STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE by and among INTERCONTINENTAL RESOURCES, INC. a Nevada Corporation; and CHINA VALVE HOLDINGS LIMITED a Samoa Corporation; effective as of December 18, 2007
by
and
among
INTERCONTINENTAL
RESOURCES, INC.
a
Nevada
Corporation;
and
CHINA
VALVE HOLDINGS LIMITED
a
Samoa
Corporation;
effective
as of December 18, 2007
Page
1
THIS
STOCK PURCHASE AGREEMENT AND
SHARE EXCHANGE, made and entered into as of this 18th
day of
December, 2007 (the “Agreement”), by and among Intercontinental Resources, Inc.,
a Nevada corporation with its principal place of business located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“INCL"); the
undersigned INCL Shareholders (the “INCL Shareholder”) and China Valve Holdings
Limited, a Samoa Corporation, with its registered office at ▇▇.▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, P.R.C (“China Valve”).
WHEREAS,
this Agreement provides for
the acquisition of China Valve whereby China Valve shall become a wholly owned
subsidiary of INCL and in connection therewith, INCL shall issue 40,000,000
total of shares of INCL common stock, which will represent, and equate to,
99.8% of the issued and
outstanding INCL common stock to China Valve or its designated entities after
the transaction is closed.
WHEREAS,
the boards of directors of
INCL and China Valve have determined, subject to the terms and conditions set
forth in this Agreement, that the transaction contemplated hereby is desirable
and in the best interests of their stockholders, respectively. This
Agreement is being entered into for the purpose of setting forth the terms
and
conditions of the proposed acquisition.
Agreement
NOW,
THEREFORE, on the stated premises
and for and in consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits to the parties to be derived herefrom, it
is
hereby agreed as follows:
ARTICLE
I
REPRESENTATIONS,
COVENANTS AND WARRANTIES OF INTELISYS AND INTELISYS SHAREHOLDERS
As
an inducement to and to obtain the
reliance of China Valve, INCL represents and warrants as follows:
Section
1.1 Organization. INCL
is a corporation duly organized, validly existing, and in good standing under
the laws of Nevada and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws, regulations,
ordinances and orders of public authorities to own all of its properties and
assets and to carry on its business in all material respects as it is now being
conducted, including qualification to do business as a foreign corporation
in
the jurisdiction in which the character and location of the assets owned by
it
or the nature of the business transacted by it requires
qualification. Included in the Schedules attached hereto (hereinafter
defined) are complete and correct copies of the articles of incorporation,
by-laws and amendments thereto as in effect on the date hereof. The
execution and delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not violate any provision of INCL’s articles of incorporation or
by-laws. INCL has full power, authority and legal right and has taken
all action required by law, its articles of incorporation, its by-laws or
otherwise to authorize the execution and delivery of this Agreement.
Page
2
Section
1.2 Capitalization. The
authorized capitalization of INCL consists of 300,000,000 shares of common
stock, $0.001 par value per share and is not authorized to issue any shares
of
preferred stock. As of the date hereof, INCL has 106,500 common
shares issued and outstanding.
All
issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in violation
of
the preemptive or other rights of any person. There are no
securities, warrants or options authorized or issued.
Section
1.3 Subsidiaries.
INCL
has
no subsidiaries.
Section
1.4 Tax Matters: Books
and Records.
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(a)
|
The
books and records, financial and others, of INCL are in all material
respects complete and correct and have been maintained in accordance
with
good business accounting practices;
and
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(b)
|
INCL
has no liabilities with respect to the payment of any country, federal,
state, county, or local taxes (including any deficiencies, interest
or
penalties); and
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(c)
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INCL
shall pay all outstanding liabilities at or prior to the
Closing.
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Section
1.5 Litigation
and
Proceedings. There is one outstanding legal proceeding against
the Company. The Company was sued by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada, Inc., in
British Columbia, Canada, in July 2000 (the “▇▇▇▇▇▇▇ ▇▇▇▇▇ Litigation”).
Other than initial pleadings, the plaintiff did not proceed with the suit since
it was filed. The Company believes that the suit is without merit. In
anticipation of this Agreement, INCL engaged in settlement discussions and
resolved the lawsuit for $30,000.
There
are
no other actions, suits, proceedings or investigations pending or threatened
by
or against or affecting INCL or its properties, at law or in equity, before
any
court or other governmental agency or instrumentality, domestic or foreign
or
before any arbitrator of any kind that would have a material adverse affect
on
the business, operations, financial condition or income of INCL. INCL
is not in default with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental agency or
instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.
Section
1.6 Material
Contract
Defaults. INCL is not in default in any material respect under the
terms of any outstanding contract, agreement, lease or other commitment which
is
material to the business, operations, properties, assets or condition of INCL,
and there is no event of default in any material respect under any such
contract, agreement, lease or other commitment in respect of which INCL has
not
taken adequate steps to prevent such a default from occurring.
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3
Section 1.7 Information. The
information concerning INCL as set forth in this Agreement and in the attached
Schedules is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made in light of the circumstances under which
they were made, not misleading.
