EXHIBIT 10.1
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AMENDED AND RESTATED
SECURITIES EXCHANGE AGREEMENT
BY AND AMONG
DEEP FIELD TECHNOLOGIES, INC.,
BEIJING SINO-US JINCHE
YINGANG AUTO TECHNOLOGICAL SERVICES LIMITED
AND
THE JOINT VENTURE PARTICIPANTS NAMED HEREIN
DATED AS OF JANUARY 25, 2007
TABLE OF CONTENTS
Page
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SECTION I DEFINITIONS............................................................i
SECTION II EXCHANGE OF INTERESTS AND CONSIDERATION..............................vii
2.1 Exchange.............................................................vii
2.2 Withholding..........................................................vii
2.3 Tax Treatment.......................................................viii
2.4 Directors of DFT at Closing.........................................viii
SECTION III CLOSING...............................................................ix
3.1 Closing...............................................................ix
SECTION IV REPRESENTATIONS AND WARRANTIES OF JV PARTICIPANTS.....................ix
4.1 Generally.............................................................ix
4.2 Investment Representations.............................................x
SECTION V REPRESENTATIONS AND WARRANTIES BY THE COMPANY.......................xiii
5.1 Organization and Qualification......................................xiii
5.2 Subsidiaries........................................................xiii
5.3 Organizational Documents............................................xiii
5.4 Authorization.......................................................xiii
5.5 No Violation.........................................................xiv
5.6 Binding Obligations..................................................xiv
5.7 Capitalization and Related Matters...................................xiv
5.8 Financial Statements..................................................xv
5.9 JV Participant........................................................xv
5.10 Compliance with Laws..................................................xv
5.11 Certain Proceedings..................................................xvi
5.12 No Brokers or Finders................................................xvi
5.13 Employees............................................................xvi
5.14 Litigation; Orders...................................................xvi
5.15 Licenses.............................................................xvi
5.16 Interested Party Transactions.......................................xvii
5.17 Title To And Condition Of Properties................................xvii
5.18 Company Board Recommendation; JV Participant Approval...............xvii
5.19 Absence of Undisclosed Liabilities..................................xvii
5.20 Changes............................................................xviii
5.21 Material Company Contracts.........................................xviii
5.22 Tax Matters..........................................................xix
5.23 Material Assets.......................................................xx
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5.24 Insurance Coverage....................................................xx
5.25 Intellectual Property.................................................xx
5.26 Employee Benefits....................................................xxi
5.27 Environmental and Safety Matters....................................xxii
5.28 Product Liability and Recalls.......................................xxii
5.29 Receivables and Payables...........................................xxiii
5.30 Ethical Business Practices.........................................xxiii
5.31 Money Laundering Laws..............................................xxiii
5.32 Customers and Suppliers............................................xxiii
5.33 Governmental Inquiry................................................xxiv
5.34 Information Statement...............................................xxiv
SECTION VI REPRESENTATIONS AND WARRANTIES OF DFT...............................xxiv
6.1 Organization and Qualification......................................xxiv
6.2 Subsidiaries.........................................................xxv
6.3 Organizational Documents.............................................xxv
6.4 Authorization........................................................xxv
6.5 No Violation.........................................................xxv
6.6 Securities Laws.....................................................xxvi
6.7 Binding Obligations.................................................xxvi
6.8 Duly Authorized.....................................................xxvi
6.9 Certain Proceedings.................................................xxvi
6.10 No Brokers or Finders...............................................xxvi
6.11 Material DFT Contracts..............................................xxvi
6.12 Material Assets.....................................................xxvi
6.13 SEC Documents; Financial Statements................................xxvii
6.14 Board Recommendation...............................................xxvii
6.15 Compliance with Laws...............................................xxvii
6.16 Litigation; Orders.................................................xxvii
6.17 Foreign Corrupt Practices Act.....................................xxviii
6.18 Money Laundering Laws.............................................xxviii
6.19 Absence of Certain Changes or Events..............................xxviii
6.20 Capitalization....................................................xxviii
6.21 Tax Matters.......................................................xxviii
6.22 Information Statement...............................................xxix
SECTION VII COVENANTS OF THE COMPANY AND THE JV PARTICIPANTS.....................xxx
7.1 Access and Investigation.............................................xxx
7.2 Operation of the Business of the Company.............................xxx
7.3 No Transfers of Interests............................................xxx
7.4 Required Filings and Approvals......................................xxxi
7.5 Notification........................................................xxxi
7.6 Financing..........................................................xxxii
7.7 Closing Conditions.................................................xxxii
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SECTION VIII COVENANTS OF DFT...................................................xxxii
8.1 Access and Investigation...........................................xxxii
8.2 Operation of the Business of DFT...................................xxxii
8.3 Required Filings and Approvals....................................xxxiii
8.4 Notification......................................................xxxiii
8.5 Closing Conditions................................................xxxiii
8.6 Indemnification and Insurance.....................................xxxiii
8.7 Rule 144 Reporting..................................................xxxv
8.8 Books and Records...................................................xxxv
8.9 Sale of Unified Messaging Business..................................xxxv
8.10 Information Statement...............................................xxxv
8.11 DFT Stockholders Meeting............................................xxxv
SECTION IX CONDITIONS PRECEDENT TO DFT'S OBLIGATION TO CLOSE..................xxxvi
9.1 Accuracy of Representations........................................xxxvi
9.2 Performance by the Company and JV Participants.....................xxxvi
9.3 No Force Majeure Event.............................................xxxvi
9.4 Certificate of Officer.............................................xxxvi
9.5 Certificate of JV Participants.....................................xxxvi
9.6 Consents..........................................................xxxvii
9.7 Documents.........................................................xxxvii
9.8 No Proceedings...................................................xxxviii
9.9 No Claim Regarding Ownership or Consideration....................xxxviii
9.10 Satisfactory Due Diligence.......................................xxxviii
9.11 Financial Statements.............................................xxxviii
9.12 Stockholder Approval.............................................xxxviii
9.13 Payments by the Company..........................................xxxviii
SECTION X CONDITIONS PRECEDENT TO THE OBLIGATION OF THE
COMPANY AND THE JV PARTICIPANTS TO THE CLOSING.....................xxxix
10.1 Accuracy of Representations........................................xxxix
10.2 Performance by DFT.................................................xxxix
10.3 No Force Majeure Event.............................................xxxix
10.4 Certificate of Officer.............................................xxxix
10.5 Consents...........................................................xxxix
10.6 Documents.............................................................xl
10.7 No Proceedings........................................................xl
10.8 Resignation of Officers...............................................xl
10.9 D&O Insurance.........................................................xl
10.10 Stockholder Approval.................................................xli
SECTION XI TERMINATION..........................................................xli
11.1 Termination Events...................................................xli
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11.2 Effect of Termination...............................................xlii
SECTION XII GENERAL PROVISIONS..................................................xlii
12.1 Expenses............................................................xlii
12.2 Public Announcements................................................xlii
12.3 Confidentiality.....................................................xlii
12.4 Notices............................................................xliii
12.5 Arbitration.........................................................xliv
12.6 Further Assurances..................................................xliv
12.7 Waiver..............................................................xliv
12.8 Entire Agreement and Modification...................................xliv
12.9 Assignments, Successors, and No Third-Party Rights...................xlv
12.10 Severability.........................................................xlv
12.11 Section Headings, Construction.......................................xlv
12.12 Governing Law........................................................xlv
12.13 Counterparts.........................................................xlv
12.14 Survival.............................................................xlv
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AMENDED AND RESTATED
SECURITIES EXCHANGE AGREEMENT
This AMENDED AND RESTATED SECURITIES EXCHANGE AGREEMENT (this
"Agreement") dated as of January 25, 2007, is made by and among DEEP FIELD
TECHNOLOGIES, INC., a New Jersey corporation ("DFT"), each of the Persons listed
on Schedule A hereto (collectively, the "JV Participants" and each, a "JV
Participant"), and BEIJING SINO-US JINCHE YINGANG AUTO TECHNOLOGICAL SERVICES
LIMITED, a cooperative joint venture under the laws of The People's Republic of
China (the "Company") and amends and restates in its entirety the Securities
Exchange Agreement, dated as of January 12, 2006, as amended, by and among DFT,
the JV Participants and the Company.
RECITAL:
WHEREAS, the JV Participants have agreed to transfer to DFT, and DFT
has agreed to acquire from the JV Participants, (a) all of the Interests, less
the Retained Interest, which Interests (less the Retained Interest) constitute
ninety-five percent (95%) of the outstanding equity of the Company and (b) all
voting and economic rights, benefits and obligations (other than the right to
receive distributions in connection with a liquidation, sale or other transfer,
in whole, of the Company) associated with the Retained Interest, in exchange for
Eighty-Three Million Eighty-One Thousand Six Hundred Thirty-Five (83,081,635)
shares of DFT's Common Stock and Two Million (2,000,000) shares of DFT's Class B
Common Stock (collectively, the "DFT Shares") on the terms and conditions as set
forth herein.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
SECTION I
DEFINITIONS
Unless the context otherwise requires, the terms defined in this
Section I have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.
1.1 "Accredited Investor" has the meaning set forth in Regulation D
under the Securities Act.
1.2 "Affiliate" means any Person that directly or indirectly controls,
is controlled by or is under common control with the indicated Person.
1.3 "Agreement" means this Amended and Restated Securities Exchange
Agreement, including all Schedules and Exhibits hereto, as this Amended and
Restated Securities Exchange Agreement may be from time to time amended,
modified or supplemented.
1.4 "Asset Purchase Agreement" has the meaning set forth in Section
8.9.
1.5 "Assumed Liabilities" means the following previous liabilities of
DFT: (a) approximately $36,750 due and owing on the newly-extended D&O Insurance
policy; (b) approximately $240,000 due and owing to ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP for legal services rendered; (c) approximately $11,130 due and owing
to Jincheng & Tongda for legal services rendered; (d) approximately $2,500 due
and owing to ▇▇▇▇▇ & ▇▇▇▇▇ for legal services rendered; (e) approximately
$12,000 due and owing to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. for professional services
rendered; and (f) all costs relating to the preparation and distribution to the
DFT stockholders of the notice to shareholders, including, without limitation,
any and all related legal, printing and other professional fees in connection
therewith.
1.6 "Business Day" means a day, other than Saturday or Sunday, on which
banks in New York, New York, USA, are open for business.
1.7 "Closing" has the meaning set forth in Section 3.1.
1.8 "Closing Date" has the meaning set forth in Section 3.1.
1.9 "Code" means the Internal Revenue Code of 1986, as amended.
1.10 "Commission" means the Securities and Exchange Commission or any
other federal agency then administering the Securities Act.
1.11 "Company Balance Sheet" means the audited balance sheet at
December 31, 2005 of Jinche.
1.12 "Company Benefit Plans" means employee pension benefit plans,
medical, disability, severance pay, educational, life insurance and other
employee welfare benefit plans, and all other bonus, stock option, stock
purchase or other equity-based compensation arrangements, and incentive,
deferred compensation, supplemental retirement, severance, disability, vacation,
cafeteria and other similar employee benefit plans, policies, programs or
contracts (including those which contain change of control provisions or pending
change of control provisions), and any employment, executive compensation or
severance agreements (including those with change of control provisions or
pending change of control provisions), as amended, modified or supplemented, in
any case that (a) are maintained or contributed to (or to which there was an
obligation to contribute) by the Company, or (b) were formerly maintained or
contributed to (or to which there was an obligation to contribute), by the
Company, as well as each plan with respect to which the Company has or could
have any liability, whether direct or indirect or actual or contingent
(including any liability arising out of an indemnification, guarantee, hold
harmless or similar agreement).
1.13 "Company Audited Financial Statements" has the meaning set forth
in Section 5.8.
1.14 "Company Board" means the Board of Directors of the Company.
1.15 "Consultant Agreements" mean that certain Consulting Agreement
dated as of the Closing Date between DFT and ▇▇▇▇▇▇▇ substantially in the form
of Exhibit A hereto, that certain Consulting Agreement dated as of the Closing
Date between DFT and ▇▇▇▇▇▇,
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substantially in the form of Exhibit B hereto, that certain Consulting Agreement
dated as of the Closing Date between DFT and MM2 Group, Inc. substantially in
the form of Exhibit C hereto and that certain Consulting Agreement dated as of
the Closing Date between DFT and iVoice, Inc. substantially in the form of
Exhibit D hereto.
1.16 "Consultants" means Mahoney, Meller, iVoice, Inc. and MM2 Group,
Inc.
1.17 "D&O Insurance" has the meaning set forth in Section 8.6.3.
1.18 "DFT Balance Sheet" means DFT's balance sheet at September 30,
2006.
1.19 "DFT Board" means the Board of Directors of DFT.
1.20 "DFT's Class B Common Stock" means DFT's Class B Common Stock, par
value $0.01 per share.
1.21 "DFT's Common Stock" means DFT's Class A common stock, no par
value per share.
1.22 "DFT Shares" has the meaning set forth in the Recital.
1.23 "DFT Stockholder Approval" has the meaning set forth in Section
8.11.
1.24 "DFT Stockholders Meeting" has the meaning set forth in Section
6.22.
1.25 "Distributor" means any underwriter, dealer or other Person who
participates, pursuant to a contractual arrangement, in the distribution of the
securities offered or sold in reliance on Regulation S.
1.26 "Environmental Laws" means any Law or other requirement relating
to the environment, natural resources, or public or employee health and safety.
1.27 "Environmental Permit" means all licenses, permits,
authorizations, approvals, franchises and rights required under any applicable
Environmental Law or Order.
1.28 "Equity Security" means any stock or similar security, including,
without limitation, securities containing equity features and securities
containing profit participation features, or any security convertible into or
exchangeable for, with or without consideration, any stock or similar security,
or any security carrying any warrant, right or option to subscribe to or
purchase any shares of capital stock, or any such warrant or right.
1.29 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.30 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same will then be in effect.
1.31 "Exhibits" means the several exhibits referred to and identified
in this Agreement.
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1.32 "GAAP" means, with respect to any Person, generally accepted
accounting principles applied on a consistent basis with such Person's past
practices.
