SHARE EXCHANGE AGREEMENT AMONG PERPETUAL TECHNOLOGIES INC., (a Delaware corporation) HONG HUI HOLDINGS LIMITED (a British Virgin Islands company) AND THE SHAREHOLDERS OF HONG HUI HOLDINGS LIMITED DATED AS OF FEBRUARY 12, 2010
Exhibit 10.1
AMONG
PERPETUAL
TECHNOLOGIES INC.,
(a
Delaware corporation)
HONG
HUI HOLDINGS LIMITED
(a
British Virgin Islands company)
AND
THE
SHAREHOLDERS OF HONG HUI HOLDINGS LIMITED
DATED
AS OF FEBRUARY 12, 2010
1
This SHARE EXCHANGE AGREEMENT,
dated as of February 12, 2010 (the “Agreement”) by and among PERPETUAL TECHNOLOGIES INC., a
Delaware corporation (the “Company”), HONG HUI HOLDINGS LIMITED, a
British Virgin Islands company (“Hong Hui”) and the holders of
all of the outstanding shares of Hong Hui set forth on Schedule A (the
“Hong Hui
Shareholders”).
WITNESSETH:
WHEREAS, the Hong Hui
Shareholders own an aggregate of 100% of the issued and outstanding ordinary
shares in Hong Hui (the "Hong
Hui Shares");
WHEREAS, each of the Company,
Hong Hui and the Hong Hui Shareholders believes that it is in its best interests
for the Company to issue to the Hong Hui Shareholders an aggregate of
72,551,020 shares of its
common stock, par value $.001 per share (“Company Shares”) in exchange
for all of the outstanding shares of Hong Hui, upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, it is the intention
of the parties that: (i) said exchange of shares shall qualify as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended (the “Code”); and (ii) said exchange
shall qualify as a transaction in securities exempt from registration or
qualification under the Securities Act of 1933, as amended and in effect on the
date of this Agreement (the “Securities Act”).
NOW, THEREFORE, in
consideration of the mutual terms, conditions and other agreements set forth
herein, the parties hereto hereby agree as follows:
ARTICLE
I
EXCHANGE
OF COMPANY SHARES FOR HONG HUI SHARES
Section
1.1 Agreement
to Exchange Company Shares for Hong Hui Shares. On the Closing
Date (as hereinafter defined) and subject to the terms and conditions set forth
in this Agreement, the Hong Hui Shareholders shall sell, assign, transfer,
convey and deliver all of Hong Hui Shares to the Company, and in exchange
therefor the Company shall issue to the Hong Hui Shareholders of 72,551,020
newly issued Company Shares (the “Share
Exchange”).
Section
1.2 Capitalization. On the
Closing Date, immediately before the Share Exchange, the Company shall have
authorized (a) 200,000,000 shares of Common Stock, $.001 par value per share ;
and (b) 10,000,000 shares of Preferred Stock, $.001 par value per share(none of
which are issued or outstanding). Under the terms of a Stock
Repurchase Agreement of even date herewith between the Company and certain of
its shareholders, immediately prior to the Share Exchange the Company share
repurchase 12,640,000 of its 13,000,000 Company Shares then
outstanding (the “Stock
Repurchase”). Accordingly, following the Stock Repurchase the
Company shall have 360,000 shares of its common stock outstanding all
of which are duly authorized, validly issued and fully paid and non
assessable.
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Section
1.3 Closing. The closing of
the Shares Exchange (the "Closing") shall take place at
10:00 a.m. E.S.T. on the day when the conditions to closing set forth in
Articles V and VI have been satisfied or waived, or at such other time and date
as the parties hereto shall agree in writing but no later than February 28, 2010
(the "Closing Date"), at
the offices of Guzov Ofsink, LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. At the Closing, (a) the Company shall
deliver to the Hong Hui Shareholders, stock certificates representing an
aggregate of 72,551,020 Company Shares (such shares to be issued to the
respective Hong Hui Shareholders in the amounts set forth on Schedule A attached
hereto), and (b) the Hong Hui Shareholders shall deliver to the Company share
certificates representing the Hong Hui Shares held by each such Hong Hui
Shareholder (which shall represent in the aggregate all of the outstanding Hong
Hui Shares), accompanied by share transfer instruments and appropriate powers of
attorney duly executed in blank.
