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Execution Copy
AGREEMENT AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER (this
“
Agreement ”)
has been made as of October 19, 2007, by and among Best Care, Inc.,
a Nevada corporation (
“BCI” ),
BCAE Merger Sub, Inc., a Nevada corporation and a wholly-owned
Subsidiary of BCI (
“
Sub ”),
China Baolong Logistic Limited, a British Virgin Islands
corporation (
“CBL” ),
and the shareholders of CBL, each of whom is identified on
Schedule A to
this Agreement (the “
CBL Shareholders ”).
Whereas ,
the respective Boards of Directors of BCI, Sub and CBL have
approved the merger, pursuant and subject to the terms and
conditions of this Agreement, of Sub with and into CBL (the
“Merger” ),
whereby all of the issued and outstanding shares of the Common
Stock of CBL (the “
CBL Common Stock” )
will be converted into the right to receive a specified number of
shares of the Common Stock of BCI (the “
BCI Common Stock ”);
and the parties each desire to make certain representations,
warranties and agreements in connection with the Merger and also to
prescribe various conditions to the Merger;
Now, Therefore ,
in consideration of the premises and the representations,
warranties and covenants herein contained, the parties agree to
effect the Merger on the terms and conditions herein provided and
further agree as follows:
ARTICLE 1. DEFINITIONS
1.1
Definitions.
In
addition to the other definitions contained in this Agreement,
the following terms will, when used in this Agreement, have
the following respective meanings:
“
Affiliate
” means
a Person that, directly or indirectly, controls, is controlled by,
or is under common control with, the referenced party.
“BVI” British
Virgin Islands.
“Claim” means
any contest, claim, demand, assessment, action, suit, cause of
action, complaint, litigation, proceeding, hearing, arbitration,
investigation or notice of any of the foregoing involving any
Person.
“Closing” means
the consummation of the Merger.
“Code” means
the Internal Revenue Code of 1986, as amended, together with all
rules and regulations promulgated thereunder.
“Constituent Corporations”
means
CBL and Sub, as the constituent corporations of the
Merger.
“GAAP” means
United States generally accepted accounting practices.
“GCL” means
the Nevada General Corporation Law.
“Person” means
and includes any individual, partnership, corporation, trust,
company, unincorporated organization, joint venture or other
entity, and any Governmental Entity.
“Record Holder” means
a holder of record of CBL Common Stock as shown on the regularly
maintained stock transfer records of CBL.
“Subsidiary” means,
with respect to any Person, any corporation, partnership, joint
venture, trust or other entity of which such Person, directly or
indirectly through an Affiliate, owns an amount of voting
securities, or possesses other ownership interests, having the
power, direct or indirect, to elect a majority of the Board of
Directors or other governing body thereof.
“Surviving Corporation”
means
CBL, as the surviving corporation of the Merger.
“U.S.” means
the United States of America.
1.2
Interpretation.
In
this Agreement, unless the express context otherwise
requires:
(a) the
words “
herein,”
“hereof” and
“hereunder and
words of similar import refer to this Agreement as a whole and not
to any particular provision of this Agreement;
(b) references
to
“Article” or
“
Section” are
to the respective Articles and Sections of this Agreement, and
references to
“Exhibit” or
“Schedule” are
to the respective Exhibits and Schedules annexed
hereto;
(c) references
to a
“party” means
a party to this Agreement and include references to such
party’s successors and permitted assigns;
(d) references
to a
“third party” means
a Person that is neither a Party to this Agreement nor an Affiliate
thereof;
(e) the
terms
“dollars” and
“$
” means
U.S. dollars;
(f) terms
defined in the singular have a comparable meaning when used in the
plural, and vice versa;
(g) the
masculine pronoun includes the feminine and the neuter, and vice
versa, as appropriate in the context; and
(h) wherever
the word
“include,”
“includes” or
“including is
used in this Agreement, it will be deemed to be followed by the
words “without limitation.”
ARTICLE 2. THE MERGER
2.1
Effective Time of the Merger.
Subject
to the provisions of this Agreement, the Merger will be
consummated by the filing with the Secretary of State of the
State of Nevada of articles of merger, in such form as
required by, and signed and attested in accordance with, the
relevant provisions of the GCL and by the filing with the of
the BVI of articles of merger, in such form as required by,
and signed and attested in accordance with, the relevant
provisions of the GCL (the time of the filing of such
instruments as occurs second or such later time and date as is
specified in such filings being the
“Effective Time” ).
