EXHIBIT 2.7
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STOCK PURCHASE AGREEMENT
by and among
DRAGON INTERNATIONAL GROUP CORPORATION
as Acquiror
NINBO ANXIN INTERNATIONAL COMPANY LIMITED
as Acquiree
and
Ms. Shunli Shi
Shareholder of 30% ownership of
NINBO ANXIN INTERNATIONAL COMPANY LIMITED
December 31, 2004
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into this
31st day of December 2004 by and among DRAGON INTERNATIONAL GROUP CORPORATION, a
Nevada corporation (hereinafter referred to as "Dragon"), NINBO ANXIN
INTERNATIONAL COMPANY, LIMITED, a Chinese Limited Liability Company (hereinafter
referred to as the "Company" or "Anxin"), and Ms. Shunli Shi who owns 30%
ownership of the company (hereinafter referred to as the "Shareholder").
RECITALS:
A. The Shareholder owns 30% of the issued and outstanding shares of the
capital stock of the Company.
B. Dragon is willing to acquire 30% of the issued and outstanding capital
stock of the Company, making the Company a subsidiary of Dragon, and the
Shareholders desire to exchange 30% of his shares of the Company's capital
stock for shares of Dragon authorized but unissued shares of Common Stock
as hereinafter provided.
C. The Company and its subsidiary are doing business in China and related
territories with an address of
Bldg 14, Unit A09, International Trading Center,
29 Dongdu Rd,
Ningbo, China 315000
Tel: 86-574-56169308
Fax: 86-574-56169378
D. It is the intention of the parties hereto that: (i) Dragon shall acquire
30% of the issued and outstanding capital stock of the Company in exchange
solely for 4,000,000 shares of Dragon authorized but unissued Common Stock
set forth below (the "Exchange"); and (ii) the Exchange shall qualify as a
transaction in securities exempt from registration or qualification under
the Securities Act of 1933, as amended, (the "Act") and under the
applicable securities laws of the state or jurisdiction where the
Shareholders reside.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
1
SECTION 1. EXCHANGE OF SHARES
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1.1 Exchange of Shares. Dragon and the Shareholders hereby agree that the
Shareholders shall, on the Closing Date on December 31, 2004, exchange 30% of
his issued and outstanding shares of the capital stock of the Company (the
"Anxin Shares") for 4,000,000 newly issued shares of Dragon Common Stock, $.001
par value (the "Dragon Shares").
1.2 Delivery of Anxin Shares. On the Closing Date, the Shareholder will
deliver to Dragon the certificates representing 30% of the Anxin Shares, duly
endorsed (or with executed stock powers) so as to make Dragon the 30% owner
thereof. Dragon shall deliver to the Shareholders 4,000,000 Dragon Shares to be
delivered to the Shareholders or as the shareholders direct so as to make the
Shareholders or their nominee the sole owner thereof.
1.3 Investment Intent. 4,000,000 newly issued shares of Dragon common stock
have not been registered under the Securities Act of 1933, as Amended, and may
not be resold unless the Dragon Shares are registered under the Act or an
exemption from such registration is available. The Shareholder represents and
warrants that he is acquiring the Dragon Shares for his own account, for
investment, and not with a view to the sale or distribution of such Shares. Each
certificate representing the Dragon Shares will have a legend thereon
incorporating language as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). The shares have been acquired for investment and may
not be sold or transferred in the absence of an effective
Registration Statement for the shares under the Act unless in
the opinion of counsel satisfactory to the Company,
registration is not required under the Act."
