Attached files
| file | filename |
|---|---|
| 8-K - Oriental Dragon Corp | v163424_8k.htm |
| EX-4.1 - Oriental Dragon Corp | v163424_ex4-1.htm |
| EX-10.4 - Oriental Dragon Corp | v163424_ex10-4.htm |
| EX-10.9 - Oriental Dragon Corp | v163424_ex10-9.htm |
| EX-16.1 - Oriental Dragon Corp | v163424_ex16-1.htm |
| EX-10.3 - Oriental Dragon Corp | v163424_ex10-3.htm |
| EX-10.7 - Oriental Dragon Corp | v163424_ex10-7.htm |
| EX-10.2 - Oriental Dragon Corp | v163424_ex10-2.htm |
| EX-10.5 - Oriental Dragon Corp | v163424_ex10-5.htm |
| EX-10.1 - Oriental Dragon Corp | v163424_ex10-1.htm |
| EX-10.8 - Oriental Dragon Corp | v163424_ex10-8.htm |
| EX-99.2 - Oriental Dragon Corp | v163424_ex99-2.htm |
| EX-10.6 - Oriental Dragon Corp | v163424_ex10-6.htm |
| EX-99.1 - Oriental Dragon Corp | v163424_ex99-1.htm |
| EX-10.12 - Oriental Dragon Corp | v163424_ex10-12.htm |
| EX-10.11 - Oriental Dragon Corp | v163424_ex10-11.htm |
| EX-10.10 - Oriental Dragon Corp | v163424_ex10-10.htm |
SHARE
EXCHANGE AGREEMENT
by
and among
Emerald
Acquisition Corporation,
a Cayman
Islands corporation
and
Access
America Fund, LP,
a
Delaware limited partnership
and
Merit
Times International Limited,
a British
Virgin Islands corporation
and
the
Shareholders of
Merit
Times International Limited
Dated as
of October 22, 2009
SHARE
EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT
(hereinafter referred to as this “Agreement”) is
entered into as of this 22nd day of
October, 2009, by and between EMERALD ACQUISITION CORPORATION, a Cayman Islands
exempted company incorporated with limited liability (hereinafter referred to as
“Emerald”),
ACCESS AMERICA FUND, LP, a Delaware limited partnership (hereinafter referred to
as “AAI”),
MERIT TIMES INTERNATIONAL LIMITED, a British Virgin Islands business company
(hereinafter referred to as “Merit Times”) and the
shareholders of Merit Times (the “Merit Times
Shareholders”), upon the following premises:
Premises
WHEREAS, Emerald is an
exempted company incorporated with limited liability under the laws of Cayman
Islands with no significant operations;
WHEREAS, Merit Times is a
private company incorporated under the laws of the British Virgin Islands. Merit
Times owns 100% of the issued and outstanding capital stock of Shandong
MeKeFuBang Food Limited (“MeKeFuBang”), a
wholly foreign owned enterprise incorporated under the laws of the People’s
Republic of China (“PRC”). On
June 10, 2009, MeKeFuBang entered into a series of contractual agreements with
Shandong Longkang Juice Co., Ltd. (“Longkang Juice”), a
company incorporated under the laws of the PRC, and its five shareholders, in
which MeKeFuBang effectively assumed management of the business activities
of Longkang Juice and has the right to appoint all executives and senior
management and the members of the board of directors. Merit Times,
MeKeFuBang, and Longkang Juice shall be referred to herein collectively as the
“Group”;
WHEREAS, Emerald agrees to
acquire up to 100% of the issued and outstanding shares of Merit Times from the
Merit Times Shareholders in exchange for the issuance of certain shares of
Emerald (the “Exchange”) and the
Merit Times Shareholders agree to exchange their shares of Merit Times on the
terms described herein. On the Closing Date, Merit Times will become a
wholly-owned subsidiary of Emerald;
WHEREAS, such Exchange is in
connection with the offering (the “Offering”) pursuant
to a Subscription Agreement (the “Subscription
Agreement”)
between Emerald and certain subscribers named in the Subscription Agreement in
connection with a private placement by Emerald of units (the “Units”), each Unit
consisting of fifty thousand (50,000) ordinary shares, par value $0.001 per
share (the “Ordinary
Shares”) and warrants to purchase Twenty Five Thousand (25,000) of the
Ordinary Shares of Emerald, at an exercise price of $6.00 per share (the “Warrants”), as
further described in the Private Placement Memorandum dated October 1,
2009. The closing of the Exchange is conditioned upon all of the
conditions of the Offering being met, and the Offering is conditioned upon the
closing of the Exchange.
Agreement
NOW THEREFORE, on the stated
premises and for and in consideration of the mutual covenants and agreements
hereinafter set forth and the mutual benefits to the parties to be derived here
from, and intending to be legally bound hereby, it is hereby agreed as
follows:
ARTICLE
I
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF MERIT TIMES
As an
inducement to, and to obtain the reliance of Emerald, except as set forth in the
Merit Times Schedules (as hereinafter defined), Merit Times represents and
warrants as of the Closing Date, as defined below, as follows:
Section
1.01 Incorporation.
Merit
Times is a company duly incorporated, validly existing, and in good standing
under the laws of the British Virgin Islands and has the corporate power and is
duly authorized under all applicable laws, regulations, ordinances, and orders
of public authorities to carry on its business in all material respects as it is
now being conducted. Included in the Merit Times Schedules are
complete and correct copies of the memorandum of association and articles of
association of Merit Times as in effect on the date hereof. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Merit Times’
memorandum of association or articles of association. Merit Times has
taken all actions required by law, its memorandum of association and articles of
association, or otherwise to authorize the execution and delivery of this
Agreement. Merit Times has full power, authority, and legal capacity
and has taken all action required by law, its memorandum of association and
articles of association, and otherwise to consummate the transactions herein
contemplated.
Each
member of the Group is organized under the laws of the jurisdiction set forth in
Schedule 1.03
hereto, is duly formed or organized, validly existing and in good standing under
the laws of its jurisdiction of organization and has the requisite power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being or currently planned by each member of the Group
to be conducted. Each member of the Group is in possession of all
Approvals necessary to own, lease and operate the properties it purports to own,
operate or lease, to carry on its business as it is now being conducted, to
consummate the Transactions contemplated under this Agreement. No
member of the Group is in violation of any of the provisions of their respective
Charter Documents. The Corporate Records of each member of the Group
contain true, complete and accurate records of meetings and consents in lieu of
meetings of its board of directors (and any committees thereof), similar
governing bodies and holders of its registered capital, since the time of their
respective organization, and such Corporate Records have been heretofore
delivered to Emerald. The ownership records of each Group member’s
registered capital are true, complete and accurate records of such ownership as
of the date of such records and contain all transfers of such registered capital
since the time of their respective organization, and such ownership records have
been heretofore been delivered to Emerald. No member of the Group is
required to qualify to do business as a foreign corporation in any other
jurisdiction.
Section
1.02 Authorized
Shares. The
number of shares which Merit Times is authorized to issue consists of 50,000
shares of a single class, par value of $1.00 per share. There are
50,000 shares currently issued and outstanding. The issued and
outstanding shares are validly issued, fully paid, and non-assessable and not
issued in violation of the preemptive or other rights of any
person.
Section
1.03 Subsidiaries and Predecessor
Corporations. Except
as set forth in the Merit Times Schedule 1.03, Merit
Times does not have any subsidiaries, and does not own, beneficially or of
record, any shares of any other corporation. For purposes
hereinafter, the term “Merit Times” also includes those subsidiaries set forth
on the Merit Times Schedules.
Section
1.04 Financial
Statements.
(a) Included
in the Merit Times Schedule 1.04 are (i)
the audited balance sheets of Merit Times as of December 31, 2008 and December
31, 2007 and the related audited statements of operations, stockholders’ equity
and cash flows for the fiscal years ended December 31, 2008 and December 31,
2007 together with the notes to such statements and the opinion of Sherb & Co., LLP,
independent certified public accountants, and (ii) the unaudited financial
statements for the quarter ended June 30, 2009.
2
(b) All
such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved. The Merit Times balance sheets are true and accurate and present
fairly as of their respective dates the financial condition of Merit
Times. As of the date of such balance sheets, except as and to the
extent reflected or reserved against therein, Merit Times had no liabilities or
obligations (absolute or contingent) which should be reflected in the balance
sheets or the notes thereto prepared in accordance with generally accepted
accounting principles, and all assets reflected therein are properly reported
and present fairly the value of the assets of Merit Times, in accordance with
generally accepted accounting principles. The statements of operations,
stockholders’ equity and cash flows reflect fairly the information required to
be set forth therein by generally accepted accounting principles.
