Share Exchange Agreement among Northport Investments Inc., ATC Systems Inc., Dalian Telecommunication and Electronic Technology Co Ltd, and Shareholders

Contract Categories: Business Finance › Exchange Agreements
Summary

This agreement, dated May 6, 2002, is between Northport Investments Inc. (a Nevada company), ATC Systems Inc. (a British Columbia company), Dalian Telecommunication and Electronic Technology Co Ltd, and several individual shareholders. The shareholders agree to exchange all their shares in ATC Systems Inc. for 16,140,000 shares in Northport Investments Inc. The agreement ensures that Northport acquires 100% of ATC, which owns a majority stake in a Chinese joint venture operating an online tax payment system. The transaction is structured to be tax-free for the shareholders and includes standard representations, warranties, and closing conditions.

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EX-1.2 5 sdc125c.txt SHARE EXCHANGE AGREEMENT Share Exchange Agreement This Agreement as of the 6th May 2002. Jia Zhang Bo, Zhao Yan,Xiang Dong Liu business persons of Rm 512A no 1 Huoju Rd. Qixianling Industrial Base High-Tech Zone FJV PR China Yao Gao businesswoman of 5 Xiao Bao Fang Hu Tong Dong Dan Dongcheng District Beijing PRC Wei Guo Rm businessman of 102# 66-2 Wanguanhe Rd. Haidan District Beijing PRC Edward Chen businessman of ###-###-#### Parkway Blvd. Coquitlam British Columbia Canada Richard Wang businessman of 2 7051 Ash Cres. Vancouver British Columbia Canada Karen Dadson businesswoman of 3263 West 48th Ave. Vancouver British Columbia Canada Brian Roberts businessman of 7057 Woodcrest Place Delta British Columbia Jia Zhang Bo representing those persons described in schedule A AND Dalian Telecommunication and Electronic Technology Co Ltd with an office at Rm 512A no 1 Huoju Rd. Qixianling Industrial Base High-Tech Zone FJV PR China (collectively called the Shareholders) AND Northport Investments Inc., a Nevada Company with international offices at 8980 Fraserwood Court Unit # 10 Burnaby British Columbia (Pubco) AND ATC Systems Inc., a British Columbia Company with offices at 8980 Fraserwood Court Unit # 10 Burnaby British Columbia Canada (ATC) WHEREAS: A The Shareholders are the registered and beneficial shareholders of all of the shares of ATC. B. ATC owns 90% of DALIAN NORTHPORT INFORMATION CO LTD. (FJV), a Chinese foreign joint venture company, C. FJV recently acquired a system application called Tenet being a online tax payment service business to collect Federal taxes in China. D. Tenet is launched in Dalian and wishes to expand to other parts of China. E. The parties hereto wish to enter into a tax free exchange of their shares to result in PUBCO acquiring 100% of the issued and outstanding shares of ATC in exchange for shares in PUBCO as more particularly described herein: NOW THEREFORE this Agreement witnesses that in consideration of the premises and the respective covenants and agreements herein contained, the parties hereto covenant and agree as follows: DEFINITIONS and INTERPRETATIONS 1.0 In this Agreement and the recitals hereto, unless the context otherwise requires, the following terms shall have the meanings hereinafter set forth: (a) "Business Day" means a day, other than a Saturday, a Sunday or a holiday; (b) "Closing" or "Closing Date" means May 7th 2002; (c) "Encumbrance" means any mortgage, or charge whether or not registered; (d) "GAAP" means generally accepted western accounting principles: (e) "Governmental Authority" means any national, central, federal, provincial, state, municipal, county or regional governmental or quasi-governmental authority, domestic or foreign; (f) "Material Contract" means any contract, agreement or instrument to which ATC or any of its Subsidiaries are a party which are critical to ATC's business; (g) "Material Indebtedness" means: any outstanding and unpaid indebtedness, obligation or liability, for borrowed money, amounts unpaid for real or personal property or services, taxes, fines, judgments, wages or employment benefits in excess of $5000; (h) "Shares" means 100% of the issued shares of ATC that are owns by the Shareholders; and (i) "ATC Subsidiaries" means companies of which ATC owned more than fifty (50%) percent of the outstanding shares; 2 1.1 Schedules Attached to and forming part of this Agreement are the following Schedules: Schedule "A" schedule of shareholders represented by Jia Zhong Bo Schedule "B" Share apportionment Schedule "C" Schedule of ATC debt Schedule "D" Schedule of ATC subsidiaries 2.0 PURCHASE AND SALE 2.1 Relying upon the representations contained and subject to the terms and conditions hereof, at the Closing, PUBCO will exchange with the Shareholders the Shares for 16,140,000 PUBCO common shares at a deemed price of $.001 per share in accordance with Schedule "B". 