1.4. Conditions Precedent. Completion of the Exchange shall be conditional
upon (a) the Shareholder completing a review of the financial, trading and legal
position of Dragon in respect of Dragon; (b) Dragon has obtained all the
necessary consent, authorization and approval from the relevant regulatory
authorities, its board of directors and/or its shareholders; (c) receipt by the
Shareholder of a legal opinion that the Exchange qualifies as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDER
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The Company and the Shareholders hereby represent and warrant as follows:
2.1 Organization and Good Standing; Ownership of Shares. The Company and
its subsidiary are corporations duly organized, validly existing and in good
standing under the laws of China, and is entitled to own or lease its properties
and to carry on its business as and in the places where such properties are now
owned, leased or operated and such business is now conducted. The Company is
duly licensed or qualified and in good standing as a Chinese company where the
character of the properties owned by it or the nature of the business transacted
by it make such licenses or qualifications necessary. There are no outstanding
subscriptions, rights, options, warrants or other agreements obligating either
the Company or the Shareholder to issue, sell or transfer any stock or other
securities of the Company.
2.2 Ownership of Capital Stock. The Shareholders are the beneficial owner
of record and beneficially of all of the shares of capital stock of the Company,
all of which shares are free and clear of all rights, claims, liens and
encumbrances, and have not been sold, pledged, assigned or otherwise transferred
except pursuant to this Agreement.
2.3 Financial Statements, Books and Records. There has been previously
delivered to Dragon the audited balance sheet of the Company as of September 30,
2004 (the "Balance Sheet"). The Balance Sheet is true and accurate and fairly
represents the financial position of the Company as at such date, and has been
prepared in accordance with generally accepted accounting principles
consistently applied.
2.4 No Material Adverse Changes. Since the date of the Balance Sheet there
has not been:
(i) any material adverse change in the assets, operations, condition
(financial or otherwise) or prospective business of the Company;
(ii) any damage, destruction or loss materially affecting the assets,
prospective business, operations or condition (financial or otherwise) of
the Company, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any dividend or
distribution with respect to any redemption or repurchase of the Company's
capital stock;
(iv) any sale of an asset (other than in the ordinary course of
business) or any mortgage or pledge by the Company of any properties or
assets; or
(v) adoption of any pension, profit sharing, retirement, stock bonus,
stock option or similar plan or arrangement.
2.5 Taxes. The Company has prepared and filed all appropriate tax returns
for all periods prior to and through the date hereof for which any such returns
have been required to be filed by it and has paid all taxes shown to be due by
said returns or on any assessments received by it or has made adequate provision
for the payment thereof.
2.6 Compliance with Laws. The Company has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would materially and adversely affect the business of the
Company.
2.7 No Breach. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Articles of Incorporation or By-Laws
of the Company;
(ii) violate, conflict with or result in the breach of any of the
terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default under, any contract or other
agreement to which the Company is a party or by or to which it or any of
its assets or properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding
upon, the Company, or upon the properties or business of the Company; or
(iv) violate any statute, law or regulation of any jurisdiction
applicable to the transactions contemplated herein which could have a
materially adverse effect on the business or operations of the Company.
2.8 Actions and Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving the Company.
2.9 Brokers or Finders. No broker's or finder's fee will be payable by the
Company in connection with the transactions contemplated by this Agreement, nor
will any such fee be incurred as a result of any actions by the Company or the
Shareholders.
2.10 Real Estate. The Company neither owns real property nor is a party to
any leasehold agreement.
2.11 Tangible Assets. The Company has full title and interest in all
machinery, equipment, furniture, leasehold improvements, fixtures, vehicles,
structures, owned or leased by the Company, any related capitalized items or
other tangible property material to the business of the Company (the "Tangible
Assets"). The Company holds all rights, title and interest in all the Tangible
Assets owned by it on the Balance Sheet or acquired by it after the date of the
Balance Sheet, free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts or any other encumbrances. All of the
Tangible Assets are in good operating condition
and repair taking into account the age of the tangible assets and subject to
fair wear and tear, and are usable in the ordinary course of business of the
Company and conform to all applicable laws, ordinances and governmental orders,
rules and regulations relating to their construction and operation.
