SHARE EXCHANGE AGREEMENT by and among Aurum Explorations, Inc. a Nevada corporation and Greatmat Holdings Limited a British Virgin Islands company and Chris Yun Sang SO and Yau-sing TANG Dated as of October 30, 2010
Exhibit
2.1
EXCHANGE
AGREEMENT
by
and among
a Nevada
corporation
and
Greatmat
Holdings Limited
a British
Virgin Islands company
and
Xxxxx Xxx Sang SO
and
Yau-sing
TANG
Dated as
of October 30, 2010
SHARE
EXCHANGE AGREEMENT
THIS SHARE EXCHANGE
AGREEMENT (this “Agreement”) is
entered into as of this 30th day of October, 2010, by and among Aurum
Explorations, Inc., a Nevada corporation (“Aurum”), and Greatmat
Holdings Limited, a British Virgin Islands company (“Greatmat”), Xxxxx Xxx
Sang SO, the sole shareholder of Greatmat (the “Greatmat
Shareholder”), and Yau-sing TANG, the indirect beneficial
majority shareholder of Aurum (the “Aurum Majority
Shareholder”), upon the following premises:
Premises
WHEREAS, Aurum is a publicly
traded corporation quoted on the inter-dealer electronic quotation and trading
system maintained by Pink OTC Markets Inc. (the “Pink
Sheets”);
WHEREAS, Aurum agrees to
acquire 100% of the issued and outstanding shares of Greatmat from the Greatmat
Shareholder in exchange for the issuance of certain shares of Aurum (the “Exchange”) and the
Greatmat Shareholder agrees to exchange his shares of Greatmat on the terms
described herein. On the Closing Date (as defined in Section 4.03), Greatmat
will become a wholly-owned subsidiary of Aurum;
WHEREAS, the boards of
directors of Aurum and Greatmat have determined, subject to the terms and
conditions set forth in this Agreement, that the transaction contemplated hereby
is desirable and in the best interests of their respective
stockholders. This Agreement is being entered into for the purpose of
setting forth the terms and conditions of the proposed acquisition.
Agreement
NOW THEREFORE, on the stated
premises and for and in consideration of the mutual covenants and agreements
hereinafter set forth and the mutual benefits to the parties to be derived
herefrom, and intending to be legally bound hereby, it is hereby agreed as
follows:
ARTICLE
I
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF GREATMAT
As an
inducement to, and to obtain the reliance of Aurum, except as set forth in the
Greatmat Schedules (as hereinafter defined), Greatmat represents and warrants as
of the Closing Date, as defined below, as follows:
Section
1.01
Incorporation.
Greatmat
is a company duly incorporated, validly existing, and in good standing under the
laws of the British Virgin Islands and has the corporate power and is duly
authorized under all applicable laws, regulations, ordinances, and orders of
public authorities to carry on its business in all material respects as it is
now being conducted. Included in the Greatmat Schedules are complete
and correct copies of the memorandum of association and articles of association
of Greatmat as in effect on the date hereof, as well as a true and correct copy
of the certificate of incorporation of Greatmat. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of Greatmat’s memorandum of
association or articles of association. Greatmat has taken all
actions required by law, its memorandum of association and articles of
association, or otherwise to authorize the execution and delivery of this
Agreement. Greatmat has full power, authority, and legal capacity and
has taken all action required by law, its memorandum of association and articles
of association, and otherwise to consummate the transactions herein
contemplated.
1
Section
1.02
Authorized
Shares. The
number of shares which Greatmat is authorized to issue consists of 50,000 shares
of a single class, par value $1.00 per share. Greatmat has one (1)
share currently issued and outstanding. The issued and outstanding
share is validly issued, fully paid, and non-assessable and not issued in
violation of the preemptive or other rights of any person.
Section
1.03
Subsidiaries and Predecessor
Corporations. Except
as set forth in the Greatmat Schedule 1.03,
Greatmat does not have any subsidiaries, and does not own, beneficially or of
record, any shares of or control any other corporation. For purposes
hereinafter, the term “Greatmat” also includes those subsidiaries set forth on
the Greatmat Schedules.
Section
1.04
Financial
Statements.
(a) Included
in the Greatmat Schedule 1.04 are (i)
the consolidated audited balance sheets of Greatmat as of December 31, 2008 and
December 31, 2009 and the related consolidated audited statements of income,
stockholders’ equity and cash flows for the fiscal years ended December 31, 2008
and December 31, 2009 together with the notes to such statements and the opinion
of Xxxxxx Xxxx & Co., independent registered public accountants, and (ii)
the unaudited consolidated financial statements of Greatmat for the six-month
periods ended June 30, 2010 and 2009. All such financial statements have been
prepared in accordance with U.S. generally accepted accounting principles
consistently applied throughout the periods involved. The Greatmat balance
sheets are true and accurate and present fairly as of their respective dates the
financial condition of Greatmat. As of the date of such balance
sheets, except as and to the extent reflected or reserved against therein,
Greatmat had no liabilities or obligations (absolute or contingent) which should
be reflected in the balance sheets or the notes thereto prepared in accordance
with U.S. generally accepted accounting principles, and all assets reflected
therein are properly reported and present fairly the value of the assets of
Greatmat, in accordance with U.S. generally accepted accounting principles. The
statements of income, stockholders’ equity and cash flows reflect fairly the
information required to be set forth therein by U.S. generally accepted
accounting principles.
(b) Greatmat
has duly and punctually paid all governmental fees and taxation which it has
become liable to pay and has duly allowed for all taxation reasonably
foreseeable and is under no liability to pay any penalty or interest in
connection with any claim for governmental fees or taxation and Greatmat has
made any and all proper declarations and returns for taxation purposes and all
information contained in such declarations and returns is true and complete and
full provision or reserves have been made in its financial statements for all
governmental fees and taxation.
(c) The books
and records, financial and otherwise, of Greatmat are in all material aspects
complete and correct and have been maintained in accordance with U.S. generally
accepted accounting principles consistently applied throughout the periods
involved.
(d) All of
Greatmat’s assets are reflected on its financial statements, and, except as set
forth in the Greatmat Schedules or the financial statements of Greatmat or the
notes thereto, Greatmat has no material liabilities, direct or indirect, matured
or unmatured, contingent or otherwise.
Section
1.05
Information. The
information concerning Greatmat set forth in this Agreement and in the Greatmat
Schedules is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. In addition, Greatmat has fully
disclosed in writing to Aurum (through this Agreement, the Greatmat Schedules or
drafts of the Current Report on Form 8-K previously provided to and to be filed
by Aurum in connection with the Exchange) all information relating to matters
involving Greatmat or its assets or its present or past operations or activities
which (i) indicated or may indicate, in the aggregate, the existence of a
greater than $500,000 liability, (ii) have led or may reasonably foreseeably
lead to a competitive disadvantage on the part of Greatmat or (iii) either alone
or in aggregation with other information covered by this Section, otherwise have
led or may reasonably foreseeably lead to a material adverse effect on Greatmat,
its assets, or its operations or activities as presently conducted or as
contemplated to be conducted after the Closing Date (a “Material Adverse
Effect”), including, but not limited to, information relating to governmental,
employee, environmental, litigation and securities matters and transactions with
affiliates.
