AMENDED AND RESTATED MERGER AGREEMENT by and among Wincroft, Inc. and Apollo Solar Energy, Inc. (a Nevada corporation) and Apollo Solar Energy, Inc. (a Delaware corporation) Dated as of October 14, 2008
Exhibit 10-a
AMENDED
AND RESTATED
by
and among
Wincroft,
Inc.
and
Apollo
Solar Energy, Inc. (a Nevada corporation)
and
Apollo
Solar Energy, Inc. (a Delaware corporation)
Dated
as of October 14, 2008
1
This
Amended and Restated Merger Agreement (the “Agreement”)
is made and entered into as of October 14, 2008 by and among Wincroft, Inc., a
corporation formed under the laws of the State of Nevada (“WCRF”),
Apollo Solar Energy, Inc, a corporation newly formed under the laws of the State
of Nevada and a wholly owned subsidiary of WCRF (the “Merger
Sub”), and Apollo Solar Energy, Inc., a corporation formed under the laws
of the State of Delaware (“Apollo”). Each
of WCRF, the Merger Sub and Apollo is referred to herein individually as a
“Party”
and all are referred to collectively as the “Parties.”
PREAMBLE
WHEREAS,
the parties hereto entered into that certain merger agreement (the “Prior
Agreement”) dated as of August 8, 2008 in connection with the Merger and
wish to amend and restate the Prior Agreement in its entirety by virtue of this
Agreement;
WHEREAS,
Apollo owns 100% of the equity of Sichuan Apollo Solar Science and Technology
Co. Ltd. (“Sichuan
Apollo”), a wholly foreign-owned enterprise (WOFE) organized under the
laws of the People’s Republic of China (“Sichuan
Apollo”);
WHEREAS,
the Boards of Directors of each of WCRF, Merger Sub and Apollo have determined
that a business combination between Apollo and Merger Sub through the statutory
merger of Merger Sub with and into Apollo (the “Merger”),
is advisable and in the best interests of their respective companies and
stockholders and in furtherance thereof have approved the Merger;
and
WHEREAS,
pursuant to the Merger, all issued and outstanding shares of common stock of
Apollo, $0.0001 par value (the “Apollo
Shares”), shall be cancelled and converted into the right to receive
shares of WCRF Common Stock, $0.001 par value (“Merger
Shares”), at the rate set forth herein, which shall represent 96.87% of
the voting stock of WCRF after the Merger;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, the Parties, intending to be
legally bound, hereby agree as follows:
CERTAIN
DEFINITIONS
As used
in this Agreement, the following terms shall have the meanings set forth
below:
“Acquired
Entities” means Apollo and Sichuan Apollo collectively.
2
“Applicable
Law” means any domestic or foreign law, statute, regulation, rule,
policy, guideline or ordinance applicable to the businesses of the Parties, the
Merger and/or the Parties.
“Apollo
Shares” has the meaning set forth in the Preamble.
“Closing”
has the meaning set forth in Section 1.02.
“Dissenting
Shares” has the meaning set forth in Section 1.01(c)(ii).
“DGCL”
means the Delaware General Corporation Law.
“Effective
Time” has the meaning set forth in Section 1.03.
“Knowledge”
means, in the case of WCRF or Apollo, a particular fact or other matter of which
its Chief Executive Officer or Chief Financial Officer is actually aware or
which a prudent individual serving in such capacity could be expected to
discover or otherwise become aware of in the course of conducting a reasonable
review or investigation of the corporation and its business and
affairs.
“Lien”
means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, claim, encumbrance, royalty interest, any other
adverse claim of any kind in respect of such property or asset, or any other
restrictions or limitations of any nature whatsoever.
“Merger”
has the meaning set forth in the Preamble.
“Merger
Shares” has the meaning set forth in the Preamble.
“Material
Adverse Effect” with respect to any entity or group of entities means any
event, change or effect that has or would have a materially adverse effect on
the financial condition, business or results of operations of such entity or
group of entities, taken as a whole.
“NGCL”
means the Nevada General Corporation Law.
“Person”
means any individual, corporation, partnership, trust or unincorporated
organization or a government or any agency or political subdivision
thereof.
“Surviving
Entity” shall mean Apollo as the surviving entity in the Merger as
provided in Section 1.03.
“Tax”
(and, with correlative meaning, “Taxes”
and “Taxable”)
means:
(i) any
income, alternative or add-on minimum tax, gross receipts tax, sales tax, use
tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,
withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp
tax, occupation tax, property tax, environmental or windfall profit tax, custom,
duty or other tax, impost, levy, governmental fee or other like assessment or
charge of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto by any
governmental or Tax authority responsible for the imposition of any such tax
(domestic or foreign), and
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(ii) any
liability for the payment of any amounts of the type described in clause (i)
above as a result of being a member of an affiliated, consolidated, combined or
unitary group for any taxable period, and
(iii) any
liability for the payment of any amounts of the type described in clauses (i) or
(ii) above as a result of any express or implied obligation to indemnify any
other person.
“Tax
Return” means any return, declaration, form, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
ARTICLE
I
THE
MERGER
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SECTION
1.01
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THE
MERGER
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Subject
to the terms and conditions set forth in this Agreement and in accordance with
applicable provisions the DGCL and the NGCL, at the Effective Time, all Apollo
Shares shall be cancelled and converted into the right to receive the Merger
Shares. In connection therewith, the following terms shall apply:
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(a)
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Conversion
of Securities.
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(i) Conversion
of Apollo Securities. At the Effective Time, by virtue of the Merger and
without any action on the part of WCRF, Apollo or the Merger Sub, or the holders
of any of their respective securities:
(A) Each
of the issued and outstanding shares of common stock of Apollo immediately prior
to the Effective Time shall be canceled and extinguished and each shall be
converted automatically into the right to receive Four Thousand (4,000) Merger
Shares. The allocation of the Merger Shares among the shareholders of
Apollo is set forth in Schedule 1.01 hereto.
(B) All
Apollo Shares shall no longer be outstanding and shall automatically be canceled
and extinguished and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Shares to be issued pursuant to
this Section 1.01(a)(i) upon the surrender of such certificate in accordance
with Section 1.07.
(C) The
Merger Shares shall represent 96.87%, on a fully diluted basis, of the voting
stock of all classes of issued and outstanding stock of WCRF at the Effective
Time.
4
(ii) Conversion
of Merger Sub Stock. At the Effective Time, by virtue of the Merger and
without any action on the part of Apollo, WCRF, the Merger Sub, or the holders
of any of their respective securities, each share of capital stock of Merger Sub
outstanding immediately prior to the Effective Time shall be converted into one
share of the common stock of the Surviving Entity and the Surviving Entity shall
be a wholly owned subsidiary of WCRF. The shares of common
stock of the Surviving Entity so issued in such conversion shall constitute the
only outstanding shares of capital stock of the Surviving Entity.
(b) Exemption
from Registration. The Parties intend that the issuance of the Merger
Shares to Apollo shall be exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) of the Securities Act and the rules and
regulations promulgated thereunder.
(c) Shares
Subject to Appraisal Rights.
(i) Notwithstanding
Section 1.01, Dissenting Shares shall not be converted into a right to receive
Merger Shares and the holders thereof shall be entitled only to such rights as
are granted by Delaware Law. Each holder of Dissenting Shares who becomes
entitled to payment for such shares pursuant to Delaware Law shall receive
payment therefor from the Surviving Entity in accordance with the Delaware Law,
provided, however, that (i) if any stockholder of Company who
asserts appraisal rights in connection with the Merger (a “Dissenter”)
has failed to establish his entitlement to such rights as provided in Delaware
Law, or (ii) if any such Dissenter has effectively withdrawn his demand for
payment for such shares or waived or lost his right to payment for his shares
under the appraisal rights process under Delaware Law the Apollo Shares held by
such Dissenter shall be treated as if they had been converted, as of the
Effective Time, into a right to receive Merger Shares and as provided in Section
1.01. Apollo shall give WCRF prompt notice of any demands for payment received
by Apollo from a person asserting appraisal rights, and WCRF shall have the
right to participate in all negotiations and proceedings with respect to such
demands. Apollo shall not, except with the prior written consent of WCRF, make
any payment with respect to, or settlement or offer to settle, any such
demands.
