AGREEMENT AND PLAN OF MERGER by and among ASAP Show, Inc. CRI Acquisition Corp. and Sino-American Petroleum Group, Inc. Dated as of May 24, 2007 SHARE PURCHASE AND MERGER AGREEMENT
Exhibit
10.2
AGREEMENT
AND PLAN OF MERGER
by
and among
ASAP
Show, Inc.
CRI
Acquisition Corp.
and
Sino-American
Petroleum Group, Inc.
Dated
as of May 24, 2007
Share Purchase and Merger Agreement
(the “Agreement”)
dated as of May 24, 2007 by and among ASAP Show Inc., a corporation
formed under the laws of the State of Nevada (“ASAP”), CRI Acquisition Corp.,
a corporation newly formed under the laws of the State of Delaware and a wholly
owned subsidiary of ASAP (the “Merger Sub”), Sino-American
Petroleum Group, Inc., a
corporation formed under the laws of the State of Delaware (“Yili Oil”), and the
individuals who are identified on the signature pages of this Agreement as the
“Investors.” ASAP,
the Merger Sub, Yili Oil and each of the Investors are referred to herein
individually as a “Party” and collectively as the
“Parties.”
PREAMBLE
WHEREAS, ASAP and Yili Oil
have determined that a business combination between them is advisable and in the
best interests of their respective companies and stockholders and presents an
opportunity for their respective companies to achieve long-term strategic and
financial benefits;
WHEREAS, the Investors are
affiliated with Yili Oil, and wish to purchase certain convertible preferred
shares of ASAP (the “Series A
Convertible Shares,” as further defined herein) for cash (the “Share Purchase”);
WHEREAS, ASAP has proposed to
acquire Yili Oil pursuant to a merger transaction whereby, pursuant to the terms
and subject to the conditions of this Agreement, Yili Oil shall become a wholly
owned subsidiary of ASAP through the merger of Yili Oil with and into the Merger
Sub (the “Merger”);
and
WHEREAS, in the Merger, all
issued and outstanding shares of capital stock of Yili Oil held by the Investors
shall be cancelled and converted into the right to receive 200,000 Series A
Convertible Shares of ASAP (the “Merger Shares”) which Shares,
together with the Series A Convertible Shares purchased in the Share Purchase,
shall represent 99.00 % of the voting power of ASAP after the
Merger;
NOW, THEREFORE, in
consideration of the premises and the mutual covenants, representations and
warranties contained herein, the Parties, intending to be legally bound, hereby
agree as follows:
CERTAIN
DEFINITIONS
As used
in this Agreement, the following terms shall have the meanings set forth
below:
“Applicable Law” means any
domestic or foreign law, statute, regulation, rule, policy, guideline or
ordinance applicable to the businesses of the Parties, the Merger and/or the
Parties.
“DGCL” means Delaware General
Corporation Law.
“Knowledge” means, in the case
of ASAP or Yili Oil, a particular fact or other matter of which its Chief
Executive Officer or the Chief Financial Officer is actually aware or which a
prudent individual serving in such capacity could be expected to discover or
otherwise become aware of in the course of conducting a reasonable review or
investigation of the corporation and its business and
affairs.
“Lien” means, with respect to
any property or asset, any mortgage, lien, pledge, charge, security interest,
claim, encumbrance, royalty interest, any other adverse claim of any kind in
respect of such property or asset, or any other restrictions or limitations of
any nature whatsoever.
“Material Adverse Effect” with
respect to any entity or group of entities means any event, change or effect
that has or would have a materially adverse effect on the financial condition,
business or results of operations of such entity or group of entities, taken as
a whole.
“Person” means any individual,
corporation, partnership, trust or unincorporated organization or a government
or any agency or political subdivision thereof.
“Surviving Entity” shall mean
Yili Oil as the surviving entity in the Merger as provided in Section
1.04.
“Tax” (and, with correlative
meaning, “Taxes” and
“Taxable”)
means:
(i) any
income, alternative or add-on minimum tax, gross receipts tax, sales tax, use
tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,
withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp
tax, occupation tax, property tax, environmental or windfall profit tax, custom,
duty or other tax, impost, levy, governmental fee or other like assessment or
charge of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto by any
governmental or Tax authority responsible for the imposition of any such tax
(domestic or foreign), and
(ii) any
liability for the payment of any amounts of the type described in clause (i)
above as a result of being a member of an affiliated, consolidated, combined or
unitary group for any Taxable period, and
(iii) any
liability for the payment of any amounts of the type described in clauses (i) or
(ii) above as a result of any express or implied obligation to indemnify any
other person.
“Tax Return” means any return,
declaration, form, claim for refund or information return or statement relating
to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
ARTICLE
I
THE
TRANSACTIONS
SECTION
1.01 THE SHARE
PURCHASE
(a) Prior
to the Closing of the Share Purchase and Merger, ASAP shall file with the
Secretary of State of Nevada a Certificate of Designation of Series A
Convertible Preferred Stock (the “Series A Convertible Shares”)
in the form annexed hereto as Schedule
1.01(a). On the Closing Date (defined herein), the Share
Purchase shall be consummated, in which the Investors shall purchase from ASAP
an aggregate of one hundred thousand (100,000) Series A Convertible Shares for
cash consideration of Six Hundred Thousand and 00/100 Dollars
($600,000.00). The amount to be paid by and the number of
Series A Convertible Shares to be distributed to each Investor is set forth in
Schedule
1.01(b).
(b) The
Parties intend that the issuance of the Series A Convertible Shares to the
Investors pursuant to the Share Purchase shall be exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) of the Securities
Act and the rules and regulations promulgated thereunder.
SECTION
1.02 THE
MERGER.
Upon the
terms and subject to the conditions set forth in this Agreement and in
accordance with the DGCL, at the Effective Time (as hereinafter
defined), all Yili Oil Shares (as hereinafter defined) shall be cancelled and
converted into the right to receive the Merger Shares. In connection
therewith, the following terms shall apply:
(a) Exchange
Agent. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., counsel for Yili Oil, shall
act as the exchange agent (the “Exchange Agent”) for the
purpose of exchanging Yili Oil Shares for the Merger Shares. At
or prior to the Closing, ASAP shall deliver to the Exchange Agent the Merger
Shares.
(b) Conversion of
Securities.
