4.1 In order to induce the Vendors to enter into and consummate this Agreement,
the Purchaser represents and warrants to the Vendors, and acknowledges that
the Vendors are relying on such representations and warranties in entering
into this Agreement and completing the transactions contemplated hereby,
that:
(a) the Purchaser is duly incorporated pursuant to the laws of the State
of Florida and is in good standing with respect to the filing of
annual reports thereunder;
(b) the authorized capital of the Purchaser consists of 50,000,000 common
shares with a par value of US$0.001, of which 1,000,000 common shares
are issued and outstanding as fully paid and non-assessable;
(c) the Purchaser will issue the First Geneva Shares and First Geneva
Warrants against payment for same pursuant to section 1.2 of this
Agreement, free of all liens, claims, charges, restrictions on
transfer, voting agreements, voting trusts, escrow conditions and
encumbrances whatsoever, other than statutory hold periods or other
restrictions imposed by applicable securities laws or securities
regulatory bodies;
(d) the Purchaser has due and sufficient right and authority to enter into
this Agreement on the terms and conditions herein set out and all
necessary corporate action has been taken by or on the part of the
Purchaser to authorize the execution and delivery of this Agreement
and all other documents contemplated hereby;
(e) this Agreement constitutes a valid and legally binding contract,
enforceable against the Purchaser in accordance with its terms,
subject to equitable remedies and the rights of creditors generally;
(f) other than the First Geneva Securities, no person, firm or corporation
has any right, agreement or option, whether oral or in writing, or a
right capable of becoming a right, agreement or option:
(i) for the purchase of the First Geneva Securities,
(ii) for the purchase, subscription or issuance of any of the unissued
shares in the capital of the Purchaser, or
(iii)to require the Purchaser to purchase, redeem or otherwise
acquire the First Geneva Securities,
(g) the audited financial statements of the Purchaser as at March 31,
1998, which are attached hereto as Schedule "G", are true and correct
in every material respect and present fairly the assets, liabilities
and the financial position of the Purchaser as at March 31, 1998 and
the sales, earnings and the results of its operations for the periods
then ended in accordance with United States' generally accepted
accounting principles, on a basis consistently applied;
(h) copies of all documents filed with the United States Securities and
Exchange Commission (the "Public Record") since March 31, 1998 have,
or will have, prior to the Closing, been provided to the Vendors'
counsel;
(i) except as set out in the Public Record, since March 31, 1998:
(i) there has not been any material adverse change in the financial
position or condition of the Purchaser or any damage, loss or
other change in circumstances materially affecting the business
of the Purchaser or its right or capacity to carry on business,
(ii) the Purchaser has not waived or surrendered any right of material
value,
(iii)the Purchaser has not discharged or satisfied or paid any
material lien or encumbrance or obligation or liability other
than current liabilities in the ordinary course of business, and
(iv) the business of the Purchaser has been carried on in the ordinary
course;
(j) there are no material liabilities, contingent or otherwise, of the
Purchaser, of which the Purchaser has knowledge, not disclosed in the
financial statements of the Purchaser as at March 31, 1998 or the
Public Record, except those non-material liabilities incurred in the
ordinary course of business of the Purchaser since March 31, 1998 and
the Purchaser has not guaranteed, or agreed to guarantee, any material
debt, liability or other obligation of any person, firm or
corporation;
(k) no dividends or other distribution on any shares in the capital of the
Purchaser has been made, declared or authorized since its
incorporation nor will any be declared, paid or authorized after the
date hereof and up to the Closing Date;
(l) except as set out in the Public Record, no payments of any kind have
been made or authorized by or on behalf of the Purchaser to or on
behalf of officers, directors, shareholders or employees of the
Purchaser or under any management agreements with the Purchaser, other
than in the ordinary course of business;
(m) the Purchaser has not entered into any material contracts (including
without limitation employment agreements, change of control
agreements, collective agreements, finders' fee agreements, agreements
to pay bonuses, agreements in respect of gifts or donations,
agreements regarding dividends or distributions or containing
restrictions on dividends or distributions, agreements with respect to
borrowings, agreements with respect to loans or advances, agreements
with respect to investments, guarantees or other financial support for
the obligations of others, management or consulting agreements, leases
