EXHIBIT 10.1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF SHARE EXCHANGE
by and among
Broad Faith Limited,
a British Virgin Islands Corporation,
and
the Sole Stockholder of Broad Faith Limited
on the one hand;
and
Industries International Inc.,
a Nevada corporation
and
Certain Stockholders of Industries International, Inc.,
on the other hand
February 10, 2003
AMENDED AND RESTATED
AGREEMENT AND PLAN OF SHARE EXCHANGE
This Agreement and Plan of Share Exchange, dated as of February 10, 2003
(this "Agreement"), is made and entered into by and among Broad Faith Limited, a
British Virgin Islands corporation ("Broad Faith"), and Dr. Kit Tsui, an
individual who is the sole stockholder of Broad Faith (the "Stockholder"), on
the one hand, and Industries International, Inc., a Nevada corporation ("INDI"),
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, an individual who owns at least a majority of INDI's
outstanding capital stock (the "INDI Stockholder"), Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇") and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), each individuals who are stockholders
of INDI, on the other hand.
WHEREAS, the respective Boards of Directors of Broad Faith and INDI have
adopted resolutions approving and adopting the proposed share exchange (the
"Exchange") upon the terms and conditions hereinafter set forth in this
Agreement;
WHEREAS, the Exchange ratio is 28,131,944 shares of INDI common stock for
each single share of Broad Faith common stock;
WHEREAS, the Stockholder holds two shares of Broad Faith's common stock
(the "Broad Faith Shares"), which represent all of the issued and outstanding
capital stock of Broad Faith, and the Stockholder desires to participate in the
Exchange;
WHEREAS, Broad Faith will enter into this Agreement for the purpose of
evidencing its consent to the consummation of the Exchange and for the purpose
of making certain representations, warranties, covenants and agreements;
WHEREAS, the INDI Stockholder will enter into this Agreement for the
purpose of making certain representations, warranties, covenants and agreements;
WHEREAS, it is intended that the terms and conditions of this Agreement
comply in all respects with Section 368(a)(1)(B) of the Code and the regulations
corresponding thereto, so that the Exchange shall qualify as a tax free
reorganization under the Code;
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE 1
THE EXCHANGE
1.1 The Exchange. Upon the terms and subject to the conditions hereof,
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at the Closing (as hereinafter defined) the Stockholder will sell, convey,
assign, transfer and deliver to INDI one or more stock certificates representing
the Broad Faith Shares, and INDI will issue to the Stockholder, in exchange for
the Broad Faith Shares, one or more stock certificates representing an aggregate
of 15,003,140 shares (the "INDI Shares") of its common capital stock, par value
$.01 per share ("INDI Common Stock"). In addition, subject to compliance with
applicable federal securities laws, as soon as practicable following the
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Closing, INDI shall increase its authorized capital to at least 100,000,000
shares of common stock and upon the effectiveness of such increase INDI shall
issue the remaining 41,260,748 shares (the "Post Closing Shares") of common
stock of INDI owed to the Stockholder pursuant to the Exchange without
additional consideration. The number of Post Closing Shares shall be adjusted
accordingly in the event a reverse stock split is effected concurrently with the
increase in authorized common stock of INDI.
1.2 Closing. The closing of the Exchange (the "Closing") shall take place
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on the date of this Agreement. Such date is referred to herein as the "Closing
Date."
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF BROAD FAITH
Broad Faith hereby represents and warrants to INDI as follows:
2.1 Organization. Broad Faith has been duly incorporated, is validly
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existing as a corporation and is in good standing under the laws of its
jurisdiction of incorporation, and has the requisite power to carry on its
business as now conducted.
2.2 Capitalization. The authorized capital stock of Broad Faith
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consists of 50,000 shares of common stock, U.S. $1.00 par value, of which two
shares are issued and outstanding, and no shares of preferred stock. All of the
issued and outstanding shares of capital stock of Broad Faith are duly
authorized, validly issued, fully paid, non-assessable and free of preemptive
rights. There are no outstanding or authorized options, rights, warrants,
calls, convertible securities, rights to subscribe, conversion rights or other
agreements or commitments to which Broad Faith is a party or which are binding
upon Broad Faith providing for the issuance or transfer by Broad Faith of
additional shares of its capital stock and Broad Faith has not reserved any
shares of its capital stock for issuance, nor are there any outstanding stock
option rights, phantom equity or similar rights, contracts, arrangements or
commitments which are binding upon Broad Faith. There are no voting trusts or
any other agreements or understandings with respect to the voting of Broad
Faith's capital stock.
2.3 Certain Corporate Matters. Broad Faith is duly qualified to do
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business as a corporation and is in good standing in each jurisdiction in which
the ownership of its properties, the employment of its personnel or the conduct
of its business requires it to be so qualified, except where the failure to be
so qualified would not have a material adverse effect on Broad Faith's financial
condition, results of operations or business. Broad Faith has full corporate
power and authority and all authorizations, licenses and permits necessary to
carry on the business in which it is engaged and to own and use the properties
owned and used by it.