(i) Conversion of Yili Oil
Securities. At the Effective Time, by virtue of the Merger and
without any action on the part of ASAP, Yili Oil or the Merger Sub, or the
holders of any of their respective securities:
(A) Each
of the issued and outstanding shares of common stock of Yili Oil (the “Yili Oil Shares”) immediately
prior to the Effective Time shall be converted into and represent the right to
receive, and shall be exchangeable for, that number of Series A Convertible
Shares of ASAP as shall be determined by dividing 200,000 by the number of then
issued and outstanding Yili Oil Shares.
(B) All
Yili Oil Shares shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Shares to be issued pursuant to
this Section 1.02(b)(i)(A) upon the surrender of such certificate in accordance
with Section 1.08, without interest. No fractional shares may be
issued; but each fractional share that would result from the Merger will be
rounded to the nearest number of whole shares.
(C) The
Merger Shares, together with the Series A Convertible Shares acquired in the
Share Purchase, (I) shall represent 99.00%, on a fully diluted basis, of the
voting power of all classes of issued and outstanding stock of ASAP at the
Effective Time, after giving effect to the Merger, and (II) shall be convertible
into 99.00% of the common stock of ASAP on a fully diluted basis at any time
after the consummation of the spin-off transaction described in the Operating
Subsidiary Agreement (as defined in Section 5.01 (d) hereof).
(ii) Conversion of Merger Sub
Stock. At the Effective Time, by virtue of the Merger and
without any action on the part of Yili Oil, ASAP, the Merger Sub, or the holders
of any of their respective securities, each share of capital stock of Merger Sub
outstanding immediately prior to the Effective Time shall be converted into one
share of the common stock of the Surviving Entity and the shares of common stock
of the Surviving Entity so issued in such conversion shall constitute the only
outstanding shares of capital stock of the Surviving Entity and the Surviving
Entity shall be a wholly owned subsidiary of ASAP.
(c) Exemption from
Registration. The Parties intend that the issuance of the
Merger Shares to the Investors shall be exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) of the Securities
Act and the rules and regulations promulgated thereunder.
SECTION
1.03 CLOSING.
The
closing of the Share Purchase and the Merger (the “Closing”) will take place at
the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., counsel for Yili Oil, within one (1)
business day following the satisfaction or waiver of the conditions precedent
set forth in Article V or at such other date as ASAP and Yili Oil shall agree
(the “Closing Date”),
but in any event no later than June 30, 2007 unless extended by a written
agreement of ASAP and Yili Oil.
SECTION
1.04 MERGER;
EFFECTIVE TIME.
At the
Effective Time and subject to and upon the terms and conditions of this
Agreement, Merger Sub shall, and ASAP shall cause Merger Sub to, merge with and
into Yili Oil in accordance with the provisions of the DGCL, the separate
corporate existence of Merger Sub shall cease and Yili Oil shall continue as the
Surviving Entity. The Effective Time shall occur upon the filing with
the Secretary of State of the State of Delaware of a Certificate of Merger,
executed in accordance with the applicable provisions of the DGCL (the “Effective
Time”). The date on which the Effective Time occurs is
referred to as the “Effective
Date.” Provided that this Agreement has not been terminated
pursuant to Article VI, the Parties will cause the Certificate of Merger to be
filed as soon as practicable after the Closing.
SECTION
1.05 EFFECT OF THE
MERGER.
The
Merger shall have the effect set forth in Title 8, Section 259 of the
DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchises of Yili Oil and Merger Sub shall vest in the Surviving Entity,
and all debts, liabilities and duties of Yili Oil and Merger Sub shall become
the debts, liabilities and duties of the Surviving Entity.
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SECTION
1.06
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CERTIFICATE
OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS.
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Pursuant
to the Merger:
(a) The
Certificate of Incorporation and Bylaws of Yili Oil as in effect immediately
prior to the Effective Time shall be the Certificate of Incorporation and Bylaws
of the Surviving Entity immediately following the Merger.
(b) The
directors and officers of the Yili Oil immediately prior to the Merger shall be
the directors and officers of the Surviving Entity subsequent to the
Merger.
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SECTION
1.07
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RESTRICTIONS
ON RESALE
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(a) The
Series A Convertible Shares issued pursuant to the Share Purchase and the Merger
Shares will not be registered under the Securities Act, or the securities laws
of any state, and cannot be transferred, hypothecated, sold or otherwise
disposed of until: (i) a registration statement with respect to such
securities is declared effective under the Securities Act, or (ii) ASAP receives
an opinion of counsel for the Investors, reasonably satisfactory to counsel for
ASAP, that an exemption from the registration requirements of the Securities Act
is available.
The
certificates representing the Merger Shares which are being issued to the
Investors shall contain a legend substantially as follows:
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR ASAP SHOW, INC.
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL
FOR ASAP SHOW, INC. THAT AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS AVAILABLE.”
SECTION
1.08 EXCHANGE OF
CERTIFICATES.
(a) EXCHANGE
OF CERTIFICATES. After the Effective Time, the Investors shall be
required to surrender all their Yili Oil Shares to the Exchange Agent, and the
Investors shall be entitled upon such surrender to receive in exchange therefor
certificates representing the proportionate number of Merger Shares into which
the Yili Oil Shares theretofore represented by the stock transfer forms so
surrendered shall have been exchanged pursuant to this
Agreement. Until so surrendered, each outstanding certificate which,
prior to the Effective Time, represented Yili Oil Shares shall be deemed for all
corporate purposes, subject to the further provisions of this Article I, to
evidence the ownership of the number of whole Merger Shares for which such Yili
Oil Shares have been so exchanged. No dividend payable to holders of
Merger Shares of record as of any date subsequent to the Effective Time shall be
paid to the owner of any certificate which, prior to the Effective Time,
represented Yili Oil Shares, until such certificate or certificates representing
all the relevant Yili Oil Shares, together with a stock transfer form, are
surrendered as provided in this Article I or pursuant to letters of transmittal
or other instructions with respect to lost certificates provided by the Exchange
Agent.
(b) FULL
SATISFACTION OF RIGHTS. All Merger Shares for which the Yili Oil
Shares shall have been exchanged pursuant to this Article I shall be deemed to
have been issued in full satisfaction of all rights pertaining to the Yili Oil
Shares.