1.33 "Governmental Authority" means any federal or national, state or
provincial, municipal or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, commission, court, tribunal,
official, arbitrator or arbitral body, in each case whether U.S. or non-U.S.
1.34 "Indebtedness" means any monetary obligation, contingent or
otherwise. Any obligation secured by a Lien on, or payable out of the proceeds
of, or production from, property of the relevant party will be deemed to be
Indebtedness.
1.35 "Indemnified Parties" has the meaning set forth in Section 8.6.2.
1.36 "Information Statement" has the meaning set forth in Section 6.22.
1.37 "Intellectual Property" means all industrial and intellectual
property, including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service ▇▇▇▇
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.
1.38 "Interests" means the Equity Securities owned by the JV
Participants in the Company and exchanged pursuant to this Agreement.
1.39 "Jinche" means Beijing Jinche Yingang Automobile Service Center, a
corporation duly registered and existing under the laws of the PRC.
1.40 "JV Participant" has the meaning set forth in the Preamble hereof.
1.41 "Key Employee" means those persons who, in the opinion of the
Company's management, are the most integral to the business operations of the
Company.
1.42 "Laws" means, with respect to any Person, any U.S. or non-U.S.
federal, national, state, provincial, local, municipal, international,
multinational or other law (including common law), constitution, statute, code,
ordinance, rule, regulation or treaty applicable to such Person.
1.43 "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including, without limitation, any conditional sale
or other title retention agreement, any lease in the nature thereof and the
filing of or agreement to give any financing
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statement under the Uniform Commercial Code of any jurisdiction and including
any lien or charge arising by Law.
1.44 "▇▇▇▇▇▇▇" means ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
1.45 "Material DFT Contract" means any and all agreements, contracts,
arrangements, leases, commitments or otherwise, of DFT required to be filed with
the Commission.
1.46 "Material Adverse Effect" means, when used with respect to DFT or
the Company, as the case may be, any change, effect or circumstance which,
individually or in the aggregate, would reasonably be expected to (a) have a
material adverse effect on the business, assets, financial condition or results
of operations of DFT or the Company, as the case may be, in each case taken as a
whole or (b) materially impair the ability of DFT or the Company, as the case
may be, to perform their obligations under this Agreement, excluding any change,
effect or circumstance resulting from (i) the announcement, pendency or
consummation of the transactions contemplated by this Agreement, (ii) changes in
the United States securities markets generally, or (iii) changes in general
economic, currency exchange rate, political or regulatory conditions in
industries in which DFT or the Company, as the case may be, operate.
1.47 "Material Company Contract" means any and all agreements,
contracts, arrangements, leases, commitments or otherwise, of the Company or
Jinche of the type and nature that would be required to be filed with the
Commission if the Company was a reporting company.
1.48 "▇▇▇▇▇▇" means ▇▇. ▇▇▇▇ ▇▇▇▇▇▇.
1.49 "Money Laundering Laws" has the meaning set forth in Section 5.31
herein.
1.50 "Order" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any
Governmental Authority.
1.51 "Organizational Documents" means (a) the articles or certificate
of incorporation and the by-laws or code of regulations of a corporation; (b)
the partnership agreement and any statement of partnership of a general
partnership; (c) the limited partnership agreement and the certificate of
limited partnership of a limited partnership; (d) the articles or certificate of
formation and operating agreement of a limited liability company; (e) any other
document performing a similar function to the documents specified in clauses
(a), (b), (c) and (d) adopted or filed in connection with the creation,
formation or organization of a Person; and (f) any and all amendments to any of
the foregoing.
1.52 "Outside Date" has the meaning set forth in Section 11.1.3.
1.53 "Permitted Liens" means (a) Liens for Taxes not yet payable or in
respect of which the validity thereof is being contested in good faith by
appropriate proceedings and for the payment of which the relevant party has made
adequate reserves; (b) Liens in respect of pledges or deposits under workmen's
compensation laws or similar legislation, carriers, warehousemen, mechanics,
laborers and materialmen and similar Liens, if the obligations secured by such
Liens are not then delinquent or are being contested in good faith by
appropriate proceedings
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conducted and for the payment of which the relevant party has made adequate
reserves; (c) statutory Liens incidental to the conduct of the business of the
relevant party which were not incurred in connection with the borrowing of money
or the obtaining of advances or credits and that do not in the aggregate
materially detract from the value of its property or materially impair the use
thereof in the operation of its business; and (d) Liens that would not have a
Material Adverse Effect.
1.54 "Person" means all natural persons, corporations, business trusts,
associations, companies, partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political subdivisions.
1.55 "PRC" means The People's Republic of China.
1.56 "Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Authority.
1.57 "Regulation S" means Regulation S under the Securities Act, as the
same may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
1.58 "Retained Interest" means five percent (5%) of the Interests,
which shall be retained by Jinche, subject to the assignment of Rights With
Respect to Retained Interest.
1.59 "Rule 144" means Rule 144 under the Securities Act, as the same
may be amended from time to time, or any successor statute.
1.60 "Rights With Respect to Retained Interest" means all rights,
benefits and obligations associated with the Retained Interest other than the
right to receive distributions upon a liquidation, sale or other transfer, in
whole, of the Company and the liabilities associated therewith.
1.61 "Schedules" means the several schedules referred to and identified
herein, setting forth certain disclosures, exceptions and other information,
data and documents referred to at various places throughout this Agreement.
1.62 "SEC Documents" has the meaning set forth in Section 6.13.
1.63 "Section 4(2)" means Section 4(2) under the Securities Act.
1.64 "Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will be in effect at the time.
1.65 "Subsidiary" means, with respect to any Person, any corporation,
limited liability company, joint venture or partnership of which such Person (a)
beneficially owns, either directly or indirectly, more than 50% of (i) the total
combined voting power of all classes of voting securities of such entity, (ii)
the total combined equity interests, or (iii) the capital or profit
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interests, in the case of a partnership; or (b) otherwise has the power to vote
or to direct the voting of sufficient securities to elect a majority of the
board of directors or similar governing body.
1.66 "Tax or "Taxes" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, recording, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty or addition thereto.
1.67 "Tax Group" means any federal, state, local or foreign
consolidated, affiliated, combined, unitary or other similar group of which DFT
is now or was formerly a member.
1.68 "Tax Laws" means any Law or other requirement relating to any
Taxes.
1.69 "Tax Return" means any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
governmental authority in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any law relating to any
Tax.
1.70 "Termination and Settlement Agreements" means that certain
Termination and Settlement Agreement dated as of the Closing Date between DFT
and ▇▇▇▇▇▇▇ substantially in the form of Exhibit E hereof and that certain
Termination and Settlement Agreement dated as of the Closing Date between DFT
and ▇▇▇▇▇▇, substantially in the form of Exhibit F hereof.
1.71 "Transaction Documents" means, collectively, all agreements,
instruments and other documents to be executed and delivered in connection with
the transactions contemplated hereby.
1.72 "U.S." means the United States of America.
1.73 "U.S. person" has the meaning set forth in Regulation S under the
Securities Act.
SECTION II
EXCHANGE OF INTERESTS AND CONSIDERATION
2.1.1 Exchange. Each of the JV Participants desires to
transfer to, and DFT desires to acquire from each JV Participant, the Interests
set out beside the respective names of the JV Participants on Schedule A, free
and clear of all Liens, for the consideration and on the terms set forth in this
Agreement. The aggregate consideration for the Interests and Rights With Respect
to Retained Interests acquired by DFT pursuant to this Agreement will be (a)
Eighty Three Million Eighty-One Thousand Six Hundred Thirty-Five (83,081,635)
shares of DFT's Common Stock, (b) Two Million (2,000,000) shares of DFT Class B
Common Stock to be issued
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to the JV Participants as set forth on Schedule A and (c) the assumption by DFT
of all obligations of Mayflower Auto Group LLC ("Mayflower") with respect to (i)
that certain Promissory Note, dated September 15, 2005, issued by Cornell
Capital Partners, LP ("Cornell") to Mayflower in the principal amount of
$1,850,000 (the "September Note") and (ii) that certain Promissory Note, dated
October 5, 2006, issued by Cornell to Mayflower in the principal amount of
$1,500,000 (together with the September Note, the "Cornell Notes").
2.2 Withholding. DFT shall be entitled to deduct and withhold from the
DFT Shares otherwise deliverable pursuant to this Agreement to any holder of
Interests a number of DFT Shares equal in value to such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code or any provision of state, local, provincial or foreign Tax Law. To the
extent that amounts are so withheld, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of Interests in
respect of which such deduction and withholding was made.
2.3 Tax Treatment. For U.S. federal income tax purposes, the exchange
by the JV Participants of the Interests for DFT's Common Stock is intended to
constitute a "reorganization" within the meaning of Section 368(a)(1)(B) of the
Code and/or as a transfer described in Section 351 of the Code. The parties to
this Agreement hereby adopt this Agreement as a "plan of reorganization" within
the meaning of Section 1.368-2(g) of the United States Treasury Regulations.
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement, the parties acknowledge and agree that no party is making any
representation or warranty as to the qualification of the exchange by the JV
Participants of the Interests for DFT's Common Stock as a reorganization under
Section 368 of the Code and/or as a transfer described in Section 351 of the
Code or as to the effect, if any, that any transaction consummated prior to the
Closing has or may have on any such reorganization status. The parties
acknowledge and agree that each (i) has had the opportunity to obtain
independent legal and tax advice with respect to the transaction contemplated by
this Agreement and (ii) is responsible for paying its own Taxes including
without limitation, any adverse Tax consequences that may result if the
transaction contemplated by this Agreement is not determined to qualify as a
reorganization under Section 368 of the Code and/or as a transfer described in
Section 351 of the Code.
2.4 Directors of DFT at Closing. ▇▇▇▇▇▇▇ shall resign from the DFT
Board immediately prior to the Closing. Simultaneously with the Closing of the
transactions contemplated by this Agreement, ▇▇▇▇▇▇, as the sole director of
DFT, shall appoint ▇▇. ▇▇▇▇ Guisan to fill the vacancy on the DFT Board created
by ▇▇▇▇▇▇▇'▇ resignation. Immediately thereafter, ▇▇▇▇▇▇ shall resign as a
director of DFT and the remaining director of DFT shall appoint ▇▇. ▇▇▇▇▇ ▇▇▇▇
to fill the resulting vacancy on the DFT Board. Prior to the Closing, the bylaws
of DFT shall be amended to provide for a nine (9) member DFT Board and
immediately following the Closing, Messrs. Pang and Cray, as the two (2)
directors, shall appoint the Persons listed on Schedule 2.4 to the DFT Board.
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SECTION III
CLOSING
3.1 Closing. The closing (the "Closing") of the share exchange will
occur at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, in New York, New
York, on such date as shall be two (2) Business Days after all of the closing
conditions set forth in Sections 9 and 10 have been satisfied or waived (the
"Closing Date"). At the Closing, each JV Participant will deliver to DFT
instruments of assignment, each in form and substance reasonably satisfactory to
DFT transferring the Interests (other than the Retained Interest) and
transferring the Rights With Respect to Retained Interest, to DFT, against
delivery to each JV Participant by DFT of certificates evidencing such JV
Participant's share of the DFT Shares (as set forth in Schedule A hereto).
SECTION IV
REPRESENTATIONS AND WARRANTIES OF JV PARTICIPANTS
4.1 Generally. Each JV Participant, severally and not jointly, hereby
represents and warrants to DFT:
4.1.1 Authority. Such JV Participant has the right, power,
authority and capacity to execute and deliver this Agreement and each of the
Transaction Documents to which such JV Participant is a party, to consummate the
transactions contemplated by this Agreement and each of the Transaction
Documents to which such JV Participant is a party, and to perform such JV
Participant's obligations under this Agreement and each of the Transaction
Documents to which such JV Participant is a party. This Agreement has been, and
each of the Transaction Documents to which such JV Participant is a party will
be, duly and validly authorized and approved, executed and delivered by such JV
Participant. Assuming this Agreement and the Transaction Documents have been
duly and validly authorized, executed and delivered by the parties thereto other
than such JV Participant, this Agreement is, and as of the Closing each of the
Transaction Documents to which such JV Participant is a party will have been,
duly authorized, executed and delivered by such JV Participant and constitute or
will constitute the legal, valid and binding obligation of such JV Participant,
enforceable against such JV Participant in accordance with their respective
terms, except as such enforcement is limited by general equitable principles, or
by bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
4.1.2 No Conflict. Neither the execution or delivery by such
JV Participant of this Agreement or any Transaction Document to which such JV
Participant is a party, nor the consummation or performance by such JV
Participant of the transactions contemplated hereby or thereby will, directly or
indirectly, (a) contravene, conflict with, or result in a violation of any
provision of the Organizational Documents of such JV Participant (if such JV
Participant is not a natural person); (b) contravene, conflict with, constitute
a default (or an event or condition which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination or acceleration
of, any agreement or instrument to which such JV Participant is a party or by
which the properties or assets of such JV Participant are bound; or (c)
contravene,
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conflict with, or result in a violation of, any Law or Order to which such JV
Participant, or any of the properties or assets of such JV Participant, may be
subject.
4.1.3 Ownership of Interests. Such JV Participant owns, of
record and beneficially, and has good, valid and marketable title to and the
right to transfer to DFT pursuant to this Agreement, such JV Participant's
Interest and/or Rights With Respect to Retained Interest, as the case may be,
free and clear of any and all Liens. Except as disclosed in writing to DFT,
there are no options, rights, voting trusts, stockholder agreements or any other
contracts or understandings to which such JV Participant is a party or by which
such JV Participant or such JV Participant's Interest and Rights With Respect to
Retained Interest, as the case may be, is bound with respect to the issuance,
sale, transfer, voting or registration of such JV Participant's Interest or
Rights With Respect to Retained Interest, as the case may be. At the Closing,
DFT will acquire good, valid and marketable title to such JV Participant's
Interest and Rights With Respect to Retained Interest, as the case may be, free
and clear of any and all Liens. The Interests represent one hundred percent
(100%) of the authorized and issued Equity Securities of the Company.
4.1.4 Litigation. There is no pending Proceeding against such
JV Participant that challenges, or may have the effect of preventing, delaying
or making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement and, to the knowledge of such JV Participant, no
such Proceeding has been threatened, and no event or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding.