(ii) As used
herein, “Dissenting
Shares” means any shares of Apollo Common Apollo held by stockholders of
Apollo who are entitled to appraisal rights under Delaware Law, and who have
properly exercised, perfected and not subsequently withdrawn or lost or waived
their rights to demand payment with respect to their shares in accordance with
Delaware Law.
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SECTION
1.02
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CLOSING
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The
closing of the Merger (the “Closing”)
will take place as soon as practicable after the satisfaction or waiver of the
conditions precedent set forth in Article V or at such other date as WCRF and
Apollo shall agree (the “Closing
Date”), but in any event no later than October 31, 2008, unless extended
by a written agreement of WCRF and Apollo. The Closing shall
take place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other location as
the parties hereto agree.
5
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SECTION
1.03
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MERGER;
EFFECTIVE TIME
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At the
Effective Time, and subject to and upon the terms and conditions of this
Agreement, Merger Sub shall merge with and into Apollo in accordance with the
applicable provisions of the DGCL and the NGCL, the separate corporate existence
of Merger Sub shall cease and Apollo shall continue as the Surviving Entity. The
Effective Time shall occur upon the later of (a) the filing with the Secretary
of State of the State of Nevada of a Certificate of Merger, executed in
accordance with the applicable provisions of the NGCL and (b) the filing with
the Secretary of State of the State of Delaware of a Certificate of Merger,
executed in accordance with the applicable provisions of the DGCL (the “Effective
Time”). The date on which the Effective Time occurs is referred to as the
“Effective
Date.” Provided that this Agreement has not been terminated pursuant to
Article VI, the Parties will cause the Certificates of Merger to be filed as
soon as practicable after the Closing.
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SECTION
1.04
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EFFECT
OF THE MERGER
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The
Merger shall have the effect set forth in Section 92A.250 of the Nevada Revised
Statutes. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time, all the properties, rights, privileges, powers and
franchises of Apollo and Merger Sub shall vest in the Surviving Entity, and all
debts, liabilities and duties of Apollo and Merger Sub shall become the debts,
liabilities and duties of the Surviving Entity.
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SECTION
1.05
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CERTIFICATE
OF INCORPORATION AND BYLAWS; DIRECTORS AND
OFFICERS
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Pursuant
to the Merger:
(a) The
Articles of Incorporation and Bylaws of Merger Sub as in effect immediately
prior to the Effective Time shall be the Certificate of Incorporation and Bylaws
of the Surviving Entity immediately following the Merger.
(b) The
directors and officers of Apollo immediately prior to the Merger shall be the
directors and officers of the Surviving Entity subsequent to the
Merger.
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SECTION 1.06
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RESTRICTIONS
ON RESALE
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The
Merger Shares issued pursuant to the Merger will not be registered under the
Securities Act or the securities laws of any state, and cannot be transferred,
hypothecated, sold or otherwise disposed of until: (i) a registration statement
with respect to such securities is declared effective under the Securities Act,
or (ii) WCRF receives an opinion of counsel for the holders of the shares
proposed to be transferred, reasonably satisfactory to counsel for WCRF, that an
exemption from the registration requirements of the Securities Act is
available.
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The
certificates representing the Merger Shares which are being issued hereunder
shall contain a legend substantially as follows:
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR WINCROFT, INC. RECEIVES
AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL FOR
WINCROFT, INC. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
IS AVAILABLE.”
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SECTION
1.07
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EXCHANGE
OF CERTIFICATES
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(a) Exchange
of Certificates. After the Effective Time, the holders of the
Apollo Shares shall be required to surrender all their Apollo Shares to the
Exchange Agent, and the holders shall be entitled upon such surrender to receive
in exchange therefor certificates representing the proportionate number of
Merger Shares into which the Apollo Shares theretofore represented by the stock
certificates so surrendered. Until so surrendered, each outstanding certificate
that, prior to the Effective Time, represented Apollo Shares shall be deemed for
all corporate purposes, subject to the further provisions of this Article I, to
evidence the ownership of the number of whole Merger Shares for which such
Apollo Shares have been so exchanged. No dividend payable to holders of Merger
Shares of record as of any date subsequent to the Effective Time shall be paid
to the owner of any certificate which, prior to the Effective Time, represented
Apollo Shares, until such certificate or certificates representing all the
relevant Apollo Shares, together with a stock transfer form, are surrendered as
provided in this Article I or pursuant to letters of transmittal or other
instructions with respect to lost certificates provided by the Exchange
Agent.
(b) Exchange
Procedures.
(i) Empire
Stock Transfer, Inc., WCRF’s transfer agent, shall
act as exchange agent (the “Exchange
Agent”) in the Merger.
(ii) Promptly
after the Effective Time, WCRF shall make available to the Exchange Agent for
exchange in accordance with this Article I, through such reasonable
procedures as WCRF may adopt, the Merger Shares issuable pursuant to
Section 1.01(a) in exchange for Apollo Shares outstanding immediately prior
to the Effective Time.
(iii) Promptly
after the Effective Time, WCRF shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates (the “Certificates”)
which immediately prior to the Effective Time represented outstanding Apollo
Shares, whose shares were converted into the right to receive shares of Merger
Shares pursuant to Section 1.01, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon receipt of the Certificates by the Exchange
Agent, and shall be in such form and have such other provisions as WCRF may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing Merger Shares. Upon
surrender of a Certificate for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by WCRF, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing the number of Merger
Shares which such holder has the right to receive pursuant to Section 1.01, and
the Certificate so surrendered shall forthwith be canceled.
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(iv) Notwithstanding
anything to the contrary in this Section 1.07, none of the Exchange Agent, the
Surviving Entity, WCRF or any party hereto shall be liable to any person for any
amount properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(c) Full
Satisfaction of Rights. All Merger Shares for which the Apollo Shares
shall have been exchanged pursuant to this Article I shall be deemed to have
been issued in full satisfaction of all rights pertaining to the Apollo
Shares.
(d)
Exchange
of Certificates. All certificates representing Apollo Shares converted
into the right to receive Merger Shares pursuant to this Article I shall be
furnished to WCRF subsequent to delivery thereof to the Exchange Agent pursuant
to this Agreement.
(e)
Closing
of Transfer Books. On the Effective Date, the stock transfer book of
Apollo shall be deemed to be closed and no transfer of Apollo Shares shall
thereafter be recorded thereon.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF WCRF AND MERGER SUB
WCRF and,
where applicable, the Merger Sub hereby jointly and severally represent and
warrant to Apollo, as of the date of this Agreement, as of the Closing Date and
as of the Effective Time except at otherwise indicated, and except in each case
as disclosed in the WCRF disclosure letter delivered as of the date hereof, as
follows:
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SECTION
2.01
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ORGANIZATION,
STANDING AND POWER
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WCRF is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada, and has corporate power and authority to conduct
its business as presently conducted by it and to enter into and perform this
Agreement and to carry out the transactions contemplated by this Agreement.
Merger Sub is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada, and has corporate power and
authority to enter into and perform this Agreement and to carry out the
transactions contemplated by this Agreement. Each of WCRF and
Merger Sub has the power to own its properties and to carry on its business as
now being conducted and as presently proposed to be conducted and is duly
authorized and qualified to do business and is in good standing in each
jurisdiction in which the failure to be so qualified and in good standing would
have a Material Adverse Effect on WCRF. WCRF has delivered or made available to
Apollo a true and correct copy of the Articles of Incorporation (the “Articles
of Incorporation”), and the Bylaws, or other charter documents, as
applicable, of WCRF and Merger Sub, each as amended to date. Neither WCRF nor
Merger Sub is in violation of any of the provisions of its respective charter or
bylaws or equivalent organization documents. There are no outstanding
subscriptions, options, warrants, puts, calls, rights, exchangeable or
convertible securities or other commitments or agreements of any character
relating to the issued or unissued capital stock or other securities of WCRF or
Merger Sub, or otherwise obligating WCRF or Merger Sub to issue, transfer, sell,
purchase, redeem or otherwise acquire any such securities. WCRF does not
directly or indirectly own any equity or similar interest in, or any interest
convertible or exchangeable or exercisable for, any equity or similar interest
in, any corporation, partnership, joint venture or other business association or
entity.