(c) EXCHANGE OF
CERTIFICATES. All certificates representing Yili Oil Shares converted
into the right to receive Merger Shares pursuant to this Article I shall be
furnished to ASAP subsequent to delivery thereof to the Exchange Agent pursuant
to this Agreement.
(d) CLOSING
OF TRANSFER BOOKS. On the Effective Date, the stock transfer book of
Yili Oil shall be deemed to be closed and no transfer of Yili Oil Shares shall
thereafter be recorded thereon.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF ASAP
ASAP and
, where applicable, the Merger Sub hereby jointly and severally represent and
warrant to Yili Oil and to the Investors, as of the date of this Agreement, as
of the Closing Date and as of the Effective Time, as follows:
SECTION
2.01 ORGANIZATION,
STANDING AND POWER.
ASAP is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada, and has corporate power and authority to conduct
its business as presently conducted by it and to enter into and perform this
Agreement and to carry out the transactions contemplated by this
Agreement. Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, and has
corporate power and authority to enter into and perform this Agreement and to
carry out the transactions contemplated by this Agreement.
SECTION
2.02 SUBSIDIARIES
ASAP owns
all of the outstanding capital stock of the Merger Sub and of ASAP, Inc., a
newly formed Nevada corporation (“Operating
Sub”). Other than its ownership of the Merger Sub and the
Operating Sub, ASAP does not have an ownership interest in any
Person. Merger Sub is a
recently formed corporation and prior to the date hereof and through the
Effective Date, Merger Sub shall not conduct any operating business, become a
party to any agreements, or incur any liabilities or obligations. Operating Sub
is a recently formed corporation and prior to the date hereof and through the
date on which the Operating Subsidiary Agreement (defined in Section 5.01 (d)
hereof) becomes effective, Operating Sub shall not conduct any operating
business, become a party to any agreements, or incur any liabilities or
obligations.
SECTION
2.03 CAPITALIZATION.
(a) There are
50,000,000 shares of capital stock of ASAP authorized, consisting of 45,000,000
shares of common stock, $0.001 par value per share (the “ASAP Common Shares”),
5,000,000 shares of preferred stock, $0.001 per share (“ASAP Preferred
Shares”). As of the date of this Agreement, there are
8,626,480 ASAP Common Shares issued and outstanding.
(b) The
individuals named in Schedule
2.03 hereto, collectively, own of record and beneficially 4,658,300 of
the issued and outstanding ASAP Common Shares, constituting fifty-four percent
(54%) of such Shares. No ASAP Common Shares or ASAP Preferred Shares have been
reserved for issuance to any Person, and there are no other outstanding rights,
warrants, options or agreements for the purchase of ASAP Common or Preferred
Shares except as provided in this Agreement.
(c) All
outstanding ASAP Common Shares are validly issued, fully paid, non-assessable,
not subject to pre-emptive rights and have been issued in compliance with all
state and federal securities laws or other Applicable Law. The Series
A Convertible Shares issuable to the Investors pursuant to the Merger and the
Share Purchase will, when issued pursuant to this Agreement, be duly and validly
authorized and issued, fully paid and non-assessable.
SECTION
2.04 AUTHORITY
FOR AGREEMENT.
The
execution, delivery, and performance of this Agreement by each of ASAP and
Merger Sub has been duly authorized by all necessary corporate and shareholder
action, and this Agreement, upon its execution by the Parties, will constitute
the valid and binding obligation of each of ASAP and the Merger Sub,
enforceable against each of them in accordance with and subject to its terms,
except as enforceability may be affected by bankruptcy, insolvency or other laws
of general application affecting the enforcement of creditors'
rights. The execution and consummation of the transactions
contemplated by this Agreement and compliance with its provisions by ASAP and
Merger Sub will not violate any provision of Applicable Law and will not
conflict with or result in any breach of any of the terms, conditions, or
provisions of, or constitute a default under, ASAP's Articles of Incorporation,
Merger Sub’s Certificate of Incorporation, or either of their Bylaws, in each
case as amended, or, in any material respect, any indenture, lease, loan
agreement or other agreement or instrument to which ASAP is a party or by which
it or any of its properties is bound, or any decree, judgment, order, statute,
rule or regulation applicable to ASAP or Merger Sub.
SECTION
2.05 FINANCIAL
CONDITION
The
Annual Report on Form 10-KSB filed by ASAP for the year ended May 31, 2006 and
the Quarterly Report on Form 10-QSB filed by ASAP for the period ended November
30, 2006 (the “SEC Filings”) are true, correct and complete in all material
respects, are not misleading and do not omit to state any material fact which is
necessary to make the statements contained in such public filings not misleading
in any material respect. The financial statements included in the SEC
Filings (the “Financial Statements”) were prepared in accordance with generally
accepted accounting principles and fairly reflect the financial condition of
ASAP as of the dates stated and the results of its operations for the periods
presented.
SECTION
2.06 ABSENCE OF CERTAIN CHANGES OR
EVENTS.
Since
November 30, 2006, except as reported in the Quarterly Report filed by ASAP with
the Securities and Exchange Commission (“SEC”) on Form 10-QSB for the
period ending on that date, and except as contemplated by this
Agreement:
(a) there has
not been any Material Adverse Change in the business, operations, properties,
assets, or condition of ASAP;
(b) ASAP has
not (i) amended its Articles of Incorporation; (ii) declared or made,
or agreed to declare or make, any payment of dividends or distributions of any
assets of any kind whatsoever to stockholders or purchased or redeemed, or
agreed to purchase or redeem, any outstanding capital stock; (iii) made any
material change in its method of management, operation, or accounting; (iv)
entered into any material transaction; or (v) made any accrual or arrangement
for payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee;
(c) ASAP has
not (i) borrowed or agreed to borrow any funds or incurred, or become subject
to, any material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (ii) paid any material
obligation or liability (absolute or contingent) other than current liabilities
reflected in or shown on the most recent ASAP balance sheet, and current
liabilities incurred since that date in the ordinary course of business; (iii)
sold or transferred, or agreed to sell or transfer, any material assets,
properties, or rights, or canceled, or agreed to cancel, any material debts or
claims; or (iv) made or permitted any material amendment or termination of any
contract, agreement, or license to which it is a party.
SECTION
2.07 GOVERNMENTAL AND THIRD PARTY
CONSENTS
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party to
any agreement with ASAP, the Operating Sub or Merger Sub, is required by or with
respect to ASAP, the Operating Sub or Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
(i) applicable securities laws, or (ii) the Nevada Revised Statues or the
DGCL.
