Exhibit 10-a
MERGER AGREEMENT
by and among
Standard Commerce, Inc.,
Jianye Acquisition Corp.
and
American Jianye Ethanol Company, Inc.
Dated as of November 12, 2007
MERGER AGREEMENT
Merger Agreement (the “ Agreement ”)
dated as of November 12, 2007 by and among Standard Commerce, Inc.,
a corporation formed under the laws of the State of Delaware
(“STCC”), Jianye Acquisition Corp., a corporation newly
formed under the laws of the State of Delaware and a wholly owned
subsidiary of STCC (the “ Merger Sub ”), and
American Jianye Ethanol Company, Inc. , a corporation formed
under the laws of the State of Delaware (“ American
Jianye ”). Each of STCC, the Merger Sub, and
American Jianye is referred to herein individually as a “
Party ” and all are referred to collectively as the
“ Parties .”
PREAMBLE
WHEREAS , American Jianye owns 100% of the registered
capital of Zhao Dong Jianye Fuel Co., Ltd., a corporation organized
under the laws of The People’s Republic of China (“
Zhao Dong Jianye ”);
WHEREAS , STCC and American Jianye have determined that a
business combination between them is advisable and in the best
interests of their respective companies and stockholders and
presents an opportunity for their respective companies to achieve
long-term strategic and financial benefits;
WHEREAS , STCC has proposed to acquire American Jianye
pursuant to a merger transaction whereby, pursuant to the terms and
subject to the conditions of this Agreement, American Jianye shall
become a wholly owned subsidiary of STCC through the merger of
American Jianye with and into the Merger Sub (the “
Merger ”); and
WHEREAS , in the Merger, all issued and outstanding shares
of capital stock of American Jianye shall be cancelled and
converted into the right to receive 189,901,500 shares of common
stock of STCC (the “ Merger Shares”) which
Shares shall represent 97.46% of the voting power of STCC after the
Merger;
NOW, THEREFORE , in consideration of the premises and the
mutual covenants, representations and warranties contained herein,
the Parties, intending to be legally bound, hereby agree as
follows:
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings set forth below:
“ Applicable Law ” means any domestic or foreign
law, statute, regulation, rule, policy, guideline or ordinance
applicable to the businesses of the Parties, the Merger and/or the
Parties.
“ DGCL” means Delaware General Corporation
Law.
“Knowledge” means, in the case of STCC or
American Jianye, a particular fact or other matter of which its
Chief Executive Officer or the Chief Financial Officer is actually
aware or which a prudent individual serving in such capacity could
be expected to discover or otherwise become aware of in the course
of conducting a reasonable review or
investigation of the corporation and its
business and affairs.
“ Lien ” means, with respect to any property or
asset, any mortgage, lien, pledge, charge, security interest,
claim, encumbrance, royalty interest, any other adverse claim of
any kind in respect of such property or asset, or any other
restrictions or limitations of any nature whatsoever.
“ Material Adverse Effect ” with respect to any
entity or group of entities means any event, change or effect that
has or would have a materially adverse effect on the financial
condition, business or results of operations of such entity or
group of entities, taken as a whole.
“ Person ” means any individual, corporation,
partnership, trust or unincorporated organization or a government
or any agency or political subdivision thereof.
“ Surviving Entity ” shall mean American Jianye
as the surviving entity in the Merger as provided in Section
1.04.
“ Tax ” (and, with correlative meaning, “
Taxes ” and “ Taxable ”) means:
(i) any income, alternative or add-on minimum tax, gross receipts
tax, sales tax, use tax, ad valorem tax, transfer tax, franchise
tax, profits tax, license tax, withholding tax, payroll tax,
employment tax, excise tax, severance tax, stamp tax, occupation
tax, property tax, environmental or windfall profit tax, custom,
duty or other tax, impost, levy, governmental fee or other like
assessment or charge of any kind whatsoever together with any
interest or any penalty, addition to tax or additional amount
imposed with respect thereto by any governmental or Tax authority
responsible for the imposition of any such tax (domestic or
foreign), and
(ii) any liability for the payment of any amounts of the type
described in clause (i) above as a result of being a member of an
affiliated, consolidated, combined or unitary group for any Taxable
period, and
(iii) any liability for the payment of any amounts of the type
described in clauses (i) or (ii) above as a result of any express
or implied obligation to indemnify any other person.
“ Tax Return ” means any return, declaration,
form, claim for refund or information return or statement relating
to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
ARTICLE I
THE MERGER
SECTION 1.01
PROCEDURE
Upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the DGCL, at the Effective
Time (as hereinafter defined), all American Jianye Shares (as
hereinafter defined) shall be cancelled and converted into the
right to receive the Merger Shares. In connection therewith,
the following terms shall apply:
(a)
Exchange Agent . Robert Brantl, Esq., counsel for
STCC, shall act as the exchange agent (the “ Exchange
Agent ”) for the purpose of exchanging American Jianye
Shares for the Merger Shares. At or prior to the
Closing, STCC shall deliver to the Exchange Agent the Merger
Shares.
