Exhibit 10.1

 

 

 

SHARE EXCHANGE AGREEMENT

 

by and among

 

PLANET GREEN HOLDINGS CORPORATION,

as the Purchaser,

 

FAST APPROACH, INC.

as the Company

 

and

 

THE SHAREHOLDERS OF THE COMPANY NAMED HEREIN

as the Sellers

 

Dated as of June 5, 2020

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

  Page     I. THE SHARE EXCHANGE 1 1.1. Purchase and Sale of Shares 1 1.2.
Consideration 1 1.3. Company Shareholder Consent 2     II. CLOSING 2 2.1.
Closing 2     III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 2 3.1. Due
Organization and Good Standing 2 3.2. Authorization; Binding Agreement 2 3.3.
Governmental Approvals 3 3.4. Non-Contravention 3 3.5. Capitalization 3 3.6. SEC
Filings and Purchaser Financials 4 3.7. Absence of Certain Changes 5 3.8.
Actions; Orders; Permits 5 3.9. Investment Company Act 5 3.10. Finders and
Brokers 5 3.11. Ownership of Exchange Shares 5 3.12. Independent Investigation 6
    IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLER 6 4.1. Due
Organization and Good Standing 6 4.2. Authorization; Binding Agreement 7 4.3.
Capitalization 7 4.4. Subsidiaries 8 4.5. Governmental Approvals 8 4.6.
Non-Contravention 9 .7. Financial Statements 9 4.8. Absence of Certain Changes
10 4.9. Compliance with Laws 10 4.10. Company Permits 10 4.11. Litigation 12
4.12. Material Contracts 12 4.13. Intellectual Property 13 4.14. Taxes and
Returns 15 4.15. Real Property 16 4.16. Personal Property 16 4.17. Title to and
Sufficiency of Assets 16 4.18. Employee Matters 16 4.19. Benefit Plans 18 4.20.
Environmental Matters 18 4.21. Transactions with Related Persons 19 4.22.
Insurance 20 4.23. Top Customers and Suppliers 20 4.23. Books and Records 20
4.25. Loans Receivable 21 4.26. Certain Business Practices 21 4.27. Investment
Company Act 21 4.28. Finders and Investment Bankers 21

 

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4.29. Independent Investigation 22 4.30. Information Supplied 22 4.31. SAFE
Registrations 22 4.32. PRC Compliance 22 4.33. Disclosure 23     V.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS 23 5.1. Due Organization and Good
Standing 23 5.2. Authorization; Binding Agreement 24 5.3. Ownership 24 5.4.
Governmental Approvals 24 5.5. Information Supplied 24 5.6. No Litigation 24
5.7. Investment Representations 25 5.8. Finders and Investment Bankers 25 5.9.
Independent Investigation 25 5.10. Information Supplied 26 4.31. Disclosure 26  
  VI. COVENANTS 26 6.1. Access and Information 26 6.2. Conduct of Business of
the Company 27 6.3. Conduct of Business of the Purchaser 29 6.4. Annual and
Interim Financial Statements 31 6.5. Purchaser Public Filings 31 6.6. No
Solicitation 31 6.7. No Trading 32 6.8. Notification of Certain Matters 32 6.9.
Efforts 33 6.10. Further Assurances 33 6.11. [Intentionally Omitted] 33 6.12.
Public Announcements 33 6.13. Confidential Information 34 6.14. Litigation
Support 35 6.15. Documents and Information 35 6.16. Supplemental Disclosure
Schedules 35 6.18. Purchaser Policies 35 6.19. SOX 404(b) Compliance 36     VII.
SURVIVAL AND INDEMNIFICATION 36 7.1. Survival 36 7.2. Indemnification by the
Sellers 36 7.3. Limitations and General Indemnification Provisions 37 7.4.
Indemnification Procedures 37     VIII. CLOSING CONDITIONS 39 8.1. Conditions of
Each Party’s Obligations 39 8.2. Conditions to Obligations of the Company and
the Sellers 39 8.3. Conditions to Obligations of the Purchaser 40 8.4.
Frustration of Conditions 42

 

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IX. TERMINATION AND EXPENSES 42 9.1. Termination 42 9.2. Effect of Termination
43 9.3. Fees and Expenses 43 9.4. Termination Fee 43     X. WAIVERS AND RELEASES
44 10.1. Release and Covenant Not to Sue 44     XI. MISCELLANEOUS 44 11.1.
Notices 44 11.2. Binding Effect; Assignment 45 11.3. Third Parties 45 11.4.
Arbitration 45 11.5. Governing Law; Jurisdiction 46 11.6. WAIVER OF JURY TRIAL
46 11.7. Specific Performance 47 11.8. Severability 47 11.9. Amendment 47 11.10.
Waiver 47 11.11. Entire Agreement 47 11.12. Interpretation 48 11.13.
Counterparts 48     XII. DEFINITIONS 48 12.1. Certain Definitions 48 12.2.
Section References 55