Section 1.8 Title
and Related
Matters. INCL does not
have
substantial assets, however, if any, INCL has good and
marketable title to and is the sole and exclusive owner of all of its
properties, inventory, interest in properties and assets, real and personal
(collectively, the “Assets”) free and clear of all liens, pledges, charges or
encumbrances. INCL owns free and clear of any liens, claims,
encumbrances, royalty interests or other restrictions or limitations of any
nature whatsoever and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
INCL’s business. No third party has any right to, and INCL has
not received any notice of infringement of or conflict with asserted rights
of
other with respect to any product, technology, data, trade secrets, know-how,
proprietary techniques, trademarks, service marks, trade names or copyrights
which, singly on in the aggregate, if the subject of an unfavorable decision
ruling or finding, would have a materially adverse affect on the business,
operations, financial conditions or income of INCL or any material portion
of
its properties, assets or rights.
Section
1.9 Contracts. On
the closing
date:
|
(a)
|
There
are no material contracts, agreements, franchises, license agreements,
or
other commitments to which INCL is a party or by which it or any
of its
properties are bound;
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(b)
|
INCL
is not a party to any contract, agreement, commitment or instrument
or
subject to any charter or other corporate restriction or any judgment,
order, writ, injunction, decree or award materially and adversely
affects,
or in the future may (as far as INCL can now foresee) materially
and
adversely affect, the business, operations, properties, assets or
conditions of INCL; and
|
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(c)
|
INCL
is not a party to any material oral or written: (i) contract for
the
employment of any officer or employee; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension benefit
or
retirement plan, agreement or arrangement covered by Title IV of
the
Employee Retirement Income Security Act, as amended;
(iii) agreement, contract or indenture relating to the
borrowing of money; (iv) guaranty of any obligation for the borrowing
of
money or otherwise, excluding endorsements made for collection and
other
guaranties, of obligations, which, in the aggregate exceeds $1,000;
(v)
consulting or other contract with an unexpired term of more than
one year
or providing for payments in excess of $10,000 in the aggregate;
(vi)
collective bargaining agreement; and (vii) contract, agreement or
other
commitment involving payments by it for more than $10,000 in the
aggregate.
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Section 1.10 Compliance
With Laws
and Regulations. To the best
of INCL’s
knowledge and belief, INCL has complied with all applicable statutes and
regulations of any federal, state or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition
of
INCL or would not result in INCL incurring material liability.
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4
Section
1.11 Approval of
Agreement. The directors
of INCL
have authorized the execution and delivery of this Agreement and have approved
the transactions contemplated. A copy of the Director’s Resolution
authorizing entry into this Agreement is attached as Schedule 1.11.
Section
1.12 Material Transactions
or Affiliations. Other than the employment agreement (the
“Employment Agreement”) between INCL and its sole officer and director, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, there are no material contracts or agreements of arrangements between
INCL and any person, who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or known to
beneficially own ten percent (10%) or more of the issued and outstanding Common
Shares of INCL and which is to be performed in whole or in part after the date
hereof. INCL has no commitment, whether written or oral, to lend any
funds, to borrow any money from or enter into material transactions with any
such affiliated person.
Pursuant
to the terms of this Agreement, INCL and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, shall enter into an
agreement terminating his employment and forgiving any accrued salary or amounts
owed under the agreement.
Section
1.13 No
Conflict With Other
Instruments. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, or constitute an event of default
under, any material indenture, mortgage, deed of trust or other material
contract, agreement or instrument to which INCL is a party or to which any
of
its properties or operations are subject.
Section
1.14 Governmental
Authorizations. INCL has all
licenses,
franchises, permits or other governmental authorizations legally required to
enable it to conduct its business in all material respects as conducted on
the
date hereof. Except for compliance with federal and state securities
and corporation laws, as hereinafter provided, no authorization, approval,
consent or order of, or registration, declaration or filing with, any court
or
other governmental body is required in connection with the execution and
delivery by INCL of this Agreement and the consummation of the transactions
contemplated hereby.
Section
1.15 Ownership
of Stock. INCL
and the INCL Shareholder are
the
lawful owners of the stock to be exchanged with China Valve or its designees
and
shall be free and clear of all liens, encumbrances, restrictions and claims
of
every kind and character, other than any of the foregoing arising from actions
by China Valve (collectively, "Encumbrances") as of the Closing Date. The
delivery to China Valve of the stock pursuant to the provisions of this
Agreement will transfer to China Valve valid title thereto, free and clear
of
any and all Encumbrances.