of real property, leases of personal property, non-competition or
non-solicitation agreements, confidentiality agreements, and licensing
or royalty agreements relating to intellectual property);
(n) except as set out in the Public Record, there are no material actions,
suits, judgements, investigations or proceedings outstanding or
pending or, to the best of the Purchaser's knowledge, threatened
against or affecting the Purchaser at law or in equity or before or by
any federal, provincial, state, municipal or other governmental
department, commission, board, bureau, agency, court or tribunal;
(o) there are no pensions, profit sharing, group insurance or similar
plans or other deferred compensation plans affecting the Purchaser;
(p) except as set out in the Public Record, no shareholders, directors,
officers, employees or consultants of the Purchaser are now indebted
or under obligation to the Purchaser on any account whatsoever;
(q) except as set out in the Public Record, the Purchaser is not indebted
to any of its shareholders, directors, officers, employees or
consultants, other than in the ordinary course of business;
(r) the performance of this Agreement will not be in violation of the
Articles or By-laws of the Purchaser or of any agreement to which the
Purchaser is a party and will not give any person any right to
terminate or cancel any agreement or any right enjoyed by the
Purchaser and will not result in the creation or imposition of any
lien, encumbrance or restriction of any nature whatsoever in favour of
a third party upon or against the assets of the Purchaser;
(s) the Purchaser has not retained, employed or introduced any broker,
finder or other person who would be entitled to a brokerage commission
or finder's fee arising out of the transactions contemplated hereby;
(t) there are no liabilities of the Purchaser of any kind whatsoever,
contingent or otherwise, existing on the date hereof in respect of
which the Purchaser may be liable on or after the completion of the
transactions contemplated hereby other than:
(i) liabilities disclosed or referred to in this Agreement, and
(ii) liabilities incurred in the ordinary course of business, none of
which are materially adverse to the business, operations, affairs
or financial condition of the Purchaser.
(u) the Purchaser is currently listed on the NASD OTC Bulletin Board under
the trading symbol FGAI;
(v) the Purchaser is not subject to any cease trade or any other similar
order of any securities regulatory authority, and, to the knowledge of
the Purchaser, no investigation or other similar proceeding is
currently in progress or pending before any securities regulatory
authority;
(w) the Purchaser is current in the filing of all public disclosure
documents required to be filed by the Purchaser under applicable
securities and other legislation and all such filings are complete and
correct and do not contain any misrepresentations and the Purchaser is
not in default of any material requirement of the securities laws of
any jurisdiction;
(x) as of the date hereof, to the best of its knowledge, Schedule "H"
lists all of the holders of 10% or more of the total number of
outstanding shares in the capital of the Purchaser;
(y) to the best of the Purchaser's knowledge, all currently issued and
outstanding common shares of the Purchaser were originally issued in
full compliance with all applicable securities laws;
(z) the Purchaser does not have any information or knowledge of any
material facts pertaining to it which, if known to the Vendors, might
reasonably be expected to deter the Vendors from completing the
transactions contemplated hereby;
(aa) no authorization, approval, order, license, permit, consent,
certificate or registration of any Governmental Authority, court or
arbitrator, or any other party, and no registration, declaration or
filing by the Purchaser with any Governmental Authority, court or
arbitrator, or any other party, is required in order for the Purchaser
to execute and deliver this Agreement and all other documents and
instruments to be delivered by it pursuant hereto;
(bb) no action, suit, judgement, investigation, inquiry, assessment,
reassessment, litigation, determination or administrative or other
proceeding or arbitration before or of any court, arbitrator or
Governmental Authority or dispute with any Governmental Authority is
in process or, to the best of the Purchaser's knowledge, threatened,
against or relating to the business of the Purchaser or any of its
assets or properties and, to the best of the Purchaser's knowledge, no
state of facts exists which could constitute the basis therefor;
(cc) to the best of the Purchaser's knowledge, the business of the
Purchaser complies in all material respects with all applicable laws,
judgements, decrees, orders, injunctions, rules, statutes and
regulations of all courts, arbitrators or Governmental Authority,
including all environmental, health and safety statutes and
regulations;
(dd) the Purchaser does not have any contracts, agreements, pension plans,
benefit plans, profit sharing plans, bonus plans, undertakings or