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SECTION
2.08
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LITIGATION
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There is
no action, suit, investigation, audit or proceeding pending against, or to the
Knowledge of ASAP, threatened against or affecting, ASAP or the Merger Sub or
the Operating Sub or any of their respective assets or properties before any
court or arbitrator or any governmental body, agency or official.
SECTION
2.09 COMPLIANCE WITH APPLICABLE
LAWS.
To the
Knowledge of ASAP, the business of each of ASAP, the Operating Sub and the
Merger Sub has not been, and is not being, conducted in violation of any
Applicable Law.
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SECTION
2.10
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TAX
RETURNS AND PAYMENT
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ASAP has
duly and timely filed all material Tax Returns required to be filed by it and
has duly and timely paid all Taxes shown thereon to be due. Except as
disclosed in Financial Statements filed by ASAP with the SEC, there is no
material claim for Taxes that is a Lien against the property of ASAP other than
Liens for Taxes not yet due and payable, none of which is
material. ASAP has not received written notification of any audit of
any Tax Return of ASAP being conducted or pending by a Tax authority where an
adverse determination could have a Material Adverse Effect on ASAP, no extension
or waiver of the statute of limitations on the assessment of any Taxes has been
granted by ASAP which is currently in effect, and ASAP is not a party to any
agreement, contract or arrangement with any Tax authority or otherwise, which
may result in the payment of any material amount in excess of the amount
reflected on the above referenced ASAP Financial Statements.
SECTION
2.11 SECURITY
LISTING
ASAP is a
fully compliant reporting company under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), and all ASAP public filings required under the Exchange Act have
been made. The common stock of ASAP is listed for quotation on the
OTC Bulletin Board. To the Knowledge of ASAP, ASAP has not been
threatened or is not subject to removal of its common stock from the OTC
Bulletin Board.
SECTION
2.12 FINDERS’
FEES
ASAP has
not incurred, nor will it incur, directly or indirectly, any liability for
brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any transaction
contemplated hereby.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF YILI OIL
Yili Oil
hereby represents and warrants to ASAP and to Merger Sub, as of the date of this
Agreement and as of the Effective Time (except as otherwise indicated), as
follows:
SECTION
3.01 ORGANIZATION,
STANDING AND POWER.
Yili Oil
is a privately held corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and has full corporate power
and authority to conduct its business as presently conducted by it and to enter
into and perform this Agreement and to carry out the transactions contemplated
by this Agreement. Yili Oil is duly qualified to do business as a
foreign corporation in each state in which the nature of the business conducted
by it or the character or location of the properties and assets owned or leased
by it make such qualification necessary.
SECTION
3.02 CAPITALIZATION.
There are
100,000,000 shares of Yili Oil capital stock authorized, consisting of
100,000,000 shares of common stock with $.00001 par value (the “Yili Oil Common
Shares”). As of the date of this Agreement, there were 30,000
issued and outstanding Yili Oil Common Shares. No Yili Oil Common
Shares have been reserved for issuance to any Person, and there are no
outstanding rights, warrants, options or agreements for the purchase of Yili Oil
Common Shares. No Person is entitled to any rights with respect
to the conversion, exchange or delivery of the Yili Oil Common
Shares. The Yili Oil Common Shares have been issued in compliance
with Applicable Law.
SECTION
3.03 AUTHORITY
FOR AGREEMENT.
The
execution, delivery and performance of this Agreement by Yili Oil has been duly
authorized by all necessary corporate action, and this Agreement constitutes the
valid and binding obligation of Yili Oil and each of the Investors, enforceable
against Yili Oil and each Investor in accordance with its terms, except as
enforceability may be affected by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors'
rights. The execution and consummation of the transactions
contemplated by this Agreement and compliance with its provisions by Yili Oil
and each of the Investors will not violate any provision of Applicable Law and
will not conflict with or result in any breach of any of the terms, conditions,
or provisions of, or constitute a default under, Yili Oil’s Certificate of
Incorporation or Bylaws, in each case as amended, or, to the Knowledge of Yili
Oil, in any material respect, any indenture, lease, loan agreement or other
agreement instrument to which Yili Oil or any Investor is a party or by which it
or any of them or any of its or their properties are bound, or any decree,
judgment, order, statute, rule or regulation applicable to Yili Oil or any
Investor.
SECTION
3.04 GOVERNMENTAL
OR THIRD PARTY CONSENT
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party to
any agreement with Yili Oil or any Investor, is required by or with respect to
Yili Oil or any of the Investors in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby,
except for such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under (i) applicable
securities laws, or (ii) the DGCL.
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SECTION
3.05
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LITIGATION
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There is
no action, suit, investigation, audit or proceeding pending against or, to the
Knowledge of Yili Oil, threatened, against or affecting Yili Oil or any of its
material assets or properties before any court or arbitrator or any governmental
body, agency or official.
SECTION
3.06 COMPLIANCE
WITH APPLICABLE LAWS.
To the
Knowledge of Yili Oil, the business of Yili Oil has not been, and is not being,
conducted in violation of any Applicable Law, except for possible violations
which individually or in the aggregate have not had and are not reasonably
likely to have a Material Adverse Effect on Yili Oil.
SECTION
3.07 TAX
RETURNS AND PAYMENT
Yili Oil
has duly and timely filed all material Tax Returns required to be filed by it
and has duly and timely paid all Taxes shown thereon to be due, except as
reflected in Yili Oil Financial Statements heretofore delivered to ASAP and
except for Taxes being contested in good faith. Subject to the
foregoing, to the Knowledge of Yili Oil, except as disclosed in the Yili Oil
Financial Statements, there is no material claim for Taxes that is a Lien
against the property of Yili Oil other than Liens for Taxes not yet due and
payable, none of which is material. Yili Oil has not received written
notification of any audit of any Tax Return of Yili Oil being conducted or
pending by a Tax authority where an adverse determination could have a Material
Adverse Effect on Yili Oil, no extension or waiver of the statute of limitations
on the assessment of any Taxes has been granted by Yili Oil which is currently
in effect, and Yili Oil is not a party to any agreement, contract or arrangement
with any Tax authority or otherwise, which may result in the payment of any
material amount in excess of the amount reflected on the Yili Oil Financial
Statements.