ARTICLE
II
REPRESENTATIONS,
COVENANTS AND WARRANTIES OF CHINA VALVE
As
an inducement to, and to obtain the
reliance of INCL and the INCL Shareholder, China Valve represents and warrants
as follows:
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5
Section
2.1 Organization. China
Valve is a corporation duly organized, validly existing and in good standing
under the laws of Samoa and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws, regulations,
ordinances and orders of public authorities to own all of its properties and
assets and to carry on its business in all material respects as it is now being
conducted, including qualification to do business as a foreign entity in the
country or states in which the character and location of the assets owned by
it
or the nature of the business transacted by it requires qualification. Included
in the attached Schedules (as hereinafter defined) are complete and correct
copies of the articles of incorporation, by-laws and amendments thereto as
in
effect on the date hereof. The execution and delivery of this Agreement does
not
and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of China
Valve's certificate of incorporation or by-laws. China Valve has full power,
authority and legal right and has taken all action required by law, its articles
of incorporation, by-laws or otherwise to authorize the execution and delivery
of this Agreement.
Section
2.2 Capitalization. China
Valve’s authorized capitalization consists of a total of 93,768,100 shares, par
value $0.12, held by the individuals and entities listed on Schedule
2.2.
All
issued and outstanding common
shares have been legally issued, fully paid, are nonassessable and not issued
in
violation of the preemptive rights of any other person. China Valve
has no other securities, warrants or options authorized or issued.
Section
2.3 Subsidiaries. China
Valve has the following subsidiaries:
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(a)
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Henan
Tonghai Valve Science Technology Co., Ltd – a company incorporated in the
People’s Republic of China with a capital contribution of
$10,000,000(HKD).
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The
following are the subsidiaries of Henan Tonghai Valve Science Technology Co.,
Ltd.:
|
(a)
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Zhengzhou
City ZhengDie Valve Co., Ltd. – a company incorporated in the People’s
Republic of China, with a cash contribution of $33,768,100
(RMB)
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(b)
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Henan
Kaifeng High Pressure Valve Co., Ltd. – a company incorporated in the
People’s Republic of China, with a cash contribution of $60,000,000
(RMB).
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Section
2.4 Tax Matters, Books
& Records.
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(a)
|
China
Valve’s books and records, financial and others are in all material
respects complete and correct and have been maintained in accordance
with
good business accounting practices;
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(b)
|
China
Valve has no liabilities with respect to the payment of any country,
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties); and
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(c)
|
China
Valve shall remain responsible for all debts incurred prior to the
closing.
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Section
2.5 Information. The
information concerning China Valve as set forth in this Agreement and in the
attached Schedules is complete and accurate in all material respects and does
not contain any untrue statement of a material fact or omit a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading.
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6
Section
2.6 Title
and Related
Matters. China Valve has good and marketable title to and is
the sole and exclusive owner of all of its properties, inventory, interests
in
properties and assets, real and personal (collectively, the "Assets") free
and
clear of all liens, pledges, charges or encumbrances. Except as set
forth in the attached Schedules, China Valve owns free and clear of any liens,
claims, encumbrances, royalty interests or other restrictions or limitations
of
any nature whatsoever and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
China Valve’s business. Except as set forth in the attached
Schedules, no third party has any right to, and China Valve has not received
any
notice of infringement of or conflict with asserted rights of others with
respect to any product, technology, data, trade secrets, know-how, proprietary
techniques, trademarks, service marks, trade names or copyrights which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a materially adverse affect on the business, operations,
financial conditions or income of China Valve or any material portion of its
properties, assets or rights.
Section
2.7 Litigation
and
Proceedings. There are no actions, suits or proceedings
pending or threatened by or against or affecting China Valve, at law or in
equity, before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that would have a
material adverse effect on the business, operations, financial condition, income
or business prospects of China Valve. China Valve does not have any
knowledge of any default on its part with respect to any judgment, order, writ,
injunction, decree, award, rule or regulation of any court, arbitrator or
governmental agency or instrumentality.
Section
2.8 Contracts. On
the Closing
Date:
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(a)
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Except
for those enumerated on the attached Schedules, there are no material
contracts, agreements, franchises, license agreements, or other
commitments to which China Valve is a party to or by which it or
any of
its subsidiaries or properties are
bound;
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(b)
|
Except
as enumerated on the attached Schedules, China Valve is not a party
to any
contract, agreement, commitment or instrument or subject to any charter
or
other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the
future
may (as far as China Valve can now foresee) materially and adversely
affect, the business, operations, properties, assets or conditions
of
China Valve; and
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(c)
|
Except
as enumerated on the attached Schedules, China Valve is not a party
to any
material oral or written: (i) contract for the employment of any
officer
or employee; (ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension, benefit or retirement plan, agreement
or
arrangement covered by Title IV of the Employee Retirement Income
Security
Act, as amended; (iii) agreement, contract or indenture relating
to the
borrowing of money; (iv) guaranty of any obligation for the borrowing
of
money or otherwise, excluding endorsements made for collection and
other
guaranties of obligations, which, in the aggregate exceeds $1,000;
(v)
consulting or other contract with an unexpired term of more than
one year
or providing for payments in excess of $10,000 in the aggregate;
(vi)
collective bargaining agreement; and (vii) contract, agreement, or
other
commitment involving payments by it for more than $10,000 in the
aggregate.
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Page
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Section
2.9 No
Conflict With Other
Instruments. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, or constitute an event of default
under, any material indenture, mortgage, deed of trust or other material
contract, agreement or instrument to which China Valve is a party or to which
any of its properties or operations are subject.