(c) Merit
Times has duly and punctually paid all governmental fees and taxation which it
has become liable to pay and has duly allowed for all taxation reasonably
foreseeable and is under no liability to pay any penalty or interest in
connection with any claim for governmental fees or taxation and Merit Times has
made any and all proper declarations and returns for taxation purposes and all
information contained in such declarations and returns is true and complete and
full provision or reserves have been made in its financial statements for all
governmental fees and taxation.
(d) The
books and records, financial and otherwise, of Merit Times are in all material
aspects complete and correct and have been maintained in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved.
(e) All
of Merit Times’ assets are reflected on its financial statements, and, except as
set forth in the Merit Times Schedules or the financial statements of Merit
Times or the notes thereto, Merit Times has no material liabilities, direct or
indirect, matured or unmatured, contingent or otherwise.
Section
1.05 Information. The
information concerning Merit Times set forth in this Agreement and in the Merit
Times Schedules is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. In addition, Merit Times has fully
disclosed in writing to Emerald (through this Agreement or the Merit Times
Schedules) all information relating to matters involving Merit Times or its
assets or its present or past operations or activities which (i) indicated or
may indicate, in the aggregate, the existence of a greater than $100,000
liability , (ii) have led or may lead to a competitive disadvantage on the part
of Merit Times or (iii) either alone or in aggregation with other information
covered by this Section, otherwise have led or may lead to a material adverse
effect on Merit Times, its assets, or its operations or activities as presently
conducted or as contemplated to be conducted after the Closing Date, including,
but not limited to, information relating to governmental, employee,
environmental, litigation and securities matters and transactions with
affiliates.
Section
1.06 Options or
Warrants. Except
as set forth in the Merit Times Schedule 1.06, there
are no existing options, warrants, calls, or commitments of any character
relating to the authorized and unissued stock of Merit Times.
Section
1.07 Absence of Certain Changes
or Events. Since
June 30, 2009:
(a) There
has not been any material adverse change in the business, operations,
properties, assets, or condition (financial or otherwise) of Merit
Times;
3
(b) Merit
Times has not (i) amended its memorandum of association or articles of
association; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to stockholders
or purchased or redeemed, or agreed to purchase or redeem, any of its shares;
(iii) made any material change in its method of management, operation or
accounting, (iv) entered into any other material transaction other than sales in
the ordinary course of its business; or (v) made any increase in or adoption of
any profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made to,
for, or with its officers, directors, or employees; and
(c) Merit
Times has not (i) granted or agreed to grant any options, warrants or other
rights for its stocks, bonds or other corporate securities calling for the
issuance thereof, (ii) borrowed or agreed to borrow any funds or incurred, or
become subject to, any material obligation or liability (absolute or contingent)
except as disclosed herein and except liabilities incurred in the ordinary
course of business; (iii) sold or transferred, or agreed to sell or transfer,
any of its assets, properties, or rights or canceled, or agreed to cancel, any
debts or claims; or (iv) issued, delivered, or agreed to issue or deliver any
stock, bonds or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock) except in connection with
this Agreement.
Section
1.08 Litigation and
Proceedings. Except
as disclosed on Schedule 1.08, there
are no actions, suits, proceedings, or investigations pending or, to the
knowledge of Merit Times after reasonable investigation, threatened by or
against Merit Times or affecting Merit Times or its properties, at law or in
equity, before any court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind. Merit
Times does not have any knowledge of any material default on its part with
respect to any judgment, order, injunction, decree, award, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default.
Section
1.09 Contracts.
(a) All
“material” contracts, agreements, franchises, license agreements, debt
instruments or other commitments to which Merit Times is a party or
by which it or any of its assets, products, technology, or properties are bound
other than those incurred in the ordinary course of business are set forth on
the Merit Times Schedules. A “material” contract, agreement,
franchise, license agreement, debt instrument or commitment is one which (i)
will remain in effect for more than six (6) months after the date of this
Agreement or (ii) involves aggregate obligations of at least one hundred
thousand dollars ($100,000);
(b) All
contracts, agreements, franchises, license agreements, and other commitments to
which Merit Times is a party or by which its properties are bound and which are
material to the operations of Merit Times taken as a whole are valid and
enforceable by Merit Times in all respects, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors generally;
and
(c) Except
as included or described in the Merit Times Schedule 1.09 or
reflected in the most recent Merit Times balance sheet, Merit Times is not a
party to any oral or written (i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, (iii) agreement, contract, or
indenture relating to the borrowing of money, (iv) guaranty of any obligation;
(vi) collective bargaining agreement; or (vii) agreement with any present or
former officer or director of Merit Times.
Section
1.10 No Conflict With Other
Instruments. The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, constitute a default under, or terminate, accelerate or modify the
terms of any indenture, mortgage, deed of trust, or other material agreement, or
instrument to which Merit Times is a party or to which any of its assets,
properties or operations are subject.
4
Section
1.11 Compliance With Laws and
Regulations. To the
best of its knowledge, Merit Times has complied with all applicable statutes and
regulations of any federal, state, or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets, or condition of
Merit Times or except to the extent that noncompliance would not result in the
occurrence of any material liability for Merit Times. This compliance
includes, but is not limited to, the filing of all reports to date with federal
and state securities authorities.
Section
1.12 Approval of
Agreement. The
Board of Directors of Merit Times has authorized the execution and delivery of
this Agreement by Merit Times and has approved this Agreement and the
transactions contemplated hereby, and will recommend to the Merit Times
Shareholders that the Exchange be accepted.
Section
1.13 Merit Times
Schedules. Merit
Times has delivered to Emerald the following schedules, which are collectively
referred to as the “Merit Times Schedules” and which consist of separate
schedules dated as of the date of execution of this Agreement, all certified by
the chief executive officer of Merit Times as complete, true, and correct as of
the date of this Agreement in all material respects:
(a)
a schedule containing complete and correct copies of the
memorandum of association and articles of association of Merit Times in effect
as of the date of this Agreement;
(b) a
schedule containing the financial statements of Merit Times identified in
paragraph 1.04(a);
(c) a
schedule setting forth a description of any material adverse change in the
business, operations, property, inventory, assets, or condition of Merit Times
since June 30, 2009, required to be provided pursuant to Section 1.07
hereof;
(d) a
schedule of any exceptions to the representations made herein; and
(e) a
schedule containing the other information requested above.
Merit
Times shall cause the Merit Times Schedules and the instruments and data
delivered to Emerald hereunder to be promptly updated after the date hereof up
to and including the Closing Date.
Section
1.14 Valid
Obligation. This
Agreement and all agreements and other documents executed by Merit Times in
connection herewith constitute the valid and binding obligation of Merit Times,
enforceable in accordance with its or their terms, except as may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
Section
1.15 Title to Assets; Liens,
Etc. Each of Merit Times and its subsidiaries has good and
marketable title to its assets, including the assets reflected in the most
recent balance sheet included in the Merit Times’ financial statements as set
forth in Section
1.04, and in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (a) those resulting from taxes which have not
yet become delinquent; (b) liens and encumbrances which do not materially
detract from the value of the assets subject thereto or materially impair the
operations of Merit Times or any subsidiary; (c) those that have otherwise
arisen in the ordinary course of business; and (d) those that would not
reasonably be expected to have a material adverse change in the business,
operations, property, inventory, assets, or condition of Merit Times and its
subsidiaries. Each of Merit Times and its subsidiaries is in
compliance with all material terms of each lease to which it is a party or is
otherwise bound.
5
Section
1.16 Intellectual
Property. Except as set forth on Schedule 1.16, each of Merit
Times and its subsidiaries owns or possesses licenses or rights to use all
patents, patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service names, trade
names and copyrights that it believes are necessary to enable it to conduct its
business as now operated (the “Intellectual
Property”). Except as set forth on Schedule 1.16, there are no
material options, licenses or agreements relating to the Intellectual Property,
nor is Merit Times or any subsidiary bound by, or a party to, any material
options, licenses or agreements relating to the patents, patent applications,
patent rights, inventions, know-how, trade secrets, trademarks, trademark
applications, service marks, service names, trade names or copyrights of any
other person or entity. Except as disclosed in the Memorandum, there
is no claim or action or proceeding pending or, to the Company’s knowledge,
threatened, that challenges the right of Merit Times or any subsidiary with
respect to any Intellectual Property.
Section
1.17 Environmental
Laws. To the best of the knowledge of Merit Times, Merit Times
and its subsidiaries (a) is in compliance with any and all Environmental Laws
(as hereinafter defined), (b) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
business and (c) are in compliance with all terms and conditions of any
such permit, license or approval where, in each of the foregoing clauses (a),
(b) and (c), the failure to so comply would reasonably be expected to have,
individually or in the aggregate, a material adverse change in the business,
operations, property, inventory, assets, or condition of Merit Times and its
subsidiaries. The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or
demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved
thereunder.
