Exhibit 10.1
STOCK PURCHASE
AGREEMENT
by and among
DIONICS, INC.
a Delaware corporation
and
CENTRAL MEGA LIMITED
a British Virgin Islands
corporation
and
BERNARD KRAVITZ
Dated October 8, 2009
STOCK PURCHASE
AGREEMENT
This Stock Purchase Agreement (the
“ Agreement ”), is made and entered into as of
the 8 th day of October 2009 by and among DIONICS,
INC ., a corporation organized under the laws of the State of
Delaware (“ Dionics ” or the “
Company ”); CENTRAL MEGA LIMITED , a British
Virgin Islands corporation (“ CML ”); and
BERNARD KRAVITZ (the “ Dionics Stockholder
” or “ Kravitz ”). Dionics, CML and
the Dionics Stockholder hereinafter sometimes individually
referred to as a “ Party ” and collectively
referred to as the “ Parties .”
RECITALS:
A.
CML desires to purchase an aggregate of
13,000,000 shares of capital stock (the “ Subject
Shares ”) at a purchase price of $0.04 per share,
including 11,000,000 shares of newly issued capital stock of
Dionics from the Company and 2,000,000 shares of previously issued
capital stock from the Dionics Stockholder.
B.
Dionics Stockholder is the record and
beneficial owner of 3,054,551 shares of common stock of Dionics,
representing 30.76% of the 9,928,678 issued and outstanding shares
of common stock of Dionics, $0.01 par value per share (the “
Dionics Outstanding Shares ”).
C.
Dionics and Dionics Stockholder are
willing to sell the Subject Shares to CML, all upon the terms and
subject to the conditions hereinafter set forth.
D.
The board of directors of each of Dionics
and CML and the Dionics Stockholder each deem it to be in the best
interests of Dionics and CML and
their respective shareholders to consummate the sale and purchase
of the Subject Shares, as a result of which CML shall acquire
62.12% of all of the issued and outstanding stock of Dionics, which
will be 20,928,678 shares of common stock immediately after the
Closing (as hereinafter defined) and Dionics and the Dionics
Stockholder shall receive the Purchase Price (as hereinafter
defined).
E.
Dionics shall enter into a two-year
employment agreement with the Dionics Stockholder at the
Closing.
NOW, THEREFORE,
in consideration of the mutual covenants,
agreements, representations and warranties contained in this
Agreement, the parties hereto agree as follows:
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 Share Purchase and/or the Parties.
“ Affiliate ”
means any one or more Person controlling, controlled by or under
common control with any other Person or their affiliate.
“ Business Day ” shall
mean any day, excluding Saturday, Sunday and any other day on which
national banks located in New York, New York shall be closed for
business.
“ Closing ” or “
Closing Date ” shall mean the date upon which the
purchase and sale of the Subject Shares shall be
consummated.
“ Dionics Common Stock
” means the 50,000,000 shares of common stock, $0.01 par
value per share, of Dionics that are authorized for issuance
pursuant to its certificate of incorporation.
“ Dionics Outstanding Shares
” means the 9,928,678 shares of Dionics Common Stock that are
issued and outstanding as at the date of this Agreement.
“ Dollar” and
“ $” means lawful money of the United States of
America.
“ Exchange Act”
means the Securities Exchange Act of 1934, as amended.
“ Financial Statements
” shall have the meaning as is defined in Section 2.4
of this Agreement.
“ GAAP ” means
generally accepted accounting principles in the United States of
America as promulgated by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board or
any successor Institutes concerning the treatment of any accounting
matter.
“ Knowledge ” means
the knowledge after reasonable inquiry.
“ Lien ” means, with
respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset.
“ 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
consolidated whole.
“CML”
means Central Mega Limited, a British
Virgin Islands corporation.
“ CML Common Stock
” shall mean the 50,000 shares of common stock of CML, 1 USD
par value per share, that are authorized for issuance pursuant to
the certificate of incorporation of CML.