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SECTION
2.02
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SUBSIDIARIES
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WCRF owns
all of the outstanding capital stock of the Merger Sub.
All of the outstanding shares of capital stock of Merger Sub are owned by WCRF
free and clear of all liens, charges, claims or encumbrances or rights of
others. Other than its ownership of the Merger Sub, WCRF does
not have an ownership interest in any Person.
Merger Sub is a recently formed corporation and prior to the date hereof and
through the Effective Date, Merger Sub has not and shall not have conducted any
business operations, become a party to any agreements, or incurred any
liabilities or obligations.
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SECTION
2.03
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CAPITALIZATION
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(a) There
are 125,000,000 shares of capital stock of WCRF authorized, consisting of
100,000,000 shares of common stock, $.001 par value per share (the “WCRF
Common Shares”), and 25,000,000 shares of preferred stock, $0.001 par
value per share (“WCRF
Preferred Shares”). As of the date of this Agreement, there are 555,013
WCRF Common Shares issued and outstanding, and no WCRF Preferred Shares
outstanding.
(b) No
WCRF Common Shares or WCRF Preferred Shares have been reserved for issuance to
any Person. There are no contracts, commitments or agreements
relating to voting, purchase or sale of WCRF’s capital stock (i) between or
among WCRF and any of its stockholders and (ii) to the best of WCRF’s knowledge,
between or among any of WCRF’s stockholders.
(c) All
outstanding WCRF Common Shares are validly issued, fully paid, non-assessable,
not subject to pre-emptive rights and have been issued in compliance with all
state and federal securities laws or other Applicable Law.
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SECTION
2.04
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AUTHORITY
FOR AGREEMENT
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The
execution, delivery, and performance of this Agreement by each of WCRF and
Merger Sub has been duly authorized by all necessary corporate and shareholder
action, and this Agreement, upon its execution by the Parties, will constitute
the valid and binding obligation of each of WCRF and the Merger Sub, enforceable
against each of them in accordance with and subject to its terms, except as
enforceability may be affected by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors' rights. The
execution and consummation of the transactions contemplated by this Agreement
and compliance with its provisions by WCRF and Merger Sub will not violate any
provision of Applicable Law and will not conflict with or result in any breach
of any of the terms, conditions, or provisions of, or constitute a default
under, WCRF's or Merger Sub’s Articles of Incorporation, or either of their
Bylaws, in each case as amended, or, in any material respect, any indenture,
lease, loan agreement or other agreement or instrument to which WCRF is a party
or by which it or any of its properties is bound, or any decree, judgment,
order, statute, rule or regulation applicable to WCRF or Merger
Sub. No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality (“Governmental
Entity”) is required by or with respect to WCRF or Merger Sub in
connection with the execution and delivery of this Agreement, or the
consummation of the transactions contemplated hereby and thereby, except for (i)
the filing of the Certificate of Merger as provided in Section 1.03;
(ii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state securities
laws and the securities laws of any foreign country; (iii) such filings, if any,
as may be required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (“HSR”);
and (iv) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on WCRF and would not prevent, or materially alter or delay any of the
transactions contemplated by this Agreement.
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SECTION
2.05
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SEC
DOCUMENTS; FINANCIAL CONDITION
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WCRF has
made available to Apollo a true and complete copy of each statement, report,
registration statement (with the prospectus in the form filed pursuant to Rule
424(b) of the Securities Act), definitive proxy statement, and other filings
filed with the SEC by WCRF since July 11, 2008, and, prior to the Effective
Time, WCRF will have furnished or made available to Apollo true and complete
copies of any additional documents filed with the SEC by WCRF prior to the
Effective Time (collectively, the “WCRF
SEC Documents”). WCRF has timely filed all forms, statements and
documents required to be filed by it with the SEC since July 11, 2008. In
addition, WCRF has made available to Apollo all exhibits to the WCRF SEC
Documents filed prior to the date hereof, and will promptly make available to
Apollo all exhibits to any additional WCRF SEC Documents filed prior to the
Effective Time. All documents required to be filed as exhibits to the WCRF SEC
Documents have been so filed, and all material contracts so filed as exhibits
are in full force and effect, except those that have expired in accordance with
their terms, and neither WCRF nor any of its subsidiaries is in material default
thereunder. As of their respective filing dates, the WCRF SEC Documents complied
in all material respects with the requirements of the Exchange Act and the
Securities Act, and none of the WCRF SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except to the extent
corrected by a subsequently filed WCRF SEC Document. The financial statements of
WCRF, including the notes thereto, included in the WCRF SEC Documents (the
“WCRF
Financial Statements”) were complete and correct in all material respects
as of their respective dates, complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto as of their respective dates, and have been
prepared in accordance with GAAP applied on a basis consistent throughout the
periods indicated and consistent with each other (except as may be indicated in
the notes thereto or, in the case of unaudited statements included in Quarterly
Reports on Form 10-QSB, as permitted by Form 10-QSB of the SEC). The WCRF
Financial Statements fairly present the financial condition and operating
results of WCRF at the dates and during the periods indicated therein (subject,
in the case of unaudited statements, to normal, recurring year-end
adjustments).
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SECTION
2.06
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▇▇▇▇▇▇▇▇-▇▇▇▇▇
ACT OF 2002
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There
has been no change in WCRF accounting policies since June 30, 2008 except as
described in the notes to the WCRF Financial Statements. Each required form,
report and document containing financial statements that has been filed with or
submitted to the SEC since August 31, 2002, was accompanied by the
certifications required to be filed or submitted by WCRF’s chief executive
officer and chief financial officer pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
(the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”), and at the time of filing or submission of each such
certification, such certification was true and accurate and materially complied
with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and regulations promulgated
thereunder. Since June 30, 2008, neither WCRF nor, to the knowledge of the WCRF,
any director, officer, employee, auditor, accountant or representative of WCRF
or any of its subsidiaries has received or otherwise had or obtained knowledge
of any complaint, allegation, assertion or claim, whether written or oral,
regarding the accounting or auditing practices, procedures, methodologies or
methods of WCRF or their respective internal accounting controls, including any
complaint, allegation, assertion or claim that WCRF has engaged in questionable
accounting or auditing practices, except for (A) any complaint, allegation,
assertion or claim as has been resolved without any resulting change to WCRF’s
accounting or auditing practices, procedures methodologies or methods of WCRF or
its internal accounting controls and (b) questions regarding such matters raised
and resolved in the ordinary course in connection with the preparation and
review of WCRF’s financial statements and periodic reports. To the knowledge of
WCRF, no attorney representing WCRF, whether or not employed by WCRF, has
reported evidence of a material violation of securities laws, breach of
fiduciary duty or similar violation by WCRF or any of its officers, directors,
employees or agents to the Board of Directors of WCRF or any committee thereof
or to any director or officer of WCRF. To the knowledge of WCRF, no employee of
WCRF has provided or is providing information to any law enforcement agency
regarding the commission or possible commission of any crime or the violation or
possible violation of any applicable law.
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SECTION
2.07
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ABSENCE
OF CERTAIN CHANGES OR
EVENTS
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Since
June 30, 2008,
(a) there
has not been any Material Adverse Change in the business, operations,
properties, assets, or condition of WCRF;
(b) WCRF
has not (i) amended its Articles of Incorporation; (ii) declared or made, or
agreed to declare or make, any payment of dividends or distributions of any
assets of any kind whatsoever to stockholders or exchanged or redeemed, or
agreed to exchange or redeem, any outstanding capital stock; (iii) made any
material change in its method of management, operation, or accounting; (iv)
entered into any material transaction; or (v) made any accrual or arrangement
for payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee;
(c) WCRF
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (ii) paid any material
obligation or liability (absolute or contingent) other than current liabilities
reflected in or shown on the most recent WCRF balance sheet, and current
liabilities incurred since that date in the ordinary course of business; (iii)
sold or transferred, or agreed to sell or transfer, any material assets,
properties, or rights, or canceled, or agreed to cancel, any material debts or
claims; or (iv) made or permitted any material amendment or termination of any
contract, agreement, or license to which it is a party.
|
SECTION
2.08
|
ABSENCE
OF UNDISCLOSED LIABILITIES
|
WCRF has
no material obligations or liabilities of any nature (matured or unmatured,
fixed or contingent) other than (i) those set forth or adequately provided for
in the Balance Sheet included in WCRF’s Quarterly Report on Form 10-KSB for
the year ended June 30, 2008 (the “WCRF
Balance Sheet”), (ii) those incurred in the ordinary course of business
and not required to be set forth in the WCRF Balance Sheet under GAAP, (iii)
those incurred in the ordinary course of business since the WCRF Balance Sheet
date and not reasonably likely to have a Material Adverse Effect on WCRF, and
(iv) those incurred in connection with this Agreement.
|
SECTION
2.09
|
GOVERNMENTAL
AND THIRD PARTY CONSENTS
|
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party to
any agreement with WCRF or Merger Sub, is required by or with respect to WCRF or
Merger Sub in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, except for such
consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under (i) applicable securities
laws, or (ii) the NGCL.