Section
2.10 Material
Contract
Defaults. To the best of China Valve’s knowledge and belief,
it is not in default in any material respect under the terms of any outstanding
contract, agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of China Valve, and there
is no event of default in any material respect under any such contract,
agreement, lease or other commitment in respect of which China Valve has not
taken adequate steps to prevent such a default from occurring.
Section
2.11 Governmental
Authorizations. To the best
of China
Valve’s knowledge, China Valve has all licenses, franchises, permits and other
governmental authorizations that are legally required to enable it to conduct
its business operations in all material respects as conducted on the date
hereof. Except for compliance with federal and state securities or
corporation laws, no authorization, approval, consent or order of, or
registration, declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by China Valve of
the
transactions contemplated hereby.
Section
2.12 Compliance
With Laws and
Regulations. To the best of China Valve’s knowledge and
belief, China Valve has complied with all applicable statutes and regulations
of
any federal, state or other governmental entity or agency thereof, except to
the
extent that noncompliance would not materially and adversely affect the
business, operations, properties, assets or condition of China Valve or would
not result in China Valve incurring any material liability.
Section
2.13 Insurance. All
of
China Valve’s insurable properties are insured for China Valve’s benefit under
valid and enforceable policy or policies containing substantially equivalent
coverage and will be outstanding and in full force at the Closing
Date.
Section
2.14 Approval
of
Agreement. The directors of China Valve have authorized the
execution and delivery of this Agreement and have approved the transactions
contemplated hereby.
Section
2.15 Material
Transactions or
Affiliations. As of the Closing Date, there will exist no
material contract, agreement or arrangement between China Valve and any person
who was at the time of such contract, agreement or arrangement an officer,
director or person owning of record, or known by China Valve to own
beneficially, ten percent (10%) or more of the issued and outstanding Common
Shares of China Valve and which is to be performed in whole or in part after
the
date hereof except with regard to an agreement with the shareholders of China
Valve providing for the distribution of cash to provide for payment of federal
and state taxes on Subchapter S income. China Valve has no
commitment, whether written or oral, to lend any funds to, borrow any money
from
or enter into any other material transactions with, any such affiliated
person.
Page
8
ARTICLE
III
EXCHANGE
PROCEDURE AND OTHER CONSIDERATION
Section
3.1 Share
Exchange/Delivery of China
Valve’s Securities. On the Closing Date, China Valve shall
deliver to INCL all of its issued and outstanding shares (the “China Valve
Common Shares”), duly endorsed in blank or with executed power attached thereto
in transferable form, so that China Valve shall become a wholly owned subsidiary
of INCL.
Section
3.2 Issuance of INCL
Shares. In exchange for all of the China Valve Common Shares
tendered pursuant to Section 3.1, INCL will issue 40,000,000 common shares
of
INCL common stock to China Valve or their designees which will represent, and
equate to approximately 99.8% of INCL’s issued and outstanding common stock
after the closing of this transaction (the “INCL Common
Shares”). Such shares will be issued to China Valve or their
designees. Such shares are restricted in accordance with Rule 144 of
the 1933 Securities Act.
Section
3.3 Additional
Consideration. On the Closing Date, in addition to the share
exchange as contemplated by Sections 3.1 and 3.2, China Valve shall pay $490,000
(the “Additional Consideration”) to INCL. Of such amount, $300,000
has previously been forwarded to Belmont Partners as an escrow deposit and
$75,000 of which is non-refundable unless this Agreement shall be terminated
through no fault of China Valve (the “Initial Good Faith
Deposit”). Upon execution of this Agreement, China Valve shall pay
the remainder of the Additional Consideration or $200,000 to INCL on the Closing
Date.
Section 3.4 Satisfaction
of Present Liabilities
of INCL. At or prior to the Closing Date, the liabilities and
obligations of INCL as set forth on Schedule 3.4 shall be satisfied by
INCL. The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Litigation shall be resolved on or before the
Closing Date, otherwise, INCL shall agree to place $200,000 in escrow pending
resolution of this proceeding. If necessary, this escrow arrangement
will be memorialized in an additional agreement.
In
addition, INCL has a Note Payable
for $28,343 and Interest Payable for $14,261 which will not be satisfied prior
to the Closing Date. INCL has agreed to place $20,000 in escrow
pending resolution of this liability.
Section
3.5 Events
Prior to
Closing. Upon execution hereof or as soon thereafter as
practical, management of INCL and China Valve shall execute, acknowledge and
deliver (or shall cause to be executed, acknowledged and delivered) any and
all
certificates, opinions, financial statements, schedules, agreements, resolutions
rulings or other instruments required by this Agreement to be so delivered,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence
the
transactions contemplated hereby, subject only to the conditions to Closing
referenced herein below.
Section
3.6 Closing. The
closing ("Closing Date") of the transactions contemplated by this Agreement
shall be on the date and at the time the exchange documents are executed
herewith.