Section 1.4
Tax
Treatment. The
exchange described herein is intended to comply with Section 368(a)(1)(B) of the
Code, and all applicable regulations thereunder. In order to
ensure compliance with said provisions, the parties agree to take whatever
steps may be necessary, including, but not limited to, the amendment of this
Agreement.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE TECNIC STOCKCHOLDERS AND HONG HUI
Each of the Hong Hui Shareholders and
Hong Hui hereby, jointly and severally, represents, warrants and agrees as
follows:
Section
2.1 Corporate
Organization
(a)
Hong Hui is a company duly organized, validly existing and in good standing
under the laws of the British Virgin Islands, and has all requisite corporate
power and authority to own its properties and assets and to conduct its business
and is duly qualified to do business in good standing in each jurisdiction in
which the nature of the business conducted by Hong Hui or the ownership or
leasing of its properties makes such qualification and being in good standing
necessary, except where the failure to be so qualified and in good standing will
not have a material adverse effect on the business, operations, properties,
assets, condition or results of operation of (a "Hong Hui Material Adverse
Effect");
(b)
Copies of the memorandum and articles of association of Hong Hui, with
all amendments thereto to the date hereof, have been furnished to the Company,
and such copies are accurate and complete as of the date hereof.
3
Section
2.2 Capitalization of Hong
Hui.
The
maximum number of shares that Hong Hui is authorized to issue consists of
50,000 shares of a single class which 10,000 shares are issued and
outstanding, all of which are duly authorized, validly issued and fully paid and
held by the Hong Hui Shareholders free and clear of all liens, charges and
encumbrances. All of the Hong Hui Shares to be transferred to
the Company pursuant to this Agreement have been duly authorized and will be
validly issued, fully paid and non-assessable and no personal liability will
attach to the ownership thereof and in each instance, have been issued in
accordance with the registration requirements of applicable securities laws or
an exemption therefrom. As of the date of this Agreement there are no
outstanding options, warrants, agreements, commitments, conversion rights,
preemptive rights or other rights to subscribe for, purchase or otherwise
acquire any shares or any un-issued or treasury shares of Hong
Hui. As of the date of this Agreement, Hong Hui owns all of the
issued and outstanding equity or voting interests in Technic International
Limited (“Technic”), a
Hong Kong company and Technic is the owner of all of the equity interests of
Foshan SLP Special Materials Company (“Foshan”). Foshan is
duly organized, validly existing and in good standing under the laws of the
Peoples’ Republic of China (“PRC”) and has all requisite
corporate power and authority to own its properties and assets and to conduct
its business as now conducted and is duly qualified to do business, is in good
standing in each jurisdiction wherein the nature of the business conducted by
Foshan or the ownership or leasing of its properties makes such qualification
and being in good standing necessary, except where the failure to be so
qualified and in good standing will not have a material adverse effect on the
business, operations, properties, assets, condition or results of operation of
Foshan (a "Foshan
Material Adverse Effect")
Section
2.3 Subsidiaries
and Equity Investments. Except as set forth in Schedule 2.3, neither
Hong Hui, Technic, nor Foshan has any subsidiaries or holds any equity interest
in any corporation, partnership, joint venture or other entity.
Section
2.4 Authorization
and Validity of Agreements. Hong Hui has all corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby and upon the
execution and delivery by the Company and the Company’s performance of its
obligations herein, will constitute, a legal, valid and binding obligation of
Hong Hui enforceable against Hong Hui in accordance with it s
terms. The execution and delivery of this Agreement by Hong Hui and
the consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of Hong Hui, and no other corporate
proceedings on the part of Hong Hui are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby.
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Section 2.5
No
Conflict or Violation. The execution,
delivery and performance of this Agreement by Hong Hui do not and will not
violate or conflict with any provision of Hong Hui’s charter documents, and does
not and will not violate any provision of law, or any order, judgment or decree
of any court or other governmental or regulatory authority, nor violate or
result in a breach of or constitute (with due notice or lapse of time or both) a
default under, or give to any other entity any right of termination, amendment,
acceleration or cancellation of, any contract, lease, loan agreement, mortgage,
security agreement, trust indenture or other agreement or instrument to which
Hong Hui is a party or by which it is bound or to which any of
its properties or assets is subject, nor will it result in the
creation or imposition of any lien, charge or encumbrance of any kind whatsoever
upon any of the properties or assets of Hong Hui, nor will it result in the
cancellation, modification, revocation or suspension of any of the licenses,
franchises, permits to which Hong Hui is bound.
Section
2.6 Consents
and Approvals. No consent, waiver, authorization or approval
of any governmental or regulatory authority, domestic or foreign, or of any
other person, firm or corporation, is required in connection with the execution
and delivery of this Agreement by the Hong Hui Shareholders or Hong Hui or the
performance by either of them of its obligations hereunder.
Section
2.7 Absence of Certain Changes
or Events.
Since
its inception:
(i) and
as of the date of this Agreement, Hong Hui does not know or
have reason to know of any event, condition, circumstance or
prospective development which threatens or may threaten to have a material
adverse effect on the assets, properties, operations, prospects, net income or
financial condition of Hong Hui or any of its subsidiaries;
(ii) there
has not been any declaration, setting aside or payment of dividends or
distributions with respect to shares of Hong Hui or any of its subsidiaries;
and
(iii) there
has not been an increase in the compensation payable or to become payable to any
director or officer of Hong Hui or any of its subsidiaries.