(b)
Conversion of Securities .
(i)
Conversion of American Jianye Securities . At the
Effective Time, by virtue of the Merger and without any action on
the part of STCC, American Jianye or the Merger Sub, or the holders
of any of their respective securities:
(A)
Each of the issued and outstanding shares of common stock of
American Jianye (the “ American Jianye Shares ”)
immediately prior to the Effective Time shall be converted into and
represent the right to receive, and shall be exchangeable for, that
number of common shares of STCC as shall be determined by dividing
189,901,500 by the number of then issued and outstanding American
Jianye Shares.
(B)
All American Jianye Shares shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto, except the right to
receive the Merger Shares to be issued pursuant to this Section
1.01(b)(i) upon the surrender of such certificate in accordance
with Section 1.07, without interest. No fractional shares may
be issued; but each fractional share that would result from the
Merger will be rounded to the nearest number of whole shares.
(ii)
Conversion of Merger Sub Stock . At the Effective
Time, by virtue of the Merger and without any action on the part of
American Jianye, STCC, the Merger Sub, or the holders of any of
their respective securities, each share of capital stock of Merger
Sub outstanding immediately prior to the Effective Time shall be
converted into one share of the common stock of the Surviving
Entity and the shares of common stock of the Surviving Entity so
issued in such conversion shall constitute the only outstanding
shares of capital stock of the Surviving Entity and the Surviving
Entity shall be a wholly owned subsidiary of STCC.
SECTION 1.02
CLOSING
The closing of the Merger (the “ Closing ”) will
take place at the offices of Robert Brantl, Esq. within one (1)
business day following the satisfaction or waiver of the conditions
precedent set forth in Article V or at such other date as STCC and
American Jianye shall agree (the “ Closing Date
”), but in any event no later than November 30, 2007 unless
extended by a written agreement of STCC and American Jianye.
SECTION 1.03
MERGER; EFFECTIVE TIME
At the Effective Time and subject to and upon the terms and
conditions of this Agreement, Merger Sub shall, and STCC shall
cause Merger Sub to, merge with and into American Jianye in
accordance with the provisions of the DGCL, the separate corporate
existence of Merger Sub shall cease and American Jianye shall
continue as the Surviving Entity. The Effective Time shall
occur upon the filing with the Secretary of State of the State of
Delaware of a Certificate of Merger, executed in accordance with
the applicable provisions of the DGCL (the “ Effective
Time ”). The date on which the Effective Time
occurs is referred to as the “ Effective Date .”
Provided that this Agreement has not been terminated pursuant
to Article VI, the Parties will cause the Certificate of Merger to
be filed as soon as practicable after the Closing.
SECTION 1.04
EFFECT OF THE MERGER
The Merger shall have the effect set forth in Title 8, Section 259
of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the
properties, rights,
privileges, powers and franchises of American Jianye and Merger Sub
shall vest in the Surviving Entity, and all debts, liabilities and
duties of American Jianye and Merger Sub shall become the debts,
liabilities and duties of the Surviving Entity.
SECTION 1.05
CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS
AND OFFICERS
Pursuant to the Merger:
(a)
The Certificate of Incorporation and Bylaws of American Jianye as
in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation and Bylaws of the Surviving Entity
immediately following the Merger.
(b)
The directors and officers of the American Jianye immediately prior
to the Merger shall be the directors and officers of the Surviving
Entity subsequent to the Merger.
SECTION 1.06
RESTRICTIONS ON RESALE
(a)
The Merger Shares will not be registered under the Securities Act,
or the securities laws of any state, and cannot be transferred,
hypothecated, sold or otherwise disposed of until: (i) a
registration statement with respect to such securities is declared
effective under the Securities Act, or (ii) STCC receives an
opinion of counsel for the holders of the shares proposed to be
transferred, reasonably satisfactory to counsel for STCC, that an
exemption from the registration requirements of the Securities Act
is available.
The certificates representing the Merger Shares which are being
issued hereunder shall contain a legend substantially as
follows:
“THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT
THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR STANDARD COMMERCE,
INC. RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY
SATISFACTORY TO COUNSEL FOR STANDARD COMMERCE, INC. THAT AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS
AVAILABLE.”