Page
9
Section
3.7 Effective
Date. The
date, on or after the Closing Date, when all of the terms and conditions of
this
Agreement are satisfied, including but not limited to the Conditions Precedent
set forth in Articles V and VI (the “Effective Date”).
Section
3.8 Termination.
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(a)
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This
Agreement may be terminated by the board of directors or majority
interest
of Shareholders of either INCL or China Valve, respectively, at any
time
prior to the Closing Date if:
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(i)
|
there
shall be any action or proceeding before any court or any governmental
body which shall seek to restrain, prohibit or invalidate the transactions
contemplated by this Agreement and which, in the judgment of such
board of
directors, made in good faith and based on the advice of its legal
counsel, makes it inadvisable to proceed with the exchange contemplated
by
this Agreement; or
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(ii)
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any
of the transactions contemplated hereby are disapproved by any regulatory
authority whose approval is required to consummate such
transactions.
|
In
the event of termination pursuant to
Paragraph (a) of this Section 3.8, no obligation, right, or liability shall
arise hereunder and each party shall bear all of the expenses incurred by it
in
connection with the negotiation, drafting and execution of this Agreement and
the transactions herein contemplated.
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(b)
|
This
Agreement may be terminated at any time prior to the Closing Date
by
action of the board of directors of INCL if China Valve shall fail
to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or warranties
of China Valve contained herein shall be inaccurate in any material
respect, which noncompliance or inaccuracy is not cured after 20
days
written notice thereof is given to China Valve. If this
Agreement is terminated pursuant to Paragraph (b) of this Section
3.8,
this Agreement shall be of no further force or effect and no obligation,
right or liability shall arise
hereunder.
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(c)
|
This
Agreement may be terminated at any time prior to the Closing Date
by
action of the board of directors of China Valve if INCL shall fail
to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or warranties
of China Valve contained herein shall be inaccurate in any material
respect, which noncompliance or inaccuracy is not cured after 20
days
written notice thereof is given to China Valve. If this
Agreement is terminated pursuant to Paragraph (c) of this Section
3.8,
this Agreement shall be of no further force or effect and no obligation,
right or liability shall arise
hereunder.
|
In
the event of termination pursuant to
paragraph (b) and (c) of Section 3.8, the breaching party shall bear all of
the
expenses incurred by the other party in connection with the negotiation,
drafting and execution of this Agreement and the transactions herein
contemplated.
Page
10
Section
3.9 Directors
of INCL After
Acquisition. Effective 10 days after the Effective Date, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall resign as the member of the Board of Directors of INCL
and
▇▇. ▇▇▇▇ Si Ping, Zhu ▇▇▇ ▇▇▇▇, Tang Ren Rui, ▇▇▇▇ ▇▇▇ Feng and Fang Bin Jie
shall be appointed to the Board of Directors of INCL effective 10 days after
the
Effective Date and upon the resignation of ▇▇. ▇▇▇▇▇▇. Each director
shall hold office until his successor has been duly elected and has qualified
or
until his death, resignation or removal.
Section
3.10 Officers
of INCL. Pursuant to
Section
3.9, the persons listed on Schedule 3.10 shall be appointed as Officers of
INCL.
ARTICLE
IV
SPECIAL
COVENANTS
Section
4.1 Access
to Properties and
Records. Prior to closing, INCL and China Valve will each
afford to the officers and authorized representatives of the other full access
to the properties, books and records of each other, so that each may have full
opportunity to make such reasonable investigation as it shall desire to make
of
the affairs of the other and each will furnish the other with such additional
financial and operating data and other information as to the business and
properties of each other, as the other shall from time to time reasonably
request.
Section
4.2 Availability
of Rule
144. INCL and the INCL Shareholders holding "restricted
securities," as that term is defined in Rule 144 of the 1933 Securities Act
will
remain as “restricted securities.” INCL is under no obligation to
register such shares under the Securities Act, except as otherwise
provided. The stockholders of INCL and China Valve holding restricted
securities of INCL and China Valve as of the date of this Agreement and their
respective heirs, administrators, personal representatives, successors and
assigns, are intended third party beneficiaries of the provisions set forth
herein. The covenants set forth in Article IV shall survive the
Closing Date and the consummation of the transactions herein
contemplated.
Section
4.3 Special
Covenants and Representations
Regarding the INCL Common Shares to be Issued in the
Exchange. The consummation of this Agreement, including the
issuance of the INCL Common Shares to the Shareholders of China Valve as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act, and applicable state statutes. Such transaction shall
be consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, inter alia, upon the
circumstances under which the China Valve Shareholders and their designees
acquire such securities.
Section
4.4 Third
Party
Consents. INCL and China Valve agree to cooperate with each
other in order to obtain any required third party consents to this Agreement
and
the transactions herein contemplated.