“ National Securities
Exchange ” means the collective reference to the New York
Stock Exchange, the NYSE Alternext Exchange, the Nasdaq Stock
Exchange, the FINRA OTC
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Bulletin Board or any other recognized
national securities exchange in the United States.
“ Person ” means any
individual, corporation, partnership, trust or unincorporated
organization or a government or any agency or political subdivision
thereof.
“ Purchase Price ”
shall mean Five Hundred and Twenty Thousand United States Dollars
(U.S. $520,000).
“ Sale of Control ”
means the sale or transfer of all or substantially all of the
shares of capital stock or assets of Dionics and its consolidated
Subsidiaries, whether through merger, consolidation, asset sale,
tender offer or like combination or consolidation, to any Person
who is not an Affiliate of Dionics immediately prior to such Sale
of Control.
“ Subject Shares
” shall mean an aggregate of 13,000,000 shares of capital
stock, including 11,000,000 shares of newly issued capital stock of
Dionics and 2,000,000 shares of previously issued capital stock
held by the Dionics Stockholder as at the date hereof.
“ Subsidiary ” of any
Person means another Person, an amount of the voting securities,
other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors
or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or
indirectly by such first Person.
“ 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.
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SECTION 1
PURCHASE AND SALE OF THE SUBJECT
SHARES
1.1
Sale of the Subject Shares
.
(a)
On the Closing Date and subject to and
upon the terms and conditions of this Agreement, Dionics and the
Dionics Stockholder shall issue, sell, assign, transfer and
exchange, as the case may be (collectively, “ Transfer
”), to CML all, and not less than all, of the Subject Shares,
consisting of 11,000,000 shares of newly issued capital stock of
Dionics and 2,000,000 shares of previously issued capital stock
that are owned of record and beneficially by the Dionics
Stockholder, and representing in the aggregate 62.12% of the
Dionics total outstanding shares at the Closing Date.
(b)
On the Closing Date, Dionics shall
deliver to CML (i) one or more stock certificates evidencing
11,000,000 of the Subject Shares, and (ii) one or more stock
certificates evidencing 2,000,000 of the Subject Shares duly
endorsed in blank for transfer and with a medallion signature
guarantee (the “ Subject Shares Certificates
”).
1.2
Payment of Purchase Price
. On the Closing Date, against
delivery of the Subject Shares Certificates, CML shall pay the
$520,000 Purchase Price as follows:
(a)
$440,000 shall be paid by wire transfer
of immediately available funds to a bank account designated by
Dionics prior to the Closing Date; and
(b)
$80,000 shall be paid by wire transfer of
immediately available funds to a bank account designated by the
Dionics Stockholder prior to the Closing Date
1.3
Closing .
The closing of the sale and purchase of
the Subject Shares (the “ Closing ”) will take
place following the execution of the Agreement, at the offices of
Anslow & Jaclin, LLP, counsel to CML, at its office in
Manalapan, New Jersey, within five (5) Business Days following the
delivery of satisfaction or waiver of the conditions precedent set
forth in Section 4 or at such other date and place as CML, Dionics
and the Dionics Stockholder shall agree (the “ Closing
Date ”), but in no event shall the Closing Date occur
later than October 30, 2009, unless such date shall be extended by
mutual agreement of CML, Dionics and the Dionics Stockholder.
1.4
Fees .
Upon Closing of the transaction, CML
shall pay to Brean Murray, Carret & Co. an investing banking
fee of $15,600 for services rendered in connection with this
Agreement.
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SECTION 2
REPRESENTATIONS AND WARRANTIES OF
DIONICS
Dionics hereby represents and warrants to
CML as follows:
2.1
Organization and Good Standing:
Ownership of Shares. Dionics is a corporation duly organized and
validly existing under the laws of Delaware. Except as
described in Schedule 2.1 , there are no outstanding
subscriptions, rights, options, warrants or other agreements
obligating Dionics to issue, sell or transfer any stock or other
securities of Dionics.
