CANCELLATION AGREEMENT
THIS AGREEMENT is made and entered into
this 23 rd day of August, 2005, to be effective as of
December 31, 2004 (the “Effective Date”), by and
between Mid-Am Systems, Inc., a Delaware corporation,
(“Mid-Am”), Connelly Investments Limited, a British
Virgin Islands corporation (“Connelly”) and Song Bohai,
Hu Weiming, Wang Jingsong and Fairwood Capital Inc. (collectively
referred to as the “Shareholders”).
RECITALS
The parties executed an Agreement for
Share Exchange dated December 31, 2004, pursuant to which Mid-Am
agreed to acquire 1,000 shares of Connelly from the Shareholders,
representing all of Connelly’s issued and outstanding stock,
in exchange for the issuance of 8,870,040 shares of Mid-Am common
stock.
The parties completed the exchange of
shares pursuant to the Agreement for Share Exchange on December 31,
2004.
In conjunction with closing under the
Agreement for Share Exchange, the officers and directors of Mid-Am
resigned and appointed new officers and directors designated by
Connelly.
The parties have determined that it would
be in their mutual best interests to rescind the share exchange
transaction effective retroactively to December 31, 2004.
NOW THEREFORE, in consideration of the
foregoing, and in consideration of the mutual covenants and
promises hereinafter set forth, it is agreed as follows:
1.
Cancellation of Share
Exchange . The share
exchange transaction between the parties, completed pursuant to and
in accordance with the terms of an Agreement for Share Exchange,
dated December 31, 2004, is hereby rescinded and cancelled as of
the Effective Date.
2.
Transfer or Reconveyance of
Shares . By execution of
this Agreement, Mid-Am hereby agrees to convey and transfer to the
Shareholders 1,000 shares of stock of Connelly currently held by
Mid-Am, in exchange for the transfer and conveyance to Mid-Am of a
total 8,870,040 shares of Mid-Am currently held by the
Shareholders. The transfer and conveyance of shares between
the parties shall be made in accordance with the following
schedule:
-1-
|
|
|
|
|
Name
|
Number of Shares of
Connelly
|
Number of Shares of
Mid-Am
|
|
|
|
|
|
Song Bohai
|
730
|
6,475,129
|
|
|
|
|
|
Hu Weiming
|
100
|
887,004
|
|
|
|
|
|
Wang Jingsong
|
50
|
443,502
|
|
|
|
|
|
Fairwood Capital, Inc.
|
120
|
1,064,405
|
|
|
|
|
|
TOTAL
|
1,000
|
8,870,040
|
3.
Cancellation of Mid-Am
Shares . Upon conveyance
to Mid-Am of a total of 8,870,040 of its shares in accordance with
the provisions of paragraph 2 hereof, such shares shall be
cancelled and returned to the status of authorized but unissued
shares. Such cancellation of shares shall be retroactive to
December 31, 2004.
4.
Resignation of Officers and
Directors . The persons
appointed as officers and directors of Mid-Am in conjunction with
closing under the Agreement for Share Exchange shall resign as of
the date of execution of this Agreement, with such resignations to
be effective retroactively to December 31, 2004, and shall take
such steps as may be necessary or appropriate to appoint the
following persons as officers and directors of Mid-Am effective as
of December 31, 2004:
|
|
|
|
Name
|
Position
|
|
|
|
|
Song
Bohai
|
CEO, President and Director
|
|
|
|
|
Zhou
Xiaoling
|
Chief Financial Officer
|
|
|
|
|
Wang
Jingsong
|
Director
|
5.
Representations and Warranties of
Connelly and the Shareholders . By execution of this Agreement Connelly and
the Shareholders represent and warrant as follows:
(i) From the date of closing under the
Agreement of Share Exchange through the date of execution of this
Agreement they have not incurred any liabilities