arrangements, whether oral, written, or implied, with employees,
lessees, licensees, managers, accountants, suppliers, agents,
distributors, officers, lawyers, or others which cannot be terminated
on not more than one month's notice and for an amount not in excess of
$1,000;
(ee) the Purchaser has complied with all laws, rules, regulations and
orders applicable to it relating to employment, including those
relating to wages, hours, collective bargaining, occupational health
and safety, workers' hazardous materials, employment standards, pay
equity and workers' compensation;
(ff) all requisite tax returns and reports of the Purchaser have been
prepared and filed and are all substantially true, correct and
complete, the Purchaser has been assessed for applicable income tax
for all years up to and including the fiscal year of the Purchaser
ended December 31, 1998, all taxes and other government charges have
been paid to date or, if not yet due, have been accrued and are
reflected in the Purchaser's Financial Statements, and, to the best of
the Purchaser's knowledge, there are no contingent tax liabilities;
(gg) the Purchaser has made adequate provision for all tax payable for the
current period for which returns or records are not yet required to be
filed, and the Purchaser has not made any agreements or other
arrangements providing for, or received any waivers allowing, an
extension of time within which any tax return or record must be filed
or any tax, tax deficiency or other charge to any government agency
must be paid;
(hh) there are no actions, audits, assessments, reassessments, suits,
proceedings, investigations or claims now pending or, to the best of
the Purchaser's knowledge, threatened against the Purchaser in respect
of taxes or governmental charges asserted by any Governmental
Authority, nor has the Purchaser been notified that any tax returns
previously filed will be subject to reassessment;
(ii) all material transactions of the Purchaser have been properly recorded
in the books and records of the Purchaser, and the minute books of the
Purchaser contain records of all material contracts and meetings and
proceedings of shareholders and directors thereof;
(jj) the Purchaser owns, holds, possesses or lawfully uses in the operation
of its business all Authorizations of any governmental entity having
jurisdiction which are necessary for it to conduct its business as
presently conducted in compliance with all applicable laws. All such
Authorizations are valid, subsisting and in good standing, the
Purchaser is not in material default or breach thereof and, to the
best of the Purchaser's knowledge, no proceeding is pending or
threatened to revoke or limit any Authorization. All Authorizations
are renewable by their terms or in the ordinary course of business
without the need to comply with any special rules or procedures, agree
to any materially different terms or conditions or pay any amounts
other than routine filing fees. Neither the Purchaser nor any
affiliate thereof owns or has any proprietary, financial or other
interest (direct or indirect) in any such Authorization; and
(kk) the Purchaser has not granted a power of attorney to any person.
4.2 The representations and warranties of the Purchaser contained in this
Agreement or any certificates or documents delivered pursuant to the
provisions hereof or in connection with the transactions contemplated
hereby will be true at and as of the Time of Closing as though such
representations and warranties were made at and as of such time.
Notwithstanding any investigations or inquiries made by the Purchaser prior
to the Closing or the waiver of any condition by the Purchaser, the
representations and warranties of the Purchaser will survive the Closing
Date and, notwithstanding the Closing, will continue in full force and
effect for one year from the Closing, except those relating to tax matters
which will survive until the expiration of any statutory limitation period
and those relating to fraud or intentional misrepresentation which will
survive indefinitely. 5. CONDITIONS PRECEDENT
5.1 All obligations of the Vendors and the Purchaser under this Agreement are
subject to:
(a) the receipt of all necessary consents, approvals, orders and
authorizations from any regulatory or Governmental Authority or stock
exchange having jurisdiction over the transactions contemplated
hereby; and
(b) there being no injunction or restraining order issued preventing, and
no pending or threatened claim, action, litigation or proceeding,
judicial or administrative, or investigation against, the Vendors, the
Purchaser or the Company by any regulatory or Governmental Authority
or stock exchange for the purpose of enjoining or preventing the
consummation of the transactions contemplated hereby or otherwise
claiming that this Agreement or the consummation of this Agreement is
improper or would give rise to proceedings under any statute or rule
of law, which would have a material adverse impact on the business of
the Company or the Purchaser, as the case may be.
