EXHIBIT 10.25
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STOCK PURCHASE AGREEMENT
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dated as of January 31, 2000
by and among
WILLIAM MCKAY
as Buyer
and
SMITH ACQUISITION COMPANY, INC.,
d/b/a SOUTHWEST PRODUCTS COMPANY, INC.
as Company
and
SUNBASE ASIA, INC.
as Parent
and
SAMUEL T. MOK
as Voting Trustee
TABLE OF CONTENTS
Page
ARTICLE I...................................................................................................... 1
PURCHASE AND SALE OF COMPANY SHARES................................................................... 1
1.1 Sale of Company Shares by Seller.................................................... 1
1.2 Time and Place of Closing........................................................... 1
1.3 No Implied Representations or Warranties............................................ 2
ARTICLE II..................................................................................................... 2
PURCHASE PRICE........................................................................................ 2
2.1 Purchase Price...................................................................... 2
ARTICLE III.................................................................................................... 2
SELLER REPRESENTATIONS AND WARRANTIES................................................................. 2
3.1 Organization; Title to Company Shares............................................... 2
3.2 Certificate of Incorporation and Bylaws............................................. 3
3.3 Authority........................................................................... 3
3.4 No Conflict; Required Filings and Consents.......................................... 3
3.5 Absence of Litigation............................................................... 3
3.6 Brokers............................................................................. 4
ARTICLE IV..................................................................................................... 4
COMPANY REPRESENTATIONS AND WARRANTIES................................................................ 4
4.1 Organization........................................................................ 4
4.2 Capital Stock....................................................................... 4
4.3 Certificate of Incorporation and Bylaws............................................. 4
4.4 No Conflict; Required Filings and Consents.......................................... 4
4.5 Absence of Litigation............................................................... 4
4.6 Absence of Obligation............................................................... 4
ARTICLE V...................................................................................................... 5
BUYER REPRESENTATIONS AND WARRANTIES.................................................................. 5
5.1 Organization; Approvals............................................................. 5
5.2 Authority........................................................................... 5
5.3 No Conflict; Required Filings and Consents.......................................... 5
5.4 Absence of Litigation............................................................... 5
5.5 Brokers............................................................................. 6
5.6 Status of Buyer..................................................................... 6
ARTICLE VI..................................................................................................... 6
CERTAIN COVENANTS.....................................................................................
6.1 Expenses............................................................................ 6
6.2 Retention of Records................................................................ 6
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ARTICLE VII.................................................................................................... 6
ADDITIONAL AGREEMENTS................................................................................. 6
7.1 Notification of Certain Matters..................................................... 6
7.2 Public Announcements................................................................ 6
7.3 Indemnification by Buyer............................................................ 7
7.4 Mutual Release between Buyer, Seller and the Company................................ 7
7.5 Release of Service Providers........................................................ 7
7.6 Consent and Release of Corporate Guarantee from Seller's Debenture Holders ......... 7
7.7 Liquidated Damages.................................................................. 7
7.8 Cooperation......................................................................... 7
ARTICLE VIII CONDITIONS OF CLOSING............................................................................. 8
8.1 Conditions to Obligations of Each Party............................................. 8
8.2 Additional Conditions to Obligations of Buyer....................................... 8
8.3 Additional Conditions to Obligations of the Seller.................................. 9
ARTICLE IX..................................................................................................... 10
GENERAL PROVISIONS.................................................................................... 10
9.1 No Survival of Representations, Warranties, Covenants and Agreements................ 10
9.2 Notices............................................................................. 10
9.3 Certain Definitions................................................................. 11
9.4 Headings............................................................................ 11
9.5 Severability........................................................................ 12
9.6 Entire Agreement.................................................................... 12
9.7 Assignment.......................................................................... 12
9.8 Parties In Interest................................................................. 12
9.9 Governing Law....................................................................... 12
9.10 Counterparts........................................................................ 12
9.11 Amendment........................................................................... 12
9.12 Waiver of Jury Trial................................................................ 12
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT dated as of January 31, 2000 (the
"Agreement") between William McKay ("Buyer") and SMITH ACQUISITION COMPANY,
INC., D/B/A SOUTHWEST PRODUCTS COMPANY, INC., a California corporation (the
"Company"), SUNBASE ASIA, INC., a Nevada corporation (the "Seller"), and SAMUEL
T. MOK, as voting trustee for all of the issued and outstanding shares of
capital stock of the Company (the "Trustee").