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Section
1.06
Options or
Warrants. There
are no existing options, warrants, calls, or commitments of any character
relating to the authorized and unissued stock of Greatmat.
Section
1.07
Absence of Certain Changes
or Events. Since
June 30, 2010:
(a) There has
not been any material adverse change in the business, operations, properties,
assets, or condition (financial or otherwise) of Greatmat;
(b) Greatmat
has not (i) amended its memorandum of association or articles of association;
(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 of its shares; (iii) made any
material change in its method of management, operation or accounting, (iv)
entered into any other material transaction other than sales in the ordinary
course of its business; or (v) made any increase in or adoption of any profit
sharing, bonus, deferred compensation, insurance, pension, retirement, or other
employee benefit plan, payment, or arrangement made to, for, or with its
officers, directors, or employees; and
(c) Greatmat
has not (i) granted or agreed to grant any options, warrants or other rights for
its stocks, bonds or other corporate securities calling for the issuance
thereof, (ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) except
as disclosed herein and except liabilities incurred in the ordinary course of
business; (iii) sold or transferred, or agreed to sell or transfer, any of its
assets, properties, or rights or canceled, or agreed to cancel, any debts or
claims; or (iv) issued, delivered, or agreed to issue or deliver any stock,
bonds or other corporate securities including debentures (whether authorized and
unissued or held as treasury stock) except in connection with this
Agreement.
Section
1.08
Litigation and
Proceedings. Except
as disclosed on Schedule 1.08, there
are no actions, suits, proceedings, or investigations pending or, to the
knowledge of Greatmat after reasonable investigation, threatened, by or against
Greatmat or affecting Greatmat or its properties, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign,
or before any arbitrator of any kind. Greatmat does not have any
knowledge of any material default on its part with respect to any judgment,
order, injunction, decree, award, rule, or regulation of any court, arbitrator,
or governmental agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a
default.
Section
1.09
Contracts.
(a) All
“material” contracts, agreements, franchises, license agreements, debt
instruments or other commitments to which Greatmat is a party or by
which it or any of its assets, products, technology, or properties are bound
other than those incurred in the ordinary course of business are set forth on
the Greatmat Schedules. A “material” contract, agreement, franchise,
license agreement, debt instrument or commitment is one which (i) will remain in
effect for more than six (6) months after the date of this Agreement or (ii)
involves aggregate obligations of at least twenty thousand dollars
($20,000);
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(b) All
contracts, agreements, franchises, license agreements, and other commitments to
which Greatmat is a party or by which its properties are bound and which are
material to the operations of Greatmat taken as a whole are valid and
enforceable by Greatmat in all respects, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors generally;
and
(c) Except as
included or described in the Greatmat Schedule 1.09 or
reflected in the most recent Greatmat balance sheet, Greatmat is not a party to
any oral or written (i) contract for the employment of any officer or employee;
(ii) profit sharing, bonus, deferred compensation, stock option, severance pay,
pension benefit or retirement plan, (iii) agreement, contract, or indenture
relating to the borrowing of money, (iv) guaranty of any obligation; (vi)
collective bargaining agreement; or (vii) agreement with any present or former
officer or director of Greatmat.
Section
1.10
No Conflict With Other
Instruments. Except
as included or described in the Greatmat Schedule 1.10, the
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, constitute a default under, or terminate, accelerate or modify the
terms of any indenture, mortgage, deed of trust, or other material agreement, or
instrument to which Greatmat is a party or to which any of its assets,
properties or operations are subject.
Section
1.11
Compliance With Laws and
Regulations. To the
best of its knowledge, Greatmat has complied with all applicable statutes and
regulations of any federal, state, or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets, or condition of
Greatmat or except to the extent that noncompliance would not result in the
occurrence of any material liability for Greatmat. This compliance
includes, but is not limited to, the filing of all reports to date with federal
and state securities authorities.
Section
1.12
Approval of
Agreement. The
Board of Directors of Greatmat has authorized the execution and delivery of this
Agreement by Greatmat and has approved this Agreement and the transactions
contemplated hereby, and will recommend to the Greatmat Shareholder that the
Exchange be accepted.
Section
1.13
Greatmat
Schedules. Greatmat
has delivered to Aurum the following schedules, which are collectively referred
to as the “Greatmat Schedules” and which consist of separate schedules dated as
of the date of execution of this Agreement, all certified by the chief executive
officer of Greatmat as complete, true, and correct as of the date of this
Agreement in all material respects:
(a) a
schedule containing complete and correct copies of the memorandum of association
and articles of association of Greatmat in effect as of the date of this
Agreement;
(b) listing
the subsidiaries of Greatmat required to be provided pursuant to Section 1.03
hereof;
(c) a
schedule containing the financial statements of Greatmat identified in paragraph
1.04(a);
(d) a
schedule setting forth a the contracts identified pursuant to Section 1.09
hereof;
(e) a
schedule of any exceptions to the representations made herein; and
(f) a
schedule containing the other information requested herein.
4
Greatmat
shall cause the Greatmat Schedules and the instruments and data delivered to
Aurum hereunder to be promptly updated after the date hereof up to and including
the Closing Date.
Section
1.14
Valid
Obligation. This
Agreement and all agreements and other documents executed by Greatmat in
connection herewith constitute the valid and binding obligation of Greatmat,
enforceable in accordance with its or their terms, except as may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
Section
1.15 Intellectual
Property. Greatmat owns, possesses, or can acquire on reasonable terms
all Intellectual Property necessary for the conduct of its business as now
conducted, except as such failure to own, possess, or acquire such rights would
not result in a Material Adverse Effect. Furthermore, (A) to the
knowledge of Greatmat, there is no infringement, misappropriation or
violation by third parties of any such Intellectual Property, except
as such infringement, misappropriation or violation would not result in a
Material Adverse Effect; (B) there is no pending or, to the knowledge of
Greatmat, threatened, action, suit, proceeding or claim by others challenging
Greatmat’s rights in or to any such Intellectual Property, and Greatmat is not
aware of any facts which would form a reasonable basis for any such claim; (C)
the Intellectual Property owned by Greatmat, and the Intellectual Property
licensed to Greatmat, has not been adjudged invalid or unenforceable, in whole
or in part, and there is no pending or threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such Intellectual
Property, and Greatmat is not aware of any facts which would form a reasonable
basis for any such claim; (D) there is no pending or threatened action, suit,
proceeding or claim by others that Greatmat infringes, misappropriates or
otherwise violates any Intellectual Property or other proprietary rights of
others, Greatmat has not received any written notice of such claim and Greatmat
is not aware of any other fact which would form a reasonable basis for any such
claim; and (E) to the knowledge of Greatmat, no employee of Greatmat is in or
has ever been in violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant
to or with a former employer where the basis of such violation relates to such
employee’s employment with Greatmat or actions undertaken by the employee while
employed with Greatmat, except as such violation would not result in a Material
Adverse Effect. “Intellectual
Property” shall mean all patents, patent applications, trade and service
marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, domain names, technology, know-how and
other intellectual property.
