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ACQUISITION
AGREEMENT
THIS ACQUISITION AND STOCK PURCHASE
AGREEMENT (this “Agreement”) is dated as of
October 18, 2007, by and among American Oriental
Bioengineering Inc., a Nevada Corporation ,with registered address
at 90 Park Avenue 17th Floor New York, NY10016
(“AOBO”), and Bonson Investment Holdings Limited, (the
“Parent”), a company with registered address at 30
DeCastro Street, Wickhams Cay l, 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
GuangXi Boke Pharmaceutical Limited (Boke), 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 Boke
(“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$36.5 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 Boke for a purchase price of US$36.5
million 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$36.5 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 . Boke 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 Boke 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 Boke, AOBO, will own all the issued and
outstanding capital stock of Boke 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 Boke and there are no outstanding
securities convertible into or exchangeable for any class of the
common stock of Boke, nor does Boke have any obligation to issue or
enter into any such options, warrants, rights, agreements, or
securities. There are no outstanding contractual obligations of
Boke 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 Boke which have been delivered to AOBO are true, correct and
complete copies thereof. The minute books of Boke 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
Boke 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 Boke accurately records:
(i) the name and address of each person owning shares of
capital stock of Boke and (ii) the certificate number of each
certificate evidencing shares of capital stock issued by Boke, 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 Boke has been duly authorized, and Boke 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 . Boke has no subsidiaries nor are there any other
corporations, partnerships, joint ventures, associations or other
entities in which Boke owns, of record or beneficially, any direct
or indirect equity or other interest or any right (contingent or
otherwise) to acquire the same.
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(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 Boke or
Parent are necessary to authorize the Acquisition and the other
transactions contemplated hereby.
(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 Boke
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 Boke or their respective
properties or assets or (iii) conflict with, result in any
breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any ri
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