5.2 All obligations of the Vendors under this Agreement are further subject to
the fulfilment, at or before the Time of Closing, of each of the following
conditions:
(a) the Vendors carrying out a due diligence review of the business of the
Purchaser to their satisfaction;
(b) the representations and warranties of the Purchaser being true and
correct in all material respects as of the Closing Date;
(c) the Purchaser having complied in all material respects with all
covenants to be performed by it hereunder;
(d) the Purchaser delivering to the Vendors at the Time of Closing:
(i) a certified copy of the resolution of the directors of the
Purchaser approving this Agreement and the transactions
contemplated hereby;
(ii) a certified copy of the resolution of the directors of the
Purchaser authorizing the issuance of the First Geneva
Securities;
(iii)certificates representing the First Geneva Shares and First
Geneva Warrants registered in the names of the Vendors in
accordance with section 1.2 of this Agreement;
(iv) a certificate of the Purchaser certifying, as of the Date of
Closing, that:
(A) the representations and warranties of the Purchaser set out
in this Agreement were true and correct as of the date of
this Agreement and are true and correct in all material
respects as of the Date of Closing as if made by the
Purchaser on the Closing Date,
(B) the Purchaser has complied in all mater ial respects with
all covenants to be performed by it hereunder;
(v) an opinion dated as of the Closing Date from counsel for the
Purchaser addressed to the Vendors in a form acceptable to the
Company, acting reasonably.
5.3 The conditions set out in section 5.2 of this Agreement are for the
exclusive benefit of the Vendors and the Vendors may waive the conditions
in whole or in part by delivering to the Purchaser at or before the Time of
Closing a written waiver to that effect stated to be made pursuant to this
subsection and executed by each of the Vendors.
5.4 All obligations of the Purchaser under this Agreement are further subject
to the fulfilment, at or before the Time of Closing, of each of the
following conditions:
(a) the Purchaser carrying out a due diligence review of the business of
the Company to its satisfaction;
(b) the representations and warranties of the Company and the Vendors
being true and correct in all material respects as of the Closing
Date;
(c) the Company and the Vendors having complied in all material respects
with all covenants to be performed by them hereunder;
(d) the Vendors delivering to the Purchaser at the Time of Closing:
(i) a certified copy of the resolution of the directors of the
Company consenting to the transfer of the Allwin Shares from the
Vendors to the Purchaser and authorizing the issuance of a new
share certificate in the name of the Purchaser,
(ii) certificates representing the Allwin Shares registered in the
names of the Vendors, duly endorsed for transfer to the Purchaser
or transfer documents transferring the Allwin Shares to the
Purchaser,
(iii)a certificate representing the Allwin Shares registered in the
name of the Purchaser,
(iv) a certificate of the Vendors certifying, as of the Date of
Closing, that:
(A) the representations and warranties of the Company and the
Vendors set out in this Agreement were true and correct as
of the date of this Agreement and are true and correct in
all material respects as of the Date of Closing as if made
by the Company or the Vendors, as the case may be, on the
Closing Date,
(B) the Company and the Vendors have complied in all material
respects with all covenants to be performed by them
hereunder;
(v) an opinion dated as of the Closing Date from counsel for the
Vendors addressed to the Purchaser in a form acceptable to the
Purchaser, acting reasonably; and
(vi) such other certificates, instruments and other documents as the
Purchaser may reasonably request.
5.5 The conditions set out in section 5.4 of this Agreement are for the
exclusive benefit of the Purchaser and the Purchaser may waive the
conditions in whole or in part by delivering to the Vendors, at or before
the Time of Closing, a written waiver to that effect stated to be made
pursuant to this subsection and executed by the Purchaser.