2.2
Authority and Ownership of Subject
Shares.
(a)
The Dionics Stockholder individually has
the power and authority, and Dionics has the corporate power to
enter into this Agreement and to perform their respective
obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transaction contemplated
hereby have been duly authorized by the Board of Directors of
Dionics. The execution and performance of this Agreement will
not constitute a material breach of any agreement, indenture,
mortgage, license or other instrument or document to which Dionics
is a party and will not violate any judgment, decree, order, writ,
rule, statute, or regulation applicable to Dionics or its
properties. The execution and performance of this Agreement
will not violate or conflict with any provision of the Articles of
Incorporation or by-laws of Dionics.
(b)
The Dionics Stockholder is the owner of
record and beneficially of 2,000,000 of the Subject Shares, which
shares are owned free and clear of all rights, claims, liens and
encumbrances, and have not been sold, pledged, assigned or
otherwise transferred by the Dionics Stockholder.
(c)
As at the date of this Agreement and the
Closing Date, Dionics has available a sufficient number of
authorized and unissued shares of Common Stock to issue 11,000,000
of the Subject Shares to CML pursuant to this Agreement.
2.3
Capitalization.
As of the date of this Agreement,
Dionics is authorized to issue 50,000,000 shares of Dionics Common
Stock, $0.01 par value per share, and 1,000,000 shares of preferred
stock, $0.01 par value per share (the “ Dionics Preferred
Stock ”). An aggregate of 9,928,678 shares of Dionics
Common Stock and no shares of Preferred Stock are issued and
outstanding. Except as contemplated by this Agreement
or as otherwise reflected in the SEC Reports (as hereinafter
defined) or Schedule 2.3 , no shares of Dionics Common Stock
are reserved for issuance pursuant to any agreement, convertible
securities, options or warrants.
2.4
Financial Statements, Books and
Records.
(a)
Schedule 2.4(a)
consists of the (i) audited financial
statements (balance sheet, income statement, statements of cash
flows and stockholders’ equity and notes thereto) of Dionics
as of December 31, 2008 and December 31, 2007 (the “
Dionics Annual Financial Statements ”) and (ii)
unaudited balance sheet of Dionics as of June 30, 2009 and related
income statement for the
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three and six months ended June 30, 2009
and 2008, statement of cash flows for the six months ended June 30,
2009 and 2008, statement of stockholders’ equity for the six
months ended June 30, 2009, and notes thereto (the “Dionics
Unaudited Financial Statements”). (The Dionics Annual
Financial Statements and Dionics Unaudited Financial Statements are
sometimes referred to herein as the “ Dionics Financial
Statements ”).
(b)
The Dionics Financial Statements fairly
represent the financial position of Dionics as at such dates and
the results of their operations for the periods then ended.
The Dionics Financial Statements were prepared in accordance
with generally accepted accounting principles applied on a
consistent basis with prior periods except as otherwise stated
therein. The books of account and other financial records of
Dionics are in all respects complete and correct in all material
respects and are maintained in accordance with good business and
accounting practices.
(c)
The Dionics Annual Financial Statements
were audited in accordance with generally accepted accounting
principles and comply in all material respects with applicable
accounting requirements and the rules and regulations of the
Securities and Exchange Commission (“ SEC ”)
with respect thereto as in effect at the time of filing with the
SEC.
2.5
Access to Records.
The corporate financial records,
minute books and other documents and records of Dionics have been
made available to CML prior to the Closing hereof, and have been
reviewed to the extent deemed necessary by CML.
