SHARE EXCHANGE AGREEMENT by and among Rhino Productions, Inc. (a Nevada corporation), Vast Glory Holdings Limited (a British Virgin Islands company) and Yakun Song Dated as of September 13, 2011 SHARE EXCHANGE AGREEMENT

(a Nevada corporation),

(a British Virgin Islands company)

 

 

 

 

THIS SHARE EXCHANGE AGREEMENT (hereinafter referred to as this “Agreement”) is entered into as of this 13th day of September 2011, by and among Rhino Productions, Inc., a Nevada corporation (“Rhino”), Vast Glory Holdings Limited., a British Virgin Islands company (the “Company”), and Yakun Song (the “Shareholder”), upon the following premises:

 

Rhino is a publicly traded corporation quoted on the Over-The-Counter Bulletin Board (the “OTCBB”).

 

Rhino desires to acquire up to 100% of the issued and outstanding shares of the Company from the Shareholder in exchange for the issuance of an aggregate eight million two hundred fifty thousand (8,250,000) shares of Rhino common stock (the “Exchange Shares”) and the Shareholder is willing to exchange her shares of the Company in exchange for the Exchange Shares on the terms and subject to the conditions set forth herein (the “Exchange”). On the Closing Date (as defined in Section 4.05), the Company will become a wholly-owned subsidiary of Rhino.

 

The boards of directors of Rhino and the Company have determined, subject to the terms and conditions set forth in this Agreement, that the transaction contemplated hereby is desirable and in the best interests of their respective shareholders.  This Agreement is being entered into for the purpose of setting forth the terms and conditions of the proposed acquisition.

 

 

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:

 

 

As an inducement to, and to obtain the reliance of Rhino, except as set forth in the Company Schedules (as hereinafter defined), the Company represents and warrants as of the Closing Date, as defined below, as follows:

 

Section 1.01 Incorporation.  The Company 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.  The Company has delivered to Rhino complete and correct copies of the memorandum of association and articles of association of the Company as in effect on the date hereof, as well as a true and correct copy of the Business Registration Certificate of the Company.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of Company’s memorandum of association or articles of association.  The Company 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.  The Company 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.

 

 

 

Section 1.03 Subsidiaries and Predecessor Corporations.  Except as set forth in the Company Schedule 1.03, the Company does not have any subsidiaries, and does not own, beneficially or of record, any shares of or control any other corporation.  For purposes hereinafter, the term “Company” also includes those subsidiaries set forth on the Company Schedules.

 

Section 1.04 Financial Statements.

 

(a)   The Company has delivered to Rhino (i) the audited balance sheets of the Company as of December 31, 2009 and December 31, 2010 and the related audited statements of operations, stockholders’ equity and cash flows for the fiscal years ended December 31, 2009 and December 31, 2010   together with the notes to such statements and the opinion of  Child Van Wagoner & Bradshaw, PLLC, independent certified public accountants and the unaudited consolidated balance sheets of the Company and its subsidiaries as of June 30, 2010 and June 30, 2011 and the related unaudited consolidated statements of operations and retained earnings and cash flows of the Company and its subsidiaries for the six months then ended. All such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, 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 upon the business, prospects, management, properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole. The Company balance sheets are true and accurate and present fairly as of their respective dates the financial condition of the Company.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, the Company 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 the Company, 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.

 

(b)   The Company has duly and punctually paid all governmental fees and taxes which it has become liable to pay and has duly allowed for all taxes reasonably foreseeable and is under no liability to pay any penalty or interest in connection with any claim for governmental fees or taxation and the Company 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.

 

(c)   The books and records, financial and otherwise, of the Company 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.

 

Section 1.05 Information.  The information concerning the Company set forth in this Agreement and in the Company Schedules or delivered to Rhino pursuant hereto, 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.   

 

            

Section 1.06 Options or Warrants.  There are no existing options, warrants, calls, or commitments of any character relating to the authorized and unissued stock of the Company.

