STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (“Agreement”) made this 15
th day of August, 2008 by and among Aspen Racing
Stables, Inc., a Nevada corporation (“Parent”), Trixy
Sasyniuk-Walt, the principal shareholder of the Parent
(“Walt”) KUN RUN Biotechnology LTD, a Hong Kong holding
company (“the Company”), and Cui Xueyun and Yang
Liqiong, the shareholders of the Company
(“Sellers”).
R E C I T A L S:
A. The respective Boards of Directors
of Parent and the Company have determined that an acquisition of
the Company by Parent, upon the terms and subject to the conditions
set forth in this Agreement, would be fair and in the best
interests of their respective shareholders, and such Boards of
Directors have approved such transaction, pursuant to which all
shares of Ordinary Shares of the Company (“Company Ordinary
Shares”) issued and outstanding immediately prior to the
Closing (as defined in Section 1.03) will be exchanged for the
right to receive shares of Common Stock of Parent representing a
controlling interest outstanding after the sale hereby (the
“Sale”).
B. Parent, Sellers, Walt and the
Company desire to make certain representations, warranties,
covenants and agreements in connection with the Sale and also to
prescribe various conditions to the Sale.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement,
the parties agree as follows:
1.01 Transfer of Stock .
Following the execution of this Agreement, the Board of Directors
and a majority of stockholders of Parent will effect a reverse
stock split of the Parent’s common stock, in which one new
share will be issued for each 3.42857 shares outstanding upon such
execution, and after the reverse split there will remain
100,000,000 authorized shares of Common Stock. All share members
set forth in this Agreement are expressed in post-reverse split
numbers of shares. At the Closing, the Sellers will transfer to
Parent 10,000 shares of the Company Ordinary Shares, representing
100% of the issued and outstanding shares of the Ordinary Shares of
the Company free and clear of all liens, claims and encumbrances.
In exchange therefor, the Parent will issue and convey to Sellers
24,250,000 shares of common stock (the “Purchase Price
Shares”). Such shares shall be restricted from transfer under
the rules and interpretations of the United States Securities and
Exchange Commission (“SEC”). The numbers of shares and
relative percentages of ownership of the Common Stock of Parent
owned by Sellers, Walt and their designees after the Closing is set
for in Exhibit A attached hereto.
1.02 Closing . Unless this
Agreement shall have been terminated and the transactions herein
contemplated shall have been abandoned pursuant to Section 7.01 and
subject to the satisfaction or waiver of the conditions set forth
in Article VI, the closing of the Sale (the “Closing”)
will take place at 10:00 a.m. on the business day after
satisfaction of the conditions set forth in Article VI (or as
soon as practicable thereafter) (the “Closing Date”),
at the offices of Andrews Kurth LLP, Dallas, Texas, unless another
date, time or place is agreed to in writing by the parties hereto.
The Sale and all other transactions contemplated hereby shall
become effective on the Closing Date.
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ARTICLE
II
PURCHASE PRICE ADJUSTMENT
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2.01 Reservation of Shares. On
the Closing, Sellers will cause 1,000,000 of shares issuable
hereunder to be transferred to Securities Transfer Corporation (the
“Escrow Agent”) to be held in escrow pursuant to this
Article II (the “Escrow Shares”) and to be
released and issued pursuant to the Make Good Escrow Agreement
attached hereto as Exhibit B .
2.02 Escrow Agreement. The
parties agree to sign the Make Good Escrow Agreement. The costs and
fee of the Make Good Escrow Agreement shall be borne and paid by
the Company.
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ARTICLE
III
REPRESENTATIONS AND WARRANTIES
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3.01 Representations and
Warranties of the Company . Except as set forth in the Company
Disclosure Schedule delivered by the Company to the Parent at the
time of execution of this Agreement, the Company represents and
warrants to Parent as follows:
(a)
Organization, Standing and Corporate Power . The Company is
duly organized, validly existing and in good standing under the
laws of Hong Kong and has the requisite corporate power and
authority to carry on its business as now being conducted. The
Company is duly qualified or licensed 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
qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a material
adverse effect with respect to the Company.