 

INDEX OF EXHIBITS

 

Exhibit   Description Exhibit A   Form of Non-Competition Agreement Exhibit B  
Form of Lock-Up Agreement

 

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SHARE EXCHANGE AGREEMENT

 

This Share Exchange Agreement (this “Agreement”) is made and entered into as of
June 5, 2020 by and among (i) Planet Green Holdings Corporation, a corporation
incorporated in the State of Nevada (the “Purchaser”), and (ii) Fast Approach,
Inc., a corporation incorporated under the laws of Canada (the “Company”) and
(iv) each of the shareholders of the Company (collectively, the “Sellers”). The
Purchaser, the Company and the Sellers are sometimes referred to herein
individually as a “Party” and, collectively, as the “Parties”. Capitalized
terms, unless otherwise defined, shall have the meanings ascribed to such terms
in Article XII hereof.

 

RECITALS:

 

WHEREAS, the Sellers collectively own 100% of the issued and outstanding shares
and other equity interests in or of the Company;

 

WHEREAS, the Company is a corporation incorporated under the laws of Canada;

 

WHEREAS, the Company operates a demand side platform targeting the Chinese
education market in North America; and

 

WHEREAS, the Sellers desire to sell to the Purchaser, and the Purchaser desires
to purchase from the Sellers, all of the issued and outstanding shares and any
other equity interests in or of the Company in exchange for newly issued
Purchaser Shares, subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises set forth above, which are
incorporated in this Agreement as if fully set forth below, and the
representations, warranties, covenants and agreements contained in this
Agreement, and intending to be legally bound hereby, the Parties hereto agree as
follows:

 

Article I
THE SHARE EXCHANGE

 

1.1 Purchase and Sale of Shares. At the Closing and subject to and upon the
terms and conditions of this Agreement, the Sellers shall sell, transfer,
convey, assign and deliver to the Purchaser, and the Purchaser shall purchase,
acquire and accept from the Sellers, all of the issued and outstanding shares
(being 2,730,000 shares of $1 par value each) of the Company (collectively, the
“Purchased Shares”), free and clear of all Liens (other than potential
restrictions on resale under applicable securities Laws).

 

1.2 Consideration. At the Closing and subject to and upon the terms and
conditions of this Agreement, in full payment for the Purchased Shares, the
Purchaser shall issue and deliver to the Sellers an aggregate of 1,800,000
Purchaser Shares (the “Exchange Shares”). Each Seller shall receive its pro rata
share of the Exchange Shares based on the percentage of Purchased Shares owned
by such Seller as compared to the total number of Purchased Shares owned by all
Sellers (such percentage being each such Seller’s “Pro Rata Share”).
Notwithstanding anything to the contrary contained herein, no fraction of a
Purchaser Share will be issued by the Purchaser by virtue of this Agreement or
the transactions contemplated hereby, and each Person who would otherwise be
entitled to a fraction of a Purchaser Share (after aggregating all fractional
Purchaser Shares that would otherwise be received by such Person) shall instead
have the number of Purchaser Shares issued to such Person rounded down in the
aggregate to the nearest whole Purchaser Share.

 

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1.3 Company Shareholder Consent. Each Seller, as a shareholder of the Company,
hereby approves, authorizes and consents to the Company’s execution and delivery
of this Agreement and the Ancillary Documents to which it is or is required to
be a party or otherwise bound, the performance by the Company of its obligations
hereunder and thereunder and the consummation by the Company of the transactions
contemplated hereby and thereby. Each Seller acknowledges and agrees that the
consents set forth herein are intended and shall constitute such consent of the
Sellers as may be required (and shall, if applicable, operate as a written
shareholder resolution of the Company) pursuant to the Company Charter, any
other agreement in respect of the Company to which any Seller is a party and all
applicable Laws.

 

Article II
CLOSING

 

2.1 Closing. Subject to the satisfaction or waiver of the conditions set forth
in Article VIII, the consummation of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of the Purchaser, on
the second (2nd) Business Day after all the Closing conditions to this Agreement
have been satisfied or waived at 10:00 a.m. local time, or at such other date,
time or place as the Purchaser and the Company may agree (the date and time at
which the Closing is actually held being the “Closing Date”).

