STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE by and among CHINA POWERSOFT TECHNOLOGIES, INC. A Delaware Corporation and POWER SOFT TECHNOLOGY CO., LIMITED A Hong Kong Corporation Effective as of September 25, 2007
by
and
among
A
Delaware Corporation
and
POWER
SOFT TECHNOLOGY CO., LIMITED
A
Hong
Kong Corporation
Effective
as of September 25, 2007
1
THIS
STOCK PURCHASE AGREEMENT AND
SHARE EXCHANGE, made and entered into
this 25th day of September, 2007, by
and among CHINA POWERSOFT TECHNOLOGIES, INC a Delaware Corporation with its
principal place of business at ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇-▇▇▇
Century Fortune Plaza, High-Tech Zone, Jinan, Shandong, China ("CPWSF
INC"), POWER SOFT TECHNOLOGY CO., LIMITED , a Hong Kong corporation
with its principal place of business located at Room 1005 Wing Yue
▇▇▇▇, ▇▇-▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ("PS LTD"); and the
shareholders of CHINA POWER SOFT TECHNOLOGY CO., LIMITED
(“Shareholders”) (collectively PS LTD and the PS LTD shareholders shall be known
as the “PS LTD Group”).
Premises
A.
This Agreement provides for the acquisition of PS LTD whereby PS LTD shall
become a wholly owned subsidiary of CPWSF INC and in connection therewith,
the
issuance of a total of 69,000,000 shares of CPWSF INC to the
Shareholders.
B.
The boards of directors of CPWSF INC and PS LTD have determined, subject
to the
terms and conditions set forth in this Agreement, that the transaction
contemplated hereby is desirable and in the best interests of their
stockholders, respectively. This Agreement is being entered into for the
purpose
of setting forth the terms and conditions of the proposed acquisition.
Agreement
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 here from,
it is
hereby agreed as follows:
ARTICLE
I
REPRESENTATIONS,
COVENANTS AND WARRANTIES OF
As
an inducement to and to obtain the
reliance of PS LTD, CPWSF INC represents and warrants as follows:
Section
1.1 Organization.
CPWSF INC is a corporation duly organized, validly existing,
and in good standing under the laws of Delaware 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 and to carry on its business in all material respects
as
it is now being conducted, including qualification to do business as a foreign
corporation in the jurisdiction 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 Schedules attached hereto (hereinafter
defined) are complete and correct copies of the articles of incorporation,
bylaws and amendments thereto as in effect on the date hereof. The
execution and delivery of this Agreement does not and the consummation of
the
transactions contemplated by this Agreement in accordance with the terms
hereof
will not violate any provision of Holding's articles of incorporation or
bylaws. CPWSF INC has full power, authority and legal right and has
taken all action required by law, its articles of incorporation, its bylaws
or
otherwise to authorize the execution and delivery of this Agreement.
2
Section
1.2 Capitalization. The
authorized capitalization of CPWSF INC consists of 100,000,000 Common Shares,
$0.01 par value per share, and 10,000,000 shares of Preferred Stock, $0.01
par
value. As of the date hereof, CPWSF INC has 950,000 common shares
issued and outstanding.
All
issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in violation
of
the preemptive or other rights of any person. CPWSF INC has no
securities, warrants or options authorized or issued.
Section
1.3 Subsidiaries. CPWSF
INC has no
subsidiaries.
Section
1.4 Tax Matters: Books and
Records.
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(a)
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The
books and records, financial and others, of CPWSF INC are in all
material
respects complete and correct and have been maintained in accordance
with
good business accounting practices; and
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(b)
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CPWSF
INC has no liabilities with respect to the payment of any country,
federal, state, county, or local taxes (including any deficiencies,
interest or penalties).
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(c)
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CPWSF
INC shall remain responsible for all debts incurred by CPWSF INC
prior to
the date of closing.
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Section
1.5 Litigation
and
Proceedings. There are no actions, suits, proceedings or
investigations pending or threatened by or against or affecting CPWSF INC
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
that would have a material adverse affect on the business, operations, financial
condition or income of CPWSF INC. CPWSF INC is not in default with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of 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.
Section
1.6 Material
Contract
Defaults. CPWSF INC is not 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 CPWSF INC, and there is no event of default in any material
respect
under any such contract, agreement, lease or other commitment in respect
of
which CPWSF INC has not taken adequate steps to prevent such a default from
occurring.