It is the intent of the parties to cause such filings to be made no
later than the Closing Date.
2.2
Closing.
The
Closing will take place at 10:00 a.m., local time, on the
earliest date practicable after all of the conditions set
forth in Articles 7 and 8 are satisfied or waived by the
appropriate party, but in no event later than the applicable
date referred to in Section 10.1(d) (the
“Closing Date” ),
unless another time, date or place is agreed to in writing by the
parties.
2.3
Effects of the Merger.
By
virtue of the Merger and without the necessity of any action
by or on behalf of the Constituent Corporations, or either of
them:
(a) at
the Effective Time, (i) the separate existence of Sub will cease,
and Sub will be merged with and into CBL, and (ii) the certificate
of incorporation and bylaws of CBL as in effect immediately prior
to the Effective Time will be the certificate of incorporation and
bylaws of the Surviving Corporation until thereafter amended;
and
(b) at
and after the Effective Time, the Surviving Corporation will
possess all the rights, privileges, powers and franchises of a
public as well as of a private nature, and be subject to all the
restrictions, disabilities and duties, of each of the Constituent
Corporations; and all property, real, personal and mixed, and all
debts due to either of the Constituent Corporations on whatever
account, as well for stock subscriptions as all other things in
action or belonging to each of the Constituent Corporations will be
vested in the Surviving Corporation; and all property, rights,
privileges, powers and franchises, and all and every other interest
of each of the Constituent Corporations will be thereafter as
effectually be the property of the Surviving Corporation as they
were of the respective Constituent Corporations, and the title to
any real estate vested by deed or otherwise, in either of the
Constituent Corporations, will not revert or be in any way
impaired; but all rights of creditors and all liens upon any
property of either of the Constituent Corporations will be
preserved unimpaired, and all debts, liabilities and duties of the
respective Constituent Corporations will thereafter attach to the
Surviving Corporation, and may be enforced against it to the same
extent as if such debts and liabilities had been incurred or
contracted by it.
ARTICLE 3. EFFECT OF MERGER ON CAPITAL STOCK
3.1
Effect on Capital Stock.
As
of the Effective Time, by virtue of the Merger and without any
action on the part of any holder of shares of CBL Common Stock
or of shares of the capital stock of Sub:
(a)
Capital Stock of Sub. Each
issued and outstanding share of the capital stock of Sub will be
converted into the right to receive one fully paid and
non-assessable share of the capital stock of the Surviving
Corporation.
(b)
Cancellation of Treasury Stock.
Shares
of common stock of CBL (“Common Stock”), if any, that
are held by CBL as treasury stock will be cancelled and retired and
will cease to exist, and no Merger Consideration will be delivered
in exchange therefor. Any shares of common stock of BCI (“BCI
Common Stock”), if any, owned by CBL or the CBL Shareholders
as of the Effective Time will remain unaffected by the
Merger.
(c)
Exchanged Shares;
Merger Consideration.
(i)
“Exchanged Shares”
means all shares of CBL Common Stock issued and outstanding
immediately prior to the Effective Time other than shares of CBL
Common Stock, if any, held by CBL as treasury stock
(ii) The
consideration to the CBL Shareholders in the Merger will consist of
an aggregate of 89,192,441 shares of BCI Common Stock (the
“Merger Consideration”). The “Merger
Consideration” shall be distributed among the CBL
Shareholders proportionately in accordance with their shareholdings
as set forth on
Schedule A hereto.
(d)
Exchange of Exchanged Shares for Merger
Consideration. As
of the Effective Time, by virtue of the Merger, each issued and
outstanding Exchanged Share will be converted into the right to
receive the Merger Consideration due in respect thereof, payable,
to the Record Holders of Exchanged Shares at the Effective Time. As
of the Effective Time, all
shares of CBL Common Stock will no longer be outstanding and will
automatically be cancelled and retired and will cease to exist, and
each holder of a certificate representing any such shares will
cease to have any rights with respect thereto, except the right to
receive the Merger Consideration therefor, without interest, upon
the surrender of such certificate in accordance with Section
3.2.
3.2
Exchange of Merger Consideration for Exchanged
Shares.
(a)
Exchange. On
the Closing Date, the holders of all of the CBL Common Stock shall
deliver to BCI certificates or other documents evidencing all of
the issued and outstanding CBL Common Stock, duly endorsed in blank
or with executed power attached thereto in transferable form. In
exchange for all of the CBL Common Stock tendered pursuant hereto,
BCI shall issue to CBL Shareholders the Merger Consideration pro
.