11
|
SECTION
2.10
|
LITIGATION
|
There is
no action, suit, investigation, audit or proceeding pending against, or to the
Knowledge of WCRF, threatened against or affecting WCRF or the Merger Sub or any
of their respective assets or properties before any court or arbitrator or any
governmental body, agency or official. There is no injunction,
judgment, decree, order or regulatory restriction imposed upon WCRF or Merger
Sub or any of their respective assets or business, or, to the knowledge of WCRF
and Merger Sub, any of their respective directors or officers (in their
capacities as such), that would prevent, enjoin, alter or materially delay any
of the transactions contemplated by this Agreement, or that could reasonably be
expected to have a Material Adverse Effect on WCRF.
|
SECTION
2.11
|
INTERESTED
PARTY TRANSACTIONS
|
Except as
disclosed in its SEC filings or on Schedule 2.11 hereto, WCRF is not indebted to
any officer or director of WCRF (except for amounts due as normal salaries and
bonuses and in reimbursement of ordinary expenses), and no such person is
indebted to WCRF, and there are no other transactions of the type required to be
disclosed pursuant to Items 402 or 404 of Regulation S-K under the Securities
Act and the Exchange Act.
|
SECTION
2.12
|
COMPLIANCE
WITH APPLICABLE LAWS
|
To the
Knowledge of WCRF, the business of each of WCRF and the Merger Sub has not been,
and is not being, conducted in violation of any Applicable Law.
|
SECTION
2.13
|
TAX
RETURNS AND PAYMENT
|
WCRF has
duly and timely filed all material Tax Returns required to be filed by it and
has duly and timely paid all Taxes shown thereon to be due. There is no claim
for Taxes that is a Lien against the property of WCRF other than Liens for Taxes
not yet due and payable. WCRF has not received written notification of any audit
of any Tax Return of WCRF being conducted or pending by a Tax authority, no
extension or waiver of the statute of limitations on the assessment of any Taxes
has been granted by WCRF which is currently in effect, and WCRF is not a party
to any agreement, contract or arrangement with any Tax authority or otherwise,
which may result in the payment of any material amount in excess of the amount
reflected on the above referenced WCRF Financial Statements.
|
SECTION
2.14
|
SECURITY
LISTING
|
WCRF is a
fully compliant reporting company under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), and all WCRF public filings required under the Exchange Act have
been made. The common stock of WCRF is listed for quotation on the OTC Bulletin
Board. To the Knowledge of WCRF, WCRF has not been threatened or is not subject
to removal of its common stock from the OTC Bulletin Board.
|
SECTION
2.15
|
FINDERS’
FEES
|
WCRF has
not incurred, nor will it incur, directly or indirectly, any liability for
brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any transaction
contemplated hereby.
12
|
SECTION
2.16
|
MINUTE
BOOKS
|
The
minute books of WCRF made available to Apollo contain in all material respects a
complete and accurate summary of all meetings of directors and stockholders or
actions by written consent of WCRF during the past three years and through the
date of this Agreement, and reflect all transactions referred to in such minutes
accurately in all material respects.
|
SECTION
2.17
|
VOTE
REQUIRED
|
The
approval of WCRF’s Board of Directors and the affirmative vote of WCRF as sole
stockholder of Merger Sub are the only approvals or votes necessary to approve
this Agreement and the transactions contemplated hereby on behalf of such
entities.
|
SECTION
2.18
|
BOARD
APPOVAL
|
The Board
of Directors of WCRF has (i) approved this Agreement and the Merger, and (ii)
approved the issuance of the Merger Shares pursuant to Section 1.01. The Board
of Directors of Merger Sub has approved this Agreement and the Merger, and
recommended that the sole stockholder of Merger Sub approve this Agreement and
the Merger.
|
SECTION
2.19
|
EMPLOYEE
BENEFIT PLANS
|
Except as
disclosed in the WCRF SEC Documents, there are no Benefit Plans maintained by
WCRF covering only WCRF executive officers. Each Benefit Plan maintained by WCRF
has been operated and administered in accordance with its terms and applicable
law, except where failure to do so would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on WCRF. The execution
of this Agreement and the consummation of the Merger will not constitute an
event under any Benefit Plan maintained by WCRF that will or may result in any
payment, acceleration, termination, forgiveness of indebtedness, vesting,
distribution, increase in compensation or benefits or obligation to fund
benefits with respect to any WCRF employee with such exceptions which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on WCRF.
13
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF APOLLO
Apollo
hereby represents and warrants to WCRF and to Merger Sub, as of the date of this
Agreement, as of the Closing Date and as of the Effective Time (except as
otherwise indicated, and except in each case as disclosed in the Apollo
disclosure letter delivered as of the date hereof), as follows:
|
SECTION
3.01
|
ORGANIZATION,
STANDING AND POWER
|
Apollo is
a privately held corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and has full corporate power
and authority to conduct its business as presently conducted by it and to enter
into and perform this Agreement and to carry out the transactions contemplated
by this Agreement. Apollo is duly qualified to do business as a foreign
corporation in each state in which the nature of the business conducted by it or
the character or location of the properties and assets owned or leased by it
make such qualification necessary. Each of Apollo and its subsidiaries has the
power to own its properties and to carry on its business as now being conducted
and as presently proposed to be conducted and is duly authorized and qualified
to do business and is in good standing in each jurisdiction in which the failure
to be so qualified and in good standing would have a Material Adverse Effect on
Apollo. Apollo has delivered or made available to WCRF a true and correct copy
of the Certificate of Incorporation (the “Certificate
of Incorporation”), and the Bylaws, or other charter documents, as
applicable, of Apollo and its subsidiaries, each as amended to date. Neither
Apollo nor its subsidiaries is in violation of any of the provisions of its
respective charter or bylaws or equivalent organization documents. There are no
outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable
or convertible securities or other commitments or agreements of any character
relating to the issued or unissued capital stock or other securities of Merger
Sub, or otherwise obligating Apollo or its subsidiaries to issue, transfer,
sell, purchase, redeem or otherwise acquire any such securities. Apollo does not
directly or indirectly own any equity or similar interest in, or any interest
convertible or exchangeable or exercisable for, any equity or similar interest
in, any corporation, partnership, joint venture or other business association or
entity.
|
SECTION
3.02
|
CAPITALIZATION
|
There are
100,000,000 shares of Apollo capital stock authorized, consisting of 100,000,000
shares of common stock with $0.0001 par value (the “Apollo
Common Shares”). As of the date of this Agreement, there are 4,300 issued
and outstanding Apollo Common Shares. No Apollo Common Shares have been reserved
for issuance to any Person, and there are no outstanding rights, warrants,
options or agreements for the exchange of Apollo Common Shares. There are no
contracts, commitments or agreements relating to voting, purchase or sale of
Apollo’s capital stock (i) between or among Apollo and any of its stockholders
and (ii) to the best of Apollo’s Knowledge, between or among any of Apollo’s
stockholders. No Person is entitled to any rights with respect to the
conversion, exchange or delivery of the Apollo Common Shares. The Apollo Common
Shares have been issued in compliance with Applicable Law.