 

Section 1.07 Absence of Certain Changes or Events.  Since June 30, 2011:

 

(a)   There has not been any material adverse change in the business, operations, properties, assets, or condition (financial or otherwise) of the Company;

 

(b)   The Company 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)   The Company 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.  There are no actions, suits, proceedings, or investigations pending or, to the knowledge of the Company after reasonable investigation, threatened by or against the Company or affecting the Company 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.  The Company 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  the Company 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 have been delivered to or made available to Rhino.  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 the Company is a party or by which its properties are bound and which are material to the operations of the Company taken as a whole are valid and enforceable by the Company 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 Company Schedule 1.09 or reflected in the most recent Company balance sheet, the Company is not a party to any oral or written (i) contract for the employment of any officer or employee which cannot be terminated by the Company on no more than 30 days notice to the employee at a cot to the Company of no more than five thousand dollars ($5,000); (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) guaranty of any obligation; (iv) collective bargaining agreement; or (v) agreement with any present or former officer or director of the Company which contains no more adverse to the Company than those which would be obtained from a third party.

 

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 the Company is a party or to which any of its assets, properties or operations are subject.

 

Section 1.11   Compliance With Laws and Regulations.  To the best of its knowledge, the Company has complied with all applicable statutes and regulations of the British Virgin Islands (“BVI”), and of each other locality located therein 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 the Company or except to the extent that noncompliance would not result in the occurrence of any material liability for the Company.  

 

Section 1.12   Approval of Agreement.  The Board of Directors of the Company has authorized the execution and delivery of this Agreement by the Company and has approved this Agreement and the transactions contemplated hereby, and has recommend to the Shareholder that the Exchange be accepted.

 

Section 1.13 PRC Laws and Regulations. To the best of its knowledge, each of the Company’s subsidiaries is in compliance with all applicable laws and regulations of the PRC and Jilin Province and of each other locality located therein.  All material consents, approvals, authorizations or licenses requisite under PRC law for the due and proper establishment and operation of the Company’s subsidiaries doing business in the PRC have been duly obtained from the relevant PRC governmental authorities and are in full force and effect.

  

 

 

The Shareholder hereby represents and warrants to Rhino as follows.

 

Section 2.01 Good Title.   Shareholder is the record and beneficial owner, and has good title to the shares of the Company owned by the Shareholder (“Company Shares”), with the right and authority to sell and deliver such Company Shares, 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 Rhino as the new owner of such Company Shares in the share register of the Company, Rhino will receive good title to such Company Shares, free and clear of all liens.

 

 

Section 2.02 Power and Authority. Shareholder has the legal power, capacity and authority to execute and deliver this Agreement to consummate the transactions contemplated by this Agreement, and to perform such Shareholder’s obligations under this Agreement.  This Agreement constitutes a legal, valid and binding obligation of the Shareholder, enforceable against the Shareholder in accordance with the terms hereof.

 

Section 2.03 No Conflicts.  The execution and delivery of this Agreement by the Shareholder and the performance by the Shareholder of her 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 Shareholder and (c) will not violate or breach any contractual obligation to which the Shareholder is a party.

 

Section 2.04 Finder’s Fee.   Shareholder represents and warrants that she has not created any obligation for any finder’s, investment banker’s or broker’s fee in connection with the Exchange.

 

Section 2.05 Purchase Entirely for Own Account. The Exchange Shares proposed to be acquired by the Shareholder hereunder will be acquired for investment for her own account, and not with a view to the resale or distribution of any part thereof, and Shareholder has no present intention of selling or otherwise distributing the Exchange Shares, except in compliance with applicable securities laws.

 

Section 2.06 Acquisition of Exchange Shares for Investment.

 

(a) Shareholder is acquiring the Exchange Shares for investment for such 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 Shareholder has no present intention of selling, granting any participation in, or otherwise distributing the same.  Shareholder further represents that 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)  Shareholder represents and warrants that such Shareholder (i) can bear the economic risk of such Shareholder’s respective investments, and (ii) possesses such knowledge and experience in financial and business matters that such Shareholder is capable of evaluating the merits and risks of the investment in Rhino and its securities.

 

(c)  Shareholder is not a “U.S. Person” as defined in Rule 902(k) of Regulation S of the Securities Act (“Regulation S”) and understands that the Exchange Shares are not registered under the Securities Act and that the issuance thereof to such Shareholder is intended to be exempt from registration under the Securities Act pursuant to Regulation 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, 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.”

 

 

“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)  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.

  

(e)   Shareholder acknowledges that she has carefully reviewed such information as he has deemed necessary to evaluate an investment in Rhino and its securities. To the full satisfaction of  Shareholder, he has been furnished all materials that she has requested relating to Rhino and the issuance of the Exchange Shares hereunder, and  h Shareholder has been afforded the opportunity to ask questions of Rhino’s representatives to obtain any information necessary to verify the accuracy of any representations or information made or given to the Shareholder.  Notwithstanding the foregoing, nothing herein shall derogate from or otherwise modify the representations and warranties of Rhino set forth in this Agreement, on which   the Shareholder has relied in making an exchange of her  Company Shares for the Exchange Shares.