SECTION
3.08 FINDERS’
FEES
Yili Oil
has not incurred, nor will it incur, directly or indirectly, any liability for
brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any transaction
contemplated hereby.
ARTICLE
IV
CERTAIN
COVENANTS AND AGREEMENTS
|
SECTION
4.01
|
COVENANTS
OF YILI OIL
|
Yili Oil
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, Yili Oil shall, except as otherwise disclosed in this
Agreement and other than as contemplated by this Agreement or for the purposes
of effecting the Closing pursuant to this Agreement, conduct its business as
presently operated and solely in the ordinary course, and consistent with such
operation, and, in connection therewith, without the written consent of
ASAP:
|
(a)
|
shall
not amend its Certificate of Incorporation or
Bylaws;
|
|
(b)
|
shall
not pay or agree to pay to any employee, officer or director compensation
that is in excess of the current compensation level of such employee,
officer or director other than salary increases or payments made in the
ordinary course of business or as otherwise provided in any contracts or
agreements with any such employees;
|
|
(c)
|
shall
not merge or consolidate with any other entity or acquire or agree to
acquire any other entity;
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|
(d)
|
shall
not sell, transfer, or otherwise dispose of any material assets required
for the operations of Yili Oil’s business, except in the ordinary course
of business consistent with past
practices;
|
|
(e)
|
shall
not declare or pay any dividends on or make any distribution of any kind
with respect to the Yili Oil Shares;
and
|
|
(f)
|
shall
use commercially reasonable efforts to comply with and not be in default
or violation under any known law, regulation, decree or order applicable
to Yili Oil’s business, operations or assets where such violation would
have a Material Adverse Effect on Yili
Oil.
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|
SECTION
4.02
|
COVENANTS
OF ASAP
|
ASAP
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, ASAP shall not, other than as contemplated by this
Agreement or for the purposes of effecting the Closing pursuant to this
Agreement, conduct its business as presently operated and solely in the ordinary
course, and consistent with such operation, and, in connection therewith,
without the written consent of Yili Oil:
|
(a)
|
shall
not amend its Articles of Incorporation or Bylaws, except to create the
Series A Convertible Shares, as provided in Section
1.01;
|
|
(b)
|
shall
not pay or agree to pay to any employee, officer or director compensation
of any kind or amount;
|
|
(c)
|
shall
not merge or consolidate with any other entity or acquire or agree to
acquire any other entity;
|
|
(d)
|
shall
not create, incur, assume, or guarantee any material indebtedness for
money borrowed except in the ordinary course of business, or create or
suffer to exist any mortgage, Lien or other encumbrance on any
of its material assets;
|
|
(e)
|
shall
not make any material capital expenditure or series of capital
expenditures except in the ordinary course of
business;
|
|
(f)
|
shall
not declare or pay any dividends on or make any distribution of any kind
with respect to ASAP;
|
|
(g)
|
shall
not issue any additional shares of ASAP capital stock or take any action
affecting the capitalization of ASAP or the ASAP Common or Preferred
Shares; and
|
|
(h)
|
shall
not grant any severance or termination pay to any director, officer or any
other employees of ASAP.
|
SECTION
4.03
COVENANTS OF THE PARTIES
(a) Tax-free
Reorganization. The Parties intend that the Merger qualify as
a Tax-free “reorganization” under Sections 368(a) of the Code, as amended, and
the Parties will take the position for all purposes that the Merger shall
qualify as a reorganization under such Section. In addition, the
Parties covenant and agree that they will not engage in any action, or fail to
take any action, which action or failure to take action would reasonably be
expected to cause the Merger to fail to qualify as a Tax-free “reorganization”
under Section 368(a) of the Code, whether or not otherwise permitted by the
provisions of this Agreement;
(b) Announcement. Neither
Yili Oil, on the one hand, nor ASAP on the other hand, shall issue any press
release or otherwise make any public statement with respect to this Agreement or
the transactions contemplated hereby without the prior consent of the other
Party (which consent shall not be unreasonably withheld), except as may be
required by applicable law or securities regulation. Upon execution
of this Agreement, ASAP shall issue a press release, which shall be approved by
Yili Oil, and file a Current Report on Form 8-K reporting the execution of the
Agreement.
(c) Notification of Certain
Matters. Yili Oil shall give prompt written notice to ASAP,
and ASAP shall give prompt written notice to Yili Oil, of:
(i) The
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time; and
(ii) Any
material failure of Yili Oil or any of the Investors on the one hand, or ASAP,
on the other hand, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder.
(d) Reasonable Best
Efforts. Before Closing, upon the terms and subject to the
conditions of this Agreement, the Parties agree to use their respective
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable (subject to
applicable laws) to consummate and make effective the Merger and other
transactions contemplated by this Agreement as promptly as practicable
including, but not limited to:
(i) The
preparation and filing of all forms, registrations and notices required to be
filed to consummate the Share Purchase and the Share Purchase and the Merger,
including without limitation, any approvals, consents, orders, exemptions or
waivers by any third party or governmental entity; and
(ii) The
satisfaction of the Party's conditions precedent to Closing.
(e) Access to
Information
(i) Inspection by Yili
Oil. ASAP will make available for inspection by Yili Oil,
during normal business hours and in a manner so as not to interfere with normal
business operations, all of ASAP’s records (including tax records), books of
account, premises, contracts and all other documents in ASAP’s possession or
control that are reasonably requested by Yili Oil to inspect and examine the
business and affairs of ASAP. ASAP will cause its managerial
employees and regular independent accountants to be available upon reasonable
advance notice to answer questions of Yili Oil concerning the business and
affairs of ASAP. Yili Oil will treat and hold as confidential any
information it receives from ASAP in the course of the reviews contemplated by
this Section 4.03(e). No examination by Yili Oil will, however,
constitute a waiver or relinquishment by Yili Oil of its rights to rely on
ASAP’s or the ASAP Shareholders’ covenants, representations and warranties made
herein or pursuant hereto.