Section
2.8 Disclosure.
This Agreement the schedules hereto and any certificate attached hereto or
delivered in accordance with the terms hereby by or on behalf of either Hong Hui
or the Hong Hui Shareholders in connection with the transactions contemplated by
this Agreement, when taken together, do not contain any untrue statement of a
material fact or omit any material fact necessary in order to make the
statements contained herein and/or therein not misleading.
Section
2.9 Litigation. There
is no action, suit, proceeding or investigation pending or threatened against
any of the Hong Hui Shareholders or Hong Hui (or any of its subsidiaries) that
may affect the validity of this Agreement or the right of either Hong Hui or any
of the Hong Hui Shareholders to enter into this Agreement or to consummate the
transactions contemplated hereby.
5
Section
2.10 Investment
Representations. (a) The Company
Shares to be issued to the Hong Hui Shareholders will be acquired by each Hong
Hui Shareholders hereunder solely for the accounts of each Hong Hui Stockholder
for investment, and not with a view to the resale or distribution
thereof. Each Hong Hui Stockholder understands and is able to bear
any economic risks associated with such investment in the Company Shares. Each
Hong Hui Stockholder has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect to
the Company Shares to be acquired under this Agreement. Each Hong Hui
Stockholder further has had an opportunity to ask questions and receive answers
from the Company’s directors regarding the Company and to obtain additional
information (to the extent the Company’s directors possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify any
information furnished to the Hong Hui Shareholders or to which the
Hong Hui Shareholders had access. Each Hong Hui Stockholder is at the time of
the offer and execution of this Agreement domiciled and resident outside the
United States (a “Non-U.S.
Shareholder”).
Section
2.12 Tax
Returns, Payments and Elections. Each of Hong Hui (and its subsidiaries)
and the Hong Hui Shareholders has timely filed all tax returns, statements,
reports, declarations and other forms and documents and has, to date, paid all
taxes due.
Section
2.13 Survival. Each
of the representations and warranties set forth in this Article II shall be
deemed represented and made by Hong Hui and the Hong Hui Shareholders at the
Closing as if made at such time and shall survive the Closing for a period
terminating on the second anniversary of the date of this
Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents, warrants and agrees as follows:
Section
3.1 Corporate
Organization.
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and has all requisite corporate power
and authority to own its properties and assets and to conduct its business as
now conducted and is duly qualified to do business, is in good standing in each
jurisdiction wherein the nature of the business conducted by the Company or the
ownership or leasing of its properties makes such qualification and being in
good standing necessary, except where the failure to be so qualified and in good
standing will not have a material adverse effect on the business, operations,
properties, assets, condition or results of operation of the Company (a "Company Material Adverse
Effect").
(b) Copies
of the Certificate of Incorporation and By-laws of the Company, with all
amendments thereto to the date hereof, have been furnished to each of Hong Hui
and the Hong Hui Shareholders, and such copies are accurate and complete as of
the date hereof. The minute books of the Company are current as
required by law, contain the minutes of all meetings of the Board of Directors
and shareholders of the Company, and adequately reflect all material actions
taken by the Board of Directors, shareholders of the Company.
6
Section
3.2 Capitalization
of the Company. On the Closing Date, immediately before the
transactions to be consummated pursuant to this Agreement, the Company shall
have authorized 200,000,000 Company Shares, of which 360,000 shares will be
issued and outstanding. There are no outstanding options, warrants,
agreements, commitments, conversion rights, preemptive rights or other rights to
subscribe for, purchase or otherwise acquire any shares of capital stock or
other equity or voting interest or any unissued or treasury shares of capital
stock of the Company.
Section
3.3. Authorization
and Validity of Agreements. The Company has all corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. No stockholder
approvals are required to consummate the transactions contemplated
hereby. No other proceedings on the part of the Company are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby.
Section
3.4 No
Conflict or Violation. The execution, delivery and performance
of this Agreement by the Company does not and will not violate or conflict with
any provision of the constituent documents of the Company, and does not and will
not violate any provision of law, or any order, judgment or decree of any court
or other governmental or regulatory authority, nor violate, result in a breach
of or constitute (with due notice or lapse of time or both) a default under or
give to any other entity any right of termination, amendment, acceleration or
cancellation of any contract, lease, loan agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to which the Company
is a party or by which it is bound or to which any of its properties or assets
is subject, nor result in the creation or imposition of any lien, charge or
encumbrance of any kind whatsoever upon any of the properties or assets of the
Company, nor result in the cancellation, modification, revocation or suspension
of any of the licenses, franchises, permits to which the Company is
bound.