Section
1.16 Greatmat carries, or is covered by, insurance
from insurers with appropriately rated claims paying abilities in such amounts
and covering such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged in similar
businesses in similar industries; all policies of insurance and any fidelity or
surety bonds insuring Greatmat or its business, assets, employees, officers and
directors are in full force and effect; Greatmat is in compliance with the terms
of such policies and instruments in all material respects; there are no claims
by Greatmat under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause;
and Greatmat has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse
Effect.
Section
1.17 OFAC. Neither
Greatmat nor any of its affiliates nor any director, officer, agent, employee or
affiliate of Greatmat or any of affiliates is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”); no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving Greatmat or any of its affiliates
with respect to U.S. sanctions administered by OFAC is pending or, to the
knowledge of Greatmat, threatened; and Greatmat will not directly or indirectly
lend, contribute or otherwise make available funds such proceeds to any party,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person that would, if undertaken by a U.S. person as
defined in U.S. sanctions administered by OFAC, be prohibited by any U.S.
sanctions administered by OFAC.
5
Section
1.18 Labor. No labor
problem or dispute with the employees of Greatmat exists or is threatened or
imminent, and Greatmat is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, contractors or
customers, that could have a Material Adverse Effect.
ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF THE AURUM MAJORITY SHAREHOLDER
As an
inducement to, and to obtain the reliance of, Greatmat and the Greatmat
Shareholder, except as set forth in the Aurum Schedules (as hereinafter
defined), the Aurum Majority Shareholder represents and warrants, as of the date
hereof and as of the Closing Date, as follows:
Section
2.01
Organization. Aurum
is a corporation duly incorporated, validly existing, and in good standing under
the laws of Nevada and has the corporate power and is duly authorized under all
applicable laws, regulations, ordinances, and orders of public authorities to
carry on its business in all material respects as it is now being
conducted. Included in the Aurum Schedules are complete and correct
copies of the articles of incorporation and bylaws of Aurum (the “Articles”) as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Aurum’s Articles. Aurum has taken all action
required by law, its Articles, or otherwise to authorize the execution and
delivery of this Agreement, and Aurum has full power, authority, and legal right
and has taken all action required by law, its Articles, or otherwise to
consummate the transactions herein contemplated.
Section
2.02
Capitalization
(a) Aurum’s
authorized capitalization consists of 50,000,000 shares of common stock, par
value $0.001 per share, of which 12,186,900 shares are issued and outstanding
(the “Outstanding Aurum Shares”). No shares of preferred stock
of Aurum are authorized, issued or outstanding. All issued and
outstanding shares of Aurum are legally issued, fully paid, and non-assessable
and not issued in violation of the preemptive or other rights of any person. As
of the Closing Date, no shares of Aurum’s common stock were reserved for
issuance upon the exercise of outstanding options to purchase the common shares;
(iv) no common shares were reserved for issuance upon the exercise of
outstanding warrants to purchase Aurum common shares; (v) no shares of preferred
stock were reserved for issuance to any party; and (vi) no common shares were
reserved for issuance upon the conversion of Aurum preferred stock or any
outstanding convertible notes, debentures or securities. All
outstanding Aurum common shares have been issued and granted in compliance with
(i) all applicable securities laws and (in all material respects) other
applicable laws and regulations, and (ii) all requirements set forth in any
applicable contracts.
(b) Other
than the Outstanding Aurum Shares, there are no equity securities, partnership
interests or similar ownership interests of any class of any equity security of
Aurum, or any securities exchangeable or convertible into or exercisable for
such equity securities, partnership interests or similar ownership interests,
issued, reserved for issuance or outstanding. Except as
contemplated by this Agreement, there are no subscriptions, options, warrants,
equity securities, partnership interests or similar ownership interests, calls,
rights (including preemptive rights), commitments or agreements of any character
to which Aurum is a party or by which it is bound obligating Aurum to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or cause the repurchase, redemption or acquisition of, any
shares of capital stock, partnership interests or similar ownership interests of
Aurum or obligating Aurum to grant, extend, accelerate the vesting of or enter
into any such subscription, option, warrant, equity security, call, right,
commitment or agreement. There is no plan or arrangement to issue
Aurum common shares or preferred stock except as set forth in this
Agreement.
6
(c)
Except as contemplated by this Agreement or as set forth on the Aurum Schedules,
there are no registration rights, and there is no voting trust, proxy, rights
plan, anti-takeover plan or other agreement or understanding to which Aurum is a
party or by which it is bound with respect to any equity security of any class
of Aurum, and there are no agreements to which Aurum is a party, or which Aurum
has knowledge of, which conflict with this Agreement or the transactions
contemplated herein or otherwise prohibit the consummation of the transactions
contemplated hereunder.
Section
2.03
Subsidiaries and Predecessor
Corporations. Aurum
does not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation.
Section
2.04
Financial
Statements.
(a) Included
in the Aurum Schedules are the audited balance sheets of Aurum as of July 31,
2009 and July 31, 2010 and the related audited statements of operations,
stockholders’ equity and cash flows for the years ended July 31, 2009 and July
31, 2010, together with the notes to such statements and the opinion of Xxxxxx
Xxxx & Co., independent certified public accountants, with respect
thereto. All such financial statements have been prepared in
accordance with U.S. generally accepted accounting principles consistently
applied throughout the periods involved. The Aurum balance sheets are true and
accurate and present fairly as of their respective dates the financial condition
of Aurum. As of the date of such balance sheets, except as and to the
extent reflected or reserved against therein, Aurum had no liabilities or
obligations (absolute or contingent) which should be reflected in the balance
sheets or the notes thereto prepared in accordance with U.S. generally accepted
accounting principles, and all assets reflected therein are properly reported
and present fairly the value of the assets of Aurum, in accordance with U.S.
generally accepted accounting principles. The statements of operations,
stockholders’ equity and cash flows reflect fairly the information required to
be set forth therein by U.S. generally accepted accounting
principles;
(b) Aurum has
duly and punctually paid all governmental fees and taxation which it has become
liable to pay and has duly allowed for all taxation reasonably foreseeable and
is under no liability to pay any penalty or interest in connection with any
claim for governmental fees or taxation and Aurum has made any and all proper
declarations and returns for taxation purposes and all information contained in
such declarations and returns is true and complete and full provision or
reserves have been made in its financial statements for all governmental fees
and taxation.
(c) The books
and records, financial and otherwise, of Aurum are in all material aspects
complete and correct and have been maintained in accordance with U.S. generally
accepted accounting principles consistently applied throughout the periods
involved; and
(d) All of
Aurum’s assets are reflected on its financial statements, and, except as set
forth in the Aurum Schedules or the financial statements of Aurum or the notes
thereto, Aurum has no material liabilities, direct or indirect, matured or
unmatured, contingent or otherwise.
7
Section
2.05
Information. The
information concerning Aurum set forth in this Agreement and the Aurum Schedules
is complete and accurate in all material respects and does not contain any
untrue statements of a material fact or omit to state a material fact required
to make the statements made, in light of the circumstances under which they were
made, not misleading. In addition, Aurum has fully disclosed in
writing to Greatmat (through this Agreement, the Aurum Schedules or its filings
with the SEC) all information relating to matters involving Aurum or its assets
or its present or past operations or activities which (i) indicated or may
indicate, in the aggregate, the existence of a greater than $1,000 liability,
(ii) have led or may reasonably foreseeably lead to a competitive disadvantage
on the part of Aurum or (iii) either alone or in aggregation with other
information covered by this Section, otherwise have led or may reasonably
foreseeably lead to a material adverse effect on Aurum, its assets, or its
operations or activities as presently conducted or as contemplated to be
conducted after the Closing Date, including, but not limited to, information
relating to governmental, employee, environmental, litigation and securities
matters and transactions with affiliates.
