Exhibit 2.1
EXECUTION
COPY
SHARE EXCHANGE
AGREEMENT
THIS
SHARE EXCHANGE AGREEMENT (the “ Agreement ”)
made this 30th day of September 2009 by and among GC China Turbine
Corp., f.k.a. Nordic Turbines, Inc., a Nevada corporation (“
Pubco ”) and a certain stockholder of Pubco (the
“ Pubco Stockholder ”) listed on the Pubco
Stockholder’s Signature Page that is attached hereto, on the
one hand, and Wuhan Guoce Nordic New Energy Co. Ltd., a
company organized under the laws of the People’s Republic of
China and wholly-owned subsidiary of the Company (the “
WFOE ”), Luckcharm Holdings Limited, a company
organized under the laws of Hong Kong (the “ Company
”) and Golden Wind Holdings Limited, a company organized
under the laws of the British Virgin Islands (the “
Selling Shareholder ”), on the other hand.
BACKGROUND:
A.
The respective Boards of Directors of Pubco and the Company have
determined that an acquisition of the Company’s outstanding
shares by Pubco through a voluntary share exchange with the Selling
Shareholder (the “ Exchange ”), 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 Exchange, pursuant
to which shares of capital stock of the Company issued and
outstanding immediately prior to the Effective Time (as defined in
Section 1.04 ) and all securities convertible or
exchangeable into capital stock of the Company (the “
Shares ”) will be exchanged (including by reservation
for future issuances) for the right to receive 32,383,808 shares of
common stock of Pubco (the “ Exchange Shares
”).
B. At
the Closing, the Selling Shareholder’s ownership interest in
Pubco shall represent no less than fifty four percent (54%) of
the issued and outstanding shares of Pubco.
C.
Pubco, Pubco Stockholder, Selling Shareholder, WFOE and the Company
desire to make certain representations, warranties, covenants and
agreements in connection with the Exchange and also to prescribe
various conditions to the Exchange.
D.
For federal income tax purposes, the parties intend that the
Exchange shall qualify as reorganization under the provisions of
Section 368 of the Internal Revenue Code of 1986, as amended (the
“ Code ”).
NOW,
THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties
agree as follows:
ARTICLE I.
THE EXCHANGE
1.01
Share Exchange . Upon the terms and subject to
the conditions set forth in this Agreement, and in accordance with
the Nevada Revised Statutes (“ Nevada Statutes
”), at the Closing (as hereinafter defined), the parties
shall do the following:
(a) The
Selling Shareholder will sell, convey, assign, transfer the Shares
to Pubco by delivering to Pubco a stock certificate issued in the
name of Pubco evidencing the Shares (the “ Shares
Certificate ”). The Shares transferred to
Pubco at the Closing shall constitute 100% of the issued and
outstanding equity interests of the Company; and
(b) As
consideration for its acquisition of the Shares, Pubco shall issue
the Exchange Shares to the Selling Shareholder by delivering a
share certificate registered in the name of the Selling Shareholder
evidencing the Exchange Shares (the “ Exchange Shares
Certificate ”). The Exchange Shares issued
shall equal no less than fifty four percent (54%) of the
outstanding shares of Pubco’s common stock at the time of
Closing.
1.02
Effect of the Exchange . The Exchange
shall have the effects set forth in the applicable provisions of
the Nevada Statutes.
1.03
Closing. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned
pursuant to Article VI and subject to the satisfaction or
waiver of the conditions set forth in Article V , the
closing of the Exchange (the “ Closing ”) will
take place at 10:00 a.m. U.S. Pacific Standard Time on the business
day upon satisfaction of the conditions set forth in Article
V (or as soon as practicable thereafter following satisfaction
or waiver of the conditions set forth in Article V ) (the
“ Closing Date ”), at the offices of Weintraub
Genshlea Chediak, 400 Capitol Mall, 11 th Floor, Sacramento, California, unless another
date, time or place is agreed to in writing by the parties
hereto.
