SHARE EXCHANGE AGREEMENT SHENGTAI HOLDING, INC. FOR THE EXCHANGE OF CAPITAL STOCK OF WEST COAST CAR COMPANY DATED AS OF May 15, 2007
EXHIBIT
10.1
SHENGTAI
HOLDING, INC.
FOR
THE EXCHANGE OF
CAPITAL
STOCK
OF
WEST
COAST CAR COMPANY
DATED
AS OF May 15, 2007
1
This
SHARE EXCHANGE AGREEMENT, dated as of May 15, 2007 (the “Agreement”) by and
among SHENGTAI HOLDING,
INC.,
a
newly-formed New Jersey corporation (“SHI”), WEST COAST CAR COMPANY, a Delaware
corporation (“WCCC”), Tryant, LLC. (“Tryant”) and all of the shareholders of
SHI, whose names are set forth on Exhibit A attached hereto (“SHAREHOLDERS”).
WHEREAS,
SHAREHOLDERS own 100% of the issued and outstanding shares of Common Stock
of
SHI (the "SHI
Shares");
WHEREAS,
SHAREHOLDERS believe it is in their best interest to exchange the SHI Shares
for
shares of common stock of WCCC, par value $.001 per share (“WCCC
Shares”),
and
WCCC believes it is in its best interests to acquire the SHI Shares in exchange
for WCCC Shares, upon the terms and subject to the conditions set forth in
this
Agreement; and
WHEREAS,
it is the intention of the parties that: (i) WCCC shall acquire 100% of the
SHI
Shares in exchange solely for the amount of WCCC Shares set forth herein; (ii)
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
(iii) 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 SHARES FOR COMMON STOCK
Section
1.1 Agreement
to Exchange SHI Shares for WCCC Shares.
On the
Closing Date (as hereinafter defined) and upon the terms and subject to the
conditions set forth in this Agreement, SHAREHOLDERS shall sell, assign,
transfer, convey and deliver the SHI Shares (representing 100 SHI Shares or
100%
of the issued and outstanding SHI Shares), to WCCC, and WCCC shall accept the
SHI Shares from the SHAREHOLDERS in exchange for the issuance to the
SHAREHOLDERS of the number of WCCC Shares set forth opposite the names of the
SHAREHOLDERS on Exhibit A hereto.
Section
1.2 Capitalization.
On the
Closing Date, immediately before the transactions to be consummated pursuant
to
this Agreement, WCCC shall have authorized (a) 100,000,000 shares of Common
Stock, par value $.001 per share, of which 1,000,000 shares shall be issued
and
outstanding, all of which are duly authorized, validly issued and fully paid
and
the detailed shareholdings of which are more particularly set out in Exhibit
B
hereto; and (b) 5,000,000 shares of Preferred Stock, $.001 par value, of which
no shares are issued or outstanding.
2
Section
1.3 Closing.
The
closing of the exchange to be made pursuant to this Agreement (the "Closing")
shall take place at 10:00 a.m. E.D.T. on the second business day after 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 May __, 2007(the "Closing Date"), at the offices
of
Guzov Ofsink, LLC, 000 Xxxxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000. At the Closing, SHAREHOLDERS shall (i) deliver to
WCCC
the stock certificates representing 100% of the SHI Shares, duly endorsed in
blank for transfer or accompanied by appropriate stock powers duly executed
in
blank and (ii) pay or cause to be paid to [Names of Payees] the sum of $500,000
(Five Hundred Thousand Dollars Only). In full consideration and exchange for
the
SHI Shares and payment, WCCC shall issue and exchange with SHAREHOLDERS
9,125,000 WCCC Shares representing approximately 91,250 WCCC Shares for each
SHI
Share exchanged.