Section
1.18 Exclusive Rights.
Merit Times and its subsidiaries has been granted by the Laiyang City
government the right to act as the exclusive producer of Laiyang Pear juice
concentrate beginning in January 2009 for a period of 30 years. No other
producer can use the trademark or enter into the Laiyang Pear juice concentrate
business until the exclusive right held by Merit Times and its Subsidiaries has
expired.
Section
1.19 PRC Laws and
Regulations. Merit Times and its subsidiaries are in compliance with PRC
laws and regulations governing food safety and hygiene. All material consents,
approvals, authorizations or licenses requisite under PRC law for the due and
proper establishment and operation of Merit Times’ subsidiaries doing business
in the PRC have been duly obtained from the relevant PRC governmental
authorities and are in full force and effect.
Section
1.20 Sarbanes-Oxley; Disclosure
Controls. Merit Times will be in compliance in all material
respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are
applicable to it after the Exchange. Merit Times shall establish
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for Merit Times and design such disclosure controls and
procedures to ensure that material information relating to Merit Times is made
known to the certifying officers by others within those entities.
6
ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF EMERALD
As an
inducement to, and to obtain the reliance of Merit Times and the Merit Times
Shareholders, except as set forth in the Emerald Schedules (as hereinafter
defined), Emerald represents and warrants, as of the date hereof and as of the
Closing Date, as follows:
Section
2.01 Organization. Emerald
is a corporation duly incorporated, validly existing, and in good standing under
the laws of Cayman Islands and has the corporate power and is duly authorized
under all applicable laws, regulations, ordinances, and orders of public
authorities to carry on its business in all material respects as it is now being
conducted. Included in the Emerald Schedules are complete and correct
copies of the certificate of incorporation and articles of association of
Emerald (the “Articles”) as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Emerald’s certificate of incorporation or
Articles. Emerald has taken all action required by law, its
certificate of incorporation, its Articles, or otherwise to authorize the
execution and delivery of this Agreement, and Emerald has full power, authority,
and legal right and has taken all action required by law, its certificate of
incorporation, Articles, or otherwise to consummate the transactions herein
contemplated.
Section
2.02 Capitalization.
(a) Emerald’s
authorized capitalization consists of (a) 50,000,000 Ordinary Shares, of which
1,281,500 shares are issued and outstanding, and (b) 1,000,000 shares of
preferred shares, par value $0.001 per share, none of which are issued and
outstanding. All issued and outstanding shares are legally issued,
fully paid, and non-assessable and not issued in violation of the preemptive or
other rights of any person. As of the Closing Date, no shares of Emerald’s
Ordinary Shares were reserved for issuance upon the exercise of outstanding
options to purchase the Ordinary Shares; (iv) no Ordinary Shares were reserved
for issuance upon the exercise of outstanding warrants to purchase Emerald
Ordinary Shares; (v) no shares of preferred stock were reserved for issuance to
any party; and (vi) no Ordinary Shares were reserved for issuance upon the
conversion of Emerald preferred stock or any outstanding convertible notes,
debentures or securities. All outstanding Emerald Ordinary Shares
have been issued and granted in compliance with (i) all applicable securities
laws and (in all material respects) other applicable laws and regulations, and
(ii) all requirements set forth in any applicable Contracts.
(b) There
are no equity securities, partnership interests or similar ownership interests
of any class of any equity security of Emerald, or any securities exchangeable
or convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. Except as contemplated by this Agreement or as set
forth in Schedule
2.02, there are no subscriptions, options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any character to which Emerald
is a party or by which it is bound obligating Emerald to issue, deliver or sell,
or cause to be issued, delivered or sold, or repurchase, redeem or otherwise
acquire, or cause the repurchase, redemption or acquisition of, any shares of
capital stock, partnership interests or similar ownership interests of Emerald
or obligating Emerald to grant, extend, accelerate the vesting of or enter into
any such subscription, option, warrant, equity security, call, right, commitment
or agreement. There is no plan or arrangement to issue Emerald
Ordinary Shares or preferred stock except as set forth in this
Agreement.
7
Except as
contemplated by this Agreement and except as set forth in Schedule 2.02 hereto,
there are no registration rights, and there is no voting trust, proxy, rights
plan, anti-takeover plan or other agreement or understanding to which Emerald is
a party or by which it is bound with respect to any equity security of any class
of Emerald, and there are no agreements to which Emerald is a party, or which
Emerald has knowledge of, which conflict with this Agreement or the transactions
contemplated herein or otherwise prohibit the consummation of the transactions
contemplated hereunder.
Section
2.03 Subsidiaries and Predecessor
Corporations. Emerald
does not have any predecessor corporation(s), no subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation.
Section
2.04 Financial
Statements.
(a) Included
in the Emerald Schedules are (i) the audited balance sheets of Emerald as of
December 31, 2009 and the related audited statements of operations,
stockholders’ equity and cash flows for December 31, 2008 together with the
notes to such statements and the opinion of PMB Helin Donovan, LLP, independent
certified public accountants, with respect thereto;
(b) Included
in the Emerald Schedules are: (i) unaudited balance sheets of June 30, 2009 and
the related unaudited statements of operations, stockholders’ equity and cash
flows for the quarters ended on such dates and all such financial statements
have been reviewed by PMB Helin Donovan, LLP;
(c) All
such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved. The Emerald balance sheets are true and accurate and present fairly as
of their respective dates the financial condition of Emerald. As of
the date of such balance sheets, except as and to the extent reflected or
reserved against therein, Emerald had no liabilities or obligations (absolute or
contingent) which should be reflected in the balance sheets or the notes thereto
prepared in accordance with generally accepted accounting principles, and all
assets reflected therein are properly reported and present fairly the value of
the assets of Emerald, in accordance with generally accepted accounting
principles. The statements of operations, stockholders’ equity and cash flows
reflect fairly the information required to be set forth therein by generally
accepted accounting principles;
(d) Emerald
has no liabilities with respect to the payment of any federal, state, county,
local or other taxes (including any deficiencies, interest or penalties), except
for taxes accrued but not yet due and payable;
(e) Emerald
has timely filed all state, federal or local income and/or franchise tax returns
required to be filed by it from inception to the date hereof. Each of
such income tax returns reflects the taxes due for the period covered thereby,
except for amounts which, in the aggregate, are immaterial;
(f) The
books and records, financial and otherwise, of Emerald are in all material
aspects complete and correct and have been maintained in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved; and
(g) All
of Emerald’s assets are reflected on its financial statements, and, except as
set forth in the Emerald Schedules or the financial statements of Emerald or the
notes thereto, Emerald has no material liabilities, direct or indirect, matured
or unmatured, contingent or otherwise.
8
Section
2.05 Information. The
information concerning Emerald set forth in this Agreement and the Emerald
Schedules is complete and accurate in all material respects and does not contain
any untrue statements of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. In addition, Emerald has fully
disclosed in writing to Merit Times (through this Agreement or the Emerald
Schedules) all information relating to matters involving Emerald or its assets
or its present or past operations or activities which (i) indicated or may
indicate, in the aggregate, the existence of a greater than $1,000 liability ,
(ii) have led or may lead to a competitive disadvantage on the part of Emerald
or (iii) either alone or in aggregation with other information covered by this
Section, otherwise have led or may lead to a material adverse effect on Emerald,
its assets, or its operations or activities as presently conducted or as
contemplated to be conducted after the Closing Date, including, but not limited
to, information relating to governmental, employee, environmental, litigation
and securities matters and transactions with affiliates.
Section
2.06 Options or
Warrants. There
are no existing options, warrants, calls, or commitments of any character
relating to the authorized and unissued stock of Emerald.
