Exhibit 2.1
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT ("Agreement") dated as of this 31st day of August,
2004 by and among Lin Ray Yang Enterprise Ltd., a British Virgin Islands company
("LRY"), the Shareholders of LRY identified on Schedule I hereto (the "LRY
Shareholders"), Lin Chi Jung ("Lin"), as sole director of LRY and as agent for
the LRY Shareholders, and SUNRISE REAL ESTATE DEVELOPMENT GROUP, INC. ("SRRE") a
Texas corporation.
RECITALS
WHEREAS, the LRY Shareholders holds two (2) million shares of common
stock of LRY (the "LRY SHARES"), which constitute all of the issued and
outstanding shares of LRY.
WHEREAS, the LRY Shareholders and SRRE desire to effect the exchange of
the LRY Shares for ten (10) million shares of common stock of SRRE (the "SRRE
SHARES") as a result LRY shall be merged as a wholly owned subsidiary of SunRise
Real Estate Development Group, Inc., a Cayman Island company ("CY-SRRE"), upon
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, warranties and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
When used herein, the following terms shall have the meanings set forth
below:
"Affiliate" means, with respect to any given Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. The term "control"
(including, with correlative meaning, the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Assets" means all properties, assets, Contracts, business, goodwill
and rights of a Person as a going concern, of every kind, nature, character and
description, tangible and intangible, wherever located and whether or not
carried or reflected on the books and records of a Person on the Closing Date.
"Contract" means any contract, agreement, lease, license, arrangement,
commitment, sales order, purchase order or any claim or right or any benefit or
obligation arising thereunder or resulting therefrom and currently in effect,
whether oral or written.
"Dollars" and "$" means dollars in lawful currency of the United States
of America.
"Employee Benefit Plan" means any (i) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (ii) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (iii) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (iv) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended.
"Export Control Laws" shall mean all laws, now or hereafter in effect,
and in each case as amended or supplemented from time to time, and any judicial
or administrative interpretations thereof, relating to the export or re-export
of commodities and technologies. Export Control Laws include, but are not
limited to, the Export Administration Act of 1979 (24 U.S.C. ss.ss. 2401-2420);
the International Emergency Economic Powers Act (50 U.S.C. ss.ss. 1701-1706);
the Trading with the Enemy Act (50 U.S.C. ss.ss. 1 et seq); the Arms Export
Control Act (22 U.S.C. ss.ss. 2778, 2779); and the International Boycott
Provisions of Section 999 of the Code.
"GAAP" shall mean generally accepted accounting principles in the
United States as of the date of this Agreement consistently applied.
"Intellectual Property" means any and all (i) inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (ii)
trademarks, service marks, trade dress, logos, trade names, and corporate names,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (iii) copyrightable works,
whether or not registered, all copyrights, and all applications, registrations,
and renewals in connection therewith, (iv) mask works and all applications,
registrations, and renewals in connection therewith, (v) trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, blueprints, sketches,
storyboards, models, engineering drawings, specifications, customer and supplier
lists, pricing and cost information, and business and marketing plans and
proposals), (vi) computer software (including data and related documentation),
(vii) other proprietary rights and Know-how, (viii) copies and tangible
embodiments thereof (in whatever form or medium) and (ix) licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder.
"Know-how" means any and all technical knowledge, proprietary rights,
patented or unpatented inventions, trade secrets, analytical methodology,
processes, data and all other information or experience possessed by, as the
case may be, SRRE or LRY, or which SRRE or LRY have the right to use.
"Liabilities" means any direct or indirect liability, indebtedness,
claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed,
choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, known or unknown, contingent or otherwise.
"Lien" means any mortgage, lien, pledge, charge, security interest,
license, lease, claim, restriction, option, conditional sale or installment
Contract or encumbrance of any kind.
"Person" shall include an individual, a partnership, a corporation, a
limited liability company or a division or business unit thereof, a trust, an
unincorporated organization, a government or any department or agency thereof
and any other entity.
"Securities Act" shall mean the United States Securities Act of 1933,
as amended.
ARTICLE II.
EXCHANGE OF SHARES
2.1. Delivery of LRY Shares. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date, the LRY Shareholders shall
sell, transfer, assign and convey to SRRE, and SRRE shall acquire, the LRY
Shares, and the LRY Shareholders shall deliver to SRRE share certificates
representing the LRY Shares, duly endorsed to SRRE or accompanied by stock
powers duly executed in proper form for transfer.
2.2. Issuance of SRRE Shares. In consideration of and in exchange for
the LRY Shares, SRRE shall, at the Closing, allot and issue to the LRY
Shareholders, and the LRY Shareholders shall acquire, the SRRE Shares, and SRRE
shall deliver to the LRY Shareholders share certificates representing newly
issued SRRE Shares.
2.3. Escrow of Shares. Prior to the Closing, the LRY Shareholders shall
deliver to Carl A. Generes, Attorney at Law, 4315 West Lovers Lane, Dallas,
75209-2818, U.S.A (the "Escrow Agent") the certificate(s) representing the LRY
Shares and SRRE shall deliver to the Escrow Agent the certificate(s)
representing the SRRE Shares. The Escrow Agent shall release the certificates
representing the SRRE Shares to the LRY Shareholders and the certificates
representing the LRY Shares to SRRE upon Closing.
ARTICLE III.
CLOSING
3.1. Closing. The closing (the "Closing") of the transactions
contemplated hereby shall be held at the offices of Carl A. Generes, Attorney at
Law, 4315 West Lovers Lane, Dallas, Texas 75209-2818, U.S.A on or before
September 30, 2004 or within five (5) days after the conditions contained in
Articles VII and VIII have been satisfied or waived or at such other place and
time as may be agreed upon by the parties hereto. The time and date of the
Closing is referred to herein as the "Closing Date." At the Closing, in addition
to the exchange of the LRY Shares and the SRRE Shares, the parties hereto shall
deliver such certificates, opinions and other documents as are specified in
Articles VII and VIII.