2.12 Liabilities. The Company does not have any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated,
secured or unsecured, accrued or absolute, contingent or otherwise, including,
without limitation, any liability on account of taxes, any other governmental
charge or lawsuit (all of the foregoing collectively defined to as
"Liabilities"), which were not fully, fairly and adequately reflected on the
Balance Sheet. As of the Closing Date, the Company will not have any
Liabilities, other than Liabilities fully and adequately reflected on the
Balance Sheet, except for Liabilities incurred in the ordinary course of
business.
2.13 Operations of the Company. From the date of the Balance Sheet on
September 30, 2004 and through the Closing Date on December 31, 2004 hereof the
Company has not and will not have:
(i) incurred any indebtedness for borrowed money;
(ii) declared or paid any dividend or declared or made any
distribution of any kind to any shareholder, or made any direct or indirect
redemption, retirement, purchase or other acquisition of any shares in its
capital stock;
(iii) made any loan or advance to any shareholder, officer, director,
employee, consultant, agent or other representative or made any other loan
or advance otherwise than in the ordinary course of business;
(iv) except in the ordinary course of business, incurred or
assumed any indebtedness or liability (whether or not currently due and
payable);
(v) disposed of any assets of the Company except in the ordinary
course of business; or
(vi) materially increased the annual rate of compensation of any
executive employee of the Company;
(vii) increased, terminated, amended or otherwise modified any plan
for the benefit of employees of the Company;
(viii) issued any equity securities or rights to acquire such equity
securities; or
(ix) except in the ordinary course of business, entered into or
modified any contract, agreement or transaction.
2.14 Capitalization. The registered capital is RMB 1 million. Ms. Shunli
Shi owns 30% of Ningbo Anxin International Company Limited.
2.15 Full Disclosure. No representation or warranty by the Company or the
Shareholder in this Agreement or in any document or schedule to be delivered by
them pursuant hereto, and no written statement, certificate or instrument
furnished or to be furnished to Dragon pursuant hereto or in connection with the
negotiation, execution or performance of this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any fact necessary to make any statement herein or therein not materially
misleading or necessary to a complete and correct presentation of all material
aspects of the businesses of the Company.
2.16 Representations and Warranties on Closing Date. The representations
and warranties contained in this Section 2 shall be true and complete on the
Closing Date on December 31, 2004 with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF DRAGON
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Dragon hereby represents and warrants to the Company and the Shareholders
as follows:
3.1 Organization and Good Standing. Dragon is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida and
is entitled to own or lease its properties and to carry on its business as and
in the places where such properties are now owned, leased, or operated and such
business is now conducted. The authorized capital stock of Dragon consists of
200,000,000 shares of Common Stock (Par Value $.001 per share), of which
35,000,000 shares are presently issued and outstanding and 5,000,000 shares of
preferred stock, of which none is issued and outstanding. Dragon is duly
licensed or qualified and in good standing as a foreign corporation where the
character of the properties owned by Dragon or the nature of the business
transacted by it make such license or qualification necessary. Dragon does not
have any subsidiaries.
3.2 The Dragon Shares. The Dragon Shares to be issued to the Shareholders
have been or will have been duly authorized by all necessary corporate and
stockholder actions and, when so issued in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable.
3.3 Financial Statements; Books and Records. There has been previously
delivered to the Company, the audited balance sheet of Dragon as September 30,
2003 and the audited balance sheet as at September 30, 2004 (the " Balance
Sheets") and the related statements of operations for the periods then ended
(the "Financial Statements"). The Financial Statements are true and accurate and
fairly represent the financial position of the Company as at such dates and
the results of its operations for the periods then ended, and have been prepared
in accordance with generally accepted accounting principles consistently
applied.
3.4 No Material Adverse Changes. Since the date of the Dragon Balance Sheet
on September 30, 2004, there has not been:
(i) any material adverse change in the assets, operations, condition
(financial or otherwise) or prospective business of Dragon;
(ii) any damage, destruction or loss materially affecting the assets,
prospective business, operations or condition (financial or otherwise) of
Dragon, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any dividend or
distribution with respect to any redemption or repurchase of Dragon's
capital stock;
(iv) any sale of an asset (other than in the ordinary course of
business) or any mortgage or pledge by Dragon of any properties or assets;
or
(v) adoption of any pension, profit sharing, retirement, stock bonus,
stock option or similar plan or arrangement.