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(b)
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Subsidiaries . The Company owns 99.12%
of its subsidiary, Hainan Zhonghe Pharmaceuticals Co., Ltd. (the
“Company Sub”).
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(c)
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Capital
Structure . The authorized capital stock of the Company
consists of 10,000 authorized shares of Company Ordinary Shares.
There are 10,000 shares of Ordinary Shares outstanding, all of
which are owned by Sellers. Except as set forth above, no shares of
capital stock or other equity securities of the Company are issued,
reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Company having the right to
vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which shareholders of the
Company may vote. Except as set forth above, there are no
outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind
to which the Company is a party or by which it is bound obligating
the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other
equity or voting securities of the Company or obligating the
Company to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. There are no outstanding contractual obligations,
commitments, understandings or arrangements of the Company to
repurchase, redeem or otherwise acquire or make any payment in
respect of any shares of capital stock of the Company. There are no
agreements or arrangements pursuant to which the Company is or
could be required to register shares of Company Ordinary Shares or
other securities under the Securities Act of 1933, as amended (the
“Securities Act”) or other agreements or arrangements
with or among any security holders of the Company with respect to
securities of the Company.
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(d)
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Authority;
Noncontravention . The Company has the requisite corporate and
other power and authority to enter into this Agreement and to
consummate the transactions hereby to which it is a party. The
execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the
part of the Company. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions
hereof will not, conflict with, or result in any breach or
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 or “put” right with
respect to any obligation or to loss of a material benefit under,
or result in the creation of any lien upon any of the properties or
assets of the Company under, (i) the Articles of Incorporation or
Bylaws of the Company, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to the Company,
its properties or assets, or (iii) subject to the governmental
filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule,
regulation or arbitration award applicable to the Company, its
properties or assets. No consent, approval, order or authorization
of, or registration, declaration or filing with, or notice to, any
federal, state or local government or any court, administrative
agency or commission or other governmental authority, agency,
domestic or foreign (a “Governmental Entity”), is
required by or with respect to the Company in connection with the
execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated
hereby.
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(e)
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Financial
Statements (i) The Parent has received a copy of the
audited consolidated financial statements of the Company and
Company Sub for the fiscal years ended December 31, 2007 and
2006 (“Financial Statements”). The Financial Statements
fairly present the financial condition of the Company at the dates
indicated and its results of their operations and cash flows for
the periods then ended and, except as indicated therein, reflect
all claims against, debts and liabilities of the Company, fixed or
contingent, and of whatever nature. (ii) Since
December 31, 2007 (the “Balance Sheet Date”),
there has been no material adverse change in the assets or
liabilities, or in the business or condition, financial or
otherwise, or in the results of operations of the Company, whether
as a result of any legislative or regulatory change, revocation of
any license or rights to do business, fire, explosion, accident,
casualty, labor trouble, flood, drought, riot, storm, condemnation,
act of God, public force or otherwise and no material adverse
change in the assets or liabilities, or in the business or
condition, financial or otherwise, or in the results of operation
or prospects, of the Company except in the ordinary course of
business. (iii) Since the Balance Sheet Date, the Company has
not suffered any damage, destruction or loss of physical property
(whether or not covered by insurance) affecting its condition
(financial or otherwise) or operations (present or prospective),
nor has the Company issued, sold or otherwise disposed of, or
agreed to issue, sell or otherwise dispose of, any capital stock or
any other security of the Company and has not granted or agreed to
grant any option, warrant or other right to subscribe for or to
purchase any capital stock or any other security of the Company or
has incurred or agreed to incur any indebtedness for borrowed
money.
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(f)
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Absence of
Certain Changes or Events . Since December 31, 2007, the
Company has conducted its business only in the ordinary course
consistent with past practice, and there is not and has not been:
(i) any material adverse change with respect to the Company; (ii)
any condition, event or occurrence which individually or in the
aggregate could reasonably be expected to have a material adverse
effect or give rise to a material adverse change with respect to
the Company; (iii) any event which, if it had taken place following
the execution of this Agreement, would not have been permitted by
Section 4.01 without prior consent of Parent; or (iv) any
condition, event or occurrence which could reasonably be expected
to prevent, hinder or materially delay the ability of the Company
to consummate the transactions contemplated by this
Agreement.