RECITALS:
WHEREAS, Buyer desires to acquire all of the issued and outstanding
shares (the "Company Shares") of capital stock of the Company upon the terms and
conditions set forth herein; and
WHEREAS, the Company is a wholly-owned subsidiary of Seller; and
WHEREAS, voting rights with respect to all of the Company Shares have
been transferred to a trust administered by the Trustee pursuant to that certain
Voting Trust Agreement (the "Trust Agreement") dated as of December 31, 1998 by
and between the Company, Seller and Trustee; and
WHEREAS, the Seller and Trustee desire to sell the Company Shares upon
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF COMPANY SHARES
1.1 Sale of Company Shares by Seller. Subject to the satisfaction or
waiver of the conditions set forth in this Agreement, at the Closing (as defined
in Section 1.2), Seller shall sell, assign, transfer, convey and deliver to
Buyer, and Buyer shall purchase and accept from Seller, all of the Company
Shares, free and clear of all restrictions on transfer (subject, however, to
restrictions on the transferability thereof under all applicable securities laws
and regulations thereunder), liens, options, warrants, purchase rights,
contracts, commitments, equities, claims and demands (other than the rights of
Buyer under this Agreement).
1.2 Time and Place of Closing.
(a) The closing of the transactions contemplated hereby (the
"Closing") will take place on April 10, 2000, or as such other time as the
parties agree at or prior to 60 days after the date of execution of the
Agreement. (the "Closing Date"). The Closing shall be held at the offices of
Jenkens & Gilchrist, 1919 Pennsylvania Ave., N.W., Suite 600, Washington, D.C.
20006, or such location as may be agreed upon by the parties.
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(b) At the Closing:
(i) Buyer shall deliver Seller (A) immediately available
funds by wire transfer to an account specified by Seller in an amount equal to
the Purchase Price (as defined in Section 2.1), offset as provided in Section
2.1, and (B) the certificates and other agreements and documents set forth in
Article VIII; and
(ii) Seller shall deliver to Buyer (A) the certificate or
certificates representing all of the Company Shares, either duly endorsed for
transfer to Buyer or accompanied by appropriate duly executed stock powers and
with all requisite stock transfer stamps and taxes attached or provided for, (B)
the certificates and other documents set forth in Article VIII, and (C)
resignations from each member of the Company's Board of Directors.
1.3 No Implied Representations or Warranties. William McKay, the
Buyer, has been the chief executive officer of the Company since 1991. It is the
intention of the parties that the sole representations and warranties of Seller
and/or the Company are set forth in Article III and Article IV hereof and that
except as specifically provided in Article III or Article IV, the Company Shares
and the Company are being purchased "WHERE IS, AS IS."
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The aggregate purchase price for the Company
Shares shall be Three Million Five Hundred Thousand United States Dollars (US
$3,500,000) (the "Purchase Price"). On the date of this Agreement, Buyer shall
deliver to the Voting Trustee the amount of One Hundred Thousand United States
Dollars (US $100,000) as earnest money. At Closing, the earnest money shall be
offset against the Purchase Price, the balance of which shall be delivered by
Buyer to Seller at Closing by wire transfer in immediately available federal
funds to an account designated by Seller by written notice to Buyer given at
least two days prior to the Closing Date.
ARTICLE III
SELLER REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer as follows:
3.1 Organization; Title to Company Shares. Seller is a corporation
validly existing and in good standing under the laws of the State of Nevada.
Seller is, and on the Closing Date will be, the record and beneficial owner of
the Company Shares, and Seller owns, and on the Closing Date will own, the
Company Shares free and clear of all restrictions on transfer, liens, options,
warrants, purchase rights, contracts, commitments, equities, claims and demands
(other than restrictions on transferability under applicable securities laws and
regulations thereunder and the rights of Buyer under this Agreement). The
delivery on the Closing Date of the certificates representing the Company Shares
purchased hereunder to Buyer will transfer to Buyer good, valid and marketable
title to the Company
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Shares, free and clear of all restrictions on transfer (other than restrictions
on transferability under applicable securities laws and regulations thereunder),
liens, options, warrants, purchase rights, contracts, commitments, equities,
claims and demands.
