SHAREEXCHANGE AGREEMENT AMONG FREZER,INC., BEFUTINTERNATIONAL CO. LIMITED AND BEFUTCORPORATION FORTHE EXCHANGE OF CAPITALSTOCK OF FREZER,INC. AND BEFUT CORPORATION DATEDAS OF MARCH 13, 2009

 

 

This SHARE EXCHANGE AGREEMENT, dated as of March 13, 2009 (the “Agreement”) by and among Frezer, Inc., a Nevada corporation (the “Company”), BEFUT Corporation, a Nevada corporation (“Befut Nevada”), and Befut International Co. Limited, a company incorporated under the laws of the British Virgin Islands (“Befut BVI”).

 

 

WHEREAS, Befut BVI owns 100% of the issued and outstanding shares of Common Stock of Befut Nevada (the "Befut Nevada Shares");

 

WHEREAS, Befut Nevada owns 2,176,170 shares of Common Stock, $0.001 par value, of the Company (“Company Shares”);

 

WHEREAS, each of the Company, Befut BVI and Befut Nevada believes it is in its best interests for the Company to issue to Befut BVI an aggregate of 120,899,170 Company Shares in exchange for (a) all of the outstanding equity interests in Befut Nevada, including, without limitation, all of the Befut Nevada Shares and (b) the cancellation of 2,176,170 Company Shares owned by Befut Nevada, upon the terms and subject to the conditions set forth in this Agreement; and

 

WHEREAS, it is the intention of the parties that: (i) said exchange of shares shall qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii) said exchange shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended and in effect on the date of this Agreement (the “Securities Act”).

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto hereby agree as follows:

 

 

Section 1.1         Agreement to Exchange Company Shares for Befut Nevada Shares and Cancellation of Company Shares Held by Befut Nevada.  On the Closing Date (as hereinafter defined) and subject to the terms and conditions set forth in this Agreement, Befut BVI shall sell, assign, transfer, convey and deliver all of the equity interests in Befut Nevada, including, without limitation, all of the outstanding Befut Nevada Shares, to the Company, and the Company shall accept such equity interest in Befut Nevada from the Befut BVI in exchange for the issuance to Befut BVI of 120,899,170 newly issued Company Shares. In addition, (i) simultaneously with said exchange, Befut Nevada shall relinquish all right, title and interest to all of the 2,176,170 Company Shares held by Befut Nevada and all of such Company Shares shall immediately be cancelled; and (ii) in connection with the Company’s financing of $500,000 to be consummated immediately after the share exchange herein, pursuant to which the Company shall issue notes convertible to a total of 3,130,871 shares of Common Stock at the option of the note holders within one year (including the one year anniversary) from the Closing Date, Befut BVI shall relinquish all right, title and interest to 3,130,871 Company Shares held by Befut BVI and such Company Shares shall immediately be cancelled upon the consummation of the financing.

Section 1.2         Capitalization.  On the Closing Date, immediately before the transactions to be consummated pursuant to this Agreement, the Company shall have authorized (a) 200,000,000 shares of Common Stock, $.001 par value per share, of which 4,267,000 shares shall be issued and outstanding, all of which are duly authorized, validly issued and fully paid and 2,176,170 of which shall be held by Befut Nevada; and (b) 10,000,000 shares of Preferred Stock, $.001 par value per share, of which no shares are issued or outstanding.

Section 1.3         Closing.  The closing of the exchange to be made pursuant to this Agreement (the "Closing") shall take place at 10:00 a.m. E.S.T. on the day when the conditions to closing set forth in Articles V and VI have been satisfied or waived, or at such other time and date as the parties hereto shall agree in writing but no later than March 13, 2009 (the "Closing Date"), at the offices of Guzov Ofsink, LLC, 600 Madison Avenue, 14th Floor, New York, New York 10022. At the Closing, (a) the Company shall deliver to Befut BVI a stock certificate or stock certificates representing an aggregate of 120,899,170 Company Shares, (b) Befut BVI shall deliver to the Company a stock certificate or stock certificates representing all of the outstanding Befut Nevada Shares, duly endorsed in blank for transfer or accompanied by appropriate stock powers duly executed in blank and (c) Befut Nevada shall deliver to the Company a stock certificate or stock certificates representing an aggregate of 2,176,170 Company Shares duly endorsed in blank for transfer or accompanied by appropriate stock powers duly executed in blank so that all of such shares may be cancelled.

