SUBSCRIPTION AGREEMENT BY AND AMONG SUPREME REALTY INVESTMENTS, INC. AND THE INVESTORS LISTED ON SCHEDULE 1 Dated as of May 4, 2006
EXHIBIT
10.1
BY
AND
AMONG
AND
THE
INVESTORS LISTED ON SCHEDULE 1
Dated
as
of May 4, 2006
THE
SECURITIES OFFERED BY THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED
WITH
OR APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION, NOR HAS SUCH COMMISSION OR ANY STATE SECURITIES BUREAU, COMMISSION
OR OTHER REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THIS
OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT.
ACCORDINGLY, YOU MAY NOT OFFER OR SELL THE OFFERED SECURITIES IN THE UNITED
STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN RULE 902(K) PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)) IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
EVIDENCE ACCEPTABLE TO US AND OUR COUNSEL, WHICH MAY INCLUDE AN OPINION OF
COUNSEL, THAT REGISTRATION IS NOT REQUIRED. HEDGING TRANSACTIONS INVOLVING
THE
OFFERED SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS
SUBSCRIPTION AGREEMENT MAY NOT BE SHOWN OR GIVEN TO ANY PERSON OTHER THAN THE
PERSON WHOSE NAME APPEARS ON SCHEDULE 1 AND MAY NOT BE PRINTED OR REPRODUCED
IN
ANY MANNER WHATSOEVER. FAILURE TO COMPLY WITH THIS DIRECTIVE CAN RESULT IN
A
VIOLATION OF THE SECURITIES ACT. ANY FURTHER DISTRIBUTION OR REPRODUCTION OF
THIS SUBSCRIPTION AGREEMENT IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF
ITS
CONTENTS BY AN OFFEREE, IS UNAUTHORIZED. BY ACCEPTING THIS SUBSCRIPTION
AGREEMENT, YOU EXPRESSLY AGREE TO COMPLY WITH THESE AND THE OTHER RESTRICTIONS
CONTAINED HEREIN.
LIST
OF EXHIBITS
EXHIBIT
A Accredited
Investor Questionnaire
EXHIBIT
B
Promissory
Note
EXHIBIT
C
Stock
Power
i
THIS
SUBSCRIPTION AGREEMENT
(this
“Agreement”) is made and entered into as of May 4, 2006 by and among Supreme
Realty Investments, Inc., a Nevada corporation (the “Company”),
and
the investors named on Schedule
1
attached
hereto (each such investor is referred to herein as an “Investor” and
collectively as the “Investors”).
Certain terms used and not otherwise defined in the text of this Agreement
are
defined in Article 7 of this Agreement.
W
I T N E S S E T H
WHEREAS,
the
Company desires to issue and to sell to the Investors,
and the
Investors desire to purchase from the Company, an aggregate of fifty five
million (55,000,000) shares of Common Stock at an average per share purchase
price of $0.0182, for an aggregate purchase price of one million dollars
($1,000,000), all in accordance with the terms and provisions of this
Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual representations, warranties and
covenants herein contained, the parties hereto hereby agree as
follows:
ARTICLE
I
AUTHORIZATION
OF SECURITIES
1.1 Authorization
of Securities.
Prior
to
the Closing Date, the Company’s Board of Directors shall have taken all action
necessary to authorize the issuance and sale of 55,000,000 shares of its Common
Stock (the “Securities”) to the Investors.
ARTICLE
II
SALE
AND
PURCHASE OF THE SECURITIES
Subject
to the terms and conditions set forth in this Agreement,
each
Investor hereby subscribes for and agrees to acquire from the Company at the
Closing, and the Company hereby agrees that it shall issue to each Investor
at
the Closing, free and clear of any Encumbrances, the number of shares of Common
Stock set forth opposite such Investor's name on Schedule
1 hereto against payment of the purchase price (the “Purchase Price”) set forth
on Schedule 1 hereto. Each Investor acknowledges that the Securities acquired
hereunder are subject to restrictions
on transfer under both the federal securities laws of the U.S. and applicable
state securities laws
in the
U.S., and the terms of this Agreement and the Promissory Note.
ARTICLE
III
CLOSING
3.1 Closing.
The
closing of the sale to, and purchase by, the Investors of the Securities (the
“Closing”) shall occur at the offices of Berkman, Henoch, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
P.C., legal counsel to the Company, in Garden City, New York, or at such other
location or by such other means as the parties hereto may agree, on the date
hereof or at such other time and place as the parties hereto may agree (the
“Closing Date”). In the event that such date is not a Business Day, the Closing
Date shall be deemed to be the first Business Day following such
date.
1
3.2 Deliveries
by the Company.
(a)
At the Closing, the Company shall deliver to the Escrow Agent one or more
certificates evidencing the number of Securities to be purchased by such
Investor at the Closing, each of which shall be registered in such Investor's
name or its designee, and each Investor shall deliver to the Company the
executed Promissory Note and Stock Power, and the Purchase Price as per Section
3.1 below by wire transfer to the Company.
3.3 Deliveries
by the Investors.