Section
2.06
Options or
Warrants. There
are no existing options, warrants, calls, or commitments of any character
relating to the capital stock of Aurum.
Section
2.07
Absence of Certain Changes
or Events. Since
July 31, 2010:
(a) there has
not been (i) any material adverse change in the business, operations,
properties, assets or condition of Aurum or (ii) any damage, destruction or loss
to Aurum (whether or not covered by insurance) materially and adversely
affecting the business, operations, properties, assets or condition of
Aurum;
(b) Aurum has
not (i) amended its Articles except as required by this Agreement or as
previously publicly disclosed in Aurum’s filings with the SEC; (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 of its capital stock; (iii) waived any rights
of value which in the aggregate are outside of the ordinary course of business
or material considering the business of Aurum; (iv) made any material change in
its method of management, operation, or accounting; (v) entered into any
transactions or agreements other than in the ordinary course of business; (vi)
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any
present or former officer or employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its officers or directors or any of
its salaried employees whose monthly compensation exceed $1,000;
or (viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement, made to, for or with its officers, directors, or
employees;
(c) Aurum has
not (i) granted or agreed to grant any options, warrants, or other rights for
its stock, bonds, or other corporate securities calling for the issuance
thereof; (ii) 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; (iii) paid or agreed to
pay any material obligations or liabilities (absolute or contingent) other than
current liabilities reflected in or shown on the most recent Aurum balance sheet
and current liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses in connection with the
preparation of this Agreement and the consummation of the transaction
contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer,
any of its assets, properties, or rights (except assets, properties, or rights
not used or useful in its business which, in the aggregate have a value of less
than $1,000), or canceled, or agreed to cancel, any debts or claims (except
debts or claims which in the aggregate are of a value less than $1,000); (v)
made or permitted any amendment or termination of any contract, agreement, or
license to which it is a party if such amendment or termination is material,
considering the business of Aurum; or (vi) issued, delivered or agreed to issue
or deliver, any stock, bonds or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock), except in
connection with this Agreement; and
8
(d) To the
Aurum Majority Shareholder’s knowledge, Aurum has not become subject to any law
or regulation which materially and adversely affects, or in the future, may
adversely affect, the business, operations, properties, assets or condition of
Aurum.
Section
2.08
Litigation and
Proceedings. There
are no actions, suits, proceedings or investigations pending or, to the
knowledge of the Aurum Majority Shareholder after reasonable investigation,
threatened by or against Aurum or affecting Aurum or its properties, at law or
in equity, before any court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind. The Aurum
Majority Shareholder has no knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator, or governmental agency or instrumentality or any circumstance
which after reasonable investigation would result in the discovery of such
default.
Section
2.09
Contracts.
(a) Aurum is
not a party to, and its assets, products, technology and properties are not
bound by, any contract, franchise, license agreement, agreement, debt instrument
or other commitments whether such agreement is in writing or oral;
(b) Aurum is
not a party to or bound by, and the properties of Aurum are not subject to, any
contract, agreement, other commitment or instrument; any charter or other
corporate restriction; or any judgment, order, writ, injunction, decree, or
award; and
(c) Aurum is
not a party to any oral or written (i) contract for the employment of any
officer or employee; (ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension benefit or retirement plan, (iii) agreement,
contract, or indenture relating to the borrowing of money, (iv) guaranty of any
obligation, (vi) collective bargaining agreement; or (vii) agreement with any
present or former officer or director of Aurum.
Section
2.10
No Conflict With Other
Instruments. The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, constitute a default under, or terminate, accelerate or modify the
terms of, any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Aurum is a party or to which any of its assets, properties
or operations are subject.
Section
2.11
Compliance With Laws and
Regulations. To the
best of the Aurum Majority Shareholder’s knowledge, Aurum has complied with all
applicable statutes and regulations of any federal, state, or other applicable
governmental entity or agency thereof. This compliance includes, but
is not limited to, the filing of all reports to date with federal and state
securities authorities.
Section
2.12
Approval of
Agreement. The
Board of Directors of Aurum has authorized the execution and delivery of this
Agreement by Aurum and has approved this Agreement and the transactions
contemplated hereby.
Section
2.13
Material Transactions or
Affiliations. Except
as disclosed herein and in the Aurum Schedules, there exists no contract,
agreement or arrangement between Aurum or any predecessor and any person who was
at the time of such contract, agreement or arrangement an officer, director, or
person owning of record or known by Aurum to own beneficially, 5% or more of the
issued and outstanding common shares of Aurum and which is to be performed in
whole or in part after the date hereof or was entered into not more than two
years prior to the date hereof. Neither any officer, director, nor 5%
Shareholders of Aurum has, or has had since inception of Aurum, any known
interest, direct or indirect, in any such transaction with Aurum which was
material to the business of Aurum. Aurum has no commitment, whether
written or oral, to lend any funds to, borrow any money from, or enter into any
other transaction with, any such affiliated person.
9
Section
2.14
Aurum
Schedules. Aurum
has delivered to Greatmat the following schedules, which are collectively
referred to as the “Aurum Schedules” and which consist of separate schedules,
which are dated the date of this Agreement, all certified by the chief executive
officer of Aurum to be complete, true, and accurate in all material respects as
of the date of this Agreement.
(a) a
schedule containing complete and accurate copies of the articles of
incorporation and bylaws of Aurum as in effect as of the date of this
Agreement;
(b) a
schedule containing the financial statements of Aurum identified in paragraph
2.04;
(c) a
schedule setting forth a description of any material adverse change in the
business, operations, property, inventory, assets, or condition of Aurum since
July 31, 2010, required to be provided pursuant to section 2.07 hereof;
and
(d) a
schedule of any exceptions to the representations made herein; and
(e) a
schedule containing the other information requested herein.
Aurum
shall cause the Aurum Schedules and the instruments and data delivered to
Greatmat hereunder to be promptly updated after the date hereof up to and
including the Closing Date.
Section
2.15
Bank Accounts; Power of
Attorney. Set
forth in the Aurum Schedules is a true and complete list of (a) all accounts
with banks, money market mutual funds or securities or other financial
institutions maintained by Aurum within the past twelve (12) months, the account
numbers thereof, and all persons authorized to sign or act on behalf of Aurum,
(b) all safe deposit boxes and other similar custodial arrangements maintained
by Aurum within the past twelve (12) months, and (c) the names of all persons
holding powers of attorney from Aurum or who are otherwise authorized to act on
behalf of Aurum with respect to any matter, other than its officers and
directors, and a summary of the terms of such powers or
authorizations.
Section
2.16
Valid
Obligation. This
Agreement and all agreements and other documents executed by Aurum in connection
herewith constitute the valid and binding obligation of Aurum, enforceable in
accordance with its or their terms, except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
Section
2.17
SEC
Filings; Financial
Statements.