3.2. Transfer Taxes. The LRY Shareholders and SRRE, as the case may be,
shall be responsible for any transfer and similar taxes assessed or payable by
each of them in connection with the sale and transfer of the LRY Shares or
issuance of the SRRE Shares, as the case may be, and the transactions
contemplated hereby.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
OF LRY, THE LRY SHAREHOLDERS AND LIN
LRY, LIN and LRY Shareholders, shall jointly and severally, represent
and warrant to, and agree with, SRRE and CY-SRRE as follows:
4.1. Organization.
(a) LRY is a corporation duly organized, validly existing and
in good standing under the laws of the British Virgin Islands. LRY has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. LRY is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the property owned, leased or operated by LRY or the nature of the
business conducted by it makes such qualification necessary. LRY has heretofore
made available to SRRE true, accurate and complete copies of LRY's of Memorandum
and Articles of Association as in effect on the date hereof and minutes of all
meetings of the stockholders and directors of LRY held through and including the
date of this Agreement. LRY is not in violation of any of the provisions of its
Memorandum and Articles of Association.
(b) LRY has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors and, if necessary, the stockholders of LRY and no other
corporate proceedings on the part of LRY are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by LRY and constitutes the
legal, valid and binding obligations of LRY, enforceable against them in
accordance with its terms.
4.2. Capitalization. LRY has authorized capital stock of 19,500,000
shares of Common Stock, par value $1 per share, of which two (2) million shares
are issued and outstanding as of the date hereof. All issued and outstanding
shares of capital stock of LRY have been duly authorized, validly issued, fully
paid, nonassessable and are free of preemptive rights. There are no other
convertible securities, options, warrants, subscription calls or other rights or
agreements, arrangements or commitments obligating LRY to issue, transfer or
sell any of its securities. None of such issued and outstanding shares is the
subject of any voting trust agreement or other agreement relating to the voting
thereof or restricting in any way the sale or transfer thereof.
4.3. Share Ownership. The LRY Shareholders has full and valid title and
control of the LRY Shares free and clear of any Lien. None of the LRY Shares are
the subject of any voting trust agreement or other agreement relating to the
voting thereof or restricting in any way the sale or transfer thereof except for
this Agreement.
4.4. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby will not, (i) conflict
with or violate any law, regulation, court order, judgment or decree, (ii)
violate or conflict with the Memorandum and Articles of Association of LRY, or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination or cancellation of any Contract, permit, license or
franchise to which LRY is bound or affected, except for conflicts, violations,
breaches or defaults which, in the aggregate, would not have a material adverse
effect on the business, operations, Assets, Liabilities, condition (financial or
otherwise), results of operations or prospects (a "Material Adverse Effect") of
LRY.
(b) The execution, delivery or performance of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
require any notice, report or other filing with any governmental authority,
domestic or foreign, or require any waiver, consent, approval or authorization
of any Person or any governmental or regulatory authority, domestic or foreign.
4.5. [Internationally Omitted.]
4.6. Real and Personal Property. LRY has good and marketable title to,
or valid leasehold or license interests in, all real property or other Assets
used or held for use in the conduct of its business, including, without
limitation, the Assets reflected on its books and records or acquired after the
date thereof (other than those which have been disposed of in the ordinary
course of business since such date), free and clear of any Liens, other than
Liens for taxes not yet due and payable. All of the real property and Assets
owned or leased by LRY are in all material respects in working condition and
repair, ordinary wear and tear excepted.
4.7. No Undisclosed Liabilities. LRY has had no direct or indirect
Liabilities, whether due or to become due, or arising out of transactions
entered into, or any state of facts existing on the date hereof which would have
a Material Adverse Effect on LRY.
4.8. Absence of Certain Changes. Since August 30, 2004, there has been
no material adverse change in the condition (financial or otherwise), Assets,
Liabilities, results of operations, business or prospects of LRY, and nothing
has occurred relative to the business or prospects of LRY which would have a
Material Adverse Effect on the future business of LRY.
4.9. Litigation. No material investigation or review by any
governmental entity or regulatory body, foreign or domestic, with respect to LRY
is pending or, to the knowledge of LRY, threatened against LRY, and no
governmental entity or regulatory body has advised LRY of an intention to
conduct the same. There is no claim, action, suit, investigation or proceeding
pending or, to the knowledge of LRY, threatened against or affecting LRY at law
or in equity or before any federal, state, municipal or other governmental
entity or regulatory body, or which challenges the validity of this Agreement or
any action taken or to be taken by LRY pursuant to this Agreement. As of the
date hereof, LRY is not subject to, nor is there in existence, any outstanding
judgment, award, order, writ, injunction or decree of any court, governmental
entity or regulatory body relating to LRY which would have a material adverse
effect on LRY.
4.10. Contracts. LRY has previously provided SRRE access to true,
correct and complete copies of all material Contracts to which LRY is a party.
As to such Contracts, (i) there are no existing breaches or defaults by LRY
thereunder or, to the knowledge of LRY, by the other parties to such Contracts;
(ii) no event, act or omission has occurred or, as a result of the consummation
of the transactions contemplated hereby, will occur which (with or without
notice, lapse of time or the happening or occurrence of any other event) would
result in a default by LRY thereunder or give cause for termination thereof,
provided that insofar as the foregoing representation involves the actions or
omissions of parties other than LRY, it shall be limited to the knowledge of
LRY; (iii) none of them will result in any loss to LRY upon completion or
performance thereof; and (iv) none of the parties to Contracts have expressed an
indication to LRY of their intention to cancel, renegotiate or exercise or not
exercise any option under any such Contracts as a result of the consummation of
the transactions contemplated hereby.