 

Article III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser represents and warrants to the Company, as of the date hereof and
as of the Closing as follows:

 

3.1 Due Organization and Good Standing. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the Laws of Nevada.
The Purchaser has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. The
Purchaser is duly qualified or licensed and in good standing to conduct business
in each jurisdiction in which the character of the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except for any deviations from any of the
foregoing that would not reasonably be expected to have a Material Adverse
Effect on the Purchaser. The Purchaser has heretofore made available to the
Company accurate and complete copies of the Organizational Documents of the
Purchaser, as currently in effect.

 

3.2 Authorization; Binding Agreement. The Purchaser has all requisite corporate
power and authority to execute and deliver this Agreement and each Ancillary
Document to which it is a party, to perform the Purchaser’s obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and each Ancillary
Document to which it is a party and the consummation of the transactions
contemplated hereby and thereby (a) have been duly and validly authorized by the
board of directors of the Purchaser and (b) no other corporate proceedings,
other than as set forth elsewhere in the Agreement, on the part of the Purchaser
are necessary to authorize the execution and delivery of this Agreement and each
Ancillary Document to which it is a party or to consummate the transactions
contemplated hereby and thereby. This Agreement has been, and each Ancillary
Document to which the Purchaser is a party shall be when delivered, duly and
validly executed and delivered by the Purchaser and, assuming the due
authorization, execution and delivery of this Agreement and such Ancillary
Documents by the other parties hereto and thereto, constitutes, or when
delivered shall constitute, the valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except to the
extent that enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
application affecting the enforcement of creditors’ rights generally or by any
applicable statute of limitation or by any valid defense of set-off or
counterclaim, and the fact that equitable remedies or relief (including the
remedy of specific performance) are subject to the discretion of the court from
which such relief may be sought (collectively, the “Enforceability Exceptions”).

 

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3.3 Governmental Approvals. No Consent of or with any Governmental Authority, on
the part of the Purchaser is required to be obtained or made in connection with
the execution, delivery or performance by the Purchaser of this Agreement and
each Ancillary Document to which it is a party or the consummation by the
Purchaser of the transactions contemplated hereby and thereby, other than (a)
such filings as may be required in any jurisdiction where the Purchaser is
qualified or authorized to conduct business as a foreign corporation in order to
maintain such qualification or authorization, (b) such filings as contemplated
by this Agreement, (c) any filings required with NYSE with respect to the
transactions contemplated by this Agreement, (d) applicable requirements, if
any, of the Securities Act, the Exchange Act, and/ or any state “blue sky”
securities Laws, and the rules and regulations thereunder, and (e) where the
failure to obtain or make such Consents or to make such filings or
notifications, would not reasonably be expected to have a Material Adverse
Effect on the Purchaser.

 

3.4 Non-Contravention. The execution and delivery by the Purchaser of this
Agreement and each Ancillary Document to which it is a party, the consummation
by the Purchaser of the transactions contemplated hereby and thereby, and
compliance by the Purchaser with any of the provisions hereof and thereof, will
not (a) conflict with or violate any provision of the Purchaser’s Organizational
Documents, (b) subject to obtaining the Consents from Governmental Authorities
referred to in Section 3.3 hereof, and any condition precedent to such Consent
or waiver having been satisfied, conflict with or violate any Law, Order or
Consent applicable to the Purchaser or any of their properties or assets, or (c)
(i) violate, conflict with or result in a breach of, (ii) constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, (iii) result in the termination, withdrawal, suspension,
cancellation or modification of, (iv) accelerate the performance required by the
Purchaser under, (v) result in a right of termination or acceleration under,
(vi) give rise to any obligation to make payments or provide compensation under,
(vii) result in the creation of any Lien upon any of the properties or assets of
the Purchaser under, (viii) give rise to any obligation to obtain any third
party consent or provide any notice to any Person or (ix) give any Person the
right to declare a default, exercise any remedy, claim a rebate, chargeback,
penalty or change in delivery schedule, accelerate the maturity or performance,
cancel, terminate or modify any right, benefit, obligation or other term under,
any of the terms, conditions or provisions of, any Purchaser Material Contract,
respectively, except for any deviations from any of the foregoing clauses (b) or
(c) that would not reasonably be expected to have a Material Adverse Effect on
the Purchaser.

 

3.5 Capitalization.

 

(a) The Purchaser is authorized to issue (i) 200,000,000 Purchaser Shares and
(ii) 5,000,000 preferred shares, par value $0.001 per share. All outstanding
Purchaser Shares are duly authorized, validly issued, fully paid and
non-assessable and not subject to or issued in violation of any purchase option,
right of first refusal, preemptive right, subscription right or any similar
right under any provision of the NRS, the Purchaser Charter or any Contract to
which the Purchaser is a party. None of the outstanding Purchaser Shares has
been issued in violation of any applicable securities Laws.