4.1.5 No Brokers or Finders. Except as disclosed in Schedule
4.1.5, no Person has, or as a result of the transactions contemplated herein
will have, any right or valid claim against such JV Participant for any
commission, fee or other compensation as a finder or broker, or in any similar
capacity, and such JV Participant will indemnify and hold DFT harmless against
any liability or expense arising out of, or in connection with, any such claim.
4.2 Investment Representations. Each JV Participant, severally and not
jointly, hereby represents and warrants to DFT:
4.2.1 Acknowledgment. Each JV Participant understands and
agrees that the DFT Shares have not been registered under the Securities Act or
the securities laws of any state of the U.S. and that the issuance of the DFT
Shares is being effected in reliance upon an exemption from registration
afforded either under Section 4(2) of the Securities Act for transactions by an
issuer not involving a public offering or Regulation S for offers and sales of
securities outside the U.S.
4.2.2 Status. By its execution of this Agreement, each JV
Participant, severally and not jointly, represents and warrants to DFT as
indicated on its signature page to this Agreement, either that: (a) it is an
Accredited Investor; or (b) it is not a U.S. person. Each JV Participant
severally understands that the DFT Shares are being offered and sold to such JV
Participant in reliance upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such JV
Participant set forth in this
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Agreement, in order that DFT may determine the applicability and availability of
the exemptions from registration of the DFT Shares on which DFT is relying.
4.2.3 Additional Representations and Warranties of Accredited
Investors. Each JV Participant indicating that it is an Accredited Investor on
its signature page to this Agreement, severally and not jointly, further makes
the representations and warranties to DFT set forth on Exhibit G.
4.2.4 Additional Representations and Warranties of Non-U.S.
Persons. Each JV Participant indicating that it is not a U.S. person on its
signature page to this Agreement, severally and not jointly, further makes the
representations and warranties to DFT set forth on Exhibit H.
4.2.5 Stock Legends. Each JV Participant hereby agrees with
DFT as follows:
(a) Securities Act Legend - Accredited Investors. The
certificates evidencing the DFT Shares issued to those JV Participants
who are Accredited Investors, and each certificate issued in transfer
thereof, will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE CORPORATION AN OPINION OF COUNSEL, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE CORPORATION, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS.
(b) Securities Act Legend - Non-U.S. Persons. The certificates
evidencing the DFT Shares issued to those JV Participants who are not
U.S. persons, and each certificate issued in transfer thereof, will
bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE
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TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
S PROMULGATED UNDER THE SECURITIES ACT, AND BASED ON AN OPINION OF
COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
CORPORATION, THAT THE PROVISIONS OF REGULATION S HAVE BEEN SATISFIED
(2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (3) PURSUANT TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE CORPORATION AN
OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE CORPORATION, THAT SUCH SECURITIES MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
(c) Other Legends. The certificates representing such DFT
Shares, and each certificate issued in transfer thereof, will also bear
any other legend required under any applicable Law, including, without
limitation, any U.S. state corporate and state securities law, or
contract.
(d) Opinion. No JV Participant will transfer any or all of the
DFT Shares pursuant to Regulation S or absent an effective registration
statement under the Securities Act and applicable state securities law
covering the disposition of such JV Participant's DFT Shares, without
first providing DFT with an opinion of counsel (which counsel and
opinion are reasonably satisfactory to DFT) to the effect that such
transfer will be made in compliance with Regulation S or will be exempt
from the registration and the prospectus delivery requirements of the
Securities Act and the registration or qualification requirements of
any applicable U.S. state securities laws.
(e) Consent. Each JV Participant understands and acknowledges
that DFT may refuse to transfer the DFT Shares, unless such JV
Participant complies with this Section 4.2.5. Each JV Participant
consents to DFT making a notation on its records or giving instructions
to any transfer agent of DFT's Common Stock in order to implement the
restrictions on transfer of the DFT Shares.
(f) No Subsidiaries. Jinche has no Subsidiaries and did not
contribute any Subsidiaries to the Company.
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SECTION V
REPRESENTATIONS AND WARRANTIES BY THE COMPANY
The Company represents and warrants to DFT as follows:
5.1 Organization and Qualification. The Company is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and to own, hold and operate its properties and
assets as now owned, held and operated by it, except where the failure to be so
organized, existing and in good standing or to have such authority and power,
governmental licenses, authorizations, consents or approvals would not have a
Material Adverse Effect. The Company is duly qualified, licensed or domesticated
as a foreign corporation in good standing in each jurisdiction wherein the
nature of its activities or its properties owned, held or operated makes such
qualification, licensing or domestication necessary, except where the failure to
be so duly qualified, licensed or domesticated and in good standing would not
have a Material Adverse Effect. Schedule 5.1 sets forth a true, complete and
correct list of the Company's jurisdiction of organization and each other
jurisdiction in which the Company presently conducts its business or owns, holds
and operates its properties and assets. The Company is a joint venture
established by the contribution of the JV Participants of the assets, interests
and securities as generally described on Schedule 5.1 hereto, in each case free
and clear of all Liens, except Permitted Liens.
5.2 Subsidiaries. The Company does not own, directly or indirectly, any
equity or other ownership interest in any corporation, partnership, joint
venture or other entity or enterprise.
5.3 Organizational Documents. True, correct and complete copies of the
Organizational Documents of the Company have been delivered to DFT prior to the
execution of this Agreement, and no action has been taken to amend or repeal
such Organizational Documents. The Company is not in violation or breach of any
of the provisions of its Organizational Documents, except for such violations or
breaches as, would not have a Material Adverse Effect. The Organizational
Documents of the Company are valid and subsisting and have been approved by all
applicable Governmental Authorities, including, without limitation, the State
Administration of Industry and Commerce Bureau of the PRC and the Ministry of
Foreign Trade and Economic Corporation/Ministry of Commerce, or their respective
delegated local authorities, which have jurisdiction over the registration of
the Company and to the Company's knowledge, there are no circumstances which may
lead to the Organizational Documents of the Company being revoked or terminated
prior to the expiration of its terms.
5.4 Authorization. Except as disclosed on Schedule 5.4, the Company has
all requisite authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to enter into this Agreement and each of
the Transaction Documents to which the Company is a party, to consummate the
transactions contemplated by this Agreement and each of the Transaction
Documents to which the Company
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is a party and to perform its obligations under this Agreement and each of the
Transaction Documents to which the Company is a party. The execution, delivery
and performance by the Company of this Agreement and each of the Transaction
Documents to which the Company is a party and the recording of the transfer of
the Interests have been duly authorized by all necessary corporate or other
action and do not require from the Company Board or the JV Participants any
consent or approval that has not been validly and lawfully obtained. The
execution, delivery and performance by the Company of this Agreement and each of
the Transaction Documents to which the Company is a party and the recording of
the transfer of the Interests (other than Retained Interests) and the Rights
With Respect to Retained Interests requires no authorization, consent, approval,
license, exemption of or filing or registration with any Governmental Authority
or other Person other than (a) such filings and mailings required by the
Exchange Act and any other policy or requirement of the Commission imposed in
connection therewith, (b) consents and approvals by the PRC and any subdivision
thereof and (c) such other customary filings with the Commission for
transactions of the type contemplated by this Agreement which approvals and
consents shall be obtained prior to and in full force and effect on and after
the Closing.
5.5 No Violation. Except as set forth on Schedule 5.5, either the
execution or delivery by the Company of this Agreement or any Transaction
Document to which the Company is a party, nor the consummation or performance by
the Company of the transactions contemplated hereby or thereby will, directly or
indirectly, (a) contravene, conflict with, or result in a violation of any
provision of the Organizational Documents of the Company; (b) contravene,
conflict with, constitute a default (or an event or condition which, with notice
or lapse of time or both, would constitute a default) under, or result in the
termination or acceleration of, or result in the imposition or creation of any
Lien under, any agreement or instrument to which the Company is a party or by
which the properties or assets of the Company is bound; (c) contravene, conflict
with, or result in a violation of, any Law or Order to which the Company, or any
of the properties or assets owned or used by the Company, may be subject; or (d)
contravene, conflict with, or result in a violation of, the terms or
requirements of, or give any Governmental Authority the right to revoke,
withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by the Company or
that otherwise relate to the business of, or any of the properties or assets
owned or used by, the Company, except, in the case of clause (b), (c) or (d),
for any such contraventions, conflicts, violations, or other occurrences as
would not have a Material Adverse Effect.
5.6 Binding Obligations. Assuming this Agreement and the Transaction
Documents have been duly and validly authorized, executed and delivered by the
parties thereto other than the Company, this Agreement has been, and as of the
Closing each of the Transaction Documents to which the Company is a party will
be, duly authorized, executed and delivered by the Company and constitutes or
will constitute, as the case may be, the legal, valid and binding obligations of
the Company.
5.7 Capitalization and Related Matters.
5.7.1 Capitalization. The authorized capital of the Company
consists solely of the Interests. There are no outstanding or authorized
options, warrants, purchase agreements, participation agreements, subscription
rights, conversion rights, exchange rights or other securities or contracts that
could require the Company to issue, sell or otherwise cause to become
outstanding any additional Interests, shares of capital stock or any Equity
Security or to create,
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authorize, issue, sell or otherwise cause to become outstanding any new
Interests or class of capital stock. There are no outstanding agreements, voting
trusts or arrangements, registration rights agreements, rights of first refusal
or other contracts pertaining to the Interests. The Interests are duly
authorized and validly issued and have not been issued in violation of any
preemptive or similar rights of any Person or in violation of any Law.
5.7.2 No Redemption Requirements. There are no outstanding
contractual obligations (contingent or otherwise) of the Company to retire,
repurchase, redeem or otherwise acquire any ownership interests in the Company
or to provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any other Person.
5.8 Financial Statements. Attached as Schedule 5.8 are the audited
financial statements of Jinche for the period ended December 31, 2005,
including, in each case, the notes thereto (the "Company Audited Financial
Statements"). The Company Audited Financial Statements (a) are in accordance
with the books and records of Jinche; (b) present fairly the financial condition
and the results of operations, changes in stockholder's equity and cash flow of
Jinche for the periods therein specified; and (c) have been prepared in
accordance with GAAP applied on a consistent basis during the periods concerned.
Specifically, but not by way of limitation, the Company Balance Sheets included
in the Company Audited Financial Statements disclose all of the debts,
liabilities and obligations of any nature (whether absolute, accrued, contingent
or otherwise and whether due or to become due) of Jinche for the periods therein
specified which must be disclosed on a balance sheet in accordance with GAAP.
All of the material properties and assets (real and personal) owned or leased by
Jinche are reflected on the Company Audited Financial Statements.
5.9 JV Participant. Schedule A contains a true and complete list of the
names and addresses of the record and beneficial holders of the Interests.
Except as expressly provided in this Agreement, no JV Participant or holder of
any other security of the Company or any other Person is entitled to any
preemptive right, right of first refusal or similar right as a result of the
exchange of the Interests or otherwise. Except as set forth in Schedule 5.9,
there is no voting trust, agreement or arrangement among any of the JV
Participants affecting the exercise of the voting rights of any such Interests.
5.10 Compliance with Laws. Except as would not have a Material Adverse
Effect, the business and operations of the Company have been and are being
conducted in accordance with all applicable Laws and Orders. Except as would not
have a Material Adverse Effect, the Company has not received notice of any
violation (or any Proceeding involving an allegation of any violation) of any
applicable Law or Order by or affecting the Company and, to the knowledge of the
Company, no Proceeding involving an allegation of violation of any applicable
Law or Order is threatened or contemplated. Except as would not have a Material
Adverse Effect, the Company is not subject to any obligation or restriction of
any kind or character, nor is there, to the knowledge of the Company, any event
or circumstance relating to the Company that materially and adversely affects in
any way its business, properties, assets or prospects or that prohibits the
Company from entering into this Agreement or would prevent or make burdensome
its performance of or compliance with all or any part of this Agreement or the
consummation of the transactions contemplated hereby.
-xv-
5.11 Certain Proceedings. There is no pending Proceeding that has been
commenced against the Company and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated by this Agreement. To the knowledge of the Company, no
such Proceeding has been threatened.
5.12 No Brokers or Finders. No Person has, or as a result of the
transactions contemplated herein will have, any right or valid claim against the
Company for any commission, fee or other compensation as a finder or broker, or
in any similar capacity, and the Company will indemnify and hold DFT harmless
against any liability or expense arising out of, or in connection with, any such
claim.
5.13 Employees.
5.13.1 Except as would not have a Material Adverse Effect, the
Company is in compliance in all material respects with all Laws regarding
employment, wages, hours, benefits, the payment of Taxes, occupational safety
and health. The Company is not liable for the payment of any compensation,
damages, Taxes, fines, penalties or other amounts, however designated, for
failure to comply with any of the foregoing material Laws.
5.13.2 No director, officer or Key Employee of the Company is
a party to, or is otherwise bound by, any contract (including any
confidentiality, noncompetition or proprietary rights agreement) with any other
Person that in any way materially adversely affects (a) the performance of his
or her duties as a director, officer or Key Employee of the Company or (b) the
ability of the Company to conduct its business.
5.13.3 Schedule 5.13.3 sets forth a true, correct and complete
list of each Key Employee of the Company. Each such Key Employee has executed
and delivered to the Company a confidentiality agreement. The Company has
delivered to DFT the form of each of the confidentiality agreements. To the
knowledge of the Company, no Key Employee is in violation of his or her
confidentiality agreement and the Company will use its best efforts to prevent
any such violation.
5.14 Litigation; Orders. Except as would not have a Material Adverse
Effect, there is no Proceeding (whether federal, state, local or foreign)
pending or, to the knowledge of the Company, threatened against or affecting the
Company or the Company's properties, assets, business or employees. To the
knowledge of the Company, there is no fact that might result in or form the
basis for any such Proceeding. The Company is not subject to any Orders.