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 WCCC
Each
of
WCCC and Tryant hereby, jointly and severally, represents, warrants and agrees
as follows:
Section
2.1 Corporate
Organization
a. WCCC
is a
corporation duly organized, validly existing and in good standing under the
laws
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 in good standing in each jurisdiction in which the
nature of the business conducted by WCCC 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 WCCC (a "WCCC
Material Adverse Effect");
b. Copies
of
the Articles of Incorporation and By-laws of WCCC as well as the Certificates
of
Designation of the Preferred Stock, with all amendments thereto to the date
hereof, have been furnished to SHI and the SHAREHOLDERS, and such copies are
accurate and complete as of the date hereof. The minute books of WCCC are
current as required by law, contain the minutes of all meetings of the Board
of
Directors and shareholders of WCCC from its date of incorporation to the date
of
this Agreement, and adequately reflect all material actions taken by the Board
of Directors and shareholders of WCCC.
3
Section
2.2 Capitalization
of WCCC.
The
authorized capital stock of WCCC consists of (a) 100,000,000 shares of Common
Stock, par value $.001 per share, of which 1,000,000 shares are issued and
outstanding, all of which are duly authorized, validly issued and fully paid
and
the detailed shareholdings of which are more particularly set out in Exhibit
B
hereto; and (b) 5,000,000 shares of Preferred Stock, $.001 par value, of which
no shares are issued or outstanding. The parties agree that they have been
informed of the issuances of these WCCC Shares, and that all such issuances
of
WCCC Shares pursuant to this Agreement will be in accordance with the provisions
of this Agreement. All of the WCCC Shares to be issued 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. As of the date of this Agreement
there are and as of the Closing Date, there will be, 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 any un-issued or treasury shares of capital stock of WCCC.
Section
2.3 Subsidiaries
and Equity Investments.
WCCC
has no subsidiaries or equity interest in any corporation, partnership or joint
venture.
Section
2.4 Authorization
and Validity of Agreements.
WCCC
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 SHI and the SHI
Shareholders and the performance of their obligations herein, will constitute,
a
legal, valid and binding obligation of WCCC. The execution and delivery of
this
Agreement by WCCC and the consummation by WCCC of the transactions contemplated
hereby have been duly authorized by all necessary corporate action of WCCC,
and
no other corporate proceedings on the part of WCCC are necessary to authorize
this Agreement or to consummate the transactions contemplated
hereby.
Section 2.5 No
Conflict or Violation.
The
execution, delivery and performance of this Agreement by WCCC do not and will
not violate or conflict with any provision of its Articles of Incorporation
or
By-laws, 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 WCCC is a party or by which it is bound or to which
any
of their respective 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 WCCC, nor will it result in the
cancellation, modification, revocation or suspension of any of the licenses,
franchises, permits to which WCCC 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
WCCC
or the performance by WCCC of its obligations hereunder.
4
Section
2.7 Absence
of Certain Changes or Events.
Since
its inception:
a. WCCC
has
operated in the ordinary course of business consistent with past practice and
there has not been any material adverse change in the assets, properties,
business, operations, prospects, net income or condition, financial or otherwise
of WCCC. As of the date of this Agreement, WCCC 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
WCCC;
b. there
has
not been any declaration, setting aside or payment of dividends or distributions
with respect to shares of capital stock of WCCC or any redemption, purchase
or
other acquisition of any capital stock of WCCC or any other of WCCC’s
securities; and
c. there
has
not been an increase in the compensation payable or to become payable to any
director or officer of WCCC.
Section
2.8 Disclosure.
This
Agreement and any certificate attached hereto or delivered in accordance with
the terms hereby by or on behalf of WCCC 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
the Company or any subsidiary that may affect the validity of this Agreement
or
the right of WCCC to enter into this Agreement or to consummate the transactions
contemplated hereby.
Section
2.10 Securities
Laws.
WCCC
has complied in all respects with applicable federal and state securities laws,
rules and regulations, including the Sarbanes Oxley Act of 2002, as such laws,
rules and regulations apply to WCCC and its securities; and (b) all shares
of
capital stock of the Company have been issued in accordance with applicable
federal and state securities laws, rules and regulations. There are no stop
orders in effect with respect to any of the Company’s securities.
