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ACQUISITION
AGREEMENT
THIS ACQUISITION AND STOCK PURCHASE
AGREEMENT (this “Agreement”) is dated as of
September 6, 2007, by and among American Oriental
Bioengineering Inc., a Nevada Corporation with registered address
at 90 Park Avenue 17th Floor, New York, NY 10016
(“AOBO”), and Renson Holdings Limited, (the
“Parent”), a company with registered address at 30
DeCastro Street, Wickhams Cayl, P.O. Box 4519, Road Town, Trotola,
British Virgin Islands , organized under the laws of the
British Virgin Islands which owns all of the outstanding capital
stock of Changchun Xinan Pharmaceutical Group Company Limited
(“Xinan”), a corporation organized under the laws of
the People’s Republic of China
(“PRC”).
RECITALS:
WHEREAS, Parent owns all of
the issued and outstanding shares of common stock of Xinan
(“Shares”); and
WHEREAS, the Parent wishes to
sell to AOBO, and AOBO wishes to purchase from the Parent, the
Shares, for a consideration of US$28.5 million, upon the terms and
subject to the conditions set forth herein;
THE PARTIES desire to make
certain representations, warranties and agreements in connection
with the sale of the Shares to AOBO.
NOW, THEREFORE, in
consideration of the foregoing recitals, which shall be considered
an integral part of this Agreement, and the covenants, conditions,
representations and warranties hereinafter set forth, the parties
hereby agree as follows:
ARTICLE I
THE
ACQUISITION
1.1 The
Acquisition . Concurrently with the execution of this
Agreement, Parent is selling to AOBO, and AOBO is purchasing from
Parent all of the Shares of Xinan for a purchase price of US$28.5
million in cash (“Consideration”).
1.2 Payment for and
Delivery of Shares . Concurrently with the execution of
this Agreement, (i) AOBO is delivering to Parent a certified
or bank check in the amount of US$28.5 million and (ii) Parent
is delivering to AOBO all stock certificates evidencing the Shares
duly endorsed in blank, or accompanied by stock powers duly
executed in blank, in form satisfactory to AOBO and with all
required stock transfer tax stamps affixed where
applicable.
1.3 Additional Closing
Matters .
(a) Resolutions
. Parent has herewith delivered to AOBO a complete copy, certified
by the Secretary or an Assistant Secretary of Parent, of the
resolutions duly and validly adopted by the Board of Directors of
the Purchaser evidencing its authorization of the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(b) Incumbency
Certificate . Parent has herewith delivered to AOBO a
certificate of the Secretary or an Assistant Secretary of Parent
certifying the names and signatures of the officers of authorized
to sign this Agreement and the other documents to be delivered
hereunder and Xinan has agreed to such actions; and
(c) Legal
Opinions . Parent has herewith delivered to AOBO from
(i) BVI counsel a legal opinion, addressed to AOBO dated the
date hereof in form and substance satisfactory to AOBO and
(ii) a PRC legal opinion, addressed to AOBO dated the date
hereof in form and substance satisfactory to AOBO.
ARTICLE II
REPRESENTATIONS AND
WARRANTIES
2.1 Representations and
Warranties of AOBO . AOBO represents and warrants to Parent
as follows:
(a) Authority .
AOBO has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized
by the Board of Directors of AOBO. No other corporate or
shareholder proceedings on the part of AOBO are necessary to
authorize the transactions contemplated hereby.
(b) Conflict with Other
Agreements; Approvals . The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated hereby will not (i) result in any violation of,
or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or
acceleration of any obligation or the loss of a material benefit
under, or the creation of a lien, pledge, security interest or
other encumbrance on assets (any such conflict, violation, default,
right of termination, cancellation or acceleration, loss or
creation, a “violation”) pursuant to any provision of
the Articles of Incorporation or Bylaws or any organizational
document of AOBO or, (ii) result in any violation of any loan
or credit agreement, note, mortgage, indenture, lease, benefit plan
or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to AOBO, which violation
would have a material adverse effect on AOBO taken as a whole. No
consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality,
domestic or foreign (a “Governmental Entity”) is
required by or with respect to AOBO in connection with the
execution and delivery of this Agreement by AOBO or the
consummation by AOBO of the transactions contemplated
hereby.
