EXHIBIT 10.1
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is entered into
effective as of April 13, 2006, by and between Kelton Capital Group Limited
(hereinafter "KCGL"), a corporation registered in the British Virgin Islands,
and certain Shareholders of Scientific Energy, Inc. (hereinafter "SCFE
Shareholders"). Each of KCGL and SCFE Shareholders is also referred to as a
"Party", collectively the "Parties".
RECITALS
WHEREAS, SCFE Shareholders, whose identities are set forth in the list
attached hereto as Exhibit 1, are the beneficial owners and hold of record
8,834,395 shares, which constitute 96.46% of the capital stock of Scientific
Energy Inc. (hereinafter "SCFE"), a corporation registered in the State of
Utah;
WHEREAS, SCFE Shareholders desire to sell to KCGL 7,905,000 shares of the
capital stock of SCFE (hereinafter "SCFE Shares"); and
WHEREAS, KCGL desires to acquire the SCFE Shares from SCFE Shareholders
and agrees to pay five hundred thirty-nine thousand nine hundred twenty-nine
dollars ($539,929) as consideration therefor.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1) TERMS OF SHARE TRANSFER AND ACQUISITION
a) Purchase and Sale of SCFE Shares. Subject to the terms and conditions of
this Agreement, KCGL agrees to purchase from SCFE Shareholders, and SCFE
Shareholders agree to sell to KCGL all of the SCFE Shares. In
consideration for the SCFE Shares, KCGL agrees to pay to SCFE
Shareholders a sum in the amount of five hundred thirty-nine thousand
nine hundred twenty-nine U.S. dollars ($539,929) (hereinafter the
"Consideration").
2) THE CLOSING.
a) The closing of the transactions contemplated by this Agreement (the
"Closing") shall occur upon:
i) the execution and delivery of this Agreement by the Parties;
ii) the delivery by SCFE's stock transfer agent to KCGL of a stock
certificate or stock certificates representing the SCFE Shares,
newly issued, or endorsed in blank or accompanied by stock powers
that shall be in form reasonably acceptable to KCGL, and;
iii) the payment of the Consideration to SCFE Shareholders by certified
check or wire transfer in immediately available funds. The date on
which the Closing occurs shall be referred to as the "Closing Date".
3) REPRESENTATIONS, WARRANTIES AND COVENANTS
a) Representations, Warranties and Covenants of SCFE Shareholders. SCFE
Shareholders hereby represent and warrant to KCGL that the statements
contained in this Section 3.a. are correct and complete as of the
Closing Date.
i) Organization and Authorization of SCFE. SCFE is duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and is qualified to transact
business in all jurisdictions where such qualification is necessary.
SCFE has all requisite power and authority to conduct its business, to
own its properties and to execute and deliver, and to perform its
obligations under, this Agreement. SCFE Shareholders have full power
and authority to execute and deliver this Agreement and to perform
their obligations hereunder.
ii) Capitalization. As of the date hereof and on the Closing Date, there
are 9,158,488 shares of common stock issued and outstanding. No
preferred stock has been issued and outstanding.
iii) SCFE Shares. SCFE Shareholders hold of record and own beneficially a
total of 8,834,395 shares, which constitute 96.46% of the capital
stock of SCFE currently issued and outstanding, clear of any
restrictions on transfer, and clear of any liens, security interests,
claims and other encumbrances. There are no (i) other securities
convertible or exchangeable for shares of capital stock of SCFE, or
(ii) outstanding rights, rights of first refusal or similar rights
for, or understandings relating to, the purchase of any shares of
SCFE's capital stock, and SCFE is not obligated in any other manner
to issue any shares. SCFE Shareholders are not parties to any voting
trust, proxy, or other agreement or understanding with respect to the
voting of any capital stock of SCFE. All of the issued and
outstanding shares of the capital stock of SCFE have been duly
authorized and are validly issued, fully paid and non-assessable.
SCFE has not granted or agreed to grant any individual or entity any
registration rights. SCFE has not granted previously redemption or
repurchase rights in connection with the issuance of its shares.
iv) SCFE's Trading and Reporting Status. The shares of capital stock of
SCFE are traded on the Over the Counter Bulletin Board ("OTC/BB")
under the ticker symbol of SCFE.OB. SCFE has been current with all
requisite filings with the U.S. Securities and Exchange Commission
(the "SEC"). SCFE Shareholders will cause SCFE to be current with
all SEC reporting obligations on the Closing Date. After the
Closing, SCFE Shareholders will file, or cause to be filed, all
requisite SEC reporting documents in connection with the sale and
purchase of the SCFE Shares.
v) Legal Proceedings. There are no actions, suits or proceedings
pending or threatened against SCFE or SCFE Shareholders, or their
respective assets or affiliates before any court, governmental
department, commission, board, business or agency.
vi) Undisclosed Liabilities. SCFE does not have any liability except as
set forth on the face of its most recent audited financial
statements, a copy of which has been delivered to KCGL. SCFE
Shareholders will pay off any and all accrued liabilities existing
as of the date of the Closing.
vii) Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (a) violate any governing law or other restrictions of
any governmental authority to which SCFE Shareholders are subject,
or (b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any person the right
to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, permit, governmental
approval, certificate, instrument, or other arrangement to which
SCFE or SCFE Shareholders are a party or by which they are bound or
to which any of their assets or properties is subject.