At
the
Closing, each Investor shall deliver to the Company:
(a) Ten
Percent (10%) of the Purchase Price payable by wire transfer of immediately
available funds to an account that the Company designated in writing to each
Investor prior to the Closing Date or such other funds as the Company may
accept;
(b) An
executed Promissory Note in the form annexed hereto as Exhibit B, for the
payment of the remaining ninety percent (90%) of the Purchase Price when
the
Registration Statement covering the Securities is declared effective by the
SEC;
(c) An
executed Stock Power in the form annexed hereto as Exhibit C.
(d) Such
other documents as are required to be delivered by the Investor to the Company
or that are, in the opinion of legal counsel to the Company, necessary or
advisable for the completion of the transaction.
3.4 Other
Deliveries.
At the
Closing, the Company and the Investors will deliver such duly executed
Transaction Documents as are required to be executed by the parties hereunder
or
thereunder.
3.5 Escrow.
The parties agree that Berkman, Henoch, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C. shall be
appointed to serve as Escrow Agent under this Agreement to hold the Securities.
The Escrow Agent shall hold the Securities in escrow pursuant to the terms
of
this Agreement and the Promissory Note. The Escrow Agent shall release the
Securities to each Investor promptly upon notification from the Company that
such Investor has complied with the terms of the Promissory Note. In the event
the Registration Statement has not been declared effective on or prior to the
one year anniversary of the date of this Agreement (i) the Company shall return
to each Investor the payment each Investor made to the Company pursuant to
Section 3.1 herein, and (ii) the Escrow Agent shall return the Securities to
the
Company for cancellation. Should any party attempt to change this Agreement
in a
manner which, in the Escrow Agent’s discretion, shall be undesirable, the Escrow
Agent may resign as Escrow Agent by notifying the Company and the Investors
in
writing. The Escrow Agent shall be reimbursed by the Company and the Investors
for any reasonable expenses incurred in the event there is a conflict between
the parties and the Escrow Agent shall deem it necessary to retain counsel.
The
Escrow Agent shall not be liable for any action taken or omitted by it in good
faith in accordance with the advice of the Escrow Agent’s counsel; and in no
event shall the Escrow Agent be liable or responsible except for the Escrow
Agent’s own gross negligence or willful misconduct. The Escrow Agent has no
liability hereunder to either party other than to hold the Securities and funds
and to deliver them under the terms hereof. Each party hereto agrees to
indemnify and hold harmless the Escrow Agent from and with respect to any suits,
claims, actions or liabilities arising in any way out of this transaction
including the obligation to defend any legal action brought which in any way
arises out of or is related to this Escrow. The parties acknowledge that
Berkman, Henoch, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C. is counsel to the Company, and the
Investors waive any claim for conflict of interest which may arise.
2
ARTICLE
IV
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE INVESTORS
Each
Investor acknowledges that this Agreement is made with the Company in reliance
upon Investor’s representation to the Company. Each Investor, severally as to
itself and not jointly, represents and warrants to and agrees with the Company
as follows:
4.1 Regulation
S Representations and Warranties.
(a)
US Person. Investor represents that it is not an “U.S. Person” as that term is
defined in Rule 902(k) of Regulation S promulgated under the Securities Act,
that the Investor resides outside of the United States, and that the Investor
has accurately completed the accredited investor questionnaire set forth as
Exhibit A attached hereto.
(b)
Dealer; Distributor. Investor represents that it is not a distributor or dealer
as such term is defined in Section 2(a)(12) of the Securities Act, or a person
receiving a selling concession, fee or other remuneration in connection with
the
Securities.
(c)
Resale Limitations. Investor understands that the Securities have not been,
and
will not upon issuance be, registered under the Securities Act of 1933, as
amended (the “Securities Act”), and further understands that the Securities are
“restricted securities” as such term is defined in Rule 144 promulgated under
the Act and may be resold without registration under the Act and the applicable
rules and regulations under the Act, only in very limited circumstances. In
this
connection, Investor represents that it is familiar with the terms and
provisions of Regulation S (including Rule 903 and Rule 904 promulgated under
the Securities Act) and Rule 144 promulgated under the Securities Act, as
presently in effect, and understands the resale limitations imposed thereby
and
by the Securities Act. Investor further agrees that all offers and sales of
the
Securities prior to the expiration of the one year distribution compliance
period shall be made in accordance with the terms and provisions of the
Securities Act including without limitation Rules 144, 903 and 904 promulgated
under the Securities Act, pursuant to a registration of the Securities under
the
Securities Act, or pursuant to an available exemption from the registration
requirements of the Securities Act.
(d)
Hedging Transactions. Investor agrees not to engage in hedging transactions
with
regard to the Securities prior to the expiration of the one-year distribution
compliance period.
(e)
Restrictive Legends. Investor further understands that the certificates
evidencing the Securities shall bear one or more of the following
legends:
“These
securities have not been registered under the Securities Act of 1933, as amended
(the “Act”).
They
may not be sold, offered for sale, pledged or hypothecated in the absence of
a
registration statement in effect with respect to the securities under the Act
unless an opinion of counsel to the Company is delivered to the effect that
such
registration is not required or that the securities are being sold pursuant
to
Rule 144 of the Act and therefore this legend should be removed.”