Section
3.5
Investment
Representations. The Hong Hui Shares will be acquired hereunder solely
for the account of the Company, for investment, and not with a view to the
resale or distribution thereof. The Company understands and is able to bear any
economic risks associated with such investment in the Hong Hui Shares. The
Company has had full access to all the information it considers necessary or
appropriate to make an informed investment decision with respect to the Hong Hui
Shares to be acquired under this Agreement. The Company further has
had an opportunity to ask questions and receive answers from Hong Hui’s
directors regarding Hong Hui’s and to obtain additional information (to the
extent Hong Hui’s directors possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify any information
furnished to the Company or to which the Company had access.
7
Section
3.6 Brokers’
Fees. The
Company has no liability to pay any fees or commissions or other consideration
to any broker, finder, or agent with respect to the transactions contemplated by
this Agreement.
Section
3.7 Disclosure. This Agreement,
the schedules hereto and any certificate attached hereto or delivered in
accordance with the terms hereby by or on behalf of the Company in connection
with the transactions contemplated by this Agreement, when taken together, do
not contain any untrue statement of a material fact or omit any material fact
necessary in order to make the statements contained herein and/or therein not
misleading.
Section 3.8
Survival. Each
of the representations and warranties set forth in this Article III shall be
deemed represented and made by the Company at the Closing as if made at such
time and shall survive the Closing for a period terminating on the second
anniversary of the date of this Agreement.
ARTICLE
IV
COVENANTS
Section
4.1 Certain Changes and Conduct
of Business.
(a) From
and after the date of this Agreement and until the Closing Date each of Hong Hui
and its subsidiaries shall conduct its business solely in the ordinary course
consistent with past practices and, in a manner consistent with all of its
representations, warranties or covenants, and without the prior written consent
of the Company will not, and will prohibit Foshan to, except as required or
permitted pursuant to the terms hereof:
(i) make
any material change in the conduct of its businesses and/or operations or enter
into any transaction other than in the ordinary course of business consistent
with past practices;
(ii) make
any change in its charter documents; issue any additional shares or shares of
capital stock or equity securities or grant any option, warrant or right to
acquire any shares or capital stock or equity securities or issue any security
convertible into or exchangeable for shares or its capital stock or alter in any
material term of any of its outstanding securities or make any change in its
outstanding shares or shares of capital stock or its capitalization, whether by
reason of a reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, stock dividend or otherwise;
8
(iii) A. incur,
assume or guarantee any indebtedness for borrowed money, issue any notes, bonds,
debentures or other corporate securities or grant any option, warrant or right
to purchase any thereof, except pursuant to transactions in the ordinary course
of business consistent with past practices; or
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B.
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issue
any securities convertible or exchangeable for debt or equity securities
of its shares or capital stock;
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(iv) make
any sale, assignment, transfer, abandonment or other conveyance of any of its
assets or any part thereof, except pursuant to transactions in the ordinary
course of business consistent with past practice;
(v) subject
any of its assets, or any part thereof, to any lien or suffer such to be imposed
other than such liens as may arise in the ordinary course of business consistent
with past practices by operation of law which will not have a Hong Hui Material
Adverse Effect;
(vi) acquire
any assets, raw materials or properties, or enter into any other transaction,
other than in the ordinary course of business consistent with past
practices;
(vii) enter
into any new (or amend any existing) employee benefit plan, program or
arrangement or any new (or amend any existing) employment, severance or
consulting agreement, grant any general increase in the compensation of officers
or employees (including any such increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment) or grant any increase in the
compensation payable or to become payable to any employee, except in accordance
with pre-existing contractual provisions or consistent with past
practices;
(viii) make
or commit to make any material capital expenditures;
(ix) pay,
loan or advance any amount to, or sell, transfer or lease any properties or
assets to, or enter into any agreement or arrangement with, any of its
affiliates;
(x) guarantee
any indebtedness for borrowed money or any other obligation of any other
person;
(xi) fail
to keep in full force and effect insurance comparable in amount and scope to
coverage maintained by it (or on behalf of it) on the date hereof;
(xii) take
any other action that would cause any of the representations and warranties made
by it in this Agreement not to remain true and correct in any material
aspect;
9
(xiii) make
any material loan, advance or capital contribution to or investment in any
person;
(xiv) make
any material change in any method of accounting or accounting principle, method,
estimate or practice;
(xv) settle,
release or forgive any claim or litigation or waive any right; or
(xvi) commit
itself to do any of the foregoing.
(b) From
and after the date of this Agreement and until the Closing Date, the Company
will:
(i) continue
to maintain, in all material respects, its properties in accordance with present
practices in a condition suitable for its current use;
(ii) file,
when due or required, federal, state, foreign and other tax returns and other
reports required to be filed and pay when due all taxes, assessments, fees and
other charges lawfully levied or assessed against it, unless the validity
thereof is contested in good faith and by appropriate proceedings diligently
conducted;
(iii) continue
to conduct its business in the ordinary course consistent with past
practices;
(iv) keep
its books of account, records and files in the ordinary course and in accordance
with existing practices; and
(v) continue
to maintain existing business relationships.