2.4 Authority Relative to this Agreement. Broad Faith has the requisite
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power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by Broad Faith and the consummation by Broad Faith of the transactions
contemplated hereby have been duly authorized by the Stockholder and the Board
of Directors of Broad Faith and no other actions on the part of Broad Faith are
necessary to authorize this Agreement or the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Broad Faith
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and constitutes a valid and binding agreement of Broad Faith, enforceable
against Broad Faith in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
2.5 Consents and Approvals; No Violations. Except for requirements of
-----------------------------------------
applicable law, no filing with, and no permit, authorization, consent or
approval of, any third party, public body or authority is necessary for the
consummation by Broad Faith of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by Broad Faith nor the
consummation by Broad Faith of the transactions contemplated hereby, nor
compliance by Broad Faith with any of the provisions hereof, will (a) conflict
with or result in any breach of any provisions of the organizational documents
of Broad Faith, (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Broad Faith is a
party or by which it or its properties or assets may be bound or (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to Broad
Faith, or any of its properties or assets, except in the case of clauses (b) and
(c) for violations, breaches or defaults which are not in the aggregate material
to Broad Faith taken as a whole.
2.6 Financial Statements. The reviewed consolidated balance sheets of
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Broad Faith as of September 30, 2002 and reviewed consolidated statements of
operations and cash flows for the 9 months ended September 30, 2002, and the
reviewed consolidated balance sheets as of December 31, 2001 and reviewed
statements of operations and cash flows for the 12 months ended December 31,
2001, and the reviewed consolidated balance sheets of Broad Faith as of December
31, 2000 and reviewed consolidated statements of operations and cash flows for
the 12 months ended December 31, 2000, and the reviewed consolidated balance
sheets of Broad Faith as of December 31, 1999 and reviewed consolidated
statements of operations and cash flows for the 12 months ended December 31,
1999 (collectively, the "Broad Faith Financial Statements") (a) were prepared in
accordance with the books and records of Broad Faith; (b) were prepared in
accordance with United States generally accepted accounting principles, subject
to final review by the U.S. affiliate of Broad Faith's auditor, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.;
and (c) are accurate and fairly present its financial condition and the results
of operations as of the relevant dates thereof and for the entities and periods
covered thereby.
2.7 Absence of Material Changes. Since September 30, 2002, there has not
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been any material adverse change in the condition (financial or otherwise) of
the properties, assets, liabilities or business of Broad Faith, except changes
in the ordinary course of business which, individually and in the aggregate,
have not been materially adverse.
2.8 Title to Assets. Broad Faith has good and marketable title to all of
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the assets and properties now carried on its books including those reflected in
the most recent balance sheet contained in the Broad Faith Financial Statements,
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free and clear of all liens, claims, charges, security interests or other
encumbrances, except as described in the Broad Faith Financial Statements or
arising thereafter in the ordinary course of business (none of which will be
material).
2.9 Disclosure. The representations and warranties and statements of
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fact made by Broad Faith in this Agreement are, as applicable, accurate, correct
and complete and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to INDI and the INDI
Stockholder as follows:
3.1 Ownership of the Broad Faith Shares. The Stockholder owns,
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beneficially and of record, good and marketable title to the Broad Faith Shares,
free and clear of all security interests, liens, adverse claims, encumbrances,
equities, proxies, options or stockholders' agreements. At the Closing, the
Stockholder will convey to INDI good and marketable title to the Broad Faith
Shares, free and clear of any security interests, liens, adverse claims,
encumbrances, equities, proxies, options, stockholders' agreements or
restrictions.
3.2 Authority Relative to this Agreement. The execution, delivery and
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performance of this Agreement by the Stockholder and the consummation by the
Stockholder of the transactions contemplated hereby have been duly authorized by
the Stockholder, and no other actions on the part of the Stockholder are
necessary to authorize this Agreement or the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the
Stockholder and constitutes a valid and binding agreement of the Stockholder,
enforceable against the Stockholder in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
3.3 Consents and Approvals; No Violations. Except for requirements of
---------------------------------------
applicable laws, no filing with, and no permit, authorization, consent or
approval of, any public body or authority is necessary for the consummation by
the Stockholder of the transactions contemplated by this Agreement. Neither the
execution and delivery of this Agreement by the Stockholder nor the consummation
by the Stockholder of the transactions contemplated hereby, nor compliance by
the Stockholder with any of the provisions hereof, will (a) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, agreement or other instrument or
obligation to which the Stockholder is a party or by which the Stockholder or
his property may be bound or (b) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Stockholder, except in the case of
clauses (a) and (b) for violations, breaches or defaults which are not in the
aggregate material to the Stockholder.
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3.6 Restricted Securities. The Stockholder acknowledges that the INDI
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Shares will not be registered pursuant to the Securities Act of 1933, as amended
(the "Securities Act") or any applicable state securities laws, that the INDI
Shares will be characterized as "restricted securities" under federal securities
laws, and that under such laws and applicable regulations the INDI Shares cannot
be sold or otherwise disposed of without registration under the Securities Act
or an exemption therefrom. In this regard, the Stockholder is familiar with
Rule 144 promulgated under the Securities Act, as currently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
3.7 Accredited Investor. The Stockholder is an "Accredited Investor" as
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that term is defined in rule 501 of Regulation D promulgated under the
Securities Act. The Stockholder is able to bear the economic risk of acquiring
the INDI Shares pursuant to the terms of this Agreement, including a complete
loss of the Stockholder's investment in the INDI Shares.
3.7 Legend. The Stockholder acknowledges that the certificate(s)
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representing the INDI Shares shall each conspicuously set forth on the face or
back thereof a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
INDI AND THE INDI STOCKHOLDER
INDI and the INDI Stockholder hereby represent and warrant, jointly and
severally, to Broad Faith and the Stockholder as follows:
4.1 Organization. INDI is a corporation duly organized, validly
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existing and in good standing under the laws of the state of its incorporation,
and has the requisite corporate power to carry on its business as now conducted.