2.2 Shareholders' Resale Restrictions Shareholders acknowledge that PUBCO is a public US company that is not yet listed on any publicly trading exchange. 3.0 REPRESENTATIONS AND WARRANTIES 3.1 Representation and Warranties of ATC and the Shareholders Shareholders and ATC represents to PUBCO and acknowledge it is relying upon such representations to complete this Agreement: (a) Shareholders are the true owners of the Shares which are free of any Encumbrance; (b) Shareholders have the authority to enter into this Agreement; (c) the execution of this Agreement will not; i) result in the breach of any term or provision of the rules that govern ATC; ii) result in the change of a Material Contract; iii) create an Encumbrance for ATC; or iv) violate any provision of law or regulation that could adversely affect ATC; (d) there are no judicial proceedings commenced against ATC to the knowledge of the Shareholders which could reasonably be expected to have an adverse effect on ATC's business; (e) no approval, by any Governmental Authority or any third party is required to execute this Agreement by ATC or by the Shareholders; (f) the execution of this Agreement has been authorized by the board of directors of ATC and this Agreement is binding on ATC and the Shareholders; 3 (g) The Material Debt is as described in Schedule B and ATC has no other debt; (h) ATC owns 90% of FJV; and (i) FJV owns all of the assets and business associated with an online tax system called Tenet that is presently operating in Dalian city of which there are over 3000 paying subscribers. 3.2 Representations and Warranties of PUBCO PUBCO represents; (a) It is duly incorporated and is up-to-date with respect to all filings required of it and no proceedings have been taken or authorized by PUBCO with respect to the bankruptcy, insolvency, liquidation or winding up of PUBCO. (b) PUBCO has the authority to enter into this Agreement; (c) the execution of this Agreement will not: i) result in the breach of any rules governing PUBCO; or ii) violate any administrative regulation which would have a materially adverse effect on PUBCO; (d) there are no actions or proceedings against PUBCO which would prevent this Agreement or affect PUBCO's ability to fulfill this Agreement; (e) Shareholders Purchaser Shares will, upon Closing, be validly issued as fully paid and non-assessable shares in the capital stock of PUBCO; (f) no exemption, consent, approval, order or authorization of, or registration, from any governmental Authority is required by PUBCO in connection with the execution of this Agreement; and (g) the execution and delivery of this Agreement and the completion of the transactions contemplated herein have been duly authorized by the board of directors of PUBCO and this Agreement constitutes a valid and binding obligation of PUBCO enforceable against it in accordance with its terms; and 4.0 CONDITIONS 4.1 The parties recognize that it is a condition that the share exchange contemplated by this agreement does NOT, in and of itself, subject the Shareholders to any income or excise tax; 4.2 Conditions to Obligations of PUBCO The obligations of PUBCO to complete this agreement, are subject to the satisfaction, on or before the Closing Date of the following conditions any of which may be waived by PUBCO without prejudice to its right to rely on any others or others of them: (a) The Shareholders' performance of each of its undertakings herein on or before the Closing Date pursuant to the terms of this Agreement; (b) Shareholders' delivery of the documents required by PUBCO pursuant to this Agreement; 4 (c) the representations of the Shareholders herein shall be true in all material respects immediately prior to the Closing Date with the same effect as though made at and as of such time; (d) The Shareholders agree that ATC's board of directors immediately following the completion of this agreement shall be: Jia Zhong Bo, Zhao Yan (Chairman), Gao Yao (Vice Chairman) and Richard Wang; and (e) The Shareholders shall not have breached any of the covenants contained herein. 