3.5 Taxes. Dragon has prepared and filed all appropriate federal, state and
local tax returns of every kind and category (including, without limitation,
income taxes, estimated taxes, excise taxes, sales taxes, inventory taxes, use
taxes, gross receipt taxes, franchise taxes and property taxes) for all periods
prior to and through the date hereof for which any such returns have been
required to be filed by it or the failure to make such filings and resulting
liability would not be material relative to the results of operations of Dragon.
Dragon has paid all taxes shown to be due by the said returns or on any
assessments received by it or has made adequate provision for the payment
thereof.
3.6 Compliance with Laws. Dragon has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to their businesses, including Federal
and State securities laws, which, if not complied with, would materially and
adversely affect the business of Dragon or the trading market for the shares of
Dragon Common Stock.
3.7 No Breach. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Articles of Incorporation or By-Laws
of Dragon;
(ii) violate, conflict with or result in the breach of any of the
terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default under, any contract or other
agreement to which Dragon is a party or by or to which it or any of its
assets or properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding
upon, Dragon or upon the properties or business of Dragon; or
(iv) violate any statute, law or regulation of any jurisdiction
applicable to the transactions contemplated herein which could have a
material adverse effect on the business or operations of Dragon.
3.8 Actions and Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving Dragon.
3.9 Brokers or Finders. No broker's or finder's fee will be payable by
Dragon in connection with the transactions contemplated by this Agreement, nor
will any such fee be incurred as a result of any actions by Dragon.
3.10 Assets The Company has full title and interest in all machinery,
equipment, furniture, leasehold improvements, fixtures, vehicles, structures,
owned or leased by the Company, any related capitalized items or other tangible
property material to the business of the Company (the "Tangible Assets"). The
Company holds all rights, title and interest in all the Tangible Assets owned by
it on the Balance Sheet or acquired by it after the date of the Balance Sheet,
free and clear of all liens, pledges, mortgages, security interests, conditional
sales contracts or any other encumbrances. All of the Tangible Assets are in
good operating condition and repair taking into account the age of the tangible
assets and subject to fair wear and tear, and are usable in the ordinary course
of business of the Company and conform to all applicable laws, ordinances and
governmental orders, rules and regulations relating to their construction and
operation.
3.11 Liabilities. Dragon does not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured,
accrued or absolute, contingent or otherwise, including, without limitation, any
liability on account of taxes, any other governmental charge or lawsuit (all of
the foregoing collectively defined to as "Liabilities"), which were not fully,
fairly and adequately reflected on the Balance Sheet. As of the Closing Date,
Dragon will not have any Liabilities, other than Liabilities fully and
adequately reflected on the Dragon Balance Sheet or Dragon balance sheet dated
May 31, 2004, except for Liabilities incurred in the ordinary course of
business.
3.12 Operations of Dragon. Except as set forth on Schedule 3.11
(i) incurred any indebtedness for borrowed money;
(ii) declared or paid any dividend or declared or made any
distribution of any kind to any shareholder, or made any direct or indirect
redemption, retirement, purchase or other acquisition of any shares in its
capital stock;
(iii) made any loan or advance to any shareholder, officer, director,
employee, consultant, agent or other representative or made any other loan
or advance otherwise than in the ordinary course of business;
(iv) except in the ordinary course of business, incurred or assumed
any indebtedness or liability (whether or not currently due and payable);
(v) disposed of any assets of Dragon except in the ordinary course of
business; or
(vi) materially increased the annual level of compensation of any
executive employee of Dragon;
(vii) increased, terminated amended or otherwise modified any plan for
the benefit of employees of Dragon;
(viii) issued any equity securities or rights to acquire such equity
securities; or
(ix) except in the ordinary course of business, entered into or
modified any contract, agreement or transaction.
