Exhibit 10.29
MEMBERSHIP INTEREST
PURCHASE AGREEMENT
by and among
Sense Holdings, Inc.
and its wholly owned subsidiary
China Chemical Group, Inc.
and
Shanghai Aohong Industry Co., Ltd.
and its members
▇▇. ▇▇▇▇▇ ▇▇
and
▇▇▇. ▇▇▇▇ ▇▇
MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (the "Agreement") is
effective as of the 27th day of June, 2007 (the "Effective Date") by and among
Sense Holdings, Inc., a Florida corporation ("SEHO") and its wholly owned
subsidiary China Chemical Group, Inc., a Florida corporation ("China Chemical"),
Shanghai Aohong Industry Co., Ltd, a Chinese company of limited liabilities
("Aohong") and ▇▇. ▇▇▇▇▇ ▇▇ ("Hu"), an individual, and ▇▇▇. ▇▇▇▇ ▇▇ ("Ye"), an
individual. SEHO and China Chemical are sometimes hereinafter collectively
referred to as the "Buyer" and Hu and Ye are sometimes hereinafter collectively
referred to as the "Members."
RECITALS:
WHEREAS, Aohong is organized under the laws of the People's Republic of
China and its business and operations which are the distribution and sale of
coolants and refrigerants are located in China.
WHEREAS, Aohong has two wholly-owned subsidiaries, Shanghai
Binghong Trading Co., Ltd. and Shanghai Wuling Environmental Material Co., Ltd.
WHEREAS, Aohong has total registered capital which is equivalent
to approximately $2,300,000 U.S. Dollars.
WHEREAS, Hu and Ye are the sole members of Aohong, holding membership
interests of 65.35% and 34.65%, respectively.
WHEREAS, the Buyer is desirous of purchasing membership interests in
Aohong for the consideration and pursuant to the terms and conditions hereof
which shall equal 54.9% of the total membership interests of Aohong (the
"Membership Interests").
WHEREAS, Aohong and the Members are desirous of selling the Buyer such
Membership Interests for the consideration and upon the terms and conditions
hereof.
WHEREAS, upon consummation of the transaction herein contemplated
pursuant to its terms, the registered capital of Aohong will be approximately
$5,100,000 U.S. Dollars.
WHEREAS, upon consummation of the transaction herein contemplated, the
Buyer will own 54.9% of Aohong and the Members will own the remaining 45.1%, and
their respective contributions to the registered capital of Aohong will be
proportionate to their membership interests.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
SECTION 1. PURCHASE CONSIDERATION AND TERMS
1.1 Purchase Consideration of Membership Shares. Subject to the terms
and conditions of this Agreement, at the Closing Aohong will sell the Membership
Interests to Buyer, and Buyer will purchase the Membership Interests from Aohong
free and clear of all liens, charges, claims, encumbrances of whatever nature.
At Closing, Aohong will deliver to Buyer the certificates representing the
Membership Interests which shall be issued in the name of China Chemical.
1.2 Purchase Price. As full and complete consideration for the purchase
of the Membership Interests Buyer will pay Aohong a total of Two Million Eight
Hundred Thousand Dollars ($2,800,000), payable in U.S. Dollars as follows:
o $800,000 shall be paid to Aohong on or before September 30, 2007; and o an
additional $400,000 shall be paid to Aohong on or before June 30, 2008; and o an
additional $600,000 shall be paid to Aohong on or before December 31, 2008; and
o the remaining $1,000,000 shall be paid to Aohong on or before June 27, 2009.
In addition, at Closing SEHO shall issue to Hu a certificate
representing Twelve Million Five Hundred Thousand (12,500,000) shares of SEHO's
common stock (the "Premium Shares"). These shares shall be valued at $0.095 per
share, the fair market value of SEHO's common stock on the Effective Date.
1.3 Closing. The Closing of this Agreement shall take place immediately
upon the execution hereof by all parties.