4.3 Conditions to Obligations of Shareholders The obligation of Shareholders to complete this agreement is subject to the satisfaction, on or before the Closing Date, of the following conditions, any of which may be waived by the Shareholders without prejudice to its right to rely on any other or others of them: (a) each of the acts and undertakings of PUBCO to be performed on or before the Closing Date pursuant to the terms of this Agreement shall have been duly performed by it; (b) PUBCO will have had delivered all of the documents required to be delivered to it by ATC pursuant to this Agreement; (c) the representations of PUBCO contained in Clause 3.2 hereof shall be true in all material respects immediately prior to the Closing Date with the same effect as though made at and as of such time; (d) PUBCO agrees that its board of directors immediately following the completion of this agreement shall be: Jia Zhong Bo, Zhao Yan (Chairman), Gao Yao, Guo Wei, Xiang Dong Liu, Richard Wang and Stephen Dadson; and (e) PUBCO shall not have breached any of the covenants contained herein. 5.0 Deliveries by the Shareholders The Closing will be on or before May 7th 2002 at which time the Shareholders will deliver the following to PUBCO: (a) certified copies of the resolutions of the respective boards of directors of ATC approving this Agreement; (b) an instrument of assignment duly executed by ATC and Shareholders providing for the assignment of the Shares; and (c) certified copies of such resolutions or consents of the board of directors of ATC; 5.1 Deliveries by PUBCO At Closing, PUBCO will deliver the following to the Shareholders: (a) a certified copy of the resolution of the board of directors of PUBCO approving this Agreement; (b) one or more share certificates representing the PUBCO shares registered in the name of the Shareholders in accordance with Schedule "B"; 5 (c) a certificate of an officer of PUBCO that all of the representations of PUBCO contained herein are correct; 6.0 GENERAL 6.1 Notices All notices which may or are required to be given pursuant to any provision of this Agreement shall be given in writing and shall be delivered personally or by telecopy, and addressed to the parties whose addresses are hereinbefore setforth or such other address or facsimile number of which a party may, from time to time, advise the other parties hereto by notice in writing given in accordance with the foregoing. 6.2 Binding Effect This Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their respective successors and permitted assigns. 6.3 Waiver Any waiver or release of any of the provisions of this Agreement, to be effective, must be in writing executed by the party granting the same. 6.4 Further Assurances Each of the parties, upon the request of any other party, shall do or sign any further acts or deeds, documents, assignments, transfers, conveyances and assurances as may be reasonably necessary to complete this Agreement. 6.5 Entire Agreement This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements, understandings whether oral or written, between the parties. 6 6.6 Governing Law This Agreement shall be governed by the Province of British Columbia. IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written. By /s/ Jia Zhang Bo - ---------------------------------- /s/ Zhao Yan - ---------------------------------- /s/ Xiang Dong Liu - ---------------------------------- /s/ Edward Chen - ---------------------------------- /s/ Richard Wang - ---------------------------------- /s/ Karen Dadson - ---------------------------------- /s/ Brian Roberts - ---------------------------------- Dalian Telecommunication and Electronic Technology Co Ltd Witnessed by /s/ Jia Znong Bo - ---------------------------------- (director) Northport Investments Inc. Witnessed by /s/ Richard Wang - ---------------------------------- Richard Wang (director) /s/ Zhao Yan - ---------------------------------- Zhao Yan (director) ATC Systems Inc. Witnessed by /s/ Zhao Yan - ---------------------------------- 7 Schedule A