1.04
Effective Time of Exchange. As soon as practicable following
the satisfaction or waiver of the conditions set forth in
Article V , the parties shall make all filings or recordings
required under Nevada Statutes and Hong Kong law. The
Exchange shall become effective at such time as is permissible in
accordance with Nevada Statutes and Hong Kong law (the time the
Exchange becomes effective being the “ Effective Time
”). Pubco and the Company shall use reasonable efforts to
have the Closing Date and the Effective Time to be the same
day.
1.05
Directors and Officers . Within seven (7)
business days of the execution of this Agreement, Pubco shall cause
the appointment of the individuals as set forth on Schedule
1.05 to be directors of Pubco, and upon the Effective Time,
Pubco shall cause the appointment of the individuals as set forth
on Schedule 1.05 to be officers of Pubco and concurrent
resignation of John J. Lennon as Pubco’s Chief Executive
Officer, Chief Financial Officer, Treasurer and Secretary and as a
director of Pubco.
ARTICLE II.
REPRESENTATIONS AND
WARRANTIES
2.01
Representations and Warranties of the Company.
Except as set forth in the disclosure
schedule delivered by the Company to Pubco at the time of
execution of this Agreement (the “ Company Disclosure
Schedule ”), the Company, Selling Shareholder and
WFOE, jointly and severally, represent and warrant to Pubco and the
Pubco Stockholder as follows:
(a)
Organization, Standing and Corporate Power . The
Company, WFOE and their respective subsidiaries (“
Existing Company Entities ”) and the Selling
Shareholder are each duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable) and has the requisite
corporate power and authority and all government licenses,
authorizations, permits, consents and approvals required to own,
lease and operate its properties and carry on its business as now
being conducted. The Selling Shareholder and each
Existing Company Entity are duly qualified or licensed to do
business and are in good standing in each jurisdiction in which the
nature of their respective businesses or the ownership or leasing
of their respective 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 ).
(b)
Subsidiaries . Except for WFOE, the Company does
not own directly or indirectly, any equity or other ownership
interest in any company, corporation, partnership, joint venture or
otherwise.
(c)
Capital Structure . The number of shares and type
of all authorized, issued and outstanding capital stock of the
Company, and all shares of capital stock reserved for issuance
under the Company or WFOE’s various option and incentive
plans is specified on Schedule 2.01(c) . Except as set
forth in Schedule 2.01(c) , no shares of capital stock or
other equity securities of the Existing Company Entities 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. Except as set forth
in Schedule 2.01(c) and the Deed of Share Charge by and
among the Selling Shareholder, the Company, NewMargin Growth Fund
L.P., Ceyuan Ventures II, L.P. and Ceyuan Ventures Advisors Fund
II, LLC dated August 21, 2009, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Existing
Company Entities are a party or by which they are bound obligating
any Existing Company Entity 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
Common Stock or other securities under the Securities Act of 1933,
as amended and the rules and regulations promulgated thereunder
(the “ Securities Act ”) or other agreements or
arrangements with or among any security holders of the Company with
respect to securities of the Company.
(d)
Corporate Authority; Noncontravention . The
Selling Shareholder and each Existing Company Entity have all
requisite corporate and other power and authority to enter into
this Agreement and to consummate the Exchange. The execution
and delivery of this Agreement by the Selling Shareholder
and each Existing Company Entity and the consummation by each
of them of the transactions contemplated hereby have been (or at
Closing will have been) duly authorized by all necessary corporate
action on the part of the Selling Shareholder and each Existing
Company Entity. This Agreement has been duly executed and
when delivered by the Selling Shareholder and each Existing Company
Entity shall constitute a valid and binding obligation of the
Selling Shareholder and each such Existing Company Entity,
enforceable against the Selling Shareholder and each such Existing
Company Entity and its shareholders, as applicable, in accordance
with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors’ rights generally or by general
principles of equity. 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 a loss of a material benefit under,
or result in the creation of any lien upon any of the properties or
assets of the Existing Company Entities under, (i) the certificate
or articles of incorporation, bylaws or other organizational or
charter documents of any of the Existing Company Entities, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or
license applicable to any of the Existing Company Entities, their
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 Existing Company Entities,
their properties or assets, other than, in the case of clauses (ii)
and (iii), any such conflicts, breaches, violations, defaults,
rights, losses or liens that individually or in the aggregate could
not have a material adverse effect with respect to the Existing
Company Entities or could not prevent, hinder or materially delay
the ability of the Existing Company Entities to consummate the
transactions contemplated by this Agreement.