Section
2.11 Tax
Returns, Payments and Elections.
WCCC
has timely filed all tax returns, statements, reports, declarations and other
forms and documents and has, to date, paid all taxes due.
Section
2.12 ’34
Act Reports.
None of
WCCC’s filings with the SEC, contains any untrue statement of a material face or
omits to state a material fact necessary to make the statements therein not
misleading, in light of the circumstances in which they were made.
5
Section
2.13 Market
Makers.
WCCC
has at least four (4) market makers in its Common Stock.
Section
2.14 Survival.
Each of
the representations and warranties set forth in this Article II shall be deemed
represented and made by WCCC 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 SHI AND SHAREHOLDERS
SHI
and
each of the SHAREHOLDERS, severally, represent, warrant and agree as
follows:
Section
3.1 Corporate
Organization.
a. SHI
is a
newly-formed corporation with no prior business activities. It is duly
organized, validly existing and in good standing under the laws of the state
of
New Jersey 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 SHI 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 SHI (a "SHI
Material Adverse Effect").
As of
the date of this Agreement, SHI owns all of the issued and outstanding equity
or
voting interests in Weifang Shengtai Pharmaceutical Co., Ltd (“Shengtai”).
Shengtai 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 Shengtai 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 Shengtai (a
"Shengtai
Material Adverse Effect")
b. Copies
of
the Certificate of Incorporation and By-laws of SHI and Shengtai, with all
amendments thereto to the date hereof, have been furnished to WCCC, and such
copies are accurate and complete as of the date hereof. The minute books of
SHI
are current as required by law, contain the minutes of all meetings of the
Board
of Directors and shareholders of SHI, and committees of the Board of Directors
of SHI from the date of incorporation to the date of this Agreement, and
adequately reflect all material actions taken by the Board of Directors,
shareholders and committees of the Board of Directors of SHI.
6
Section
3.2 Capitalization
of SHI; Title to the SHI Shares.
On the
Closing Date, immediately before the transactions to be consummated pursuant
to
this Agreement, SHI shall have authorized One Hundred Thousand (100,000) SHI
Shares, of which 100 SHI Shares will be issued and outstanding. The SHI Shares
are the sole outstanding shares of capital stock of SHI, and 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 SHI. As of the date hereof
and
on the Closing Date, each SHAREHOLDER owns and will own the SHI Shares free
and
clear of any liens, claims or encumbrances and has and will have the right
to
transfer the SHI Shares without consent of any other person or entity.
Section
3.3 Subsidiaries
and Equity Investments; Assets.
As of
the date hereof and on the Closing Date, SHI owns and will own all of the equity
or voting interests in Shengtai. SHI does not and will not directly or
indirectly, own any other shares of capital stock or any other equity interest
in any entity or any right to acquire any shares or other equity interest in
any
entity and SHI does not and will not have any assets or liabilities. As of
the
date hereof and on Closing Date, Shengtai does not and will not directly or
indirectly, own any shares of capital stock or any other equity interest in
any
entity or any right to acquire any shares or other equity interest in any
entity. As of the date hereof and on the Closing Date, there are and will be
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 in
Shengtai.
Section
3.4 Authorization
and Validity of Agreements.
SHI 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 SHI 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 SHI are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. The SHAREHOLDERS have approved this Agreement
on behalf of SHI and no other stockholder approvals are required to consummate
the transactions contemplated hereby. Each SHAREHOLDER who is a natural person
is over the age of 21, is competent to execute this Agreement, and has the
power
to execute and perform this Agreement. The execution and delivery of this
Agreement by each SHAREHOLDER which is not a natural person (“Entity
Shareholder”) and the consummation of the transactions contemplated hereby by
each Entity Shareholder have been duly authorized by all necessary action by
the
Entity Shareholder and no other proceedings on the part of SHI or any
SHAREHOLDER are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.
Section
3.5 No
Conflict or Violation.