14
|
SECTION
3.03
|
AUTHORITY
FOR AGREEMENT
|
The
execution, delivery and performance of this Agreement by Apollo has been duly
authorized by all necessary corporate action, and this Agreement constitutes the
valid and binding obligation of Apollo, enforceable against Apollo in accordance
with its terms, except as enforceability may be affected by bankruptcy,
insolvency or other laws of general application affecting the enforcement of
creditors' rights. The execution and consummation of the transactions
contemplated by this Agreement and compliance with its provisions by Apollo will
not violate any provision of Applicable Law and will not conflict with or result
in any breach of any of the terms, conditions, or provisions of, or constitute a
default under, Apollo’s Certificate of Incorporation or Bylaws, in each case as
amended, or, to the Knowledge of Apollo, in any material respect, any indenture,
lease, loan agreement or other agreement instrument to which Apollo is a party
or by which it or any of its properties are bound, or any decree, judgment,
order, statute, rule or regulation applicable to Apollo. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
Governmental Entity is required by or with respect to Apollo in connection with
the execution and delivery of this Agreement, or the consummation of the
transactions contemplated hereby and thereby, except for (i) the filing of the
Certificate of Merger as provided in Section 1.03; (ii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws and the securities laws
of any foreign country; (iii) such filings, if any, as may be required under the
HSR and (iv) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on Apollo and would not prevent, or materially alter or delay any of the
transactions contemplated by this Agreement.
|
SECTION
3.04
|
GOVERNMENTAL
OR THIRD PARTY CONSENT
|
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party to
any agreement with Apollo, is required by or with respect to Apollo in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby, except for such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under (i) applicable securities laws, or (ii) the
DGCL.
|
SECTION
3.05
|
BUSINESS
OPERATIONS AND LIABILITIES -
APOLLO.
|
Apollo
has conducted no business operations other than the acquisition of ownership of
the capital stock of Sichuan Apollo. Apollo has 26,60 RMB promissory Note
liabilities on the Closing Date.
|
SECTION
3.06.
|
ORGANIZATION
AND STANDING – SUBSIDIARIES
|
Sichuan
Apollo is a corporation duly organized, validly existing and in good standing
under the laws of the People’s Republic of China. Sichuan
Apollo has full power and authority to carry on its business as now conducted
and to own and operate its assets, properties and
business.
|
SECTION
3.07
|
OWNERSHIP
OF
SUBSIDIARIES.
|
Apollo is
the owner of one hundred percent (100%) the registered capital stock of Sichuan
Apollo, free and clear of all Liens, encumbrances, and restrictions whatsoever.
No Person other than Apollo has any equity interest in the registered capital of
Sichuan Apollo, whether by tender of consideration or
otherwise.
15
|
SECTION
3.08.
|
CORPORATE
RECORDS.
|
All of
the books and records of each of the Acquired Entities including, without
limitation, its books of account, corporate records, minute book, stock
certificate books and other records are up-to-date, complete and reflect
accurately and fairly the conduct of its business in all material respects since
its date of incorporation. All reports, returns and statements currently
required to be filed by any of the Acquired Entities with any government agency
with respect to its business and operations have been filed or valid extensions
have been obtained in accordance with normal procedures and all governmental
reporting requirements have been complied with.
|
SECTION
3.09
|
FINANCIAL
STATEMENTS – APOLLO
|
The
financial statements of Apollo for the year ended June 30, 2008 that will be
delivered to WCRF prior to the Closing will have been prepared in accordance
with accounting principles generally accepted in the United States and will
fairly present the financial condition of Apollo at the date presented and the
results of operations of Apollo for the period presented. The
financial statements shall be accompanied by an audit opinion rendered by an
independent accountant registered with the PCAOB.
|
SECTION
3.10
|
FINANCIAL
STATEMENTS - SICHUAN APOLLO
|
The
financial statements of Sichuan Apollo for the year ended June 30, 2008 that
will be delivered to WCRF prior to the Closing will have been prepared in
accordance with accounting principles generally accepted in the United States
and will fairly present the financial condition of Sichuan Apollo at the dates
presented and the results of operations of Sichuan Apollo for the periods
presented. The financial statements for the year ended June 30, 2008
shall be accompanied by an audit opinion rendered by an independent accountant
registered with the PCAOB.
|
SECTION
3.11
|
TAXES.
|
Each of
the Acquired Entities has filed all Tax Returns that it is required to file with
all governmental agencies, wherever situate, and has paid or accrued for payment
all Taxes as shown on such returns except for Taxes being contested in good
faith. There is no material claim for Taxes that is a Lien against the property
of any of the Acquired Entities other than Liens for Taxes not yet due and
payable. All Taxes due and owing by any of the Acquired Entities have been paid.
None of the Acquired Entities is the beneficiary of any extension of time within
which to file any tax return.
|
SECTION
3.12
|
PENDING
ACTIONS.
|
There are
no material legal actions, lawsuits, proceedings or investigations, either
administrative or judicial, pending or threatened, against or affecting any of
the Acquired Entities, or against their Officers or Directors that arose out of
their operation of any of the Acquired Entities. None of the Acquired
Entities nor any of their Officers or Directors is subject to any order, writ,
judgment, injunction, decree, determination or award of any court, arbitrator or
administrative, governmental or regulatory authority or body which would be
likely to have a Material Adverse Effect on the business of any of the Acquired
Entities. There is no injunction, judgment, decree, order or
regulatory restriction imposed upon Apollo or any of the Acquired Entities or
any of their respective assets or business, or, to the knowledge of Apollo, any
of its respective directors or officers (in their capacities as such), that
would prevent, enjoin, alter or materially delay any of the transactions
contemplated by this Agreement, or that could reasonably be expected to have a
Material Adverse Effect on Apollo or any of the Acquired Entities.
16
|
SECTION
3.12
|
INTELLECTUAL
PROPERTY AND INTANGIBLE ASSETS.
|
To the
Knowledge of Apollo, Sichuan Apollo has full legal right, title and interest in
and to all of the intellectual property utilized in the operation of its
business. Sichuan Apollo has not received any written notice that the rights of
any other person are violated by the use by Sichuan Apollo of the intellectual
property. None of the intellectual property has ever been declared invalid or
unenforceable, or is the subject of any pending or, to the Knowledge of Apollo,
threatened action for opposition, cancellation, declaration, infringement, or
invalidity, unenforceability or misappropriation or like claim, action or
proceeding.
|
SECTION
3.13.
|
COMPLIANCE
WITH LAWS.
|
Sichuan
Apollo’s operations have been conducted in all material respects in accordance
with all applicable statutes, laws, rules and regulations. Sichuan Apollo is not
in violation of any law, ordinance or regulation of the People’s Republic of
China or of any other jurisdiction. Sichuan Apollo holds all the environmental,
health and safety and other permits, licenses, authorizations, certificates and
approvals of governmental authorities (collectively, "Permits") necessary or
proper for the current use, occupancy or operation of its business, and all of
the Permits are now in full force and effect.
|
SECTION
3.14
|
FINDERS’
FEES
|
Neither
Apollo nor Sichuan Apollo has incurred, nor will it incur, directly or
indirectly, any liability for brokers’ or finders’ fees or agents’ commissions
or investment bankers’ fees or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
|
SECTION
3.15
|
MINUTE
BOOKS
|
The
minute books of Apollo and the Acquired Entities made available to WCRF contain
in all material respects a complete and accurate summary of all meetings of
directors and stockholders or actions by written consent of Apollo and the
Acquired Entities during the past three years and through the date of this
Agreement, and reflect all transactions referred to in such minutes accurately
in all material respects.
|
SECTION
3.16
|
VOTE
REQUIRED
|
The
approval of Apollo’s Board of Directors and the affirmative vote of a majority
of the stockholders of Apollo are the only approvals or votes necessary to
approve this Agreement and the transactions contemplated hereby on behalf of
Apollo.
|
SECTION
3.17
|
BOARD
APPOVAL
|
The Board
of Directors of Apollo has (i) approved this Agreement and the Merger, and (ii)
approved the exchange of the Apollo Shares pursuant to Section
1.01.