Section
1.7 Information. The
information concerning CPWSF INC as set forth in this Agreement and in the
attached Schedules 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.
Section
1.8 Title and Related
Matters. CPWSF INC has good and marketable title to and is the
sole and exclusive owner of all of its properties, inventory, interest in
properties and assets, real and personal (collectively, the “Assets”) free and
clear of all liens, pledges, charges or encumbrances. CPWSF INC owns
free and clear of any liens, claims, encumbrances, royalty interests or other
restrictions or limitations of any nature whatsoever and all procedures,
techniques, marketing plans, business plans, methods of management or other
information utilized in connection with CPWSF INC
business.
3
No
third
party has any right to, and CPWSF INC has not received any notice of
infringement of or conflict with asserted rights of other with respect to
any
product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly on in
the
aggregate, if the subject of an unfavorable decision ruling or finding, would
have a materially adverse affect on the business, operations, financial
conditions or income of CPWSF INC or any material portion of its properties,
assets or rights.
Section
1.9 Contracts On the closing
date:
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(a)
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There
are no material contracts, agreements franchises, license agreements,
or
other commitments to which CPWSF INC is a party or by which it
or any of
its properties are bound:
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(b)
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CPWSF
INC is not a party to any contract, agreement, commitment or instrument
or
subject to any charter or other corporate restriction or any judgment,
order, writ, injunction, decree or award materially and adversely
affects,
or in the future may (as far as CPWSF INC can now foresee) materially
and
adversely affect , the business, operations, properties, assets
or
conditions of CPWSF INC; and
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(c)
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CPWSF
INC is not a party to any material oral or written: (I) contract
for the
employment of any officer or employee; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension benefit
or
retirement plan, agreement or arrangement covered by Title IV of
the
Employee Retirement Income Security Act, as amended; (iii) agreement,
contract or indenture relating to the borrowing of money; (iv)
guaranty of
any obligation for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties, of obligations,
which, in the aggregate exceeds $1,000; (v) consulting or other
contract
with an unexpired term of more than one year or providing for payments
in
excess of $10,000 in the aggregate; (vi) collective bargaining
agreement;
(vii) contract, agreement or other commitment involving payments
by it for
more than $10,000 in the aggregate.
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Section 1.10 Compliance
With Laws and Regulations. To the best of CPWSF INC’s
knowledge and belief, CPWSF INC 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
CPWSF INC or would not result in CPWSF INC incurring material liability.
Section
1.11 Insurance. All of the
insurable properties of CPWSF INC are insured for CPWSF INC‘s benefit under
valid and enforceable policy or policies containing substantially equivalent
coverage and will be outstanding and in full force at the Closing Date.
Section
1.12
Approval of Agreement. The directors of CPWSF INC
have authorized the execution and delivery of the Agreement by and have approved
the transactions contemplated hereby.
Section
1.13
Material Transactions or Affiliations. There are
no material contracts or agreements of arrangement between CPWSF INC and
any
person, who was at the time of such contract, agreement or arrangement an
officer, director or person owning of record, or known to beneficially own
ten
percent (10%) or more of the issued and outstanding Common Shares of CPWSF
INC
and which is to be performed in whole or in part after the date
hereof.
4
CPWSF
INC
has no commitment, whether written or oral, to lend any funds to, borrow
any
money from or enter into material transactions with any such affiliated
person.
Section
1.14 No
Conflict With Other
Instruments. 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 CPWSF INC is a party or to which
any
of its properties or operations are subject.
Section
1.15 Governmental
Authorizations. CPWSF INC has
all licenses,
franchises, permits or other governmental authorizations legally required
to
enable it to conduct its business in all material respects as conducted on
the
date hereof. 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
CPWSF INC of this Agreement and the consummation of the transactions
contemplated hereby.
ARTICLE
II
REPRESENTATIONS,
COVENANTS AND WARRANTIES
OF
POWER SOFT TECHNOLOGY CO., LIMITED
As
an inducement to, and to obtain the
reliance of CPWSF INC, PS LTD represents and warrants as follows:
Section
2.1 Organization. PS
LTD is a corporation duly organized, validly existing and in good standing
under
the laws of Hong Kong 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 and to carry on its business in all material respects as it is now
being
conducted, including qualification to do business as a foreign entity in
the
country or states 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 Attached Schedules (as hereinafter defined) are complete and correct
copies of the articles of incorporation, bylaws and amendments thereto as
in
effect on the date hereof. The execution and delivery of this Agreement does
not
and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of PS LTD's
certificate of incorporation or bylaws. PS LTD has full power, authority
and
legal right and has taken all action required by law, its articles of
incorporation, bylaws or otherwise to authorize the execution and delivery
of
this Agreement.