(a)
Aurum has made available to Greatmat a correct and complete copy, or there has
been available on XXXXX, copies of each report, registration statement and
definitive proxy statement filed by Aurum with the SEC for the 36 months prior
to the date of this Agreement (the “Aurum SEC Reports”),
which, to Aurum’s knowledge, are all the forms, reports and documents filed by
Aurum with the SEC for the 36 months or applicable period prior to the date of
this Agreement. As of their respective dates, to Aurum’s knowledge, the Aurum
SEC Reports: (i) were prepared in accordance and complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC thereunder applicable to
such Aurum SEC Reports, and (ii) did not at the time they were filed (and if
amended or superseded by a filing prior to the date of this Agreement then on
the date of such filing and as so amended or superseded) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
10
(b)
Each set of financial statements (including, in each case, any related notes
thereto) contained in the Aurum SEC Reports comply as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with U.S. GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto) and each fairly presents in all material respects the financial
position of Aurum at the respective dates thereof and the results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal adjustments which
were not or are not expected to have a material adverse effect upon
the business, prospects, management, properties, operations, condition
(financial or otherwise) or results of operations of Aurum, taken as a whole
(“Material Adverse Effect”).
Section
2.18
Exchange Act
Compliance. Aurum
is in compliance with, and current in, all of the reporting, filing and other
requirements under the Exchange Act, the common shares have been registered
under Section 12(g) of the Exchange Act, and Aurum is in compliance with all of
the requirements under, and imposed by, Section 12(g) of the Exchange Act,
except where a failure to so comply is not reasonably likely to have a Material
Adverse Effect on Aurum.
Section
2.19
Title to
Property. Aurum does not own or lease any real property or
personal property. There are no options or other contracts under
which Aurum has a right or obligation to acquire or lease any interest in real
property or personal property.
Section
2.20
Intellectual
Property. Aurum does not own, license or otherwise have any
right, title or interest in any intellectual property.
Section
2.21
Application of Takeover
Protections. Aurum has taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Aurum Articles of Incorporation and By-laws or
the laws of its state of incorporation that is or could become applicable to the
Greatmat Shareholder as a result of the Greatmat Shareholder and Aurum
fulfilling their obligations or exercising their rights under this Agreement,
including, without limitation, the issuance of the Exchange Shares and the
Greatmat Shareholder’s ownership of the Exchange Shares.
Section
2.22 Foreign Corrupt
Practices. Neither Aurum, nor to Aurum’s knowledge, any director,
officer, agent, employee or other person acting on behalf of Aurum has, in the
course of its actions for, or on behalf of, Aurum (a) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (b) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds;
(c) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
11
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF
THE
GREATMAT SHAREHOLDER
The Greatmat Shareholder hereby
represents and warrants to Aurum as follows.
Section
3.01
Good Title.
The
Greatmat Shareholder is the record and beneficial owner of, and has good title
to, his Greatmat common share, with the right and authority to sell and deliver
such Greatmat common share, free and clear of all liens, claims, charges,
encumbrances, pledges, mortgages, security interests, options, rights to
acquire, proxies, voting trusts or similar agreements, restrictions on transfer
or adverse claims of any nature whatsoever. Upon delivery of any
certificate or certificates duly assigned, representing the same as herein
contemplated and/or upon registering of Aurum as the new owner of such Greatmat
common share in the share register of Greatmat, Aurum will receive good title to
such Greatmat common share, free and clear of all liens.
Section
3.02
Capacity. The
Greatmat Shareholder has the legal power, capacity and authority to execute and
deliver this Agreement and to consummate the transactions contemplated by this
Agreement, and to perform his obligations under this Agreement. This
Agreement constitutes a legal, valid and binding obligation of the Greatmat
Shareholder, enforceable against the Greatmat Shareholder in accordance with the
terms hereof.
Section
3.03
No
Conflicts. The execution and delivery of this Agreement by the
Greatmat Shareholder and the performance by the Greatmat Shareholder of his
obligations hereunder in accordance with the terms hereof: (a) will not require
the consent of any third party or governmental entity under any laws; (b) will
not violate any laws applicable to the Greatmat Shareholder and (c) will not
violate or breach any contractual obligation to which the Greatmat Shareholder
is a party.
Section
3.04
Purchase Entirely for Own
Account. The Exchange Shares (as defined in Section 4.01 herein) proposed
to be acquired by the Greatmat Shareholder hereunder will be acquired for
investment for his own account, and not with a view to the resale or
distribution of any part thereof, and the Greatmat Shareholder has no present
intention of selling or otherwise distributing the Exchange Shares, except in
compliance with applicable securities laws.
Section
3.05 Acquisition of Exchange
Shares for Investment.
(a) The
Greatmat Shareholder is acquiring the Exchange Shares for investment for the
Greatmat Shareholder’s own account and not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and the Greatmat
Shareholder has no present intention of selling, granting any participation in,
or otherwise distributing the same. The Greatmat Shareholder further
represents that he does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the Exchange
Shares.
(b) The
Greatmat Shareholder represents and warrants that he: (i) can bear the economic
risk of his investment, and (ii) possesses such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of the investment in Aurum and its securities.
(c) The
Greatmat Shareholder certifies that he is not a “U.S. Person” as defined in Rule
902(k) of Regulation S of the Securities Act (“Regulation S”) (a
“Non-U.S.
Shareholder”) and is not acquiring the Exchange Shares for the account or
benefit of any U.S. Person, and understands that the Exchange Shares are not
registered under the Securities Act and that the issuance thereof to the
Greatmat Shareholder is intended to be exempt from registration under the
Securities Act pursuant to Regulation S. The Greatmat Shareholder has
no intention of becoming a U.S. Person. At the time of the
origination of contact concerning this Agreement and the date of the execution
and delivery of this Agreement, the Greatmat Shareholder was outside of the
United States. Each certificate representing the Exchange Shares
shall be endorsed with the following legends, in addition to any other legend
required to be placed thereon by applicable federal or state securities
laws:
12
“THE
SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED
IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”))
AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED
UNDER THE SECURITIES ACT.”
“TRANSFER
OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
(d) The
Greatmat Shareholder acknowledges that neither the SEC nor the securities
regulatory body of any state or other jurisdiction has received, considered or
passed upon the accuracy or adequacy of the information and representations made
in this Agreement.
(e) The
Greatmat Shareholder acknowledges that he has carefully reviewed such
information as he has deemed necessary to evaluate an investment in Aurum and
its securities. To the full satisfaction of the Greatmat Shareholder,
he has been furnished all materials that he has requested relating to Aurum and
the issuance of the Exchange Shares hereunder, and the Greatmat Shareholder has
been afforded the opportunity to ask questions of Aurum’s representatives to
obtain any information necessary to verify the accuracy of any representations
or information made or given to the Greatmat
Shareholder. Notwithstanding the foregoing, nothing herein shall
derogate from or otherwise modify the representations and warranties of Aurum or
the Aurum Majority Shareholder set forth in this Agreement, on which the
Greatmat Shareholder has relied in making an exchange of his shares in Greatmat
for the Exchange Shares.