3
“Transfer
of these securities is prohibited except in accordance with the provisions
of
Regulation S promulgated under the Securities Act of 1933, as amended (the
“Act”), pursuant to registration under the Act, or pursuant to an available
exemption from registration. Hedging transactions involving these securities
may
not be conducted unless in compliance with the Act.”
“These
securities are subject to the provisions of that certain Subscription Agreement
and Promissory Note between the Company and the original holder hereof, and
may
not be sold, offered for sale, pledged or hypothecated unless permitted under
such documents.”
Any
legend required by the securities laws of any applicable
jurisdictions.
(f)
Acquisition for Own Account.
Investor hereby confirms that the Securities will be acquired for investment
for
Investor’s own account, not as a nominee or agent and not with a view to the
resale or distribution of any part thereof, not for the benefit or the account
of a U.S. Person, and that Investor does not have any present intention of
selling, granting any participation in or otherwise distributing any such
Securities. Investor further represents that Investor does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer, encumber, pledge, hypothecate or grant participations to such person
or to any third person, with respect to any of the Securities.
(g)
No Public Review/ No Soliciting Materials. Investor understands that no federal
or state agency has recommended or endorsed the purchase of the Securities
or
passed on the adequacy or accuracy of the information set forth in this
Agreement. Investor acknowledges that it has not seen, received, been presented
with, or been solicited by any leaflet, public promotional meeting, newspaper
or
magazine article or advertisement, radio or television advertisement, or any
other form of advertising or general solicitation with respect to the sale
of
the Securities.
4.2 General
Representations and Warranties.
(a)
Organization.
If
Investor is an entity, Investor is validly existing and in good standing under
the laws of its jurisdiction of organization, and has all requisite power and
authority to enter into this Agreement and consummate the transactions
contemplated hereby.
(b)
Validity.
The
execution, delivery and performance of this Agreement, and the other documents
and instruments referred to herein, in each case to which Investor is a party,
and the consummation of the transactions contemplated hereby, have been duly
authorized by all necessary action on the part of Investor. This Agreement
and
each other Transaction Document have been duly and validly executed and
delivered by Investor and assuming their due authorization, execution and
delivery by the Company constitute a valid and binding obligation of Investor,
enforceable against it in accordance with the terms of each Transaction
Document, subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and the rights of creditors of
insurance companies generally.
(c)
Disclosure of Information.
Investor acknowledges that it has received or has had the opportunity to review
all the information it considers necessary or appropriate for deciding whether
to purchase the Securities. Investor further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding
the
terms and conditions of the offering of the Securities and the business,
properties, prospects and financial condition of the Company. Investor further
acknowledges that it has been advised to carefully review the Company’s filings
with the U.S. Securities and Exchange Commission. Investor is aware of the
Company’s current limited operations, “shell company” status, and financial
condition and is making this investment on an “As
Is, Where Is”
basis.
4
(d)
Investment Experience.
Investor is an investor in securities of companies in the development stage
and
acknowledges that it is able to fend for itself, can bear the economic risk
of
its investment and has such knowledge and experience in financial or business
matters such that it is capable of evaluating the merits and risks of the
investment in the Securities.
If the Investor is an entity, Investor represents that it has not been organized
for the purpose of acquiring the Securities.
(e)
Acknowledgment of Risk. Investor understands the risks involved in investing
in
the Company and represents that it can bear the full loss of its investment
in
the Company.
(f)
Tax Consequences. Investor is aware that there can be no assurance regarding
the
federal, state or local tax consequences of an investment in the Company, nor
can there be any assurance that the Code or the regulations promulgated
thereunder or other applicable laws and regulations will not be amended at
some
future time in such manner as to deprive the Company and its stockholders of
any
tax benefits that might be received. In making this investment, Investor is
relying upon the advice of its personal tax advisor with respect to the tax
aspects of an investment in the Company and not on the Company or any agent
thereof.
(g)
Tax Allocation. Investor understands that taxable income and gain allocated
to
the Investor by the Company and the tax on the portion thereof allocated to
the
Investor for any year may exceed the cash distributions from the Company to
the
Investor and, if so, the Investor will have to look to sources other than
distributions from the Company to pay such tax.
(h)
Brokers. There is no broker, investment banker, financial advisor, finder or
other Person which has been retained by or is authorized to act on behalf of
Investor who might be entitled to any fee or commission for which the Company
will be liable in connection with the execution of this Agreement.
(i)
Reverse Stock Split. Investor acknowledges that it is aware of, and consents
to,
ten for one reverse stock split of its Common Stock the Board of Directors
of
the Company is presently contemplating, which will be effective after the
closing of the transactions contemplated by this Agreement.
ARTICLE
V
REPRESENTATIONS,
WARRANTIES AND COVENANTS BY THE COMPANY
The
Company represents and warrants to and agrees with each Investor as
follows:
5.1 Limitation.
The
Company makes no representations or warranties other than the representations
and warranties contained in this Agreement.