 

1.4           Tax Treatment. The exchange described herein is intended to comply with Section 368(a)(1)(B) of the Code, and all applicable regulations thereunder. In order to ensure compliance with said provisions, the parties agree to take whatever steps may be necessary, including, but not limited to, the amendment of this Agreement.

Each of Befut BVI and Befut Nevada hereby, jointly and severally, represents, warrants and agrees as follows:

Section 2.1         Corporate Organization

(a)           Befut Nevada is a corporation duly organized, validly existing and in good standing under the laws of Nevada, and has all requisite corporate power and authority to own its properties and assets and to conduct its business and is duly qualified to do business in good standing in each jurisdiction in which the nature of the business conducted by Befut Nevada or the ownership or leasing of its properties makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a material adverse effect on the business, operations, properties, assets, condition or results of operation of (a "Befut Nevada Material Adverse Effect");

(b)           Copies of the Articles of Incorporation and By-laws of Befut Nevada, with all amendments thereto to the date hereof, have been furnished to the Company, and such copies are accurate and complete as of the date hereof.  The minute books of Befut Nevada are current as required by law, contain the minutes of all meetings of the Board of Directors and shareholders of Befut Nevada from its date of incorporation to the date of this Agreement, and adequately reflect all material actions taken by the Board of Directors and shareholders of Befut Nevada.

(c)           Befut BVI is a corporation duly organized, validly existing and in good standing under the laws of the British Virgin Islands, and has all requisite corporate power and authority to own its properties and assets and to conduct its business and is duly qualified to do business in good standing in each jurisdiction in which the nature of the business conducted by Befut BVI or the ownership or leasing of its properties makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a material adverse effect on the business, operations, properties, assets, condition or results of operation of (a "Befut BVI Material Adverse Effect");

(d)           Copies of the Memorandum of Association and Articles of Association of Befut BVI, with all amendments thereto to the date hereof, have been furnished to the Company, and such copies are accurate and complete as of the date hereof.  The minute books of Befut BVI are current as required by law, contain the minutes of all meetings of the Board of Directors and shareholders of Befut BVI from its date of incorporation to the date of this Agreement, and adequately reflect all material actions taken by the Board of Directors and shareholders of Befut BVI.

Section 2.2 Capitalization of Befut Nevada and Befut BVI.  The authorized capital stock of Befut Nevada consists of 50,000,000 shares of Common Stock, par value $.001 per share, of which 28,756,134 shares are issued and outstanding, all of which are duly authorized, validly issued and fully paid and held by Befut BVI. The authorized capital stock of Befut BVI consists of 50,000 shares, par value US$1.00 per share, of which 11,500 shares are issued and outstanding, all of which are duly authorized, validly issued and fully paid. All of the Befut Nevada Shares to be transferred to the Company pursuant to this Agreement have been duly authorized and will be validly issued, fully paid and non-assessable and no personal liability will attach to the ownership thereof and in each instance, have been issued in accordance with the registration requirements of applicable securities laws or an exemption therefrom.  As of the date of this Agreement there are no outstanding options, warrants, agreements, commitments, conversion rights, preemptive rights or other rights to subscribe for, purchase or otherwise acquire any shares of capital stock or any un-issued or treasury shares of capital stock of either Befut Nevada or Befut BVI. As of the date of this Agreement, Befut Nevada owns all of the issued and outstanding equity or voting interests in Hongkong BEFUT Co., Limited, which owns all of the equity interests in Befut Electric (Dalian) Co., Ltd. (the “WFOE”). The WFOE has exclusive business relationship with Dalian Befut Wire and Cable Manufacturing Co., Ltd (“Dalian Befut”).  Dalian Befut is duly organized, validly existing and in good standing under the laws of the Peoples’ Republic of China (“PRC”) and has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted and is duly qualified to do business, is in good standing in each jurisdiction wherein the nature of the business conducted by Dalian Befut or the ownership or leasing of its properties makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a material adverse effect on the business, operations, properties, assets, condition or results of operation of Dalian Befut (a "Dalian Befut Material Adverse Effect")

Section 2.3         Subsidiaries and Equity Investments. Except as set forth in Schedule 2.3, neither Befut Nevada nor Befut BVI has any subsidiaries or holds any equity interest in any corporation, partnership, joint venture or other entity.