5.15 Licenses. Except as would not have a Material Adverse Effect, the
Company possesses from the appropriate Governmental Authority all licenses,
permits, authorizations, approvals, franchises and rights that are necessary for
the Company to engage in its business as currently conducted and to permit the
Company to own and use its properties and assets in the manner in which it
currently owns and uses such properties and assets (collectively, "Company
Permits"). The Company has not received notice from any Governmental Authority
or other Person that there is lacking any license, permit, authorization,
approval, franchise or right necessary for the Company to engage in its business
as currently conducted and to permit the Company to own and use its properties
and assets in the manner in which it currently owns and
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uses such properties and assets. Except as would not have a Material Adverse
Effect, the Company Permits are valid and in full force and effect. Except as
would not have a Material Adverse Effect, no event has occurred or, to the
Company's knowledge, circumstance exists that may (with or without notice or
lapse of time): (a) constitute or result, directly or indirectly, in a violation
of or a failure to comply with any Company Permit; or (b) result, directly or
indirectly, in the revocation, withdrawal, suspension, cancellation or
termination of, or any modification to, any Company Permit. The Company has not
received notice from any Governmental Authority or any other Person regarding:
(a) any actual, alleged, possible or potential contravention of any Company
Permit; or (b) any actual, proposed, possible or potential revocation,
withdrawal, suspension, cancellation, termination of, or modification to, any
Company Permit. All applications required to have been filed for the renewal of
such Company Permits have been duly filed on a timely basis with the appropriate
Persons, and all other filings required to have been made with respect to such
Company Permits have been duly made on a timely basis with the appropriate
Persons. All Company Permits are renewable by their terms or in the ordinary
course of business without the need to comply with any special qualification
procedures or to pay any amounts other than routine fees or similar charges, all
of which, to the extent due, have been duly paid.
5.16 Interested Party Transactions. Except as disclosed on Schedule
5.16, in the past thirty (30) months, no Person has entered into any transaction
or proposed transaction with the Company which would be required to be disclosed
pursuant to Item 404 of Regulation S-B.
5.17 Title To And Condition Of Properties. Except as would not have a
Material Adverse Effect, the Company owns (with good and marketable title in the
case of real property owned) or holds under valid leases or other rights to use
all real property, plants, machinery, equipment and other personal property
necessary for the conduct of its business as presently conducted, free and clear
of all Liens, except Permitted Liens. The material buildings, plants, machinery
and equipment necessary for the conduct of the business of the Company as
presently conducted are in good operating condition and repair and are adequate
for the uses to which they are being put. The buildings, plants, machinery,
equipment and other personal property of the Company is sufficient for the
continued conduct of the Company's businesses after the Closing in substantially
the same manner as conducted prior to the Closing.
5.18 Company Board Recommendation; JV Participant Approval. The Company
Board, at a meeting duly called and held, has by unanimous vote of those
directors present (who constituted one hundred percent (100%) of the directors
then in office), determined that this Agreement and the transactions
contemplated by this Agreement, are advisable and in the best interests of the
Company and the JV Participants. The JV Participants, in their capacities as
holders of Interests, by unanimous written consent, have approved this Agreement
and the transactions contemplated by this Agreement.
5.19 Absence of Undisclosed Liabilities. Except as reflected in the
Company Audited Financial Statements or disclosed on Schedule 5.19, the Company
does not have any debt, obligation or liability (whether accrued, absolute,
contingent, liquidated or otherwise, whether due or to become due) arising out
of any transaction entered into at or prior to the Closing, or any act or
omission at or prior to the Closing, except for liabilities incurred and
obligations under
-xvii-
agreements entered into, in the usual and ordinary course of business since
December 31, 2004, none of which would have a Material Adverse Effect.
5.20 Changes. Except as set forth on Schedule 5.20, the Company has
not, since December 31, 2005, conducted its business or entered into any
transaction other than in the usual and ordinary course of business, except for
this Agreement and has not (a) suffered or experienced any change in, or
affecting, its condition (financial or otherwise), properties, assets,
liabilities, business, operations, results of operations or prospects other than
changes, events or conditions in the usual and ordinary course of its business,
none of which would have a Material Adverse Effect; (b) made any loans or
advances to any Person other than travel advances and reimbursement of expenses
made to employees, officers and directors in the ordinary course of business;
(c) created or permitted to exist any Lien on any material property or asset of
the Company, other than Permitted Liens; (d) issued, sold, disposed of or
encumbered, or authorized the issuance, sale, disposition or encumbrance of, or
granted or issued any option to acquire any shares of its capital stock or any
other of its securities or any Equity Security, or altered the term of any of
its outstanding securities or made any change in its outstanding shares of
capital stock or its capitalization, whether by reason of reclassification,
recapitalization, stock split, combination, exchange or readjustment of shares,
stock dividend or otherwise; (e) declared, set aside, made or paid any dividend
or other distribution to any of its stockholders; (f) materially increased the
compensation or other remuneration or benefits payable or to become payable to
any of its directors, executive officers or employees, except for increases in
the ordinary course of business, or entered into any employment, severance or
similar contracts with any of the foregoing; (g) adopted, amended or increased
the payments to or benefits under any Company Benefit Plan; (h) Terminated or
modified any Material Company Contract; (i) released, waived or cancelled any
claims or rights relating to or affecting the Company in excess of $250,000 in
the aggregate or instituted or settled any Proceeding involving in excess of
$250,000 in the aggregate; (j) paid, discharged or satisfied any claim,
obligation or liability in excess of $250,000 in the aggregate, except for
liabilities incurred prior to the date of this Agreement in the ordinary course
of business; (k) created, incurred, assumed or otherwise become liable for any
Indebtedness in excess of $250,000 in the aggregate; (l) guaranteed or endorsed
in a material amount any obligation or net worth of any Person; (m) acquired the
capital stock or other securities or any ownership interest in, or substantially
all of the assets of, any other; (n) changed its method of accounting or the
accounting principles or practices utilized in the preparation of its financial
statements, other than as required by GAAP; (o) granted any license, sublicense
or other rights of use with respect to any Intellectual Property of the Company;
(p) entered into any agreement, or otherwise obligated itself, to do any of the
foregoing.
5.21 Material Company Contracts.
5.21.1 The Company has made available to DFT, prior to the
date of this Agreement, true, correct and complete copies of each written
Material Company Contract, including each amendment, supplement and modification
relating thereto. Each Material Company Contract is a valid and binding
agreement of the Company, and is in full force and effect.
5.21.2 Except as would not have a Material Adverse Effect, the
Company is not in breach or default of any Material Company Contract to which it
is a party and, to the
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knowledge of the Company, no other party to any Material Company Contract is in
breach or default thereof. Except as would not have a Material Adverse Effect,
no event has occurred or, to the Company's knowledge, circumstance exists that
(with or without notice or lapse of time), would (a) contravene, conflict with
or result in a violation or breach of, or become a default or event of default
under, any provision of any Material Company Contract or (b) permit the Company
or any other Person the right to declare a default or exercise any remedy under,
or to accelerate the maturity or performance of, or to cancel, terminate or
modify any Material Company Contract. The Company has not received written
notice of the pending or threatened cancellation, revocation or termination of
any Material Company Contract to which it is a party. There are no
renegotiations of, or attempts to renegotiate, or outstanding rights to
renegotiate any material terms of any Material Company Contract.
5.22 Tax Matters.
5.22.1 Except as set forth on Schedule 5.22.1, (a) all
material Tax Returns required to be filed by or on behalf of the Company have
been timely filed and all such Tax Returns were (at the time they were filed)
and are true, correct and complete in all material respects; (b) all material
Taxes of the Company (whether or not reflected on any Tax Return) have been
fully and timely paid, except those Taxes which are presently being contested in
good faith or for which an adequate reserve for the payment of such Taxes has
been established on the Company Balance Sheet; (c) no waivers of statutes of
limitation have been given or requested with respect to the Company in
connection with any Tax Returns covering the Company or with respect to any
Taxes payable by it; (d) no Governmental Authority in a jurisdiction where the
Company does not file Tax Returns has made a claim, assertion or threat to the
Company that the Company is or may be subject to taxation by such jurisdiction;
(e) the Company has duly and timely collected or withheld, and paid over and
reported to the appropriate Governmental Authority all amounts required to be so
collected or withheld and paid over for all periods under all applicable Laws;
(f) there are no Liens with respect to Taxes on the Company's property or assets
other than Permitted Liens; (g) there are no Tax rulings, requests for rulings,
or closing agreements relating to the Company for any period (or portion of a
period) that would affect any period after the date hereof; (h) any adjustment
of Taxes of the Company made by a Governmental Authority in any examination that
the Company is required to report to the appropriate state, local or foreign
taxing authorities has been reported, and any additional Taxes due with respect
thereto have been paid; (i) there is no audit, administrative proceeding or
court proceeding with respect to any Taxes or Tax Returns of the Company that is
being conducted or is pending and no governmental authority responsible for the
imposition of any Tax has asserted in writing against the Company any material
deficiency or claim for Taxes; (j) no power of attorney has been granted by the
Company with respect to any matters relating to Taxes that is currently in
effect; and (k) the Company does not own an interest in real property in any
jurisdiction in which a Tax is imposed, or the value of the interest reassessed,
on the transfer of any interest in real property and which treats the transfer
of an interest in an entity that owns an interest in real property as a
transferor of the interest in real property.
5.22.2 Except as set forth on Schedule 5.22.2, the Company is
treated as a corporation for U.S. federal income tax purposes, and the Company
has not made an election under Treasury Regulation Section 301.7701-3 to be
treated as a partnership.
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5.22.3 The Company is not, and has never been, a controlled
foreign corporation, as that term is defined in Section 957 of the Code and the
Treasury Regulations promulgated thereunder.
5.22.4 There is no pending Proceeding with respect to any
Taxes of the Company, nor, to the knowledge of the Company, is any such
Proceeding threatened. The Company has made available to DFT, prior to the date
of this Agreement, true, correct and complete copies of all Tax Returns,
examination reports and statements of deficiencies assessed or asserted against
or agreed to by the Company since its inception and any and all correspondence
with respect to the foregoing.
5.22.5 The Company is not liable for the Taxes of any other
Person, whether as a result of being part of an affiliated, unitary,
consolidated or similar group, pursuant to a tax sharing or similar agreement.
5.23 Material Assets. The Company has, and will continue to
have upon consummation of the transaction contemplated by this Agreement, good
and marketable title to, or a valid leasehold interest in, its properties and
assets, free and clear of all Liens, other than Permitted Liens. Such properties
and assets are sufficient for the continued conduct of the Company's businesses
after the Closing in substantially the same manner as conducted prior to the
Closing. No Person other than DFT has any contract, right or option to purchase
or acquire any of such properties or assets from the Company. No Affiliate of
the Company or the JV Participants owns or otherwise has any interest in or
right to use any properties or assets used or held for use in, or otherwise
arising from or relating to, the business of the Company.
5.24 Insurance Coverage. The Company has made available to DFT, prior
to the date of this Agreement, true, correct and complete copies of all
insurance policies maintained by the Company on its properties and assets.
Except as would not have a Material Adverse Effect, all of such policies
(a) taken together, provide adequate insurance coverage for
the properties, assets and operations of the Company for all risks
normally insured against by a Person carrying on the same business as
the Company in the PRC, and
(b) are sufficient for compliance with all applicable Laws and
Material Company Contracts. Except as would not have a Material Adverse
Effect, all of such policies are valid, outstanding and in full force
and effect and, by their express terms, will continue in full force and
effect following the consummation of the transactions contemplated by
this Agreement. There are no pending claims with respect to the Company
or its properties or assets under any such insurance policies, and
there are no claims as to which the insurers have notified the Company
that they intend to deny liability. There is no existing default under
any such insurance policy.
5.25 Intellectual Property. Except as set forth on Schedule 5.25(a),
the Company owns, licenses or otherwise has the legal right to use all
Intellectual Property for its business as currently conducted. Schedule 5.25(b)
sets forth a true, correct and complete list of all Intellectual Property of the
Company. There are no outstanding options, licenses or agreements
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of any kind relating to the foregoing, nor is the Company bound by or a party to
any options, licenses or agreements of any kind with respect to the Intellectual
Property of any other Person other than licenses or agreements arising from the
purchase of "off the shelf" or standard products. Except as would not have a
Material Adverse Effect, the Company's Intellectual Property is in compliance
will all applicable legal requirements. No Intellectual Property of the Company
has been or is now involved in any dispute, opposition, invalidation or
cancellation proceeding, and no such action has been threatened in writing. No
Intellectual Property, wherever situated or registered, of the Company, to the
knowledge of the Company is infringed, or has been challenged or, to the
knowledge of the Company, threatened in any way, and no Intellectual Property of
the Company interferes with or is alleged to infringe or interfere with the
Intellectual Property of any other Person. Except as would not have a Material
Adverse Effect, the Company has not taken any action that would result in the
voiding or invalidation of any of its Intellectual Property. The Company is not
aware that any of its employees, officers or consultants is obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any Order, that would interfere with their duties to
the Company or that would conflict with the business of the Company as currently
conducted. To the knowledge of the Company, it is not necessary for it to
utilize in its business any inventions, trade secrets or proprietary information
of any of its officers, employees, consultants or persons it currently intends
to hire made prior to their employment with any the Company, except for
inventions, trade secrets or proprietary information that have been assigned to
the Company. Knowledge for purposes of this Section 5.25 means knowledge of the
Company's executive officers.
5.26 Employee Benefits.
5.26.1 The Company has made available to DFT, prior to the
date of this Agreement, copies of each written Company Benefit Plan and any
related agreements and other contracts.
5.26.2 Except as would not have a Material Adverse Effect, all
Company Benefit Plans have been established, maintained and operated in
accordance with their terms and the requirements of applicable Law, have been
maintained in good standing with applicable Government Authorities, and may by
their terms be amended and/or terminated at any time to the greatest extent
permitted by applicable Law. The Company has made in respect of its employees
and has paid all required social welfare payments and made all social welfare
filings as required by relevant laws and regulations of the PRC. No event has
occurred and, to the knowledge of the Company, there does not now exist any
condition or set of circumstances, that could subject the Company to any
liability arising under any applicable Law, or under any indemnity agreement to
which the Company is a party, excluding liability for benefit claims and funding
obligations payable in the ordinary course.
5.26.3 There are no outstanding or unpaid material severance
or employee-related obligations or amounts due to employees or former employees
of the Company.