(f) The
Greatmat Shareholder understands that the Exchange Shares may not be sold,
transferred, or otherwise disposed of without registration under the Securities
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Exchange Shares or any available exemption
from registration under the Securities Act, the Exchange Shares may have to be
held indefinitely. The Greatmat Shareholder further acknowledges that
the Exchange Shares may not be sold pursuant to Rule 144 promulgated under the
Securities Act unless all of the conditions of Rule 144 are satisfied
(including, without limitation, Aurum’s compliance with the reporting
requirements under the Securities Exchange Act of 1934, as amended (“Exchange
Act”)).
(h) The
Greatmat Shareholder agrees that, notwithstanding anything contained herein to
the contrary, the warranties, representations, agreements and covenants of the
Greatmat Shareholder under this Section 3.06 shall survive the
Closing.
Section
3.06 Additional Legend;
Consent. Additionally, the Exchange Shares will bear any legend required
by the “blue sky” laws of any state to the extent such laws are applicable to
the securities represented by the certificate so legended. The Greatmat
Shareholder consents to Aurum making a notation on its records or giving
instructions to any transfer agent of Exchange Shares in order to implement the
restrictions on transfer of the Exchange Shares.
13
ARTICLE
IV
PLAN
OF EXCHANGE
Section
4.01
The Exchange.
On the
terms and subject to the conditions set forth in this Agreement, on the Closing
Date, the Greatmat Shareholder, who has elected to accept the exchange offer
described herein by executing this Agreement, shall assign, transfer and
deliver, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature, or description, one (1) share
of Greatmat, constituting all of the shares of Greatmat held by such
shareholder; the objective of such Exchange being the acquisition by Aurum of
not less than 100% of the issued and outstanding shares of
Greatmat. In exchange for the transfer of such securities by the
Greatmat Shareholder, Aurum shall issue to the Greatmat Shareholder, his
affiliates or assigns, a total of 36,560,700 shares of Aurum common stock, par
value $0.001, representing 75.0% of the total common shares of Aurum, for all of
the outstanding shares of Greatmat held by the Greatmat Shareholder (the “Exchange Shares”). At
the Closing Date, the Greatmat Shareholder shall, on surrender of his
certificate or certificates representing his Greatmat shares to Aurum or its
registrar or transfer agent, be entitled to receive a certificate or
certificates evidencing the Exchange Shares.
Upon
consummation of the transaction contemplated herein, all of the issued and
outstanding shares of Greatmat shall be held by Aurum. Upon consummation of the
transaction contemplated herein there shall be 48,747,600 Aurum common shares
issued and outstanding.
Section
4.02
Satisfaction of Present
Liabilities of Aurum. At or prior to
the Closing Date, any and all liabilities and obligations of Aurum shall be
satisfied by Aurum and the Aurum Majority Shareholder.
Section
4.03
Closing. The closing (the
“Closing” or
the “Closing
Date”) of the transactions contemplated by this Agreement shall occur on
October 30, 2010 upon the exchange of the shares of Aurum and Greatmat as
described in Section 4.01 herein. Such Closing shall take place at a mutually
agreeable time and place, and be conditioned upon all of the conditions of the
Closing being met.
Section
4.04
Closing
Events. At the
Closing, Aurum, Greatmat, the Greatmat Shareholder and the Aurum Majority
Shareholder shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered), any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby.
Section
4.05 Termination. This
Agreement may be terminated by the Board of Directors of Greatmat or Aurum only
in the event that Aurum or Greatmat does not meet the conditions precedent set
forth in Articles VI and VII. If this Agreement is terminated
pursuant to this section, this Agreement shall be of no further force or effect,
and no obligation, right or liability shall arise hereunder.
14
ARTICLE
V
SPECIAL
COVENANTS
Section
5.01 Regulation S
Compliance. Aurum agrees to refuse to register any
transfer of shares issued pursuant to this Agreement pursuant to Regulation S if
such transfer was not made in accordance with Regulation S, pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration.
Section
5.02 Delivery of Books and
Records. At the
Closing, Aurum shall deliver to Greatmat, the originals of the corporate minute
books, books of account, contracts, records, and all other books or documents of
Aurum which is now in the possession of Aurum or its
representatives.
Section
5.03 Third Party Consents and
Certificates. Aurum
and Greatmat agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein
contemplated.
Section
5.04 Designation of
Directors. At the Closing, Yau-sing TANG shall resign as a
director of Aurum and Xxxxx Xxx Sang SO (Chairman), Xxxxx Xxx Ping HO and Xxxx
Xxxx Xxx XXX shall be appointed to the Board of Directors of
Aurum. Such resignation and appointment will become effective on the
tenth day following the mailing by Aurum of an information statement, or the
Information Statement, to Aurum’s stockholders that complies with the
requirements of Section 14f-1 of the Exchange Act. Each director
shall hold office until his successor has been duly elected and has qualified or
until his death, resignation or removal.
Section
5.05 Designation of
Officers. At the Closing, all present officers of Aurum shall
resign from all their officer positions of Aurum and the persons as set forth
below shall be appointed as Officers of Aurum:
Name
|
Position
|
Xxxxx
Xxx Sang SO
|
Chief
Executive Officer, President and Chief Financial
Officer
|
Xxxxx
Xxx Xxxx XX
|
General
Manager, Secretary and Treasurer
|
Xxxx
Xxxx Xxx XXX
|
Marketing
Director
|
Section
5.06 Indemnification.
(a) Greatmat
hereby agrees to indemnify Aurum, the Aurum Majority Shareholder and each of the
officers, agents and directors of Aurum as of the date of execution of this
Agreement against any loss, liability, claim, damage, or expense (including, but
not limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever) (the “Loss”), to which it
or they may become subject arising out of or based on any inaccuracy appearing
in or misrepresentations made under Article I of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and termination of this
Agreement for one year following the Closing.
(b) The
Greatmat Shareholder agrees to indemnify Aurum, the Aurum Majority Shareholder
and each of the officers, agents and directors of Aurum as of the date of
execution of this Agreement against any Loss to which it or they may become
subject arising out of or based on any inaccuracy appearing in or
misrepresentations made under Article III of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and termination of this
Agreement for one year following the Closing.
15
(c) The Aurum
Majority Shareholder hereby agrees to indemnify Greatmat and each of
the officers, agents, and directors of Greatmat and the Greatmat Shareholder as
of the date of execution of this Agreement against any Loss to which it or they
may become subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article II of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and termination of this
Agreement for one year following the Closing.
Section
5.07 The Acquisition of Aurum
Common Shares. Aurum
and Greatmat understand and agree that the consummation of this Agreement
including the issuance of the Aurum common shares to the Greatmat Shareholder in
exchange for the Greatmat Share as contemplated hereby constitutes the offer and
sale of securities under the Securities Act and applicable state
statutes. Aurum and Greatmat agree that such transactions shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes, which depend, among other items, on the
circumstances under which such securities are acquired.
(a) In
connection with the transaction contemplated by this Agreement, Aurum and
Greatmat shall each file, with the assistance of the other and their respective
legal counsel, such notices, applications, reports, or other instruments as may
be deemed by them to be necessary or appropriate in an effort to document
reliance on such exemptions, and the appropriate regulatory authority in the
states where the shareholders of Greatmat reside unless an exemption requiring
no filing is available in such jurisdictions, all to the extent and in the
manner as may be deemed by such parties to be appropriate.