(e)
Governmental Authorization . No consent, approval,
order or authorization of, or registration, declaration or filing
with, or notice to, any United States, People’s Republic of
China (“ PRC ”) or Hong Kong court,
administrative agency or commission, or other federal, state or
local government or other governmental authority, agency, domestic
or foreign (a “ Governmental Entity ”), is
required by or with respect to the Selling Shareholder or
the Existing Company Entities in connection with the execution
and delivery of this Agreement by the Selling Shareholder or the
Existing Company Entities or the consummation by the Selling
Shareholder or the Existing Company Entities of the transactions
contemplated hereby, except, with respect to this Agreement, any
filings under the Securities Act or Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder (the “ Exchange Act ”) and any
registrations, notices or filings required to be made in order to
comply with the currency and exchange control requirements imposed
by the Chinese and Hong Kong governments and/or PRC or Hong Kong
law, if any.
(f)
Financial Statements .
(i) Pubco
has received a copy of the unaudited consolidated financial
statements of Existing Company Entities for the fiscal year ended
December 31, 2008 and 2007 and unaudited financial statements for
the six-months ended June 30, 2009 and 2008 (collectively, the
“ Financial Statements ”). The Financial
Statements fairly present the financial condition of Existing
Company Entities 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 Existing Company Entities, fixed or contingent,
and of whatever nature.
(ii) Since
June 30, 2009 (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 or prospects, of the
Existing Company Entities, 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
Existing Company Entities except in the ordinary course of business
and except for the change of the registered capital of WFOE from
RMB 30 million to US$4,400,000 on August 10, 2009.
(iii) Since
the Balance Sheet Date, the Existing Company Entities have 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 Existing Company Entities except as disclosed in
writing to Pubco, issued, sold or otherwise disposed of, or agreed
to issue, sell or otherwise dispose of, any capital stock or any
other security of the Existing Company Entities 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 Existing Company Entities or has incurred or
agreed to incur any indebtedness for borrowed money except for
the Amended and Restated Agreement executed among the Company,
WFOE, NewMargin Growth Fund L.P., Ceyuan Ventures II, L.P., Ceyuan
Ventures Advisors Fund II, LLC and Pubco as of July 31,
2009, the Amended and Restated Binding Letter of Intent among the
Company, WFOE, NewMargin Growth Fund L.P., Ceyuan Ventures II,
L.P., Ceyuan Ventures Advisors Fund II, LLC and Pubco as
of July 31, 2009, and the Promissory Note issued by the
Company to Pubco dated as of July 31, 2009.
(g)
Absence of Certain Changes or Events . Since the
Balance Sheet Date, the Existing Company Entities have conducted
its business only in the ordinary course consistent with past
practice, and there is not and has not been any:
(i) material
adverse change with respect to the Existing Company
Entities;
(ii) event
which, if it had taken place following the execution of this
Agreement, would not have been permitted by Section 3.01
without prior consent of Pubco;
(iii) condition,
event or occurrence which could reasonably be expected to prevent,
hinder or materially delay the ability of the Existing Company
Entities to consummate the transactions contemplated by this
Agreement;
(iv) incurrence,
assumption or guarantee by the Existing Company Entities of any
indebtedness for borrowed money other than in the ordinary course
and in amounts and on terms consistent with past practices or as
disclosed to Pubco in writing except for the Amended and
Restated Agreement executed among the Company, WFOE, NewMargin
Growth Fund L.P., Ceyuan Ventures II, L.P., Ceyuan Ventures
Advisors Fund II, LLC and Pubco as of July 31, 2009, the
Amended and Restated Binding Letter of Intent among the Company,
WFOE, NewMargin Growth Fund L.P., Ceyuan Ventures II, L.P., Ceyuan
Ventures Advisors Fund II, LLC and Pubco as of July 31,
2009, and the Promissory Note issued by the Company to Pubco dated
as of July 31, 2009;
(v) creation
or other incurrence by the Company of any lien on any asset other
than in the ordinary course consistent with past
practices;
(vi) transaction
or commitment made, or any contract or agreement entered into, by
the Company relating to their assets or business (including the
acquisition or disposition of any assets) or any relinquishment by
the Company of any contract or other right, in either case,
material to the Company, other than transactions and commitments in
the ordinary course consistent with past practices and those
contemplated by this Agreement;
(vii) labor
dispute, other than routine, individual grievances, or, to the
knowledge of the Existing Company Entities, any activity or
proceeding by a labor union or representative thereof to organize
any employees of any Existing Company Entity or any lockouts,
strikes, slowdowns, work stoppages or threats by or with respect to
such employees;
(viii) payment,
prepayment or discharge of liability other than in the ordinary
course of business or any failure to pay any liability when
due;
(ix) write-offs
or write-downs of any assets of the Company;
(x)
creation, termination or amendment of, or waiver of any right
under, any material contract of the Company;
(xi) damage,
destruction or loss having, or reasonably expected to have, a
material adverse effect on the Company;
(xii) other
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; or
(xiii) agreement
or commitment to do any of the foregoing.