17
ARTICLE
IV
CERTAIN
COVENANTS AND AGREEMENTS
|
SECTION
4.01
|
COVENANTS
OF APOLLO
|
Apollo
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, other than as contemplated by this Agreement or for the
purposes of effecting the Closing pursuant to this Agreement, Apollo shall
conduct and shall cause Sichuan Apollo to conduct its business as presently
operated and solely in the ordinary course, and consistent with such operation,
and, in connection therewith, without the written consent of WCRF, none of the
Acquired Entities shall:
|
(a)
|
Amend
its Certificate of Incorporation or
Bylaws;
|
|
(b)
|
pay
or agree to pay to any employee, officer or director compensation that is
in excess of the current compensation level of such employee, officer or
director other than salary increases or payments made in the ordinary
course of business or as otherwise provided in any contracts or agreements
with any such employees;
|
|
(c)
|
merge
or consolidate with any other entity or acquire or agree to acquire any
other entity;
|
|
(d)
|
sell,
transfer, or otherwise dispose of any material assets required for the
operations of Apollo’s or Sichuan Apollo’s business, except in the
ordinary course of business consistent with past
practices;
|
|
(e)
|
declare
or pay any dividends on or make any distribution of any kind with respect
to the Apollo Shares (provided that the Sichuan Apollo may pay dividends
or distributions of any kind to Apollo);
and
|
|
(f)
|
use
commercially reasonable efforts to comply with and not be in default or
violation under any known law, regulation, decree or order applicable to
Apollo’s or Sichuan Apollo’s business, operations or assets where such
violation would have a Material Adverse Effect on Apollo or Sichuan
Apollo.
|
18
|
SECTION
4.02
|
COVENANTS
OF WCRF
|
WCRF
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, WCRF shall, other than as contemplated by this Agreement
or for the purposes of effecting the Closing pursuant to this Agreement, conduct
its business as presently operated and solely in the ordinary course, and
consistent with such operation, and, in connection therewith, without the
written consent of Apollo shall not:
|
(a)
|
amend
its Articles of Incorporation or
Bylaws;
|
|
(b)
|
pay
or agree to pay to any employee, officer or director compensation of any
kind or amount;
|
|
(c)
|
merge
or consolidate with any other entity or acquire or agree to acquire any
other entity;
|
|
(d)
|
create,
incur, assume, or guarantee any material indebtedness for money borrowed
except in the ordinary course of business, or create or suffer to exist
any mortgage, Lien or other encumbrance on any of its material
assets;
|
|
(e)
|
make
any material capital expenditure or series of capital expenditures except
in the ordinary course of business;
|
|
(f)
|
declare
or pay any dividends on or make any distribution of any kind with respect
to WCRF;
|
|
(g)
|
issue
any additional shares of WCRF capital stock or take any action affecting
the capitalization of WCRF or the WCRF Common Shares;
and
|
|
(h)
|
grant
any severance or termination pay to any director, officer or any other
employees of WCRF.
|
|
SECTION
4.03
|
COVENANTS
OF THE PARTIES
|
(a) Tax-free
Reorganization. The Parties intend that the Merger qualify as a Tax-free
“reorganization” under Sections 368(a) of the Code, as amended, and the Parties
will take the position for all purposes that the Merger shall qualify as a
reorganization under such Section. In addition, the Parties covenant and agree
that they will not engage in any action, or fail to take any action, which
action or failure to take action would reasonably be expected to cause the
Merger to fail to qualify as a Tax-free “reorganization” under Section 368(a) of
the Code, whether or not otherwise permitted by the provisions of this
Agreement.
(b) Announcement.
Neither Apollo, on the one hand, nor WCRF on the other hand, shall issue any
press release or otherwise make any public statement with respect to this
Agreement or the transactions contemplated hereby without the prior consent of
the other Party (which consent shall not be unreasonably withheld), except as
may be required by applicable law or securities regulation. Upon execution of
this Agreement, WCRF shall issue a press release, which shall be approved by
Apollo, and file a Current Report on Form 8-K reporting the execution of the
Agreement.
19
(c) Notification
of Certain Matters. Apollo shall give prompt written notice to WCRF, and
WCRF shall give prompt written notice to Apollo, of:
(i) The
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time; and
(ii) Any
material failure of Apollo, on the one hand, or WCRF, on the other hand, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder.
(d) Reasonable
Best Efforts. Before Closing, upon the terms and subject to the
conditions of this Agreement, the Parties agree to use their respective
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable (subject to
applicable laws) to consummate and make effective the Merger and other
transactions contemplated by this Agreement as promptly as practicable
including, but not limited to:
(i) The
preparation and filing of all forms, registrations and notices required to be
filed to consummate the Merger, including without limitation, any approvals,
consents, orders, exemptions or waivers by any third party or governmental
entity; and
(ii) The
satisfaction of the Party's conditions precedent to Closing.
(e) Access
to Information
(i) Inspection
by Apollo. WCRF will make available for inspection by Apollo, during
normal business hours and in a manner so as not to interfere with normal
business operations, all of WCRF’s records (including tax records), books of
account, premises, contracts and all other documents in WCRF’s possession or
control that are reasonably requested by Apollo to inspect and examine the
business and affairs of WCRF. WCRF will cause its managerial employees and
regular independent accountants to be available upon reasonable advance notice
to answer questions of Apollo concerning the business and affairs of WCRF.
Apollo will treat and hold as confidential any information it receives from WCRF
in the course of the reviews contemplated by this Section 4.03(e). No
examination by Apollo will, however, constitute a waiver or relinquishment by
Apollo of its rights to rely on WCRF’s covenants, representations and warranties
made herein or pursuant hereto.
(ii) Inspection
by WCRF. Apollo will, if requested, make available for inspection by
WCRF, during normal business hours and in a manner so as not to interfere with
normal business operations, all of the Acquired Entities’ records (including tax
records), books of account, premises, contracts and all other documents in
Apollo’s possession or control that are reasonably requested by WCRF to inspect
and examine the business and affairs of the Acquired Entities. Apollo will cause
its managerial employees and regular independent accountants to be available
upon reasonable advance notice to answer questions of WCRF concerning the
business and affairs of the Acquired Entities. WCRF will treat and hold as
confidential any information it receives from Apollo in the course of the
reviews contemplated by this Section 4.03(e). No examination by WCRF will,
however, constitute a waiver or relinquishment by WCRF of its rights to rely on
Apollo’s covenants, representations and warranties made herein or pursuant
hereto.
(f) WCRF
Board of Directors. As promptly as possible after the Effective Time of
the Merger or in accordance with applicable law, all of the officers and members
of the board of directors of WCRF shall tender their resignations as officers
and directors of WCRF, and the vacancies created on the WCRF board of directors
shall be filled by persons designated by the Board of Directors of
Apollo.
20
ARTICLE
V
CONDITIONS
PRECEDENT
|
SECTION
5.01
|
CONDITIONS
PRECEDENT TO THE PARTIES'
OBLIGATIONS
|
The
obligations of the Parties as provided herein shall be subject to each of the
following conditions precedent, unless waived in writing by both WCRF and
Apollo:
(a) Consents,
Approvals. The Parties shall have obtained all necessary consents and
approvals of their respective boards of directors, and all consents, approvals,
permits and authorizations required under their respective charter documents,
and, except as set forth on Schedule 5.01(a), all consents, including any
material consents and waivers by the Parties’ respective lenders and other
third-parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
(b) Shareholder
Approval. This Agreement and the transactions contemplated hereby shall
have been approved by the shareholders of Apollo in accordance with the
applicable provisions of the DGCL and its bylaws.
(c) Absence
of Certain Litigation. No action or proceeding shall be threatened or
pending before any governmental entity or authority which is likely to result
(i) in a restraint, prohibition or the obtaining of damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby, or (ii) in limiting or restricting Apollo or WCRF’s conduct
or operation of the business of Apollo or WCRF or any of their subsidiaries,
following the Merger.
|
SECTION
5.02
|
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF
WCRF
|
The
obligations of WCRF on the Closing Date as provided herein shall be subject to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived in writing by WCRF:
(a) Consents
and Approvals. Apollo shall have obtained all material consents,
including any material consents and waivers by Apollo's lenders and other third
parties, if necessary, to the consummation of the transactions contemplated by
this Agreement.