Section 2.4         Authorization and Validity of Agreements.  Each of Befut Nevada and Befut BVI has all corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby and upon the execution and delivery by the Company and the Company’s performance of its obligations herein, will constitute, a legal, valid and binding obligation of Befut Nevada and Befut BVI.  The execution and delivery of this Agreement by each of Befut Nevada and Befut BVI and the consummation by them of the transactions contemplated hereby have been duly authorized by all necessary corporate action of Befut Nevada and Befut BVI, and no other corporate proceedings on the part of Befut Nevada and Befut BVI are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.

Section 2.5         No Conflict or Violation.  (a) The execution, delivery and performance of this Agreement by Befut Nevada do not and will not violate or conflict with any provision of Befut Nevada’s Articles of Incorporation or By-laws, and does not and will not violate any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, nor violate or result in a breach of or constitute (with due notice or lapse of time or both) a default under, or give to any other entity any right of termination, amendment, acceleration or cancellation of, any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which Befut Nevada is a party or by which it is bound or to which any of its  properties or assets is subject, nor will it result in the creation or imposition of any lien, charge or encumbrance of any kind whatsoever upon any of the properties or assets of Befut Nevada, nor will it result in the cancellation, modification, revocation or suspension of any of the licenses, franchises, permits to which Befut Nevada is bound.

(b) The execution, delivery and performance of this Agreement by Befut BVI do not and will not violate or conflict with any provision of Befut BVI’s Memorandum of Association and Articles of Association and does not and will not violate any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, nor violate or result in a breach of or constitute (with due notice or lapse of time or both) a default under, or give to any other entity any right of termination, amendment, acceleration or cancellation of, any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which Befut BVI is a party or by which it is bound or to which any of its  properties or assets is subject, nor will it result in the creation or imposition of any lien, charge or encumbrance of any kind whatsoever upon any of the properties or assets of Befut BVI, nor will it result in the cancellation, modification, revocation or suspension of any of the licenses, franchises, permits to which Befut BVI is bound.

Section 2.6         Consents and Approvals.  No consent, waiver, authorization or approval of any governmental or regulatory authority, domestic or foreign, or of any other person, firm or corporation, is required in connection with the execution and delivery of this Agreement by either Befut Nevada or Befut BVI or the performance by either Befut Nevada or Befut BVI of its obligations hereunder.

Section 2.7         Absence of Certain Changes or Events.

(a) Since its inception:

(i)  and as of the date of this Agreement, Befut Nevada does not know or have  reason to know of any event, condition, circumstance or prospective development which threatens or may threaten to have a material adverse effect on the assets, properties, operations, prospects, net income or financial condition of Befut Nevada;

(ii) there has not been any declaration, setting aside or payment of dividends or distributions with respect to shares of capital stock of Befut Nevada; and

(iii) there has not been an increase in the compensation payable or to become payable to any director or officer of Befut Nevada.

(b) Since its inception:

(i)  and as of the date of this Agreement, Befut BVI does not know or have  reason to know of any event, condition, circumstance or prospective development which threatens or may threaten to have a material adverse effect on the assets, properties, operations, prospects, net income or financial condition of Befut BVI;

(ii) there has not been any declaration, setting aside or payment of dividends or distributions with respect to shares of capital stock of Befut BVI; and

(iii) there has not been an increase in the compensation payable or to become payable to any director or officer of Befut BVI.

Section 2.8         Disclosure.  This Agreement and any certificate attached hereto or delivered in accordance with the terms hereby by or on behalf of either Befut Nevada or Befut BVI in connection with the transactions contemplated by this Agreement, when taken together, do not contain any untrue statement of a material fact or omit any material fact necessary in order to make the statements contained herein and/or therein not misleading.

Section 2.9         Litigation.  There is no action, suit, proceeding or investigation pending or threatened against either Befut Nevada or Befut BVI or any of their respective subsidiaries and Dalian Befut that may affect the validity of this Agreement or the right of either Befut Nevada or Befut BVI to enter into this Agreement or to consummate the transactions contemplated hereby.

Section 2.10       [Reserved.]

Section 2.11       Investment Representations.  (a) The Company Shares to be issued to Befut BVI will be acquired by Befut BVI hereunder solely for the account of Befut BVI, for investment, and not with a view to the resale or distribution thereof. Befut BVI understands and is able to bear any economic risks associated with such investment in the Company Shares. Befut BVI has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the Company Shares to be acquired under this Agreement.  Befut BVI further has had an opportunity to ask questions and receive answers from the Company’s directors regarding the Company and to obtain additional information (to the extent the Company’s directors possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Befut BVI  or to which Befut BVI had access. Befut BVI is at the time of the offer and execution of this Agreement domiciled and resident outside the United States (a “Non-U.S. Shareholder”).