(h)
Litigation; Labor Matters; Compliance with Laws .
(i) There
is no suit, action or proceeding or investigation pending or, to
the knowledge of each of the Existing Company Entities, threatened
against or affecting any of the Existing Company Entities 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 Existing Company
Entities or prevent, hinder or materially delay the ability of the
Existing Company Entities 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 Existing Company Entities having, or which,
insofar as reasonably could be foreseen by the Existing Company
Entities, in the future could have, any such effect.
(ii) Each
of the Existing Company Entities 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 such Existing Company
Entity.
(iii) The
conduct of the business of the Existing Company Entities complies
with all statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees or arbitration awards applicable
thereto.
(i)
Tax Returns and Tax Payments .
(i)
Each of the Existing Company
Entities 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.
(ii) No
material claim for unpaid Taxes has been made or become a lien
against the property of any of the Existing Company Entities or is
being asserted against any of the Existing Company Entities, no
audit of any Tax Return of any of the Existing Company Entities 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
any of the Existing Company Entities and is currently in
effect.
(iii) 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.
(j)
Environmental Matters . The Existing Company
Entities are in compliance with all Environmental Laws in all
material respects. The Existing Company Entities have
not received any written notice regarding any violation of any
Environmental Laws, including any investigatory, remedial or
corrective obligations. Each of the Existing Company
Entities holds all permits and authorizations required under
applicable Environmental Laws, unless the failure to hold such
permits and authorizations would not have a material adverse effect
on such Existing Company Entity, and are is compliance with all
terms, conditions and provisions of all such permits and
authorizations in all material respects. No releases of
Hazardous Materials have occurred at, from, in, to, on or under any
real property currently or formerly owned, operated or leased by
any of the Existing Company Entities or any predecessor thereof and
no Hazardous Materials are present in, on, about or migrating to or
from any such property which could result in any liability to the
Existing Company Entities. The Existing Company Entities
have not transported or arranged for the treatment, storage,
handling, disposal, or transportation of any Hazardous Material to
any off-site location which could result in any liability to any
Existing Company Entities. The Existing Company Entities
have no liability, absolute or contingent, under any Environmental
Law that if enforced or collected would have a material adverse
effect on the Existing Company Entities. There are no
past, pending or threatened claims under Environmental Laws against
any of the Existing Company Entities and none of the Existing
Company Entities is aware of any facts or circumstances that could
reasonably be expected to result in a liability or claim against
the Existing Company Entities pursuant to Environmental
Laws. “ Environmental Laws ” means
all applicable foreign, 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. “ Hazardous Material ” means
any toxic, radioactive, corrosive or otherwise hazardous substance,
including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics, which in any event
is regulated under any Environmental Law.
(k)
Material Contract Defaults . The Existing Company
Entities are not, or have not received any notice or have 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 any Existing Company Entities is a party (i)
with expected receipts or expenditures in excess of $50,000, (ii)
requiring an Existing Company Entity to indemnify any person, (iii)
granting exclusive rights to any party, (iv) evidencing
indebtedness for borrowed or loaned money in excess of $50,000 or
more, including guarantees of such indebtedness, or (v) which, if
breached by an Existing Company Entity 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 such
Existing Company Entities 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.