(b) In order
to more fully document reliance on the exemptions as provided herein, Greatmat,
the Greatmat Shareholder, and Aurum shall execute and deliver to the other, at
or prior to the Closing, such further letters of representation, acknowledgment,
suitability, or the like as Greatmat or Aurum and their respective counsel may
reasonably request in connection with reliance on exemptions from registration
under such securities laws.
(c) The
Greatmat Shareholder acknowledges that the basis for relying on exemptions from
registration or qualifications are factual, depending on the conduct of the
various parties, and that no legal opinion or other assurance will be required
or given to the effect that the transactions contemplated hereby are in fact
exempt from registration or qualification.
Section
5.08 Sales of Securities Under
Rule 144, If Applicable. As long as the Greatmat Shareholder
owns any Exchange Shares:
(a) Aurum
will use its best efforts to at all times to satisfy the current public
information requirements of Rule 144 promulgated under the Securities Act so
that the Greatmat Shareholder can sell restricted securities that have been held
for one year or more or such other restricted period as required by Rule 144 as
it is from time to time amended.
(b) Upon
being informed in writing by the Greatmat Shareholder that such person intends
to sell any shares under rule 144 promulgated under the Securities Act
(including any rule adopted in substitution or replacement thereof), Aurum will
certify in writing to such person that it is compliance with Rule 144 current
public information requirement to enable such person to sell such person’s
restricted stock under Rule 144, as may be applicable under the
circumstances.
(c) If any
certificate representing any such restricted stock is presented to Aurum’s
transfer agent for registration or transfer in connection with any sales
theretofore made under Rule 144, provided such certificate is duly endorsed for
transfer by the appropriate person(s) or accompanied by a separate stock power
duly executed by the appropriate person(s) in each case with reasonable
assurances that such endorsements are genuine and effective, and is accompanied
by a legal opinion that such transfer has complied with the requirements of Rule
144, as the case may be, Aurum will promptly instruct its transfer agent to
register such transfer and to issue one or more new certificates representing
such shares to the transferee and, if appropriate under the provisions of Rule
144, as the case may be, free of any stop transfer order or restrictive
legend.
16
Section
5.09 Payment of
Liabilities. Recognizing
the need to extinguish all existing liabilities of Aurum prior to the Exchange,
Greatmat has indicated it will not enter into this Agreement unless Aurum and
the Aurum Majority Shareholder have arranged for the payment and discharge of
all of Aurum’s liabilities, including all of Aurum’s accounts payable and any
outstanding legal fees incurred prior to the Closing
Date. Accordingly, Aurum and the Aurum Majority Shareholder have
agreed to arrange for the payment and discharge of all such
liabilities.
Section
5.10 Assistance with Post-Closing
SEC Reports and Inquiries. Upon the
reasonable request of Aurum, after the Closing Date, the Aurum Majority
Shareholder shall
use his reasonable best efforts to provide such information available to him,
including information, filings, reports, financial statements or other
circumstances of Aurum occurring, reported or filed prior to the Closing, as may
be necessary or required by Aurum for the preparation of the reports that Aurum
is required to file after Closing with the SEC to remain in compliance and
current with its reporting requirements under the Exchange Act, or filings
required to address and resolve matters as may relate to the period prior to
Closing and any SEC comments relating thereto or any SEC inquiry
thereof.
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF AURUM
The
obligations of Aurum under this Agreement are subject to the satisfaction, at or
before the Closing Date, of the following conditions:
Section
6.01 Accuracy of Representations
and Performance of Covenants. The
representations and warranties made by Greatmat in this Agreement were true when
made and shall be true at the Closing Date with the same force and effect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement). Greatmat
shall have performed or complied with all covenants and conditions required by
this Agreement to be performed or complied with by Greatmat prior to or at the
Closing. Aurum shall be furnished with a certificate, signed by the
director of Greatmat and dated the Closing Date, to the foregoing
effect.
Section
6.02 Approval by Greatmat
Shareholder. The
Exchange shall have been approved by the holders of not less than one hundred
percent (100%) of the shares, including voting power, of Greatmat, unless a
lesser number is agreed to by Aurum.
Section
6.03 No Governmental
Prohibition. No
order, statute, rule, regulation, executive order, injunction, stay, decree,
judgment or restraining order shall have been enacted, entered, promulgated or
enforced by any court or governmental or regulatory authority or instrumentality
which prohibits the consummation of the transactions contemplated
hereby.
Section
6.04 Consents. All
consents, approvals, waivers or amendments pursuant to all contracts, licenses,
permits, trademarks and other intangibles in connection with the transactions
contemplated herein, or for the continued operation of Greatmat after the
Closing Date on the basis as presently operated shall have been
obtained.
Section
6.05 Other Items. Aurum
shall have received such further opinions, documents, certificates or
instruments relating to the transactions contemplated hereby as Aurum may
reasonably request.
17
ARTICLE
VII
CONDITIONS
PRECEDENT TO OBLIGATIONS OF GREATMAT
AND
THE GREATMAT SHAREHOLDER
The
obligations of Greatmat and the Greatmat Shareholder under this Agreement are
subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section
7.01 Accuracy of Representations
and Performance of Covenants. The
representations and warranties made by Aurum and the Aurum Majority Shareholder
in this Agreement were true when made and shall be true as of the Closing Date
(except for changes therein permitted by this Agreement) with the same force and
effect as if such representations and warranties were made at and as of the
Closing Date. Additionally, Aurum shall have performed and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by Aurum. Greatmat shall be furnished with a certificate, signed
by the chief executive officer of Aurum and dated the Closing Date, to the
foregoing effect.
Section
7.02 Good Standing. Aurum
shall have received a certificate of good standing from the Nevada Secretary of
State or other appropriate office, dated as of a date within thirty days prior
to the Closing Date certifying that Aurum is in good standing as a company in
the State of Nevada and has filed all tax returns required to have been filed by
it to date and has paid all taxes reported as due thereon.
Section
7.03 No Governmental
Prohibition. No
order, statute, rule, regulation, executive order, injunction, stay, decree,
judgment or restraining order shall have been enacted, entered, promulgated or
enforced by any court or governmental or regulatory authority or instrumentality
which prohibits the consummation of the transactions contemplated
hereby.
Section
7.04 Consents. All
consents, approvals, waivers or amendments pursuant to all contracts, licenses,
permits, trademarks and other intangibles in connection with the transactions
contemplated herein, or for the continued operation of Aurum after the Closing
Date on the basis as presently operated shall have been obtained.
Section
7.05 Approval of Name Change and
By-law Amendments. The board of directors of Aurum shall
through unanimous written consent have (i) approved an amendment to Aurum’s
Articles of Incorporation to change the name of Aurum to Greatmat Technology
Corporation and to effect a reverse stock split and/or increase the authorized
shares of Aurum, (ii) recommended to the stockholders of Aurum to approve such
amendments, (iii) instructed the officers of Aurum to prepare and file a
Schedule 14C with the SEC regarding the approval of such amendments upon the
receipt of the requisite stockholder consents, and (iv) approved amendments to
Aurum’s By-laws providing for the indemnity of officers and directors and
clarifying the procedure for shareholder written consents.