Section
2.2 Capitalization. The
authorized capitalization of PS LTD consists of 10,000 issued and
outstanding.
All
issued and outstanding common
shares have been legally issued, fully paid, are nonassessable and not issued
in
violation of the preemptive rights of any other person. PS LTD has no
other securities, warrants or options authorized or issued.
5
Section
2.3 Subsidiaries. PS
LTD has no subsidiaries.
Section
2.4 Tax Matters; Books &
Records
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(a)
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The
books and records, financial and others, of PS LTD are in all material
respects complete and correct and have been maintained in accordance
with
good business accounting practices; and
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(b)
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PS
LTD has no liabilities with respect to the payment of any country,
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties).
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(c)
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PS
LTD shall remain responsible for all debts incurred prior to the
closing.
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Section
2.5 Information. The
information concerning PS LTD as set forth in this Agreement and in the attached
Schedules 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.
Section
2.6 Title
and Related
Matters. PS LTD has good and marketable title to
and is the sole and exclusive owner of all of its properties, inventory,
interests in properties and assets, real and personal (collectively, the
"Assets") free and clear of all liens, pledges, charges or encumbrances.
Except
as set forth in the Schedules attached hereto, PS LTD owns free and clear
of any
liens, claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and all procedures, techniques, marketing
plans, business plans, methods of management or other information utilized
in
connection with PS LTD's business. Except as set forth in the attached
Schedules, no third party has any right to, and PS LTD has not received any
notice of infringement of or conflict with asserted rights of others with
respect to any product, technology, data, trade secrets, know-how, proprietary
techniques, trademarks, service marks, trade names or copyrights which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a materially adverse affect on the business, operations,
financial conditions or income of PS LTD or any material portion of its
properties, assets or rights.
Section
2.7 Litigation
and
Proceedings. There are no actions, suits or proceedings
pending or threatened by or against or affecting PS LTD, at law or in equity,
before any court or other governmental agency or instrumentality, domestic
or
foreign or before any arbitrator of any kind that would have a material adverse
effect on the business, operations, financial condition, income or business
prospects of PS LTD. PS LTD does not have any knowledge of any default on
its
part with respect to any judgment, order, writ, injunction, decree, award,
rule
or regulation of any court, arbitrator or governmental agency or
instrumentality.
Section
2.8 Contracts. On
the
Closing Date:
(a) There
are no
material contracts, agreements, franchises, license agreements, or other
commitments to which PS LTD is a party or by which it or any of its properties
are bound;
(b) PS
LTD is not
a party to any contract, agreement, commitment or instrument or subject to
any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the future
may (as
far as PS LTD can now foresee) materially and adversely affect, the business,
operations, properties, assets or conditions of PS LTD; and
6
(c) PS
LTD is not
a party to any material oral or written: (i) contract for the
employment of any officer or employee; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension, benefit or
retirement plan, agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv) guaranty of any
obligation for the borrowing of money or otherwise, excluding endorsements
made
for collection and other guaranties of obligations, which, in the aggregate
exceeds $1,000; (v) consulting or other contract with an
unexpired term of more than one year or providing for payments in excess
of
$10,000 in the aggregate; (vi) collective bargaining
agreement; (vii) contract, agreement, or other commitment
involving payments by it for more than $10,000 in the aggregate.
Section
2.9 No
Conflict With Other
Instruments. 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 PS LTD is a party or to which
any of
its properties or operations are subject.
Section
2.10 Material
Contract
Defaults. To the best of PS LTD's knowledge and belief,
it is not 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 PS LTD, and there
is no
event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which PS LTD has not taken adequate
steps to prevent such a default from occurring.
Section
2.11 Governmental
Authorizations. To the best of PS LTD’s knowledge, PS
LTD has all licenses, franchises, permits and other governmental authorizations
that are legally required to enable it to conduct its business operations
in all
material respects as conducted on the date hereof. Except for
compliance with federal and state securities or corporation laws, 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 PS LTD of the transactions contemplated
hereby.
Section
2.12 Compliance
With Laws and
Regulations. To the best of PS LTD's knowledge and belief, PS
LTD 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 PS LTD or would not result
in PS
LTD's incurring any material liability.