SECTION 2. REPRESENTATIONS AND WARRANTIES
2.1 Aohong hereby represents and warrants to Buyer as follows. For the
purposes of this Section, such representations and warranties are made by Aohong
on its behalf and on behalf of its wholly owned subsidiaries:
2.1.1 Organization and Good Standing; Due Authorization.
Aohong is a limited liability company, duly organized, validly existing, and in
good standing under the laws of its jurisdiction of organization, with full
power and authority to conduct its business as it is now being conducted, and to
own or use the properties and assets that it purports to own or use. Aohong is
duly qualified to do business as a foreign organization and is in good standing
under the laws of each state or other jurisdiction in which either the ownership
or use of the properties and assets owned or used by it, or the nature of the
activities conducted by it, requires such qualification. The Members have
previously delivered to Buyer true and correct copies of the organizational
documents of Aohong as currently in effect. Aohong has all requisite corporate
power and authority to execute and deliver this Agreement and each instrument to
be executed and delivered by Aohong in connection with the Closing, to perform
its obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and each
instrument required hereby to be executed and delivered by Aohong at the
Closing, the performance of its obligations hereunder and the consummation by
Aohong of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Aohong, and no other
corporate proceedings on the part of Aohong are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed by Aohong and this Agreement constitutes a
valid and binding agreement of Aohong, enforceable against Aohong in accordance
with its terms.
2.1.2 Compliance With Legal Requirements; Governmental
Authorizations. Aohong is, and at all times has been, in material compliance
with all governmental order, law, ordinance, principle of common law, regulation
or statute existing on the date of this Agreement (the "Legal Requirements")
that is or was applicable to it or to the conduct or operation of its business
and no event has occurred or circumstance exists that (with or without notice or
lapse of time) may constitute or result in a material violation by Aohong of, or
a failure on the part of Aohong to comply with, any Legal Requirement, or may
give rise to any obligation on the part of Aohong to undertake, or to bear all
or any portion of the cost of, any remedial action of any nature. Aohong has not
received any notice or other communication (whether oral or written) from any
governmental body or any other person regarding any actual, alleged, possible,
or potential violation of, or failure to comply with, any Legal Requirement, or
any actual, alleged, possible, or potential obligation on the part of Aohong to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature. All licenses and permits required by Aohong to operate its business
as it is presently conducted are in full force and effect. No event has occurred
or circumstance exists that may (with or without notice or lapse of time)
constitute or result directly or indirectly in a material violation of or a
material failure to comply with any term or requirement of any such governmental
authorization, or result directly or indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or any modification to, any such
governmental authorization.
2.1.3 Full Disclosure. No representation or warranty by Aohong
in this Agreement or in any document to be delivered by it pursuant hereto, and
no written statement, certificate or instrument furnished or to be furnished to
Buyer pursuant hereto or in connection with the negotiation, execution or
performance of this Agreement, contains or will contain any untrue statement of
a material fact or omits or will omit to state any fact necessary to make any
statement herein or therein not materially misleading or necessary to a complete
and correct presentation of all material aspects of the businesses of Aohong.
2.1.4 Valid Issuance. When issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, the Membership Interests will be duly and validly issued, fully paid,
and nonassessable, will be free of any lien, encumbrance or restrictions on
transfer other than restrictions on transfer under applicable state and federal
securities laws.
2.2 The Members hereby jointly and severally represent and
warrant to each of Buyer and Aohong as follows:
2.2.1 Power and Authority. The execution and delivery of this
Agreement and each instrument required hereby to be executed and delivered by
each Member at the Closing, the performance of each Member's obligations
hereunder and thereunder and the consummation by the Members of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of each Member, and no other proceedings on the part of the
Members are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed by each Member and this Agreement constitutes a valid and binding
agreement of each Member, enforceable against each Member in accordance with its
terms.
2.2.2 No Conflicts. The Members are the sole record and
beneficial owners of all existing membership interests in Aohong, all of which
are owned free and clear of all liens, and have not been sold, pledged, assigned
or otherwise transferred.