3.13 Authority to Execute and Perform Agreements. Dragon has the full legal
right and power and all authority and approval required to enter into, execute
and deliver this Agreement and to perform fully their obligations hereunder.
This Agreement has been duly executed and delivered and is the valid and binding
obligation of Dragon, enforceable in accordance with its terms, except as may be
limited by bankruptcy, moratorium, insolvency or other similar laws generally
affecting the enforcement of creditors' rights. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby and
the performance by Dragon of this Agreement, in accordance with its respective
terms and conditions will not:
(i) require the approval or consent of any governmental or regulatory
body, the Stockholders of Dragon, or the approval or consent of any other
person;
(ii) conflict with or result in any breach or violation of any of the
terms and conditions of, or constitute (or with any notice or lapse of time
or both would constitute) a
default under, any order, judgment or decree applicable to Dragon, or any
instrument, contract or other agreement to which Dragon is a party or by or
to which Dragon is bound or subject; or
(iii) result in the creation of any lien or other encumbrance on the
assets or properties of Dragon.
3.14 Delivery of Periodic Reports; Compliance with 1934 Act. Dragon has
provided the Company and the Shareholder with financial statements. All reports
filed pursuant to such Act are complete and correct in all material respects.
All material contracts relative to Dragon are included in the Periodic Reports.
All material contracts and commitments for the provision or receipt of services
or involving any obligation on the part of Dragon are included as exhibits to
such periodic reports or are listed on Schedule 3.13 hereto.
3.15 Capitalization. The authorized capital stock of Dragon consists of
200,000,000 shares of common stock, $.001 par value, of which 35,000,000 shares
are presently issued and outstanding and 5,000,000 shares of preferred stock, of
which none is issued and outstanding. Except as indicated in Schedule 3.14
hereto, Dragon has not granted, issued or agreed to grant, issue or make
available any warrants, options, subscription rights or any other commitments of
any character relating to the issued or unissued shares of capital stock of
Dragon.
3.16 Full Disclosure. No representation or warranty by Dragon in this
Agreement or in any document or schedule to be delivered by it pursuant hereto,
and no written statement, certificate or instrument furnished or to be furnished
to the Company or the Shareholders pursuant hereto or in connection with the
execution or performance of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to a complete and correct presentation of all material aspects of the business
of Dragon.
3.17 Representations and Warranties on Closing Date. The representations
and warranties contained in this Section 3 shall be true and complete on the
Closing Date with the same force and effect as through such representations and
warranties had been made on and as of the Closing Date on December 31, 2004.
SECTION 4. COVENANTS OF COMPANY AND SHAREHOLDER
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The Company and the Shareholders covenant to Dragon as follows:
4.1 Conduct of Business. From the date hereof through the Closing Date, the
Shareholders and The Company shall conduct its business in the ordinary course.
4.2 Preservation of Business. From the date December 31, 2004 through the
Closing Date, the Shareholder and the Company shall use its best efforts to
preserve its business organization intact, keep available the services of its
present employees, consultants and agents, maintain its present suppliers and
customers and preserve its goodwill.
4.3 Litigation. The Company shall promptly notify Dragon of any lawsuits,
claims, proceedings or investigations which after the date hereof are threatened
or commenced against the Company or against any officer, director, employee,
consultant, agent, shareholder or other representative with respect to the
affairs of the Company.
4.4 Continued Effectiveness of Representations and Warranties. From the
date hereof through the Closing Date, the Shareholder and the Company shall
conduct its business in such a manner so that the representations and warranties
contained in Section 2 shall continue to be true and correct on and as of the
Closing Date and as if made on and as of the Closing Date, and shall:
(i) promptly give notice to Dragon of any event, condition or
circumstance occurring from the date hereof through the Closing Date which
would render any of the representations or warranties materially untrue,
incomplete, insufficient or constitute a violation or breach of this
Agreement; and
(ii) supplement the information contained herein in order that the
information contained herein is kept current, complete and accurate in all
material respects.