Section
2.13 Insurance. All
of
the insurable properties of PS LTD are insured for PS LTD‘s benefit under valid
and enforceable policy or policies containing substantially equivalent coverage
and will be outstanding and in full force at the Closing Date.
7
Section
2.14 Approval
of
Agreement. The directors of PS LTD have authorized the
execution and delivery of the Agreement and have approved the transactions
contemplated hereby.
Section
2.15 Material
Transactions or
Affiliations. As of the Closing Date, there will exist
no material contract, agreement or arrangement between PS LTD and any person
who
was at the time of such contract, agreement or arrangement an officer, director
or person owning of record, or known by PS LTD to own beneficially, ten percent
(10%) or more of the issued and outstanding Common Shares of PS LTD and which
is
to be performed in whole or in part after the date hereof except with regard
to
an agreement with the PS LTD shareholders providing for the distribution
of cash
to provide for payment of federal and state taxes on Subchapter S income.
PS LTD
has no commitment, whether written or oral, to lend any funds to, borrow
any
money from or enter into any other material transactions with, any such
affiliated person.
ARTICLE
III
EXCHANGE
PROCEDURE AND OTHER CONSIDERATION
Section
3.1 Share
Exchange/Delivery of PS LTD
Securities. On the Closing Date, the holders of all of the PS
LTD Common Shares shall deliver to CPWSF INC (i) certificates or other documents
evidencing all of the issued and outstanding PS LTD Common Shares, duly endorsed
in blank or with executed power attached thereto in transferable form. On
the
Closing Date, all previously issued and outstanding Common Shares of PS LTD
shall be transferred to CPWSF INC, so that PS LTD shall become a wholly owned
subsidiary of CPWSF INC.
Section
3.2 Issuance of CPWSF INC Common
Shares. In exchange for all of the PS LTD Common Shares
tendered pursuant to Section 3.1, CPWSF INC shall issue to the PS LTD
shareholders a total of 69,000,000 shares of CPWSF INC common stock in the
following manner. Such shares are restricted in accordance with Rule
144 of the 1933 Securities Act.
Section
3.3 Events
Prior to
Closing. Upon execution hereof or as soon thereafter as
practical, management of CPWSF INC and PS LTD shall execute, acknowledge
and
deliver (or shall cause to be executed, acknowledged and delivered) any and
all
certificates, opinions, financial statements, schedules, agreements, resolutions
rulings or other instruments required by this Agreement to be so delivered,
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, subject only to the conditions to Closing
referenced herein below.
Section
3.4 Closing. The
closing ("Closing") of the transactions contemplated by this Agreement shall
be
September 25, 2007.
Section
3.5 Termination.
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(a)
This Agreement may be terminated by the board of directors or majority
interest of Shareholders of either CPWSF INC or PS LTD, respectively,
at
any time prior to the Closing Date if:
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(i)
there shall be any action or proceeding before any court or any
governmental body 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 on the advice
of its
legal counsel, makes it inadvisable to proceed with the exchange
contemplated by this Agreement; or
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(ii)
any of the transactions contemplated hereby are disapproved by
any
regulatory authority whose approval is required to consummate such
transactions.
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In
the event of termination pursuant to
this paragraph (a) of this Section 3.5, 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.
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(b)
This Agreement may be terminated at any time prior to the Closing
Date by
action of the board of directors of CPWSF INC if PS LTD shall fail
to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or
warranties
of PS LTD contained herein shall be inaccurate in any material
respect,
which noncompliance or inaccuracy is not cured after 20 days written
notice thereof is given to PS LTD. If this Agreement is terminated
pursuant to this paragraph (b) of this Section 3.5, this Agreement
shall
be of no further force or effect and no obligation, right or liability
shall arise hereunder.
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(c)
This Agreement may be terminated at any time prior to the Closing
Date by
action of the board of directors of PS LTD if CPWSF INC shall fail
to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or
warranties
of CPWSF INC contained herein shall be inaccurate in any material
respect,
which noncompliance or inaccuracy is not cured after 20 days written
notice thereof is given to CPWSF INC. If this Agreement is terminated
pursuant to this paragraph (d) of this Section 3.5, this Agreement
shall
be of no further force or effect and no obligation, right or liability
shall arise hereunder.