- --- --------------- ------------------------------------------------------- -------------- NO. Name Address Occupation - --- --------------- ------------------------------------------------------- -------------- 1 Liping Qu 14 Ruyi Street, Dalian, Liaoning, China Businesswoman - --- --------------- ------------------------------------------------------- -------------- 2 Yingyi Liu 02-4-1, 32 Garden Street, Xigang District, Dalian, Engineer Liaoning, China - --- --------------- ------------------------------------------------------- -------------- 3 Qian Sun 3-8, Building 6, Tiyuguan Road, Chongwen Distrct, Businesswoman Beijing, China - --- --------------- ------------------------------------------------------- -------------- 4 Xiuying Jiang Room 401, Building 3, Hupan Garden, Zhongshan Businesswoman Distric, Dalian, Liaoning, China - --- --------------- ------------------------------------------------------- -------------- 5 Hongtao Zhao 1 Songhua Street, Dalian, Liaoning, China Businessman - --- --------------- ------------------------------------------------------- -------------- 6 Wenbin Lu 11 Haoshuang Street, Dalian, Liaoning, China Businessman - --- --------------- ------------------------------------------------------- -------------- 7 Jiwen Yang 28-5-3 Zhongnan Road, Dalian, Liaoning, China Chief-Engineer - --- --------------- ------------------------------------------------------- -------------- 8 Wenxin Guo 17 Rixin Street, Dalian, Liaoning, China Businessman - --- --------------- ------------------------------------------------------- -------------- 9 Lianxiang Zhang 1 Huayuan Street, Dalian, Liaoning, China Businesswoman - --- --------------- ------------------------------------------------------- -------------- 10 Zhipeng Liu Room 7, Unit 1, N. Building 14, N. Sanlitun, Chaoyang General District, Beijing, China Manager - --- --------------- ------------------------------------------------------- -------------- 11 Kangmei Chen 5 Taijichang Street, Dongcheng Distric, Beijing, China Businesswoman - --- --------------- ------------------------------------------------------- -------------- 12 Jie Zhang 134 Changjiang Road, Dalian, Liaoning, China Vice-General Manager - --- --------------- ------------------------------------------------------- -------------- 13 Baocheng Yang 40 Fuxing Road, Haidian District, Beijing, China Businessman - --- --------------- ------------------------------------------------------- -------------- 14 Erlin Niu Room 703, Building 311, Jinsong 3rd Zone, Chaoyang Businessman District, Beijing, China - --- --------------- ------------------------------------------------------- -------------- 15 Guiping Jiang 19 Wenpang Street, Dalian, Liaoning, China Businesswoman - --- --------------- ------------------------------------------------------- -------------- 16 Shuping Xu 7-2 Building 316, Changchun Road, Xigang District, Businesswoman Dalian, Liaoning, China - --- --------------- ------------------------------------------------------- -------------- 17 Fang Zhang 2 Fuchengmenwai Street, Xicheng District, Beijing, Businesswoman china - --- --------------- ------------------------------------------------------- -------------- 18 Chunqi Lin 2 Longfeng Street, Longfeng District, Daqing, Businessman Heilongjiang, China - --- --------------- ------------------------------------------------------- -------------- 19 Hui Hui Shi 7050 Ash Crescent #4, Vancouver, B.C. Businessman - --- --------------- ------------------------------------------------------- -------------- 20 Nanxing Cheng 5 Xiao Bao Fang, Dan Street, Beijing, 100005 Businesswomen - --- --------------- ------------------------------------------------------- --------------
8 Schedule B Share apportionment Pubco ATC ---------- ---------- 1 Jai Zhang Bo 1,000,000 1,000,000 2 Zhao Yan 3,000,000 3,000,000 3 Xiang Dong Liu 1,000,000 1,000,000 4 Guo Wei 1,000,000 1,000,000 5 Gao Yao 1,000,000 1,000,000 6 Richard Wang 1,000,000 1,000,000 7 Edward Chen 1,000,000 1,000,000 8 Brian Roberts 1,000,000 1,000,000 9 Karen Dadson 1,000,000 1,000,000 10 Liping Qu 220,000 220,000 11 Yingyi Liu 100,000 100,000 12 Qian Sun 100,000 100,000 13 Xiuying Jiang 100,000 100,000 14 Hongtao Zhao 50,000 50,000 15 Wenbin Lu 50,000 50,000 16 Jiwen Yang 60,000 60,000 17 Wenxin Guo 50,000 50,000 18 Lianxiang Zhang 250,000 250,000 19 Zhipeng Liu 80,000 80,000 20 Kangmei Chen 80,000 80,000 21 Jie Zhang 20,000 20,000 22 Baocheng Yang 50,000 50,000 23 Erlin Niu 20,000 20,000 24 Guiping Jiang 50,000 50,000 25 Shuping Xu 70,000 70,000 26 Fang Zhang 30,000 30,000 27 Chunqi Lin 30,000 30,000 28 Hui Hui Shi 10,000 10,000 29 Nanxing Cheng 30,000 30,000 30 Dalian Telecommunication &Electronic Technology Co 3,690,000 3,690,000 16,140,000 16,140,000 9 SCHEDULE C DEBT OF CONSOLIDATED ATC IN EXCESS OF $5000 US Debt of FJV: 1. Communication Bank of China (Dalian head branch) 3,400,000 rmb (interest @ 5.3% due April 03) 2. Private Loan held in trust for 2,000,000 rmb due Sept 15th 2002 10 SCHEDULE D List of ATC's Subsidiaries 1. 90% equity interest in Dalian Northport Information Development Co. Ltd. 11