3.2 Certificate of Incorporation and Bylaws. Seller has made
available to Buyer a true, complete and accurate copy of its Certificate of
Incorporation and Bylaws, as amended or restated (the "Seller Certificate and
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Bylaws"). Such Seller Certificate and Bylaws are in full force and effect.
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Seller is not in violation of any of the provisions of the Seller Certificate
and Bylaws.
3.3 Authority. Each of Seller and Trustee has the requisite power and
authority to execute and deliver this Agreement, to perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Seller and the consummation by
Seller of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Seller are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby (other than applicable stockholder
approvals). This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of, Seller and, assuming due
authorization, execution and delivery by Buyer, is enforceable against Seller in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally.
3.4 No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by Seller does not, and the performance of this
Agreement and the transactions contemplated hereby by Seller shall not, (i)
conflict with or violate the Seller Certificate and Bylaws (ii) conflict with or
violate any federal or state law, statute, ordinance, rule, regulation, order,
judgment or decree (collectively, "Laws") applicable to Seller or by which it or
any of its properties are bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration, cancellation of, or result in the creation of a lien on
Seller or any of its assets pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Seller is a party, except for any such conflicts,
violations, breaches, defaults or other occurrences that have been waived or
that individually or in the aggregate, would not, or be reasonably likely to
have, have a Material Adverse Effect with respect to Seller.
3.5 Absence of Litigation. Seller is not a party to any, and there
are no pending or, to the knowledge of Seller, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or governmental
or regulatory investigations of any nature against Seller challenging the
validity or propriety of the transactions contemplated by this Agreement which
if unfavorably determined would prevent the consummation of the transactions
contemplated hereby, except where such events would not have, or be reasonably
likely to have, a Material Adverse Effect with respect to Seller or the Company.
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3.6 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller, except as provided in that certain agreement between Seller
and Trustee and that certain agreement between Seller and Friedman, Billings,
Ramsey & Co., Inc. regarding such fees, which fees are the sole responsibility
of, and are to be paid by, Seller.
ARTICLE IV
COMPANY REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer with respect to both Seller and the
Company, as follows:
4.1 Organization. The Company is a corporation validly existing and
in good standing under the laws of the State of California.
4.2 Capital Stock. As of the Closing Date, the authorized capital
stock of the Company consists of 10,000,000 shares of common stock, no par
value, and 4,000,000 shares of preferred stock, no par value. As of the Closing
Date, the only issued and outstanding shares of common stock are the Company
Shares, all of which are, duly authorized, validly issued, fully paid and
nonassessable, and the issuance thereof was in compliance with all applicable
Laws.
4.3 Certificate of Incorporation and Bylaws. The Company has made
available to Buyer a true, complete and accurate copy of its Certificate of
Incorporation and Bylaws, as amended or restated (the "Company Certificate and
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Bylaws"). Such Company Certificate and Bylaws are in full force and effect.
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4.4 No Conflict; Required Filings and Consents. The transactions
contemplated hereby by the Company shall not, (i) conflict with or violate the
Company Certificate and Bylaws or (ii) conflict with or violate any Laws
applicable to the Company or by which it or any of its properties are bound or
affected, except for any such conflicts, violations, breaches, defaults or other
occurrences that individually or in the aggregate, would not have a Material
Adverse Effect with respect to the Company.
4.5 Absence of Litigation. To the knowledge of Seller, the Company is
not a party to any, and there are no pending or, to the knowledge of the
Company, threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations of any nature
against the Company challenging the validity or propriety of the transactions
contemplated by this Agreement which if unfavorably determined would prevent the
consummation of the transactions contemplated hereby. This representation does
not purport to apply to the pending ITAR investigation.
4.6 Absence of Obligations. Except as set forth on Schedule 4.6
hereto, Seller has not executed any agreement creating any obligation for the
Company (other than in connection with those obligations set forth in Section
8.2(f), which obligations will be discharged on the Closing Date).