SECTION 1.07
EXCHANGE OF CERTIFICATES
(a)
EXCHANGE OF CERTIFICATES. After the Effective Time, the
holders of the American Jianye Shares shall be required to
surrender all their American Jianye Shares to the Exchange Agent,
and the holders shall be entitled upon such surrender to receive in
exchange therefor certificates representing the proportionate
number of Merger Shares into which the American Jianye Shares
theretofore represented by the stock certificates so surrendered
shall have been exchanged pursuant to this Agreement. Until
so surrendered, each outstanding certificate which, prior to the
Effective Time, represented American Jianye Shares shall be deemed
for all corporate purposes, subject to the further provisions of
this Article I, to evidence the ownership of the number of whole
Merger Shares for which such American Jianye Shares have been so
exchanged. No dividend payable to holders of Merger Shares of
record as of any date subsequent to the Effective Time shall be
paid to the owner of any certificate which, prior to the Effective
Time, represented American Jianye Shares, until such certificate
or
certificates representing all the relevant American Jianye Shares,
together with a stock transfer form, are surrendered as provided in
this Article I or pursuant to letters of transmittal or other
instructions with respect to lost certificates provided by the
Exchange Agent.
(b)
FULL SATISFACTION OF RIGHTS. All Merger Shares for which the
American Jianye Shares shall have been exchanged pursuant to this
Article I shall be deemed to have been issued in full satisfaction
of all rights pertaining to the American Jianye Shares.
(c)
EXCHANGE OF CERTIFICATES. All certificates representing
American Jianye Shares converted into the right to receive Merger
Shares pursuant to this Article I shall be furnished to STCC
subsequent to delivery thereof to the Exchange Agent pursuant to
this Agreement.
(d)
CLOSING OF TRANSFER BOOKS. On the Effective Date, the stock
transfer book of American Jianye shall be deemed to be closed and
no transfer of American Jianye Shares shall thereafter be recorded
thereon.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STCC
STCC and, where applicable, the Merger Sub hereby jointly and
severally represent and warrant to American Jianye, as of the date
of this Agreement, as of the Closing Date and as of the Effective
Time, as follows:
SECTION 2.01
ORGANIZATION, STANDING AND POWER
STCC is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, and has
corporate power and authority to conduct its business as presently
conducted by it and to enter into and perform this Agreement and to
carry out the transactions contemplated by this Agreement.
Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has corporate power and authority to enter into and
perform this Agreement and to carry out the transactions
contemplated by this Agreement.
SECTION 2.02
SUBSIDIARIES
STCC owns all of the outstanding capital stock of the Merger Sub.
Other than its ownership of the Merger Sub, STCC does not
have an ownership interest in any Person.
Merger Sub is a recently formed
corporation and prior to the date hereof and through the Effective
Date, Merger Sub has not and shall not have conducted any operating
business, become a party to any agreements, or incurred any
liabilities or obligations.
SECTION 2.03
CAPITALIZATION
(a)
There are 201,000,000 shares of capital stock of STCC authorized,
consisting of 100,000,000 shares of common stock, $0.001 par value
per share (the “ STCC Common Shares ”), and
1,000,000 shares of preferred stock, $0.001 par value per
share (“ STCC Preferred Shares”) . As of
the date of this Agreement, there are 4,948,500 STCC Common Shares
issued and outstanding and no STCC Preferred Shares
outstanding.
(b)
No STCC Common Shares or STCC Preferred Shares have been reserved
for issuance to any Person. There are no outstanding rights,
warrants, options or agreements for the purchase of STCC Common or
Preferred Shares except as provided in this Agreement.
(c)
All outstanding STCC Common Shares are validly issued, fully paid,
non-assessable, not subject to pre-emptive rights and have been
issued in compliance with all state and federal securities laws or
other Applicable Law. The Merger Shares issuable to the
American Jianye shareholders pursuant to the Merger will, when
issued pursuant to this Agreement, be duly and validly authorized
and issued, fully paid and non-assessable.
SECTION 2.04
AUTHORITY FOR AGREEMENT
The execution, delivery, and performance of this Agreement by each
of STCC and Merger Sub has been duly authorized by all necessary
corporate and shareholder action, and this Agreement, upon its
execution by the Parties, will constitute the valid and binding
obligation of each of STCC and the Merger Sub, enforceable
against each of them in accordance with and subject to its terms,
except as enforceability may be affected by bankruptcy, insolvency
or other laws of general application affecting the enforcement of
creditors' rights. The execution and consummation of the
transactions contemplated by this Agreement and compliance with its
provisions by STCC and Merger Sub will not violate any provision of
Applicable Law and will not conflict with or result in any breach
of any of the terms, conditions, or provisions of, or constitute a
default under, STCC's or Merger Sub’s Certificate of
Incorporation, or either of their Bylaws, in each case as amended,
or, in any material respect, any indenture, lease, loan agreement
or other agreement or instrument to which STCC is a party or by
which it or any of its properties is bound, or any decree,
judgment, order, statute, rule or regulation applicable to STCC or
Merger Sub.