4.11. Intellectual Property.
(a) LRY owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary for the
operation of the business of LRY as proposed to be conducted. LRY has taken all
commercially reasonable action to maintain and protect each item of Intellectual
Property that it owns or uses.
(b) LRY has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of third parties, and LRY has not received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement, misappropriation
or violation (including any claim that LRY must license or refrain from using
any Intellectual Property rights of any third Person). To the knowledge of LRY,
no third party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of any of
LRY.
4.12. Licenses, Permits and Consents; Compliance with Applicable Law.
(a) LRY has all licenses and permits which individually or in
the aggregate are material to the conduct of the business of LRY or any of its
employees by reason of such employee's activities on behalf of LRY under
applicable law or by any federal, state, local or foreign governmental entity or
regulatory body for the operation of the business of LRY, and all of such listed
licenses and permits are in full force and effect as of the date hereof. LRY has
not received notice and, to the knowledge of LRY, there is no reason to believe,
that any appropriate authority intends to cancel or terminate any of such
licenses or permits or that valid grounds for such cancellation or termination
currently exist.
(b) LRY is not in violation or breach of any, and the business
and operations of LRY comply in all material respects and are being conducted in
accordance with, all material governing laws, regulations and ordinances
applicable thereto and LRY is not in material violation of or in material
default under, any judgment, award, order, writ, injunction or decree of any
court, arbitration tribunal, governmental entity or regulatory body.
4.13. Securities Law Acknowledgments. The LRY Shareholders acknowledge
that the SRRE Shares are, and will be, offered and sold to the LRY Shareholder
in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws. The LRY Shareholders will not sell or
otherwise transfer the SRRE Shares without registration under the Securities Act
or an exemption therefrom, and fully understand and agree that the LRY
Shareholders or any such transferee must bear the economic risk of holding the
SRRE Shares for an indefinite period of time because, among other reasons, the
SRRE Shares have not been registered under the Securities Act or under the
securities laws of certain states and, therefore, cannot be resold, pledged,
assigned or otherwise disposed of unless the securities are subsequently
registered under the Securities Act and under the applicable securities laws of
such states or unless an exemption from such registration is available in the
opinion of counsel for the holder, which counsel and opinion are reasonably
satisfactory to counsel for SRRE. The LRY Shareholders are acquiring the SRRE
Shares for the account of the LRY Shareholders for investment and not with a
view to resale or distribution except in compliance with the Securities Act.
4.14. Regulation S Exemption. The LRY Shareholders understands that the
SRRE Shares are being offered and sold to it in reliance on an exemption from
the registration requirements of United States federal and state securities laws
under Regulation S promulgated pursuant to the Securities Act and that SRRE is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgements and understandings of each LRY Shareholders set
forth herein in order to determine the applicability of such exemptions and the
suitability of each LRY Shareholders to acquire the SRRE Shares. In this regard,
each LRY Shareholders represents, warrants and agrees that:
(a) The LRY Shareholders is not a U.S. Person (as defined
below) and is not an affiliate (as defined in Rule 501(b) under the Securities
Act) of the Seller. A "U.S. person" means any one of the following:
(i) any natural person resident in the United States;
(ii) any partnership or corporation organized or incorporated
under the laws of the United States;
(iii) any estate of which any executor or administrator is a
U.S. person;
(iv) any trust of which any trustee is a U.S. person;
(v) any agency or branch of a foreign entity located in the
United States;
(vi) any non-discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary for the
benefit or account of a U.S. person;
(vii) any discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary organized,
incorporated or (if an individual) resident in the United States; and
(viii) any partnership or corporation if:
(1) organized or incorporated under the laws of any
foreign jurisdiction; and
(2) formed by a U.S. person principally for the
purpose of investing in securities not registered
under the Securities Act, unless it is organized or
incorporated, and owned, by accredited investors (as
defined in Rule 501(a) under the Securities Act) who
are not natural persons, estates or trusts.
(b) At the time of the origination of contact concerning this
Agreement and the date of the execution and delivery of this Agreement, each LRY
Shareholders was outside of the United States.
(c) The LRY Shareholders will not, during the period
commencing on the date of acquisition of the SRRE Shares and ending on the first
anniversary of such date, or such shorter period as may be permitted by
Regulation S or other applicable securities law (the "Restricted Period"),
offer, sell, pledge or otherwise transfer the shares in the United States, or to
a U.S. person or for the account or benefit of a U.S. person, or otherwise in a
manner that is not in compliance with Regulation S.
(d) The LRY Shareholders will, after expiration of the
Restricted Period, offer, sell, pledge or otherwise transfer the SRRE Shares
only pursuant to registration under the Securities Act or an available exemption
therefrom and, in accordance with all applicable state and foreign securities
laws.
(e) No LRY Shareholders has engaged in and prior to the
expiration of the Restricted Period will not engage in, any short selling of or
any hedging transaction with respect to the SRRE Shares within the United
States, including without limitation, any put, call or other option transaction,
option writing or equity swap.
(f) No LRY Shareholders nor any person acting on its behalf
has engaged, nor will, during the Restricted Period, engage in any directed
selling efforts to any U.S. person with respect to the Shares and each LRY
Shareholders and any person acting on its behalf have complied and will comply
with the "offering restrictions" requirements of Regulation S under the
Securities Act.
(g) The transactions contemplated by this Agreement have not
been pre-arranged with a buyer located in the United States or with a U.S.
person, and are not part of a plan or scheme to evade the registration
requirements of the Securities Act.
(h) No LRY Shareholders nor any person acting on its behalf
has undertaken or carried out any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States, its territories or possessions, for any of the SRRE Shares. Each
LRY Shareholders agrees not to cause any advertisement of the Shares to be
published in any newspaper or periodical or posted in any public place and not
to issue any circular relating to the SRRE Shares, except such advertisements
that include the statements required by Regulation S under the Securities Act,
and only offshore and not in the United States or its territories, and only in
compliance with any local applicable securities laws.