(c) From
and after the date of this Agreement and until the Closing Date, the Company
will not:
(i) make
any material change in the conduct of its businesses and/or operations or enter
into any transaction other than in the ordinary course of business consistent
with past practices;
(ii) make
any change in its certificate of incorporation or bylaws; issue any
additional shares of capital stock or equity securities or grant any option,
warrant or right to acquire any capital stock or equity securities or issue any
security convertible into or exchangeable for its capital stock or alter in any
material term of any of its outstanding securities or make any change in its
outstanding shares of capital stock or its capitalization, whether by reason of
a reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, stock dividend or otherwise;
10
(iii) A. incur,
assume or guarantee any indebtedness for borrowed money, issue any notes, bonds,
debentures or other corporate securities or grant any option, warrant or right
to purchase any thereof, except pursuant to transactions in the ordinary course
of business consistent with past practices; or
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B.
|
issue
any securities convertible or exchangeable for debt or equity securities
of the Company;
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(iv)
make any sale, assignment, transfer, abandonment or other conveyance of any of
its assets or any part thereof, except pursuant to transactions in the ordinary
course of business consistent with past practice;
(v) subject
any of its assets, or any part thereof, to any lien or suffer such to be imposed
other than such liens as may arise in the ordinary course of business consistent
with past practices by operation of law which will not have a Company Material
Adverse Effect;
(vi) acquire
any assets, raw materials or properties, or enter into any other transaction,
other than in the ordinary course of business consistent with past
practices;
(vii) enter
into any new (or amend any existing) employee benefit plan, program or
arrangement or any new (or amend any existing) employment, severance or
consulting agreement, grant any general increase in the compensation of officers
or employees (including any such increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment) or grant any increase in the
compensation payable or to become payable to any employee, except in accordance
with pre-existing contractual provisions or consistent with past
practices;
(viii) make
or commit to make any material capital expenditures;
(ix) pay,
loan or advance any amount to, or sell, transfer or lease any properties or
assets to, or enter into any agreement or arrangement with, any of its
affiliates;
(x) guarantee
any indebtedness for borrowed money or any other obligation of any other
person;
(xi) fail
to keep in full force and effect insurance comparable in amount and scope to
coverage maintained by it (or on behalf of it) on the date hereof;
11
(xii) take
any other action that would cause any of the representations and warranties made
by it in this Agreement not to remain true and correct in all material
aspect;
(xiii) make
any material loan, advance or capital contribution to or investment in any
person;
(xiv) make
any material change in any method of accounting or accounting principle, method,
estimate or practice;
(xv) settle,
release or forgive any claim or litigation or waive any right; or
(xvi) commit
itself to do any of the foregoing.
Section
4.2 Access to
Properties and Records. The Company shall afford the
accountants, counsel and authorized representatives of each of Hong Hui and the
Hong Hui Shareholders, and each of Hong Hui and the Hong Hui Shareholders shall
afford to the Company’s accountants, counsel and authorized representatives full
access during normal business hours throughout the period prior to the Closing
Date (or the earlier termination of this Agreement) to all of such parties’
properties, books, contracts, commitments and records and, during such period,
shall furnish promptly to the requesting party all other information concerning
the other party's business, properties and personnel as the requesting party may
reasonably request, provided that no investigation or receipt of information
pursuant to this Section 4.2 shall affect any representation or warranty of or
the conditions to the obligations of any party.
Section
4.3 Negotiations. From and after
the date hereof until the earlier of the Closing or the termination of this
Agreement, no party to this Agreement nor its officers or directors (subject to
such director's fiduciary duties) nor anyone acting on behalf of any party or
other persons shall, directly or indirectly, encourage, solicit, engage in
discussions or negotiations with, or provide any information to, any person,
firm, or other entity or group concerning any merger, sale of substantial
assets, purchase or sale of shares of capital stock or similar transaction
involving any party. A party shall promptly communicate to any other
party any inquiries or communications concerning any such transaction which they
may receive or of which they may become aware of.
Section
4.4 Consents
and Approvals. The parties shall:
12
(a) use
their reasonable commercial efforts to obtain all necessary consents, waivers,
authorizations and approvals of all governmental and regulatory authorities,
domestic and foreign, and of all other persons, firms or corporations required
in connection with the execution, delivery and performance by them of this
Agreement; and
(b)
diligently assist and cooperate with each party in preparing and filing all
documents required to be submitted by a party to any governmental or regulatory
authority, domestic or foreign, in connection with such transactions and in
obtaining any governmental consents, waivers, authorizations or approvals which
may be required to be obtained connection in with such
transactions.
Section
4.5 Public
Announcement. Unless otherwise required by applicable law, the
parties hereto shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement and shall
not issue any such press release or make any such public statement prior to such
consultation.