5.2 Due
Issuance and Authorization of Capital Stock. All of the outstanding shares
of
capital stock of the Company have been validly issued and are fully paid and
nonassessable. No shares of capital stock of the Company are subject to any
lien, claim, judgment, charge, mortgage, security interest, pledge, escrow
equity or other encumbrance of any kind (including any agreement to give any
of
the foregoing, any conditional sale or other title retention agreement, and
any
lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing (collectively,
“Encumbrances”) and the sale and delivery of the Securities to the Investor
pursuant to the terms hereof will vest in the Investor legal and valid title
to
such Securities free and clear of all Encumbrances.
5
5.3 Organization.
The
Company is a corporation validly existing and in good standing under the laws
of
the State of Nevada.
5.4 Authorization;
Enforcement.
The
Company has all requisite corporate power and has taken all necessary corporate
action required for the due authorization, execution, delivery and performance
by the Company of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, the issuance of the
Securities).
5.5 Issuance
of Shares.
Upon
issuance against payment of the Purchase Price, the Securities will be duly
authorized, validly issued, fully paid and non-assessable, and such Securities
will be free from all taxes, liens, claims and Encumbrances, and will not impose
personal liability upon the holder thereof.
5.6 Registration.
The Company will use its best efforts to promptly file with the SEC a
Registration Statement registering the Securities for resale.
ARTICLE
VI
RISK
FACTORS
THIS
OFFERING INVOLVES AN EXTREMELY HIGH DEGREE OF RISK. IT IS POSSIBLE THAT EACH
INVESTOR MAY LOSE HIS ENTIRE INVESTMENT IN THE COMPANY. THERE CAN BE NO
ASSURANCE THAT AN ADEQUATE MARKET WILL DEVELOP IN THE SECURITIES OF THE COMPANY
NECESSARY TO SELL THE SECURITIES. THE SECURITIES ARE SUBJECT TO SUBSTANTIAL
RESTRICTIONS ON TRANSFER THAT MAY MAKE IT DIFFICULT FOR INVESTORS TO LIQUIDATE
THEIR INVESTMENT IN THE COMPANY. THESE RISK FACTORS ARE NOT, AND ARE NOT MEANT
TO BE, COMPLETE. INVESTORS SHOULD CAREFULLY CONSIDER ALL RISKS ASSOCIATED WITH
THE INVESTMENT, AND SHOULD CAREFULLY REVIEW THE COMPANY’S FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ARTICLE
VII
DEFINITIONS
7.1 Definitions.
Unless
the context otherwise requires, the terms defined in this Section 7.1 shall
have
the meanings specified for all purposes of this Agreement.
Except
as
otherwise expressly provided, all accounting terms used in this Agreement,
whether or not defined in this Section 7.1, shall be construed in accordance
with United States generally accepted accounting principles.
“Affiliate”
of any Person means any other Person which directly, or indirectly through
one
or more intermediaries, controls, or is controlled by, or is under common
control with, such Person. The term “control” (including the terms “controlled
by” and “under common control with”) as used with respect to any Person means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
6
“Agreement”
means this Subscription Agreement.
“Business
Day” means a day other than a Saturday, Sunday or day on which banking
institutions in Los Angeles, California are authorized or required to remain
closed.
“By-Laws”
shall mean the By-Laws of the Company as in effect on the Closing Date and
as
hereafter from time to time amended, modified, supplemented or
restated.
“Common
Stock” means the shares of the Company's common stock with a par value of $0.001
per share authorized in, and designated as, “Common Stock” in the Company's
Articles of Incorporation.
“Closing”
has the meaning assigned to it in Section 3.1 hereof.
“Closing
Date” has the meaning assigned to it in Section 3.1 hereof.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Encumbrances”
has the meaning assigned to it in Section 5.2 hereof.
“Escrow
Agent” shall mean Berkman, Henoch, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
“Indemnification
Period” shall have the meaning set forth in Section 8.3.
“Indemnified
Party” shall have the meaning set forth in Section 8.3.
“Indemnifying
Party” shall have the meaning set forth in Section 8.3.
“Investor”
has the meaning set forth in the recitals.
“Losses”
shall have the meaning set forth in Section 8.3.
“Person”
means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, government (whether
federal, state, country, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof)
or other entity.
“Purchase
Price” has the meaning assigned it in Section 2.1 hereof.
“Registration
Statement” shall mean the registration statement to be filed by the Company with
the SEC under the Securities Act for the resale of the Securities by the
Investors.
“SEC”
means the Securities and Exchange Commission.
“Securities”
shall have the meaning assigned to such term in Section 1.1 hereof.
“Securities
Act” or “Act” means the Securities Act of 1933, as amended.
“Third
Party Claimant” shall have the meaning set forth in Section 8.3.
7
“Transaction
Documents” shall mean this Agreement and all other documents as are required
to be delivered by the Investor to the Company pursuant to this
Agreement.
“U.S.”
means the United States of America.
ARTICLE
VIII
MISCELLANEOUS
8.1 Waivers
and Amendments.