5.26.4 Neither the consummation of the transactions
contemplated hereby alone, nor in combination with another event, with respect
to each director, officer, employee and consultant of the Company, will not
result in (a) any payment (including, without limitation,
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severance, unemployment compensation or bonus payments) becoming due from the
Company or under any Company Benefit Plan, (b) any increase in the amount of
compensation or benefits payable to any such individual or (c) any acceleration
of the vesting or timing of payment of benefits or compensation payable to any
such individual. No Company Benefit Plan provides benefits or payments
contingent upon, triggered by, or increased as a result of a change in the
ownership or effective control of the Company.
5.27 Environmental and Safety Matters.
5.27.1 The Company has at all times been and is in material
compliance with all Environmental Laws applicable to the Company. The Company
has obtained the necessary environmental protection approval from the requisite
PRC Governmental Authority in respect of the PRC operations and activities of
the Company, except where the failure to obtain such approvals would not have a
Material Adverse Effect.
5.27.2 There are no Proceedings pending, or to the knowledge
of the Company, threatened in writing against any Company alleging the violation
of any Environmental Law or Environmental Permit applicable to the Company, or
alleging that the Company is a potentially responsible party for any
environmental site contamination.
5.27.3 Neither this Agreement nor the consummation of the
transactions contemplated by this Agreement shall impose any obligations to
notify or obtain the consent of any Governmental Authority or third Persons
under any Environmental Laws applicable to the Company.
5.28 Product Liability and Recalls.
5.28.1 Except as would not have a Material Adverse Effect,
there are no losses, damages, expenses or liabilities (whether absolute,
accrued, contingent or otherwise) against the Company asserted and arising out
of or based upon incidents occurring on or prior to the date hereof with respect
to: (a) any product liability or any similar claim that relates to any of the
products designed, developed, manufactured, produced, distributed, supplied or
sold by the Company to others; (b) the delivery of faulty services; or (c) any
claim for the breach of any express or limited product warranty, or any similar
claim that relates to any product designed, developed, manufactured, produced,
distributed, supplied or sold, or any service delivered, by the Company, and the
Company has no knowledge of any product or service defects which could give rise
to any such losses, claims, damages, expenses or liabilities. For purposes of
this Section 5.28.1 and Section 5.28.2, "knowledge" means knowledge of the
Company's executive officers.
5.28.2 To the knowledge of the Company, there exists no basis
for the recall, withdrawal or suspension by order of any Governmental Authority
of any product designed, developed, manufactured, produced, distributed,
supplied or sold by the Company. To the knowledge of the Company, there are no
defects in the designs, specifications, or process with respect to any product
designed, manufactured, sold, supplied or distributed by the Company that will
give rise to any liability. There has been no recall, withdrawal, or suspension
from the market of any product designed, manufactured, sold, supplied or
distributed by the Company.
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5.29 Receivables and Payables. All accounts and notes receivable of the
Company as of the date hereof have arisen in the ordinary course of business,
represent valid obligations to the Company arising from bona fide transactions
in the ordinary course of business and, to the Company's knowledge, no material
amounts are subject to claims or set-off or other defenses or counterclaims. All
accounts and notes payable by the Company as of the date hereof arose in bona
fide transactions in the ordinary course of business. All items which are
required by GAAP to be reflected as receivables and payables in the Company
Audited Financial Statements and on the books and records of the Company are so
reflected and have been recorded in accordance with GAAP in a manner consistent
with past practice.
5.30 Ethical Business Practices.
(a) The Company and the officers, directors, employees,
shareholders, or agents of the Company, acting for or on behalf of the
Company, have not offered, promised, paid, or authorized the payment,
directly or indirectly through any other party, of anything of value to
any government official or employee (including an employee of a
state-owned entity), political party or candidate for public office,
for the purpose of influencing any acts or decisions of such official
or of the government to obtain or retain business or direct business to
any person.
(b) No owner, officer, director, Key Employee or, to the
Company's knowledge, other employee of the Company is an official or
employee of any government or governmental entity.
(c) The Company maintains its books and records, and prepares
its periodic statements of accounts in accordance with generally
accepted accounting principles. The Company makes and keeps books,
records, and accounts which, in reasonable detail, accurately and
fairly reflect the transactions and disposition of the assets of the
Company. The Company has in place a system of internal accounting
controls to ensure that transactions have been recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability of
assets.
5.31 Money Laundering Laws. The operations of the Company are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes in
all applicable U.S. and non-U.S. jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Authority (collectively, the "Money
Laundering Laws") and no Proceeding involving the Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
5.32 Customers and Suppliers. To the knowledge of the Company, all
supplies and services necessary for the conduct of the Company's business as
presently conducted may be obtained from readily available alternate sources on
terms and conditions comparable to those presently available to the Company.
There exists no actual or, to the knowledge of the Company, threatened,
termination, cancellation or material limitation of, or any material change
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in, the business relationship of the Company with any customer or supplier, the
loss of which could reasonably be expected, together with any other customers or
suppliers with respect to which there has been any such actual or threatened
termination, cancellation, material limitation or material change, to have or
result in a Material Adverse Effect. To the knowledge of the Company, no
customer or supplier of the Company, the loss of which could reasonably be
expected, together with any other customers or suppliers who have experienced
any material work stoppage or adverse circumstances or condition, to have or
result in a Material Adverse Effect, has experienced any material work stoppage
or other material adverse circumstance or condition that is reasonably likely to
jeopardize or adversely affect the Company's future relationship with such
customer or supplier. There are no pending material disputes or controversies
between any customer or supplier of the Company. No customer of the Company has
any right to any credit or refund for products sold or services rendered or to
be rendered by the Company pursuant to any contract or practice of the Company
other than pursuant to the normal course return policy of the Company.
5.33 Governmental Inquiry. The Company has not received any material
written inspection report, questionnaire, inquiry, demand or request for
information from a Governmental Authority.
5.34 Information Statement. Subject to the accuracy of the
representations of DFT in Section 6.22, the information supplied by the JV
Participants and the Company in writing specifically for inclusion in the
Information Statement, if any, will not, on the date the Information Statement
(or any amendment thereof or supplement thereto) is first mailed to stockholders
or at the time of the DFT Stockholders Meeting, contain any statement which, at
such time and in light of the circumstances under which it shall be made, is
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not false or
misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication with the DFT Stockholders with respect to
the transactions contemplated herein which has become false or misleading. If at
any time prior to the Closing any event relating to the Company or any JV
Participant or any of their respective affiliates, officers or directors should
be discovered by the Company or any JV Participant which should be set forth in
a supplement to the Information Statement, the Company or such JV Participant,
as applicable, will promptly inform DFT.
SECTION VI
REPRESENTATIONS AND WARRANTIES OF DFT
DFT represents and warrants to the JV Participants and the Company as
follows:
6.1 Organization and Qualification. DFT is duly organized, validly
existing and in good standing under the laws of the State of New Jersey, has all
requisite authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to carry on its business as presently
conducted and to own, hold and operate its properties and assets as now owned,
held and operated by it, except where the failure to be so organized, existing
and in good standing, or to have such authority and power, governmental
licenses, authorizations, consents or approvals would not have a Material
Adverse Effect. DFT is duly qualified, licensed or
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domesticated as a foreign corporation in good standing in each jurisdiction
wherein the nature of its activities or its properties owned, held or operated
makes such qualification, licensing or domestication necessary, except where the
failure to be so duly qualified, licensed or domesticated and in good standing
would not have a Material Adverse Effect.
6.2 Subsidiaries. DFT does not own, directly or indirectly, any equity
or other ownership interest in any corporation, partnership, joint venture or
other entity or enterprise.
6.3 Organizational Documents. True, correct and complete copies of the
Organizational Documents of DFT have been delivered to the Company prior to the
execution of this Agreement, and no action has been taken to amend or repeal
such Organizational Documents. DFT is not in violation or breach of any of the
provisions of its Organizational Documents, except for such violations or
breaches as would not have a Material Adverse Effect.
6.4 Authorization. DFT has all requisite authority and power (corporate
and other), governmental licenses, authorizations, consents and approvals to
enter into this Agreement and each of the Transaction Documents to which DFT is
a party, and, subject to obtaining the DFT Stockholder Approval, to consummate
the transactions contemplated by this Agreement and each of the Transaction
Documents to which DFT is a party and to perform its obligations under this
Agreement and each of the Transaction Documents to which DFT is a party. The
execution, delivery and performance by DFT of this Agreement and each of the
Transaction Documents to which DFT is a party have been duly authorized by all
necessary corporate action (other than the approval of the transactions
contemplated by this Agreement and the Transaction Documents, to the extent
required by Law by DFT's stockholders) and do not require from the DFT Board any
consent or approval that has not been validly and lawfully obtained. The
execution, delivery and performance by DFT of this Agreement and each of the
Transaction Documents to which DFT is a party requires no authorization,
consent, approval, license, exemption of or filing or registration with any
Governmental Authority or other Person other than (a) the filing of the Articles
of Share Exchange with the Secretary of State of the State of New Jersey, (b)
such filings and mailings required by the laws of the State of New Jersey or
Exchange Act and any other policy or requirement of the Commission imposed in
connection therewith, (c) the filing of a Form D with the Commission, and any
applicable state securities law filings, if required, (d) such other customary
filings with the Commission for transactions of the type contemplated by this
Agreement and (e) such approval by the stockholders of DFT as may be required by
Law.
6.5 No Violation. Neither the execution or delivery by DFT of this
Agreement or any Transaction Document to which DFT is a party, nor the
consummation or performance by DFT of the transactions contemplated hereby or
thereby will, directly or indirectly, (a) contravene, conflict with, or result
in a violation of any provision of the Organizational Documents of DFT; (b)
contravene, conflict with, constitute a default (or an event or condition which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination or acceleration of, or result in the imposition or
creation of any Lien under, any agreement or instrument to which DFT is a party
or by which the properties or assets of DFT is bound; (c) contravene, conflict
with, or result in a violation of, any Law or Order to which DFT or any of the
properties or assets owned or used by DFT may be subject; or (d) contravene,
conflict with, or result in a violation of, the terms or requirements of, or
give any Governmental Authority the right to revoke, withdraw, suspend, cancel,
terminate or modify, any licenses, permits,
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authorizations, approvals, franchises or other rights held by DFT or that
otherwise relate to the business of, or any of the properties or assets owned or
used by DFT except, in the case of clause (b), (c), or (d), for any such
contraventions, conflicts, violations, or other occurrences as would not have a
Material Adverse Effect.
6.6 Securities Laws. Assuming the accuracy of the representations and
warranties of the JV Participants contained in Section 4 and Exhibits G and H,
the issuance of the DFT Shares pursuant to this Agreement are and will be (a)
exempt from the registration and prospectus delivery requirements of the
Securities Act, (b) registered or qualified (or are exempt from registration and
qualification) under the registration permit or qualification requirements of
all applicable state securities laws, and (c) accomplished in conformity with
all other applicable federal and state securities laws.
6.7 Binding Obligations. Assuming this Agreement and the Transaction
Documents have been duly and validly authorized, executed and delivered by the
parties thereto other than DFT, this Agreement has been, and as of the Closing
each of the Transaction Documents to which DFT is a party will be, duly
authorized, executed and delivered by DFT and constitutes or will constitute, as
the case may be, the legal, valid and binding obligations of DFT, enforceable
against DFT in accordance with their respective terms, except as such
enforcement is limited by general equitable principles, or by bankruptcy,
insolvency and other similar Laws affecting the enforcement of creditors rights
generally.
6.8 Duly Authorized. The issuance of the DFT Shares has been duly
authorized and, upon delivery to the JV Participants of certificates therefore
in accordance with the terms of this Agreement, the DFT Shares will have been
validly issued and fully paid, and will be nonassessable, have the rights,
preferences and privileges specified, will be free of preemptive rights and will
be free and clear of all Liens and restrictions, other than Liens created by the
JV Participants and restrictions on transfer imposed by this Agreement, state
securities laws and the Securities Act.
6.9 Certain Proceedings. There is no pending Proceeding that has been
commenced against DFT and that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement. To the knowledge of DFT, no such Proceeding has
been threatened.
6.10 No Brokers or Finders. No Person has, or as a result of the
transactions contemplated herein will have, any right or valid claim against DFT
for any commission, fee or other compensation as a finder or broker, or in any
similar capacity, and DFT will indemnify and hold the Company harmless against
any liability or expense arising out of, or in connection with, any such claim.
6.11 Material DFT Contracts. DFT has made available to the Company,
prior to the date of this Agreement, true, correct and complete copies of each
Material DFT Contract, including each amendment, supplement and modification
thereto.
6.12 Material Assets. The financial statements of DFT set forth in the
SEC Documents reflect the material properties and assets (real and personal)
owned or leased by DFT.
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6.13 SEC Documents; Financial Statements. DFT has filed all reports
required to be filed by it under the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the three (3) years preceding the date hereof (or
such shorter period as DFT was required by law to file such material) (the
foregoing materials, together with DFT's registration statement on Form SB-2,
Registration No. 333-120506 (together with all amendments thereto), being
collectively referred to herein as the "SEC Documents") and has filed any such
SEC Documents prior to the expiration of any such extension. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statement therein, in light of the circumstances under which
they were made, not misleading. All material agreements to which DFT is a party
or to which the property or assets of DFT are subject have been appropriately
filed as exhibits to the SEC Documents as and to the extent required under the
Exchange Act. The financial statements of DFT included in the SEC Documents
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing, were prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto, or, in the case of unaudited statements as permitted by Form 10-Q of
the Commission), and fairly present in all material respects (subject in the
case of unaudited statements, to normal, recurring audit adjustments) the
financial position of DFT as at the dates thereof and the results of its
operations and cash flows for the periods then ended. DFT's Common Stock is
quoted on the Over the Counter Bulletin Board, and DFT is not aware of any facts
which would make DFT's Common Stock ineligible for quotation on the Over the
Counter Bulletin Board.
6.14 Board Recommendation. The DFT Board, at a meeting duly called and
held, has determined that this Agreement and the transactions contemplated by
this Agreement are advisable and in the best interests of DFT's stockholders and
has duly authorized this Agreement and the transactions contemplated by this
Agreement.