(i) Each certificate representing the SRRE Shares shall be
endorsed with the following legends, in addition to any other legend required to
be placed thereon by applicable federal or state securities laws:
(A) "THE SHARES ARE BEING OFFERED TO
INVESTORS WHO ARE NOT U.S. PERSONS (AS
DEFINED IN REGULATION S UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE SECURITIES
ACT")) AND WITHOUT REGISTRATION WITH THE
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT IN
RELIANCE UPON REGULATION S PROMULGATED UNDER
THE SECURITIES ACT."
(B) "TRANSFER OF THESE SHARES IS PROHIBITED,
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO REGISTRATION UNDER
THE SECURITIES ACT, OR PURSUANT TO AVAILABLE
EXEMPTION FROM REGISTRATION. HEDGING
TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT."
(j) The LRY Shareholders consents to SRRE making a notation on
its records or giving instructions to any transfer agent of SRRE in order to
implement the restrictions on transfer of the Shares set forth in this Section
4.14.
(k) The LRY Shareholders agrees that it will not transfer the
SRRE Shares, and SRRE shall not be required to transfer the shares unless the
transferee executes a representation letter substantially in accordance with
Exhibit A hereto.
4.15. Finder's Fee. There is no investment banker, broker, finder or
other intermediary which has been retained by, or is authorized to act on behalf
of, LRY, who might be entitled to any fee or commission from LRY, SRRE or their
Affiliates upon the consummation of the transactions contemplated hereby.
4.16. Accuracy of Representations. The representations and warranties
made by LRY, LIN and the LRY Shareholders in this Agreement, and in any
certificate or Schedule referenced hereby or attached hereto, do not contain,
and will not contain, any statement which is false or misleading with respect to
any material fact and do not and will not omit to state a material fact required
to be stated herein or therein or necessary in order to make the statements
contained herein or therein not materially false or misleading. There is no
material fact or condition which could have a Material Adverse Effect on LRY
which has not been set forth in this Agreement or described in the Schedules
hereto.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
OF SRRE and CY-SRRE
SRRE and CY-SRRE, represents and warrants to, and agrees with, LRY, LIN
and the LRY Shareholders as follows:
5.1. Organization; Authority.
(a) SRRE is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas. SRRE has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. SRRE is duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction in
which the property owned, leased or operated by SRRE or the nature of the
business conducted by it makes such qualification necessary. SRRE has heretofore
made available to LRY true, accurate and complete copies of SRRE's Articles of
Incorporation and By-Laws as in effect on the date hereof and minutes of all
meetings of the stockholders and directors of SRRE held through and including
the date of this Agreement. SRRE is not in violation of any of the provisions of
its Articles of Incorporation or By-Laws.
(b) SRRE has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors and, if necessary, the stockholders of SRRE and no other
corporate proceedings on the part of SRRE are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.
(c) This Agreement has been duly authorized, executed and
delivered by SRRE and constitutes the legal, valid and binding obligations of
each of them, enforceable against them in accordance with its terms. The
issuance of the SRRE Shares have been duly authorized by all required corporate
action on the part of SRRE. The SRRE Shares when issued and paid for in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof and
will be free and clear of all Liens.
5.2. Capitalization. SRRE has authorized capital stock of 200,000,000
shares of Common Stock, no par value, of which 6,630,614 are issued and
outstanding as of the date hereof. A copy of the current stockholder list is
attached hereto as Schedule 5.2. All issued and outstanding shares of capital
stock of SRRE have been duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. There are no convertible
securities, options, warrants, subscription calls or other rights or agreements,
arrangements or commitments obligating SRRE to issue, transfer or sell any of
its securities other than as provided for in Section 8.5 hereto. All of such
shares have been issued in compliance with all Federal and State securities law.
None of such issued and outstanding shares is the subject of any voting trust
agreement or other agreement relating to the voting thereof or restricting in
any way the sale or transfer thereof.
5.3. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby will not, (i) conflict
with or violate any law, regulation, court order, judgment or decree, (ii)
violate or conflict with the Articles of Incorporation or By-Laws of SRRE, or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination or cancellation of any Contract, permit, license or
franchise to which SRRE is bound or affected, except for conflicts, violations,
breaches or defaults which, in the aggregate, would not have a Material Adverse
Effect on SRRE.
(b) The execution, delivery or performance of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
require any notice, report or other filing with any governmental authority,
domestic or foreign, or require any waiver, consent, approval or authorization
of any Person or any governmental or regulatory authority, domestic or foreign.
5.4. SEC Reports; Financial Statements.
(a) SRRE has previously delivered to LRY true and complete
copies of its Form 10-SB dated ______ _____, ______, Form 10-KSB for the fiscal
year ended December 31, 2003 and its Forms 10-QSB for the quarters ended
December 31, 2003 and June 30, 2004 (the "SEC Reports"), and all other documents
(other than preliminary material) that SRRE was required to file with the SEC
since the effective date of its Form 10-SB. Prior to the Closing Date, SRRE will
have furnished LRY with true and complete copies of any additional SEC Reports
required to be filed by SRRE, if any, with the SEC prior to the Closing Date. As
of their respective filing dates, the SEC Reports complied in all material
respects with the requirements of the Exchange Act or the Securities Act, as the
case may be, and none of the SEC Reports contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
in which they were made, not misleading, except to the extent corrected by a
subsequently filed SEC Document.
(b) The financial statements of SRRE, including the notes
thereto, included in the SEC Reports, comply as to form in all material respects
with applicable accounting requirements and with respect to the published
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles consistently applied and fairly
present the financial position of SRRE at the dates thereof and for the periods
to which they relate.