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In
the event of termination pursuant to
paragraph (b) and (c) of this Section 3.5, the breaching party shall bear
all of
the expenses incurred by the other party in connection with the negotiation,
drafting and execution of this Agreement and the transactions herein
contemplated.
Section
3.6 Directors
of CPWSF INC After
Acquisition. After the Closing Date, ▇▇▇▇▇▇
▇▇▇▇ shall remain the sole member of the Board of Directors of CPWSF
INC. Each director shall hold office until his successor shall have
been duly elected and shall have qualified or until his earlier death,
resignation or removal.
Section
3.7 Officers
of CPWSF INC.
Upon the closing, the following person shall remain the sole
officer of CPWSF INC:
NAME
OFFICE
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▇▇▇▇▇▇
▇▇▇▇
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Chief
Executive Officer, Chief Financial Officer, President and Secretary
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9
ARTICLE
IV
SPECIAL
COVENANTS
Section
4.1 Access
to Properties and
Records. Prior to closing, CPWSF INC and PS
LTD will each afford to the officers and authorized representatives of the
other
full access to the properties, books and records of each other, in order
that
each may have full opportunity to make such reasonable investigation as it
shall
desire to make of the affairs of the other and each will furnish the other
with
such additional financial and operating data and other information as to
the
business and properties of each other, as the other shall from time to time
reasonably request.
Section
4.2 Availability
of Rule
144. CPWSF INC and PS LTD shareholders holding "restricted
securities,” as that term is defined in Rule 144 promulgated pursuant to the
Securities Act will remain as “restricted securities”. CPWSF INC is
under no obligation to register such shares under the Securities Act, or
otherwise. The stockholders of CPWSF INC and PS LTD holding restricted
securities of CPWSF INC and PS LTD as of the date of this Agreement and their
respective heirs, administrators, personal representatives, successors and
assigns, are intended third party beneficiaries of the provisions set forth
herein. The covenants set forth in this Section 4.2 shall survive the
Closing and the consummation of the transactions herein contemplated.
Section
4.3 Special
Covenants and Representations
Regarding the CPWSF INC Common Shares to be Issued in the
Exchange. The consummation of this Agreement, including the
issuance of the CPWSF INC Common Shares to the Shareholders of PS LTD as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act, and applicable state statutes. Such transaction shall
be consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, inter alia, upon the
circumstances under which the PS LTD Shareholders acquire such
securities.
Section
4.4 Third
Party
Consents. CPWSF INC and PS LTD agree to cooperate with
each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
Section
4.5 Actions
Prior and Subsequent to
Closing.
(a)
From and after the date of this Agreement until the Closing Date, except
as
permitted or contemplated by this Agreement, CPWSF INC and PS LTD will each
use
its best efforts to:
(i)
maintain and keep its 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;
(ii)
maintain in full force and effect insurance comparable in amount and in scope
of
coverage to that now maintained by it;
(iii)
perform in all material respects all of its obligations under material
contracts, leases and instruments relating to or affecting its assets,
properties and business;
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(b)
From and after the date of this Agreement until the Closing Date, CPWSF INC
will
not, without the prior consent of PS LTD:
(i)
except
as
otherwise specifically set forth herein, make any change in its articles
of
incorporation or bylaws;
(ii)
declare or pay any
dividend on its outstanding Common Shares, except as may otherwise be required
by law, or effect any stock split or otherwise change its capitalization,
except
as provided herein;
(iii)
enter
into or amend
any employment, severance or agreements or arrangements with any directors
or
officers;
(iv)
grant, confer or award any
options, warrants, conversion rights or other rights not existing on the
date
hereof to acquire any Common Shares; or
(v)
purchase or redeem any
Common Shares.
Section
4.6 Indemnification.
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(a)
CPWSF INC hereby agrees to indemnify PS LTD, each of the officers,
agents
and directors and current shareholders of PS LTD as of the Closing
Date
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 to or rising out of or based on any inaccuracy appearing
in or
misrepresentation made in 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;
and
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(b)
PS LTD hereby agrees to indemnify CPWSF INC, each of the officers,
agents,
directors and current shareholders of CPWSF INC as of the Closing
Date
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 in 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.