4.2 Capitalization. INDI's authorized capital stock consists of
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20,000,000 shares of capital stock, all of which are designated as Common Stock,
of which 4,996,860 shares are and at the Closing will be issued and outstanding.
All issued and outstanding shares of INDI Common Stock are duly authorized,
validly issued, fully paid, non-assessable and free of preemptive rights. When
issued, the INDI Shares will be duly authorized, validly issued, fully paid,
non-assessable and free of preemptive rights, there are no outstanding or
authorized options, rights, warrants, calls, convertible securities, rights to
subscribe, conversion rights or other agreements or commitments to which INDI is
a party or which are binding upon INDI providing for the issuance by INDI or
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transfer by INDI of additional shares of INDI's capital stock and INDI has not
reserved any shares of its capital stock for issuance, nor are there any
outstanding stock option rights, phantom equity or similar rights, contracts,
arrangements or commitments to issue capital stock of INDI. There are no voting
trusts or any other agreements or understandings with respect to the voting of
INDI's capital stock.
4.3 Certain Corporate Matters. INDI is duly licensed or qualified to do
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business and is in good standing as a foreign corporation in every jurisdiction
in which the character of INDI's properties or nature of INDI's business
requires it to be so licensed or qualified other than such jurisdictions in
which the failure to be so licensed or qualified does not, or insofar as can
reasonably be foreseen, in the future will not, have a material adverse effect
on its financial condition, results of operations or business. INDI has full
corporate power and authority and all authorizations, licenses and permits
necessary to carry on the business in which it is engaged or in which it
proposes presently to engage and to own and use the properties owned and used by
it. INDI has delivered to Broad Faith true, accurate and complete copies of its
Certificate of Incorporation and Bylaws, which reflect all restatements of and
amendments made thereto at any time prior to the date of this Agreement. The
records of meetings of the stockholders and Board of Directors of INDI are
complete and correct in all material respects. The stock records of INDI and the
stockholder lists of INDI that INDI has previously furnished to Broad Faith are
complete and correct in all material respects and accurately reflect the record
ownership and the beneficial ownership of all the outstanding shares of INDI's
capital stock and any other outstanding securities issued by INDI. INDI is not
in default under or in violation of any provision of its Certificate of
Incorporation or Bylaws in any material respect. INDI is not in any material
default or in violation of any restriction, lien, encumbrance, indenture,
contract, lease, sublease, loan agreement, note or other obligation or liability
by which it is bound or to which any of its assets is subject.
4.4 Authority Relative to this Agreement. INDI has the requisite
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corporate power and authority to enter into this Agreement and carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by INDI and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of INDI and no other actions on the
part of INDI are necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by INDI and constitutes a valid and binding obligation of INDI,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
4.5 Consents and Approvals; No Violations. Except for applicable
-----------------------------------------
requirements of federal securities laws and state securities or blue-sky laws,
no filing with, and no permit, authorization, consent or approval of, any third
party, public body or authority is necessary for the consummation by INDI of the
transactions contemplated by this Agreement. Neither the execution and delivery
of this Agreement by INDI nor the consummation by INDI of the transactions
contemplated hereby, nor compliance by INDI with any of the provisions hereof,
will (a) conflict with or result in any breach of any provisions of the charter
or Bylaws of INDI, (b) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
7
contract, agreement or other instrument or obligation to which INDI is a party
or by which it or any of its properties or assets may be bound or (c) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
INDI, or any of its properties or assets, except in the case of clauses (b) and
(c) for violations, breaches or defaults which are not in the aggregate material
to INDI taken as a whole.
4.6 SEC Documents. INDI hereby makes reference to the following
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documents filed with the United States Securities and Exchange Commission (the
"SEC"), as posted on the SEC's website, ▇▇▇.▇▇▇.▇▇▇: (collectively, the "SEC
-----------
Documents"): (a) Annual Report on Form 10-KSB for the fiscal year ended December
31, 2001; (b) General Form For Registration of Securities Of Small Business
Issuers on Form 10-SB12G as filed on December 4, 2000, and all amendments
thereto; and (c) Quarterly Reports on Form 10-QSB for the periods ended March
31, 2001, June 30, 2001, September 30, 2001, March 31, 2002, June 30, 2002 and
September 30, 2002, and all amendments thereto. The SEC Documents constitute
all of the documents and reports that INDI was required to file with the SEC
pursuant to the Securities Exchange Act of 1934 ("Exchange Act") and the rules
and regulations promulgated thereunder by the SEC since the effectiveness of
INDI's Form 10-SB12G filed on December 4, 2000. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder and none of
the SEC Documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of INDI included in the SEC Documents
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles in the United States (except, in the case of unaudited statements, as
permitted by the applicable form under the Exchange Act) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the financial position of INDI as of the dates
thereof and its statements of operations, stockholders' equity and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal and recurring year-end audit adjustments which were and are not expected
to have a material adverse effect on INDI, its business, financial condition or
results of operations). Except as and to the extent set forth on the
consolidated balance sheet of INDI as of September 30, 2002, including the notes
thereto, INDI has no liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise and whether required to be reflected on a
balance sheet or not), except for liabilities and obligations incurred in the
ordinary course of business consistent with past practices since September 30,
2002 which in the aggregate could not reasonably be expected to have a material
adverse effect on INDI, its business, financial condition or results of
operations.