(c) Except and as to the extent reflected in the June 30, 2004
balance sheet of SRRE included in its June 30, 2004 10-QSB, SRRE did not have
any direct or indirect Liabilities, whether due or to become due, or arising out
of transactions entered into, or any state of facts existing, on or prior to
June 30, 2004 which would be required to be reflected on the June 30, 2004
balance sheet in accordance with GAAP.
5.5. Real and Personal Property.
(a) SRRE does not own any real property or lease any property
which is material to the operation of its business, would result in any material
liability if the lease were terminated prior to the expiration of the term
thereof or would interfere with the business of SRRE if it was required to
vacate such premises.
(b) SRRE has good and marketable title to, or valid leasehold
or license interests in, all other Assets used or held for use in the conduct of
its business, including, without limitation, the Assets reflected on the books
and records or acquired after the date thereof (other than those which have been
disposed of in the ordinary course of business since such date), free and clear
of any Liens, Liens reflected on its books and records and Liens for Taxes not
yet due and payable. All of the Assets owned or leased by SRRE are in all
material respects in good condition and repair, ordinary wear and tear excepted,
and well maintained. There are no material capital expenditures currently
contemplated or necessary to maintain the current business of SRRE.
5.6. No Undisclosed Liabilities. Except as set forth in SRRE's
financial statements SRRE had no direct or indirect Liabilities, whether due or
to become due, or arising out of transactions entered into, or any state of
facts existing, on the date hereof.
5.7. Absence of Certain Changes. Since August, 30, 2004 there has been
no material adverse change in the condition (financial or otherwise), Assets,
Liabilities, results of operations, business or prospects of SRRE, and nothing
has occurred relative to the business or prospects of SRRE which would have a
Material Adverse Effect on the future business of SRRE.
5.8. Tax Matters. SRRE has filed all tax returns required to be filed
by it (or has filed appropriate extensions therefor), has paid all taxes due
whether identified on the tax returns or otherwise, and has made appropriate
provision in the SRRE Financial Statements for any taxes not yet due, and all
such tax returns were true, correct and complete. None of the tax returns
described in the preceding sentence or otherwise filed by or on behalf of SRRE
contains or will contain a disclosure statement under Section 6661 of the Code
or any similar provision of state, local, foreign or other law. No assets of
SRRE, and no Assets used in the business of SRRE, are subject to any Liens for
taxes.
5.9. Entire Business. No portion of the business of SRRE is conducted
by any Affiliate of SRRE or any third party and all of the Assets necessary for
the conduct of the business of SRRE as presently conducted are owned by SRRE.
All such Assets are exclusively owned or leased and used by SRRE and its
customers.
5.10. Litigation. No material investigation or review by any
governmental entity or regulatory body, foreign or domestic, with respect to
SRRE is pending or, to the knowledge of SRRE, threatened against SRRE, and no
governmental entity or regulatory body has advised SRRE of an intention to
conduct the same. There is no claim, action, suit, investigation or proceeding
pending or, to the knowledge of SRRE, threatened against or affecting SRRE at
law or in equity or before any federal, state, municipal or other governmental
entity or regulatory body, or which challenges the validity of this Agreement or
any action taken or to be taken by SRRE pursuant to this Agreement. As of the
date hereof, SRRE is not subject to, nor is there in existence, any outstanding
judgment, award, order, writ, injunction or decree of any court, governmental
entity or regulatory body relating to SRRE which would have a Material Adverse
Effect on SRRE.
5.11. Employee Benefit Plans. SRRE does not maintain or contribute to,
or is required to maintain or contribute to any Employee Benefit Plan. To the
knowledge of SRRE, SRRE does not contribute to, ever has contributed to, or ever
has been required to contribute to, any Multiemployer Plan or has any Liability
(including withdrawal Liability) under any Multiemployer Plan. SRRE does not
maintain or ever has maintained or contribute, ever has contributed, or ever has
been required to contribute to any Employee Welfare Benefit Plan providing
medical, health, or life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses, or their dependents
(other than in accordance with Code Section 4980B).
5.12. Contracts. SRRE has previously made available to LRY access to
true, correct and complete copies of all material Contracts to which SRRE is a
party. As to such Contracts, (i) there are no existing breaches or defaults by
SRRE thereunder or, to the knowledge of SRRE, by the other parties to such
Contracts; (ii) no event, act or omission has occurred or, as a result of the
consummation of the transactions contemplated hereby, will occur which (with or
without notice, lapse of time or the happening or occurrence of any other event)
would result in a default by SRRE thereunder or give cause for termination
thereof, provided that insofar as the foregoing representation involves the
actions or omissions of parties other than SRRE, it shall be limited to the
knowledge of SRRE; (iii) none of them will result in any loss to SRRE upon
completion or performance thereof; and (iv) none of the parties to Contracts
have expressed an indication to SRRE of their intention to cancel, renegotiate
or exercise or not exercise any option under any such Contracts as a result of
the transactions contemplated hereby.
5.13. Intellectual Property.
(a) SRRE owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary for the
operation of the businesses of SRRE and as proposed to be conducted. SRRE has
taken all necessary action to maintain and protect each item of Intellectual
Property that it owns or uses.
(b) To the best knowledge of SRRE, SRRE has not interfered
with, infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties and SRRE has not received any
charge, complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation or violation (including any claim that either
SRRE must license or refrain from using any Intellectual Property rights of any
third Person). To the knowledge of SRRE, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of any Person.
5.14. Licenses, Permits and Consents; Compliance with Applicable Law.
(a) SRRE has all licenses and permits which individually or in
the aggregate are material to the conduct of the business of SRRE or any of its
employees by reason of such employee's activities on behalf of SRRE under
applicable law or by any federal, state, local or foreign governmental entity or
regulatory body for the operation of the business of SRRE, and all of such
listed licenses and permits are in full force and effect as of the date hereof.