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ARTICLE
V
CONDITIONS
PRECEDENT TO OBLIGATIONS OF CPWSF INC
The
obligations of CPWSF INC under this
Agreement are subject to the satisfaction, at or before the Closing Date,
of the
following conditions:
Section
5.1 Accuracy
of
Representations. The representations and warranties made by
CPWSF INC 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 the Closing Date (except for changes therein permitted by this
Agreement), and CPWSF INC shall have performed or compiled with all covenants
and conditions required by this Agreement to be performed or complied with
by
CPWSF INC prior to or at the Closing. PS LTD shall be furnished with
a certificate, signed by a duly authorized officer of CPWSF INC and dated
the
Closing Date, to the foregoing effect.
Section
5.2 Director
Approval. The Board of Directors of CPWSF INC shall have
approved this Agreement and the transactions contemplated herein.
11
Section
5.3 Officer's
Certificate. PS LTD shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer
of
CPWSF INC to the effect that: (a) the representations and warranties of CPWSF
INC set forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material respects true
and
correct as if made on the Effective Date; (b) CPWSF INC has performed all
covenants, satisfied all conditions, and complied with all other terms and
provisions of this Agreement to be performed, satisfied or complied with
by it
as of the Effective Date; (c) since such date and other than as previously
disclosed to PS LTD, CPWSF INC has not entered into any material transaction
other than transactions which are usual and in the ordinary course if its
business; and (d) no litigation, proceeding, investigation or inquiry is
pending
or, to the best knowledge of CPWSF INC, threatened, 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 CPWSF INC Schedules,
by or
against CPWSF INC which might result in any material adverse change in any
of
the assets, properties, business or operations of CPWSF INC.
Section
5.4 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 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 CPWSF INC.
Section
5.5 Other
Items. PS LTD shall have
received such further documents, certificates or instruments relating to
the
transactions contemplated hereby as PS LTD may reasonably request.
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF PS LTD
The
obligations of PS LTD under this
Agreement are subject to the satisfaction, at or before the Closing date
(unless
otherwise indicated herein), of the following conditions:
Section
6.1 Accuracy
of
Representations. The representations and warranties made
by PS LTD 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 PS LTD shall have performed and complied with
all
covenants and conditions required by this Agreement to be performed or complied
with by PS LTD prior to or at the Closing. CPWSF INC shall have been furnished
with a certificate, signed by a duly authorized executive officer of PS LTD
and
dated the Closing Date, to the foregoing effect.
Section
6.2 Director Approval. The
Board of Directors of PS LTD shall have approved this Agreement and the
transactions contemplated herein.
Section
6.3 Officer's
Certificate. CPWSF INC shall be furnished with a certificate
dated the Closing date and signed by a duly authorized officer of PS LTD
to the
effect that: (a) the representations and warranties of PS LTD set forth in
the
Agreement and in all Exhibits, Schedules and other documents furnished in
connection herewith are in all material respects true and correct as if made
on
the Effective Date; and (b) PS LTD had performed all covenants, satisfied
all
conditions, and complied with all other terms and provisions of the Agreement
to
be performed, satisfied or complied with by it as of the Effective Date.
12
Section
6.4 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 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 PS LTD.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Brokers
and
Finders. Each party hereto hereby represents and
warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person for any
commission, brokerage or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
Section
7.2 Law,
Forum and
Jurisdiction. This Agreement shall be construed and
interpreted in accordance with the laws of the State of New Jersey, United
States of America.
Section
7.3 Notices. Any
notices 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
CPWSF INC: ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇@
▇▇▇
▇▇▇▇▇ ▇▇▇▇
Tri-cel
Century Fortune Plaza
High-Tech
Zone, Jinan, Shandong,
China
If
to PS
LTD: Room 1005 Wing Yue
▇▇▇▇
▇▇-▇▇
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇
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.
Section
7.4 Attorneys'
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
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
13
Section
7.5 Confidentiality. Each
party hereto agrees with the other party that, unless and until the transactions
contemplated by this Agreement have been consummated, they and their
representatives will hold in strict confidence all data and information obtained
with respect to another party or any subsidiary thereof from any representative,
officer, director or employee, or from any books or records or from personal
inspection, of such other party, and shall not use such data or information
or
disclose the same to others, except: (i) to the extent such data is a matter
of
public knowledge or is required by law to be published; and (ii) to the extent
that such data or information must be used or disclosed in order to consummate
the transactions contemplated by this Agreement.
Section
7.6 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.
Section
7.7 Third
Party
Beneficiaries. This contract is solely between CPWSF INC and PS LTD
and except as specifically provided, no director, officer, stockholder,
employee, agent, independent contractor or any other person or entity shall
be
deemed to be a third party beneficiary of this Agreement.