The
execution, delivery and performance of this Agreement by SHI or any SHAREHOLDER
does not and will not violate or conflict with any provision of the constituent
documents of SHI, 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 SHI or any SHAREHOLDER is a party or by which it is
bound
or to which any of its respective 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 SHI or any SHAREHOLDER,
nor
result in the cancellation, modification, revocation or suspension of any of
the
licenses, franchises, permits to which SHI or any SHAREHOLDER is
bound.
7
Section
3.6 Investment
Representations.
(a) The
WCCC Shares will be acquired hereunder solely for the account of the
SHAREHOLDERS, for investment, and not with a view to the resale or distribution
thereof. Each SHAREHOLDER understands and is able to bear any economic risks
associated with such SHAREHOLDER’S investment in the WCCC Shares. Each
SHAREHOLDER has had full access to all the information such SHAREHOLDER
considers necessary or appropriate to make an informed investment decision
with
respect to the WCCC Shares to be acquired under this Agreement. Each SHAREHOLDER
further has had an opportunity to ask questions and receive answers from WCCC’s
directors regarding WCCC and to obtain additional information (to the extent
WCCC’s directors possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished
to
such SHAREHOLDER or to which such SHAREHOLDER had access. Each SHAREHOLDER
is at
the time of the offer and execution of this Agreement, domiciled and resident
outside the United States (a “PRC
Shareholder”)
and is
an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D
promulgated by the Securities and Exchange Commission under the Securities
Act).
(b)
No
PRC Shareholder, nor any affiliate of any PRC Shareholder, nor any person acting
on behalf of any PRC Shareholder or any behalf of any such affiliate, has
engaged or will engage in any activity undertaken for the purpose of, or that
reasonably could be expected to have the effect of, conditioning the markets
in
the United States for the WCCC Shares, including, but not limited to, effecting
any sale or short sale of securities through any PRC Shareholder or any of
affiliate of any PRC Shareholder prior to the expiration of any restricted
period contained in Regulation S promulgated under the Securities Act (any
such
activity being defined herein as a “Directed Selling Effort”). To the best
knowledge of each of the PRC Shareholders, this Agreement and the transactions
contemplated herein are not part of a plan or scheme to evade the registration
provisions of the Securities Act, and the WCCC Shares are being acquired for
investment purposes by the PRC Shareholders. Each PRC Shareholder agrees that
all offers and sales of WCCC Shares from the date hereof and through the
expiration of the any restricted period set forth in Rule 903 of Regulation
S
(as the same may be amended from time to time hereafter) shall not be made
to
U.S. Persons or for the account or benefit of U.S. Persons and shall otherwise
be made in compliance with the provisions of Regulation S and any other
applicable provisions of the Securities Act. Neither any PRC Shareholder nor
the
representatives of any PRC Shareholder have conducted any Directed Selling
Effort as that term is used and defined in Rule 902 of Regulation S and no
PRC
Shareholder nor any representative of any PRC Shareholder will engage in any
such Directed Selling Effort within the United States through the expiration
of
any restricted period set forth in Rule 903 of Regulation S.
8
Section
3.7 Brokers’
Fees. No
SHAREHOLDER has any 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
3.8 Disclosure.
This
Agreement, the schedules hereto and any certificate attached hereto or delivered
in accordance with the terms hereby by or on behalf of SHI or the 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
3.9 Survival.
Each of
the representations and warranties set forth in this Article III shall be deemed
represented and made by SHI and the 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
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, WCCC shall conduct
its business solely in the ordinary course consistent with past practices and,
in a manner consistent with all representations, warranties or covenants of
WCCC, and without the prior written consent of SHI will not, 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 Articles of Incorporation or By-laws; 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;
|
| 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
|
9
|
B.
|
issue
any securities convertible or exchangeable for debt or equity securities
of WCCC;
|
| 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 an WCCC 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;
|
10
| 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;
|
| xvi. |
commit
itself to do any of the foregoing.