Upon
the approval of the Company, and the written consent of the each of the
Investors (a) the obligations of the Company, and the rights of an Investor
under this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively and either for a specified
period of time or indefinitely), and (b) the Company, may enter into a
supplemental agreement for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement, or of
any
supplemental agreement or modifying in any manner the rights and obligations
hereunder or thereunder of the Investors and the Company; provided, however,
that without each Investor's written consent, no such amendment or waiver shall
affect adversely such Investor's rights hereunder in a discriminatory manner
inconsistent with its adverse effects on rights of other Investors hereunder
(other than as reflected by the different number of shares held by such
Investors).
The
foregoing notwithstanding, no such waiver or supplemental agreement shall affect
any of the rights of any holder of a security created by any subsequent
amendments to the Articles of Incorporation or by the Nevada General Corporation
Law without compliance with all applicable provisions of the Articles of
Incorporation as may be amended and the Nevada General Corporation Law.
Neither
this Agreement, nor any provision hereof, may be changed, waived, discharged
or
terminated orally or by course of dealing, but only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, except to the extent provided in this
Section.
8.2 Notices.
All
notices, requests, consents and other communications required or permitted
hereunder shall be in writing and shall be hand delivered or mailed postage
prepaid by registered or certified mail or transmitted by facsimile transmission
(with immediate telephonic confirmation thereafter),
|
(a)
|
If
to an Investor, to the respective addresses set forth on the counterpart
signature pages of this Agreement signed by such
Investor:
|
| or | (b) | If to the Company: |
| ▇▇. ▇▇, ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇ Tian ▇▇▇▇ ▇▇▇▇, |
| Fu Tian Qu, Shenzhen City, P.R. China |
|
Facsimile
No.: (▇▇▇) ▇▇▇ ▇▇▇▇
|
or
at
such other address as the Company or an Investor each may specify by written
notice to the others, and each such notice, request, consent and other
communication shall for all purposes of the Agreement be treated as being
effective or having been given when delivered if delivered personally, upon
receipt of facsimile confirmation if transmitted by facsimile, or, if sent
by
mail, at the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of United States
mail, addressed and postage prepaid as aforesaid.
8
8.3 Indemnification
of the Company.
(a)
Each
Investor, severally as to itself and not jointly, hereby indemnifies the Company
against and agrees to hold the Company harmless from any and all Losses arising
out of any misrepresentation or breach of any representation, warranty or
covenant by such Investor pursuant to this Agreement.
(b)
Claims
Notice.
In the
event the Company wishes to assert a claim for indemnification hereunder, (the
“Indemnified Party”) it shall deliver written notice (a “Claims Notice”) to the
applicable Investor (the “Indemnifying Party”), specifying the facts
constituting the basis for, and the amount (if known) of the claim
asserted.
(c)
Third
Party Claims. Upon making any indemnification payment, the Indemnifying Party
will, to the extent of such payment, be subrogated to all rights of the
Indemnified Party against any third party in respect of the Loss to which the
payment relates; provided, however, that until the Indemnified Party recovers
full payment of its Loss, any and all claims of the Indemnifying Party against
any such third party on account of the payment are hereby made expressly
subordinated and subjected in right of payment to the Indemnified Party’s rights
against such third party. Without limiting the generality of any other provision
hereof, the Indemnified Party and Indemnifying Party will duly execute upon
request all instruments reasonably necessary to evidence and perfect the
above-described subrogation and subordination rights.
(d) Right
to Contest Claims of Third Parties.
(i) If
an
Indemnified Party asserts, or may in the future seek to assert, a claim for
indemnification hereunder because of any action, cause of action or suit brought
by any Person not a party to this Agreement (a “Third
Party Claimant”)
that
may result in a Loss with respect to which the Indemnified Party would be
entitled to indemnification pursuant to this Section 8.3 (an “Asserted
Liability”),
the
Indemnified Party shall deliver to the Indemnifying Party a Claims Notice with
respect thereto, which Claims Notice shall, in accordance with the provisions
of
Section 8.2 hereof, be delivered as promptly as practicable after an action
in
connection with such Asserted Liability is commenced against the Indemnified
Party.
(ii) The
Indemnifying Party shall have the right, upon written notice to the Indemnified
Party, to investigate, contest, defend or settle any Asserted Liability that
may
result in a Loss with respect to which the Indemnified Party is entitled to
indemnification pursuant to this Section 8.3; provided that (A)
the
counsel for the Indemnifying Party who conducts the defense of such claim or
litigation is reasonably satisfactory to the Indemnified Party, and (B)
the
Indemnified Party may, at its option and at its own expense, participate in
the
investigation, contesting, defense or settlement of any such Asserted Liability
through representatives and counsel of its own choosing (it being understood
that the Indemnifying Party shall bear the cost of such counsel if the
Indemnified Party in good faith determines that it may have one or more defenses
or counterclaims that are inconsistent with one or more of those of the
Indemnifying Party in respect of the Asserted Liability); and, provided further,
that the Indemnifying Party shall not settle any Asserted Liability unless
(i)
such settlement is on exclusively monetary terms and
provides as an unconditional term an immediate release of the Indemnified Party
for all liability with respect to such Asserted Liability or
(ii) the
Indemnified Party has consented to the terms of such settlement. If requested
by
the Indemnifying Party, the Indemnified Party will, at the sole cost and expense
of the Indemnifying Party, cooperate with reasonable requests of the
Indemnifying Party and its counsel in contesting any Asserted Liability,
including, if appropriate and related to the Asserted Liability in question,
in
making any counterclaim against the Third Party Claimant, or any cross-complaint
against any Person (other than the Indemnified Party or its Affiliates). If
the
Indemnifying Party fails to undertake the defense of the Asserted Liability
reasonably promptly, the Indemnified Party may, at its option and at the
Indemnifying Party’s expense, to do so in such manner as it deems appropriate;
provided, however, that the Indemnified Party shall not settle or compromise
any
Asserted Liability for which it seeks indemnification hereunder without the
prior written consent of the Indemnifying Party (which shall not be unreasonably
withheld or delayed).