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(g)
Litigation; Labor Matters; Compliance with Laws .
(i) There is no
suit, action or proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the
Company or any basis for any such suit, action, proceeding or
investigation that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect with
respect to the Company or prevent, hinder or materially delay the
ability of the Company to consummate the transactions contemplated
by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding
against the Company having, or which, insofar as reasonably could
be foreseen by the Company, in the future could have, any such
effect.
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(ii)
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The Company
is not a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a
labor union or labor organization, nor is it the subject of any
proceeding asserting that it has committed an unfair labor practice
or seeking to compel it to bargain with any labor organization as
to wages or conditions of employment nor is there any strike, work
stoppage or other labor dispute involving it pending or, to its
knowledge, threatened, any of which could have a material adverse
effect with respect to the Company.
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(iii)
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The conduct
of the business of the Company complies in all material aspects
with all statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees or arbitration awards applicable
thereto.
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(h) Benefit Plans . The
Company is not a party to any collective bargaining agreement or
any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or
understanding (whether or not legally binding) under which the
Company currently has an obligation to provide benefits to any
current or former employee, officer or director of the Company
(collectively, “Benefit Plans”).
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(i)
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Certain Employee
Payments . The Company is not a party to any employment
agreement which could result in the payment to any current, former
or future director or employee of the Company of any money or other
property or rights or accelerate or provide any other rights or
benefits to any such employee or director as a result of the
transactions contemplated by this Agreement, whether or not
(i) such payment, acceleration or provision would constitute a
“parachute payment” (within the meaning of
Section 280G of the Code), or (ii) some other subsequent
action or event would be required to cause such payment,
acceleration or provision to be triggered.
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(j)
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Tax Returns and
Tax Payments . The Company has timely filed all Tax Returns
required to be filed by it, has paid all Taxes shown thereon to be
due and has provided adequate reserves in its financial statements
for any Taxes that have not been paid, whether or not shown as
being due on any returns. No material claim for unpaid Taxes has
been made or become a lien against the property of the Company or
is being asserted against the Company, no audit of any Tax Return
of the Company is being conducted by a tax authority, and no
extension of the statute of limitations on the assessment of any
Taxes has been granted by the Company and is currently in effect.
As used herein, “taxes” shall mean all taxes of any
kind, including, without limitation, those on or measured by or
referred to as income, gross receipts, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium value added, property
or windfall profits taxes, customs, duties or similar fees,,
assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts
imposed by any governmental authority, domestic or foreign. As used
herein, “Tax Return” shall mean any return, report or
statement required to be filed with any governmental authority with
respect to Taxes.
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(k)
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Environmental
Matters . The Company is in compliance with all applicable
Environmental Laws. “Environmental Laws” means all
applicable federal, state and local statutes, rules, regulations,
ordinances, orders, decrees and common law relating in any manner
to contamination, pollution or protection of human health or the
environment, and similar state laws.
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(l)
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Material
Contract Defaults . The Company is not, or has not received any
notice or has any knowledge that any other party is, in default in
any respect under any Material Contract; and there has not occurred
any event that with the lapse of time or the giving of notice or
both would constitute such a material default. For purposes of this
Agreement, a Material Contract means any contract, agreement or
commitment that is effective as of the Closing Date to which the
Company is a party (i) with expected receipts or expenditures in
excess of $100,000, (ii) requiring the Company to indemnify any
person, (iii) granting exclusive rights to any party, (iv)
evidencing indebtedness for borrowed or loaned money in excess of
$100,000 or more, including guarantees of such indebtedness, or (v)
which, if breached by the Company in such a manner would (A) permit
any other party to cancel or terminate the same (with or without
notice of passage of time) or (B) provide a basis for any other
party to claim money damages (either individually or in the
aggregate with all other such claims under that contract) from the
Company or (C) give rise to a right of acceleration of any material
obligation or loss of any material benefit under any such contract,
agreement or commitment.
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(m)
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Properties .