Section 2.12       Tax Returns, Payments and Elections. Each of Befut Nevada and Befut BVI has timely filed all tax returns, statements, reports, declarations and other forms and documents and has, to date, paid all taxes due.

Section 2.13       Survival.  Each of the representations and warranties set forth in this Article II shall be deemed represented and made by Befut Nevada and Befut BVI at the Closing as if made at such time and shall survive the Closing for a period terminating on the second anniversary of the date of this Agreement.

The Company represents, warrants and agrees as follows:

Section 3.1         Corporate Organization.

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Nevada and has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted and is duly qualified to do business, is in good standing in each jurisdiction wherein the nature of the business conducted by the Company or the ownership or leasing of its properties makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a material adverse effect on the business, operations, properties, assets, condition or results of operation of the Company (a "Company Material Adverse Effect").

(b)   Copies of the Certificate of Incorporation and By-laws of the Company, with all amendments thereto to the date hereof, have been furnished to each of Befut Nevada and Befut BVI, and such copies are accurate and complete as of the date hereof.  The minute books of the Company are current as required by law, contain the minutes of all meetings of the Board of Directors and shareholders of the Company, and adequately reflect all material actions taken by the Board of Directors, shareholders of the Company.

Section 3.2         Capitalization of the Company.  On the Closing Date, immediately before the transactions to be consummated pursuant to this Agreement, the Company shall have authorized 200,000,000 Company Shares, of which an aggregate of 4,267,000 will be issued and outstanding. There are no outstanding options, warrants, agreements, commitments, conversion rights, preemptive rights or other rights to subscribe for, purchase or otherwise acquire any shares of capital stock or other equity or voting interest or any unissued or treasury shares of capital stock of the Company, except for as set forth on Schedule 3.2.  As of the date hereof and on the Closing Date, all of the 2,176,170 Company Shares owned by Befut Nevada are owned free and clear of any liens, claims or encumbrances and Befut Nevada has, and on the Closing Date will have, the right to transfer to the Company for cancellation all of such 2,176,170 Company Shares without the consent of any other person or entity.

Section 3.3.       Authorization and Validity of Agreements.  The Company has all corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.  Befut Nevada, which is the holder of more than a majority of the outstanding Company Shares, has approved this Agreement on behalf of the Company and no other stockholder approvals are required to consummate the transactions contemplated hereby. No other proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.

Section 3.4          No Conflict or Violation.  The execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with any provision of the constituent documents of the Company, and does not and will not violate any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, nor violate, result in a breach of or constitute (with due notice or lapse of time or both) a default under or give to any other entity any right of termination, amendment, acceleration or cancellation of any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien, charge or encumbrance of any kind whatsoever upon any of the properties or assets of the Company, nor result in the cancellation, modification, revocation or suspension of any of the licenses, franchises, permits to which the Company is bound.

Section 3.5          Investment Representations. The Befut Nevada Shares will be acquired hereunder solely for the account of the Company, for investment, and not with a view to the resale or distribution thereof. The Company understands and is able to bear any economic risks associated with such investment in the Befut Nevada Shares. The Company has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the Befut Nevada Shares to be acquired under this Agreement.  The Company further has had an opportunity to ask questions and receive answers from Befut Nevada’s directors regarding Befut Nevada’s and to obtain additional information (to the extent Befut Nevada’s directors possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to the Company or to which the Company had access.

Section 3.6         Brokers’ Fees. The Company has no liability to pay any fees or commissions or other consideration to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

Section 3.7         Disclosure.  This Agreement, the schedules hereto and any certificate attached hereto or delivered in accordance with the terms hereby by or on behalf of the Company in connection with the transactions contemplated by this Agreement, when taken together, do not contain any untrue statement of a material fact or omit any material fact necessary in order to make the statements contained herein and/or therein not misleading.

Section  3.8         Survival.  Each of the representations and warranties set forth in this Article III shall be deemed represented and made by the Company at the Closing as if made at such time and shall survive the Closing for a period terminating on the second anniversary of the date of this Agreement.

Section 4.1          Certain Changes and Conduct of Business.