9
(iii) The
Indemnifying Party may participate in (but not control) the defense of any
Asserted Liability that it has not elected to defend with its own counsel and
at
its own expense.
(iv) The
Indemnifying Party and the Indemnified Party shall make mutually available
to
each other all relevant information in their possession relating to any Asserted
Liability (except to the extent that such action would result in a loss of
attorney-client privilege or would violate any applicable law) and shall
cooperate with each other in the defense thereof.
(e)
No
Duplication; Sole Remedy.
(i) Any
liability for indemnification hereunder shall be determined without duplication
of recovery by reason of the state of facts giving rise to such liability
constituting a breach of more than one representation or warranty.
(ii) The
parties’ respective rights to indemnification provided for in this Section 8.3
shall be the exclusive remedy for any Losses for which indemnification is
provided hereunder; provided, however, that nothing contained herein shall
prevent an Indemnified Party from pursuing remedies that may be available to
such party under applicable law in the event of an Indemnifying Party’s failure
to comply with its indemnification obligations under this Section 8.3 or in
the
case of fraud.
8.4 Survival
of Representations, Warranties and Covenants.
The
representations and warranties of the parties hereto made pursuant to this
Agreement shall survive the Closing until two (2) years after the Closing Date,
provided that the representations and warranties contained in Sections 4.1,
4.2,
5.2, and 5.3 shall survive indefinitely.
8.5 No
Implied Waivers.
No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
8.6 Successors
and Assigns.
All the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective parties hereto, the successors
and assigns of the respective Investors and the successors of the Company
whether so expressed or not. None of the parties hereto may assign any of its
rights or obligations hereunder without the prior written consent of the other
parties hereto, except that an Investor may, without the prior consent of the
Company, assign its rights hereunder to any of its Affiliates. This Agreement
shall not inure to the benefit of or be enforceable by any other
Person.
10
8.7 Headings.
The
headings of the Sections and paragraphs of this Agreement have been inserted
for
convenience of reference only and do not constitute a part of this
Agreement.
8.8 Governing
Law.
This
Agreement will be governed by and construed under the laws of the State of
New
York without regard to its conflicts of laws rules.
8.9 Expenses.
Except
as otherwise specifically provided in this Agreement, the parties to this
Agreement shall bear their respective costs and expenses incurred in connection
with the preparation and execution of this Agreement and the transactions
contemplated hereby.
8.10 Jurisdiction.
Any
suit, action or proceeding seeking to enforce any provision of, or based on
any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby may be brought in any federal or state court located in
the
County of New York and State of New York, and each of the parties hereby
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any
such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 8.2 shall be deemed effective service of process on such
party.
8.11 Waiver
of
Jury Trial.
EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
8.12 Counterparts;
Effectiveness.
This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, with the same effect as if all parties had
signed the same document. All such counterparts shall be deemed an original,
shall be construed together and shall constitute one and the same instrument.
This Agreement shall become effective when each party hereto has received
counterparts hereof signed by all of the other parties hereto.
8.13 Entire
Agreement.
This
Agreement and the other Transaction Documents contain the entire agreement
among
the parties hereto with respect to the subject matter hereof and such Agreement
supersedes and replaces all other prior agreements, written or oral, among
the
parties hereto with respect to the subject matter hereof.
8.14 Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such a determination, the parties shall negotiate
in
good faith to modify this Agreement so as to effect the original intent of
the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated
to
the fullest extent possible.
11
8.15 No
Further Obligation.
Following the Closing, except for the payment by each Investor of the Purchase
Price in accordance with the terms hereof, no Investor has any further
obligation to invest in the Company under this Agreement, the other Transaction
Documents, or any of the transactions contemplated hereby or thereby.
IN
WITNESS WHEREOF, the Investors hereto have caused this Subscription Agreement
to
be duly executed as of the day and year first above written.
|
__________________________
▇▇▇▇▇
▇▇
Chairman
of the Board/ Chief Executive Officer/ Chief Financial
Officer
|
Escrow
Agent
Berkman,
Henoch, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
__________________________
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
|
Investors:
|
Name
|
Signature
|
Name
|
Signature
|
|
1)
▇▇▇▇▇▇ ▇▇▇▇▇
|
6)
▇▇▇ ▇▇▇
|
||
|
2)
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
7)
▇▇▇▇▇ ▇▇▇▇
|
||
|
3)
▇▇▇▇▇▇▇ ▇▇
|
8)
Shaoke Chen
|
||
|
4)
Pingxin Liu
|
9)
▇▇▇▇▇▇▇ ▇▇▇
|
||
|
5)
▇▇ ▇▇▇▇
|
10)
Mingtung Chen
|
12
EXHIBIT
A
ACCREDITED
INVESTOR QUESTIONNAIRE
To:
Supreme
Realty Investments, Inc. (the “Company”)
The
undersigned hereby represents and warrants that the information contained in
this accredited investor questionnaire is true and accurate and acknowledges
that the Company is relying thereon.