Section
4.6 Stock
Issuance. From and after the date of this Agreement until the
Closing Date, none of the parties shall issue any additional shares or shares of
its capital stock.
ARTICLE
V
CONDITIONS
TO OBLIGATIONS OF THE COMPANY
The
obligations of the Company to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing Date, of the
following conditions, any one or more of which may be waived by the Company in
its sole discretion:
Section
5.1 Representations
and Warranties of Hong Hui and the Hong Hui
Shareholders. All representations and warranties made by
Hong Hui and the Hong Hui Shareholders in this Agreement shall be true and
correct on and as of the Closing Date as if again made by Hong Hui and the Hong
Hui Shareholders as of such date.
Section
5.2 Agreements
and Covenants. Each of Hong Hui and the Hong Hui Shareholders
shall have performed and complied in all material respects to all agreements and
covenants required by this Agreement to be performed or complied with by it on
or prior to the Closing Date.
Section
5.3 Consents
and Approvals. Consents, waivers, authorizations and approvals
of any governmental or regulatory authority, domestic or foreign, and of any
other person, firm or corporation, required in connection with the execution,
delivery and performance of this Agreement shall be in full force and effect on
the Closing Date.
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Section
5.4 No
Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or governmental or regulatory
authority, domestic or foreign, nor any statute, rule, regulation, decree or
executive order promulgated or enacted by any government or governmental or
regulatory authority, which declares this Agreement invalid in any respect or
prevents the consummation of the transactions contemplated hereby, or which
materially and adversely affects the assets, properties, operations, prospects,
net income or financial condition of either Hong Hui, the Hong Hui Shareholders
or Foshan shall be in effect; and no action or proceeding before any court or
governmental or regulatory authority, domestic or foreign, shall have been
instituted or threatened by any government or governmental or regulatory
authority, domestic or foreign, or by any other person, or entity which seeks to
prevent or delay the consummation of the transactions contemplated by this
Agreement or which challenges the validity or enforceability of this
Agreement.
Section
5.5 Other
Closing Documents. The Company shall have received such other
certificates, instruments and documents in confirmation of the representations
and warranties of Hong Hui and the Hong Hui Shareholders or in furtherance of
the transactions contemplated by this Agreement as the Company or its counsel
may reasonably request.
Section
5.6 Additional
Funding. The Company shall have entered into formal agreements for a
financing of up to $4,000,000 in the aggregate from third party investor(s) to
further the business objectives of Foshan, which financing shall close
immediately after the Closing.
ARTICLE
VI
CONDITIONS
TO OBLIGATIONS OF HONG HUI AND THE HONG HUI SHAREHOLDERS
The
obligations of Hong Hui and the Hong Hui Shareholders to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or before the Closing Date, of the following conditions, any one or more of
which may be waived by both of them in their sole discretion:
Section
6.1 Representations
and Warranties of the Company. All representations and
warranties made by the Company in this Agreement shall be true and correct on
and as of the Closing Date as if again made by it on and as of such
date.
Section
6.2 Agreements
and Covenants. The Company shall have performed and complied
in all material respects to all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
Section
6.3 Consents
and Approvals. All consents, waivers, authorizations and
approvals of any governmental or regulatory authority, domestic or foreign, and
of any other person, firm or corporation, required in connection with the
execution, delivery and performance of this Agreement, shall have been duly
obtained and shall be in full force and effect on the Closing Date.
14
Section
6.4 No
Violation of Orders. No preliminary or permanent injunction or
other order issued by any court or other governmental or regulatory authority,
domestic or foreign, nor any statute, rule, regulation, decree or executive
order promulgated or enacted by any government or governmental or regulatory
authority, domestic or foreign, that declares this Agreement invalid or
unenforceable in any respect or which prevents the consummation of the
transactions contemplated hereby, or which materially and adversely affects the
assets, properties, operations, prospects, net income or financial condition of
the Company, taken as a whole, shall be in effect; and no action or proceeding
before any court or government or regulatory authority, domestic or foreign,
shall have been instituted or threatened by any government or governmental or
regulatory authority, domestic or foreign, or by any other person, or entity
which seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement.
Section
6.5. Other
Closing Documents. Hong Hui and the Hong Hui Shareholders
shall have received such other certificates, instruments and documents in
confirmation of the representations and warranties of the Company or in
furtherance of the transactions contemplated by this Agreement as Hong Hui and
the Hong Hui Shareholders or their counsel may reasonably request.
Section
6.6 Additional
Funding. The Company shall have entered into formal agreements for a
financing of up to $4,000,000 in the aggregate from third party investor(s) to
further the business objectives of Foshan, which financing shall close
immediately after the Closing.