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ARTICLE V
BUYER REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to the Company and Seller as follows:
5.1 Organization; Approvals. Buyer has the requisite power and
authority and is in possession of all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, approvals and orders
("Buyer Approvals") necessary to own, lease and operate its properties and to
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carry on its business as it is now being conducted, and Buyer has not received
any notice of proceedings relating to the revocation or modification of any
Buyer Approvals, except where the failure to be so organized, existing and in
good standing or to have such power, authority, Buyer Approvals and revocations
or modifications would not, individually or in the aggregate, have a Material
Adverse Effect with respect to Buyer.
5.2 Authority. Buyer has the requisite power and authority to execute
and deliver this Agreement, to perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Buyer and the consummation by Buyer of the transaction
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of Buyer are
necessary to authorize this Agreement or to consummate the transaction
contemplated hereby. This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of, Buyer and, assuming due
authorization, execution and delivery by the Company and Seller, is enforceable
against Buyer in accordance with its terms, except as enforcement may be limited
by general principles of equity whether applied in a court of law or a court of
equity and by bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
5.3 No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by Buyer does not, and the performance of this
Agreement and the transaction contemplated hereby by Buyer shall not, (i)
conflict with or violate any Laws applicable to Buyer or by which it or any of
its properties are bound or affected, or (ii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a Lien
on any of the properties or assets of Buyer pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Buyer is a party or by which it or any
of its properties is bound or affected, except in the case of clauses (ii) and
(iii) for any such conflicts, violations, breaches, defaults or other
occurrences that individually or in the aggregate, would not have a Material
Adverse Effect with respect to Buyer.
5.4 Absence of Litigation. Buyer is not a party to any, and there are
no pending or, to the knowledge of Buyer, threatened, legal, administrative,
arbitral or other proceedings, claims, actions or governmental or regulatory
investigations of any nature against Buyer challenging the validity or propriety
of the transactions contemplated by this Agreement which if unfavorably
determined would prevent the consummation of the transaction contemplated
hereby.
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5.5 Brokers. There is no broker, finder or investment banker who is
entitled to any brokerage, finder's or other fee or commission from Seller or
any of its affiliates in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Buyer.
5.6 Status of Buyer. Buyer is knowledgeable and experienced in making
business investments, and able to bear the economic risk of loss of its
investment in the Company Shares.
ARTICLE VI
CERTAIN COVENANTS
6.1 Expenses. All Expenses (as defined below) incurred by Buyer, on
the one hand, and Seller, on the other hand, shall be borne solely and entirely
by Buyer, on the one hand, and Seller, on the other hand. "Expenses" as used in
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this Agreement shall include all reasonable fees and out-of-pocket expenses
(including without limitation all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to the party and its affiliates)
incurred by a party or on its behalf in connection with or related to the
authorization, preparation and execution of this Agreement, the solicitation of
stockholder approvals and all other matters related to the closing of the
transactions contemplated hereby. Seller shall be liable for and assume and pay
the broker's fees owed to Friedman, Billings, Ramsey & Co., Inc.
6.2 Retention of Records. Buyer shall retain all books and records of
the Company that Buyer receives from the Company for a period of six years
following the Closing Date. After the Closing, Seller and its representatives
shall have reasonable access to all such books and records during normal
business hours. In addition, Buyer shall upon reasonable request furnish to
Seller, at Seller's expense, copies of any such books or records.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Notification of Certain Matters. Seller and the Company shall
give prompt notice to Buyer, and Buyer shall give prompt notice to Seller and
the Company, of (i) the occurrence or non-occurrence of any event, the
occurrence or nonoccurrence of which would be likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate and (ii) any
failure of Seller or the Company or Buyer, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice pursuant to
this Section shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
7.2 Public Announcements. Buyer and Seller shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to the transaction contemplated hereby and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by Law.
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7.3 Indemnification by Buyer. Buyer and the Company shall indemnify
and hold harmless Seller, its affiliates and the officers, directors and
shareholders of Seller and its affiliates, from any and all claims, losses,
damages or other amounts (including reasonable attorneys fees and expenses)
relating to any claims by any party relating to or arising out of the Seller's
purchase of the Company from its former shareholders, including without
limitation Seller's alleged failure to issue certain capital stock in a timely
fashion.