(ii) Inspection by
ASAP. Yili Oil will, if requested, make available for
inspection by ASAP, during normal business hours and in a manner so as not to
interfere with normal business operations, all of Yili Oil’s records (including
tax records), books of account, premises, contracts and all other documents in
Yili Oil’s possession or control that are reasonably requested by ASAP to
inspect and examine the business and affairs of Yili Oil. Yili Oil
will cause its managerial employees and regular independent accountants to be
available upon reasonable advance notice to answer questions of ASAP concerning
the business and affairs of Yili Oil. ASAP will treat and hold as
confidential any information it receives from Yili Oil in the course of the
reviews contemplated by this Section 4.03(e). No examination by ASAP
will, however, constitute a waiver or relinquishment by ASAP of its rights to
rely on Yili Oil’s covenants, representations and warranties made herein or
pursuant hereto.
ARTICLE
V
CONDITIONS
PRECEDENT
SECTION
5.01 CONDITIONS
PRECEDENT TO THE PARTIES' OBLIGATIONS.
The
obligations of the Parties as provided herein shall be subject to each of the
following conditions precedent, unless waived in writing by both ASAP and Yili
Oil:
(a) Consents,
Approvals. The Parties shall have obtained all necessary
consents and approvals of their respective boards of directors, and all
consents, approvals and authorizations required under their respective charter
documents, and all material consents, including any material consents and
waivers by the Parties’ respective lenders and other third-parties, if
necessary, to the consummation of the transactions contemplated by this
Agreement.
(b) Shareholder
Approval. This Agreement and the transactions contemplated
hereby shall have been approved by the shareholders of Yili Oil in accordance
with the applicable provisions of the DGCL and its bylaws.
(c) Absence of Certain
Litigation. No action or proceeding shall be threatened or
pending before any governmental entity or authority which, in the reasonable
opinion of counsel for the Parties, is likely to result in a restraint,
prohibition or the obtaining of damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated
hereby.
(d) Operating Subsidiary
Agreement. ASAP shall have formed the Operating Sub as its
wholly owned subsidiary and shall have entered into an agreement (the “Operating Subsidiary
Agreement,” in the form attached hereto as Schedule 5.01 (d)) with the
Operating Sub and the individuals identified as “Managers” in the Operating
Subsidiary Agreement regarding (i) the
transfer to the Operating Sub of all of the assets and liabilities of ASAP, (ii)
the management and operation of the Operating Sub
following the Closing, (iv) the indemnification by the ASAP Principal
Shareholder of ASAP and Yili Oil(and their respective officers, directors and
shareholders) from and against all liabilities of the Operating Sub existing on
the Closing Date or arising thereafter, and (iv) the spinning off of the stock
of the Operating Sub to the holders of ASAP common stock when the
registration statement with respect to the common stock of the Operating Sub has
become effective.
|
SECTION
5.02
|
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF
ASAP
|
The
obligations of ASAP on the Closing Date as provided herein shall be subject to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived in writing by ASAP:
(a) Consents And
Approvals. Yili Oil shall have obtained all material consents,
including any material consents and waivers by Yili Oil's lenders and other
third parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
(b) Representations and
Warranties. The representations and warranties by Yili Oil in
Article III herein shall be true and accurate in all material respects on and as
of the Closing Date with the same force and effect as though such
representations and warranties had been made at and as of the Closing Date,
except to the extent that any changes therein are specifically contemplated by
this Agreement.
(c) Performance. Yili
Oil shall have performed and complied in all material respects with all
agreements to be performed or complied with by it pursuant to this Agreement at
or prior to the Closing.
(d) Proceedings and
Documents. All corporate, company and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to ASAP and its counsel, and ASAP and its
counsel shall have received all such counterpart originals (or certified or
other copies) of such documents as they may reasonably request.
(e) Certificate of Good
Standing. Yili Oil shall have delivered to ASAP a certificate
as to the good standing of Yili Oil certified by the Secretary of State of the
State of Delaware on or within fourteen (14) business days prior to the Closing
Date.
(f) Material
Changes. Except as contemplated by this Agreement, since the
date hereof, Yili Oil shall not have suffered a Material Adverse Effect, and,
without limiting the generality of the foregoing, there shall be no pending
litigation to which Yili Oil is a party which is reasonably likely to have a
Material Adverse Effect on Yili Oil.
(g) Due
Diligence. ASAP shall have completed to its own satisfaction
due diligence in relation to Yili Oil, except that this shall cease to be a
condition precedent unless on or prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇ shall have
delivered a written notice stating that it is not satisfied with the results of
its due diligence.
(h) SEC
Filing. No less than one week prior to the Closing, Yili Oil
shall have delivered to ASAP the financial statements, report of Yili Oil’s
independent registered public accountant, and other information required for
inclusion in the Current Report that ASAP will file with the SEC within four
business days after the Closing.
|
SECTION
5.03
|
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF Yili
Oil
|
The
obligations of Yili Oil and the Investors on the Closing Date as provided herein
shall be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions precedent, unless waived in writing by Yili Oil and the
Investors:
(a) Consents
And Approvals. ASAP, the Operating Sub
and the Merger Sub shall have obtained all material consents, including any
material consents and waivers of its respective lenders and other third parties,
if necessary, to the consummation of the transactions contemplated by this
Agreement.
(b) Representations
And Warranties. The representations and
warranties by ASAP and Merger Sub in Article II herein shall be true and
accurate in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made at
and as of the Closing Date, except to the extent that any changes therein are
specifically contemplated by this Agreement.
(c) Performance. ASAP and Merger Sub shall
have performed and complied in all material respects with all agreements to be
performed or complied with by it pursuant to this Agreement prior to or at the
Closing.
(d) Proceedings
And Documents. All corporate, company and
other proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such transactions shall
be reasonably satisfactory in substance and form to Yili Oil and its counsel,
and Yili Oil and its counsel shall have received all such counterpart originals
(or certified or other copies) of such documents as they may reasonably
request.
(e) Certificates
of Good Standing. ASAP shall have delivered
to Yili Oil a certificate as to its and the Operating Sub’s good standing in the
State of Nevada, and the Merger Sub shall have delivered to Yili Oil a
certificate as to its good standing in the State of Delaware, in each case
certified by the Secretary of State not more than fourteen (14) business days
prior to the Closing Date.