6.15 Compliance with Laws. Except as would not have a Material Adverse
Effect, the business and operations of DFT have been and are being conducted in
accordance with all applicable Laws and Orders. Except as would not have a
Material Adverse Effect, DFT has not received notice of any violation (or any
Proceeding involving an allegation of any violation) of any applicable Law or
Order by or affecting DFT and, to the knowledge of the Company, no Proceeding
involving an allegation of violation of any applicable Law or Order is
threatened or contemplated. Except as would not have a Material Adverse Effect,
DFT is not subject to any obligation or restriction of any kind or character,
nor is there, to the knowledge of DFT, any event or circumstance relating to DFT
that materially and adversely affects in any way its business, properties,
assets or prospects or that prohibits DFT from entering into this Agreement or
would prevent or make burdensome its performance of or compliance with all or
any part of this Agreement or the consummation of the transactions contemplated
hereby.
6.16 Litigation; Orders. Except as would not have a Material Adverse
Effect, there is no Proceeding (whether federal, state, local or foreign)
pending or, to the knowledge of DFT, threatened against or affecting DFT or
DFT's properties, assets, business or employees. To the
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knowledge of DFT, there is no fact that might result in or form the basis for
any such Proceeding. DFT is not subject to any Orders.
6.17 Foreign Corrupt Practices Act. Neither DFT, nor any director,
officer, agent, employee or other Person associated with or acting on behalf of
DFT has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any Governmental Authority from corporate
funds; violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977 in connection with the operations of DFT; or made any
bribe, rebate, payoff, influence payment, kickback, or other unlawful payment in
connection with the operations of DFT.
6.18 Money Laundering Laws. The operations of DFT and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Money Laundering Laws and no Proceeding involving
DFT with respect to the Money Laundering Laws is pending or, to the knowledge of
DFT , threatened.
6.19 Absence of Certain Changes or Events. Since September 30, 2005,
DFT has conducted its business in the ordinary course and there has not occurred
any development or circumstance constituting, individually or in the aggregate,
a Material Adverse Effect; (ii) any material change by DFT in its accounting
methods, principles or practices (other than changes required by GAAP after the
date of this Agreement) or (iii) any material tax election, any material change
in method of accounting with respect to Taxes or any compromise or settlement of
any proceeding with respect to any material Tax liability.
6.20 Capitalization. The authorized capital stock of DFT consists of
(a) Ten Billion (10,000,000,000) shares of DFT's Common Stock, of which Twenty
Million Five Hundred Thirteen Thousand Nine Hundred Eighty-Four (20,513,984)
shares are issued and outstanding, (b) Fifty Million (50,000,000) shares of
Class B Common Stock, par value $0.01 per share, none of which shares are issued
and outstanding, (c) Twenty Million (20,000,000) shares of Class C Common Stock,
par value $0.01 per share, none of which shares are issued and outstanding and
One Million (1,000,000) shares of preferred stock, none of which shares are
issued and outstanding. All issued and outstanding shares of the DFT's Common
Stock are duly authorized, validly issued, fully paid and nonassessable, and
have not been issued in violation of any preemptive or similar rights. On the
Closing Date, DFT will have sufficient authorized and unissued DFT's Common
Stock to consummate the transactions contemplated hereby. Except as disclosed on
Schedule 6.20 or in the SEC Documents, there are no outstanding or authorized
options, warrants, purchase agreements, participation agreements, subscription
rights, conversion rights, exchange rights or other securities or contracts that
could require DFT to issue, sell or otherwise cause to become outstanding any of
its authorized but unissued shares of capital stock or any securities
convertible into, exchangeable for or carrying a right or option to purchase
shares of capital stock or to create, authorize, issue, sell or otherwise cause
to become outstanding any new class of capital stock.
6.21 Tax Matters.
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6.21.1 Except as set forth on Schedule 6.21.1, (a) all
material Tax Returns required to be filed by or on behalf of DFT have been
timely filed and all such Tax Returns were (at the time they were filed) and are
true, correct and complete in all material respects; (b) all material Taxes of
DFT (whether or not reflected on any Tax Return) have been fully and timely
paid, except those Taxes which are presently being contested in good faith or
for which an adequate reserve for the payment of such Taxes has been established
DFT Balance Sheet; (c) no waivers of statutes of limitation have been given or
requested with respect to DFT in connection with any Tax Returns covering DFT or
with respect to any Taxes payable by it; (d) no Governmental Authority in a
jurisdiction where DFT does not file Tax Returns has made a claim, assertion or
threat to DFT that DFT is or may be subject to taxation by such jurisdiction;
(e) DFT has duly and timely collected or withheld, and paid over and reported to
the appropriate Governmental Authority all amounts required to be so collected
or withheld and paid over for all periods under all applicable Laws; (f) there
are no Liens with respect to Taxes on DFT's property or assets other than
Permitted Liens; (g) there are no Tax rulings, requests for rulings, or closing
agreements relating to DFT for any period (or portion of a period) that would
affect any period after the date hereof; and (h) any adjustment of Taxes of DFT
made by a Governmental Authority in any examination that DFT is required to
report to the appropriate state, local or foreign taxing authorities has been
reported, and any additional Taxes due with respect thereto have been paid.
6.21.2 There is no pending Proceeding with respect to any
Taxes of DFT, nor, to the knowledge of DFT, is any such Proceeding threatened.
6.21.3 DFT is not liable for the Taxes of any other Person,
whether as a result of being part of an affiliated, unitary, consolidated or
similar group, pursuant to a tax sharing or similar agreement.
6.22 Information Statement. Subject to the accuracy of the
representations and warranties of the Company and the JV Participants, any
information supplied by DFT in writing specifically for inclusion in any
information statement to be sent to the stockholders of DFT in connection with
any meeting of the stockholders of DFT to consider the transactions contemplated
by this Agreement and the Transaction Documents to the extent required by Law
(the "DFT Stockholders Meeting") (such information statement, as may be required
by law, as amended or supplemented being referred to herein as the "Information
Statement") will not, on the date the Statement (or any amendment thereof or
supplement thereto) is first mailed to stockholders or at the time of the DFT
Stockholders Meeting, contain any statement which, at such time and in light of
the circumstances under which it shall be made, is false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements made therein not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the DFT Stockholders Meeting which has become
false or misleading. If at any time prior to the Closing any event relating to
DFT or any of its respective affiliates, officers or directors should be
discovered by DFT which should be set forth in a supplement to the Information
Statement, DFT shall promptly inform the Company.
6.23 Full Disclosure. No representation or warranty or other statement
made by DFT in this Agreement (including, without limitation, all Schedules and
Exhibits hereto) or in any of
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the Transaction Documents contains any untrue statement or omits to a state any
material facts necessary to make any of them, in light of the circumstances in
which it was made, not misleading.
SECTION VII
COVENANTS OF THE COMPANY AND THE JV PARTICIPANTS
7.1 Access and Investigation. Between the date of this Agreement and
the Closing Date, the Company will (a) afford DFT and its agents, advisors and
attorneys during normal business hours, and upon reasonable notice, full and
free access to the Company's senior personnel, properties, contracts, books and
records, and other documents and data, (b) furnish DFT and its agents, advisors
and attorneys with copies of all such contracts, books and records, and other
existing documents and data as DFT may reasonably request, and (c) furnish DFT
and its agents, advisors and attorneys with such additional financial,
operating, and other data and information as DFT may reasonably request.
7.2 Operation of the Business of the Company.
7.2.1 Between the date of this Agreement and the Closing Date,
the Company will:
(a) conduct its business only in the ordinary course of
business consistent with past practice;
(b) use its best efforts to preserve intact its current
business organization and business relationships, including, without
limitation, relationships with suppliers, customers, landlords,
creditors, officers, employees and agents;
(c) not create any new, or capitalize or conduct any business
through, any Subsidiary;
(d) issue any Equity Securities; and
(e) perform any act that would require the consent of the JV
Participants or any of them.
7.2.2 Notwithstanding the foregoing, between the date of this
Agreement and the Closing Date, the Company will not directly or indirectly,
without the prior written consent of DFT, engage in any transaction with, or
enter into any agreement with any officer, director or stockholder of the
Company or, or any Affiliate or "associate" (as such term is defined in Rule 405
of the Commission under the Securities Act) of any such Person.
7.3 No Transfers of Interests.
7.3.1 Between the date of this Agreement and the Closing Date,
no JV Participant shall assign, transfer, mortgage, pledge or otherwise dispose
of any or all of the
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Interests (or any interest therein) or grant any Person the option or right to
acquire such Interests (or any interest therein).
7.4 Required Filings and Approvals.
7.4.1 As promptly as practicable after the date of this
Agreement, the Company will make all filings required to be made by it in order
to consummate the transactions contemplated by this Agreement. Between the date
of this Agreement and the Closing Date, the Company will, (a) cooperate with DFT
with respect to all filings that DFT elects to make or is required to make in
connection with the transactions contemplated by this Agreement, and (b)
cooperate with DFT in obtaining any consents or approvals required to be
obtained by DFT in connection herewith.
7.4.2 Without limiting the foregoing, the Company and the JV
Participants shall promptly furnish to DFT any information reasonably requested
by DFT in connection with the preparation, filing and mailing of the Information
Statement, including, without limitation, information concerning the Company and
the JV Participants. The Company and each JV Participant, severally and not
jointly, represent and warrant to DFT that the information supplied in writing
by the Company and each JV Participant expressly for inclusion in any
Information Statement will not, on the date the Information Statement is first
mailed to the stockholders of DFT, contain any statement which, at such time and
in light of the circumstances under which it shall be made, is false or
misleading with respect to any material fact, or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not false or misleading. If, at any time prior to the Closing Date, any
information should be discovered by the Company or any JV Participant which
should be set forth in an amendment to the Information Statement so that such
Information Statement would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, the
Company or such JV Participant, as the case may be, shall promptly notify DFT.
7.5 Notification. Between the date of this Agreement and the Closing
Date, the Company and the JV Participants will promptly notify DFT in writing if
the Company or the JV Participants becomes aware of any fact or condition that
causes or constitutes a breach of any of the representations and warranties of
the Company or the JV Participants, as the case may be, as of the date of this
Agreement, or if the Company or any JV Participant becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the Schedules
to this Agreement if the Schedules to the Agreement were dated the date of the
occurrence or discovery of any such fact or condition, the Company or the JV
Participants, as the case may be, will promptly deliver to DFT a supplement to
the Schedules to the Agreement specifying such change; provided, however, that
such delivery shall not materially adversely affect any rights of DFT set forth
herein. During the same period, the Company and the JV Participants will
promptly notify DFT of the occurrence of any breach of any covenant of the
Company or the JV Participants in this Section 7 or of the occurrence of any
event that may make the satisfaction of the conditions in Section 9 impossible
or unlikely.
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7.6 Financing. The Company shall obtain financing for DFT in the amount
of at least Four Million Dollars ($4,000,000) prior to the Closing. The Company
shall instruct the funding source at the time of such initial funding to pay off
(i) the entire outstanding balance due and owing on the newly-extended D&O
Insurance policy, (ii) the entire balance due and owing for the transfer agent
cost related to the notice of shareholders, (iii) the entire balance due and
owing for the cost of printing and mailing the notice of shareholders and (iv)
$30,000 to ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP for legal services rendered
directly out of the proceeds of such initial funding on behalf of the Company.
7.7 Closing Conditions. Between the date of this Agreement and the
Closing Date, each of the Company and the JV Participants will use its
commercially reasonable efforts to cause the conditions in Section 9 to be
satisfied.
7.8 Assumed Liabilities. On the Closing Date, the Company shall assume
the Assumed Liabilities.
SECTION VIII
COVENANTS OF DFT
8.1 Access and Investigation. Between the date of this Agreement and
the Closing Date, DFT will (a) afford the Company and its agents, advisors and
attorneys during normal business hours and upon reasonable notice, full and free
access to DFT's senior personnel, properties, contracts, books and records, and
other documents and data, (b) furnish the Company and its agents, advisors and
attorneys with copies of all such contracts, books and records, and other
existing documents and data as the Company may reasonably request, and (c)
furnish the Company and its agents, advisors and attorneys with such additional
financial, operating, and other data and information as the Company may
reasonably request.
8.2 Operation of the Business of DFT. Between the date of this
Agreement and the Closing Date, DFT, to the extent consistent with the exercise
by the DFT Board of its fiduciary duties to DFT and its stockholders, will:
8.2.1 conduct its business only in the ordinary course of business;
8.2.2 use its best efforts to preserve intact the current business
organization and business relationships, including, without limitation,
relationships with suppliers, customers, landlords, creditors, officers,
employees and agents;
8.2.3 not perform any act that would require the consent of the
stockholders of DFT;
8.2.4 not engage, directly or indirectly, without the consent of the
Company, in any transaction with, or enter into any agreement with any officer,
director of the Company, or any Affiliate or associate of any such Person; and
8.2.5 not issue any Equity Securities.
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8.3 Required Filings and Approvals.
8.3.1 As promptly as practicable after the date of this
Agreement, DFT will make all filings required to be made by it in order to
consummate the transactions contemplated by this Agreement. Between the date of
this Agreement and the Closing Date, DFT will cooperate with the Company with
respect to all filings that the Company elects to make or is required to make in
connection with the transactions contemplated by this Agreement, and cooperate
with the Company in obtaining any consents or approvals required to be obtained
by the Company in connection herewith.
8.3.2 As promptly as practicable after the Closing Date, DFT
will file Form 10-SB with the Commission.
8.4 Notification. Between the date of this Agreement and the Closing
Date, DFT will promptly notify the Company and the JV Participants in writing if
DFT becomes aware of any fact or condition that causes or constitutes a breach
of any of the representations and warranties of DFT, as of the date of this
Agreement, or if DFT becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would (except as expressly contemplated
by this Agreement) cause or constitute a breach of any such representation or
warranty had such representation or warranty been made as of the time of
occurrence or discovery of such fact or condition. Should any such fact or
condition require any change in the Schedules to this Agreement if the Schedules
to the Agreement were dated the date of the occurrence or discovery of any such
fact or condition, DFT will promptly deliver to the Company and the JV
Participants a supplement to the Schedules to the Agreement specifying such
change; provided, however, that such delivery shall not materially adversely
affect any rights of the JV Participants set forth herein. During the same
period, DFT will promptly notify the Company and the JV Participants of the
occurrence of any breach of any covenant of DFT in this Section 8 or of the
occurrence of any event that may make the satisfaction of the conditions in
Section 10 impossible or unlikely.