ARTICLE
VII
TERMINATION
AND ABANDONMENT
SECTION
7.1 Methods
of Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time before the
Closing:
(a) By
the mutual written consent of the parties;
(b) By
either or both of Hong Hui and the Hong Hui Shareholders, upon a material breach
of any representation, warranty, covenant or agreement on the part of the
Company set forth in this Agreement, or if any representation or
warranty of the Company shall become untrue, in either case such that any of the
conditions set forth in Article VI hereof would not be satisfied (a "Company Breach"), and such
breach shall, if capable of cure, has not been cured within ten (10) days after
receipt by the party in breach of a notice from the non-breaching party setting
forth in detail the nature of such breach;
(c) By
the Company, upon a material breach of any representation, warranty, covenant or
agreement on the part of either or both of Hong Hui or the Hong Hui Shareholders
set forth in this Agreement, or, if any representation or warranty of Hong Hui
and/or the Hong Hui Shareholders shall become untrue, in either case such that
any of the conditions set forth in Article V hereof would not be satisfied (a
"Hong Hui Breach"), and
such breach shall, if capable of cure, not have been cured within ten (10) days
after receipt by the party in breach of a written notice from the non-breaching
party setting forth in detail the nature of such breach.;
15
(d) By
any party, if the Closing shall not have been consummated within ninety (90)
days after the date hereof; provided, however, that this
Agreement may be extended by written notice of either the Company, on one hand,
and either or both of Hong Hui or the Hong Hui Shareholders, on the other hand,
if the Closing shall not have been consummated as a result of the other party or
parties having failed to receive all required regulatory approvals or consents
with respect to this transaction or as the result of the entering of an order as
described in this Agreement; and further provided, however, that the right to
terminate this Agreement under this Section 7.1(d) shall not be available to any
party whose failure to fulfill any obligations under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before this
date.
(e) By
any party if a court of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action (which order, decree or ruling the parties hereto
shall use its best efforts to lift), which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this
Agreement.
Section
7.2 Procedure
Upon Termination. In the event of termination and abandonment
of this Agreement pursuant to Section 7.1, written notice thereof shall
forthwith be given to the other parties and this Agreement shall terminate and
the transactions contemplated hereby shall be abandoned, without further
action. If this Agreement is terminated as provided herein, no party
to this Agreement shall have any liability or further obligation to any other
party to this Agreement; provided, however, that no termination of this
Agreement pursuant to this Article VII shall relieve any party of liability for
a breach of any provision of this Agreement occurring before such
termination.
ARTICLE
VIII
POST-CLOSING
AGREEMENTS
Section
8.1 Consistency
in Reporting. Each party hereto agrees that if the
characterization of any transaction contemplated in this Agreement or any
ancillary or collateral transaction is challenged, each party hereto will
testify, affirm and ratify that the characterization contemplated in such
agreement was the characterization intended by the party; provided, however,
that nothing herein shall be construed as giving rise to any obligation if the
reporting position is determined to be incorrect by final decision of a court of
competent jurisdiction.
16
ARTICLE
IX
MISCELLANEOUS
PROVISIONS
Section
9.1 Survival
of Provisions. The respective representations, warranties,
covenants and agreements of each of the parties to this Agreement (except
covenants and agreements which are expressly required to be performed and are
performed in full on or before the Closing Date) shall survive the Closing Date
and the consummation of the transactions contemplated by this Agreement, subject
to Sections 2.13, 3.8 and 9.1. In the event of a breach of any of
such representations, warranties or covenants, the party to whom such
representations, warranties or covenants have been made shall have all rights
and remedies for such breach available to it under the provisions of this
Agreement or otherwise, whether at law or in equity, regardless of any
disclosure to, or investigation made by or on behalf of such party on or before
the Closing Date.
Section
9.2 Publicity. No party shall
cause the publication of any press release or other announcement with respect to
this Agreement or the transactions contemplated hereby without the consent of
the other parties, unless a press release or announcement is required by
law. If any such announcement or other disclosure is required by law,
the disclosing party agrees to give the non-disclosing parties prior notice and
an opportunity to comment on the proposed disclosure.
Section
9.3 Successors
and Assigns. This Agreement shall inure to the benefit of, and
be binding upon, the parties hereto and their respective successors and assigns;
provided, however, that no party shall assign or delegate any of the obligations
created under this Agreement without the prior written consent of the other
parties.
Section
9.4 Fees and
Expenses. Except as otherwise expressly provided in this
Agreement, all legal and other fees, costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees, costs or expenses.