 

(f)  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.   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, Rhino’s compliance with the reporting requirements under the Securities Exchange Act of 1934, as amended (“Exchange Act”)).

 

(h)   Shareholder agrees that, notwithstanding anything contained herein to the contrary, the warranties, representations, agreements and covenants of Shareholder under this Section 2.06 shall survive the Closing for the period set forth in Section 8.11.

 

Section 2.07 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. Shareholder consents to Rhino 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.

 

 

 

As an inducement to, and to obtain the reliance of the Company and the Shareholder, except as set forth in the Rhino Schedules (as hereinafter defined), Rhino represents and warrants, as of the date hereof and as of the Closing Date, as follows:

 

Section 3.01 Organization.  Rhino is a corporation duly incorporated, validly existing, and in good standing under the laws of Nevada 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 Rhino SEC Reports (as defined below) are complete and correct copies of the articles of incorporation and bylaws of Rhino (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 Rhino’s Articles.  Rhino has taken all action required by law, its Articles, or otherwise to authorize the execution and delivery of this Agreement, and Rhino has full power, authority, and legal right and has taken all action required by law, its Articles, or otherwise to consummate the transactions herein contemplated.

 

Section 3.02 Capitalization. 

 

(a) Rhino’s authorized capitalization consists of 70,000,000 shares of common stock, par value $0.001 per share, of which 3,809,600 shares are issued and outstanding, and 5,000,000 shares of preferred stock, par value $0.001 per share, none of which have been issued or are 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 Rhino’s common stock were reserved for issuance upon the exercise of outstanding options to purchase the common stock; no shares of common stock were reserved for issuance upon the exercise of outstanding warrants to purchase shares of Rhino common stock; and no shares of common stock were reserved for issuance upon the conversion of any outstanding convertible notes, debentures or other securities.  All outstanding shares of Rhino common stock 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 Rhino, 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, 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 Rhino is a party or by which it is bound obligating Rhino 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 Rhino or obligating Rhino 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 shares of Rhino common stock, except as set forth in this Agreement.

 

Except as contemplated by this Agreement, there are no registration rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which Rhino is a party or by which it is bound with respect to any equity security of any class of Rhino, and there are no agreements to which Rhino is a party, or which Rhino has knowledge of, which conflict with this Agreement or the transactions contemplated herein or otherwise prohibit the consummation of the transactions contemplated hereunder.

 

 

Section 3.03 Subsidiaries.  Rhino does not have any predecessor corporation(s), no subsidiaries, and does not own, beneficially or of record, any shares of any other corporation.

 

Section  3.04 SEC Filings; Financial Statements. 

 

(a) Rhino has made available to the Company a correct and complete copy, or there has been available on EDGAR, copies of each report, registration statement and definitive proxy statement filed by Rhino with the SEC since January 1, 2009 (the “Rhino SEC Reports”), which are all the forms, reports and documents required to be filed by Rhino with the SEC since January 1, 2009. As of their respective dates, the Rhino 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 Rhino 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 superseded) 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.

 

(b) Included in the Rhino SEC Reports are (i) the audited balance sheet of Rhino as of December 31, 2009 and the related audited statements of operations, stockholders’ equity and cash flows for December 31, 2009, together with the notes to such statements and the opinion of Kyle L. Tingle, CPA, LLC, independent certified public accountants, with respect thereto; (ii) the audited balance sheet of Rhino as of December 31, 2010 and the related audited statements of operations, stockholders’ equity and cash flows for December 31, 2010, together with the notes to such statements and the opinion of Child Van Wagoner & Bradshaw, PLLC, independent certified public accountants, with respect thereto; and (iii) the unaudited balance sheets of Rhino as of June 30, 2010 and June 30, 2011 and the related audited statements of operations, stockholders’ equity and cash flows for the six months ended June 30, 2010 and June 30, 2011, together with the notes to such statements.