(b) Representations
and Warranties. The representations and warranties by Apollo in Article
III herein shall be true and accurate in all material respects on and as of the
Closing Date with the same force and effect as though such representations and
warranties had been made at and as of the Closing Date, except to the extent
that any changes therein are specifically contemplated by this
Agreement.
(c) Performance.
Apollo shall have performed and complied in all material respects with all
agreements to be performed or complied with by it pursuant to this Agreement at
or prior to the Closing.
(d) Proceedings
and Documents. All corporate, company and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to WCRF and its counsel, and WCRF and its counsel shall have
received all such counterpart originals (or certified or other copies) of such
documents as they may reasonably request.
(e) Certificate
of Good Standing. Apollo shall have delivered to WCRF a certificate as to
the good standing of Apollo certified by the Secretary of State of the State of
Delaware on or within five (5) business days prior to the Closing
Date.
(f) Material
Changes. Except as contemplated by this Agreement, since the date hereof,
none of the Acquired Entities shall have suffered a Material Adverse Effect,
and, without limiting the generality of the foregoing, there shall be no pending
litigation to which any of the Acquired Entities is a party which is reasonably
likely to have a Material Adverse Effect on any of the Acquired
Entities.
21
(g) Due
Diligence. WCRF shall have satisfactorily completed its due diligence
investigation of Apollo; provided,
however, that this Section 5.02(g) shall cease to be a condition precedent to
the Merger unless on or prior to August 13, 2008
WCRF shall have delivered a written notice to Apollo stating that it is not
satisfied with the results of its due diligence.
(h) SEC
Filing. No less than one week prior to the Closing, Apollo shall have
delivered to WCRF the financial statements, report of Apollo’s independent
registered public accountant, and other information required for inclusion in
the Current Report that WCRF will file with the SEC within four business days
after the Closing.
(i) Certificate
of Apollo. WCRF shall have been provided with a certificate
executed on behalf of Apollo by its President and Chief Financial Officer
certifying that the condition set forth in Section 5.02(b) shall have been
fulfilled.
|
SECTION
5.03
|
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF
APOLLO
|
The
obligations of Apollo on the Closing Date as provided herein shall be subject to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived in writing by Apollo:
(a) Consents
and Approvals. WCRF and the Merger Sub shall have obtained all material
consents, including any material consents and waivers of its respective lenders
and other third parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
(b) Representations
and Warranties. The representations and warranties by WCRF and Merger Sub
in Article II herein shall be true and accurate in all material respects on and
as of the Closing Date with the same force and effect as though such
representations and warranties had been made at and as of the Closing Date,
except to the extent that any changes therein are specifically contemplated by
this Agreement.
(c) Performance.
Each of WCRF and Merger Sub shall have performed and complied in all material
respects with all agreements to be performed or complied with by it pursuant to
this Agreement prior to or at the Closing.
(d) Proceedings
and Documents. All corporate, company and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to Apollo and its counsel, and Apollo and its counsel shall
have received all such counterpart originals (or certified or other copies) of
such documents as they may reasonably request.
(e) Certificates
of Good Standing. WCRF shall have delivered to Apollo a certificate as to
its and the Merger Sub’s good standing in the State of Nevada, in each case
certified by the Secretary of State not more than five (5) business days prior
to the Closing Date.
(f) Material
Changes. Except as contemplated by this Agreement, since the date hereof,
neither WCRF nor the Merger Sub shall have suffered a Material Adverse Effect
and, without limiting the generality of the foregoing, there shall be no pending
litigation to which WCRF or the Merger Sub is a party which is reasonably likely
to have a Material Adverse Effect on WCRF or the Merger Sub.
(g) Due
Diligence. Apollo shall have satisfactorily completed its due
diligence investigation of WCRF; provided,
however, that this Section 5 .03(g) shall cease to be a condition precedent to
the Merger unless on or prior to August 13, 2008 Apollo shall have delivered a
written notice to WCRF stating that it is not satisfied with the results of its
due diligence.
(h) Status
of WCRF. As at the Effective Time of the Merger, WCRF (i) shall be a
fully compliant reporting public company under the Exchange Act, and shall be
current in all of its reports required to be filed under the Exchange Act, (ii)
shall not have been threatened or subject to delisting from the OTC Bulletin
Board, and (iii) shall have outstanding 555,013 WCRF Common Shares; and there
shall be no other WCRF Common Shares outstanding nor, except as provided
hereunder, any options, warrants or rights to acquire capital stock of WCRF
whether for additional consideration or on conversion.
(i) Certificate
of WCRF. Apollo shall have been provided with a certificate
executed on behalf of WCRF by its President and Chief Financial Officer
certifying that the condition set forth in Section 5.03(b) shall have been
fulfilled.
22
ARTICLE
VI
TERMINATION
|
SECTION
6.01
|
TERMINATION
|
This
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time by:
(a) The
mutual written consent of the Boards of Directors of WCRF and
Apollo;
(b) Either
WCRF, on the one hand, or Apollo, on the other hand, if any governmental entity
or court of competent jurisdiction shall have issued an order, decree or ruling
or taken any other action (which order, decree, ruling or other action the
Parties shall use their commercially reasonable best efforts to lift), which
restrains, enjoins or otherwise prohibits the Merger or the issuance of the
Merger Shares as contemplated herein and such order, decree, ruling or other
action shall have become final and non-appealable;
(c) WCRF,
if Apollo shall have breached in any material respect any of its
representations, warranties, covenants or other agreements contained in this
Agreement, and the breach cannot be or has not been cured within thirty (30)
calendar days after the giving of written notice by WCRF to Apollo, or by WCRF,
if it is not satisfied with the results of its due diligence investigation and
it so notifies Apollo on or before August 13, 2008;
(d) Apollo,
if WCRF shall have breached in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement, and the
breach cannot be or has not been cured within thirty (30) calendar days after
the giving of written notice by Apollo to WCRF, or by Apollo if it is not
satisfied with the results of its due diligence investigation and it so notifies
WCRF on or before August 13, 2008; or
(e) Without
any action on the part of the Parties if required by Applicable Law or if the
Closing shall not be consummated by August 31, 2008, unless extended by written
agreement of WCRF and Apollo.
|
SECTION
6.02
|
EFFECT
OF TERMINATION
|
If this
Agreement is terminated as provided in Section 6.01, written notice of such
termination shall be given by the terminating Party to the other Party
specifying the provision of this Agreement pursuant to which such termination is
made, this Agreement shall become null and void and there shall be no liability
on the part of WCRF or Apollo, provided,
however, that (a) the provisions of Article VII hereof shall survive the
termination of this Agreement; (b) nothing in this Agreement shall relieve any
Party from any liability or obligation with respect to any willful breach of
this Agreement; and (c) termination shall not affect accrued rights or
liabilities of any party at the time of such termination.
ARTICLE
VII
CONFIDENTIALITY
|
SECTION
7.01
|
CONFIDENTIALITY
|
WCRF, on
the one hand, and Apollo, on the other hand, will keep confidential all
information and documents obtained from the other, including but not limited to
any information or documents provided pursuant to Section 4.03(e) hereof (except
for any information disclosed to the public pursuant to a press release
authorized by the Parties); and in the event the Closing does not occur or this
Agreement is terminated for any reason, will promptly return such documents and
all copies of such documents and all notes and other evidence thereof, including
material stored on a computer, and will not use such information for its own
advantage, except to the extent that (i) the information must be disclosed by
law, (ii) the information becomes publicly available by reason other than
disclosure by the Party subject to the confidentiality obligation, (iii) the
information is independently developed without use of or reference to the other
Party’s confidential information, (iv) the information is obtained from another
source not obligated to keep such information confidential, or (v) the
information is already publicly known or known to the receiving Party when
disclosed as demonstrated by written documentation in the possession of such
Party at such time.