2.2 Representations and
Warranties of Parent . Parent represents and warrants to
AOBO as follows:
(a) Organization,
Standing and Power . Xinan is a corporation duly organized,
validly existing and in good standing under the laws of the PRC,
has all requisite power and authority to
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own, lease and operate its properties
and to carry on its business as now being conducted, and is duly
licensed or qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such licensing or
qualification necessary.
(b) Securities. The Shares
constitute all the issued and outstanding capital stock of Xinan
and are owned of record and beneficially solely by Parent free and
clear of all Encumbrances (as hereinafter defined). Upon
consummation of the transactions contemplated by this Agreement and
registration of the Shares in the name of AOBO in the stock records
of Xinan, AOBO, will own all the issued and outstanding capital
stock of Xinan free and clear of all Encumbrances. Upon
consummation of the transactions contemplated by this Agreement,
the Shares will be fully paid and nonassessable. There are no
voting trusts, stockholder agreements, proxies or other agreements
or understandings in effect with respect to the voting or transfer
of any of the Shares. As used herein, “Encumbrance”
shall mean, any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens),
charge, encumbrance, adverse claim, preferential arrangement or
restriction of any kind, including, without limitation, any
restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.
(c) Outstanding Securities
. There are no outstanding options, warrants, rights, or agreements
of any kind to acquire any shares of any class of the capital stock
of Xinan and there are no outstanding securities convertible into
or exchangeable for any class of the common stock of Xinan, nor
does Xinan have any obligation to issue or enter into any such
options, warrants, rights, agreements, or securities. There are no
outstanding contractual obligations of Xinan to repurchase, redeem
or otherwise acquire any outstanding Shares of any class of the
capital stock or other equity interests.
(d )Certificate of Incorporation,
Bylaws and Minute Books . The copies of the Certificate of
Incorporation and of the other corporate documents of Xinan which
have been delivered to AOBO are true, correct and complete copies
thereof. The minute books of Xinan which have been made available
for inspection contain accurate minutes of all meetings and
accurate consents in lieu of meetings of the Board of Directors
(and any committee thereof) and of the shareholders of Xinan since
the date of incorporation and accurately reflect all transactions
referred to in such minutes and consents in lieu of
meetings.
The stock register of Xinan accurately
records: (i) the name and address of each person owning shares
of capital stock of Xinan and (ii) the certificate number of
each certificate evidencing shares of capital stock issued by
Xinan, the number of shares evidenced by each such certificate, the
date of issuance thereof and, in the case of cancellation, the date
of cancellation
All corporate actions taken
by Xinan has been duly authorized, and Xinan has not taken any
action that in any respect conflicts with, constitutes a default
under or results in a violation of any provision of its Certificate
of Incorporation or By-laws.
(e ) Interests in Other
Entities . Xinan has no subsidiaries nor are there any
other corporations, partnerships, joint ventures, associations or
other entities in which Xinan owns, of record or beneficially, any
direct or indirect equity or other interest or any right
(contingent or otherwise) to acquire the same.
(f ) Authority
. Parent has all requisite power to enter into this Agreement and,
has the requisite power and authority to consummate the
transactions contemplated hereby. Except as specified herein, no
other corporate or shareholder proceedings on the part of Xinan or
Parent are necessary to authorize the Acquisition and the other
transactions contemplated hereby.
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( g ) Conflict with Agreements;
Approvals . The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated
hereby will not, (i) conflict with, or result in any violation
of any provision of the Certificate of Incorporation or Bylaws (or
similar organizational documents) of Parent or Xinan or
(ii) conflict with or violate any loan or credit agreement,
note, mortgage, indenture, lease, benefit plan or other agreement,
obligation, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or Xinan or their respective
properties or assets or (iii) conflict with, result in any
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