Section
2.07 Absence of Certain Changes
or Events. Since
the date of the most recent Emerald balance sheet:
(a) there
has not been (i) any material adverse change in the business, operations,
properties, assets or condition of Emerald or (ii) any damage, destruction or
loss to Emerald (whether or not covered by insurance) materially and adversely
affecting the business, operations, properties, assets or condition of
Emerald;
(b) Emerald
has not (i) amended its certificate of incorporation or Articles except as
required by this Agreement; (ii) declared or made, or agreed to declare or make
any payment of dividends or distributions of any assets of any kind whatsoever
to stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the aggregate
are outside of the ordinary course of business or material considering the
business of Emerald; (iv) made any material change in its method of management,
operation, or accounting; (v) entered into any transactions or agreements other
than in the ordinary course of business; (vi) made any accrual or arrangement
for or payment of bonuses or special compensation of any kind or any severance
or termination pay to any present or former officer or employee;
(vii) increased the rate of compensation payable or to become payable by it to
any of its officers or directors or any of its salaried employees whose monthly
compensation exceed $1,000; or (viii) made any increase in any profit
sharing, bonus, deferred compensation, insurance, pension, retirement, or other
employee benefit plan, payment, or arrangement, made to, for or with its
officers, directors, or employees;
(c) Emerald
has not (i) granted or agreed to grant any options, warrants, or other rights
for its stock, bonds, or other corporate securities calling for the issuance
thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid or agreed to
pay any material obligations or liabilities (absolute or contingent) other than
current liabilities reflected in or shown on the most recent Emerald balance
sheet and current liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses in connection with the
preparation of this Agreement and the consummation of the transaction
contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer,
any of its assets, properties, or rights (except assets, properties, or rights
not used or useful in its business which, in the aggregate have a value of less
than $1,000), or canceled, or agreed to cancel, any debts or claims (except
debts or claims which in the aggregate are of a value less than $1,000); (v)
made or permitted any amendment or termination of any contract, agreement, or
license to which it is a party if such amendment or termination is material,
considering the business of Emerald; or (vi) issued, delivered or agreed to
issue or deliver, any stock, bonds or other corporate securities including
debentures (whether authorized and unissued or held as treasury stock), except
in connection with this Agreement; and
9
(d) to
its knowledge, Emerald has not become subject to any law or regulation which
materially and adversely affects, or in the future, may adversely affect, the
business, operations, properties, assets or condition of Emerald.
Section
2.08 Litigation and
Proceedings. There
are no actions, suits, proceedings or investigations pending or, to the
knowledge of Emerald after reasonable investigation, threatened by or against
Emerald or affecting Emerald or its properties, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind except as disclosed in the Emerald Schedule
2.08. Emerald has no knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator, or governmental agency or instrumentality
or any circumstance which after reasonable investigation would result in the
discovery of such default.
Section
2.09 Contracts.
(a) Emerald
is not a party to, and its assets, products, technology and properties are not
bound by, any contract, franchise, license agreement, agreement, debt instrument
or other commitments whether such agreement is in writing or oral;
(b) Emerald
is not a party to or bound by, and the properties of Emerald are not subject to
any contract, agreement, other commitment or instrument; any charter or other
corporate restriction; or any judgment, order, writ, injunction, decree, or
award; and
(c) Emerald
is not a party to any oral or written (i) contract for the employment of any
officer or employee; (ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension benefit or retirement plan, (iii) agreement,
contract, or indenture relating to the borrowing of money, (iv) guaranty of any
obligation, (vi) collective bargaining agreement; or (vii) agreement with any
present or former officer or director of Emerald.
Section
2.10 No Conflict With Other
Instruments. The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, constitute a default under, or terminate, accelerate or modify the
terms of, any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Emerald is a party or to which any of its assets, properties
or operations are subject.
Section
2.11 Compliance With Laws and
Regulations. To the
best of its knowledge, Emerald has complied with all applicable statutes and
regulations of any federal, state, or other applicable governmental entity or
agency thereof. This compliance includes, but is not limited to, the
filing of all reports to date with federal and state securities
authorities.
Section
2.12 Approval of
Agreement. The
Board of Directors of Emerald has authorized the execution and delivery of this
Agreement by Emerald and has approved this Agreement and the transactions
contemplated hereby.
10
Section
2.13 Material Transactions or
Affiliations. Except
as disclosed herein and in the Emerald Schedules, there exists no contract,
agreement or arrangement between Emerald and any predecessor and any person who
was at the time of such contract, agreement or arrangement an officer, director,
or person owning of record or known by Emerald to own beneficially, 5% or more
of the issued and outstanding Ordinary Shares of Emerald and which is to be
performed in whole or in part after the date hereof or was entered into not more
than three years prior to the date hereof. Neither any officer,
director, nor 5% Shareholders of Emerald has, or has had since inception of
Emerald, any known interest, direct or indirect, in any such transaction with
Emerald which was material to the business of Emerald. Emerald has no
commitment, whether written or oral, to lend any funds to, borrow any money
from, or enter into any other transaction with, any such affiliated
person.
Section
2.14 Emerald
Schedules. Emerald
has delivered to Merit Times the following schedules, which are collectively
referred to as the “Emerald Schedules” and which consist of separate schedules,
which are dated the date of this Agreement, all certified by the chief executive
officer of Emerald to be complete, true, and accurate in all material respects
as of the date of this Agreement.
(a) a
schedule containing complete and accurate copies of the certificate of
incorporation and Articles of Emerald as in effect as of the date of this
Agreement;
(b) a
schedule containing the financial statements of Emerald identified in paragraph
2.04(a) and (b);
(c) a
schedule setting forth a description of any material adverse change in the
business, operations, property, inventory, assets, or condition of Emerald since
June 30, 2009, required to be provided pursuant to section 2.07 hereof;
and
(d) a
schedule setting forth any other information, together with any required copies
of documents, required to be disclosed in the Emerald Schedules by Sections 2.01
through 2.13.
Emerald
shall cause the Emerald Schedules and the instruments and data delivered to
Merit Times hereunder to be promptly updated after the date hereof up to and
including the Closing Date.
Section
2.15 Bank Accounts; Power of
Attorney. Set
forth in the Emerald Schedules is a true and complete list of (a) all accounts
with banks, money market mutual funds or securities or other financial
institutions maintained by Emerald within the past twelve (12) months, the
account numbers thereof, and all persons authorized to sign or act on behalf of
Emerald, (b) all safe deposit boxes and other similar custodial arrangements
maintained by Emerald within the past twelve (12) months, (c) the check ledger
for the last 12 months, and (d) the names of all persons holding powers of
attorney from Emerald or who are otherwise authorized to act on behalf of
Emerald with respect to any matter, other than its officers and directors, and a
summary of the terms of such powers or authorizations.
Section
2.16 Valid
Obligation. This
Agreement and all agreements and other documents executed by Emerald in
connection herewith constitute the valid and binding obligation of Emerald,
enforceable in accordance with its or their terms, except as may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
Section
2.17 SEC
Filings; Financial
Statements.
(a) Emerald
has made available to Merit Times a correct and complete copy, or there has been
available on EDGAR, copies of each report, registration statement and definitive
proxy statement filed by Emerald with the SEC for the 36 months prior to the
date of this Agreement (the “Emerald SEC
Reports”), which, to Emerald’s knowledge, are all the forms, reports and
documents filed by Emerald with the SEC for the 36 months prior to the date of
this Agreement. As of their respective dates, to Emerald’s knowledge, the
Emerald SEC Reports: (i) were prepared in accordance and complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC thereunder
applicable to such Emerald SEC Reports, and (ii) did not at the time they were
filed (and if amended or superseded by a filing prior to the date of this
Agreement then on the date of such filing and as so amended or superceded)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
11
(b) Each
set of financial statements (including, in each case, any related notes thereto)
contained in the Emerald SEC Reports comply as to form in all material respects
with the published rules and regulations of the SEC with respect thereto, were
prepared in accordance with U.S. GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, do not contain footnotes as permitted by Form 10-Q
promulgated under the Exchange Act) and each fairly presents in all material
respects the financial position of Emerald at the respective dates thereof and
the results of its operations and cash flows for the periods indicated, except
that the unaudited interim financial statements were or are subject to normal
adjustments which were not or are not expected to have a Material Adverse Effect
on Emerald taken as a whole.
Section
2.18 Exchange Act
Compliance. Emerald
is in compliance with, and current in, all of the reporting, filing and other
requirements under the Exchange Act, the Ordinary Shares have been registered
under Section 12(g) of the Exchange Act, and Emerald is in compliance with all
of the requirements under, and imposed by, Section 12(g) of the Exchange Act,
except where a failure to so comply is not reasonably likely to have a Material
Adverse Effect on Emerald.
Section
2.19 Title to
Property. Emerald does not own or lease any real property or
personal property. There are no options or other contracts under
which Emerald has a right or obligation to acquire or lease any interest in real
property or personal property.
Section
2.20 Intellectual
Property. Emerald does not own, license or otherwise have any
right, title or interest in any intellectual property.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF
THE
MERIT TIMES SHAREHOLDERS
The Merit Times Shareholders hereby
represents and warrants, severally and solely, to Emerald as
follows.
Section
3.01 Good
Title. Each of the Merit
Times Shareholders is the record and beneficial owner, and has good title to his
Merit Times Common Stock, with the right and authority to sell and deliver such
Merit Times Common Stock, free and clear of all
liens, claims, charges, encumbrances, pledges, mortgages, security interests,
options, rights to acquire, proxies, voting trusts or similar agreements,
restrictions on transfer or adverse claims of any nature
whatsoever. Upon delivery of any certificate or certificates duly
assigned, representing the same as herein contemplated and/or upon registering
of Emerald as the new owner of such Merit Times Common Stock in the share
register of Merit Times, Emerald will receive good title to such Merit Times
Common Stock, free and clear of all Liens.