The Company has good, clear and marketable title to all the
tangible properties and tangible assets reflected in the latest
balance sheet as being owned by the Company or acquired after the
date thereof which are, individually or in the aggregate, material
to the Company’s business (except properties sold or
otherwise disposed of since the date thereof in the ordinary course
of business), free and clear of all material liens.
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(n)
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Trademarks and Related Contracts. To the
knowledge of the Company :
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(i) As
used in this Agreement, the term “Trademarks” means
trademarks, service marks, trade names, Internet domain names,
designs, slogans, and general intangibles of like nature; the term
“Trade Secrets” means technology; trade secrets and
other confidential information, know-how, proprietary processes,
formulae, algorithms, models, and methodologies; the term
“Intellectual Property” means patents, copyrights,
Trademarks, applications for any of the foregoing, and Trade
Secrets; the term “Company License Agreements” means
any license agreements granting any right to use or practice any
rights under any Intellectual Property (except for such agreements
for off-the-shelf products that are generally available or less
than $25,000), and any written settlements relating to any
Intellectual Property, to which the Company is a party or otherwise
bound; and the term “Software” means any and all
computer programs, including any and all software implementations
of algorithms, models and methodologies, whether in source code or
object code.
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(ii)
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To the
knowledge of the Company, none of the Company’s Intellectual
Property or Company License Agreements infringe upon the rights of
any third party that may give rise to a cause of action or claim
against the Company or its successors.
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(o) Board
Recommendation. The Board of Directors of the Company has
unanimously determined that the terms of the Sale are fair to and
in the best interests of the shareholders of the Company and
recommended that the Sellers execute this Agreement.
3.02
Representations and Warranties of Company Sub . Except as
set forth in the Company Disclosure Schedule delivered by the
Company to the Parent at the time of execution of this Agreement,
the Company represents and warrants to Parent as
follows:
(a) Organization, Standing
and Corporate Power . Company Sub is duly organized, validly
existing and in good standing under the laws of The People’s
Republic of China (“PRC”) and has the requisite
corporate power and authority to carry on its business as now being
conducted. Company Sub is duly qualified or licensed 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 qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a material
adverse effect (as defined in Section 9.02) with respect to
Company Sub.
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(b)
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Subsidiaries . The Company Sub is
99.12% owned by the Company and shall remain a subsidiary of the
Company following the Sale.
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(c)
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Capital
Structure . Except as set forth in the Financial Statements, no
shares of capital stock or other equity securities of Company Sub
are issued, reserved for issuance or outstanding. All outstanding
equity ownership interest in Company Sub are duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no outstanding bonds, debentures,
notes or other indebtedness or other securities of Company Sub
having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which
shareholders of Company Sub may vote. The Company Disclosure
Schedule sets forth the outstanding Capitalization of Company Sub.
Except as set forth above, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which Company Sub is a
party or by which it is bound obligating Company Sub to issue,
deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity or voting
securities of Company Sub or obligating Company Sub to issue,
grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking.
There are no outstanding contractual obligations, commitments,
understandings or arrangements of Company Sub to repurchase, redeem
or otherwise acquire or make any payment in respect of any shares
of capital stock of Company Sub. There are no agreements or
arrangements pursuant to which Company Sub is or could be required
to register shares of Company Ordinary Shares or other securities
under the Securities Act of 1933, as amended (the “Securities
Act”) or other agreements or arrangements with or among any
security holders of Company Sub with respect to securities of
Company Sub.
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(d)
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Authority; Noncontravention . Company
Sub has the requisite corporate and other power and authority to
enter into this Agreement and to make the representations contained
herein. This Agreement has been duly executed and delivered by
Company Sub and constitutes a valid and binding obligation of
Company Sub, enforceable against Company Sub in accordance with its
terms. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and
compliance with the provisions hereof will not, conflict with, or
result in any breach or 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 or “put”
right with respect to any obligation or to loss of a material
benefit under, or result in the creation of any lien upon any of
the properties or assets of Company Sub under, (i) the
Articles of Incorporation or Bylaws of Company Sub, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or
license applicable to Company Sub, its properties or assets, or
(iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule, regulation or arbitration award
applicable to Company Sub, its properties or assets. No consent,
approval, order or authorization of, or registration, declaration
or filing with, or notice to, any federal, state or local
government or any court, administrative agency or commission or
other governmental authority, agency, domestic or foreign (a
“Governmental Entity”), is required by or with respect
to Company Sub in connection with the execution and delivery of
this Agreement by Company Sub or the consummation by Company Sub of
the transactions contemplated hereby, except, as set forth in the
Company Disclosure Schedule.