7.4 Mutual Release between Buyer, Seller and the Company. At Closing,
Buyer and Seller shall execute a mutual release pursuant to which each party
shall release the other (together with its affiliates, agents, officers,
directors and shareholders) from any and all claims and causes of action,
whether now existing or hereafter arising, relating to any event or matter,
including, without limitation, the employment agreement between the Company,
Seller and Buyer. The mutual release shall exclude obligations under this
Agreement and shall be in a form mutually acceptable to Buyer and Seller.
7.5 Release of Service Providers. At Closing, the Company shall
execute a release pursuant to which it releases the Voting Trustee, Friedman,
Billings, Ramsey & Co., Inc., Jenkens & Gilchrist and Oppenheimer, Wolff,
Donnelly and Bayh (together with their affiliates, officers, directors and
shareholders) from any and all claims and causes of action, whether now existing
or hereafter arising, relating to any event or matter. The release shall be in a
form mutually acceptable to the Company and the person being released.
7.6 Consent and Release of Corporate Guarantee from Seller's
Debenture Holders. Prior to Closing, Seller shall use its best efforts to obtain
the written consent of its debenture holders to the transactions contemplated
hereby and a release by its debenture holders of the Company, which release
shall be effective upon the debenture holders' receipt of immediately available
funds in the amount of U.S. $2.6 million at Closing.
7.7 Liquidated Damages. In the event that Buyer shall fail to close
the purchase of the Company for any reason other than a breach of this Agreement
by Seller or the fact that a condition to Buyer's obligations to close set forth
in Section 8.1 or Section 8.2 shall not have been satisfied, Seller shall be
entitled to keep the $100,000 earnest money and Buyer shall promptly pay Seller
the additional amount of $900,000. Such amounts shall constitute liquidated
damages and not a penalty. Buyer's obligations under this Section shall be
personally guaranteed by William McKay pursuant to a guaranty executed on the
date hereof in form acceptable to Seller.
7.8 Cooperation. No party to this Agreement shall take any action
that materially impairs the ability of such party or the ability of the parties
to consummate the transactions contemplated hereby.
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ARTICLE VIII
CONDITIONS OF CLOSING
8.1 Conditions to Obligations of Each Party. The respective
obligations of each party to effect the transactions contemplated hereby shall
be subject to the satisfaction at or prior to the Closing Date of the following
condition:
(a) No Order. No federal or state governmental or regulatory
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authority or other agency or commission, or federal or state court of competent
jurisdiction, shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which restricts, prevents or
prohibits consummation of the transactions contemplated by this Agreement.
8.2 Additional Conditions to Obligations of Buyer. The obligations of
Buyer to effect the transactions contemplated hereby are also subject to the
following conditions:
(a) Representations and Warranties. Each of the representations
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and warranties of the Company and Seller contained in this Agreement shall be
true and correct in all material respects (except that where any statement in a
representation or warranty expressly includes a standard of materiality, such
statement shall be true and correct in all respects).
(b) Trust Agreement. The Trustee shall have provided Buyer
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evidence as to the termination of the Trust Agreement upon the Closing.
(c) Agreements and Covenants. The Company shall have performed
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or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it on or prior to the
Closing Date.
(d) Consents Obtained. All consents, waivers, approvals,
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authorizations or orders required to be obtained and all filings required to be
made by Seller or the Company for the authorization, execution and delivery of
this Agreement and the consummation by it of the transactions contemplated
hereby shall have been obtained and made by Seller and the Company, except those
for which failure to obtain such approvals or make such filings would not
individually or in the aggregate, have a Material Adverse Effect with respect to
the Company.
(e) No Challenge. There shall not be pending any action,
------------
proceeding or investigation before any court or administrative agency or by a
government agency (i) challenging or seeking material damages in connection
with, the transactions hereby contemplated or (ii) seeking to restrain, prohibit
or limit the exercise of full rights of ownership or operation by Buyer of all
or any portion of the Company.