Section
3.02 Power and Authority.
Each of the Merit Times Shareholders has the legal power, capacity and authority
to execute and deliver this Agreement to consummate the transactions
contemplated by this Agreement, and to perform his obligations under this
Agreement. This Agreement constitutes a legal, valid and binding
obligation of the Merit Times Shareholders, enforceable against the Merit Times
Shareholders in accordance with the terms hereof.
12
Section
3.03 No
Conflicts. The execution and delivery of this Agreement by the
Merit Times Shareholders and the performance by the Merit Times Shareholders of
their obligations hereunder in accordance with the terms hereof: (a) will not
require the consent of any third party or governmental entity under any laws;
(b) will not violate any laws applicable to the Merit Times Shareholders and (c)
will not violate or breach any contractual obligation to which the Merit Times
Shareholders are a party.
Section
3.04 Finder’s
Fee. Each of the Merit Times Shareholders represents and
warrants that it has not created any obligation for any finder’s, investment
banker’s or broker’s fee in connection with the Exchange.
Section
3.05 Purchase Entirely for Own
Account. The Exchange Shares (as defined in Section 4.01 herein) proposed
to be acquired by each of the Merit Times Shareholders hereunder will be
acquired for investment for its own account, and not with a view to the resale
or distribution of any part thereof, and each of the Merit Times Shareholders
has no present intention of selling or otherwise distributing the Exchange
Shares, except in compliance with applicable securities laws.
Section
3.06 Acquisition of Exchange
Shares for Investment.
(a) Each
Merit Times Shareholder is acquiring the Exchange Shares for investment for
Merit Times Shareholder’s own account and not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and each Merit
Times Shareholder has no present intention of selling, granting any
participation in, or otherwise distributing the same. Each Merit
Times Shareholder further represents that he or she does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Exchange Shares.
(b) Each
Merit Times Shareholder represents and warrants that he or she: (i) can bear the
economic risk of his respective investments, and (ii) possesses such knowledge
and experience in financial and business matters that he is capable of
evaluating the merits and risks of the investment in Emerald and its
securities.
(c) Each
Merit Times Shareholder who is not a “U.S. Person” as defined in Rule 902(k) of
Regulation S of the Securities Act (“Regulation S”) (each
a “Non-U.S.
Shareholder”) understands that the Exchange Shares are not registered
under the Securities Act and that the issuance thereof to such Merit Times
Shareholder is intended to be exempt from registration under the Securities Act
pursuant to Regulation S. Each Non-U.S. Shareholder has no intention
of becoming a U.S. Person. At the time of the origination of contact
concerning this Agreement and the date of the execution and delivery of this
Agreement, each Non-U.S. Shareholder was outside of the United
States. Each certificate representing the Exchange Shares shall be
endorsed with the following legends, in addition to any other legend required to
be placed thereon by applicable federal or state securities laws:
“THE
SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED
IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”))
AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED
UNDER THE SECURITIES ACT.”
13
“TRANSFER
OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
(d) Each
Merit Times Shareholder who is a “U.S. Person” as defined in Rule 902(k) of
Regulation S (each a “U.S. Shareholder”)
understands that the Exchange Shares are not registered under the Securities Act
and that the issuance thereof to such Merit Times Shareholder is intended to be
exempt from registration under the Securities Act pursuant to Regulation D
promulgated thereunder (“Regulation
D”). Each U.S. Shareholder represents and warrants that he is
an “accredited investor” as such term is defined in Rule 501 of Regulation D or,
if not an accredited investor, that such Merit Times Shareholder otherwise meets
the suitability requirements of Regulation D and Section 4(2) of the Securities
Act (“Section
4(2)”). Each
U.S. Shareholder agrees to provide documentation to Emerald prior to Closing as
may be requested by Emerald to confirm compliance with Regulation D and/or
Section 4(2), including, without limitation, a letter of investment intent or
similar representation letter and a completed investor questionnaire. Each certificate
representing the Exchange Shares issued to such Merit Times Shareholder shall be
endorsed with the following legends, in addition to any other legend required to
be placed thereon by applicable federal or state securities laws:
“THIS
SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), OR APPLICABLE STATE
SECURITIES OR “BLUE SKY” LAWS.”
“TRANSFER
OF THESE SECURITIES IS PROHIBITED UNLESS A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WITH RESPECT TO SUCH SECURITY SHALL THEN BE IN EFFECT AND SUCH
TRANSFER HAS BEEN QUALIFIED UNDER ALL APPLICABLE STATE SECURITIES OR “BLUE SKY”
LAWS, OR AN EXEMPTION THEREFROM SHALL BE AVAILABLE UNDER THE ACT AND SUCH
LAWS.”
(e) Each
Merit Times Shareholder acknowledges that neither the SEC, nor the securities
regulatory body of any state or other jurisdiction, has received, considered or
passed upon the accuracy or adequacy of the information and representations made
in this Agreement.
(f) Each
Merit Times Shareholder acknowledges that he has carefully reviewed such
information as he has deemed necessary to evaluate an investment in Emerald and
its securities, and with respect to each U.S. Shareholder, that all information
required to be disclosed to such Merit Times Shareholder under Regulation D has
been furnished to such Merit Times Shareholder by Emerald. To the
full satisfaction of each Merit Times Shareholder, he has been furnished all
materials that he has requested relating to Emerald and the issuance of the
Exchange Shares hereunder, and each Merit Times Shareholder has been afforded
the opportunity to ask questions of Emerald’s representatives to obtain any
information necessary to verify the accuracy of any representations or
information made or given to the Merit Times
Shareholders. Notwithstanding the foregoing, nothing herein shall
derogate from or otherwise modify the representations and warranties of Emerald
set forth in this Agreement, on which each of the Merit Times Shareholders have
relied in making an exchange of his shares Merit Times for the Exchange
Shares.
14
(g) Each
Merit Times Shareholder understands that the Exchange Shares may not be sold,
transferred, or otherwise disposed of without registration under the Securities
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Exchange Shares or any available exemption
from registration under the Securities Act, the Exchange Shares may have to be
held indefinitely. Each Merit Times Shareholder further acknowledges
that the Exchange Shares may not be sold pursuant to Rule 144 promulgated under
the Securities Act unless all of the conditions of Rule 144 are satisfied
(including, without limitation, Emerald’s compliance with the reporting
requirements under the Securities Exchange Act of 1934, as amended (“Exchange
Act”)).
(h) The
Merit Times Shareholder agrees that, notwithstanding anything contained herein
to the contrary, the warranties, representations, agreements and covenants of
the Merit Times Shareholder under this Section 3.06 shall survive the
Closing.
Section
3.9 Additional Legend;
Consent. Additionally, the Exchange Shares will bear any legend required
by the “blue sky” laws of any state to the extent such laws are applicable to
the securities represented by the certificate so legended. Each of the Merit
Times Shareholders consents to Emerald making a notation on its records or
giving instructions to any transfer agent of Exchange Shares in order to
implement the restrictions on transfer of the Exchange Shares.
ARTICLE
IV
PLAN
OF EXCHANGE
Section
4.01 The
Exchange. On
the terms and subject to the conditions set forth in this Agreement, on the
Closing Date (as defined in Section 4.03), each of the Merit Times Shareholders
who has elected to accept the exchange offer described herein by executing this
Agreement, shall assign, transfer and deliver, free and clear of all liens,
pledges, encumbrances, charges, restrictions or known claims of any kind,
nature, or description, the number of shares of Merit Times set forth on the
Merit Times Schedules attached hereto, constituting all of the shares of Merit
Times held by such shareholder; the objective of such Exchange being the
acquisition by Emerald of not less than 100% of the issued and outstanding
shares of Merit Times. In exchange for the transfer of such
securities by the Merit Times Shareholders, Emerald shall issue to the Merit
Times Shareholders, his affiliates or assigns, a total of 21,333,332 shares
pursuant to Table
1 attached hereto, representing 97.77% of the total Ordinary Shares of
Emerald, for all of the outstanding shares of Merit Times held by the Merit
Times Shareholders (the “Exchange Shares”). At
the Closing Date, each of the Merit Times Shareholders shall, on surrender of
his certificate or certificates representing his Merit Times shares to Emerald
or its registrar or transfer agent, be entitled to receive a certificate or
certificates evidencing his proportionate interest in the Exchange
Shares.
Upon
consummation of the transaction contemplated herein, all of the issued and
outstanding shares of Merit Times shall be held by Emerald. Upon
consummation of the transaction contemplated herein there shall be 21,820,832
Emerald Ordinary Shares issued and outstanding.