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(e)
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Absence
of Certain Changes or Events . Since December 31, 2007,
other than the ownership interest transfer to the Company, if
applicable, Company Sub has conducted its business only in the
ordinary course consistent with past practice, and there is not and
has not been: (i) any material adverse change with respect to
Company Sub; (ii) any condition, event or occurrence which
individually or in the aggregate could reasonably be expected to
have a material adverse effect or give rise to a material adverse
change with respect to Company Sub; (iii) any event which, if
it had taken place following the execution of this Agreement, would
not have been permitted by Section 4.01 without prior consent
of Parent; or (iv) any condition, event or occurrence which could
reasonably be expected to prevent, hinder or materially delay the
ability of Company Sub to consummate the transactions contemplated
by this Agreement.
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(f)
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Litigation; Labor Matters;
Compliance with Laws.
(i) There is no
suit, action or proceeding or investigation pending or, to the
knowledge of Company Sub, threatened against or
affecting Company Sub, or any basis for
any such suit, action, proceeding or investigation that,
individually or in the aggregate, could reasonably be expected to
have a material adverse effect with respect to Company Sub or
prevent, hinder or materially delay the ability of Company Sub to
consummate the transactions contemplated by this Agreement, nor is
there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Company Sub
having, or which, to the knowledge of the Company Sub, in the
future could have, any such effect.
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(ii)
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Company Sub
is not a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a
labor union or labor organization, nor is it the subject of any
proceeding asserting that it has committed an unfair labor practice
or seeking to compel it to bargain with any labor organization as
to wages or conditions of employment nor is there any strike, work
stoppage or other labor dispute involving it pending or, to its
knowledge, threatened, any of which could have a material adverse
effect with respect to Company Sub.
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(iii)
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The conduct
of the business of Company Sub complies with all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees or
arbitration awards applicable thereto.
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(g)
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Benefit
Plans . Company Sub is not a party to any collective bargaining
agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock
purchase, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding (whether or not legally binding) under
which it currently has an obligation to provide benefits to any
current or former employee, officer or director of Company Sub
(collectively, “Benefit Plans”).
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(h)
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Certain
Employee Payments . Company Sub is not a party to any
employment agreement which could result in the payment to any
current, former or future director or employee of Company Sub of
any money or other property or rights or accelerate or provide any
other rights or benefits to any such employee or director as a
result of the transactions contemplated by this Agreement, whether
or not (i) such payment, acceleration or provision would constitute
a “parachute payment” (within the meaning of Section
280G of the Code), or (ii) some other subsequent action or event
would be required to cause such payment, acceleration or provision
to be triggered.
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(i)
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Tax
Returns and Tax Payments . Company Sub has timely filed all Tax
Returns required to be filed by it, has paid all Taxes shown
thereon to be due and has provided adequate reserves in its
financial statements for any Taxes that have not been paid, whether
or not shown as being due on any returns, except where the failure
to file Tax Returns, individually or in the aggregate, would not
have a Material Adverse Effect. No material claim for unpaid Taxes
has been made or become a lien against the property of Company Sub
or is being asserted against Company Sub, no audit of any Tax
Return of Company Sub is being conducted by a tax authority, and no
extension of the statute of limitations on the assessment of any
Taxes has been granted by Company Sub and is currently in effect.
As used herein, “taxes” shall mean all taxes of any
kind, including, without limitation, those on or measured by or
referred to as income, gross receipts, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium value added, property
or windfall profits taxes, customs, duties or similar fees,,
assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts
imposed by any governmental authority, domestic or foreign. As used
herein, “Tax Return” shall mean any return, report or
statement required to be filed with any governmental authority with
respect to Taxes.