(l)
Accounts Receivable . All of the accounts
receivable of each of the Existing Company Entities that are
reflected on the Financial Statements or the accounting records of
such Existing Company Entity as of the Closing (collectively, the
“ Accounts Receivable ”) represent or will
represent valid obligations arising from sales actually made or
services actually performed in the ordinary course of business and
are not subject to any defenses, counterclaims, or rights of set
off other than those arising in the ordinary course of business and
for which adequate reserves have been established. The
Accounts Receivable are fully collectible to the extent not
reserved for on the balance sheet on which they are
shown.
(m)
Properties . Each Existing Company Entity has
valid land use rights for all real property that is material to its
business and good, clear and marketable title to all the tangible
properties and tangible assets reflected in the latest balance
sheet as being owned by such Existing Company Entity or acquired
after the date thereof which are, individually or in the aggregate,
material to such Existing Company Entity’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, encumbrances, claims, security interest, options and
restrictions of any nature whatsoever. Any real
property and facilities held under lease by any Existing Company
Entity are held by them under valid, subsisting and enforceable
leases of which such Existing Company Entity is in compliance,
except as could not, individually or in the aggregate, have or
reasonably be expected to result in a material adverse
effect.
(n)
Intellectual Property .
(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
for less than $25,000), and any written settlements relating to any
Intellectual Property, to which any Existing Company Entity 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) Each
Existing Company Entity owns or has valid rights to use the
Trademarks, trade names, domain names, copyrights, patents, logos,
licenses and computer software programs (including, without
limitation, the source codes thereto) that are necessary for the
conduct of its respective businesses as now being
conducted. To the knowledge of each of the Existing
Company Entities, none of the Existing Company Entities’
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 any of the Existing Company Entities or
their successors.
(o)
Board Recommendation . The Board of Directors of the
Company has unanimously determined that the terms of the Exchange
are fair to and in the best interests of the sole stockholder of
the Company and recommended that the Selling
Shareholder approve the Exchange.
(p)
Compliance With Anti-Corruption Laws .
Neither the Company nor to the knowledge of the Company, any
director, officer, agent, employee or other person acting on behalf
of the Company or any of its subsidiaries has, in the course of its
actions for, or on behalf of, the Company (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii)
violated or is in violation of any applicable Hong Kong or PRC
laws; or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
(q)
OFAC . Neither the Company, nor to the knowledge
of the Company, any director, officer, agent, employee, affiliate
or person acting on behalf of the Company, is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department.
(r)
Undisclosed Liabilities . Each of the Existing Company
Entities has no liabilities or obligations of any nature (whether
fixed or unfixed, secured or unsecured, known or unknown and
whether absolute, accrued, contingent, or otherwise) except for
liabilities or obligations reflected or reserved against in the
Financial Statements incurred in the ordinary course of business or
such liabilities or obligations disclosed in Schedule
2.01(g).
(s)
Money Laundering Laws . The operations of the
Company are and have been conducted at all times in compliance with
the money laundering statutes of applicable jurisdictions, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
applicable governmental agency (collectively, the “ Money
Laundering Laws ”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or
any arbitrator involving the Company with respect to the Money
Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
(t)
Debt Financing . The Company and WFOE acknowledge
that they have received USD $11,000,000 in the aggregate in debt
financing from Pubco as of the date of execution of this
Agreement.
(u)
Other Representations and Warranties Relating to WFOE
.
(i)
All material consents, approvals, authorizations or licenses
required under PRC law for the due and proper establishment and
operation of WFOE have been duly obtained from the relevant PRC
governmental authorities and are in full force and
effect.
(ii) All
filings and registrations with the PRC governmental authorities
required in respect of WFOE and its capital structure and
operations including, without limitation, the registration with the
Ministry of Commerce, the State Administration of Industry and or
their respective local divisions of Commerce, the State
Administration of Foreign Exchange, tax bureau and customs
authorities have been duly completed in accordance with the
relevant PRC rules and regulations, except where, the failure to
complete such filings and registrations does not, and would not,
individually or in the aggregate, have a material adverse
effect.