Section
4.02 Cancellation of Certain
Shares of Emerald Ordinary Shares. Prior
to the Closing Date, Access America Fund, LP, the principal shareholder of
Emerald, will cancel a total number of 794,000 Emerald Ordinary
Shares.
Section
4.03 Closing. The
closing (the “Closing” or the
“Closing Date”)
of the transactions contemplated by this Agreement shall occur following the
payment of the outstanding liabilities of Emerald, which may be paid from the
proceeds at Closing, and upon the exchange of the shares of Emerald and Merit
Times as described in Section 4.01 herein. Such Closing shall take place at a
mutually agreeable time and place, and be conditioned upon all of the conditions
of the Offering being met.
15
Section
4.04 Closing
Events. At the
Closing, Emerald, Merit Times and the Merit Times Shareholders shall execute,
acknowledge, and deliver (or shall ensure to be executed, acknowledged, and
delivered), any and all certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings or other instruments required by this Agreement
to be so delivered at or prior to the Closing, together with such other items as
may be reasonably requested by the parties hereto and their respective legal
counsel in order to effectuate or evidence the transactions contemplated
hereby.
Section
4.05 Termination. This
Agreement may be terminated by the Board of Directors of Merit Times or Emerald
only in the event that Emerald or Merit Times do not meet the conditions
precedent set forth in Articles VI and VII. If this Agreement is
terminated pursuant to this section, this Agreement shall be of no further force
or effect, and no obligation, right or liability shall arise
hereunder.
ARTICLE
V
SPECIAL
COVENANTS
Section
5.01 Access to Properties and
Records. Emerald
and Merit Times will each afford to the officers and authorized
representatives of the other full access to the properties, books and records of
Emerald or Merit Times , as the case may be, in order that each may have a full
opportunity to make such reasonable investigation as it shall desire to make of
the affairs of the other, and each will furnish the other with such additional
financial and operating data and other information as to the business and
properties of Emerald or Merit Times, as the case may be, as the other shall
from time to time reasonably request. Without limiting the foregoing,
as soon as practicable after the end of each fiscal quarter (and in any event
through the last fiscal quarter prior to the Closing Date), each party shall
provide the other with quarterly internally prepared and unaudited financial
statements.
Section
5.02 Delivery of Books and
Records. At the
Closing, Emerald shall deliver to Merit Times, the originals of the corporate
minute books, books of account, contracts, records, and all other books or
documents of Emerald which is now in the possession of Emerald or its
representatives.
Section
5.03 Third Party Consents and
Certificates. Emerald
and Merit Times agree to cooperate with each other in order to obtain any
required third party consents to this Agreement and the transactions herein
contemplated.
Section
5.04 Designation of Directors and
Officer. Upon
the effectiveness of an information statement required by Rule 14f-1 promulgated
under the Exchange Act, Zhide Jiang will take the position of Director with
Emerald, and the existing officers and directors of Emerald, David Richardson
and Joseph Rozelle, after the signing of this Agreement, shall tender their
resignations of their positions held with Emerald effective
immediately. In addition, upon the signing of this Agreement, Emerald
shall immediately appoint Zhide Jiang as the sole officer of
Emerald.
Section
5.05 Indemnification.
(a) Merit
Times hereby agrees to indemnify Emerald and each of the officers, agents and
directors of Emerald as of the date of execution of this Agreement against any
loss, liability, claim, damage, or expense (including, but not limited to, any
and all expense whatsoever reasonably incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever) (the “Loss”), to which it
or they may become subject arising out of or based on any inaccuracy appearing
in or misrepresentations made under Article I of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and termination of this
Agreement for one year following the Closing.
16
(b) The
Merit Times Shareholders agrees to indemnify Emerald and each of the officers,
agents and directors of Emerald as of the date of execution of this Agreement
against any Loss, to which it or they may become subject arising out of or based
on any inaccuracy appearing in or misrepresentations made under Article III of
this Agreement. The indemnification provided for in this paragraph
shall survive the Closing and consummation of the transactions contemplated
hereby and termination of this Agreement for one year following the
Closing.
(c) Emerald
hereby agrees to indemnify Merit Times and each of the officers, agents, and
directors of Merit Times and the Merit Times Shareholders as of the date of
execution of this Agreement against any Loss to which it or they may become
subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article II of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and termination of this
Agreement for one year following the Closing.
Section
5.06
The Acquisition of
Emerald Ordinary Shares. Emerald
and Merit Times understand and agree that the consummation of this Agreement
including the issuance of the Emerald Ordinary Shares to the Merit Times
Shareholders in exchange for the Merit Times Shares as contemplated hereby
constitutes the offer and sale of securities under the Securities Act and
applicable state statutes. Emerald and Merit Times agree that such
transactions shall be consummated in reliance on exemptions from the
registration and prospectus delivery requirements of such statutes, which
depend, among other items, on the circumstances under which such securities are
acquired.
(a) In
order to provide documentation for reliance upon the exemptions from the
registration and prospectus delivery requirements for such transactions, Merit
Times Shareholders shall execute and deliver to Emerald a Suitability Letter and
an Investment Representation Letter in substantially the same form as that
attached hereto as Exhibit A and Exhibit B,
respectively.
(b) In
connection with the transaction contemplated by this Agreement, Emerald and
Merit Times shall each file, with the assistance of the other and their
respective legal counsel, such notices, applications, reports, or other
instruments as may be deemed by them to be necessary or appropriate in an effort
to document reliance on such exemptions, and the appropriate regulatory
authority in the states where the shareholders of Merit Times reside unless an
exemption requiring no filing is available in such jurisdictions, all to the
extent and in the manner as may be deemed by such parties to be
appropriate.
(c) In
order to more fully document reliance on the exemptions as provided herein,
Merit Times, the Merit Times Shareholders, and Emerald shall execute and deliver
to the other, at or prior to the Closing, such further letters of
representation, acknowledgment, suitability, or the like as Merit Times or
Emerald and their respective counsel may reasonably request in connection with
reliance on exemptions from registration under such securities
laws.
(d) The
Merit Times Shareholders acknowledges that the basis for relying on exemptions
from registration or qualifications are factual, depending on the conduct of the
various parties, and that no legal opinion or other assurance will be required
or given to the effect that the transactions contemplated hereby are in fact
exempt from registration or qualification.
Section
5.07 Sales of Securities Under
Rule 144, If Applicable.
(a) Emerald
will use its best efforts to at all times satisfy the current public information
requirements of Rule 144 promulgated under the Securities Act so that its
shareholders can sell restricted securities that have been held for one year or
more or such other restricted period as required by Rule 144 as it is from time
to time amended.
17
(b) Upon
being informed in writing by any person holding restricted stock of Emerald that
such person intends to sell any shares under rule 144 promulgated under the
Securities Act (including any rule adopted in substitution or replacement
thereof), Emerald will certify in writing to such person that it is compliance
with Rule 144 current public information requirement to enable such person to
sell such person’s restricted stock under Rule 144, as may be applicable under
the circumstances.
(c) If
any certificate representing any such restricted stock is presented to Emerald’s
transfer agent for registration or transfer in connection with any sales
theretofore made under Rule 144, provided such certificate is duly endorsed for
transfer by the appropriate person(s) or accompanied by a separate stock power
duly executed by the appropriate person(s) in each case with reasonable
assurances that such endorsements are genuine and effective, and is accompanied
by a legal opinion that such transfer has complied with the requirements of Rule
144, as the case may be, Emerald will promptly instruct its transfer agent to
register such transfer and to issue one or more new certificates representing
such shares to the transferee and, if appropriate under the provisions of Rule
144, as the case may be, free of any stop transfer order or restrictive
legend.
Section
5.10 Payment of
Liabilities. Recognizing
the need to extinguish all existing liabilities of Emerald prior to the
Exchange, Merit Times has indicated it will not enter into this Agreement unless
Emerald has arranged for the payment and discharge of all of Emerald’s
liabilities, including all of Emerald’s accounts payable and any outstanding
legal fees incurred prior to the Closing Date. Accordingly, Emerald
has agreed to arrange for the payment and discharge of all such
liabilities.
Section
5.11 Assistance with Post-Closing
SEC Reports and Inquiries. Upon the
reasonable request of Merit Times, after the Closing Date, David Richardson and
Joseph Rozelle shall use their reasonable best efforts to provide such
information available to it, including information, filings, reports, financial
statements or other circumstances of Emerald occurring, reported or filed prior
to the Closing, as may be necessary or required by Emerald for the preparation
of the reports that Emerald is required to file after Closing with the SEC to
remain in compliance and current with its reporting requirements under the
Exchange Act, or filings required to address and resolve matters as may relate
to the period prior to Closing and any SEC comments relating thereto or any SEC
inquiry thereof.