Section
7.06 Other
Items. Greatmat
shall have received further opinions, documents, certificates, or instruments
relating to the transactions contemplated hereby as Greatmat may reasonably
request.
18
ARTICLE
VIII
MISCELLANEOUS
Section
8.01 Brokers. Aurum
and the Aurum Majority Shareholder, on the one hand, and Greatmat and the
Greatmat Shareholder, on the other hand, agree that there were no finders or
brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution or consummation of this Agreement that are not
payable entirely by such party. The Aurum Majority Shareholder
(including with respect to claims based on the actions of Aurum) and Greatmat
(including with respect to claims based on the actions of the Greatmat
Shareholder) agree to indemnify the other against any claim by any third person
other than those described above for any commission, brokerage, or finder’s fee
arising from the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
Section
8.02 Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof, except to the extent the
laws of Nevada are mandatorily applicable to the transactions contemplated
hereunder.
Section
8.03 Notices. Any
notice or other communications required or permitted hereunder
shall be in writing and shall be sufficiently given if personally
delivered to it or sent by telecopy, overnight courier or registered mail or
certified mail, postage prepaid, addressed as follows:
|
If
to Greatmat, to:
|
|
Xxxx
0000-00, 00/X, Xxxxxxxxxx Xxxxxx
|
|
00-00
Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx
Xxxx
|
|
With
copies to (which shall not constitute
notice):
|
|
The
Xxxxx Law Group
|
|
Attn:
Xxxxx Xxxxxx, Esq.
|
|
000
Xxxxxxxxxx, Xxxxx 0000
|
|
Xxx
Xxxxxxxxx, XX 00000
|
|
If
to Aurum, to:
|
|
Inc.
Plan of Nevada
|
|
000
Xxxxxx Xxxxx Xxxxx
|
|
Xxxxxxxxx,
XX 00000
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With
copies to (which shall not constitute
notice):
|
|
Xx.
Xxx-sing Xxxx
|
|
Suite
903 Allied Kajima Xxxxxxxx
|
|
000
Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxx
Xxxx
|
19
|
If
to the Greatmat Shareholder, to:
|
|
Xx.
Xxxxx Xxx Sang So
|
|
Xxxx
0000-00, 00/X, Xxxxxxxxxx Xxxxxx
|
|
00-00
Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx
Xxxx
|
|
With
copies to (which shall not constitute
notice):
|
|
The
Xxxxx Law Group
|
|
Attn:
Xxxxx Xxxxxx, Esq.
|
|
000
Xxxxxxxxxx, Xxxxx 0000
|
|
Xxx
Xxxxxxxxx, XX 00000
|
|
If
to the Aurum Majority Shareholder,
to:
|
|
Xx.
Xxx-sing Tang
|
|
Suite
903 Allied Kajima Xxxxxxxx
|
|
000
Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx
|
or such
other addresses as shall be furnished in writing by any party in the manner for
giving notices hereunder, and any such notice or communication shall be deemed
to have been given (i) upon receipt, if personally delivered, (ii) on the day
after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section
8.04 Attorney’s
Fees. In the
event that either party institutes any action or suit to enforce this Agreement
or to secure relief from any default hereunder or breach hereof, the prevailing
party shall be reimbursed by the losing party for all costs, including
reasonable attorney’s fees, incurred in connection therewith and in enforcing or
collecting any judgment rendered therein.
Section
8.05 Confidentiality. Each
party hereto agrees with the other that, unless and until the transactions
contemplated by this Agreement have been consummated, it and its representatives
will hold in strict confidence all data and information obtained with respect to
another party or any subsidiary thereof from any representative, officer,
director or employee, or from any books or records or from personal inspection,
of such other party, and shall not use such data or information or disclose the
same to others, except (i) to the extent such data or information is published,
is a matter of public knowledge, or is required by law to be published; or (ii)
to the extent that such data or information must be used or disclosed in order
to consummate the transactions contemplated by this Agreement. In the
event of the termination of this Agreement, each party shall return to the other
party all documents and other materials obtained by it or on its behalf and
shall destroy all copies, digests, work papers, abstracts or other materials
relating thereto, and each party will continue to comply with the
confidentiality provisions set forth herein.
Section
8.06 Public Announcements and
Filings. Unless
required by applicable law or regulatory authority, none of the parties will
issue any report, statement or press release to the general public, to the
trade, to the general trade or trade press, or to any third party (other than
its advisors and representatives in connection with the transactions
contemplated hereby) or file any document, relating to this Agreement and the
transactions contemplated hereby, except as may be mutually agreed by the
parties. Copies of any such filings, public announcements or
disclosures, including any announcements or disclosures mandated by law or
regulatory authorities, shall be delivered to each party at least one (1)
business day prior to the release thereof.
Section
8.07 Schedules;
Knowledge. Each
party is presumed to have full knowledge of all information set forth in the
other party’s schedules delivered pursuant to this Agreement.
20
Section
8.08 Third Party
Beneficiaries. This
contract is strictly between Aurum, Greatmat, the Greatmat Shareholder and the
Aurum Majority Shareholder, and, except as specifically provided, no director,
officer, stockholder (other than the Greatmat Shareholder or the Aurum Majority
Shareholder), employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this
Agreement.
Section
8.09 Expenses. Subject
to Article VI and VII above, whether or not the Exchange is consummated, each of
the parties hereto will bear their own respective expenses, including legal,
accounting and professional fees, incurred in connection with the Exchange or
any of the other transactions contemplated hereby.
Section
8.10 Entire
Agreement. This
Agreement represents the entire agreement between the parties relating to the
subject matter thereof and supersedes all prior agreements, understandings and
negotiations, written or oral, with respect to such subject matter.
Section
8.11 Survival;
Termination. The
representations, warranties, and covenants of the respective parties shall
survive the Closing Date and the consummation of the transactions herein
contemplated for a period of one year.
Section
8.12 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument.
Section
8.13 Amendment or
Waiver. Every
right and remedy provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or any other
default then, theretofore, or thereafter occurring or existing. At
any time prior to the Closing Date, this Agreement may by amended by a writing
signed by all parties hereto, with respect to any of the terms contained herein,
and any term or condition of this Agreement may be waived or the time for
performance may be extended by a writing signed by the party or parties for
whose benefit the provision is intended.
Section
8.14 Best
Efforts. Subject
to the terms and conditions herein provided, each party shall use its best
efforts to perform or fulfill all conditions and obligations to be performed or
fulfilled by it under this Agreement so that the transactions contemplated
hereby shall be consummated as soon as practicable. Each party also
agrees that it shall use its 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 under applicable laws and regulations to consummate and make effective
this Agreement and the transactions contemplated herein.
[Signature
Page Follows]
21
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement or caused this Agreement to be
executed by their respective officers, hereunto duly authorized, as of the date
first-above written.
Aurum Explorations, Inc. | |||
|
By:
|
/s/ | |
Name:
Yau-sing TANG
|
|||
Title: Chief
Executive Officer
|
|||
Greatmat
Holdings Limited
|
|||
|
By:
|
/s/ | |
Name: Xxxxx
Xxx Sang SO
|
|||
Title:
Director
|
|||
Yau-sing XXXX | |||
Xxxxx Xxx Xxxx SO |