23
ARTICLE
VIII
INDEMNIFICATION
|
SECTION
8.01
|
INDEMNIFICATION
BY WCRF
|
WCRF
agrees to indemnify, defend and hold harmless each of Apollo, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior to
the date hereof or who becomes prior to the Closing, a shareholder, officer,
director or partner of Apollo, any subsidiary or affiliate thereof or an
employee of Apollo, any subsidiary or affiliate thereof and their respective
heirs, legal representatives, successors and assigns (the “Apollo
Indemnified Parties”) against all losses, claims, damages, costs,
expenses (including reasonable attorneys’ fees), liabilities or judgments or
amounts that are paid in settlement of or in connection with any threatened or
actual third party claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of (i) any material
breach of this Agreement by WCRF, or any subsidiary or affiliate thereof,
including but not limited to failure of any representation or warranty to be
true and correct at or before the Closing, or (ii) any willful or grossly
negligent act, omission or conduct of any officer, director or agent of WCRF or
any subsidiary or affiliate thereof prior to the Closing, whether asserted or
claimed prior to, at or after, the Closing. Any Apollo Indemnified Party wishing
to claim indemnification under this Section 8.01, upon learning of any such
claim, action, suit, proceeding or investigation, shall notify WCRF in writing,
but the failure to so notify shall not relieve WCRF from any liability that it
may have under this Section 8.01, except to the extent that such failure would
materially prejudice WCRF.
|
SECTION
8.02
|
INDEMNIFICATION
BY APOLLO
|
Apollo
shall indemnify, defend and hold harmless each of WCRF, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior to
the date hereof or who becomes prior to the Closing, a shareholder, officer,
director or partner of WCRF, any subsidiary or affiliate thereof or an employee
of WCRF, any subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “WCRF
Indemnified Parties”) against all losses, claims, damages, costs,
expenses (including reasonable attorneys’ fees), liabilities or judgments or
amounts that are paid in settlement of or in connection with any threatened or
actual third party claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of (i) any material
breach of this Agreement by Apollo or any subsidiary or affiliate thereof,
including but not limited to failure of any representation or warranty to be
true and correct at or before the Closing, or (ii) any willful or negligent act,
omission or conduct of any officer, director or agent of Apollo or any
subsidiary or affiliate thereof prior to the Closing, whether asserted or
claimed prior to, at or after, the Closing. Any WCRF Indemnified Party wishing
to claim indemnification under this Section 8.02, upon learning of any such
claim, action, suit, proceeding or investigation, shall notify Apollo in
writing, but the failure to so notify shall not relieve Apollo from any
liability that it may have under this Section 8.02, except to the extent that
such failure would materially prejudice Apollo.
|
SECTION
8.03
|
INDEMNIFICATION
OF EXCHANGE AGENT
|
WCRF,
Apollo, and Merger Sub (for the purposes of this Section 8.03, the “Indemnitors”)
agree to indemnify the Exchange Agent and its employees and agents
(collectively, the “Indemnitees”)
against, and hold them harmless of and from, any and all loss, liability, cost,
damage and expense, including without limitation, reasonable counsel fees, which
the Indemnitees, or any of them, may suffer or incur by reason of any action,
claim or proceeding brought against the Indemnitees, or any one of them, arising
out of or relating in any way to the Exchange Agent’s service in such capacity,
unless such action, claim or proceeding is the result of the willful misconduct
or gross negligence of any of the Indemnitees.
24
ARTICLE
IX
MISCELLANEOUS
|
SECTION
9.01
|
EXPENSES
|
All costs
and expenses incurred in connection with this Agreement and the consummation of
the transactions contemplated by this Agreement shall be paid by the Party
incurring such expenses.
|
SECTION
9.02
|
APPLICABLE
LAW
|
This
Agreement shall be governed by the laws of the State of Nevada, without giving
effect to the principles of conflicts of laws thereof, as applied to agreements
entered into and to be performed in such state.
|
SECTION
9.03
|
NOTICES
|
All
notices and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given or made as follows:
(a) If
sent by reputable overnight air courier (such as Federal Express), one business
day after being sent;
(b) If
sent by facsimile transmission, with a copy mailed on the same day in the manner
provided in clause (a) above, when transmitted and receipt is confirmed by the
fax machine; or
(c) If
otherwise actually personally delivered, when delivered.
All
notices and other communications under this Agreement shall be sent or delivered
as follows:
If to
Apollo, to:
▇▇▇▇▇▇▇
▇▇▇▇
Apollo
Solar Energy, Inc.
c/o
American Union Securities, Inc.
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ – ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a
copy to (which shall not constitute notice):
▇▇▇▇▇
▇▇▇▇▇, Esq.
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Tel:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
25
If to
WCRF, to:
▇▇▇▇▇▇▇
▇▇▇▇
Wincroft,
Inc.
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
|
With
a copy to (which shall not constitute
notice):
|
▇▇▇▇▇▇
▇▇▇▇▇▇, Esq.
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Each
Party may change its address by written notice in accordance with this
Section.
|
SECTION
9.04
|
ENTIRE
AGREEMENT
|
This
Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the Parties with respect to the
subject matter contained in this Agreement, and supersedes and cancels all prior
agreements, negotiations, correspondence, undertakings and communications of the
Parties, oral or written, respecting such subject matter including the Letter of
Intent made by Apollo and WCRF dated August15, 2008.
|
SECTION
9.05
|
ASSIGNMENT
|
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned by any of the Parties (whether by operation of law
or otherwise) without the prior written consent of the other Parties; provided
that in no event may the right to indemnification provided by Article VIII
hereto be assigned by any of the Parties, with or without consent, except by
operation of law. Subject to the immediately foregoing sentence of this Section
9.05, this Agreement will be binding upon, inure to the benefit of and be
enforceable by, the Parties and their respective successors, assigns, heirs and
representatives.
|
SECTION
9.06
|
COUNTERPARTS
|
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which shall be considered one and the same
agreement.
|
SECTION
9.07
|
NO
THIRD PARTY BENEFICIARIES
|
Except as
expressly provided by this Agreement, nothing herein is intended to confer upon
any person or entity not a Party to this Agreement any rights or remedies under
or by reason of this Agreement.
|
SECTION
9.08
|
RULES
OF CONSTRUCTION
|
The
Parties agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting such
agreement or document.
26
IN
WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
date first above written.
WINCROFT,
INC.
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ | |
| Name: |
▇▇▇▇▇▇▇
▇▇▇▇
|
|
|
Title:
|
Chief
Executive Officer
|
APOLLO SOLAR
ENERGY, INC.
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ | |
| Name: |
▇▇▇▇▇▇▇
▇▇▇▇
|
|
|
Title:
|
Chief
Executive Officer
|
APOLLO
SOLAR ENERGY, INC.
|
By:
|
/s/ Huakang | |
| Name: |
▇▇▇▇▇▇▇
▇▇▇▇
|
|
|
Title:
|
President
|
EXHIBITS
AND SCHEDULES:
|
Schedule
1.01
|
Allocation
of Merger Shares among Apollo
Shareholders
|
27
Schedule
1.01
Allocation
of Merger Shares among Apollo shareholders
|
Name
|
Shares
of Common Stock of ASE
|
%
Ownership Interest in Apollo
|
Shares
of Common Stock of WCRF
|
%
Ownership Interest in WCRF
|
||||||||||||
|
New
Greatwall Limited
|
2,150 | 50.00 | % | 8,600,000 | 48.43 | % | ||||||||||
|
Li
Yuanqing
|
25 | 0.06 | % | 100,000 | 0.56 | % | ||||||||||
|
Warner
Tech
|
1,087.5 | 25.29 | % | 4,350,000 | 24.50 | % | ||||||||||
|
▇▇▇▇▇
▇▇▇▇
|
4.5 | 0.10 | % | 18,000 | 0.10 | % | ||||||||||
|
Mariana
Lo
|
4.5 | 0.10 | % | 18,000 | 0.10 | % | ||||||||||
|
▇▇▇▇▇▇▇
▇▇▇▇
|
▇▇▇ | 4.65 | % | 800,000 | 4.50 | % | ||||||||||
|
▇▇▇▇▇▇▇
▇▇▇▇
|
180 | 3.76 | % | 720,000 | 4.05 | % | ||||||||||
|
ASE
Group
|
648.5 | 15.08 | % | 2,594,000 | 14.61 | % | ||||||||||
|
Apollo
sub total
|
4,300 | 100.00 | % | 17,200,000 | 96.87 | % | ||||||||||
|
WCRF
shell
|
555,013 | 3.13 | % | |||||||||||||
|
WCRF
total after merger close
|
17,755,103 | 100.00 | % | |||||||||||||
28