Status
as
an “Accredited Investor”. Investor is (check ALL that apply):
_____
(i) A
natural
person whose individual net worth (assets less liabilities), or joint net worth
with his or her spouse, exceeds $1,000,000.
_____
(ii) A
natural
person whose individual income was in excess of $200,000, or whose joint income
with his or her spouse was in excess of $300,000, in each of the two most recent
years, and who has a reasonable expectation of reaching the same income level
for the current year.
_____
(iii) A
director or an executive officer of the Company.
_____
(iv) A
bank,
insurance company, registered investment business development company, small
business investment company or employee benefit plan.
_____
(v) A
savings
and loan association, credit union, or similar financial institution, or a
registered broker or dealer.
_____
(vi) A
private
business development company.
_____
(vii) An
organization described in Section 501(c)(3) of the Internal Revenue Code with
assets in excess of $5,000,000.
_____
(viii) A
corporation, Massachusetts or similar business trust, or partnership with assets
in excess of $5,000,000.
_____
(ix) A
trust
with assets in excess of $5,000,000.
_____
(x) An
entity
in which all of the equity owners are accredited investors. Also check the
item(s) [(i)-(ix)] that apply to the equity owners. [This item is not available
to an irrevocable trust.]
_____
(xi) A
self-directed ▇▇▇, ▇▇▇▇▇, or similar plan of which the individual directing
the
investments qualifies as an “accredited investor” in one or more of items
(i)-(x) above. Also check the item(s) [(i)-(x)] that apply to the
individual.
_____
(xii) None
of
the above.
The
undersigned submits this accredited investor questionnaire as of the date
written below.
|
__________________________
Name:
|
13
PROMISSORY
NOTE
AND
PLEDGE AGREEMENT
|
$______,000
|
May
,
2006
|
_______________
residing at ________________________ (the “Maker”) promises to pay the principal
amount of $_____________ (the “Principal Amount”) to the order of Supreme Realty
Investments, Inc. (the “Payee”), a Nevada corporation, within five business days
of written notification from the Payee that a registration statement (the
“Registration Statement”) pursuant to the Securities Act of 1933, as amended,
filed by the Payee with the Securities and Exchange Commission (the “SEC”)
registering the shares of Payee’s Common Stock was declared effective by the SEC
(the “Maturity Date”).
By
Maker's execution and delivery of this Promissory Note and Pledge Agreement
(the
“Note”) and Payee's acceptance of thereof, Maker and Payee acknowledge and agree
that the proceeds of this Note to Maker shall be used to finance the Maker's
purchase of ___________ shares of the Payee's common stock, par value $.001
per
share (the “Shares”) pursuant to a Subscription Agreement dated the date hereof
(the “Subscription Agreement”), which Shares the Payee has agreed to cause to be
registered for resale pursuant to the Securities Act of 1933, as
amended.
The
rights, duties and obligations of (a) Maker under this Note may not be assigned
without the prior consent of Payee and (b) Payee under this Note may be assigned
without the prior consent of Maker.
In
order
to secure (i) the due and punctual payment of all monetary obligations hereunder
of Maker to Payee and any reasonable costs and expenses (including, but not
limited to, all legal fees and expenses) of collection or enforcement of any
such obligations and (ii) the due and punctual payment of any costs and expenses
incurred in connection with the realization of the security for which this
Note
provides and any reasonable costs and expenses (including, but not limited
to,
all legal fees and expenses) incurred in connection with any proceedings to
which this Note may give rise (collectively referred to herein as
“Liabilities”), Maker hereby transfers, assigns, grants, bestows, sells, conveys
and pledges to Payee a first security interest in the Collateral (as herein
defined), which security interest shall remain in full force and effect until
all of the Liabilities shall have been paid in full to Payee, or until this
Note
is cancelled as set forth herein.
For
purposes of this Note, “Collateral” shall mean all of Maker's right, title and
interest in and to the Shares, represented by the stock certificate to be issued
to the Payee in connection with the execution of this Note, and all proceeds
and
products thereof (as the foregoing terms are defined in the Uniform Commercial
Code as in effect in the State of New York).
14
Concurrently
with the Maker's execution and delivery of this Note, Maker has (a) duly
executed in blank a stock power required by the pledge of the Collateral
hereunder; (b) delivered the stock certificate representing the Collateral
to
Escrow Agent (as defined in Subscription Agreement) to be held by the Escrow
Agent pending the payment in full of this Note; and (c) irrevocably appointed
Payee as Maker's attorney-in-fact to complete the stock power to realize upon
the Collateral upon nonpayment of principal or interest under this Note, with
such appointment being coupled with an interest.