4.7 Financial Statements.
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(a) Included in the SEC Documents are the audited balance sheet of
INDI as at December 31, 2001, and the related statements of income,
stockholders' equity and cash flows for the two years then ended, together with
the unqualified report thereon (except with respect to continuation as a going
concern) of ▇▇▇▇▇ ▇▇▇▇▇▇▇ CPA, P.C. ("▇▇▇▇▇▇▇"), independent auditor
(collectively, "INDI's Audited Financials").
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(b) Included in the SEC Documents are the unaudited balance sheets of
INDI as at September 30, 2002, and the related statements of operations and cash
flows for the nine months ended September 30, 2002, as reviewed by ▇▇▇▇▇▇▇
("INDI's Interim Financials"). The unaudited balance sheet at September 30,
2002 included in INDI's Interim Financials is hereinafter referred to as the
"Unaudited Balance Sheet" and September 30, 2002 is hereinafter referred to as
the "INDI Balance Sheet Date".
(c) INDI's Audited Financials and INDI's Interim Financials
(collectively "INDI's Financial Statements") are (i) in accordance with the
books and records of INDI, (ii) correct and complete, (iii) fairly present the
financial position and results of operations of INDI as of the dates indicated,
and (iv) prepared in accordance with U.S. GAAP (except that (x) unaudited
financial statements may not be in accordance with GAAP because of the absence
of footnotes normally contained therein, and (y) interim (unaudited) financials
are subject to normal year-end audit adjustments that in the aggregate will not
have a material adverse effect on INDI, its business, financial condition or
results of operations.
4.8 Events Subsequent to Financial Statements. Since December 31, 2001,
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there has not been:
(a) Any sale, lease, transfer, license or assignment of any assets, tangible or
intangible, of INDI;
(b) Any damage, destruction or property loss, whether or not covered by
insurance, affecting adversely the properties or business of INDI;
(c) Any declaration or setting aside or payment of any dividend or distribution
with respect to the shares of capital stock of INDI or any redemption, purchase
or other acquisition of any such shares;
(d) Any subjection to any lien on any of the assets, tangible or intangible, of
INDI;
(e) Any incurrence of indebtedness or liability or assumption of obligations by
INDI;
(f) Any waiver or release by INDI of any right of any material value;
(g) Any compensation or benefits paid to officers or directors of INDI;
(h) Any change made or authorized in the Certificate of Incorporation or Bylaws
of INDI; or
(i) Any loan to or other transaction with any officer, director or stockholder
of INDI giving rise to any claim or right of INDI against any such person or of
such person against INDI.
(j) any material adverse change in the condition (financial or otherwise) of
the properties, assets, liabilities or business of INDI.
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4.9 Undisclosed Liabilities. Except as otherwise disclosed in INDI's
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Financial Statements, INDI has no material liability or obligation whatsoever,
either direct or indirect, matured or unmatured, accrued, absolute, contingent
or otherwise.
4.10 Tax Matters.
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(a) INDI has duly filed all material federal, state, local and foreign tax
returns required to be filed by or with respect to it with the Internal Revenue
Service or other applicable taxing authority, and no extensions with respect to
such tax returns have been requested or granted;
(b) INDI has paid, or adequately reserved against in INDI's Financial
Statements, all material taxes due, or claimed by any taxing authority to be
due, from or with respect to it;
(c) To the best knowledge of INDI, there has been no material issue raised or
material adjustment proposed (and none is pending) by the Internal Revenue
Service or any other taxing authority in connection with any of INDI's tax
returns;
(d) No waiver or extension of any statute of limitations as to any material
federal, state, local or foreign tax matter has been given by or requested from
INDI; and
(e) INDI has not filed a consent under Section 341(f) of the Internal Revenue
Code of 1986, as amended.
For the purposes of this Section 4.10, a tax is due (and must therefore
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either be paid or adequately reserved against in INDI's Financial Statements)
only on the last date payment of such tax can be made without interest or
penalties, whether such payment is due in respect of estimated taxes,
withholding taxes, required tax credits or any other tax.
4.11 Real Property. INDI does not own or lease any real property.
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4.12 Books and Records. The books and records of INDI delivered to the
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Stockholder prior to the Closing fully and fairly reflect the transactions to
which INDI is a party or by which it or its properties are bound.
4.13 Questionable Payments. Neither INDI nor any employee, agent or
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representative of it has, directly or indirectly, made any bribes, kickbacks,
illegal payments or illegal political contributions using Company funds or made
any payments from INDI's funds to governmental officials for improper purposes
or made any illegal payments from INDI's funds to obtain or retain business.
4.14 Environmental Matters.
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(a) Definitions. For the purpose of this Agreement, the following terms
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shall have the meaning herein specified:
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(i) "Governmental Authority" shall mean the United States, each state, each
county, each city and each other political subdivision in which INDI's
business is located, and any court, political subdivision, agency or
instrumentality with jurisdiction over INDI's business.
(ii) "Environmental Laws" shall mean (A) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.A. 9601 et
seq. ("CERCLA"), (B) the Resource Conservation and Recovery Act, as amended
by the Hazardous and Solid Waste Amendment of 1984, 42 U.S.C.A. 6901 et
seq. ("RCRA"), (C) the Clean Air Act, 42 U.S.C.A. 7401 et seq., (D) the
Federal Water Pollution Control Act, as amended, 33 U.S.C.A. 1251 et seq.,
(E) the Toxic Substances Control Act, 15 U.S.C.A. 2601 et seq., (F) all
applicable state laws, and (G) all other laws and ordinances relating to
municipal waste, solid waste, air pollution, water pollution and/or the
handling, discharge, disposal or recovery of on-site or off-site hazardous
substances or materials, as each of the foregoing has been or may hereafter
be amended from time to time.