SECTION 5. COVENANTS OF DRAGON
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Dragon covenants to the Company and the Shareholder as follows:
5.1 Conduct of Business. From the date hereof through the Closing Date,
Dragon shall conduct its business in the ordinary course and, without the prior
written consent of the Company, shall ensure that Dragon does not undertake any
of the actions specified in Section 3.12 hereof.
5.2 Preservation of Business. From the date hereof through the Closing
Date, Dragon shall preserve its business organization intact and use its best
efforts to preserve Dragon goodwill.
5.3 Litigation. Dragon shall promptly notify the Company of any lawsuits,
claims, proceedings or investigations that after the date hereof are threatened
or commenced against Dragon or against any officer, director, employee,
consultant, agent, or stockholder with respect to the affairs of Dragon.
5.4 Continued Effectiveness of Representations and Warranties. From the
date hereof through the Closing Date, Dragon shall conduct its business in such
a manner so that the representations and warranties contained in Section 3 shall
continue to be true and correct on and as of the Closing Date and as if made on
and as of the Closing Date, and shall:
(i) promptly give notice to the Company of any event, condition or
circumstance occurring from the date hereof through the Closing Date which
would render any of the representations or warranties materially untrue,
incomplete, insufficient or constitute a violation or breach of this
Agreement; and
(ii) supplement the information contained herein in order that the
information contained herein is kept current, complete and accurate in all
material respects.
5.5 No Other Negotiations. From the date hereof until the earlier of the
termination of this Agreement or consummation of this Agreement, Dragon will not
permit and will not authorize any officer or director of Dragon or any other
person on its behalf to, directly or indirectly, solicit, encourage, negotiate
or accept any offer from any party concerning the possible disposition of all or
any substantial portion of the capital stock by merger, sale or any other means
or any other transaction that would involve a change in control of Dragon, or
any transaction in which Dragon contemplates issuing equity or debt securities.
SECTION 6. COVENANTS
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6.1 Corporate Examinations and Investigations. Prior to the Closing Date,
the parties acknowledge that they have been entitled, through their employees
and representatives, to make such investigation of the assets, properties,
business and operations, books, records and financial condition of the other as
they each may reasonably require. No investigation by a party hereto shall,
however, diminish or waive in any way any of the representations, warranties,
covenants or agreements of the other party under this Agreement.
6.2 Expenses. Each party hereto agrees to pay its own costs and expenses
incurred in negotiating this Agreement and consummating the transactions
described herein.
6.3 Further Assurances. The parties shall execute such documents and other
papers and take such further actions as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated hereby.
Each such party shall use its best efforts to fulfill or obtain the fulfillment
of the conditions to the Closing on Jun 30, 2004, including, without limitation,
the execution and delivery of any documents or other papers, the execution and
delivery of which are necessary or appropriate to the Closing.
6.4 Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, each of the parties hereto agree to keep
confidential any information disclosed to each other in connection therewith for
a period of one (1) year from the date hereof; provided, however, such
obligation shall not apply to information which:
(i) at the time of disclosure was public knowledge;
(ii) after the time of disclosure becomes public knowledge (except due
to the action of the receiving party);
(iii) the receiving party had within its possession at the time of
disclosure.
(iv) the disclosure of which is required by law, the SEC or other
competent authority;
(v) which at the time of disclosure by one party written consents have
been obtained from the other parties.
SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATION OF DRAGON TO CLOSE
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The obligation of Dragon to enter into and complete the Agreement is
subject, at the option of Dragon, to the fulfillment on or prior to the Closing
Date of the following conditions, any one or more of which may be waived by
Dragon in writing.
7.1 Representations and Covenants. The representations and warranties of
the Company and the Shareholders contained in this Agreement shall be true in
all material respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date. The Company and the
Shareholders shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or complied
with by the Company and the Shareholders on or prior to the Closing Date. The
Company and the Shareholders shall have delivered to Dragon, if requested, a
certificate, dated the Closing Date, to the foregoing effect.