This
Note
may be prepaid in whole or in part without premium or penalty or at any time
and
from time to time at the option of the Maker. Contemporaneously with Maker's
final payment of all amounts due under this Note, the original copy shall be
marked “Paid in Full” and signed by Payee, and the cancelled original copy of
the Note and all Collateral shall be returned by Payee to Maker. Notwithstanding
the foregoing, in the event the Registration Statement is
Except
as
contemplated by this Note, Maker shall not encumber or grant a security interest
in any of the Collateral, without the prior written consent of Payee, and Maker
hereby represents that he has not done so heretofore and, other than the grant
of the security interest contemplated hereby, the Collateral pledged by him
hereunder is, and will be, owned by him free and clear of all liens and
encumbrances.
In
the
event the Maker defaults in the payment of this Note, the Payee shall give
written notice of such default to the Maker. In the event the Maker does not
pay
all outstanding principal due within five business days of his receipt of such
notice, Payee may thereupon proceed against the Maker to collect the Principal
Amount.
If
the
Maker does not pay the Principal Amount to the Payee within such five business
day period, then Payee may, to the extent permitted by applicable law, either
(i) sell for the account of the Maker any and all of the Shares in the Payee's
discretion in such quantities or lots as may seem best to the Payee, at which
sale or sales the maker may bid and purchase, or (ii) return such shares to
treasury. After first applying the proceeds of the sale to the payment of the
expenses of sale, the Payee shall then apply the proceeds to the satisfaction
of
this Note, and thereafter may pay any surplus and deliver any unsold Shares
to
the Maker. In the event that Payee is prohibited by applicable law from selling
the Shares, Payee shall be entitled to retain a sufficient number of Shares
such
that the product obtained by multiplying the number of shares retained by Payee
hereunder times the officially reported market closing price for comparable
Shares on the date this remedy is exercised shall be equal to the balance due
hereunder. Thereupon, all obligations between the Maker and Payee under this
Note and Pledge Agreement shall cease. In the event that the sale of the full
amount of Shares does not generate sufficient funds to retire this Note and
satisfy Maker's obligations hereunder, or in the event that the Maker is
prohibited from selling such Shares and retains the Shares as provided herein,
the Maker will be responsible for the balance of the Principal Amount
due.
In
the
event the Registration Statement has not been declared effective on or prior
to
the one year anniversary of the date of this Agreement (i) the Payee shall
return to the Maker the payment the Maker made to the Maker pursuant to Section
3.1 of the Subscription Agreement, and (ii) the Escrow Agent shall return the
Securities to the Company for cancellation.
15
This
Note
shall be governed by, and construed in accordance with the internal laws of
the
State of New York without giving effect to the conflict of laws provisions
thereof.
IN
WITNESS WHEREOF, Maker has executed and delivered this Note and Pledge Agreement
as of the date first above written.
Maker
________________________
Acknowledged
and Agreed to
Effective
as of the date first written above.
By:
_______________________
▇▇▇▇▇
▇▇,
President
16
IRREVOCABLE
STOCK POWER
FOR
VALUE
RECEIVED, The undersigned does (do) hereby sell, assign and transfer
unto
______________________________________________________________________________
______________________________________________________________________________
__________________________________________________
___________________________
S.
S. #
or F. I. D. #
__________________
Shares of the Common Stock of Supreme Realty Investments, Inc. represented
by
certificate(s) no(s) ________________________________________________ inclusive,
standing
in
the
name of the undersigned on the books of said Company.
The
undersigned does (do) hereby irrevocably constitute and appoint Supreme
Realty Investments,
Inc.
Attorney
to transfer the said stock on the books of said Company, with full power of
substitution
in
the
premises.
_______________________________________________
_______________________________________________
person(s)
executing this power sign(s) here
_________________________________________________________________
WITNESS
17
SCHEDULE
1
|
Investors
|
Address
|
Number
of Shares of Common Stock Acquired
|
Purchase
Price
|
|
1)
▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
8,250,000
|
USD
150,000
|
|
2)
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
8,250,000
|
USD
150,000
|
|
3)
▇▇▇▇▇▇▇ ▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
8,250,000
|
USD
150,000
|
|
4)
Pingxin ▇▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
8,250,000
|
USD
150,000
|
|
5)
▇▇ ▇▇▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
8,250,000
|
USD
150,000
|
|
6)
▇▇▇ ▇▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
2,750,000
|
USD
50,000
|
|
7)
▇▇▇▇▇ ▇▇▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
2,750,000
|
USD
50,000
|
|
8)
Shaoke ▇▇▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
2,750,000
|
USD
50,000
|
|
9)
▇▇▇▇▇▇▇ ▇▇▇
|
▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
2,750,000
|
USD
50,000
|
|
10)
Mingtung Chen
|
No.
5A, Zuanshi Ge,
▇▇▇▇▇▇▇
▇▇ Tian ▇▇▇▇ ▇▇▇▇,
Fu
Tian Qu, Shenzhen City, P.R. China
|
2,750,000
|
USD
50,000
|
18