(iii) "Hazardous Materials" shall mean, among others, (A) any "hazardous
waste" as defined by RCRA, and regulations promulgated thereunder; (B) any
"hazardous substance" as defined by CERCLA, and regulations promulgated
thereunder; (C) any "toxic pollutant" as defined in the Federal Water
Pollution Prevention and Control Act, as amended, 33 U.S.C. 1251 et seq.,
(commonly known as "CWA" for "Clean Water Act"), and any regulations
thereunder; (D) any "hazardous air pollutant" as defined in the Air
Pollution Prevention and Control Act, as amended, 42 U.S.C. 7401 et seq.
(commonly known as "CAA" for "Clean Air Act") and any regulations
thereunder; (E) asbestos; (F) polychlorinated biphenyls; (G) any substance
the presence of which at the Business Location (as hereinafter defined) is
prohibited by any Environmental Laws; and (H) any other substance which is
regulated by any Environmental Laws.
(iv) "Hazardous Materials Contamination" shall mean the presence of
Hazardous Materials in the soil, groundwater, air or any other media
regulated by the Environmental Laws on, under or around INDI's facilities
at levels or concentration which trigger any requirement under the
Environmental Laws to remove, remediate, mitigate, ▇▇▇▇▇ or otherwise
reduce the level or concentration of the Hazardous Materials. The term
"Hazardous Materials Contamination" does not include the presence of
Hazardous Materials in process tanks, lines, storage or reactor vessels,
delivery trucks or any other equipment or containers, which Hazardous
Materials are used in the manufacture, processing, distribution, use,
storage, sale, handling, transportation, recycling, reuse or disposal of
the products that were manufactured and/or distributed by INDI.
(v) "Business Location" shall mean any real property, building, facility or
structure owned, leased or occupied by INDI at any time from its inception
until the present.
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(b) Representations and Warranties. Based on the foregoing, INDI and the
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INDI Stockholder, jointly and severally, represent and warrant that:
(i) To the best knowledge of INDI and the INDI Stockholder, after due
investigation, there has been no material failure by INDI to comply with
all applicable requirements of Environmental Laws relating to INDI, INDI's
operations, and INDI's manufacture, processing, distribution, use,
treatment, generation, recycling, reuses, sale, storage, handling,
transportation or disposal of any Hazardous Material and INDI is not aware
of any facts or circumstances which could materially impair such compliance
with all applicable Environmental Laws.
(ii) INDI has not received notice from any Governmental Authority or any
other person of any actual or alleged violation of any Environmental Laws,
nor is any such notice anticipated.
(iii) To the best knowledge of INDI and the INDI Stockholder, after due
investigation, Environmental Laws do not require that any permits, licenses
or similar authorizations to construct, occupy or operate any equipment or
facilities used in the conduct of INDI's business.
(iv) No Hazardous Materials are now located at the Business Location, and,
to the best knowledge of INDI, after due investigation, INDI has not ever
caused or permitted any Hazardous Materials to be generated, placed,
stored, held, handled, located or used at the Business Location, except
those which may lawfully be used, transported, stored, held, handled,
generated or placed at the Business Location in the conduct of INDI's
business.
(v) INDI has not received any notices, whether from a Governmental
Authority or some other third party, that Hazardous Material Contamination
exists at the Business Location or at any other location utilized by INDI
in the conduct of its business nor is INDI aware of any circumstances that
would give rise to an allegation of such contamination.
(vi) To the best knowledge of INDI and the INDI Stockholder, after due
investigation, no investigation, administrative order, consent order or
agreement, litigation or settlement with respect to Hazardous Materials or
Hazardous Materials Contamination is proposed, threatened, anticipated,
pending or otherwise in existence with respect to the Business Location or
with respect to any other site controlled or utilized by INDI in the
operation of its business. To the best knowledge of INDI, after due
investigation, the Business Location is not currently on, and has never
been on, any federal or state "Superfund" or "Superlien" list.
12
4.15 Intellectual Property. INDI does not own or use any trademarks,
----------------------
trade names, service marks, patents, copyrights or any applications with respect
thereto. INDI has no knowledge of any claim that, or inquiry as to whether, any
product, activity or operation of INDI infringes upon or involves, or has
resulted in the infringement of, any trademarks, trade-names, service marks,
patents, copyrights or other proprietary rights of any other person, corporation
or other entity; and no proceedings have been instituted, are pending or are
threatened.
4.16 Insurance. INDI has no insurance policies in effect.
---------
4.17 Contracts. Except as set forth on Schedule 4.17, INDI has no
--------- -------------
material contracts, leases, arrangements or commitments (whether oral or
written). INDI is not a party to or bound by or affected by any contract, lease,
arrangement or commitment (whether oral or written) relating to: (a) the
employment of any person; (b) collective bargaining with, or any representation
of any employees by, any labor union or association; (c) the acquisition of
services, supplies, equipment or other personal property; (d) the purchase or
sale of real property; (e) distribution, agency or construction; (f) lease of
real or personal property as lessor or lessee or sublessor or sublessee; (g)
lending or advancing of funds; (h) borrowing of funds or receipt of credit; (i)
incurring any obligation or liability; or (j) the sale of personal property.