7.2 Governmental Permits and Approvals; Corporate Resolutions. Any and all
permits and approvals from any governmental or regulatory body required for the
lawful consummation of the Closing shall have been obtained. The Board of
Directors of the Company shall have approved the transactions contemplated by
this Agreement and the Company shall have delivered to Dragon, if requested by
Dragon, resolutions by its Board of Directors, certified by the Secretary of the
Company, authorizing the transactions contemplated by this Agreement.
7.3 Satisfactory Business Review. Dragon shall have satisfied itself, after
Dragon and its representatives have completed the review of the business of the
Company contemplated by this Agreement, that none of the information revealed
thereby or in the Balance Sheet has resulted in, or in the reasonable opinion of
Dragon may result in, a material adverse change in the assets, properties,
business, operations or condition (financial or otherwise) of the Company.
7.4 Certificate of Good Standing. Dragon shall receive a certificate of
good standing dated 10 business days after the Closing Date to the effect that
the Company is in good standing under the laws of its jurisdictions of
incorporation.
7.5 Stock Certificates: At the Closing, the Shareholder will deliver the
certificates representing the Anxin Shares, duly endorsed (or with executed
stock powers) so as to make Dragon the 30% owner thereof within 10 business
days.
7.8 Other Documents. The Company and the Shareholder shall have delivered
such other documents, instruments and certificates, if any, as are required to
be delivered pursuant to the provisions of this Agreement or which may be
reasonably requested in furtherance of the provisions of this Agreement.
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AND
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SHAREHOLDERS TO CLOSE
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The obligation of the Company and the Shareholders to enter into and
complete the agreement is subject, at the option of the Company and the
Shareholders, to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived in writing by the
Company.
8.1 Representations and Covenants. The representations and warranties of
Dragon contained in this Agreement shall be true in all material respects on the
Closing Date with the same force and effect as though made on and as of the
Closing Date. Dragon shall have performed and complied with all covenants and
agreements required by the Agreement to be performed or complied with by Dragon
on or prior to the Closing Date. Dragon will deliver to the Company and the
Shareholders, if requested, a certificate, dated the Closing Date and signed by
an executive officer of Dragon, to the foregoing effect within 10 business days
after the closing.
8.2 Governmental Permits and Approvals; Corporate Resolutions. Any and all
permits and approvals from any governmental or regulatory body required for the
lawful consummation of the Agreement shall have been obtained. The Board of
Directors of Dragon shall have approved the transactions contemplated by this
Agreement, and Dragon will deliver to the Company and the Shareholder, if
requested, resolutions by their Board of Directors certified by the Secretary of
Dragon authorizing the transactions contemplated by this Agreement within 10
business days after the closing.
8.3 Legal Opinion. Draong is to provide to the Company and the Shareholders
a legal opinion that the Exchange qualifies as a tax-free reorganization under
]Section 368(1)(1)(B) of the Internal Revenue Code of 1986, as amended.
8.4 Third Party Consents. All consents, permits and approvals from parties
to any contracts, loan agreements or other agreements with Dragon which may be
required in connection with the performance by Dragon of their obligations under
such contracts or other agreements after the Closing shall have been obtained.
8.5 Satisfactory Business Review. The Company and the Shareholders shall
have satisfied themselves, after the Company, the Shareholders and their
representatives and advisers have completed the review of business of Dragon and
the information provided hereby or in connection herewith, or following any
discussions with management or representatives of Dragon that none of the
information revealed thereby has resulted in or in the reasonable opinion of the
Company may result in a material adverse change in the assets, properties,
business, operations or condition (financial or otherwise) of Dragon.
8.6 Litigation. No action, suit or proceeding shall have been instituted
before any court or governmental or regulatory body or instituted or threatened
by any governmental or regulatory body to restrain, modify or prevent the
carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may in the
reasonable opinion of the Company and the Shareholder, have a materially adverse
effect on the assets, properties, business, operations or condition (financial
or otherwise) of Dragon.