SRRE has not received notice and, to the knowledge of SRRE, there is no reason
to believe, that any appropriate authority intends to cancel or terminate any of
such licenses or permits or that valid grounds for such cancellation or
termination currently exist.
(b) SRRE is not in violation or breach of any, and the
business and operations of SRRE comply in all material respects and are being
conducted in accordance with, all governing laws, regulations and ordinances
applicable thereto and SRRE is not in violation of or in default under, any
judgment, award, order, writ, injunction or decree of any court, arbitration
tribunal, governmental entity or regulatory body.
5.15. Environmental, Health and Safety Matters. SRRE and its respective
predecessors have at all times complied with, and SRRE is presently in
compliance with, all environmental, health, and safety requirements required by
applicable law.
5.16. Finder's Fee. There is no investment banker, broker, finder or
other intermediary which has been retained by, or is authorized to act on behalf
of, SRRE or their respective Affiliates who might be entitled to any fee or
commission from SRRE, LRY or their respective Affiliates upon the consummation
of the transactions contemplated hereby or thereafter.
5.17. Accuracy of Representations. The representations and warranties
made by SRRE in this Agreement, and in any certificate or Schedule referenced
hereby or attached hereto, do not contain, and will not contain, any statement
which is false or misleading with respect to any material fact and do not and
will not omit to state a material fact required to be stated herein or therein
or necessary in order to make the statements contained herein or therein not
materially false or misleading. There is no material fact or condition which
could have a Material Adverse Effect on SRRE which has not been set forth in
this Agreement or described in the Schedules hereto.
ARTICLE VI.
COVENANTS
6.1. Conduct of Business of SRRE and LRY. From the date hereof to the
Closing Date, LRY and SRRE, shall:
(i) conduct its business only in the ordinary course and in
substantially the same manner as heretofore conducted;
(ii) maintain and keep its Assets in good repair, working
order and condition, except for ordinary wear and tear;
(iii) use its best efforts to maintain and preserve its
business organization intact, retain its present employees so that they
will be available after the Closing Date, and maintain its
relationships with its customers so that they will be preserved after
the Closing Date; and
(iv) not take any action which would cause the representations
and warranties set forth herein to be untrue or which would have a
Mutual Adverse Effect on the business of LRY or SRRE, as the case may
be.
6.2. No Solicitation. Neither LRY or SRRE shall, and each shall direct
and otherwise cause their respective officers, directors, partners, financial
advisors, counsel, agents and Affiliates of such party not to, (i) directly or
indirectly solicit, encourage or facilitate (including by way of furnishing any
non-public information concerning LRY or SRRE, as the case may be) the
submission of proposals or offers from any Person other than LRY and SRRE
relating to any acquisition or purchase of all or a material part of the stock
or assets of, or any merger, consolidation or business combination with, LRY or
SRRE, as the case may be (an "Acquisition Proposal"), or (ii) participate in any
discussions or negotiations regarding, or furnish any non-public information to
any Person other than the other parties hereto in connection with, any
Acquisition Proposal by any Person other than LRY, SRRE or their respective
Affiliates, as the case may be.
6.3. Access to Information; Confidentiality.
(a) Between the date of this Agreement and the Closing Date,
LRY, on the one hand, and SRRE, on the other hand, shall give to the other(s)
and their respective lenders, officers, directors, financial advisors, counsel
and other agents access to all offices of LRY or SRRE, as the case may be, and
to all of its respective books and records, permit them to make such inspections
as they may require and shall cause LRY's or SRRE's respective officers,
directors and employees to furnish the other(s) and their prospective lenders,
officers, directors, financial advisors, counsel and other agents with such
financial and operating data and other information with respect to the business
and properties of LRY and SRRE or their prospective lenders, officers,
directors, financial advisors, counsel and other agents may from time to time
reasonably request, and as may be necessary to establish the performance by the
parties hereto of their covenants under this Agreement and the accuracy of their
representations and warranties herein, and in connection with the preparation of
any filing or submission to any governmental entity or regulatory body.
(b) LRY, on the one hand, and SRRE, on the other hand, shall
hold, and shall use commercially reasonable efforts to cause their respective
officers, directors, partners, prospective lenders, financial advisors, counsel
and other agents to hold, in strict confidence, unless compelled to disclose by
judicial or administrative process, or, in the opinion of their counsel, by
other requirements of law, all documents and information concerning LRY or SRRE,
as the case may be, furnished to the other in connection with the transactions
contemplated by this Agreement (except to the extent that such information can
be shown to have been (i) in the public domain through no fault of LRY or any of
their respective Affiliates on the one hand, or SRRE or any of their Affiliates,
on the other hand; or (ii) later lawfully acquired without the breach of any
other agreement by a party hereto or their respective officers, directors,
partners, financial advisors, counsel and other agents from other sources) and
will not release or disclose such information to any other Person, except its
officers, directors, prospective lenders, financial advisors, counsel and other
agents in connection with this Agreement. If the transactions contemplated by
this Agreement are not consummated, such confidence shall be maintained as
hereinbefore provided, and, if requested by any party hereto case may be, the
other(s) will, and will cause its officers, directors, partners, prospective
lenders, financial advisors, counsel and other agents to, return to the
requesting party all copies of written information furnished by or on its behalf
to the other(s) or their respective officers, directors, prospective lenders,
financial advisors, counsel and other agents.
6.4. Best Efforts. Subject to the terms and conditions herein provided,
each party hereto agrees to use commercially reasonable efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, including
making all required submissions or filings with governmental entities and
regulatory bodies, to consummate and make effective the transactions
contemplated by this Agreement. If, at any time after the Closing Date, any
further action is necessary or desirable to carry out the purposes of this
Agreement, the parties hereto or their officers, directors or representatives
shall take all such necessary action. Each party hereto shall execute any
additional instruments necessary to consummate the transactions contemplated
hereby.