4.18 Litigation. INDI is not subject to any judgment or order of any
----------
court or quasijudicial or administrative agency of any jurisdiction, domestic or
foreign, nor is there any charge, complaint, lawsuit or governmental
investigation pending against INDI. INDI is not a plaintiff in any action,
domestic or foreign, judicial or administrative. There are no existing actions,
suits, proceedings against or investigations of INDI, and INDI knows of no basis
for such actions, suits, proceedings or investigations. There are no unsatisfied
judgments, orders, decrees or stipulations affecting INDI or to which INDI is a
party.
4.19 Employees. INDI does not have any employees. INDI does not owe any
---------
compensation of any kind, deferred or otherwise, to any current or previous
employees. INDI has no written or oral employment agreements with any officer or
director of INDI. INDI is not a party to or bound by any collective bargaining
agreement. Except as set forth on Schedule 4.19, there are no loans or other
-------------
obligations payable or owing by INDI to any stockholder, officer, director or
employee of INDI, nor are there any loans or debts payable or owing by any of
such persons to INDI or any guarantees by INDI of any loan or obligation of any
nature to which any such person is a party.
4.20 Employee Benefit Plans. INDI has no (a) non-qualified deferred or
-----------------------
incentive compensation or retirement plans or arrangements, (b) qualified
retirement plans or arrangements, (c) other employee compensation, severance or
termination pay or welfare benefit plans, programs or arrangements or (d) any
related trusts, insurance contracts or other funding arrangements maintained,
established or contributed to by INDI.
4.21 Legal Compliance. To the best knowledge of INDI, after due
-----------------
investigation, no claim has been filed against INDI alleging a violation of any
applicable laws and regulations of foreign, federal, state and local governments
and all agencies thereof. INDI holds all of the material permits, licenses,
certificates or other authorizations of foreign, federal, state or local
governmental agencies required for the conduct of its business as presently
conducted.
13
4.22 No Subsidiaries. INDI does not own any capital stock or have any
----------------
interest in any corporation, partnership, or other form of business
organization.
4.23 Broker's Fees. Neither INDI, nor anyone on its behalf has any
--------------
liability to any broker, finder, investment banker or agent, or has agreed to
pay any brokerage fees, finder's fees or commissions, or to reimburse any
expenses of any broker, finder, investment banker or agent in connection with
this Agreement.
4.24 Disclosure. The representations and warranties and statements of
----------
fact made by INDI in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
ARTICLE 5
INDEMNIFICATION
5.1 The INDI Stockholder hereby agrees to indemnify Broad Faith, the
Stockholder and each of the officers, agents and directors of Broad Faith
against any loss, liability, claim, damage or expense (including, but not
limited to, any and all expenses 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 breach of or inaccuracy in any of the
representations and warranties made by INDI and/or the INDI Stockholder herein
or any misrepresentation made by INDI and/or the INDI Stockholder in this
Agreement. The indemnification provided for in this paragraph shall survive the
Closing until the expiration of the applicable statute of limitations.
ARTICLE 6
COVENANTS AND AGREEMENTS OF THE PARTIES
EFFECTIVE PRIOR TO CLOSING
6.1 Corporate Examinations and Investigations. Prior to the Closing, each
-----------------------------------------
party shall be entitled, through its employees and representatives, to make such
investigations and examinations of the books, records and financial condition of
Broad Faith (and its consolidated subsidiaries) and INDI as each party may
request. In order that each party may have the full opportunity to do so, Broad
Faith and INDI, the Stockholder and the INDI Stockholder shall furnish each
party and its representatives during such period with all such information
concerning the affairs of Broad Faith or INDI as each party or its
representatives may reasonably request and cause Broad Faith or INDI and their
respective officers, employees, consultants, agents, accountants and attorneys
to cooperate fully with each party's representatives in connection with such
review and examination and to make full disclosure of all information and
documents requested by each party and/or its representatives. Any such
investigations and examinations shall be conducted at reasonable times and under
reasonable circumstances, it being agreed that any examination of original
documents will be at each party's premises, with copies thereof to be provided
to each party and/or its representatives upon request.
14
6.2 Cooperation; Consents. Prior to the Closing, each party shall
---------------------
cooperate with the other parties to the end that the parties shall (i) in a
timely manner make all necessary filings with, and conduct negotiations with,
all authorities and other persons the consent or approval of which, or the
license or permit from which is required for the consummation of the Exchange
and (ii) provide to each other party such information as the other party may
reasonably request in order to enable it to prepare such filings and to conduct
such negotiations.
6.3 Conduct of Business. Subject to the provisions hereof, from the
-------------------
date hereof through the Closing, each party hereto shall (i) conduct its
business in the ordinary course and in such a manner so that the representations
and warranties contained herein shall continue to be true and correct in all
material respects as of the Closing as if made at and as of the Closing and (ii)
not enter into any material transactions or incur any material liability not
required or specifically contemplated hereby, without first obtaining the
written consent of Broad Faith and the Stockholder on the one hand and INDI and
the INDI Stockholder on the other hand. Without the prior written consent of
Broad Faith, the Stockholder, INDI or the INDI Stockholder, except as required
or specifically contemplated hereby, each party shall not undertake or fail to
undertake any action if such action or failure would render any of said
warranties and representations untrue in any material respect as of the Closing.
6.4 Litigation. From the date hereof through the Closing,
----------
each party hereto shall promptly notify the representative of the other parties
of any lawsuits, claims, proceedings or investigations which after the date
hereof are threatened or commenced against such party or any of its affiliates
or any officer, director, employee, consultant, agent or shareholder thereof, in
their capacities as such, which, if decided adversely, could reasonably be
expected to have a material adverse effect upon the condition (financial or
otherwise), assets, liabilities, business, operations or prospects of such party
or any of its subsidiaries.