Page
11
Section
4.5 Actions Prior to and
Subsequent to Closing.
|
(a)
|
From
and after the date of this Agreement until the Closing Date, except
as
permitted or contemplated by this Agreement, INCL and China Valve
will
each use its best efforts to:
|
|
(i)
|
maintain
and keep its properties in states of good repair and condition as
at
present, except for depreciation due to ordinary wear and tear and
damage
due to casualty;
|
|
(ii)
|
maintain
in full force and effect insurance comparable in amount and in scope
of
coverage to that now maintained by it;
and
|
|
(iii)
|
perform
in all material respects all of its obligations under material contracts,
leases and instruments relating to or affecting its assets, properties
and
business.
|
|
(b)
|
From
and after the date of this Agreement until the Effective Date, INCL
will
not, without the prior consent of China
Valve:
|
|
(i)
|
except
as otherwise specifically set forth herein, make any change in its
articles of incorporation or
by-laws;
|
|
(ii)
|
declare
or pay any dividend on its outstanding Common Shares, except as may
otherwise be required by law, or effect any stock split or otherwise
change its capitalization, except as provided
herein;
|
|
(iii)
|
enter
into or amend any employment, severance or agreements or arrangements
with
any directors or officers;
|
|
(iv)
|
grant,
confer or award any options, warrants, conversion rights or other
rights
not existing on the date hereof to acquire any Common Shares;
or
|
|
(v)
|
purchase
or redeem any Common Shares.
|
Section
4.6 Indemnification.
|
(a)
|
INCL
hereby agrees to indemnify China Valve and each of the officers,
agents
and directors and current shareholders of China Valve as of the Closing
Date against any loss, liability, claim, damage or expense (including,
but
not limited to, any and all expense whatsoever reasonably incurred
in
investigating, preparing or defending against any litigation, commenced
or
threatened or any claim whatsoever), to which it or they may become
subject to or rising out of or based on any inaccuracy appearing
in or
misrepresentation made in this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and consummation
of the transactions contemplated hereby and termination of this Agreement;
and
|
|
(b)
|
China
Valve hereby agrees to indemnify INCL and each of the officers, agents,
directors and current shareholders of INCL as of the Closing Date
against
any loss, liability, claim, damage or expense (including, but not
limited
to, any and all expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened
or
any claim whatsoever), to which it or they may become subject arising
out
of or based on any inaccuracy appearing in or misrepresentation made
in
this Agreement. The indemnification provided for in this paragraph
shall
survive the Closing and consummation of the transactions contemplated
hereby and termination of this
Agreement.
|
Page
12
ARTICLE
V
CONDITIONS
PRECEDENT TO OBLIGATIONS OF INCL
The
obligations of INCL under this
Agreement are subject to the satisfaction, at or before the Closing Date, of
the
following conditions:
Section
5.1 Accuracy
of
Representations. The representations and warranties made by
China Valve in this Agreement were true when made and shall be true at the
Closing Date with the same force and effect as if such representations and
warranties were made at the Closing Date (except for changes therein permitted
by this Agreement), and China Valve shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by China Valve prior to or at the Closing. INCL shall be
furnished with a certificate, signed by a duly authorized officer of China
Valve
and dated the Closing Date, to the foregoing effect.
Section
5.2 Director
Approval. The Board of Directors of China Valve shall have
approved this Agreement and the transactions contemplated herein.
Section
5.3 Officer's
Certificate. INCL
shall have been furnished with a certificate dated the Closing Date and signed
by a duly authorized officer of China Valve to the effect that: (a) the
representations and warranties of China Valve set forth in the Agreement and
in
all Exhibits, Schedules and other documents furnished in connection herewith
are
in all material respects true and correct as if made on the Closing Date; (b)
China Valve has performed all covenants, satisfied all conditions, and complied
with all other terms and provisions of this Agreement to be performed, satisfied
or complied with by it as of the Closing Date; (c) since such date and other
than as previously disclosed to INCL on the attached Schedules, China Valve
has
not entered into any material transaction other than transactions which are
usual and in the ordinary course if its business; and (d) no litigation,
proceeding, investigation or inquiry is pending or, to the best knowledge of
China Valve, threatened, which might result in an action to enjoin or prevent
the consummation of the transactions contemplated by this Agreement or, to
the
extent not disclosed in the China Valve Schedules, by or against China Valve
which might result in any material adverse change in any of the assets,
properties, business or operations of China Valve.
Section
5.4 No
Material Adverse
Change. Prior to the Closing Date, there shall not have
occurred any material adverse change in the financial condition, business or
operations of nor shall any event have occurred which, with the lapse of time
or
the giving of notice, may cause or create any material adverse change in the
financial condition, business or operations of China Valve.
Section
5.5 Other
Items. INCL shall have
received such further documents, certificates or instruments relating to the
transactions contemplated hereby as INCL may reasonably request.
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF
CHINA VALVE
The
obligations of China Valve under
this Agreement are subject to the satisfaction, at or before the Closing date
(unless otherwise indicated herein), of the following conditions:
Section
6.1 Accuracy
of
Representations. The representations and warranties made by
INCL in this Agreement were true when made and shall be true as of the Closing
Date (except for changes therein permitted by this Agreement) with the same
force and effect as if such representations and warranties were made at and
as
of the Closing Date, and INCL shall have performed and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by INCL prior to or at the Closing. China Valve shall have been
furnished with a certificate, signed by a duly authorized executive officer
of
INCL and dated the Closing Date, to the foregoing effect.