6.5. Consents. Each party hereto shall use their best efforts to
obtain, at its expense, all consents, approvals and waivers of third Persons or
governmental entities or regulatory bodies required to consummate the
transactions contemplated hereby.
6.6. Public Announcements. Each of the parties hereto will consult with
one another before issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby and shall not,
except as may be required by law or any listing agreements with any national
securities exchange, issue any such press release or make any such public
statement without the approval of one another.
6.7. Continued Effectiveness of Representations and Warranties. From
the date hereof until the Closing Date, each of the parties shall use their
respective best efforts to conduct such parties' affairs in such a manner so
that, except as otherwise contemplated or permitted by this Agreement, the
representations and warranties contained in Articles III and IV shall continue
to be true and correct on and as of the Closing Date as if made on the Closing
Date and the parties shall promptly notify the others of any event, condition or
circumstance occurring from the date hereof through the Closing Date that would
constitute a violation or breach such party of any of such representations and
warranties.
6.8. Expenses. Except as otherwise provided herein, whether or not the
transactions contemplated hereby are consummated, all expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
the obligation of the party incurring such expenses.
ARTICLE VII.
CONDITIONS PRECEDENT TO PERFORMANCE
of SRRE
The obligations of SRRE under this Agreement are subject to the
following conditions which may be waived in whole or in part by SRRE at their
election:
7.1. Bring Down of Representations and Warranties. The representations
and warranties of LRY and the LRY Shareholders in this Agreement shall be true
and correct in all material respects on the date hereof and shall also be true
and correct in all material respects on the Closing Date with the same force and
effect as if made on and as of the Closing Date, and LRY and the LRY
Shareholders shall have performed or complied in all material respects with all
agreements, conditions and covenants required by this Agreement to be performed
or complied with by them on or before the Closing Date.
7.2. Authority. LRY shall have delivered to SRRE a certificate of the
Secretary of LRY, certifying to the resolutions of the Board of Directors of LRY
authorizing the transactions contemplated hereby and certifying that such
resolutions have not been revoked, suspended or amended and remain in full force
and effect. SRRE shall have received all documents it may reasonably request
relating to the existence of LRY and the authority of LRY to enter into this
Agreement and to consummate the transactions contemplated hereby.
7.3. Material Adverse Changes. There shall not have been, and on the
Closing Date there shall not be in existence, any event, condition or state of
facts which could reasonably be expected to result in, any material adverse
change in the condition (financial or otherwise), Assets, Liabilities, results
of operations, business or prospects of LRY, and SRRE shall have received a
certificate of the President of LRY to the foregoing effect.
7.4. Consents. LRY shall have obtained all approvals, authorizations
and consents required to consummate the transactions contemplated hereby upon
terms and subject to conditions satisfactory to SRRE in its sole discretion and
such approvals, authorizations and consents shall be in full force and effect.
SRRE shall have been furnished with appropriate evidence, reasonably
satisfactory to it and its counsel, of the granting of such approvals,
authorizations and consents.
7.5. Injunction. There shall be no effective injunction, writ or
preliminary restraining order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided or which is
reasonably likely to have any material adverse effect of the condition
(financial or otherwise), Assets, Liabilities, results of operations, business
or prospects of LRY, taken as a whole.
ARTICLE VIII.
CONDITIONS PRECEDENT TO PERFORMANCE
OF LRY AND THE LRY SHAREHOLDERS
8.1. Bring Down of Representations and Warranties. The representations
and warranties of SRRE contained in this Agreement shall be true and correct in
all material respects on the date hereof and shall also be true and correct in
all material respects on and as at the Closing Date with the same force and
effect as if made on and as of the Closing Date, and SRRE shall have performed
or complied in all material respects with all agreements, conditions and
covenants required by this Agreement to be performed or complied with by them on
or before the Closing Date. LRY shall have received a certificate of the
President of SRRE to the foregoing effect.
8.2. Authority. SRRE shall have delivered to LRY a certificate of the
Secretary of SRRE certifying to the resolutions of the Board of Directors of
SRRE authorizing the transactions contemplated hereby and certifying that such
resolutions have not been revoked, suspended or amended and remain in full force
and effect. LRY shall have received all other documents it may reasonably
request relating to the existence of SRRE and the authority of SRRE to enter
into this Agreement and to consummate the transactions contemplated hereby.
8.3. Releases. SRRE shall have received releases from each of its
directors and officers from all claims which such directors and officers may
have against SRRE as of the Closing Date.
8.4. Consents. All approvals, authorizations and consents required by
SRRE to consummate the transactions contemplated hereby shall have been obtained
on terms and conditions satisfactory to LRY in its sole discretion and shall be
in full force and effect, and LRY shall have been furnished with appropriate
evidence, reasonably satisfactory to it and its counsel, of the granting of such
approvals, authorizations and consents.
8.5. Injunction. There shall be no effective injunction, writ or
preliminary restraining order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided.
ARTICLE IX.
NATURE AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS
All statements contained herein or in any certificate, schedule or
other document delivered pursuant hereto shall be deemed representations and
warranties by the party delivering the same. All representations and warranties
and covenants shall survive the Closing Date. All representations and warranties
contained in this Agreement and in the disclosure schedules or in any
certificates or other documents delivered pursuant hereto shall not be deemed to
be waived or otherwise affected by any prior knowledge of, or any investigation
made by or on behalf of, any party hereto. All covenants and agreements shall
survive the consummation of the transactions contemplated hereby.
ARTICLE X.
INDEMNIFICATION
(a) LRY and the LRY Shareholders hereby agree to indemnify and
hold harmless SRRE and its respective Affiliates from and against any
Liabilities, damages, losses, claims, Liens, costs or expenses (including
reasonable attorneys' fees) of any nature (any or all of the foregoing are
herein referred to as "Loss") insofar as a Loss (or actions in respect thereof),
whether existing or accruing prior or subsequent to the Closing Date, arises out
of or is based upon any misrepresentation (or alleged misrepresentation) or
breach (or alleged breach) of any of the warranties, covenants or agreements
made by LRY and the LRY Shareholders in this Agreement or in any certificate,
Schedule, document or Exhibit referenced hereby or attached hereto.