(a) From and after the date of this Agreement and until the Closing Date, each of Befut Nevada and Befut BVI shall, and shall cause Dalian Befut to, conduct its business solely in the ordinary course consistent with past practices and, in a manner consistent with all of its representations, warranties or covenants, and without the prior written consent of the Company will not, and will prohibit Dalian Befut to, except as required or permitted pursuant to the terms hereof:

(i) make any material change in the conduct of its businesses and/or operations or enter into any transaction other than in the ordinary course of business consistent with past practices;

 

(ii) make any change in its Articles of Incorporation or By-laws or memorandum of Association and Articles of Association; issue any additional shares of capital stock or equity securities or grant any option, warrant or right to acquire any capital stock or equity securities or issue any security convertible into or exchangeable for its capital stock or alter in any material term of any of its outstanding securities or make any change in its outstanding shares of capital stock or its capitalization, whether by reason of a reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, stock dividend or otherwise;

(iii)          A.          incur, assume or guarantee any indebtedness for borrowed money, issue any notes, bonds, debentures or other corporate securities or grant any option, warrant or right to purchase any thereof, except pursuant to transactions in the ordinary course of business consistent with past practices; or

B.

issue any securities convertible or exchangeable for debt or equity securities of its capital stock;

(iv) make any sale, assignment, transfer, abandonment or other conveyance of any of its assets or any part thereof, except pursuant to transactions in the ordinary course of business consistent with past practice;

(v) subject any of its assets, or any part thereof, to any lien or suffer such to be imposed other than such liens as may arise in the ordinary course of business consistent with past practices by operation of law which will not have a Befut Nevada Material Adverse Effect or Befut BVI Material Adverse Effect;

(vi) acquire any assets, raw materials or properties, or enter into any other transaction, other than in the ordinary course of business consistent with past practices;

(vii) enter into any new (or amend any existing) employee benefit plan, program or arrangement or any new (or amend any existing) employment, severance or consulting agreement, grant any general increase in the compensation of officers or employees (including any such increase pursuant to any bonus, pension, profit-sharing or other plan or commitment) or grant any increase in the compensation payable or to become payable to any employee, except in accordance with pre-existing contractual provisions or consistent with past practices;

(viii) make or commit to make any material capital expenditures;

(ix) pay, loan or advance any amount to, or sell, transfer or lease any properties or assets to, or enter into any agreement or arrangement with, any of its affiliates;

(x) guarantee any indebtedness for borrowed money or any other obligation of any other person;

(xi) fail to keep in full force and effect insurance comparable in amount and scope to coverage maintained by it (or on behalf of it) on the date hereof;

(xii) take any other action that would cause any of the representations and warranties made by it in this Agreement not to remain true and correct in all material aspect;

(xiii) make any material loan, advance or capital contribution to or investment in any person;

(xiv) make any material change in any method of accounting or accounting principle, method, estimate or practice;

(xv) settle, release or forgive any claim or litigation or waive any right; or

(xvi) commit itself to do any of the foregoing.

(b)    From and after the date of this Agreement and until the Closing Date, the Company will:

(i)  continue to maintain, in all material respects, its properties in accordance with present practices in a condition suitable for its current use;

(ii) file, when due or required, federal, state, foreign and other tax returns and other reports required to be filed and pay when due all taxes, assessments, fees and other charges lawfully levied or assessed against it, unless the validity thereof is contested in good faith and by appropriate proceedings diligently conducted;

(iii) continue to conduct its business in the ordinary course consistent with past practices;

(iv) keep its books of account, records and files in the ordinary course and in accordance with existing practices; and

(v) continue to maintain existing business relationships.

(c) From and after the date of this Agreement and until the Closing Date, the Company will not:

(i) make any material change in the conduct of its businesses and/or operations or enter into any transaction other than in the ordinary course of business consistent with past practices;

(ii) make any change in its Articles of Incorporation, Bylaws or other governing documents; issue any additional shares of capital stock or equity securities or grant any option, warrant or right to acquire any capital stock or equity securities or issue any security convertible into or exchangeable for its capital stock or alter in any material term of any of its outstanding securities or make any change in its outstanding shares of capital stock or its capitalization, whether by reason of a reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, stock dividend or otherwise;

(iii)          A.          incur, assume or guarantee any indebtedness for borrowed money, issue any notes, bonds, debentures or other corporate securities or grant any option, warrant or right to purchase any thereof, except pursuant to transactions in the ordinary course of business consistent with past practices; or

B.

issue any securities convertible or exchangeable for debt or equity securities of the Company;