|
b. From
and
after the date of this Agreement, SHI will and SHI will cause Shengtai to:
| 1. |
continue
to maintain, in all material respects, its properties in accordance
with
present practices in a condition suitable for its current
use;
|
| 2. |
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;
|
| 3. |
continue
to conduct its business in the ordinary course consistent with past
practices;
|
| 4. |
keep
its books of account, records and files in the ordinary course and
in
accordance with existing practices; and
|
5. continue
to maintain existing business relationships with suppliers.
c. From
and
after the date of this Agreement, SHI will not and will ensure that Shengtai
does not:
| xvii. |
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;
|
| xviii. |
make
any change in its Business License, Bylaws or other governing documents;
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;
|
11
| xix. |
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
|
|
B.
|
issue
any securities convertible or exchangeable for debt or equity securities
of SHI or Shengtai;
|
| xx. |
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;
|
| xxi. |
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 an SHI Material Adverse Effect;
|
| xxii. |
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;
|
| xxiii. |
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;
|
| xxiv. |
make
or commit to make any material capital
expenditures;
|
| xxv. |
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;
|
12
| xxvi. |
guarantee
any indebtedness for borrowed money or any other obligation of any
other
person;
|
| xxvii. |
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;
|
| xxviii. |
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;
|
| xxix. |
make
any material loan, advance or capital contribution to or investment
in any
person;
|
| xxx. |
make
any material change in any method of accounting or accounting principle,
method, estimate or practice;
|
| xxxi. |
settle,
release or forgive any claim or litigation or waive any
right;
|
| xxxii. |
commit
itself to do any of the foregoing.
|
Section
4.2 Access
to Properties and Records.
SHI
shall afford WCCC’s accountants, counsel and authorized representatives, and
WCCC shall afford to SHI'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.
13
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:
| i. |
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
|
| ii. |
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 WCCC,
SHI
nor Shengtai shall issue any additional shares of its capital stock.
Section
4.7 Notwithstanding
anything to the contrary contained herein, it is herewith understood and agreed
that both SHI and WCCC may enter into and conclude agreements and/or financing
transactions as same relate to and/or are contemplated by any separate written
agreements either: (a) annexed hereto as exhibits; or (b) entered into by WCCC
with SHI executed by both parties subsequent to the date hereof. These
Agreements shall become, immediately upon execution, part of this Agreement
and
subject to all warranties, representations and conditions contained
herein.
14
ARTICLE
V
CONDITIONS
TO OBLIGATIONS OF SHI AND SHAREHOLDERS
The
obligations of SHI and the 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 SHI and the SHAREHOLDERS in their sole discretion:
Section
5.1 Representations
and Warranties of WCCC and Tryant.
All
representations and warranties made by WCCC and Tryant in this Agreement shall
be true and correct on and as of the Closing Date as if again made by WCCC
as of
such date.
Section
5.2 Agreements
and Covenants.
WCCC
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.
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
WCCC 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.
SHI
shall have received such other certificates, instruments and documents in
confirmation of the representations and warranties of WCCC and Tryant or in
furtherance of the transactions contemplated by this Agreement as SHI or its
counsel may reasonably request.
Section
5.6 Additional
Funding.
SHI
shall have obtained written commitments to invest a minimum of $15,000,000
in
the aggregate from third party investor(s) to further the business objectives
of
Shengtai, which commitment may close either before or after Closing
Date.
Section
5.7 WCCC
Shareholding.
Chinamerica Fund, LP and/or its designees shall have consummated the sale and
purchase of and be the beneficial shareholder of 600,000 shares of common stock
of WCCC.
15
ARTICLE
VI
CONDITIONS
TO OBLIGATIONS OF WCCC
The
obligations of WCCC 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 WCCC in its
sole
discretion:
Section
6.1 Representations
and Warranties of SHI and SHAREHOLDERS.
All
representations and warranties made by SHI and SHAREHOLDERS in this Agreement
shall be true and correct on and as of the Closing Date as if again made by
SHI
on and as of such date.
Section
6.2 Agreements
and Covenants.