(f) Certain Obligations. Any obligations of the Company to the
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Voting Trustee, Friedman, Billings, Ramsey & Co., Jenkens & Gilchrist and
Oppenheimer, Wolff, Donnelly and Bayh
8
shall have been paid and discharged by the Company. The Company shall have been
released from any obligations to Seller (including any amounts owing as
intercompany loans or capital investment) and to Seller's debenture holders,
such release is to be effective upon the debenture holders' receipt of
immediately available funds in the amount of U.S. $2.6 million at Closing.
(g) Material Adverse Effect. Neither the Seller or the Voting
-----------------------
Trustee shall have executed a contract or agreement dated after the date hereof
that has a Material Adverse Effect on the Company.
8.3 Additional Conditions to Obligations of the Seller. The
obligations of Seller to effect the transactions contemplated hereby are also
subject to the following conditions:
(a) Representations and Warranties. Each of the representations
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and warranties of Buyer set forth in this Agreement shall be true and correct in
all material respects (except that where any statement in a representation or
warranty expressly includes a standard of materiality, such statement shall have
been true and correct in all respects).
(b) Agreements and Covenants. Buyer shall have performed or
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complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date.
(c) Consents Under Agreements. All consents, waivers, approvals,
-------------------------
authorizations or orders required to be obtained, and all filings required to be
made by Buyer for the authorization, execution and delivery of this Agreement
and the consummation by it of the transactions contemplated hereby shall have
been obtained and made by Buyer, except where failure to obtain any consents,
waivers, approvals, authorizations or orders required to be obtained or any
filings required to be made would not have a Material Adverse Effect with
respect to Buyer.
(d) No Challenge. There shall not be pending any action,
------------
proceeding or investigation before any court or administrative agency or by a
government agency (i) challenging or seeking material damages in connection
with, transactions hereby contemplated or (ii) seeking to restrain, prohibit or
limit the exercise of full rights of ownership or operation by Buyer of all or
any portion of the Company, which in either case would have a Material Adverse
Effect with respect to the Company.
(e) Required Consents. At or prior to Closing, Seller shall have
received all material governmental approvals and governmental consents
contemplated by this transaction and the written consent of Seller's debenture
holders to this transaction.
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ARTICLE IX
GENERAL PROVISIONS
9.1 No Survival of Representations, Warranties, Covenants and
Agreements. The representations and warranties of the parties shall expire at
Closing.
9.2 Notices. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed given if
delivered personally, telecopied (with confirmation), mailed by certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice) and shall be effective upon receipt:
(a) If to Seller or the Trustee:
Samuel T. Mok, Voting Trustee
1001 Connecticut Avenue, N.W.
Suite 1035
Washington, D.C. 20036
Attention: Samuel T. Mok
With copies to:
Jenkens & Gilchrist, a Professional Corporation
1445 Ross Ave., Suite 3200
Dallas, Texas 75202
1919 Pennsylvania Avenue, NW
Suite 600
Washington, D.C. 20006-3404
Telecopier: (202) 326-1555
Attention: Andrew Lynch
(b) If to Buyer:
William McKay
Southwest Products
2240 Buena Vista
Irwindale, CA 91706
Telecopier: (626) 303-6141
Attention: William McKay
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With a copy to:
______________________________
______________________________
______________________________
Telecopier: _________________
Attention: __________________
9.3 Certain Definitions. For purposes of this Agreement, the term:
(a) "Law" shall have the meaning set forth in Section 3.4.
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(b) "Lien" shall mean any conditional sale agreement, default of
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title, easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) liens for current property taxes not yet due
and payable, and (ii) liens which do not materially impair the use of, or title
to, or value of the assets subject to such lien.
(c) "Material Adverse Effect" means, with respect to Buyer,
-----------------------
Seller, the Company or Company, (i) any adverse effect on the assets,
properties, liabilities, results of operations or financial condition of, and
which is material with respect to, such party (or the Company), or (ii) any
effect that materially impairs the ability of such party to consummate the
transactions contemplated hereby; provided, however, that Material Adverse
Effect shall not be deemed to include the impact of (A) actions contemplated by
this Agreement, (B) changes in laws and regulations or interpretations thereof
that are generally applicable to the manufacturing industry and (C) changes in
generally accepted accounting principles that are generally applicable to the
manufacturing industry.