6. COVENANTS OF THE PURCHASER AND THE VENDORS
6.1 The Purchaser covenants with the Vendors that up to and including the
Closing or the termination of this Agreement:
(a) it will provide the Vendors with full and complete access to its
books, records, financial statements, and other documents, articles of
incorporation, by-laws, minutes of its board of directors and its
committees, investment agreements, material contracts, as well as such
other documents and materials as the Vendors or their legal counsel
may deem reasonable and necessary to conduct an adequate due diligence
investigation of the Purchaser, its operations and financial condition
prior to the Closing;
(b) it will use all reasonable efforts to obtain all consents, approvals
or waivers that may be necessary or desirable in connection with the
transactions contemplated hereby, and execute and deliver all such
further documents and assurances and take such steps or measures as
may be reasonably appropriate to enable it to be able to satisfy its
obligations hereunder and put itself in a position where the
transactions contemplated hereby can be closed on or about August 15,
1998; and
(c) up to and including the Closing, the Purchaser will not, without the
written consent of the Vendors:
(i) declare or pay any dividend, or make any distribution of its
assets to its shareholders, or purchase or retire any of its
shares,
(ii) allot, issue, grant or enter into any agreement for the allotment
or issuance of any shares or securities, other rights to acquire
shares or securities, securities convertible into, exchangeable
for, or which otherwise carry the right to acquire, directly or
indirectly, any shares or securities in its capital, except as
contemplated by this Agreement or referred to herein;
(iii)sell all or any part of its assets, or agree to do or perform
any act or enter into any transaction or negotiation which could
reasonably be expected to interfere with or be contemplated by
this Agreement, or which would render inaccurate any of the
representations and warranties set out in section 4 of this
Agreement, or
(iv) merge, amalgamate or consolidate into or with any entity, or
enter into any other corporate reorganization.
6.2 The Company covenants with the Purchaser that up to and including the
Closing or the termination of this Agreement:
(a) it will provide the Purchaser with full and complete access to the
Company's books, records, financial statements, and other documents,
articles of incorporation, by-laws, minutes of its board of directors
and its committees, investment agreements, material contracts, as well
as such other documents and materials as the Purchaser or its legal
counsel may deem reasonable and necessary to conduct an adequate due
diligence investigation of the Company, its operations and financial
condition prior to the Closing;
(b) it will use all reasonable efforts to obtain all consents, approvals
or waivers that may be necessary or desirable in connection with the
transactions contemplated hereby, and execute and deliver all such
further documents and assurances and take such steps or measures as
may be reasonably appropriate to enable them to be able to satisfy
their obligations hereunder and put themselves in a position where the
transactions contemplated hereby can be closed by on or about August
15, 1998; and
(c) it will carry on its businesses in the usual and ordinary course in
compliance with all applicable laws and will not, without the prior
written consent of the Purchaser:
(i) declare or pay any dividend, or make any distribution of its
assets to its shareholders, or purchase or retire any of its
shares;
(ii) allot, issue, grant or enter into any agreement for the allotment
or issuance of any shares or securities, other rights to acquire
shares or securities, or securities convertible into exchangeable
for, or which otherwise carry the right to acquire, directly or
indirectly, any shares or securities in its capital;
(iii)sell or otherwise dispose of all or any part of its assets or
agree to do or perform any act or enter into any transaction or
negotiation which could reasonably be expected to interfere with
this Agreement, or which would render inaccurate any of the
representations and warranties set out in section 2 of this
Agreement;
(iv) merge, amalgamate or consolidate into or with any entity, or
enter into any other corporate reorganization;
(v) increase its indebtedness for borrowed money other than trade
obligations entered into in the ordinary course of business; or
(vi) enter into any arrangements or transactions with any director,
former director, officer, shareholder or employee of the Company,
or any other person that is not dealing at "arm's length" with
the Company (as such term is defined in the Income Tax Act
(Canada);
7. CLOSING
7.1 The purchase and sale of the Allwin Shares and Allwin Warrants and the
issuance of the First Geneva Shares and First Geneva Warrants contemplated
by this Agreement will be closed on the third business day following the
satisfaction or waiver, as applicable, of the conditions precedent set out
in section 5 of this Agreement, or on such other date as may be agreed upon
in writing by the President of the Company and the President of the
Purchaser, which date is referred to herein as the "Date of Closing" and
"Closing Date" and which time is referred to herein as the "Closing" and
"Time of Closing".
8. PROPRIETARY INFORMATION
8.1 Each of the parties hereto covenants with the others that prior to the
Closing Time and, if the transactions contemplated hereby are not
completed, at all times after the Closing Time, it will keep confidential
all information obtained by it relating to the others, except such
information which prior to the date hereof was already in the possession of
that party, as demonstrated by written records, is generally available to
the public, other than as a result of a disclosure by that party, or is
made available to that party on a non-confidential basis from a source
other than the other parties to this Agreement or their representatives
(the "Confidential Information"). The parties further agree that the
Confidential Information will be disclosed only to those of its employees
and representatives of its advisors who need to know such information for
the purposes of evaluating and implementing the transactions contemplated
hereby.