(b)
No Further Ownership Rights in CBL Common
Stock. All
shares of BCI Common Stock issued upon the surrender for exchange
of shares of CBL Common Stock in accordance with the terms hereof
will be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of CBL Common Stock, and there
will be no further registration of transfers of the shares of CBL
Common Stock (other than shares held directly or indirectly by BCI)
after the Effective Time. If, after the Effective Time,
certificates representing CBL Common Stock are presented to the
Surviving Corporation or its transfer agent for any reason, such
certificates will be cancelled and exchanged as provided by this
Article 3.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF CBL
CBL
and each of the CBL Shareholders jointly and severally
represent and warrant to BCI and to Sub as follows, as of the
date hereof and as of the Closing Date:
4.1
Organization.
CBL
is a corporation duly organized, validly existing and in good
standing under the laws of British Virgin Island and has the
corporate power and is duly authorized, qualified, franchised
and licensed under all applicable laws, regulations,
ordinances and orders of public authorities to own all of its
properties and assets and to carry on its business in all
material respects as it is now being conducted, including
qualification to do business as a foreign entity in the
country or states in which the character and location of the
assets owned by it or the nature of the business transacted by
it requires qualification. Included in the attached Schedules
(as hereinafter defined) are complete and correct copies of
the articles of incorporation, bylaws and amendments thereto
as in effect on the date hereof. The execution and delivery of
this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with
the terms hereof will not, violate any provision of
CBL’s certificate of incorporation or bylaws. CBL has
full power, authority and legal right and has taken all action
required by law, its articles of incorporation, bylaws or
otherwise to authorize the execution and delivery of this
Agreement.
4.2
Capitalization.
The
authorized capitalization of CBL consists of 50,000 shares of
common stock, no par value and no preferred shares. As of the
date hereof, there are 50,000 shares of common stock issued
and outstanding. All issued and outstanding common shares have
been legally issued, fully paid, are non-assessable and not
issued in violation of the preemptive rights of any other
person. CBL has no other securities, warrants or options
authorized or issued.
4.3
Subsidiaries.
CBL
owns 100% of Beijing Baolong Logistics Company Limited, a
China corporation (herein, “BBL”).
4.4
Tax Matters; Books & Records
(a) The
books and records, financial and others, of CBL and BBL are in all
material respects complete and correct and have been maintained in
accordance with good business accounting practices;
and
(b) Neither
CBL nor BBL has any liabilities with respect to the payment of any
country, federal, state, county, local or other taxes (including
any deficiencies, interest or penalties).
(c) Each
of CBL and BBL shall remain responsible for all debts incurred by
it prior to the closing.
4.5
Information.
The
information concerning CBL and BBL as set forth in this
Agreement and in the attached 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.
4.6
Title and Related Matters.
Each
of CBL and BBL has good and marketable title to and is the
sole and exclusive owner of all of its properties, inventory,
interests in properties and assets, real and personal
(collectively, the “Assets”) free and clear of all
liens, pledges, charges or encumbrances. Except as set forth
in the Schedules attached hereto, each of CBL and BBL owns
free and clear of any liens, claims, encumbrances, royalty
interests or other restrictions or limitations of any nature
whatsoever, any and all procedures, techniques, marketing
plans, business plans, methods of management or other
information utilized in connection with its business. Except
as set forth in the attached Schedules, no third party has any
right to, and neither CBL nor BBL has received any notice of
infringement of or conflict with asserted rights of others
with respect to any product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks, service marks,
trade names or copyrights which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding,
would have a materially adverse affect on the business,
operations, financial conditions or income of CBL or BBL or
any material portion of their properties, assets or
rights.
4.7
Litigation and Proceedings
There
are no actions, suits or proceedings pending or threatened by
or against or affecting CBL or BBL, at law or in equity,
before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator
of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business
prospects of CBL or BBL. Neither CBL nor BBL has any 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.
4.8
Contracts.
On
the Closing Date:
(a) Except
as set forth on Schedule, there are no material contracts,
agreements, franchises, license agreements, or other commitments to
which CBL or BBL is a party or by which it or any of its properties
are bound;
(b) Neither
CBL nor BBL is party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate restriction
or any judgment, order, writ, injunction, decree or award which
materially and adversely affects, or in the future may (as far as
CBL or BBL can now foresee) materially and adversely affect, the
business, operations, properties, assets or conditions of CBL or
BBL; and
(c) Neither
CBL nor BBL is party to any material 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, agreement or arrangement covered by
Title IV of the Employee Retirement Income Security Act, as
amended; (iii) agreement, contract or indenture relating to the
borrowing of money; (iv) guaranty of any obligation for the
borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations, which, in the
aggregate exceeds $1,000; (v) consulting or other contract with an
unexpired term of more than one year or providing for payments in
excess of $10,000 in the aggregate; (vi) collective bargaining
agreement; or (vii) contract, agreement, or other commitment
involving payments by it for more than $10,000 in the
aggregate.