 

(c) Each set of financial statements (including, in each case, any related notes thereto) contained in the Rhino 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) and each fairly presents in all material respects the financial position of Rhino 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 upon the business, prospects, management, properties, operations, condition (financial or otherwise) or results of operations of Rhino, taken as a whole (“Material Adverse Effect”). The Rhino balance sheets are true and accurate and present fairly as of their respective dates the financial condition of Rhino.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, Rhino 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 Rhino, 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) Rhino 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 which, in the aggregate, are less than $3,000;

 

(e) Rhino 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; and

  

(f) The books and records, financial and otherwise, of Rhino 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.

 

Section 3.05 Information   The information concerning Rhino set forth in this Agreement and the Rhino 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, Rhino has fully disclosed in writing to the Company (through this Agreement, the Rhino SEC Reports or the Rhino Schedules) all information relating to matters involving Rhino 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 $10,000 liability, (ii) have led or may lead to a competitive disadvantage on the part of Rhino 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 Rhino, 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 3.06 Options or Warrants.   There are no existing options, warrants, calls, or commitments of any character relating to the authorized and unissued stock of Rhino.

 

Section   3.07 Absence of Certain Changes or Events.  Since June 30, 2011:

 

(a) there has not been (i) any material adverse change in the business, operations, properties, assets or condition of Rhino or (ii) any damage, destruction or loss to Rhino (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of Rhino;

 

(b) Rhino has not (i) amended its 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 Rhino; (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) Rhino 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 Rhino 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 Rhino; 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

 

 

Section 3.08 Litigation and Proceedings.  There are no actions, suits, proceedings or investigations pending or, to the knowledge of Rhino, threatened against Rhino, or affecting Rhino 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.  Rhino is not in default with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality.

 

Section  3.09 Contracts.

 

(a) Rhino is not a party to any contract, franchise, license agreement, agreement, debt instrument or other commitments whether such agreement is in writing or oral;

 

(b) Rhino is not a party to or bound by any judgment, order, writ, injunction, decree, or award; and

 

(c) Rhino 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 Rhino.

 

Section 3.10 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 Rhino is a party or to which any of its assets, properties or operations are subject.

 

Section 3.11 Compliance With Laws and Regulations.  Rhino 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 3.13 Material Transactions or Affiliations.  Except as disclosed herein, in the Rhino SEC Reports and in the Rhino Schedules, there exists no contract, agreement or arrangement between Rhino 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 Rhino to own beneficially, 5% or more of the issued and outstanding common shares of Rhino and which is to be performed in whole or in part after the date hereof or was entered into since January 1, 2009.  Neither any officer, director, nor 5% Shareholders of Rhino has, or has had since inception of Rhino, any known interest, direct or indirect, in any such transaction with Rhino which was material to the business of Rhino.  Rhino 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 3.14 Valid Obligation.  This Agreement and all agreements and other documents executed by Rhino in connection herewith constitute the valid and binding obligation of Rhino, 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 3.15 Exchange Act Compliance.

 

Rhino is in compliance with, and current in, all of the reporting, filing and other requirements under the Exchange Act, the Rhino common stock has been registered under Section 12(g) of the Exchange Act, and Rhino 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 Rhino.

 

Section 3.16 Title to Property.  Rhino does not own or lease any real property or personal property.  There are no options or other contracts under which Rhino has a right or obligation to acquire or lease any interest in real property or personal property.

 

Section 3.17 Intellectual Property.  Rhino does not own, license or otherwise have any right, title or interest in any intellectual property.

 

 

Section 4.01 The Exchange. On the terms and subject to the conditions set forth in this Agreement, on the Closing Date, the Shareholder 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 the Company set forth on the Company Schedules attached hereto, constituting all of the shares of the Company held by such shareholder; the objective of such Exchange being the acquisition by Rhino of 100% of the issued and outstanding shares of the Company.  In exchange for the transfer of such securities by the Shareholder, Rhino shall issue to the Shareholder, their affiliates or assigns, a total of eight million two hundred fifty thousand (8,250,000) shares of Rhino common stock pursuant to Table 1 attached hereto, representing approximately 86% of the total shares of common stock of Rhino, for all of the outstanding shares of the Company held by the Shareholder. At the Closing Date, the Shareholder shall, on surrender of their certificate or certificates representing his Company Shares to Rhino or its registrar or transfer agent, be entitled to receive a certificate or certificates evidencing his proportionate interest in the Exchange Shares.

  

 

 

Section 4.02 Closing.  The closing (the “Closing” or the “Closing Date”) of the transactions contemplated by this Agreement shall occur on September 13, 2011 upon the exchange of the shares of Rhino and the Company 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.