viii) Tax Matters. SCFE (i) has paid to the proper authorities when due
all taxes and other levies, assessments, fees, claims or other
charges imposed by any governmental authority to SCFE or its
affiliated entities; (ii) has filed when due all tax returns that
are required to be filed; and (iii) is not the beneficiary of any
extension of time within which to file any tax return. No director
or officer of SCFE expects any authority to assess any additional
taxes for any period for which tax returns have been filed. There
is no dispute or claim concerning any tax liability of SCFE.
ix) Real Property. SCFE does not own any real property. SCFE has
delivered to KCGL copies of all leases for any real property leased
by SCFE. Each such lease is legal, valid, binding and will be in
full force and effect upon the consummation of the transaction
hereunder and there are no disputes with respect to any such lease.
x) Contracts. SCFE has delivered to KCGL copies of all material
agreements (and a written summary of all verbal agreements) to which
SCFE is a party. All such agreements are legal, valid, binding and
will continue to be legal, valid and enforceable on identical terms
upon the consummation of the transactions contemplated hereby. SCFE
Shareholders hereby covenant that SCFE will not enter into any
material agreements with an aggregated value in excess of five
thousand dollars ($5,000) with any third party from the date hereof
to the Closing Date.
xi) Environmental Matters. SCFE is not and has not been in violation of
any law, regulation or ordinance dealing with the protection of human
health and the environment ("Environmental Laws") and there are not
and there have never been any claims, notices, demands, or
proceedings related to SCFE or its affiliated entities alleging
liability under or violation of Environmental Laws.
xii) Brokers or Finders. SCFE has no liability, contingent or otherwise,
for any brokerage or finders' fees, agents' commissions or any
similar charges or compensation in connection with this Agreement or
the transactions contemplated hereby.
xiii) Disclosure. The representations and warranties contained in this
Section 3.a. do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements and information contained in this Section 3.a. not
misleading.
b) Representations, Warranties and Covenants of KCGL. KCGL hereby represents
and warrants to SCFE Shareholders that the statements contained in this
Section 3.b are correct and complete as of the Closing Date.
i) Authorization of Transaction. KCGL has full power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder.
ii) Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (a) violate any governing law or other restrictions of
any governmental authority to which KCGL is subject, or any provision
of its charter or bylaws, or (b) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create
in any person the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
permit, governmental approval, certificate, instrument, or other
arrangement to which KCGL is a party or by which it is bound or to
which any of its assets or properties is subject.
iii) Investment Purpose. The SCFE Shares to be acquired will bear
restrictive legends. KCGL has the sophistication to make an
investment in the SCFE Shares and is able to assume the financial risk
associated therewith without the protections of the Securities Act of
1933 and the registration provisions of Section 5 thereunder.
iv) Disclosure. The representations and warranties contained in this
Section 3.b. do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements and information contained in this Section 3.b. not
misleading.
4) MISCELLANEOUS
a) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by
or between the Parties, written or oral, to the extent they related in
any way to the subject matter hereof, including that certain Share
Purchase Agreement entered into by and between the Parties dated as of
July 9, 2002.
b) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and assigns. No Party may assign this Agreement or any of
its rights, interests, or obligations hereunder without the prior
written consent of the other; provided, however, that such consent
shall not be unreasonably withheld.
c) Counterparts. This Agreement may be executed by facsimile signature and
in one or more counterparts, each of which shall be deemed an original
but all of which together will constitute one and the same instrument.
d) Applicable Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of Hong Kong, without giving effect
to any choice or conflict of law provision or rule (whether of Hong
Kong or any other jurisdiction) that would cause the application of the
laws of any state or jurisdiction other than Hong Kong.
e) Amendments and Waivers. No amendments of any provision of this
Agreement shall be valid unless the same shall be in writing and signed
by the Parties. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenants hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder
to affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
f) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any state or jurisdiction shall not
affect the validity or enforceability of the remaining terms and
provision hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other state or
jurisdiction.
g) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
h) Construction: Official Version. 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.
i) Dispute Resolution. Any disputes arising under this Agreement or
connected herewith shall solely and exclusively be settled by
arbitration to be conducted by one arbitrator in accordance with the
Rules of Conciliation and Arbitration of the International Chamber of
Commerce then in effect, excepting those disputes governed by Section
4. j. below. If the Parties are unable to agree on a single arbitrator,
then such binding arbitration shall be conducted before a panel of three
(3) arbitrators that shall be comprises of one (1) arbitrator designated
by each party and a third arbitrator designated by the two (2)
arbitrators selected by the Parties. Unless the Parties agree
otherwise, the arbitration proceedings shall take place in Hong Kong,
and the arbitrator(s) shall apply the law of Hong Kong to all issues
in dispute. All arbitration proceedings hereunder shall be conducted
in English. The findings of the arbitrator(s) shall be final and binding
on the Parties. Judgment may be entered in any court of appropriate
jurisdiction, or application may be made to that court for a judicial
acceptance for the award and an order or enforcement, as the party
seeking to enforce that award may elect.
j) Specific Performance. Each of the Parties acknowledges and agrees that
the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the
Parties agrees that the other Party shall be entitled to an injunction
or injunctions to prevent breach of the provisions of this Agreement
and to enforce specifically this Agreement and the terms and provisions
hereof in any action instituted in any court of Hong Kong having
jurisdiction over the Parties and the matter, in addition to any other
remedy to which they may be entitled, at law or equity.
IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement
on the date first above written.
Kelton Capital Group Limited SCFE Shareholders (as represented)
By: /s/ Stanley Chan By: /s/ Todd Crosland
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Stanley Chan, President Todd Crosland