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF EMERALD
The
obligations of Emerald under this Agreement are subject to the satisfaction, at
or before the Closing Date, of the following conditions:
Section
6.01 Accuracy of Representations
and Performance of Covenants. The
representations and warranties made by Merit Times and Merit Times Shareholders
in this Agreement were true when made and shall be true at the Closing Date with
the same force and effect as if such representations and warranties were made at
and as of the Closing Date (except for changes therein permitted by this
Agreement). Merit Times shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by Merit Times prior to or at the Closing. Emerald shall be
furnished with a certificate, signed by a duly authorized executive officer of
Merit Times and dated the Closing Date, to the foregoing effect.
Section
6.02 Officer’s
Certificate. Emerald
shall have been furnished with a certificate dated the Closing Date and signed
by a duly authorized officer of Merit Times to the effect that no litigation,
proceeding, investigation, or inquiry is pending, or to the best knowledge of
Merit Times threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement, or, to the
extent not disclosed in the Merit Times Schedules, by or against Merit Times,
which might result in any material adverse change in any of the assets,
properties, business, or operations of Merit Times.
18
Section
6.03
Good
Standing. Within
fifteen (15) business days from the Closing Date, Emerald shall have received a
certificate of good standing from The Registrar of Corporate Affairs of the
British Virgin Islands, certifying that Merit Times is in good standing as a
company in the British Virgin Islands.
Section
6.04
Approval by Merit
Times Shareholders. The
Exchange shall have been approved by the holders of not less than fifty and one
tenths percent (50.01%) of the shares, including voting power, of Merit Times,
unless a lesser number is agreed to by Emerald.
Section
6.05
No Governmental
Prohibition. No
order, statute, rule, regulation, executive order, injunction, stay, decree,
judgment or restraining order shall have been enacted, entered, promulgated or
enforced by any court or governmental or regulatory authority or instrumentality
which prohibits the consummation of the transactions contemplated
hereby.
Section
6.06
Consents. All
consents, approvals, waivers or amendments pursuant to all contracts, licenses,
permits, trademarks and other intangibles in connection with the transactions
contemplated herein, or for the continued operation of Merit Times after the
Closing Date on the basis as presently operated shall have been
obtained.
Section
6.07 Legal Opinion.
Emerald shall have been furnished with an opinion dated the Closing Date, from
the legal counsel of Merit Times, covering such matters as it relates to this
Agreement and other matters reasonably requested by Emerald.
Section
6.08 Other
Items.
(a) Emerald
shall have received a list containing the name, address, and number of shares
held by the Merit Times Shareholders as of the date of Closing, certified by an
executive officer of Merit Times as being true, complete and accurate;
and
(b) Emerald
shall have received such further opinions, documents, certificates or
instruments relating to the transactions contemplated hereby as Emerald may
reasonably request.
ARTICLE
VII
CONDITIONS
PRECEDENT TO OBLIGATIONS OF MERIT TIMES
AND
THE MERIT TIMES SHAREHOLDERS
The
obligations of Merit Times and the Merit Times Shareholders under this Agreement
are subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section
7.01 Accuracy of Representations
and Performance of Covenants. The
representations and warranties made by Emerald in this Agreement were true when
made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing
Date. Additionally, Emerald shall have performed and complied with
all covenants and conditions required by this Agreement to be performed or
complied with by Emerald.
19
Section
7.02 Closing
Certificate. Merit
Times shall have been furnished with certificates dated the Closing Date and
signed by duly authorized executive officers of Emerald, to the effect that no
litigation, proceeding, investigation or inquiry is pending, or to the best
knowledge of Emerald threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement or,
to the extent not disclosed in the Emerald Schedules, by or against Emerald,
which might result in any material adverse change in any of the assets,
properties or operations of Emerald.
Section
7.03 Officer’s
Certificate. Merit Times shall have been furnished with certificates
dated the Closing Date and signed by duly authorized executive officers of
Emerald, certifying that there are no existing liabilities as of the Closing
Date and that each representations and warranties of Emerald contained in this
Agreement (i) shall have been true and correct as of the date of this Agreement
and (ii) shall be true and correct on and as of the Closing Date with the same
force and effect as if made on and as of the Closing.
Section
7.04 Director’s
Certificate. Merit Times shall have been furnished with a
certificate dated the Closing Date and signed by a director of Emerald,
certifying to Merit Times and the Merit Times Shareholders the resolutions
adopted by the Board of Directors of Emerald approving, as applicable, the
transactions contemplated by this Agreement and the issuance of the Emerald
Ordinary Shares, certifying the certificates of incorporation and the current
versions of its Articles or other incorporation documents and certifying as to
the signatures and authority of persons signing this Agreement and related
documents on its behalf.
Section
7.05 Legal Opinion. Merit
Times shall have been furnished with an opinion dated the Closing Date, from the
legal counsel of Emerald, covering such matters as it relates to this Agreement
and the issuance of the Emerald Ordinary Shares and other matters reasonably
requested by Merit Times.
Section
7.06 Good
Standing. Merit Times shall have received a certificate of
good standing from the Registrar of Companies of Cayman Islands or other
appropriate office, dated as of a date within ten days prior to the Closing Date
certifying that Emerald is in good standing as an exempted company in Cayman
Islands and has filed all tax returns required to have been filed by it to date
and has paid all taxes reported as due thereon.
Section
7.07 No Governmental
Prohibition. No
order, statute, rule, regulation, executive order, injunction, stay, decree,
judgment or restraining order shall have been enacted, entered, promulgated or
enforced by any court or governmental or regulatory authority or instrumentality
which prohibits the consummation of the transactions contemplated
hereby.
Section
7.08 Consents. All
consents, approvals, waivers or amendments pursuant to all contracts, licenses,
permits, trademarks and other intangibles in connection with the transactions
contemplated herein, or for the continued operation of Emerald after the Closing
Date on the basis as presently operated shall have been obtained.
Section
7.9 Shareholder
Report. Merit Times shall receive a shareholder’s report
reflective of all Emerald shareholders which does not exceed 1,281,500 Emerald
Ordinary Shares issued and outstanding as of the day prior to the Closing
Date.
Section
7.10 Other
Items. Merit
Times shall have received further opinions, documents, certificates, or
instruments relating to the transactions contemplated hereby as Merit Times may
reasonably request.
20
ARTICLE
VIII
MISCELLANEOUS
Section
8.01 Brokers. Emerald
and Merit Times agree that, except as set out on Schedule 7.01 attached hereto,
there were no finders or brokers involved in bringing the parties together or
who were instrumental in the negotiation, execution or consummation of this
Agreement. Emerald and Merit Times each agree to indemnify the other
against any claim by any third person other than those described above for any
commission, brokerage, or finder’s fee arising from the transactions
contemplated hereby based on any alleged agreement or understanding between the
indemnifying party and such third person, whether express or implied from the
actions of the indemnifying party.
Section
8.02 Governing
Law. This
Agreement shall be governed by, enforced, and construed under and in accordance
with the laws of the United States of America and, with respect to the matters
of state law, with the laws of the State of Delaware. Venue for all
matters shall be in New York, New York, without giving effect to principles of
conflicts of law thereunder. Each of the parties (a) irrevocably
consents and agrees that any legal or equitable action or proceedings arising
under or in connection with this Agreement shall be brought exclusively in the
federal courts of the United States. By execution and delivery of this
Agreement, each party hereto irrevocably submits to and accepts, with respect to
any such action or proceeding, generally and unconditionally, the jurisdiction
of the aforesaid court, and irrevocably waives any and all rights such party may
now or hereafter have to object to such jurisdiction.
Section
8.03 Notices. Any
notice or other communications required or permitted hereunder
shall be in writing and shall be sufficiently given if personally
delivered to it or sent by telecopy, overnight courier or registered mail or
certified mail, postage prepaid, addressed as follows:
|
|
If
to Merit Times, to:
|
Zhide
Jiang, CEO
Shandong Longkang Juice Co., Ltd. No. 48 South Qingshui Road Laiyang City, Shandong 265200 People’s Republic of China |
|
|
With
copies to:
|
Richard
I. Anslow, Esq.
Anslow
& Jaclin, LLP
195 Route 9 South, Suite 204 Manalapan, New Jersey 07726 |
|
|
If
to Emerald, to:
|
Joseph
Rozelle
c/o Nautilus Global Partners 700 Gemini, Suite 100 Houston, TX 77056 |
|
|
With
copies to:
|
or such
other addresses as shall be furnished in writing by any party in the manner for
giving notices hereunder, and any such notice or communication shall be deemed
to have been given (i) upon receipt, if personally delivered, (ii) on the day
after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
21
Section
8.04 Attorney’s
Fees. In the
event that either party institutes any action or suit to enforce this Agreement
or to secure relief from any default hereunder or breach hereof, the prevailing
party shall be reimbursed by the losing party for all costs, including
reasonable attorney’s fees, incurred in connection therewith and in enforcing or
collecting any judgment rendered therein.