(iii) WFOE
has complied with all relevant PRC laws and regulations regarding
the contribution and payment of its registered share capital, the
payment schedule of which has been approved by the relevant PRC
governmental authorities. There are no outstanding
commitments made by the Company or any subsidiary to sell any
equity interest in WFOE.
(iv) WFOE
has not received any letter or notice from any relevant PRC
governmental authority notifying it of revocation of any licenses
or qualifications issued to it or any subsidy granted to it by any
PRC governmental authority for non-compliance with the terms
thereof or with applicable PRC laws, or the lack of compliance or
remedial actions in respect of the activities carried out by WFOE,
except such revocation as does not, and would not, individually or
in the aggregate, have a material adverse effect.
(v) WFOE
has conducted its business activities within the permitted scope of
business or has otherwise operated its business in compliance with
all relevant legal requirements and with all requisite licenses and
approvals granted by competent PRC governmental authorities other
than such non-compliance that do not, and would not, individually
or in the aggregate, have a material adverse effect. As
to licenses, approvals and government grants and concessions
requisite or material for the conduct of any material part of
WFOE’s business which is subject to periodic renewal, the
Company has no knowledge of any reasons related to the WFOE for
which such requisite renewals will not be granted by the relevant
PRC governmental authorities.
(vi) With
regard to employment and staff or labor, WFOE has complied with all
applicable PRC laws and regulations in all material respects,
including without limitation, laws and regulations pertaining to
welfare funds, social benefits, medical benefits, insurance,
retirement benefits, pensions or the like, other than such
non-compliance that do not, and would not, individually or in the
aggregate, have a material adverse effect.
(v)
Full Disclosure . All of the representations and
warranties made by the Existing Company Entities and Selling
Shareholder in this Agreement, and all statements set forth in the
certificates delivered by the Company at the Closing pursuant
to this Agreement, are true, correct and complete in all material
respects and do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make such
representations, warranties or statements, in light of the
circumstances under which they were made,
misleading. The copies of all documents furnished by the
Existing Company Entities and Selling Shareholder pursuant to
the terms of this Agreement are complete and accurate copies of the
original documents. The schedules, certificates, and any
and all other statements and information, whether furnished in
written or electronic form, to Pubco or its representatives by or
on behalf of any of the Company or its affiliates in connection
with the negotiation of this Agreement and the transactions
contemplated hereby do not contain any material misstatement of
fact or omit to state a material fact or any fact necessary to make
the statements contained therein not misleading.
2.02
Representations and Warranties of Pubco and the Pubco
Stockholder. Except as set forth in the disclosure
schedule delivered by Pubco and the Pubco Stockholder to the
Company at the time of execution of this Agreement (the “
Pubco Disclosure Schedule ”), Pubco and the Pubco
Stockholder, jointly and severally, represent and warrant to the
Existing Company, the WFOE and the Selling Shareholder as
follows:
(a)
Organization, Standing and Corporate Power
. Pubco is duly organized, validly existing and in good
standing under the laws of the State of Nevada, as is applicable,
and has the requisite corporate power and authority and all
government licenses, authorizations, permits, consents and
approvals required to own, lease and operate its properties and
carry on its business as now being conducted. Pubco 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
Pubco. Shares of common stock of Pubco, par value $0.001
(“ Pubco Common Stock ”), trades on the OTC
Bulletin Board under the symbol “GCHT.”
(b)
Capital Structure of Pubco . As of the date of
this Agreement, the authorized capital stock of Pubco consists of
100,000,000 shares of Pubco Common Stock, $0.001 par value, of
which 7,686,207 shares of Pubco Common Stock will be issued and
outstanding as of the date of this Agreement and except for the
Investor Notes (as defined under Section 5.03(l) ), no
shares of Pubco 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 Pubco are issued, reserved for issuance
or outstanding. All outstanding shares of capital stock of
Pubco 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 rights, and
issued in compliance with all applicable state and federal laws
concerning the issuance of securities. Except as set forth above,
there are no outstanding bonds, debentures, notes or other
indebtedness or other securities of Pubco having the right to vote
(or convertible into, or exchangeable for, securities having the
right to 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 Pubco is a party or by wh