2.6
No Material Adverse
Changes. Except as
otherwise described on Schedule 2.6 hereto or as otherwise
reflected in the SEC Reports, since June 30, 2009 there has not
been:
(a)
any material adverse change in the
financial position of Dionics, except changes arising in the
ordinary course of business, which changes will in no event
materially and adversely affect the financial position of
Dionics;
(b)
any damage, destruction or loss
materially affecting the assets, prospective business, operations
or condition (financial or otherwise) of Dionics whether or not
covered by insurance;
(c)
any declaration, setting aside or payment
of any dividend or distribution with respect to any redemption or
repurchase of Dionics capital stock;
(d)
any sale of a material asset (other than
in the ordinary course of business) or any mortgage or pledge by
Dionics of any properties or assets, other than as set forth
elsewhere herein; or
(e)
adoption of any pension, profit sharing,
retirement, stock bonus, stock option or similar plan or
arrangement.
2.7
Taxes. Dionics as of June 30, 2009, has filed all
material tax, governmental and/or related forms and reports (or
extensions thereof) due or required to be filed and has (or will
have)
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paid or made adequate provisions for all
taxes or assessments which had become due as of June 30, 2009, and
there are no deficiency notices outstanding.
2.8
Compliance with Laws. Except as set forth on Schedule 2.8
,
Dionics has complied with all federal,
state, county and local laws, ordinances, regulations, inspections,
orders, judgments, injunctions, awards or decrees applicable to it
or its business which, if not complied with, would materially and
adversely affect the business of Dionics.
2.9
No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby will not:
(a)
violate any provision of the Articles of
Incorporation or By-Laws of Dionics;
(b)
violate, conflict with or result in the
breach of any of the terms of, result in a material modification
of, otherwise give any other contracting party the right to
terminate, or constitute (or with notice or lapse of time, or both
constitute) a default under any material contract or other
agreement to which Dionics is a party or by or to which it or any
of its assets or properties may be bound or subject;
(c)
violate any order, judgment, injunction,
award or decree of any court, arbitrator or governmental or
regulatory body against, or binding upon, Dionics or upon the properties or business of
Dionics; or
(d)
violate any statute, law or regulation of
any jurisdiction applicable to the transactions contemplated herein
which could have a materially adverse effect on the business or
operations of Dionics.
2.10
Actions and Proceedings.
Dionics is not a party to any material pending
litigation or, to its knowledge, any governmental investigation or
proceeding not reflected in the SEC Reports or Dionics Financial
Statements, and to its best knowledge, no material litigation,
claims, assessments or non-governmental proceedings are threatened
against Dionics except as set forth on Schedule 2.10
attached hereto and made a part hereof.
2.11
Periodic Reports.
Dionics is current in the filing of
all forms or reports with the SEC, and has been a reporting company
under the Securities Exchange Act of 1934, as amended (the “
Exchange Act ”). All such reports and statements
filed by Dionics with the SEC (collectively, “ SEC
Reports ”) did not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstance under which they were made, not
misleading.
2.12
Agreements. Schedule 2.12 sets forth any material
contract or arrangement to which Dionics is a party or by or to which it or its assets,
properties or business are bound or subject, whether written or
oral.
2.13
Brokers or Finders.
No broker's or finder's fee will be
payable by Dionics in
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connection with the transactions
contemplated by this Agreement, nor will any such fee be incurred
as a result of any actions by Dionics or the Dionics
Stockholder.
2.14
Real Estate. Except as provided in the SEC Reports or
Schedule 2.14 , Dionics owns no real property nor is a party
to any leasehold agreement.
2.15
Tangible Assets.
Except as set forth on Schedule
2.15 hereto, Dionics has full title and interest in all machinery,
equipment, furniture, leasehold improvements, fixtures, projects,
owned or leased by Dionics, any related capitalized items or other
tangible property material to the business of Dionics (the “
Tangible Assets ”). Except as set forth on
Schedule 2.15 , Dionics holds all rights, title and interest
in all the Tangible Assets owned by it free and clear of all liens,
pledges, mortgages, security interests, conditional sales contracts
or any other encumbrances. All of the Tangible Assets are in
operating condition and repair and are usable in the ordinary
course of business of Dionics and conform to all applicable
laws, ordinances and government orders, rules and regulations
relating to their construction and operation, except as set forth
on Schedule 2.15 hereto.