SECTION 2.05
FINANCIAL CONDITION
The Form 10-SB filed by STCC and the Quarterly Reports on Form
10-QSB filed by STCC for the periods ended March 31, 2007 and June
30, 2007 (the “SEC Filings”) are true, correct and
complete in all material respects, are not misleading and do not
omit to state any material fact which is necessary to make the
statements contained in such public filings not misleading in any
material respect. The financial statements included in the
SEC Filings (the “Financial Statements”) were prepared
in accordance with generally accepted accounting principles and
fairly reflect the financial condition of STCC as of the dates
stated and the results of its operations for the periods
presented.
SECTION 2.06
ABSENCE OF CERTAIN CHANGES OR EVENTS
Since June 30, 2007, except as reported in the Quarterly Report
filed by STCC with the Securities and Exchange Commission (“
SEC”) on Form 10-QSB for the period ending on that
date, and except as contemplated by this Agreement:
(a)
there has not been any Material Adverse Change in the business,
operations, properties, assets, or condition of STCC;
(b)
STCC has not (i) amended its Articles of Incorporation; (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 outstanding capital stock; (iii) made any material
change in its method of management, operation, or accounting; (iv)
entered into any material transaction; or (v) made any accrual or
arrangement for payment of bonuses or special compensation of any
kind or any severance or termination pay to any present or former
officer or employee;
(c)
STCC has not (i) 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; (ii) paid any material obligation or liability
(absolute or contingent) other than current liabilities reflected
in or shown on the most recent STCC balance sheet, and current
liabilities incurred since that date in the ordinary course of
business; (iii) sold or transferred, or agreed to sell or transfer,
any material assets, properties, or rights, or canceled, or agreed
to cancel, any material debts or claims; or (iv) made or permitted
any material amendment or termination of any contract, agreement,
or license to which it is a party.
SECTION 2.07
GOVERNMENTAL AND THIRD PARTY CONSENTS
No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other federal, state, county, local or
other foreign governmental authority, instrumentality, agency or
commission or any third party, including a party to any agreement
with STCC or Merger Sub, is required by or with respect to STCC or
Merger Sub in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby, except for such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be
required under (i) applicable securities laws, or (ii) the
DGCL.
SECTION 2.08
LITIGATION
There is no action, suit, investigation, audit or proceeding
pending against, or to the Knowledge of STCC, threatened against or
affecting, STCC or the Merger Sub or any of their respective assets
or properties before any court or arbitrator or any governmental
body, agency or official.
SECTION 2.09
INTERESTED PARTY TRANSACTIONS
STCC is not indebted to any officer or director of STCC, and no
such person is indebted to STCC.
SECTION 2.10
COMPLIANCE WITH APPLICABLE LAWS
To the Knowledge of STCC, the business of each of STCC and the
Merger Sub has not been, and is not being, conducted in violation
of any Applicable Law.
SECTION 2.11
TAX RETURNS AND PAYMENT
STCC has duly and timely filed all material Tax Returns required to
be filed by it and has duly and timely paid all Taxes shown thereon
to be due. Except as disclosed in Financial Statements filed
by STCC with the SEC, there is no material claim for Taxes that is
a Lien against the property of STCC other than Liens for Taxes not
yet due and payable, none of which is material. STCC has not
received written notification of any audit of any Tax Return of
STCC being conducted or pending by a Tax authority where an adverse
determination could have a Material Adverse Effect on STCC, no
extension or waiver of the statute of limitations on the assessment
of any Taxes has been granted by STCC which is currently in effect,
and STCC is not a party to any agreement, contract or arrangement
with any Tax authority or otherwise, which may result in the
payment of any material amount in excess of the amount reflected on
the above referenced STCC Financial Statements.
SECTION 2.12
SECURITY LISTING
STCC is a fully compliant reporting company under the Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”), and all STCC public filings required under the Exchange
Act have been made. The common stock of STCC is listed for
quotation on the OTC Bulletin Board. To the Knowledge
of STCC, STCC has not been threatened or is not subject to removal
of its common stock from the OTC Bulletin Board.
SECTION 2.13
FINDERS’ FEES
STCC has not incurred, nor will it incur, directly or indirectly,
any liability for brokers’ or finders’ fees or
agents’ commissions or investment bankers’ fees or any
similar charges in connection with this Agreement or any
transaction contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMERICAN
JIANYE
American Jianye hereby represents and warrants to STCC and to
Merger Sub, as of the date of this Agreement and as of the
Effective Time (except as otherwise indicated), as follows:
SECTION 3.01
ORGANIZATION, STANDING AND POWER
American Jianye is a privately held corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware, and has full corporate power and authority to conduct
its business as presently conducted by it and to enter into and
perform this Agreement and to carry out the transactions
contemplated by this Agreement. American Jianye is duly
qualified to do business as a foreign corporation in each state in
which the nature of the business conducted by it or the character
or location o