(f) Material
Changes. Except
as contemplated by this Agreement, since the date hereof, neither ASAP, the
Operating Sub nor the Merger Sub shall have suffered a Material
Adverse Effect and, without limiting the generality of the foregoing, there
shall be no pending litigation to which ASAP, the Operating Sub or the Merger
Sub is a party which is reasonably likely to have a Material Adverse Effect on
ASAP, the Operating Sub or the Merger Sub;
(g) Due
Diligence. Yili
Oil shall have completed to its own satisfaction due diligence in relation to
ASAP, except that this shall cease to be a condition precedent unless on or
prior to March 29, 2007 Yili Oil shall have delivered a written notice stating
that it is not satisfied with the results of its due
diligence;
(h) Status of
ASAP. As at the
Effective Time of the Merger, ASAP (i) shall be a fully compliant reporting
public company under the Exchange Act, and shall be current in all of its
reports required to be filed under the Exchange Act, (ii) shall not have been
threatened or subject to delisting from the OTC Bulletin Board, and (iii) shall
have 8,626,480 ASAP Common Shares outstanding, and there shall be no preferred
stock outstanding nor, except as provided hereunder, any options, warrants or
rights to acquire capital stock of ASAP whether for additional consideration or
on conversion.
(i) ASAP
Principal Shareholders’ Holdings. On the date of Closing,
the individuals listed in Schedule 2.03 shall own at least 4,658,300 ASAP Common
Shares.
(j) Certificate
of Designation. The Board of Directors of ASAP shall
have filed in the Office of the Secretary of State of the State of Nevada a
Certification of Designation of the Series A Convertible Shares in the form of
Schedule 1.01(a) hereto.
(k) ASAP Board
of Directors. At the Effective Time of
the Merger or in accordance with applicable law, all of the officers and members
of the board of directors of ASAP shall tender their resignations as officers
and directors of ASAP, and the vacancies created on the ASAP board of directors
shall be filled by persons designated by the Board of Directors of Yili
Oil.
(l) Information
Statement. No less than ten days prior to the Closing, ASAP
shall have filed with the SEC and mailed to its shareholders of record an
information statement containing the information required by SEC Rule 14f-1,
which shall be provided by Yili Oil.
ARTICLE
VI
TERMINATION
SECTION
6.01 TERMINATION.
This
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time by:
(a) The mutual
written consent of the Boards of Directors of ASAP and Yili Oil;
(b) Either
ASAP, on the one hand, or Yili Oil, on the other hand, if any governmental
entity or court of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or other action
the Parties shall use their commercially reasonable best efforts to lift), which
restrains, enjoins or otherwise prohibits the Share Purchase or the Merger or
the issuance of the Series A Convertible Shares as contemplated herein and such
order, decree, ruling or other action shall have become final and
non-appealable;
(c) ASAP, if
Yili Oil or any of the Investors shall have breached in any material respect any
of its or his representations, warranties, covenants or other agreements
contained in this Agreement, and the breach cannot be or has not been cured
within thirty (30) calendar days after the giving of written notice by ASAP to
Yili Oil, or by ASAP, if it is not satisfied with the results of its due
diligence investigation and it so notifies Yili Oil on or before January
18, 2007;
(d) Yili Oil,
if ASAP shall have breached in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement, and the
breach cannot be or has not been cured within thirty (30) calendar days after
the giving of written notice by Yili Oil to ASAP, or by Yili Oil if it is not
satisfied with the results of its due diligence investigation and it so notifies
ASAP on or before March 29, 2007; or
(e) Without any
action on the part of the Parties if required by Applicable Law or if the
Closing shall not be consummated by June 30, 2007, unless extended by written
agreement of ASAP and Yili Oil.
SECTION
6.02 EFFECT OF TERMINATION.
If this
Agreement is terminated as provided in Section 6.01, written notice of such
termination shall be given by the terminating Party to the other Party
specifying the provision of this Agreement pursuant to which such termination is
made, this Agreement shall become null and void and there shall be no liability
on the part of ASAP, Yili Oil or the Investors, provided, however,
that (a) the provisions of Article VII hereof shall survive the
termination of this Agreement; (b) nothing in this Agreement shall
relieve any Party from any liability or obligation with respect to any willful
breach of this Agreement; and (c) termination shall not affect accrued rights or
liabilities of any party at the time of such termination.
ARTICLE
VII
CONFIDENTIALITY
SECTION
7.01 CONFIDENTIALITY
ASAP, on
the one hand, and Yili Oil and the Investors, on the other hand, will keep
confidential all information and documents obtained from the other, including
but not limited to any information or documents provided pursuant to Section
4.03(e) hereof (except for any information disclosed to the public pursuant to a
press release authorized by the Parties); and in the event the Closing does not
occur or this Agreement is terminated for any reason, will promptly return such
documents and all copies of such documents and all notes and other evidence
thereof, including material stored on a computer, and will not use such
information for its own advantage, except to the extent that (i) the information
must be disclosed by law, (ii) the information becomes publicly available by
reason other than disclosure by the Party subject to the confidentiality
obligation, (iii) the information is independently developed without use of or
reference to the other Party’s confidential information, (iv) the information is
obtained from another source not obligated to keep such information
confidential, or (v) the information is already publicly known or known to the
receiving Party when disclosed as demonstrated by written documentation in the
possession of such Party at such time.
ARTICLE
VIII
INDEMNIFICATION
SECTION
8.01 INDEMNIFICATION BY ASAP
ASAP
shall indemnify, defend and hold harmless each of Yili Oil, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior to
the date hereof or who becomes prior to the Closing, a shareholder, officer,
director or partner of Yili Oil, any subsidiary or affiliate thereof or an
employee of Yili Oil, any subsidiary or affiliate thereof and their respective
heirs, legal representatives, successors and assigns (the “Yili Oil Indemnified Parties”)
against all losses, claims, damages, costs, expenses (including reasonable
attorneys’ fees), liabilities or judgments or amounts that are paid in
settlement of or in connection with any threatened or actual third party claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any material breach of this Agreement by
ASAP or any subsidiary or affiliate thereof, including but not limited to
failure of any representation or warranty to be true and correct at or before
the Closing, or (ii) any willful or grossly negligent act, omission
or conduct of any officer, director or agent of ASAP or any subsidiary or
affiliate thereof prior to the Closing, whether asserted or claimed prior to, at
or after, the Closing. Any Yili Oil Indemnified Party wishing to
claim indemnification under this Section 8.01, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify ASAP in writing, but the
failure to so notify shall not relieve ASAP from any liability that it may have
under this Section 8.01, except to the extent that such failure would materially
prejudice ASAP.