2.16
Liabilities. Dionics did not have any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency,
obligation or responsibility, known or unknown, fixed or unfixed,
liquidated or unliquidated, secured or unsecured, accrued or
absolute, contingent or otherwise, including, without limitation,
any liability on account of taxes, any governmental charge or
lawsuit (all of the foregoing collectively defined to as “
Liabilities ”), which are not fully, fairly and
adequately reflected on the Dionics Financial Statements except for
Liabilities incurred in the ordinary course of business or such
other specific Liabilities set forth on Schedule 2.16
attached hereto and made a part hereof. As of the date of
Closing, Dionics will not have any
Liabilities, other than Liabilities fully and adequately reflected
on the Dionics Financial Statements except for Liabilities incurred
in the ordinary course of business or otherwise set forth on
Schedule 2.16 . To the best of the knowledge of
Dionics, there is no circumstance, condition, event or arrangement
which may hereafter give rise to any Liabilities not in the
ordinary course of business except as otherwise reflected
herein.
2.17
Operations of
Dionics. From June 30, 2009 through the Closing Date,
and except as otherwise contemplated by this Agreement or
identified in any Schedule, Dionics has not and will not
have:
(a)
declared or paid any dividend or declared
or made any distribution of any kind to any shareholder, or made
any direct or indirect redemption, retirement, purchase or other
acquisition of any shares in its capital stock;
(b)
except in the ordinary course of
business, incurred or assumed any indebtedness or liability
(whether or not currently due and payable);
(c)
disposed of any material assets of
Dionics except in the ordinary course of
business;
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(d)
materially increased the annual level of
compensation of any executive employee of Dionics;
(e)
increased, terminated, amended or
otherwise modified any plan for the benefit of employees of
Dionics; or
(f)
issued any equity securities or rights to
acquire such equity securities, except as described in Schedule
2.17(f) .
2.18
Full Disclosure.
No representation or warranty by
Dionics in this Agreement or in any document or schedule to be
delivered by them pursuant hereto, and no written statement,
certificate or instrument furnished or to be furnished by Dionics
pursuant hereto or in connection with the negotiation, execution or
performance of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any
fact necessary to make any statement herein or therein not
materially misleading or necessary to a complete and correct
presentation of all material aspects of the business of
Dionics.
2.19
Delivery of Schedules.
Any Schedule provided for hereunder
and any Schedule not delivered contemporaneously with the execution
of this Agreement shall be delivered by Dionics as soon as
practicable and, in any event, prior to the Closing. All
lists or other statements, information or documents set forth in or
attached to any Schedule delivered herewith or delivered hereunder
after the execution of this Agreement shall be deemed to be
representations and warranties by Dionics with the same force and
effect as if such lists, statements, information and documents were
set forth herein.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF
CML
CML hereby represents and warrants to
Dionics and the Dionics Stockholder, as follows:
3.01
Power and Authority
. CML has the legal power, capacity and
authority to execute and deliver this Agreement to consummate the
transactions contemplated by this Agreement, and to perform the
obligations under this Agreement. This Agreement constitutes
a legal, valid and binding obligation of CML, enforceable against
CML in accordance with the terms hereof.
3.02
No Conflicts. The execution and delivery of this Agreement by
CML and the performance by CML of its obligations hereunder in
accordance with the terms hereof: (a) will not require the consent
of any third party or governmental entity under any laws; (b) will
not violate any laws applicable to CML and (c) will not violate or
breach any contractual obligation to which CML is a party.
3.03
Finder’s Fee
. CML represents and warrants that
it has not created any obligation for any finder’s,
investment banker’s or broker’s fee in connection with
the transaction contemplated hereunder
except as otherwise reflected in Section 1.4.
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3.04
Purchase Enti