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(j)
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Environmental Matters. Company Sub is
in material compliance with all applicable Environmental Laws.
“Environmental Laws” means all applicable federal,
state and local statutes, rules, regulations, ordinances, orders,
decrees and common law relating in any manner to contamination,
pollution or protection of human health or the environment, and
similar state laws.
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(k)
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Material
Contract Defaults . Company Sub is not, nor has it they
received any notice or has any knowledge that any other party is,
in default in any respect under any Material Contract; and there
has not occurred any event that with the lapse of time or the
giving of notice or both would constitute such a material default.
For purposes of this Agreement, a Material Contract means any
contract, agreement or commitment that is effective as of the
Closing Date to which Company Sub is a party (i) with
expected receipts or expenditures in excess of $100,000, (ii)
requiring Company Sub to indemnify any person, (iii) granting
exclusive rights to any party, (iv) evidencing indebtedness
for borrowed or loaned money in excess of $100,000 or more,
including guarantees of such indebtedness, or (v) which, if
breached by Company Sub in such a manner would (A) permit any
other party to cancel or terminate the same (with or without notice
of passage of time), or (B) provide a basis for any other
party to claim money damages (either individually or in the
aggregate with all other such claims under that contract) from
Company Sub, or (C) give rise to a right of acceleration of
any material obligation or loss of any material benefit under any
such contract, agreement or commitment.
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(l)
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Properties . Company Sub has good,
clear and marketable title or land use rights, as the case may be,
to all the tangible properties and tangible assets reflected in the
latest balance sheet as being owned by Company Sub or acquired
after the date thereof which are, individually or in the aggregate,
material to Company Sub’s business (except properties sold or
otherwise disposed of since the date thereof in the ordinary course
of business), free and clear of all material liens.
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(m) Trademarks and Related
Contracts. To the knowledge of Company Sub :
(i) As used in
this Agreement, the term “Trademarks” means trademarks,
service marks, trade names, Internet domain names, designs,
slogans, and general intangibles of like nature; the term
“Trade Secrets” means technology; trade secrets and
other confidential information, know-how, proprietary processes,
formulae, algorithms, models, and methodologies; the term
“Intellectual Property” means patents, copyrights,
Trademarks, applications for any of the foregoing, and Trade
Secrets; the term “Company License Agreements” means
any license agreements granting any right to use or practice any
rights under any Intellectual Property (except for such agreements
for off-the-shelf products that are generally available or less
than $25,000), and any written settlements relating to any
Intellectual Property, to which Company Sub is a party or otherwise
bound; and the term “Software” means any and all
computer programs, including any and all software implementations
of algorithms, models and methodologies, whether in source code or
object code.
(ii) To the
knowledge of Company Sub, none of Company Sub’s Intellectual
Property or Company License Agreements infringe materially upon the
rights of any third party that may give rise to a cause of action
or claim against Company Sub or their successors.
3.03
Representations and Warranties of Parent. Except as set
forth in the disclosure schedule delivered by Parent to the Company
at the time of execution of this Agreement (the “ Parent
Disclosure Schedule”), Parent represents and warrants to the
Company as follows:
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(a)
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Organization, Standing and Corporate
Power . Parent is duly organized, validly existing and in good
standing under the laws of the State of Nevada, and has the
requisite corporate power and authority to carry on its business as
now being conducted. Parent is duly qualified or licensed 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 qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) would not have a
material adverse effect with respect to Parent.
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(b)
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Subsidiaries; Equity Interests . The
Parent does not own directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest
or other equity interest in any person.
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(c)
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Capital
Structure . The authorized capital stock of Parent consists of
100,000,000 shares of Parent Common Stock, par value $0.001, of
which 750,000 shares are issued and outstanding (the “Parent
Common Stock”). No shares of Parent Common Stock are issuable
upon the exercise of outstanding warrants, convertible notes,
options and otherwise. Except as set forth above, no shares of
capital stock or other equity securities of Parent are issued,
reserved for issuance or outstanding. All outstanding shares of
capital stock of Parent are, and all shares which may be issued
pursuant to this Agreement will be, when issued, duly authorized,
validly issued, fully paid and nonassessable, not subject to
preemptive
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