(iv) make any sale, assignment, transfer, abandonment or other conveyance of any of its assets or any part thereof, except pursuant to transactions in the ordinary course of business consistent with past practice;

(v) subject any of its assets, or any part thereof, to any lien or suffer such to be imposed other than such liens as may arise in the ordinary course of business consistent with past practices by operation of law which will not have a Company Material Adverse Effect;

(vi) acquire any assets, raw materials or properties, or enter into any other transaction, other than in the ordinary course of business consistent with past practices;

(vii) enter into any new (or amend any existing) employee benefit plan, program or arrangement or any new (or amend any existing) employment, severance or consulting agreement, grant any general increase in the compensation of officers or employees (including any such increase pursuant to any bonus, pension, profit-sharing or other plan or commitment) or grant any increase in the compensation payable or to become payable to any employee, except in accordance with pre-existing contractual provisions or consistent with past practices;

(viii) make or commit to make any material capital expenditures;

(ix) pay, loan or advance any amount to, or sell, transfer or lease any properties or assets to, or enter into any agreement or arrangement with, any of its affiliates;

(x) guarantee any indebtedness for borrowed money or any other obligation of any other person;

(xi) fail to keep in full force and effect insurance comparable in amount and scope to coverage maintained by it (or on behalf of it) on the date hereof;

(xii) take any other action that would cause any of the representations and warranties made by it in this Agreement not to remain true and correct in all material aspect;

(xiii) make any material loan, advance or capital contribution to or investment in any person;

(xiv)  make any material change in any method of accounting or accounting principle, method, estimate or practice;

(xv) settle, release or forgive any claim or litigation or waive any right; or

(xvi) commit itself to do any of the foregoing.

Section 4.2           Access to Properties and Records.  The Company shall afford the accountants, counsel and authorized representatives of each of befut Nevada and Befut BVI, and each of Befut Nevada and Befut BVI shall afford to the Company’s accountants, counsel and authorized representatives full access during normal business hours throughout the period prior to the Closing Date (or the earlier termination of this Agreement) to all of such parties’ properties, books, contracts, commitments and records and, during such period, shall furnish promptly to the requesting party all other information concerning the other party's business, properties and personnel as the requesting party may reasonably request, provided that no investigation or receipt of information pursuant to this Section 4.2 shall affect any representation or warranty of or the conditions to the obligations of any party.

Section 4.3           Negotiations.  From and after the date hereof until the earlier of the Closing or the termination of this Agreement, no party to this Agreement nor its officers or directors (subject to such director's fiduciary duties) nor anyone acting on behalf of any party or other persons shall, directly or indirectly, encourage, solicit, engage in discussions or negotiations with, or provide any information to, any person, firm, or other entity or group concerning any merger, sale of substantial assets, purchase or sale of shares of capital stock or similar transaction involving any party.  A party shall promptly communicate to any other party any inquiries or communications concerning any such transaction which they may receive or of which they may become aware of.

Section 4.4           Consents and Approvals.  The parties shall:

(a) use their reasonable commercial efforts to obtain all necessary consents, waivers, authorizations and approvals of all governmental and regulatory authorities, domestic and foreign, and of all other persons, firms or corporations required in connection with the execution, delivery and performance by them of this Agreement; and

(b) diligently assist and cooperate with each party in preparing and filing all documents required to be submitted by a party to any governmental or regulatory authority, domestic or foreign, in connection with such transactions and in obtaining any governmental consents, waivers, authorizations or approvals which may be required to be obtained connection in with such transactions.

Section 4.5          Public Announcement.  Unless otherwise required by applicable law, the parties hereto shall consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement and shall not issue any such press release or make any such public statement prior to such consultation.

Section 4.6           Stock Issuance.  From and after the date of this Agreement until the Closing Date, none of the parties shall issue any additional shares of its capital stock.

The obligations of the Company to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by the Company in its sole discretion:

Section 5.1          Representations and Warranties of Befut Nevada and Befut BVI. All representations and warranties made by Befut Nevada and Befut BVI in this Agreement shall be true and correct on and as of the Closing Date as if again made by Befut Nevada and Befut BVI as of such date.

Section 5.2          Agreements and Covenants.  Each of Befut Nevada and Befut BVI shall have performed and complied in all material respects to all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date.

Section 5.3          Consents and Approvals.  Consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement shall be in full force and effect on the Closing Date.