2.3 The Buyer hereby represents and warrants to Aohong and the
Members:
2.3.1 Organization and Good Standing; Due Authorization. Each
of SEHO and China Chemical is a corporation, duly organized, validly existing,
and in good standing under the laws of its jurisdiction of organization, with
full power and authority to conduct its business as it is now being conducted,
and to own or use the properties and assets that it purports to own or use. SEHO
is duly qualified to do business as a foreign organization and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties and assets owned or used by it, or the nature
of the activities conducted by it, requires such qualification. The Buyer has
all requisite corporate power and authority to execute and deliver this
Agreement and each instrument to be executed and delivered by Buyer in
connection with the Closing, to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and each instrument required hereby to
be executed and delivered by Buyer at the Closing, the performance of its
obligations hereunder and the consummation by Buyer of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Buyer, and no other corporate proceedings on the
part of Buyer are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed by Buyer and this Agreement constitutes a valid and binding agreement
of Buyer, enforceable against Buyer in accordance with its terms.
2.3.2 Full Disclosure. No representation or warranty by Buyer
in this Agreement or in any document to be delivered by it pursuant hereto, and
no written statement, certificate or instrument furnished or to be furnished to
Buyer pursuant hereto or in connection with the negotiation, execution or
performance of this Agreement, contains or will contain any untrue statement of
a material fact or omits or will omit to state any fact necessary to make any
statement herein or therein not materially misleading or necessary to a complete
and correct presentation of all material aspects of the businesses of Buyer.
2.3.3 Valid Issuance. When issued, sold and delivered in
accordance with the terms of this Agreement, the Premium Shares will be duly and
validly issued, fully paid, and nonassessable, will be free of any lien,
encumbrance or restrictions on transfer other than restrictions on transfer
under applicable state and federal securities laws.
SECTION 3. INVESTMENT REPRESENTATIONS. Hu represents and warrants to Buyer
as follows:
3.1. Hu is acquiring the Premium Shares hereunder for his own account
with the present intention of holding such securities for purposes of
investment, and he has no intention of distributing such Premium Shares or
selling, transferring or otherwise disposing of such Premium Shares in a public
distribution, in any of such instances, in violation of the federal securities
laws of the United States of America.
3.2 Hu understands that (a) the Premium Shares that he shall acquire
hereunder are "restricted securities," as defined in Rule 144 of the Securities
Act of 1933 (the "Securities Act"); (b) such Premium Shares have not been
registered under the Securities Act, and are being issued in reliance on
exemptions for private offerings contained in Section 4(2) of the Securities
Act; (c) the Premium Shares may not be distributed, re-offered or resold except
through a valid and effective registration statement or pursuant to a valid
exemption from the registration requirements under the Securities Act; and (d)
until such time as the Premium Shares become eligible for sale by him, either
pursuant to the registration of such Premium Shares under the Securities Act, or
pursuant to a valid exemption from such registration, the certificates
evidencing Hu's ownership of the Premium Shares shall contain the following
legend:
"The shares of common stock evidenced by this certificate have
not been registered under the Securities Act of 1933, as
amended (the "Act"). Such shares may not be sold, transferred,
pledged, hypothecated or otherwise disposed of unless they
have been so registered or the issuer of such shares shall
have received an opinion of counsel satisfactory to it to the
effect that registration thereof for purposes of transfer is
not required under the Act or the securities laws of any
state."
3.3. Hu is fully aware of the restrictions on sale, transferability and
assignment of the Premium Shares, and that he must bear the economic risk of
retaining ownership of such securities for an indefinite period of time. Hu is
aware that (a) the Premium Shares will not be registered under the Securities
Act; and (b) because the issuance of the Premium Shares has not been registered
under the Securities Act, an investment in the Premium Shares cannot be readily
liquidated if Hu desires to do so, but rather may be required to be held
indefinitely.
3.4 Hu is an "accredited investor," as such term is defined in
Regulation D promulgated under the Securities Act, or is otherwise experienced
in investments and business matters, has made investments of a speculative
nature and has such knowledge and experience in financial, tax and other
business matters as to enable him to evaluate the merits and risks of, and to
make an informed investment decision with respect to, this Agreement. Hu
understands that his acquisition of the Premium Shares is a speculative
investment, and that he is able to bear the risk of such investment for an
indefinite period, and can afford a complete loss thereof.
SECTION 4. REQUIRED APPROVALS. As promptly as practicable after the date of this
Agreement, Members will cause Aohong to make all filings required by the laws of
the People's Republic of China which necessary to be made in order to promptly
receive any and all necessary governmental approvals related to the transfer of
the Membership Interests to the Buyer as contemplated herein pursuant to the
terms of this Agreement.