(d) "person" means an individual, corporation, partnership,
------
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d) of the Exchange Act); and
(e) "subsidiary" or "subsidiaries" of the Company, Seller, Buyer
---------- ------------
or any other person, means any corporation, partnership, joint venture or other
legal entity of which either the Company, Seller, Buyer, or such other person,
as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
9.4 Headings. The headings contained in this Agreement are for
--------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11
9.5 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
9.6 Entire Agreement. This Agreement constitutes the entire agreement
of the parties and supersedes all prior agreements and undertakings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof and, except as otherwise expressly provided herein, are
not intended to confer upon any other person any rights or remedies hereunder.
9.7 Assignment. This Agreement shall not be assigned by operation of
law or otherwise, without the prior written consent of each of Buyer, Seller and
Trustee.
9.8 Parties In Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party and nothing in this Agreement, express
or implied, is intended to or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
9.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California, regardless of the laws
that might otherwise govern under applicable principles of conflict of laws.
9.10 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties in separate counterparts, each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
9.11 Amendment. This Agreement may be amended by the agreement in
writing of all of the parties and in accordance with their applicable charter
documents and applicable Law.
9.12 Waiver of Jury Trial. Each of Seller and Buyer waives rights to a
trial by jury of any claim or cause of action based upon or arising out of or
related to this Agreement, any assignment or the transactions contemplated
hereby, in any action, proceeding or other litigation of any type brought by any
party against the other parties, whether with respect to contract claims, tort
claims or otherwise. Each of Seller and Buyer agrees that any such claim or
cause of action shall be tried without a jury. Without limiting the foregoing,
the parties further agree that their respective rights to a trial by jury is
waived by operation of this Section as to any action, counterclaim or other
proceeding which seeks, in whole or in part, to challenge the validity or
enforceability of this Agreement, any assignment or any provision hereof or
thereof. This waiver shall apply to any subsequent amendments, renewals,
supplements or modifications to this Agreement or any assignment.
12
[Signature page follows.]
13
IN WITNESS WHEREOF, the Company, Buyer and Trustee have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
SMITH ACQUISITION COMPANY INC.,
d/b/a SOUTHWEST PRODUCTS COMPANY,
INC. ("Company")
By: /s/ Samuel T. Mok
----------------------------------
Name: SAMUEL T. MOK
--------------------------------
Title: CHAIRMAN
-------------------------------
/S/ William McKay
-------------------------------------
WILLIAM MCKAY
SUNBASE ASIA, INC. ("Seller")
By: /S/ Li Yuen Fai (Roger)
----------------------------------
Name: LI YUEN FAI
--------------------------------
Title: CHIEF FINANCIAL OFFICER
-------------------------------
/s/ Samuel T. Mok
----------------------------------
SAMUEL T. MOK, AS TRUSTEE
ACTIONS BY UNANIMOUS WRITTEN CONSENT
OF THE BOARD OF DIRECTORS
OF
SUNBASE ASIA INC.
----------------------------------------------------------------
The undersigned, being all the directors of Sunbase
Asia Inc., a Nevada Corporation (the "Corporation"), in
accordance with Section 78.315 (2) of the Nevada General
Corporation Law and Article III, Section 15 of the By-laws
of the Corporation, hereby consent to the adoption of the
following resolution without a meeting.
RESOLVED to dispose the equity interest of Southwest
Products Company to William Mckay at a consideration of
US$3,500,000. It was further resolved that the attached stock
purchase agreement in relation to the disposal of the equity
increase of Southwest Products Company was approved.
RESOLVED to authorize Mr. Roger Li to sign on the stock
purchase agreement in regarding to the disposal of Southwest
Products Company on behalf of the company.
- --------------------------------------------------------------------------------
Dated : 2 FEB 2000 /s/ Gunter Gao
--------------------------- ---------------------------
Gunter Gao
Dated : 2 FEB 2000 /s/ Li Yuen Fai (Roger)
--------------------------- ---------------------------
Li Yuen Fai (Roger)
Dated : 2 Feb 2000 /s/ Hongfei Chen
--------------------------- ---------------------------
Hongfei Chen