8.7 Certificate of Good Standing. The Company and the Shareholders shall
receive a certificate of good standing within 10 business days after the Closing
Date to the effect that the Company is in good standing under the laws of its
jurisdictions of incorporation.
8.8 Stock Certificates. At the Closing, the Shareholder shall receive
certificates representing the Dragon Shares to be received pursuant hereto and
subject to the conditions previously described within 10 business days.
8.9 Other Documents. Dragon shall have delivered such other instruments,
documents and certificates, if any, as are required to be delivered pursuant to
the provisions of this Agreement or which may be reasonably requested in
furtherance of the provisions of this Agreement.
SECTION 9. INDEMNIFICATION
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9.1 Obligation of Dragon to Indemnify. Subject to the limitations on the
survival of representations and warranties contained in Section 9, Dragon hereby
agrees to indemnify, defend and hold harmless the Company and the Shareholder
from and against any losses, liabilities, damages, deficiencies, costs or
expenses (including interest, penalties and reasonable attorneys' fees and
disbursements) (a "Loss") based upon, arising out of or otherwise due to any
inaccuracy in or any breach of any representation, warranty, covenant or
agreement of Dragon contained in this Agreement or in any document or other
writing delivered pursuant to this Agreement.
9.2 Obligation of the Company and the Shareholder to Indemnify. Subject to
the limitations on the survival of representations and warranties contained in
Section 10, the Company and the Shareholder agree to indemnify, defend and hold
harmless Dragon from and against any Loss, based upon, arising out of or
otherwise due to any inaccuracy in or any breach of any representation,
warranty, covenant or agreement made by any of them and contained in this
Agreement or in any document or other writing delivered pursuant to this
Agreement.
SECTION 10. THE CLOSING
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The Closing shall take place not later than June 30, 2004. At the Closing,
the parties shall provide each other with such documents as may be necessary or
appropriate in order to consummate the transactions contemplated hereby
including evidence of due authorization of the Agreement and the transactions
contemplated hereby.
SECTION 11. MISCELLANEOUS
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11.1 Waivers. The waiver of a breach of this Agreement or the failure of
any party hereto to exercise any right under this Agreement shall in no event
constitute waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
11.2 Amendment. This Agreement may be amended or modified only by an
instrument of equal formality signed by the parties or the duly authorized
representatives of the respective parties.
11.3 Assignment. This Agreement is not assignable except by operation of
law.
11.4 Notices. Until otherwise specified in writing, the mailing addresses
of both parties of this ------- Agreement shall be as follows:
Dragon
Dragon International Group Corporation
9858 Glades Road, #213
Boca Raton, FL 33428
The Shareholder:
Shunli Shi
Anxin: Ninbo Anxin International Company, Limited
Bldg 14, Unit A09, International Trading Center,
29 Dongdu Rd,
Ningbo, China 315000
Any notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address that shall have been furnished in
writing to the addressor.
11.5 Governing Law. This Agreement shall be construed, and the legal
relations be the parties determined, in accordance with the laws of the State of
Florida, thereby precluding any choice of law rules which may direct the
applicable of the laws of any other jurisdiction.
11.6 Publicity. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be issued by either
party hereto at any time from the signing hereof without advance approval in
writing of the form and substance thereof by the other party except as required
to stay in compliance with the Dragon reporting obligations under the Securities
Exchange Act of 1934.
11.7 Entire Agreement. This Agreement and the collateral agreements
executed in connection with the consummation of the transactions contemplated
herein contain the entire agreement among the parties with respect to the
purchase and issuance of the Dragon' Shares and the Dragon Shares and related
transactions, and supersede all prior agreements, written or oral, with respect
thereto.
11.8 Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
11.9 Severability of Provisions. The invalidity or unenforceability of any
term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
Dragon International Group Corporation
By:
Name: David Wu
Its: CEO and Chairman
NINBO ANXIN INTERNATIONAL COMPANY LIMITED
Shareholder Shunli Shi