Page
13
Section
6.2 Director
Approval. The Board of Directors of INCL shall have approved
this Agreement and the transactions contemplated herein.
Section
6.3 Officer's
Certificate. China Valve shall be furnished with a certificate
dated the Closing Date and signed by a duly authorized officer of INCL to the
effect that: (a) the representations and warranties of INCL set forth in the
Agreement and in all Exhibits, Schedules and other documents furnished in
connection herewith are in all material respects true and correct as if made
on
the Effective Date; and (b) INCL has performed all covenants, satisfied all
conditions, and complied with all other terms and provisions of the Agreement
to
be performed, satisfied or complied with by it as of the Effective
Date.
Section
6.4 No
Material Adverse
Change. Prior to the Closing Date, there shall not have
occurred any material adverse change in the financial condition, business or
operations of nor shall any event have occurred which, with the lapse of time
or
the giving of notice, may cause or create any material adverse change in the
financial condition, business or operations of INCL.
Section
6.5 1934
Exchange Act
Compliance. INCL must file any necessary reports to become and
stay current with its 1934 Exchange Act filings up to and including the
Effective Date of this Agreement. This shall include, but not be limited to
all
annual and quarterly filings.
Section
6.6 Cancellation
of Options and
Convertible Preferred Stock. Prior to the Closing Date, INCL
shall cancel and make worthless all options, warrants, preferred stock and/or
convertible debt issuances outstanding but not yet converted to common
stock.
Section
6.7 Cancellation
of Employment Contracts
and Waiver of any Amounts Due as Salary or Severance. Prior to
the Closing, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall cease being employed by INCL and any
amounts dues under his employment contract shall be terminated, waived,
forfeited or forgiven in consideration of this Agreement or for some other
consideration to be contemplated by the parties. INCL shall also
cancel, terminate or void any other employment or material agreements in effect
prior to the Closing Date.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Brokers
and
Finders. Each party to this Agreement represents and warrants
that it is under no obligation, express or implied, to pay certain finders
in
connection with the bringing of the parties together in the negotiation,
execution, or consummation of this Agreement. The parties each agree to
indemnify the other against any claim by any third person for any commission,
brokerage or finder's fee or other payment with respect to this Agreement or
the
transactions contemplated hereby based on any alleged agreement or understanding
between the indemnifying party and such third person, whether express or implied
from the actions of the indemnifying party.
Page
14
Section
7.2 Law,
Forum and
Jurisdiction. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Nevada, United States
of
America.
Section
7.3 Notices. Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail
or
certified mail, postage prepaid, or by prepaid telegram addressed as
follows:
If
to
INCL: Intercontinental
Resources, Inc.
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with
a copy to:
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP
▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
tel.
(▇▇▇) ▇▇▇-▇▇▇▇
fax.(▇▇▇)
▇▇▇-▇▇▇▇
If
to
China
Valve: ▇▇.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇.▇.
with
a copy to:
▇▇▇▇▇▇ & Jaclin, LLP
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
or
such
other addresses as shall be furnished in writing by any party in the manner
for
giving notices hereunder, and any such notice or communication shall be deemed
to have been given as of the date so delivered, mailed or
telegraphed.
Section
7.4 Attorneys'
Fees. In
the event that any party institutes any action or suit to enforce this Agreement
or to secure relief from any default hereunder or breach hereof, the breaching
party or parties shall reimburse the non-breaching party or parties for all
costs, including reasonable attorneys' fees, incurred in connection therewith
and in enforcing or collecting any judgment rendered therein.
Page
15
Section
7.5 Confidentiality. Each
party hereto agrees with the other party that, unless and until the transactions
contemplated by this Agreement have been consummated, they and their
representatives will hold in strict confidence all data and information obtained
with respect to another party or any subsidiary thereof from any representative,
officer, director or employee, or from any books or records or from personal
inspection, of such other party, and shall not use such data or information
or
disclose the same to others, except: (i) to the extent
such data is a matter of public knowledge or is required by law to be published;
and (ii) to the extent that such data or information must be used or
disclosed in order to consummate the transactions contemplated by this
Agreement.
Section
7.6 Schedules;
Knowledge. Each party
is presumed
to have full knowledge of all information set forth in the other party's
schedules delivered pursuant to this Agreement.
Section
7.7 Third
Party
Beneficiaries. This contract is solely between INCL and China Valve
and except as specifically provided, no director, officer, stockholder,
employee, agent, independent contractor or any other person or entity shall
be
deemed to be a third party beneficiary of this Agreement.
Section
7.8 Entire
Agreement. This Agreement
represents the entire agreement between the parties relating to the subject
matter hereof. This Agreement alone fully and completely expresses
the agreement of the parties relating to the subject matter
hereof. There are no other courses of dealing, understanding,
agreements, representations or warranties, written or oral, except as set forth
herein. This Agreement may not be amended or modified, except by a
written agreement signed by all parties hereto.