Section
8.05 Confidentiality. Each
party hereto agrees with the other that, unless and until the transactions
contemplated by this Agreement have been consummated, it and its representatives
will hold in strict confidence all data and information obtained with respect to
another party or any subsidiary thereof from any representative, officer,
director or employee, or from any books or records or from personal inspection,
of such other party, and shall not use such data or information or disclose the
same to others, except (i) to the extent such data or information is published,
is a matter of public knowledge, or is required by law to be published; or (ii)
to the extent that such data or information must be used or disclosed in order
to consummate the transactions contemplated by this Agreement. In the
event of the termination of this Agreement, each party shall return to the other
party all documents and other materials obtained by it or on its behalf and
shall destroy all copies, digests, work papers, abstracts or other materials
relating thereto, and each party will continue to comply with the
confidentiality provisions set forth herein.
Section
8.06 Public Announcements and
Filings. Unless
required by applicable law or regulatory authority, none of the parties will
issue any report, statement or press release to the general public, to the
trade, to the general trade or trade press, or to any third party (other than
its advisors and representatives in connection with the transactions
contemplated hereby) or file any document, relating to this Agreement and the
transactions contemplated hereby, except as may be mutually agreed by the
parties. Copies of any such filings, public announcements or
disclosures, including any announcements or disclosures mandated by law or
regulatory authorities, shall be delivered to each party at least one (1)
business day prior to the release thereof.
Section
8.07 Schedules;
Knowledge. Each
party is presumed to have full knowledge of all information set forth in the
other party’s schedules delivered pursuant to this Agreement.
Section
8.08 Third Party
Beneficiaries. This
contract is strictly between Emerald and Merit Times, and, except as
specifically provided, no director, officer, stockholder (other than the Merit
Times Shareholders), employee, agent, independent contractor or any other person
or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section
8.09 Expenses. Subject
to Article VI and VII above, whether or not the Exchange is consummated, each of
Emerald and Merit Times will bear their own respective expenses, including
legal, accounting and professional fees, incurred in connection with the
Exchange or any of the other transactions contemplated hereby.
Section
8.10 Entire
Agreement. This
Agreement represents the entire agreement between the parties relating to the
subject matter thereof and supersedes all prior agreements, understandings and
negotiations, written or oral, with respect to such subject matter.
Section
8.11 Survival;
Termination. The
representations, warranties, and covenants of the respective parties shall
survive the Closing Date and the consummation of the transactions herein
contemplated for a period of two years.
Section
8.12 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument.
22
Section
8.13 Amendment or
Waiver. Every
right and remedy provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or any other
default then, theretofore, or thereafter occurring or existing. At
any time prior to the Closing Date, this Agreement may by amended by a writing
signed by all parties hereto, with respect to any of the terms contained herein,
and any term or condition of this Agreement may be waived or the time for
performance may be extended by a writing signed by the party or parties for
whose benefit the provision is intended.
Section
8.14 Best
Efforts. Subject
to the terms and conditions herein provided, each party shall use its best
efforts to perform or fulfill all conditions and obligations to be performed or
fulfilled by it under this Agreement so that the transactions contemplated
hereby shall be consummated as soon as practicable. Each party also
agrees that it shall use its best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
this Agreement and the transactions contemplated herein.
[Signature
Pages Follow]
23
IN WITNESS WHEREOF, the
corporate parties hereto have caused this Agreement to be executed by their
respective officers, hereunto duly authorized, as of the date first-above
written.
|
EMERALD
ACQUISITION CORPORATION
|
|
|
By:
|
/s/ Joseph Rozelle
|
|
Name:
Joseph Rozelle
|
|
|
Title:
Chief Executive Officer
|
|
|
MERIT
TIMES INTERNATIONAL LIMITED
|
|
|
By:
|
/s/ Zhide Jiang
|
|
Name:
Zhide Jiang
|
|
|
Title:
Managing Director
|
|
|
ACCESS
AMERICA FUND, LP
|
|
|
By:
|
/s/ Christopher
Efird
|
|
Name:
Christopher Efird
|
|
|
Title:
President
|
|
24
Approved
and Accepted by the Merit Times Shareholders:
|
Name
|
Signature
|
|
|
Proud
Glory Limited
|
||
|
Name:
Zhide Jiang
|
||
|
Title: CEO
|
/s/ Zhide Jiang
|
|
|
GEP
Capital Group, LLC
|
||
|
Name:
Gary L. Wolfson
|
||
|
Title:
|
/s/ Gary L Wolfson
|
|
|
Grandview
Capital, Inc.
|
||
|
Name:
Peter Goldstein
|
||
|
Title: Chairman
|
/s/ Peter Goldstein
|
|
|
Cawston
Enterprises Ltd.
|
||
|
Name:
Shaohua Tan
|
||
|
Title: Executive
Director
|
/s/ Shaohua Tan
|
|
|
Zhengang
Sui
|
||
|
/s/ Zhengang Sui
|
||
|
Detao
Wei
|
||
|
/s/ Detao Wei
|
||
|
Peng
Wu
|
||
|
/s/ Peng Wu
|
||
|
Zhimin
Yu
|
||
|
/s/ Zhimin Yu
|
||
|
Yunian
Ai
|
||
|
/s/ Yunian Ai
|
||
|
Wei
Fu
|
||
|
/s/ Wei Fu
|
||
|
Hongying
Ju
|
||
|
/s/ Hongying Ju
|
||
|
Fengjun
Li
|
||
|
/s/ Fengjun
Li
|
25
Table
1: Exchange Shares to be
Issued
|
Name
|
Number of Shares
|
|||
|
Proud
Glory Limited
|
11,306,666 | |||
|
Zhengang
Sui
|
1,045,333 | |||
|
Detao
Wei
|
1,045,333 | |||
|
Peng
Wu
|
1,045,333 | |||
|
Zhimin
Yu
|
1,045,333 | |||
|
Fengjun
Li
|
1,258,667 | |||
|
Wei
Fu
|
1,045,333 | |||
|
Yunian
Ai
|
418,987 | |||
|
Hongying
Ju
|
426,667 | |||
|
GEP
Capital Group, LLC, as trustee
|
1,167,360 | |||
|
Grandview
Capital, Inc.
|
894,293 | |||
|
Cawston
Enterprises Ltd.
|
634,027 | |||
|
Total
|
21,333,332 | |||
26
MERIT
TIMES INTERNATIONAL LIMITED (“Merit Times”)
Share
Exchange Agreement
Merit
Times Schedules
October
22, 2009
Section
1.03
Subsidiaries
Merit
Times owns 100% of the issued and outstanding capital stock of Shandong
MeKeFuBang Food Limited (“MeKeFuBang”), a wholly foreign owned enterprise
incorporated under the laws of the People’s Republic of China
(“PRC”). On June 10, 2009, MeKeFuBang entered into a series of
contractual agreements with Shandong Longkang Juice Co., Ltd. (“Longkang
Juice”), a company incorporated under the laws of the PRC, and its five
shareholders, in which MeKeFuBang effectively assumed management of the
business activities of Longkang Juice and has the right to appoint all
executives and senior management and the members of the board of
directors. After the Combination, Merit Times will become a
wholly-owned subsidiary of Emerald.
Section
1.04
Financial
Statements
Audited
financial statements for the years ending December 31, 2008 and December 31,
2007 and the unaudited financial statements for the quarter ended June 30, 2009
are attached.
Section
1.06
Options and
Warrants
None.
Section
1.07
Absence of Certain Changes
or Events
None.
Section
1.08
Litigation and
Proceedings
None.
Section
1.09
Contracts
None.
Section
1.16
Intellectual
Property
To date,
we do not have any trademark registration for our technologies. However, we rely
on trade secret protection and confidentiality agreements to protect our
proprietary information and know-how and have entered into non-disclosure
agreements with certain of our key employees and executives to protect our trade
secrets. In connection with the technology used to produce bio animal feed, Mr.
Jiang has obtained a patent to protect our technology. The patent number is
200910015442.2. The patent is owned by Zhide Jiang, the Chief Executive Officer
of Longkang Juice.
Sch-1
EMERALD
ACQUISITION CORPORATION (“Emerald”)
Share
Exchange Agreement
Emerald
Schedules
October
22, 2009
Section
2.04
Financial
Statements
Section
2.07
Absence of Certain Changes
or Events
Section
2.08
Litigation and
Proceedings
Section
2.09
Contracts
2