8.2 Notwithstanding the foregoing provisions of this section, the obligation to
maintain the confidentiality of the Confidential Information will not apply
to the extent that disclosure of such information is required under
applicable securities laws and regulations, stock exchange by-laws or
rules, or judicial order, provided, however, that to the extent reasonably
practicable, the party disclosing the Confidential Information consults
with the others respecting such disclosure.
8.3 If the transactions contemplated hereby are not consummated for any reason,
each of the parties hereto will return forthwith, without retaining any
copies thereof, all information and documents obtained from the others.
9. INDEMNIFICATION
9.1 The Vendors severally (and not jointly) and agree to indemnify and save
harmless the Purchaser of and from any loss, cost, damage or expense
whatsoever arising out of or resulting from, under or pursuant to:
(a) all debts, liabilities, contingent or otherwise, contracts or
engagements of the Company whatsoever, including, without limitation,
liabilities for federal, provincial, sales, excise, income, corporate
or other taxes of the Company or any re-assessment therefor, interest
thereon or penalties with respect thereto existing at the Closing and
not disclosed on or included in the Company's Financial Statements;
(b) the inaccuracy of any representation or warranty or the breach of any
covenant made by the Company or the Vendors herein or in any
instrument or certificate delivered by the Company or the Vendors
pursuant hereto except as contemplated by this Agreement; and
(c) all claims, actions, suits, proceedings, demands, costs and expenses
in respect of or incidental to any of the foregoing.
9.2 The Purchaser hereby indemnifies and saves harmless the Vendors of and from
any loss, cost, damage or expense whatsoever arising out of or resulting
from, under or pursuant to:
(a) the inaccuracy of any representation or warranty or the breach of any
covenant made by the Purchaser contained herein or any instrument or
certificate delivered by the Purchaser pursuant hereto except as
contemplated by this Agreement; and
(b) all claims, actions, suits, proceedings, demands, costs and expenses
in respect of or incidental to any of the foregoing.
9.3 No claim for indemnification will arise until notice thereof is given to
the party (the "Indemnitor") from whom indemnity is sought. Such notice
shall be sent within a reasonable time following the determination by a
party (the "Claimant") that a claim for indemnity exists. In the event that
any legal proceedings shall be instituted or any claim or demand is
asserted by any third party in respect of which the Indemnitor may have an
obligation to indemnify the Claimant, the Claimant shall give or cause to
be given to the Indemnitor written notice thereof and such party shall have
the right, at its option and expense, to be present at the defence of such
proceedings, claim or demand, but not to control the defence, negotiation
or settlement thereof, which control shall at all times rest with the
Claimant, unless the Indemnitor irrevocably acknowledges full and complete
responsibility for indemnification of Claimant, in which case the
Indemnitor may assume such control through counsel of its choice, provided
however, that no settlement shall be entered into without the Claimant's
written consent (which shall not be unreasonably withheld). The parties
hereto agree to cooperate fully with each other in connection with the
defence, negotiation or settlement of any such third party legal
proceeding, claim or demand.
9.4 Notwithstanding anything in this Agreement to the contrary, the indemnity
provided for in this section shall apply to any loss, liability, damage,
deficiency or expense, whether or not the actual amount thereof shall have
been ascertained prior to the final day upon which a claim for indemnity
with respect thereto may be made hereunder, so long as written notice
thereof shall have been given to the Indemnitor prior to said date, setting
forth specifically and in reasonable detail, so far as is known, the matter
as to which indemnification is being sought, the quantum of the claim (if
ascertainable) and the provision of this Agreement under which the
Indemnitor is liable, but nothing herein shall be construed to require
payment of any claim for indemnity until the actual amount payable shall
have been finally ascertained.
10. GENERAL
10.1 Unless otherwise specified, all monetary amounts set out in this Agreement
are in reference to lawful currency of the United States of America.
10.2 Time is of the essence of this Agreement.
10.3 Each of the parties hereto shall bear all expenses incurred by it in
connection with this Agreement including, without limitation, the charges
of their respective counsel, accountants and financial advisors.