8.5 Closing Conditions. Between the date of this Agreement and the
Closing Date, DFT will use commercially reasonable efforts to cause the
conditions in Section 10 to be satisfied.
8.6 Indemnification and Insurance.
8.6.1 The indemnification provisions set forth in the
Organizational Documents of DFT shall not be amended, modified or otherwise
repealed for a period of six (6) years from the Closing Date in any manner that
would adversely affect the rights thereunder as of the Closing Date of
individuals who at the Closing Date were directors, officers, employees or
agents of DFT, unless such modification is required after the Closing Date by
Law and then only to the minimum extent required by such Law.
8.6.2 DFT shall to the fullest extent permitted under
applicable Law or its Organizational Documents, indemnify and hold harmless,
each present and former director, officer or employee of DFT (collectively, the
"Indemnified Parties") against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any Proceeding (each, a "Loss") (x) arising out
of
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or pertaining to the transactions contemplated by this Agreement or (y)
otherwise with respect to any acts or omissions occurring at or prior to the
Closing Date, to the same extent as provided in DFT's Organizational Documents
or any applicable contract or agreement as in effect on the date hereof, in each
case for a period of six (6) years after the Closing Date, except to the extent
any such Loss arises from such Indemnified Party's gross negligence or willful
misconduct. In the event of any such Proceeding (whether arising before or after
the Closing Date), (i) any counsel retained by the Indemnified Parties for any
period after the Closing Date shall be reasonably satisfactory to DFT, (ii)
after the Closing Date, DFT shall pay the reasonable fees and expenses of such
counsel, promptly after statements therefore are received, provided that the
Indemnified Parties shall be required to reimburse DFT for such payments in the
circumstances and to the extent required by DFT's Organizational Documents, any
applicable contract or agreement or applicable Law, and (iii) DFT will cooperate
in the defense of any such matter; provided, however, that DFT shall not be
liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld); and provided, further, that, in the event
that any claim or claims for indemnification are asserted or made within such
six (6) year period, all rights to indemnification in respect of any such claim
or claims shall continue until the disposition of any and all such claims. The
Indemnified Parties as a group may retain only one law firm to represent them in
each applicable jurisdiction with respect to any single action unless there is,
under applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two (2) or more Indemnified
Parties, in which case each Indemnified Person with respect to whom such a
conflict exists (or group of such Indemnified Persons who among them have no
such conflict) may retain one separate law firm in each applicable jurisdiction.
Notwithstanding the foregoing, to the extent that it may wish, DFT will be
entitled to assume the defense of any Proceeding, with counsel reasonably
satisfactory to the Indemnified Parties. After notice from DFT of its election
to assume the defense thereof, DFT will not be liable to the Indemnified Parties
for any legal or other expenses subsequently incurred by the Indemnified Parties
in connection with the defense thereof. The Indemnified Parties shall have the
right to employ counsel in such Proceeding but the fees expenses of such counsel
incurred after notice from DFT of its assumption of the defense thereof shall be
at the expense of the Indemnified Parties, unless counsel for DFT shall have
concluded that there may be a conflict of interest between DFT and such
Indemnified Parties in which case DFT shall pay the reasonable fees and expenses
of one separate counsel for the Indemnified Parties.
8.6.3 In addition, DFT will provide (or extend), for a period
of not less than six (6) years after the Closing Date, to DFT's current
directors and officers with an insurance and indemnification policy that
provides coverage for events occurring at or prior to the Closing Date (the "D&O
Insurance") that is no less favorable than the existing policy or, if
substantially equivalent insurance coverage is unavailable, the best available
coverage; provided, however, DFT shall not be required to pay an annual premium
for the D&O Insurance in excess of 300% of the annual premium currently paid by
DFT for such insurance, but in such case shall purchase as much such coverage as
possible for such amount.
8.6.4 This Section 8.6 shall survive the consummation of the
transactions contemplated by this Agreement at the Closing Date, is intended to
benefit the Indemnified Parties, shall be binding on all successors and assigns
of DFT and shall be enforceable by the Indemnified Parties, and may not be
amended without the prior written consent of the Indemnified Parties.
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8.7 Rule 144 Reporting. With a view to making available to DFT's
stockholders the benefit of certain rules and regulations of the Commission
which may permit the sale of the DFT Common Stock to the public without
registration, from and after the Closing Date, DFT agrees to use reasonable
commercial efforts to:
8.7.1 Make and keep public information available, as those
terms are understood and defined in Rule 144; and
8.7.2 File with the Commission, in a timely manner, all
reports and other documents required of DFT under the Exchange Act.
8.8 Books and Records. DFT shall maintain all of the books and records
of DFT that are currently in its possession as of the date hereof, for a period
of at least six (6) years after the Closing Date.
8.9 Sale of Unified Messaging Business. On the Closing Date, DFT shall
sell the assets comprising the "unified messaging system" business of DFT to
iVoice Inc. ("iVoice") pursuant to an Asset Purchase Agreement dated as of the
Closing Date between DFT and iVoice substantially in the form of Exhibit I
hereto.
8.10 Information Statement. As promptly as practicable after the
execution of this Agreement, if required by applicable Law DFT shall prepare and
mail to its stockholders an Information Statement containing all information
required by applicable Law to be contained therein relating to the approval of
the transactions contemplated by this Agreement and the Transaction Documents to
the extent required by Law and the adoption of this Agreement by the
stockholders of DFT pursuant to this Agreement to the extent required by Law.
The Company and the JV Participants shall furnish all information required to be
included in the Information Statement in connection with the transactions
contemplated by this Agreement. The Company and the JV Participants shall fully
cooperate with DFT in order to make any required filings in connection
therewith.
8.11 DFT Stockholders Meeting. If required by applicable Law, DFT shall
call the DFT Stockholders Meeting as promptly as practicable for the purpose of
voting upon the approval of the this Agreement and the transactions contemplated
by this Agreement and the Transaction Documents to the extent required by Law
(the "DFT Stockholder Approval"). If required by applicable Law, DFT shall
solicit from its stockholders votes or consents in favor of approval of this
Agreement and the transactions contemplated by this Agreement and the
Transaction Documents to the extent required by Law.
8.11.1 Cornell Notes. On the Closing Date, DFT shall assume
all obligations of Mayflower with respect to the Cornell Notes and shall enter
into a security agreement with Cornell whereby the Cornell Notes shall be
secured by a first priority security interest in all of the assets of DFT.
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SECTION IX
CONDITIONS PRECEDENT TO DFT'S OBLIGATION TO CLOSE
DFT's obligation to acquire the Interests and to take the other actions
required to be taken by DFT at the Closing is subject to the satisfaction, at or
prior to the Closing, of each of the following conditions (any of which may be
waived by DFT, in whole or in part):
9.1 Accuracy of Representations. The representations and warranties of
the Company and the JV Participants set forth in this Agreement or in any
Schedule or certificate delivered pursuant hereto that are not qualified as to
materiality shall be true and correct in all material respects as of the date of
this Agreement, and shall be deemed repeated as of the Closing Date and shall
then be true and correct in all material respects, except to the extent a
representation or warranty is expressly limited by its terms to another date and
without giving effect to any supplemental Schedule. The representations and
warranties of the Company and the JV Participants set forth in this Agreement or
in any Exhibit, Schedule or certificate delivered pursuant hereto that are
qualified as to materiality shall be true and correct in all respects as of the
date of this Agreement, and shall be deemed repeated as of the Closing Date and
shall then be true and correct in all respects, except to the extent a
representation or warranty is expressly limited by its terms to another date and
without giving effect to any supplemental Schedule.
9.2 Performance by the Company and JV Participants.
9.2.1 All of the covenants and obligations that the Company
and JV Participants are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), must have been duly
performed and complied with in all material respects.
9.2.2 Each document required to be delivered by the Company
and the JV Participants pursuant to this Agreement at or prior to Closing must
have been delivered.
9.3 No Force Majeure Event. There shall not have been any delay, error,
failure or interruption in the conduct of the business of the Company, or any
loss, injury, delay, damage, distress, or other casualty, due to force majeure
including but not limited to (a) acts of God; (b)fire or explosion; (c) war,
acts of terrorism or other civil unrest; or (d) national emergency.
9.4 Certificate of Officer. The Company will have delivered to DFT a
certificate, dated the Closing Date, executed by an officer of the Company,
certifying the satisfaction of the conditions specified in Sections 9.1, 9.2 and
9.3.
9.5 Certificate of JV Participants. Each JV Participant will have
delivered to DFT a certificate, dated the Closing Date, executed by such JV
Participant, if a natural person, or an authorized officer of the JV
Participant, if an entity, certifying the satisfaction of the conditions
specified in Sections 9.1, 9.2, 9.6, 9.8 and 9.9.
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9.6 Consents.
9.6.1 All consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by the
Company and/or the JV Participants for the authorization, execution and delivery
of this Agreement and the consummation by them of the transactions contemplated
by this Agreement and the other Transaction Documents to the extent required by
Law, shall have been obtained and made by the Company or the JV Participants, as
the case may be, except where the failure to receive such consents, waivers,
approvals, authorizations or orders or to make such filings could not be
expected to have a Material Adverse Effect on the Company or DFT; it being
understood that all consents, waivers, approvals, authorizations or orders of
the PRC or any subdivision thereof are required to be delivered at or prior to
Closing.
9.6.2 The requisite number of shareholders shall have approved
this Agreement pursuant to New Jersey Business Corporation Act.
9.6.3 Without limiting the foregoing, the notice to
shareholders shall have been mailed to the stockholders of DFT as required by
Law and the minimum period of time shall have elapsed from the mailing date to
permit effectiveness of the previous shareholder action taken through written
consent in lieu of meeting.
9.7 Documents. The Company and the JV Participants must have caused the
following documents to be delivered to DFT:
9.7.1 assignments of the Interests (other than the Retained
Interests) and Rights with Respect to Retained Interests held by each JV
Participant and Rights with Respect to Retained Interests, each in form and
substance reasonably satisfactory to DFT, transferring such Interests to DFT and
any necessary approvals thereof or consents thereto;
9.7.2 a Secretary's Certificate of the Company, dated the
Closing Date, certifying attached copies of (A) the Organizational Documents of
the Company, (B) the resolutions of the Company Board and the JV Participants
approving this Agreement and the transactions contemplated hereby; and (C) the
incumbency of each authorized officer of the Company signing this Agreement and
any other agreement or instrument contemplated hereby to which the Company is a
party;
9.7.3 each of the Transaction Documents (including without
limitation the Consultant Agreements, the Termination and Settlement Agreements
and the Asset Purchase Agreement) to which DFT, the Company and/or the JV
Participants is a party, shall have been duly executed and any factual
information necessary to complete such Transaction Documents shall have been
accurately inserted therein;
9.7.4 a certified certificate of good standing (or in the case
of PRC entities, a Letter from the Administrator of Commerce and Industry to the
effect that such entity is subsisting and has paid its taxes), or equivalent
thereof of the Company and each JV Participant who is not an individual.
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9.7.5 true, correct and complete English translations of each
Material Company Contract suitable for filing with the SEC; and
9.7.6 such other documents as DFT may reasonably request for
the purpose of (i) evidencing the accuracy of any of the representations and
warranties of the Company and the JV Participants pursuant to Section 9.1, (ii)
evidencing the performance of, or compliance by the Company and the JV
Participants with, any covenant or obligation required to be performed or
complied with by the Company or the JV Participants, as the case may be, (iii)
evidencing the satisfaction of any condition referred to in this Section 9
(including, without limitation such opinions of PRC counsel to the Company or
the JV Participants that all consents and approvals of PRC Governmental
Authorities necessary or required to consummate the Transactions including
without limitation the transfer of the Interests as provided herein, free and
clear of all, Liens have been obtained and are in full force and effect), or
(iv) otherwise facilitating the consummation or performance of any of the
transactions contemplated by this Agreement.
9.8 No Proceedings. Since the date of this Agreement, there must not
have been commenced or threatened against DFT, the Company or any JV
Participant, or against any Affiliate thereof, any Proceeding (which Proceeding
remains unresolved as of the Closing Date) (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the transactions
contemplated by this Agreement and the other Transaction Documents, or (b) that
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated by this Agreement and the
other Transaction Documents.
9.9 No Claim Regarding Ownership or Consideration. There must not have
been made or threatened by any Person any claim asserting that such Person (a)
is the holder of, or has the right to acquire or to obtain beneficial ownership
of the Interests or any other voting, equity, or ownership interest in, the
Company, or (b) is entitled to all or any portion of the DFT Shares.
9.10 Satisfactory Due Diligence. DFT shall have completed and
reasonably satisfied itself with the final results of its due diligence review
of the Company's contracts, books, records and other information or documents
reasonably requested by DFT.
9.11 Financial Statements. DFT shall have received with respect to the
Company and Jinche all financial statements and all other materials required to
be filed with the SEC pursuant to Regulation S-B and such financial statements
and other materials shall be adequate, in the opinion of DFT's auditors, to meet
the requirements of Regulations S-K and S-X for purposes of filing a
registration statement on Form SB-2 and a Current Report on Form 8-K.
9.12 Stockholder Approval. To the extent required by Law, this
Agreement and transactions contemplated hereby and by the Transaction Documents
shall have been approved and adopted by the requisite vote of the stockholders
of DFT.
9.13 Payments by the Company. The Company shall have paid (a) the first
quarterly premium on the newly-extended D&O Insurance policy and (b) any and all
deposits necessary to be paid in order to complete the preparation and
distribution to the DFT stockholders of the notice to shareholders.