Section 5.4          No Violation of Orders.  No preliminary or permanent injunction or other order issued by any court or governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of either Befut Nevada, Befut BVI or Dalian Befut shall be in effect; and no action or proceeding before any court or governmental or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person, or entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

Section 5.5          Other Closing Documents.  The Company shall have received such other certificates, instruments and documents in confirmation of the representations and warranties of Befut Nevada and Befut BVI or in furtherance of the transactions contemplated by this Agreement as the Company or its counsel may reasonably request.

Section 5.6          Additional Funding. The Company shall have entered into formal agreement for a financing of $500,000 in the aggregate from third party investor(s) to further the business objectives of Dalian Befut, which financing may close immediately after Closing Date.

The obligations of Befut Nevada and Befut BVI to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by both of them in their sole discretion:

Section 6.1          Representations and Warranties of the Company.  All representations and warranties made by the Company in this Agreement shall be true and correct on and as of the Closing Date as if again made by it on and as of such date.

Section 6.2          Agreements and Covenants.  The Company shall have performed and complied in all material respects to all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date.

Section 6.3          Consents and Approvals.  All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date.

Section 6.4          No Violation of Orders.  No preliminary or permanent injunction or other order issued by any court or other governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, domestic or foreign, that declares this Agreement invalid or unenforceable in any respect or which prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of the Company, taken as a whole, shall be in effect; and no action or proceeding before any court or government or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person, or entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

Section 6.5.         Other Closing Documents.  Befut Nevada and Befut BVI shall have received such other certificates, instruments and documents in confirmation of the representations and warranties of the Company or in furtherance of the transactions contemplated by this Agreement as Befut Nevada and Befut BVI or their counsel may reasonably request.

SECTION 7.1      Methods of Termination.  This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time before the Closing:

(a) By the mutual written consent of the parties;

(b) By either or both of Befut Nevada and Befut BVI, upon a material breach of any representation, warranty, covenant or agreement on the part of the Company set  forth in this Agreement, or if any representation or warranty of the Company shall become untrue, in either case such that any of the conditions set forth in Article VI hereof would not be satisfied (a "Company Breach"), and such breach shall, if capable of cure, has not been cured within ten (10) days after receipt by the party in breach of a notice from the non-breaching party setting forth in detail the nature of such breach;

(c) By the Company, upon a material breach of any representation, warranty, covenant or agreement on the part of either or both of Befut Nevada or Befut BVI set forth in this Agreement, or, if any representation or warranty of Befut Nevada and/or Befut BVI shall become untrue, in either case such that any of the conditions set forth in Article V hereof would not be satisfied (a "Befut Breach"), and such breach shall, if capable of cure, not have been cured within ten (10) days after receipt by the party in breach of a written notice from the non-breaching party setting forth in detail the nature of such breach.;

(d)  By any party, if the Closing shall not have consummated before ninety (90) days after the date hereof; provided, however, that this Agreement may be extended by written notice of either the Company, on one hand, and either or both of Befut Nevada or Befut BVI, on the other hand, if the Closing shall not have been consummated as a result of the other party or parties having failed to receive all required regulatory approvals or consents with respect to this transaction or as the result of the entering of an order as described in this Agreement; and further provided, however, that the right to terminate this Agreement under this Section 7.1(d) shall not be available to any party whose failure to fulfill any obligations under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before this date.

(e)  By any party if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling the parties hereto shall use its best efforts to lift), which permanently restrains, enjoins or otherwise prohibits the transactions contemplated by this Agreement.

Section 7.2          Procedure Upon Termination.  In the event of termination and abandonment of this Agreement pursuant to Section 7.1, written notice thereof shall forthwith be given to the other parties and this Agreement shall terminate and the transactions contemplated hereby shall be abandoned, without further action.  If this Agreement is terminated as provided herein, no party to this Agreement shall have any liability or further obligation to any other party to this Agreement; provided, however, that no termination of this Agreement pursuant to this Article VII shall relieve any party of liability for a breach of any provision of this Agreement occurring before such termination.

Section 8.1          Consistency in Reporting.  Each party hereto agrees that if the characterization of any transaction contemplated in this Agreement or any ancillary or collateral transaction is challenged, each party hereto will testify, affirm and ratify that the characterization contemplated in such agreement was the characterization intended by the party; provided, however, that nothing herein shall be construed as giving rise to any obligation if the reporting position is determined to be incorrect by final decision of a court of competent jurisdiction.

Section 8.2.         Cancellation of Company Shares.