Section
7.8 Entire
Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. This Agreement
alone
fully and completely expresses the agreement of the parties relating to the
subject matter hereof. There are no other courses of dealing, understanding,
agreements, representations or warranties, written or oral, except as set
forth
herein. This Agreement may not be amended or modified, except by a written
agreement signed by all parties hereto.
Section
7.9 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 18 months.
Section
7.10 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.
Section
7.11 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 be 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 or any other default then, theretofore, or thereafter occurring
or
existing. At any time prior to the Closing Date, this Agreement may be amended
by a writing signed by all parties hereto, with respect to any of the terms
contained herein, and any term or condition of this Agreement may be waived
or
the time for performance hereof may be extended by a writing signed by the
party
or parties for whose benefit the provision is intended.
Section
7.12 Expenses.
Each party herein shall bear all of their respective cost s and expenses
incurred in connection with the negotiation of this Agreement and in the
consummation of the transactions provided for herein and the preparation
thereof.
Section
7.13 Headings;
Context. The headings of
the sections
and paragraphs contained in this Agreement are for convenience of reference
only
and do not form a part hereof and in no way modify, interpret or construe
the
meaning of this Agreement.
Section
7.14 Benefit. This
Agreement
shall be binding upon and shall inure only to the benefit of the parties
hereto,
and their permitted assigns hereunder. This Agreement shall not be assigned
by
any party without the prior written consent of the other party.
14
Section
7.15 Public
Announcements. Except as may
be required by law,
neither party shall make any public announcement or filing with respect to
the
transactions provided for herein without the prior consent of the other party
hereto.
Section
7.16 Severability. In
the
event that any particular provision or provisions of this Agreement or the
other
agreements contained herein shall for any reason hereafter be determined
to be
unenforceable, or in violation of any law, governmental order or regulation,
such unenforceability or violation shall not affect the remaining provisions
of
such agreements, which shall continue in full force and effect and be binding
upon the respective parties hereto.
Section
7.17 Failure
of Conditions;
Termination. In the event of any of the conditions specified
in this Agreement shall not be fulfilled on or before the Closing Date, either
of the parties have the right either to proceed or, upon prompt written notice
to the other, to terminate and rescind this Agreement. In such event, the
party
that has failed to fulfill the conditions specified in this Agreement will
liable for the other parties legal fees. The election to proceed shall not
affect the right of such electing party reasonably to require the other party
to
continue to use its efforts to fulfill the unmet conditions.
Section
7.18 No
Strict
Construction. The language of
this Agreement shall be
construed as a whole, according to its fair meaning and intendment, and not
strictly for or against either party hereto, regardless of who drafted or
was
principally responsible for drafting the Agreement or terms or conditions
hereof.
Section
7.19 Execution
Knowing and
Voluntary. In executing this Agreement, the parties severally
acknowledge and represent that each: (a) has fully and carefully read and
considered this Agreement; (b) has been or has had the opportunity to be
fully
apprized by its attorneys of the legal effect and meaning of this document
and
all terms and conditions hereof; (c) is executing this Agreement voluntarily,
free from any influence, coercion or duress of any kind.
Section
7.20 Amendment. At
any time after the Closing Date, this Agreement may be amended by a writing
signed by both parties, with respect to any of the terms contained herein,
and
any term or condition of this Agreement may be waived or the time for
performance hereof may be extended by a writing signed by the party or parties
for whose benefit the provision is intended.
Section
7.21 Conflict of
Interest. Both PS LTD and CPWSF INC understand that
▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP is representing both parties in this transaction which
represents a conflict of interest. Both PS LTD and CPWSF INC have the
right to different counsel due to this conflict of
interest. Notwithstanding the above, both PS LTD and CPWSF INC agree
to waive this conflict and have ▇▇▇▇▇▇ & Jaclin, LLP represents both parties
in the above-referenced transaction. Both PS LTD and CPWSF INC agree
to hold this law firm harmless from any and all liabilities that may occur
or
arise due to this conflict.
15
IN
WITNESS WHEREOF, the
corporate parties hereto have caused this Agreement to be executed by their
respective officers, hereunto duly authorized, and entered into as of the
date
first above written.
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ATTEST:
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POWER
SOFT TECHNOLOGY CO.,
LIMITED
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______________________________ By:_______________________
ATTEST:
CHINA POWERSOFT TECHNOLOGIES,
INC.
______________________________ By:_______________________
16