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SECTION X
CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY
AND THE JV PARTICIPANTS TO THE CLOSING
The JV Participants' obligation to transfer the Interests and the
obligations of the Company to take the other actions required to be taken by the
Company at the Closing are subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by the
Company and the JV Participants, in whole or in part):
10.1 Accuracy of Representations. The representations and warranties of
DFT set forth in this Agreement or in any Schedule or certificate delivered
pursuant hereto that are not qualified as to materiality shall be true and
correct in all material respects as of the date of this Agreement, and shall be
deemed repeated as of the Closing Date and shall then be true and correct in all
material respects, except to the extent a representation or warranty is
expressly limited by its terms to another date and without giving effect to any
supplemental Exhibit or Schedule. The representations and warranties of DFT set
forth in this Agreement or in any Exhibit or Schedule or certificate delivered
pursuant hereto that are qualified as to materiality shall be true and correct
in all respects as of the date of this Agreement, and shall be deemed repeated
as of the Closing Date and shall then be true and correct in all respects,
except to the extent a representation or warranty is expressly limited by its
terms to another date and without giving effect to any supplemental Schedule.
10.2 Performance by DFT.
10.2.1 All of the covenants and obligations that DFT is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all respects.
10.2.2 Each document required to be delivered by DFT pursuant
to this Agreement at or prior to Closing must have been delivered.
10.3 No Force Majeure Event. There shall not have been any delay,
error, failure or interruption in the conduct of the business of DFT, or any
loss, injury, delay, damage, distress, or other casualty, due to force majeure
including but not limited to (a) acts of God; (b)fire or explosion; (c) war,
acts of terrorism or other civil unrest; or (d) national emergency.
10.4 Certificate of Officer. DFT will have delivered to the Company a
certificate, dated the Closing Date, executed by an officer of DFT, certifying
the satisfaction of the conditions specified in Sections 10.1, 10.2, 10.3, 10.5
and 10.7.
10.5 Consents.
10.5.1 All consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by DFT for
the authorization, execution and delivery of this Agreement and the consummation
by it of the transactions contemplated by this Agreement and the other
Transactions Documents, shall have been obtained and made by DFT,
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except where the failure to receive such consents, waivers, approvals,
authorizations or orders or to make such filings could not be expected to have a
Material Adverse Effect on the Company or DFT.
10.5.2 Without limiting the foregoing, the Information
Statement shall have been mailed to the stockholders of DFT if required by law.
10.6 Documents. DFT must have caused the following documents to be
delivered to the Company and/or the JV Participants:
10.6.1 share certificates evidencing each JV Participant's
share of the DFT Shares (as set forth on Schedule A);
10.6.2 a certificate of good standing of DFT;
10.6.3 a Secretary's Certificate, dated the Closing Date
certifying attached copies of (A) the Organizational Documents of DFT, (B) the
resolutions of the DFT Board approving this Agreement and the transactions
contemplated hereby; and (C) the incumbency of each authorized officer of DFT
signing this Agreement and any other agreement or instrument contemplated hereby
to which DFT is a party;
10.6.4 each of the Transaction Documents (including without
limitation the Consultant Agreements, the Termination and Settlement Agreements
and the Asset Purchase Agreement) to which DFT is a party, duly executed; and
10.6.5 such other documents as the Company may reasonably
request for the purpose of (i) evidencing the accuracy of any representation or
warranty of DFT pursuant to Section 10.1, (ii) evidencing the performance by DFT
of, or the compliance by DFT with, any covenant or obligation required to be
performed or complied with by DFT, (iii) evidencing the satisfaction of any
condition referred to in this Section 10, or (iv) otherwise facilitating the
consummation of any of the transactions contemplated by this Agreement.
10.7 No Proceedings. Since the date of this Agreement, there must not
have been commenced or threatened against DFT, the Company or any JV
Participant, or against any Affiliate thereof, any Proceeding (which Proceeding
remains unresolved as of the Closing Date) (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the transactions
contemplated by this Agreement and the other Transaction Documents, or (b) that
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated by this Agreement and the
other Transaction Documents.
10.8 Resignation of Officers. On the Closing Date, each officer and
director of DFT shall execute and deliver to the Company a letter of resignation
(as contemplated, in the case of the directors, by Section 2.4).
10.9 D&O Insurance. Between the date hereof and the Closing Date, DFT
shall notify its D&O Insurance carrier of its pending change in control.
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10.10 Stockholder Approval. To the extent required by Law, this
Agreement and transactions contemplated hereby and by the Transaction Documents
shall have been approved and adopted by the requisite vote of the stockholders
of DFT.
SECTION XI
TERMINATION
11.1 Termination Events. This Agreement may, by notice given prior to
or at the Closing, be terminated:
11.1.1 by mutual consent of DFT and the JV Participants
(acting jointly);
11.1.2 by DFT, if any of the conditions in Section 9 have not
been satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of DFT to comply with its
obligations under this Agreement) and DFT has not waived such condition on or
before the Closing Date; or (ii) by the JV Participants (acting jointly), if any
of the conditions in Section 10 have not been satisfied as of the Closing Date
or if satisfaction of such a condition is or becomes impossible (other than
through the failure of any JV Participant to comply with its obligations under
this Agreement) and the JV Participants (acting jointly) have not waived such
condition on or before the Closing Date;
11.1.3 by DFT or the JV Participants (acting jointly), if the
Closing has not occurred other than due to the failure of DFT (in the event DFT
seeks to terminate this Agreement) or any JV Participant (in the case the JV
Participants (acting jointly) seek to terminate this Agreement) to comply with
their respective obligations under this Agreement, by March 30, 2007 or such
later date as the parties may agree upon ( the "Outside Date");
11.1.4 by either DFT or the JV Participants (acting jointly),
if there shall have been entered a order or injunction of any Governmental
Authority restraining or prohibiting the consummation of the transactions
contemplated hereby;
11.1.5 by DFT, if, prior to the Closing Date, the Company or
any JV Participant is in material breach of any representation, warranty,
covenant or agreement herein contained and such breach shall not be cured within
10 days of the date of notice of default served by DFT claiming such breach;
provided, however, that the right to terminate this Agreement pursuant to this
Section 11.1.5 shall not be available to DFT if DFT is in material breach of
this Agreement at the time notice of termination is delivered; and
11.1.6 by the JV Participants (acting jointly), if, prior to
the Closing Date, DFT is in material breach of any representation, warranty,
covenant or agreement herein contained and such breach shall not be cured within
10 days of the date of notice of default served by the JV Participants claiming
such breach or, if such breach is not curable within such 10 day period, such
longer period of time as is necessary to cure such breach; provided, however,
that the right to terminate this Agreement pursuant to this Section 11.1.6 shall
not be available to the JV Participants (acting jointly) if any JV Participant
is in material breach of this Agreement at the time notice of termination is
delivered.
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11.2 Effect of Termination.
11.2.1 Each party's right of termination under Section 11.1 is
in addition to any other rights it may have under this Agreement or otherwise,
and the exercise of a right of termination will not be an election of remedies.
If this Agreement is terminated pursuant to Section 11.1, all further
obligations of the parties under this Agreement will terminate, except that the
obligations in Sections 5.12, 6.11, 11.2, and 12 will survive; provided,
however, that if this Agreement is terminated by a party because of the breach
of the Agreement by another party or because one (1) or more of the conditions
to the terminating party's obligations under this Agreement is not satisfied as
a result of another party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
SECTION XII
GENERAL PROVISIONS
12.1 Expenses. Except as otherwise expressly provided in this
Agreement, DFT will bear the reasonable expenses of all parties to the
Transaction Documents incurred in connection with the preparation, execution,
and performance of this Agreement and the transactions contemplated by this
Agreement, including all fees and expenses of agents, representatives, counsel,
and accountants. In the event of termination of this Agreement, each party will
bear its respective expense, which obligation will be subject to any rights of
such party arising from a breach of this Agreement by another party.
12.2 Public Announcements. DFT shall promptly, but no later than three
(3) days following the effective date of this Agreement, issue a press release
disclosing the transactions contemplated hereby. Between the date of this
Agreement and the Closing Date, the Company and DFT shall consult with each
other in issuing any other press releases or otherwise making public statements
or filings and other communications with the Commission or any regulatory agency
or stock market or trading facility with respect to the transactions
contemplated hereby and neither party shall issue any such press release or
otherwise make any such public statement, filings or other communications
without the prior written consent of the other, which consent shall not be
unreasonably withheld or delayed, except that no prior consent shall be required
if such disclosure is required by law, in which case the disclosing party shall
provide the other party with prior notice of such public statement, filing or
other communication and shall incorporate into such public statement, filing or
other communication the reasonable comments of the other party.
12.3 Confidentiality.
12.3.1 Subsequent to the date of this Agreement, DFT, the JV Participants and
the Company will maintain in confidence, and will cause their respective
directors, officers, employees, agents, and advisors to maintain in confidence,
any written, oral, or other information obtained in confidence from another
party in connection with this Agreement or the transactions contemplated by this
Agreement, unless (a) such information is already known to such party or to
others not bound by a duty of confidentiality or such information becomes
publicly available
-xlii-
through no fault of such party, (b) the use of such information is necessary or
appropriate in making any required filing with the Commission or other
Governmental Authority, or obtaining any consent or approval required for the
consummation of the transactions contemplated by this Agreement, or (c) the
furnishing or use of such information is required by or necessary or appropriate
in connection with legal proceedings.
12.3.2 In the event that any party is required to disclose any
information of another party pursuant to clause (b) or (c) of Section 12.3.1,
the party requested or required to make the disclosure (the "disclosing party")
shall provide the party that provided such information (the "providing party")
with prompt notice of any such requirement so that the providing party may seek
a protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section 12.3. If, in the absence of a protective order or
other remedy or the receipt of a waiver by the providing party, the disclosing
party is nonetheless, in the opinion of counsel, legally compelled to disclose
the information of the providing party, the disclosing party may, without
liability hereunder, disclose only that portion of the providing party's
information which such counsel advises is legally required to be disclosed,
provided that the disclosing party exercises its reasonable efforts to preserve
the confidentiality of the providing party's information, including, without
limitation, by cooperating with the providing party to obtain an appropriate
protective order or other relief assurance that confidential treatment will be
accorded the providing party's information.
12.3.3 If the transactions contemplated by this Agreement are
not consummated, each party will return or destroy as much of such written
information as the other party may reasonably request.
12.4 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by facsimile (with written confirmation of receipt), or (c) when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
If to DFT: with a copy to:
Deep Field Technologies, Inc. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 1177 Avenue of the Americas
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇ Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-xliii-
If to Company: with a copy to:
c/o Beijing Jinche Yingang Automobile ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ &
Service Center ▇▇▇▇▇▇ LLP
27th Floor, Tower A, Cyber Tower No. 2 Miami Center
South Avenue Zhongguacun 20th Floor
Haidian District ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ Guisan Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇-▇▇-▇▇▇▇▇▇▇▇ Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: ▇▇-▇▇▇-▇▇▇▇▇▇▇▇ Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
12.5 Arbitration. Any dispute or controversy under this Agreement shall
be settled exclusively by arbitration in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitration award in any court having jurisdiction. The award of the arbitrators
shall be final and binding on all parties, and any party may apply to a court of
competent jurisdiction for the enforcement of such an award. The arbitration
fee, reasonable attorney's fees and all other related costs shall be paid by the
non-prevailing party. During the period when a dispute is subject to an
arbitration, the parties shall continue to perform all obligations under this
Agreement and the other Transaction Documents that are the not the subject of
such arbitration. The provisions of this Section 12.5 shall survive the
termination or other expiration of this Agreement.
12.6 Further Assurances. The parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
12.7 Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one (1) party, in whole or in part, by a waiver or renunciation of the claim
or right unless in writing signed by the other party; (b) no waiver that may be
by a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one (1) party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
12.8 Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter
(including the Letter of Intent between DFT and the Company, dated October 29,
2005) and constitutes (along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be
-xliv-
amended except by a written agreement executed by the party against whom the
enforcement of such amendment is sought.
12.9 Assignments, Successors, and No Third-Party Rights. No party may
assign any of its rights under this Agreement without the prior consent of the
other parties. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon, and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties. Except as set
forth in Section 8.6, nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.
12.10 Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.11 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
12.12 Governing Law. This Agreement will be governed by the laws of the
State of New York without regard to conflicts of laws principles.
12.13 Counterparts. This Agreement may be executed in one (1) or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
12.14 Survival. The representations and warranties of the respective
parties shall not survive the Closing Date and the consummation of the
transaction herein contemplated.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed and delivered this
Amended and Restated Securities Exchange Agreement as of the date first written
above.
DFT:
DEEP FIELD TECHNOLOGIES INC.
By:_________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive Officer:
COMPANY:
BEIJING SINO-US JINCHE YINGANG
AUTO TECHNOLOGICAL SERVICES LIMITED
By:_________________________________
Name:
Title:
JV PARTICIPANTS:
BEIJING JINCHE YINGANG
AUTOMOBILE SERVICE CENTER
(NON-U.S. PERSON)
By:_________________________________
Name:
Title:
▇▇▇▇▇ ▇▇▇ QUEK
(ACCREDITED INVESTOR)
By:_________________________________
Name: ▇▇▇▇▇ ▇▇▇ Quek
MAYFLOWER AUTO GROUP LLC
(ACCREDITED INVESTOR)
By:_________________________________
Name:
Title:
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SCHEDULE A
----------
[LIST JV PARTICIPANTS]
EXHIBIT A
---------
[▇▇▇▇▇▇▇ CONSULTING AGREEMENT]
EXHIBIT B
---------
[▇▇▇▇▇▇ CONSULTING AGREEMENT]
EXHIBIT C
---------
[MM2 GROUP, INC. CONSULTING AGREEMENT]
EXHIBIT D
---------
[IVOICE, INC. CONSULTING AGREEMENT]
EXHIBIT E
---------
[▇▇▇▇▇▇▇ TERMINATION AND SETTLEMENT AGREEMENT]
EXHIBIT F
---------
[▇▇▇▇▇▇ TERMINATION AND SETTLEMENT AGREEMENT]
EXHIBIT G
---------
[ADDITIONAL REPS AND WARRANTIES OF ACCREDITED INVESTORS]
EXHIBIT H
---------
[ADDITIONAL REPS AND WARRANTIES OF NON-U.S. PERSONS]
EXHIBIT I
---------
[ASSET PURCHASE AGREEMENT]
-xlvii-