4.9
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, or constitute an event
of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to
which CBL or BBL is party or to which any of its properties or
operations are subject.
4.10
Material Contract Defaults.
To
the best knowledge and belief of CBL and BBL, neither CBL nor
BBL is in default in any material respect under the terms of
any outstanding contract, agreement, lease or other commitment
which is material to the business, operations, properties,
assets or condition of CBL or BBL, and there is no event of
default in any material respect under any such contract,
agreement, lease or other commitment in respect of which CBL
or BBL has not taken adequate steps to prevent such a default
from occurring.
4.11
Governmental Authorizations.
To
the best knowledge of CBL and BBL, each of CBL and BBL has all
licenses, franchises, permits and other governmental
authorizations that are legally required to enable it to
conduct its business operations in all material respects as
conducted on the date hereof. Except for compliance with
federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental
body is required in connection with the execution and delivery
by CBL and the CBL Shareholders of the transactions
contemplated hereby.
4.12
Compliance With Laws and Regulations.
To
the best knowledge and belief of CGD and BBL, CBL and BBL 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 CBL or BBL or would not result in
CBL’s or BBL’s incurring any material
liability.
4.13
Insurance.
All
of the insurable properties of CBL and BBL are insured for
CBL’s benefit under valid and enforceable policy or
policies containing substantially equivalent coverage and will
be outstanding and in full force at the Closing
Date.
4.14
Approval of Agreement.
The
directors of CBL have authorized the execution and delivery of
the Agreement and have approved the transactions contemplated
hereby.
4.15
Material Transactions or Affiliations.
As
of the Closing Date, there will exist no material contract,
agreement or arrangement between CBL or BBL 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 CBL
or BBL to own beneficially, ten percent (10%) or more of the
issued and outstanding Common Shares of CBL and which is to be
performed in whole or in part after the date hereof. Neither
CBL nor BBL has any commitment, whether written or oral, to
lend any funds to, borrow any money from or enter into any
other material transactions with, any such affiliated
person.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF BCI
BCI
represents and warrants to CBL, as of the date hereof and as
of the Closing Date, as follows:
5.1
Organization.
BCI
is a corporation duly organized, validly existing, and in good
standing under the laws of Nevada and has the corporate power
and is duly authorized, qualified, franchised and licensed
under all applicable laws, regulations, ordinances and orders
of public authorities to own all of its properties and assets
and to carry on its business in all material respects as it is
now being conducted, including qualification to do business as
a foreign corporation in the jurisdiction in which the
character and location of the assets owned by it or the nature
of the business transacted by it requires qualification. The
execution and delivery of this Agreement does not and the
consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not violate
any provision of BCI’s articles of incorporation or
bylaws. BCI has full power, authority and legal right and has
taken all action required by law, its articles of
incorporation, and its bylaws or otherwise to authorize the
execution and delivery of this Agreement.
5.2
Capitalization.
The
authorized capitalization of BCI consists of 100,000,000
shares of common stock, $0.001 par value per share. As of the
date hereof, BCI has approximately 4,250,000 shares of common
stock issued and outstanding. All issued and outstanding
shares are legally issued, fully paid and non-assessable and
are not issued in violation of the preemptive or other rights
of any person.
5.3
Subsidiaries.
BCI
has no subsidiaries other than Sub.
5.4
Tax Matters: Books and Records.
(a) The
books and records, financial and others, of BCI are in all material
respects complete and correct and have been maintained in
accordance with good business accounting practices;
and
(b) BCI
has no liabilities with respect to the payment of any country,
federal, state, county, or local taxes (including any deficiencies,
interest or penalties).
(c) BCI
shall remain responsible for all debts incurred by BCI prior to the
date of closing.
5.5
Litigation and Proceedings.
There
are no actions, suits, proceedings or investigations pending
or threatened by or against or affecting BCI 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 that would have a material
adverse affect on the business, operations, financial
condition or income of BCI. BCI is not in default with respect
to any judgment, order, writ, injunction, decree,
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