Section
9.5 Notices. All notices and
other communications given or made pursuant hereto shall be in writing and shall
be deemed to have been given or made if in writing and delivered personally or
sent by registered or certified mail (postage prepaid, return receipt requested)
to the parties at the following addresses:
If to the
Company, to:
Shishan
Industrial Park
Nanhai
District, Foshan City, Guangdong Province, PRC
Attention: Mr. Ji Lie
Facsimile:
17
with a
copy to:
Guzov
Ofsink, LLC
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇▇
If to
either Hong Hui or the Hong Hui Shareholders to the addresses set forth on
Schedule A:
or to
such other persons or at such other addresses as shall be furnished by any party
by like notice to the others, and such notice or communication shall be deemed
to have been given or made as of the date so delivered or mailed. No change in
any of such addresses shall be effective insofar as notices under this Section
9.5 are concerned unless such changed address is located in the United States of
America and notice of such change shall have been given to such other party
hereto as provided in this Section 9.5
Section
9.6 Entire
Agreement. This Agreement, together with the exhibits hereto,
represents the entire agreement and understanding of the parties with reference
to the transactions set forth herein and no representations or warranties have
been made in connection with this Agreement other than those expressly set forth
herein or in the exhibits, certificates and other documents delivered in
accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings and
agreements between the parties relating to the subject matter of this Agreement
and all prior drafts of this Agreement, all of which are merged into this
Agreement. No prior drafts of this Agreement and no words or phrases
from any such prior drafts shall be admissible into evidence in any action or
suit involving this Agreement.
Section
9.7 Severability. This Agreement
shall be deemed severable, and the invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of this
Agreement or of any other term or provision hereof. Furthermore, in
lieu of any such invalid or unenforceable term or provision, the parties hereto
intend that there shall be added as a part of this Agreement a provision as
similar in terms to such invalid or unenforceable provision as may be possible
so as to be valid and enforceable.
Section
9.8 Titles
and Headings. The Article and Section headings contained in
this Agreement are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or of any term or provision
hereof.
Section
9.9 Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original and all of which together shall be considered one and the
same agreement.
18
Section
9.10 Convenience
of Forum; Consent to Jurisdiction. The parties to this
Agreement, acting for themselves and for their respective successors and
assigns, without regard to domicile, citizenship or residence, hereby expressly
and irrevocably elect as the sole judicial forum for the adjudication of any
matters arising under or in connection with this Agreement, and consent and
subject themselves to the jurisdiction of, the courts of the State of New York
located in County of New York, and/or the United States District Court for the
Southern District of New York, in respect of any matter arising under this
Agreement. Service of process, notices and demands of such courts may be made
upon any party to this Agreement by personal service at any place where it may
be found or giving notice to such party as provided in Section 9.5.
Section
9.11 Enforcement
of the Agreement. The parties hereto agree that irreparable
damage would occur if any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereto, this being in addition to
any other remedy to which they are entitled at law or in equity.
Section
9.12 Governing
Law. This Agreement
shall be governed by and interpreted and enforced in accordance with the laws of
the State of New York without giving effect to the choice of law provisions
thereof.
Section
9.13 Amendments
and Waivers. No amendment of
any provision of this Agreement shall be valid unless the same shall be in
writing and signed by all of the parties hereto. No waiver by any party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
19
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement of the date first above
written.
|
By:
|
/s/ ▇▇▇ ▇▇
|
|
▇▇▇
▇▇, Chief Executive Officer
|
|
|
HONG
HUI HOLDINGS LIMITED.
|
|
|
By:
|
/s/ ▇▇▇ ▇▇
|
|
▇▇▇
▇▇, Director
|
|
|
BESTYIELD
GROUP LIMITED
|
|
|
By:
|
/s/ ▇▇▇ ▇▇
|
|
▇▇▇
▇▇, Director
|
|
|
PROUDLEAD
LIMITED
|
|
|
By:
|
/s/ Wawia
Law
|
|
Wawai
Law, Director
|
|
|
NEWISE
HOLDINGS LIMITED.
|
|
|
By:
|
/s/ ▇▇▇
▇▇
|
|
▇▇▇
▇▇, Director
|
|
|
PILOT
LINK INTERNATIONAL LIMITED
|
|
|
By:
|
/s/ Shiyl
Li
|
|
▇▇▇▇▇ ▇▇,
Director
|
|
|
HIGH
SWIFT LIMITED.
|
|
|
By:
|
/s/ Hung ▇▇▇
▇▇▇
|
|
Hung ▇▇▇ ▇▇▇,
Director
|
|
|
CHINA
INVESTMENT MANAGEMENT, INC.
|
|
|
By:
|
/s/ Huaying Song
|
|
Huaying Song,
Director
|
|
20
Schedule
A
|
Name of Hong Hui
Shareholder |
Number of Hong Hiu Shares
held
|
Number of Perpetual Shares
to be received |
||
|
Bestyield
Group Limited
|
3,000
|
21,765,306
|
||
|
Proudlead
Limited
|
3,000
|
21,765,306
|
||
|
Newise
Holdings Limited
|
1,600
|
11,608,163;
|
||
|
Pilot
Link International Limited
|
1,150
|
8,343,367
|
||
|
High
Swift Limited
|
750
|
5,441,327:
|
||
|
China
Investment Management Inc
|
500
|
3,627,551
|
||
|
Total
|
10,000
|
72,551,020
|
21