(b) SRRE hereby agrees to indemnify and hold harmless LRY and
the LRY Shareholders from and against any Liabilities, damages, losses, claims,
Liens, costs or expenses (including reasonable attorneys' fees) of any nature
insofar as a Loss (or actions in respect thereof), whether existing or accruing
prior or subsequent to the Closing Date, arises out of or is based upon any
misrepresentation (or alleged misrepresentation) or breach (or alleged breach)
of any of the warranties, covenants or agreements made by SRRE in this Agreement
or in any certificate, Schedule, document or Exhibit referenced hereby or
attached hereto.
ARTICLE XI.
TERMINATION; AMENDMENT; WAIVER
11.1. Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing:
(a) by mutual written agreement of LRY, the LRY Shareholders
and SRRE;
(b) by LRY and the LRY Shareholders, on the one hand, or SRRE,
on the other hand, as the case may be, if the Closing shall not have occurred on
or before September 30, 2004 so long as the party terminating this Agreement
pursuant to this Section 11.1 has not made any material misrepresentation or
materially breached a covenant, agreement or warranty contained herein;
(c) by SRRE, on the one hand, or LRY and the LRY Shareholders,
on the other hand, if (i) the transactions contemplated hereby shall violate any
non-appealable final order, decree or judgment of any court or governmental
entity or regulatory body having competent jurisdiction or (ii) there shall be a
statute, rule or regulation which makes the transactions contemplated hereby
illegal or otherwise prohibited; or
(d) by LRY and the LRY Shareholders, on the one hand, and
SRRE, on the other hand, in the event the other makes a material
misrepresentation or breaches a covenant, agreement or warranty set forth in
this Agreement, but such non-misrepresenting or non-breaching party's election
to terminate shall not limit, waive or prejudice such party's remedies at law or
in equity.
In the event this Agreement is terminated as provided in Section
11.1(a), (b) or (c), this Agreement shall become void and of no further force
and effect and no party hereto shall have any further liability to any other
party hereto, except that Sections 4.18, 5.16, 6.2, 6.3, 6.6 and 6.8 shall
survive and continue in full force and effect notwithstanding termination.
11.2. Amendment. This Agreement may be amended by action taken by the
parties hereto by an instrument in writing.
11.3. Extension; Waiver. At any time prior to the Closing Date, LRY and
SRRE may (i) extend the time for the performance of any of the obligations or
other acts of the other; (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document, certificate or writing delivered
pursuant hereto or thereto; and (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by or on behalf of such party.
ARTICLE XII.
MISCELLANEOUS
12.1. Entire Agreement; Assignment. This Agreement, together with all
Schedules and Exhibits, constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, among the parties or between any of
them with respect to the subject matter hereof. All references to Sections,
Exhibits and Schedules shall be deemed references to such parts of this
Agreement unless the text requires otherwise. This Agreement shall not be
assigned by operation of law or otherwise.
12.2. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made as of
the date delivered or mailed if delivered in person, by telecopy, cable,
telegram or telex, or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:
if to SRRE:
SunRise Real Estate Development Group, Inc.
15th Floor, No. 333 Zhaojiabang Road
Shanghai, China, P.R.C.
Fax:
Attn:
with a copy to:
Carl A. Generes
4315 West Lovers Lane
Dallas, Texas 75209-2818, U.S.A.
Fax: (214 ) 352-8674
Attn: Carl A. Generes
if to LRY:
Lin Ray Yang Enterprise Ltd.
P.O. Box 3274, Road Town
Tortola, British Virgin Islands
Fax:
Attn:
with a copy to:
BDO McCabe Lo & Co
29th Floor Wing On Centre
111 Connaught Road Central
Central, Hong Kong
Fax: (852) 2815-0002
Attn: Fanny Li
or to such other address as the Person to whom notices is given may have
previously furnished to the others in writing in the manner set forth above.
12.3. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without giving effect to
applicable principles of conflicts of laws thereof.
12.4. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, its successors and assigns.
12.5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
12.6. Specific Performance. Irreparable damage would occur if any of
the provisions of this Agreement were not performed in accordance with the terms
hereof, and the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
12.7. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Schedules shall be deemed adequate to disclose an exception to a representation
or warranty made herein unless the Schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable detail.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself). The parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached shall not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty, or covenant.
12.8. Severability. The provisions of this Agreement are severable and,
in the event that any court of competent jurisdiction shall determine that any
one or more of the provisions or part of a provision contained therein shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement and the terms thereof shall
be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of a provision, had never been contained herein, and such
provisions or part reformed so that it would be valid, legal and enforceable to
the maximum extent possible.
12.9. Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, or
individually, as the case may be, all as of the day and year first above
written.
SUNRISE REAL ESTATE
DEVELOPMENT GROUP, INC.
By: /s/ Chi-Yuan, Chiu
Name: Chi-Yuan Chiu
Title: President and CEO
LRY SHAREHOLDERS
By: /s/ Lin, Chi-Jung
Name:Lin, Chi-Jung
Title:Director of and on behalf of Lin Ray
Yang Enterprise, Ltd., Ace Develop
Properties, Ltd., Planet Technology
Corporation and Systems and Technology
Corporation
SCHEDULE 1
SHAREHOLDER LIST OF LIN RAY YANG ENTERPRISE
List of Shareholders
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Name of Shareholders Shares No. (LRY) Shares No. Post
Exchange (SRRE)
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1. Ace Develop Properties Limited 1,700,000 8,500,000
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2. Planet Technology Corporation 150,000 750,000
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3. Systems & technology corp. 150,000 750,000
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