(a) Simultaneously with said exchange, Befut Nevada shall relinquish all right, title and interest to all of the 2,176,170 Company Shares held by Befut Nevada and all of such Company Shares shall immediately be cancelled; and

(b) In connection with the Company’s financing of $500,000 to be consummated immediately after the share exchange herein, pursuant to which the Company shall issue notes convertible to a total of 3,130,871 shares of Common Stock at the option of the note holders within one year (including the one year anniversary) from the Closing Date, Befut BVI shall relinquish all right, title and interest to 3,130,871 Company Shares held by Befut BVI and such Company Shares shall immediately be cancelled upon the consummation of the financing.

Section 9.1          Survival of Provisions.  The respective representations, warranties, covenants and agreements of each of the parties to this Agreement (except covenants and agreements which are expressly required to be performed and are performed in full on or before the Closing Date) shall survive the Closing Date and the consummation of the transactions contemplated by this Agreement, subject to Sections 2.13, 3.8 and 9.1. In the event of a breach of any of such representations, warranties or covenants, the party to whom such representations, warranties or covenants have been made shall have all rights and remedies for such breach available to it under the provisions of this Agreement or otherwise, whether at law or in equity, regardless of any disclosure to, or investigation made by or on behalf of such party on or before the Closing Date.

Section 9.2          Publicity.  No party shall cause the publication of any press release or other announcement with respect to this Agreement or the transactions contemplated hereby without the consent of the other parties, unless a press release or announcement is required by law.  If any such announcement or other disclosure is required by law, the disclosing party agrees to give the non-disclosing parties prior notice and an opportunity to comment on the proposed disclosure.

Section 9.3          Successors and Assigns.  This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided, however, that no party shall assign or delegate any of the obligations created under this Agreement without the prior written consent of the other parties.

Section 9.4          Fees and Expenses.  Except as otherwise expressly provided in this Agreement, all legal and other fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs or expenses.

Section 9.5          Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been given or made if in writing and delivered personally or sent by registered or certified mail (postage prepaid, return receipt requested) to the parties at the following addresses:

If to the Company, to:

Frezer, Inc.

No. 90-1 Hongji Street

Xigang District Dalian City

Liaoning Province, PRC, 116011

Attn: Hongbo Cao

Telephone: 0411-83678755

with a copy to:

Guzov Ofsink, LLC

600 Madison Avenue, 14th Floor

New York, New York 10022

Attn: Elizabeth Chen, Esq.

Fax: 212 ###-###-####

If to either Befut Nevada or Befut BVI, to:

No. 90-1 Hongji Street

Xigang District Dalian City

Liaoning Province, PRC, 116011

Attn: Hongbo Cao

Telephone: 0411-83678755

or to such other persons or at such other addresses as shall be furnished by any party by like notice to the others, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed. No change in any of such addresses shall be effective insofar as notices under this Section 9.5 are concerned unless such changed address is located in the United States of America and notice of such change shall have been given to such other party hereto as provided in this Section 9.5

Section 9.6          Entire Agreement.  This Agreement, together with the exhibits hereto, represents the entire agreement and understanding of the parties with reference to the transactions set forth herein and no representations or warranties have been made in connection with this Agreement other than those expressly set forth herein or in the exhibits, certificates and other documents delivered in accordance herewith.  This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement and all prior drafts of this Agreement, all of which are merged into this Agreement.  No prior drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action or suit involving this Agreement.

Section 9.7          Severability.  This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible so as to be valid and enforceable.

Section 9.8          Titles and Headings.  The Article and Section headings contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.

Section 9.9          Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.

Section 9.10        Convenience of Forum; Consent to Jurisdiction.  The parties to this Agreement, acting for themselves and for their respective successors and assigns, without regard to domicile, citizenship or residence, hereby expressly and irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent and subject themselves to the jurisdiction of, the courts of the State of New York located in County of New York, and/or the United States District Court for the Southern District of New York, in respect of any matter arising under this Agreement. Service of process, notices and demands of such courts may be made upon any party to this Agreement by personal service at any place where it may be found or giving notice to such party as provided in Section 9.5.

Section 9.11        Enforcement of the Agreement.  The parties hereto agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereto, this being in addition to any other remedy to which they are entitled at law or in equity.

Section 9.12        Governing Law.  This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of New York without giving effect to the choice of law provisions thereof.

 

Section 9.13        Amendments and Waivers.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.