|
SECTION
8.02
|
INDEMNIFICATION
BY YILI OIL
|
Yili Oil
shall indemnify, defend and hold harmless each of ASAP, any subsidiary or
affiliate thereof and each person who is now, or has been at any time prior to
the date hereof or who becomes prior to the Closing, a shareholder, officer,
director or partner of ASAP, any subsidiary or affiliate thereof or an employee
of ASAP, any subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “ASAP Indemnified Parties”)
against all losses, claims, damages, costs, expenses (including reasonable
attorneys’ fees), liabilities or judgments or amounts that are paid in
settlement of or in connection with any threatened or actual third party claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any material breach of this Agreement by
Yili Oil, any Investor or any subsidiary or affiliate thereof, including but not
limited to failure of any representation or warranty to be true and correct at
or before the Closing, or (ii) any willful or negligent act, omission or conduct
of any officer, director or agent of Yili Oil or any subsidiary or affiliate
thereof prior to the Closing, whether asserted or claimed prior to, at or after,
the Closing. Any ASAP Indemnified Party wishing to claim
indemnification under this Section 8.02, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify Yili Oil in writing, but
the failure to so notify shall not relieve Yili Oil from any liability that it
may have under this Section 8.02, except to the extent that such failure would
materially prejudice Yili Oil.
SECTION
8.03 INDEMNIFICATION OF EXCHANGE
AGENT
ASAP,
Yili Oil, the Operating Sub and Merger Sub (for the purposes of this Section
8.03, the “Indemnitors”)
agree to indemnify the Exchange Agent and his employees and agents
(collectively, the “Indemnitees”) against, and
hold them harmless of and from, any and all loss, liability, cost, damage and
expense, including without limitation, reasonable counsel fees, which the
Indemnitees, or any of them, may suffer or incur by reason of any action, claim
or proceeding brought against the Indemnitees, or any one of them, arising out
of or relating in any way to the Exchange Agent’s service in such capacity,
unless such action, claim or proceeding is the result of the willful misconduct
or gross negligence of any of the Indemnitees.
ARTICLE
IX
MISCELLANEOUS
SECTION
9.01 EXPENSES.
Except as
contemplated by this Agreement, all costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated by
this Agreement shall be paid by the Party incurring such expenses.
SECTION
9.02 APPLICABLE
LAW
Except to
the extent that the law of the State of Delaware is mandatorily applicable to
the Merger (which shall be governed by the DGCL), this Agreement shall be
governed by the laws of the State of Nevada, without giving effect to
the principles of conflicts of laws thereof, as applied to agreements entered
into and to be performed in such state.
SECTION
9.03 NOTICES.
All
notices and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given or made as follows:
(a)
If sent by reputable overnight
air courier (such as Federal Express), 2 business days after being
sent;
(b)
If sent by facsimile
transmission, with a copy mailed on the same day in the manner provided in
clause (a) above, when transmitted and receipt is confirmed by the fax machine;
or
(c)
If otherwise actually personally delivered, when delivered.
All
notices and other communications under this Agreement shall be sent or delivered
as follows:
If to
Yili Oil, to:
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a
copy to (which shall not constitute notice):
|
▇▇▇▇▇▇
▇▇▇▇▇▇, Esq.
|
|
|
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
|
|
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
|
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
|
|
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
|
If to
ASAP and/or the Shareholders, to:
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Ext. 109
|
|
|
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
|
|
with
a copy to (which shall not constitute
notice):
|
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Esq.
|
|
|
The
▇▇▇▇ Law Group, PLLC
|
|
▇▇▇
▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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|
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Ext. 215
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||
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Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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||
Each
Party may change its address by written notice in accordance with this
Section.
SECTION
9.04 ENTIRE
AGREEMENT.
This
Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the Parties with respect to the
subject matter contained in this Agreement, and supersedes and cancels all prior
agreements, negotiations, correspondence, undertakings and communications of the
Parties, oral or written, respecting such subject matter including the Letter of
Intent made by Yili Oil and ASAP on May 16, 2007.
SECTION
9.05 ASSIGNMENT.
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned by any of the Parties (whether by operation of law
or otherwise) without the prior written consent of the other Parties; provided that in no event may
the right to indemnification provided by Article VIII hereto be assigned by any
of the Parties, with or without consent, except by operation of
law. Subject to the immediately foregoing sentence of this Section
9.05, this Agreement will be binding upon, inure to the benefit of and be
enforceable by, the Parties and their respective successors, assigns, heirs and
representatives.
SECTION
9.06 COUNTERPARTS.
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which shall be considered one and the same
agreement.
SECTION
9.07 NO
THIRD PARTY BENEFICIARIES.
Except as
expressly provided by this Agreement, nothing herein is intended to confer upon
any person or entity not a Party to this Agreement any rights or remedies under
or by reason of this Agreement.
SECTION
9.08 RULES OF
CONSTRUCTION.
The
Parties agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting such
agreement or document.
IN WITNESS WHEREOF, the
Parties have duly executed this Agreement as of the date first above
written.
ASAP
SHOW, INC.
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By:
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/s/ ▇▇▇▇▇
▇▇▇▇
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Name:
▇▇▇▇▇
▇▇▇▇
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||
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Title:
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Chief
Executive Officer
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CRI
ACQUISITION CORP.
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By:
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/s/ ▇▇▇▇▇
▇▇▇▇
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||
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Name:
▇▇▇▇▇
▇▇▇▇
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||
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Title:
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Chief
Executive Officer
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SINO-AMERICAN
PETROLEUM GROUP, INC.
By:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇
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Name:
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▇▇▇▇▇▇▇
▇▇▇▇
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Title:
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President
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INVESTORS:
/s/ Xiao
Hu_____________________________________
▇▇▇▇
▇▇
/s/ Xiaojin
Wang_________________________________
▇▇▇▇▇▇▇
▇▇▇▇
/s/s Huakang
Zhou________________________________
▇▇▇▇▇▇▇
▇▇▇▇
SCHEDULES:
Schedule
1.01 (a) Certificate of
Designation
Schedule
1.02 (b) Allocation of
Purchased Shares among Investors
Schedule
2.03 ASAP
Majority Shareholders
Schedule
5.01 (d) Operating
Subsidiary Agreement
2nd
signature page to Share Purchase and Merger Agreement