Section
7.9 Survival;
Termination. The representations, warranties and covenants of
the respective parties shall survive the Closing Date and the consummation
of
the transactions herein contemplated for 24 months.
Section
7.10 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument.
Section
7.11 Amendment
or Waiver. Every right
and remedy
provided herein shall be cumulative with every other right and remedy, whether
conferred herein, at law or in equity, and may be enforced concurrently
herewith, and no waiver by any party of the performance of any obligation by
the
other shall be construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time prior
to the Closing Date, this Agreement may be amended by a written consent by
all
parties hereto, with respect to any of the terms contained herein, and any
term
or condition of this Agreement may be waived or the time for performance hereof
may be extended by a written consent by the party or parties for whose benefit
the provision is intended.
Section
7.12 Expenses. Each
party herein shall bear all of their respective costs and expenses incurred
in
connection with the negotiation of this Agreement and in the consummation of
the
transactions provided for herein and the preparation thereof.
Section
7.13 Headings;
Context. The headings of the sections and paragraphs contained
in this Agreement are for convenience of reference only and do not form a part
hereof and in no way modify, interpret or construe the meaning of this
Agreement.
Page
16
Section
7.14 Benefit. This
Agreement shall be binding upon and shall inure only to the benefit of the
parties hereto, and their permitted assigns hereunder. This Agreement
shall not be assigned by any party without the prior written consent of the
other party.
Section
7.15 Public
Announcements. Except as may be required by law, neither party
shall make any public announcement or filing with respect to the transactions
provided for herein without the prior consent of the other party
hereto.
Section
7.16 Severability. In
the event that any particular provision or provisions of this Agreement or
the
other agreements contained herein shall for any reason hereafter be determined
to be unenforceable, or in violation of any law, governmental order or
regulation, such unenforceability or violation shall not affect the remaining
provisions of such agreements, which shall continue in full force and effect
and
be binding upon the respective parties hereto.
Section
7.17 Failure
of Conditions;
Termination. In the event of any of the conditions specified
in this Agreement shall not be fulfilled on or before the Closing Date, either
of the parties have the right either to proceed or, upon prompt written notice
to the other, to terminate and rescind this Agreement. In such event,
the party that has failed to fulfill the conditions specified in this Agreement
will liable for the other parties’ legal fees. The election to
proceed shall not affect the right of such electing party reasonably to require
the other party to continue to use its efforts to fulfill the unmet
conditions.
Section
7.18 No
Strict Construction. The language
of this
Agreement shall be construed as a whole, according to its fair meaning and
intendment, and not strictly for or against either party hereto, regardless
of
who drafted or was principally responsible for drafting the Agreement or terms
or conditions hereof.
Section
7.19 Execution
Knowing and
Voluntary. In executing this Agreement, the parties severally
acknowledge and represent that each: (a) has fully and carefully read
and considered this Agreement; (b) has been or has had the opportunity to be
fully apprized by its attorneys of the legal effect and meaning of this document
and all terms and conditions hereof; (c) is executing this Agreement
voluntarily, free from any influence, coercion or duress of any
kind.
Section
7.20 Amendment. At
any time after the
Closing Date, this Agreement may be amended by a writing signed by both parties,
with respect to any of the terms contained herein, and any term or condition
of
this Agreement may be waived or the time for performance hereof may be extended
by a writing signed by the party or parties for whose benefit the provision
is
intended.
[Remainder
of Page Intentionally Blank]
Page
17
[Signature
Page Follows]
IN
WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their respective
duly authorized officers or representatives and entered into as of the date
first above written.
|
ATTEST:
|
INTERCONTINENTAL
RESOURCES, INC.
|
|
|
______________________________
|
By:
|
/s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
Title:
|
CEO
|
|
|
ATTEST:
|
CHINA
VALVE HOLDINGS LIMITED
|
|
|
______________________________
|
By:
|
/s/
Fang Si
Ping
|
|
Name:
|
Fang
Si Ping
|
|
|
Title:
|
Executive
Director
|
|
INCL
SHAREHOLDERS
|
/s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
||
|
Name:
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
CHINA
VALVE SHAREHOLDERS
|
/s/
Fang Si
Ping
|
||
|
Name:
|
Fang
Si Ping
|
Page
18
SCHEDULE
1.11
See
Attached
SCHEDULE
2.2
|
China
Valve Holdings Limited, a Samoa
Company
|
|
|
Shareholder
|
Percent
Ownership
|
|
▇▇.
▇▇▇▇ Si Ping
|
100%
|
SCHEDULE
3.10
Post-Agreement
Officers of
INCL
|
Name
|
Position
|
|
Fang
Si
Ping
|
Chief
Executive
Officer
|
|
Tang
Ren
Rui
|
Chief
Financial
Officer
|
|
Zhu
▇▇▇
▇▇▇▇
|
Chief
Operating
Officer
|
|
Jia
▇▇▇
▇▇▇▇
|
Chief
Technology
Officer
|
Page
19