6.5 Notice of Default. From the date hereof through the
-----------------
Closing, each party hereto shall give to the representative of the other parties
prompt written notice of the occurrence or existence of any event, condition or
circumstance occurring which would constitute a violation or breach of this
Agreement by such party or which would render inaccurate in any material respect
any of such party's representations or warranties herein.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Broad Faith and the Stockholder. The
-------------------------------------------------------------
obligations of Broad Faith and the Stockholder under this Agreement shall be
subject to each of the following conditions:
(a) Closing Deliveries. At the Closing, INDI and/or the INDI
-------------------
Stockholder shall have delivered or caused to be delivered to Broad Faith and
the Stockholder the following:
(i) resolutions duly adopted by the Board of Directors of INDI
authorizing and approving the Exchange and the execution, delivery and
performance of this Agreement;
15
(ii) a certificate of good standing for INDI from the Secretary
of State of the State of Nevada, dated not earlier than five days
prior to the Closing Date;
(iii) subject to compliance with Section 14(f) of the Exchange
Act and Rule 14f-1 thereunder, written resignations of all officers
and directors of INDI in office immediately prior to the Closing, and
board resolutions electing the following individuals to the positions
with INDI listed opposite their names below:
Dr. Kit Tsui . . . . . . . Chairman of the Board; CEO
▇▇. ▇▇▇▇▇▇▇▇ ▇▇ . . . . . . . . . . . Director; President;
▇▇. ▇▇▇▇▇▇▇ ▇▇ . . . . . . . . . . . . . . . . Director
(iv) certificate representing the INDI Shares bearing the name of
the Stockholder;
(v) such other documents as Broad Faith may reasonably request in
connection with the transactions contemplated hereby.
(b) Representations and Warranties to be True. The representations
-----------------------------------------
and warranties of INDI and the INDI Stockholder herein contained shall be true
in all material respects at the Closing with the same effect as though made at
such time. INDI and the INDI Stockholder shall have performed in all material
respects all obligations and complied in all material respects with all
covenants and conditions required by this Agreement to be performed or complied
with by them at or prior to the Closing.
7.2 Conditions to Obligations of INDI and the INDI Stockholder. The
--------------------------------------------------------------
obligations of INDI and the INDI Stockholder under this Agreement shall be
subject to each of the following conditions:
(a) Closing Deliveries. On the Closing Date, Broad Faith and/or
------------------
the Stockholder shall have delivered to INDI the following:
(i) one or more certificates representing the Broad Faith Shares
to be delivered pursuant to this Agreement duly endorsed or
accompanied by duly executed stock power; and
(ii) such other documents as INDI may reasonably request in
connection with the transactions contemplated hereby.
(b) Representations and Warranties to be True. The representations
-------------------------------------------
and warranties of Broad Faith and the Stockholder herein contained shall be true
in all material respects at the Closing with the same effect as though made at
such time. Broad Faith and the Broad Faith Stockholder shall have performed in
all material respects all obligations and complied in all material respects with
all covenants and conditions required by this Agreement to be performed or
complied with by them at or prior to the Closing.
16
(c) Director Questionnaires. Each of the individuals listed in Section
------------------------
7.1(a)(iii) shall have submitted to INDI's legal counsel, no later than 15
calendar days prior to the Closing Date, a written response to the director
questionnaire previously delivered to Broad Faith, and upon receipt of all such
responses INDI's legal counsel shall prepare and file with the SEC at least 10
calendar days prior to the Closing Date an Information Statement Notice of
Change In Control and of a Majority of Directors pursuant to Section 14(f) of
the Exchange Act and Rule 14f-1 thereunder. The Stockholder and Broad Faith
shall have the opportunity to review and provide comments to such Information
Statement prior to its filing with the SEC.
ARTICLE 8
POST-CLOSING COVENANTS
8.1 Lock-Up/Leak-Out Agreement; Rule 144
------------------------------------
(a) Lock-Up/Leak-Out Agreement. Following the Closing, in no
--------------------------
event shall the INDI Stockholder, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, acting as a group, sell
more than: 200,000 shares of INDI common stock within 90 days after the
Closing; or more than 1,000,000 shares during the period commencing on the 91st
day after the Closing Date and ending on the 180th day after the Closing Date;
or more than 1,000,000 shares during the period commencing on the 181st day
after the Closing Date and ending on the 270th day after the Closing; or more
than 1,400,000 shares during the period commencing on the 271st day after the
Closing and ending on the 360th day following the Closing. The number of shares
subject to this Section 8.1 shall be adjusted accordingly in the event a reverse
stock split or other recapitalization is effected during a period covered
hereby. Any shares permitted to be sold but not sold during a period specified
above shall not accrue to the next period, and the INDI Stockholder shall not be
permitted to sell during any specified period more than the number of shares
listed above for such period. At the Closing, the INDI Stockholder, ▇▇▇▇▇▇▇ and
▇▇▇▇▇ shall deliver to INDI's stock transfer agent one or more stock
certificates collectively representing 3,600,000 shares (collectively, the
"Lock-Up Shares") of INDI common stock with instructions to place an appropriate
legend (the "Lock-Up Legend") referring to these transfer restrictions on such
certificate(s). INDI shall consent to the removal of such restrictive legends
to the extent such removal is appropriate under this Section 8.1 and permitted
by applicable law.