 

Section 4.03 Closing Events.  At the Closing, Rhino, the Company and the Shareholder 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 4.04 Termination.  This Agreement may be terminated by the Board of Directors of the Company or Rhino only in the event that Rhino or the Company does 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.

 

Section 5.01 Delivery of Books and Records.   At the Closing, Rhino shall deliver to the Company, the originals of the corporate minute books, books of account, contracts, records, and all other books or documents of Rhino which is now in the possession of Rhino or its representatives.

 

Section 5.02 Third Party Consents and Certificates.  Rhino and the Company agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions herein contemplated.

 

Section 5.03 Designation of Officer.  At the Closing, Fengying Su shall become the Chief Financial Officer of Rhino. 

 

 Section 5.04 Indemnification.

 

(a) The Company hereby agrees to indemnify Rhino and each of the officers, agents and directors of Rhino 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.

 

 

(b)                 Shareholder agrees to indemnify Rhino and each of the officers, agents and directors of Rhino as of the date of execution of this Agreement against any Loss, to which she or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations 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 5.05 The Acquisition of Exchange Shares.  Rhino and the Company understand and agree that the consummation of this Agreement, including the issuance of the Exchange Shares to the Shareholder in exchange for the Company Shares as contemplated hereby constitutes the offer and sale of securities under the Securities Act and applicable state statutes.  Rhino and the Company 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 connection with the transaction contemplated by this Agreement, Rhino and the Company 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 jurisdictions where the Shareholder resides 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.

 

(b) In order to more fully document reliance on the exemptions as provided herein, the Company, the Shareholder, and Rhino shall execute and deliver to the other, at or prior to the Closing, such further letters of representation, acknowledgment, suitability, or the like as the Company or Rhino and their respective counsel may reasonably request in connection with reliance on exemptions from registration under such securities laws.

 

(c) The Shareholder 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 5.06 Sales of Securities Under Rule 144, If Applicable.

 

(a) Rhino 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.

 

(b) Upon being informed in writing by any person holding restricted stock of Rhino 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), Rhino 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 Rhino’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, Rhino 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 5.07 Assistance with Post-Closing SEC Reports and Inquiries.  Upon the reasonable request of Rhino, after the Closing Date, the Company shall use its commercially reasonable best efforts to provide such information available to it, including information, filings, reports, financial statements or other circumstances of Rhino occurring, reported or filed prior to the Closing, as may be necessary or required by Rhino for the preparation of the reports that Rhino 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.

 

 

The obligations of Rhino 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 the Company 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).  The Company shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by the Company prior to or at the Closing.  Rhino shall be furnished with a certificate, signed by a duly authorized executive officer of the Company and dated the Closing Date, to the foregoing effect. The representations and warranties made by the 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).  

 

Section 6.02 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 6.03  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 the Company after the Closing Date on the basis as presently operated shall have been obtained.

 

Section 6.04 Other Items. Rhino shall have received such further opinions, documents, certificates or instruments relating to the transactions contemplated hereby as Rhino may reasonably request.

 

 

 

The obligations of the Company and the Shareholder 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 Rhino 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, Rhino shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by Rhino. The Company shall be furnished with a certificate, signed by a duly authorized executive officer of Rhino and dated the Closing Date, to the foregoing effect.

 

                  Section 7.02 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 7.03 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 Rhino after the Closing Date on the basis as presently operated shall have been obtained.

 

Section 7.04 Other Items.   The Company shall have received further opinions, documents, certificates, or instruments relating to the transactions contemplated hereby as the Company may reasonably request.

 

Section 8.01 Brokers.   Rhino and the Company agree that, except as set out on Schedule 8.01 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.  Rhino and the Company 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 Nevada.  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 the Company, to:

Number 01 Commercial Street Kuntai International Center Chaowai Road, Chaoyang District Beijing, People’s Republic of China 100020 Attention: Ya Kun Song, Chief Executive Officer

  

If to Rhino, to:         Number 01 Commercial Street         Kuntai International Center         Chaowai Road, Chaoyang District         Beijing, People’s Republic of China 100020         Attention: Ya Kun Song, Chief Executive Officer     With copies to (which shall not constitute notice):   Eaton & Van Winkle LLP 3 Park Avenue, 16th floor New York, New York 10016 Attention: Vincent J. McGill, Esq.