SECTION 5. INDEMNIFICATION
5.1 Indemnification of the Buyer by the Members. Each of the Members
jointly and severally agrees to indemnify and hold harmless each of SEHO and
China Chemical, and each of their respective affiliates, directors and officers
and each person, if any, who controls each such company within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934 (the "Exchange Act"), from and against any and all losses, claims, damages
and liabilities (including, without limitation, legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), that arise out of, or are
based upon, any untrue statement or alleged untrue statement of a material fact
contained in this Agreement caused by any omission or alleged omission to state
herein a material fact required to be stated herein or necessary in order to
make the statements herein, in the light of the circumstances under which they
were made, not misleading.
5.2 Indemnification of the Members by the Buyer. The Buyer agrees to
indemnify and hold harmless each of the Members and their affiliates from and
against any and all losses, claims, damages and liabilities (including, without
limitation, legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted, as such fees and expenses are
incurred), that arise out of, or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in this Agreement caused by any
omission or alleged omission to state herein a material fact required to be
stated herein or necessary in order to make the statements herein, in the light
of the circumstances under which they were made, not misleading.
SECTION 6. MISCELLANEOUS
6.1 Waivers. The waiver of a breach of this Agreement or the failure of
any party hereto to exercise any right under this Agreement shall in no event
constitute waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
6.2 Amendment. This Agreement may be amended or modified only by an
instrument of equal formality signed by the parties or the duly authorized
representatives of the respective parties.
6.3 Assignment. This Agreement is not assignable except by
operation of law.
6.4 Notices. Until otherwise specified in writing, the mailing
addresses of both parties of this Agreement shall be as follows:
If to Buyer: Sense Holdings, Inc.
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
If to Aohong: Shanghai Aohong Industry Co., Ltd.
▇▇▇ ▇▇▇▇▇ ▇. ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇-▇▇-▇▇▇▇-▇▇▇▇ ▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇
If to Hu or Ye: ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industry Co., Ltd.
▇▇▇ ▇▇▇▇▇ ▇. ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇-▇▇-▇▇▇▇-▇▇▇▇ ▇ ▇▇▇
Any notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address that shall have been furnished in
writing to the addressor.
6.5 Governing Law. This Agreement shall be construed, and the legal
relations be the parties determined, in accordance with the laws of the State of
Florida, thereby precluding any choice of law rules which may direct the
applicable of the laws of any other jurisdiction. If it becomes necessary for
any party to institute legal action to enforce the terms and conditions of this
Agreement, and such legal action results in a final judgment in favor of such
party ("Prevailing Party"), then the party or parties against whom said final
judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred, including, but not limited to, all
attorney's fees, court costs and other expenses incurred throughout all
negotiations, trials or appeals undertaken in order to enforce the Prevailing
Party's rights hereunder. Any suit, action or proceeding with respect to this
Agreement shall be brought in the state or federal courts located in Palm Beach
County in the State of Florida. The parties hereto hereby accept the exclusive
jurisdiction and venue of those courts for the purpose of any such suit, action
or proceeding. The parties hereto hereby irrevocably waive, to the fullest
extent permitted by law, any objection that any of them may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any judgment entered by any court in respect
thereof brought in Palm Beach County Florida, and hereby further irrevocably
waive any claim that any suit, action or proceeding brought in Palm Beach
County, Florida has been brought in an inconvenient forum.
6.6 Entire Agreement. This Agreement and the collateral agreements
executed in connection with the consummation of the transaction contemplated
herein contain the entire agreement among the parties with respect to the
subject hereof and supersede all prior agreements, written or oral, with respect
thereto.
6.7 Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
6.8 Severability of Provisions. The invalidity or unenforceability of
any term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
6.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
SENSE HOLDINGS, INC.
By: _____________________________
▇▇▇▇ ▇▇▇▇▇ Perler, President and
Chief Executive Officer
CHINA CHEMICAL GROUP, INC.
By: _____________________________
▇▇▇▇ ▇▇▇▇▇ Perler, President
SHANGHAI AOHONG INDUSTRY CO., LTD.
By: _____________________________
▇▇▇▇▇ ▇▇, Member
By: _____________________________
▇▇▇▇ ▇▇, Member
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