10.4 The Purchaser and the Vendors acknowledge that Catalyst Corporate Finance
Lawyers acts as British Columbia counsel to Allwin in respect of this
transaction.
10.5 This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, oral or written, by and
between any of the parties with respect to the subject matter hereof. There
are no pre-contractual representations and warranties except as set out in
this Agreement and any certificates or documents delivered pursuant to the
provisions hereof.
10.6 This Agreement will be governed by, construed and enforced in accordance
with the laws of the Province of British Columbia and the parties submit
and attorn to the non-exclusive jurisdiction of the courts of the Province
of British Columbia.
10.7 This Agreement and each of its terms and provisions will enure to the
benefit of and be binding upon the parties to this Agreement and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.
10.8 If any one or more of the provisions contained in this Agreement should be
invalid, illegal or unenforceable in any respect in any jurisdiction, the
validity, legality and enforceability of such provision or provisions will
not in any way be affected or impaired thereby in any other jurisdiction
and the validity, legality and enforceability of the remaining provisions
contained herein will not in any way be affected or impaired thereby,
unless in either case as a result of such determination this Agreement
would fail in its essential purpose.
10.9 This Agreement is not transferable or assignable without the prior written
consent of the other parties.
10.10 Any notice under this Agreement must be
(a) in writing,
(b) delivered, telecopied or mailed by prepaid post, and
(c) addressed to the party to which notice is to be given at the address
for such party indicated herein or at another address designated by
such party in writing.
Notice which is delivered or telecopied will be deemed to have been given
at the time of transmission or delivery. If notice is by mail it will be
deemed to have been given five business days following the date of mailing.
If there is an interruption in normal mail service at or prior to the time
a notice is mailed, the notice must be delivered or telecopied.
10.11The parties will do all such things and provide all such reasonable
assurances as may be required to consummate the transactions contemplated
hereby, and each party to this Agreement will execute and deliver such
further documents or instruments required by the other party as may be
reasonably necessary or desirable for the purposes of giving effect to or
perfecting the transactions contemplated hereby and obtaining any required
regulatory approvals, whether before or after the Closing.
10.12This Agreement may be executed in as many counterparts as may be necessary
or by facsimile and each such facsimile or counterpart so executed shall be
deemed to be an original and such counterparts together shall constitute
one and the same instrument and notwithstanding the date of execution shall
be deemed to bear the date as set out on the first page of this Agreement.
IN WITNESS WHEREOF the parties have hereunto duly executed this Agreement as of
the day and year first above written.
FIRST GENEVA INVESTMENTS, INC. ALLWIN NEWTECH LTD.
Per: /s/ Per: /s/
--------------------- ---------------------
Authorized Signatory Authorized Signatory
/s/ YU FONGMI /s/ ▇▇▇▇▇▇ ▇▇▇
--------------------------- ---------------------
Yu Fongmi ▇▇▇▇▇▇ ▇▇▇
THE SUNSHINE TRUST
/s/ LONGBIN LIU
-------------------------- Per: /s/
Longbin Liu ---------------------
Authorized Signatory
/s/ ▇▇▇ ▇. ▇▇▇ /s/ DENG ▇▇▇▇▇ ▇▇▇
-------------------------- ------------------------
▇▇▇ ▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
AFFIDA BANK ARBORA PORTFOLIO MANAGEMENT
Per: Per: /s/
---------------------- ---------------------
Authorized Signatory Authorized Signatory
NEW DRAGON (NO. 3) INVESTMENTS LIMITED BUNNATON
Per: ----------------------
Authorized Signatory Per: /s/
---------------------
Authorized Signatory
DRAGON GOLD CORPORATION
Per: /s/
---------------------
/s/ ▇▇▇▇ ▇▇▇▇▇ Authorized Signatory
-------------
▇▇▇▇ ▇▇▇▇▇
MED-▇▇▇ GROUP INC. CRESVALE FAR EAST LTD.
Per: /s/ Per: /s/
--------------------- ---------------------
Authorized Signatory Authorized Signatory
MORNING SUN HOLDINGS LTD.
Per: /s/
---------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇ Authorized Signatory
------------
▇▇▇▇▇▇▇ ▇▇▇