SHI and
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
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.
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 SHI or Shengtai, 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.
WCCC
shall have received such other certificates, instruments and documents in
confirmation of the representations and warranties of SHI or in furtherance
of
the transactions contemplated by this Agreement as WCCC or its counsel may
reasonably request.
16
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 SHAREHOLDERS, SHI, Tryant and WCCC;
b. By
WCCC,
upon a material breach of any representation, warranty, covenant or agreement
on
the part of SHI or the SHAREHOLDERS set forth in this Agreement, or if any
representation or warranty of SHI or the SHAREHOLDERS shall become untrue,
in
either case such that any of the conditions set forth in Article VI hereof
would
not be satisfied (a "SHI
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
SHI,
upon a material breach of any representation, warranty, covenant or agreement
on
the part of WCCC set forth in this Agreement, or, if any representation or
warranty of WCCC shall become untrue, in either case such that any of the
conditions set forth in Article V hereof would not be satisfied (a "WCCC
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;
d. By
either
WCCC or SHI, if the Closing shall not have consummated before ninety (90) days
after the date hereof; provided, however, that this Agreement may be extended
by
written notice of either SHI or WCCC, if the Closing shall not have been
consummated as a result of WCCC or SHI 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
either
SHI or WCCC 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.
17
Section
7.2 Procedure
Upon Termination.
In the
event of termination and abandonment of this Agreement by SHI or WCCC 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.
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 2.14, 3.9 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. Notwithstanding the foregoing, each party’s
liability to the other for breach of any representation, warranty or covenant
shall not exceed, in the aggregate, $500,000.
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.
18
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 SHI
or the SHAREHOLDERS, to:
Shengtai
Holding Inc.
00
Xxx
Xxxxxxxxx Xxxxx, Xxxx 0,
Xxxx
Xxxxxxx, XX 00000
Attn:
Mr.
Qingtai Liu/ Mr. Chenghai Du
with
a
copy to:
Guzov
Ofsink, LLC
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx, Esq.
Fax:
000-000-0000
If
to
WCCC, to:
0000
Xxxx
0000 Xxxxx
Xxxxx
Xxxxx, XX 00000
Attn:
Xxxxxx
X.
Xxxxxxxx
Fax: (000)
000-0000
with
a
copy to:
Xxxxxx
Xxxxxxxxx, Esquire
0000
Xxxx
Xxxxxx Xxxxxx
Xxxxx,
XX
00000
Fax: (000)
000-0000
19
If
to
Tryant, to:
0000
Xxxx
0000 Xxxxx
Xxxxx
Xxxxx, XX 00000
Attn:
Xxxxxxxxx
X. Ferries
Fax:
(000)
000-0000
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.
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.
20
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.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
|
SHENGTAI
HOLDING, INC.
|
||||
| By: | /s/ Qingtai Liu | |||
|
Qingtai
Liu
|
||||
| Title: |
Chief
Executive Officer
|
|||
|
WEST
COAST CAR COMPANY
|
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
|
Title:
|
Acting President |
|||
21
|
SHAREHOLDERS:
|
|||
| /s/ Qingtai Liu | |||
|
Qingtai Liu |
| /s/ Chenghai Du | |||
|
Chenghai
Du
|
| TRYANT, LLC | ||||
| By: | /s/ Xxxx Xxxxxx | |||
|
|
||||
| Title: | ||||
|
|
||||
22
EXHIBIT
A
|
Name
|
Number
of SHI Shares
|
Number
of WCCC Shares
|
||
|
of
SHAREHOLDER
|
Being
Exchanged
|
to
be Received
|
||
|
Qingtai
Liu
|
90
|
8,212,570
|
||
|
Chenghai
Du
|
10
|
912,530
|
23
Exhibit
B
|
WCCC
Shareholders
|
Number
of Shares of
Common
Stock
|
|||
|
Tryant
LLC and remaining shareholders
|
400,000
|
|||
|
Chinamerica
Fund LP
|
600,000
|
|||
24