(b) Rule 144. Subject to and in conformity with the restrictions
--------
set forth in Section 8.1(a) above, INDI shall cooperate with the INDI
Stockholder, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ in permitting sales of stock by such persons
pursuant to Rule 144. Promptly upon receipt of a standard seller's
representation form, a standard broker's representation form, and a signed Form
144, INDI shall promptly provide authorization to INDI's transfer agent to
17
remove the restrictive 144 legend from the stock certificate for resale by such
person or deposit into the account of a brokerage firm for resale by such
person. Upon written request of the INDI Stockholder, ▇▇▇▇▇▇▇, and/or ▇▇▇▇▇, as
the case may be, INDI shall promptly remove from INDI stock certificates of such
persons any 144 legend three months following Closing Date as reasonably
permitted pursuant to Rule 144(k); provided, however, that such certificates
shall continue to bear the Lock-Up Legend subject to and in compliance with
Section 8.1(a) above.
8.2 Limitation on Reverse-Split. The Stockholder and INDI hereby agree
---------------------------
that INDI shall not within the 360 days following the date of this Agreement
combine (i.e. reverse-split) its outstanding capital stock by any ratio greater
than 4 to 1, and shall not effect such combination (i.e. reverse-split) more
than once during such period.
8.3 INDI 2002 Audit Fees. The INDI Stockholder hereby agrees to pay
--------------------
all fees and costs associated with the preparation of INDI's 2002 audit and
shall cooperate fully with and provide all requisite information and documents
to INDI's auditor during the 2002 audit process.
8.4 Financial Records. The INDI Stockholder hereby agrees to provide
all original financial bookkeeping records of INDI to the Stockholder no later
than February 18, 2003.
GENERAL PROVISIONS
9.1 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been duly given if delivered personally,
sent by overnight courier or mailed by registered or certified mail (postage
prepaid and return receipt requested) to the party to whom the same is so
delivered, sent or mailed at addresses set forth on the signature page hereof
(or at such other address for a party as shall be specified by like notice).
9.2 Interpretation. The headings contained in this Agreement are for
--------------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
9.3 Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify this Agreement to preserve each party's anticipated
benefits under this Agreement.
9.4 Miscellaneous. This Agreement (together with all other documents
-------------
and instruments referred to herein): (a) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties with respect to the subject matter hereof; (b) except as
expressly set forth herein, is not intended to confer upon any other person any
rights or remedies hereunder and (c) shall not be assigned by operation of law
or otherwise, except as may be mutually agreed upon by the parties hereto.
9.5 Separate Counsel. Each party hereby expressly acknowledges that it
-----------------
has been advised to seek its own separate legal counsel for advice with respect
18
to this Agreement, and that no counsel to any party hereto has acted or is
acting as counsel to any other party hereto in connection with this Agreement.
9.6 Governing Law; Venue. This Agreement shall be governed by, and
----------------------
construed and enforced in accordance with, the laws of the State of Nevada,
U.S.A. Any and all actions brought under this Agreement shall be brought in the
state and/or federal courts of the United States sitting in the City of Los
Angeles, California and each party hereby waives any right to object to the
convenience of such venue.
9.7 Counterparts and Facsimile Signatures. This Agreement may be
----------------------------------------
executed in two or more counterparts, which together shall constitute a single
agreement. This Agreement and any documents relating to it may be executed and
transmitted to any other party by facsimile, which facsimile shall be deemed to
be, and utilized in all respects as, an original, wet-inked document.
9.8 Amendment. This Agreement may be amended, modified or supplemented
---------
only by an instrument in writing executed by all parties hereto.
9.9 Parties In Interest: No Third Party Beneficiaries. Except as
-------------------------------------------------------
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto. This Agreement
shall not be deemed to confer upon any person not a party hereto any rights or
remedies hereunder.
9.10 Waiver. No waiver by any party of any default or breach by another
------
party of any representation, warranty, covenant or condition contained in this
Agreement shall be deemed to be a waiver of any subsequent default or breach by
such party of the same or any other representation, warranty, covenant or
condition. No act, delay, omission or course of dealing on the part of any party
in exercising any right, power or remedy under this Agreement or at law or in
equity shall operate as a waiver thereof or otherwise prejudice any of such
party's rights, powers and remedies. All remedies, whether at law or in equity,
shall be cumulative and the election of any one or more shall not constitute a
waiver of the right to pursue other available remedies.
9.11 Expenses. At or prior to the Closing, the parties hereto shall pay all
--------
of their own expenses relating to the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of their
respective counsel and financial advisers.
[SIGNATURES FOLLOW]
19
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Agreement and Plan of Share Exchange as of the date first written above.
INDUSTRIES INTERNATIONAL INC.
By:
Name: ________________________
Title: _________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
INDI STOCKHOLDER:
____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
Address:
____________________________
_______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address:
________________________________
________________________________
▇▇▇▇▇ ▇▇▇▇▇
Address:
________________________________
[SIGNATURES CONTINUE ON NEXT PAGE]
20
[SIGNATURE PAGE TWO OF AMENDED AND RESTATED
AGREEMENT AND PLAN OF SHARE EXCHANGE]
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Agreement and Plan of Share Exchange as of the date first written above.
BROAD FAITH LIMITED
By: _______________________________
Name: Dr. Kit Tsui
Title: President
Address:
_________________________________
_________________________________
___________________________________
DR. KIT TSUI
Address:
_________________________________
_________________________________
21