 

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(b) Prior to giving effect to the transactions contemplated by this Agreement,
except as set forth in the SEC Reports, the Purchaser does not have any
Subsidiaries or own any equity interests in any other Person.

 

(c) Except as set forth in the SEC Reports, there are no (i) outstanding
options, warrants, puts, calls, convertible securities, preemptive or similar
rights, (ii) bonds, debentures, notes or other Indebtedness having general
voting rights or that are convertible or exchangeable into securities having
such rights or (iii) subscriptions or other rights, agreements, arrangements,
Contracts or commitments of any character (A) relating to the issued or unissued
shares of the Purchaser, or (B) obligating the Purchaser to issue, transfer,
deliver or sell or cause to be issued, transferred, delivered, sold or
repurchased any options or shares or securities convertible into or exchangeable
for such shares, or (C) obligating the Purchaser to grant, extend or enter into
any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment for such capital shares. Other than as expressly set
forth in this Agreement, there are no outstanding obligations of the Purchaser
to repurchase, redeem or otherwise acquire any shares of the Purchaser or to
provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Person.

 

(d) [Intentionally Omitted.]

 

(e) Since January 1, 2018, and except as contemplated by this Agreement or
disclosed in the SEC Reports, the Purchaser has not declared or paid any
distribution or dividend in respect of its shares and has not repurchased,
redeemed or otherwise acquired any of its shares, and the Purchaser’s board of
directors has not authorized any of the foregoing.

 

3.6 SEC Filings and Purchaser Financials.

 

(a) The Purchaser, since January 1, 2018, has filed all forms, reports,
schedules, statements, registration statements, prospectuses and other documents
required to be filed or furnished by the Purchaser with the SEC under the
Securities Act and/or the Exchange Act, together with any amendments,
restatements or supplements thereto. Except to the extent available on the SEC’s
web site through EDGAR, the Purchaser has delivered to the Company copies in the
form filed with the SEC of all of the following: (i) the Purchaser’s Annual
Reports on Form 10-K for each fiscal year of the Purchaser beginning with the
year ended December 31, 2018, (ii) the Purchaser’s Quarterly Reports on Form
10-Q for each fiscal quarter that the Purchaser filed such reports to disclose
its quarterly financial results in each of the fiscal years of the Purchaser
referred to in clause (i) above, (iii) all other forms, reports, registration
statements, prospectuses and other documents (other than preliminary materials)
filed by the Purchaser with the SEC since the beginning of the first fiscal year
referred to in clause (i) above (the forms, reports, registration statements,
prospectuses and other documents referred to in clauses (i), (ii) and (iii)
above, whether or not available through EDGAR, are, collectively, the “SEC
Reports”) and (iv) all certifications and statements required by (A) Rules
13a-14 or 15d-14 under the Exchange Act, and (B) 18 U.S.C. §1350 (Section 906 of
SOX) with respect to any report referred to in clause (i) above (collectively,
the “Public Certifications”). The SEC Reports (y) were prepared in all material
respects in accordance with the requirements of the Securities Act and the
Exchange Act, as the case may be, and the rules and regulations thereunder and
(z) did not, as of their respective effective dates (in the case of SEC Reports
that are registration statements filed pursuant to the requirements of the
Securities Act) and at the time they were filed with the SEC (in the case of all
other SEC Reports) 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 made therein, in the light of the circumstances under which
they were made, not misleading. The Public Certifications are each true as of
their respective dates of filing. As used in this Section 3.6, the term “file”
shall be broadly construed to include any manner permitted by SEC rules and
regulations in which a document or information is furnished, supplied or
otherwise made available to the SEC. As of the date of this Agreement, (A) the
Purchaser Shares are listed on NYSE, (B) the Purchaser has not received any
written deficiency notice from NYSE relating to the continued listing
requirements of the Purchaser Shares, (C) there are no Actions pending or, to
the Knowledge of the Purchaser, threatened against the Purchaser with respect to
any intention by such entity to suspend, prohibit or terminate the quoting of
the Purchaser Shares on NYSE and (D) the Purchaser Shares are in compliance with
all of the applicable listing and corporate governance rules of NYSE.

 

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(b) The financial statements and notes contained or incorporated by reference in
the SEC Reports (the “Purchaser Financials”), fairly present in all material
respects the financial position and the results of operations, changes in
shareholders’ equity, and cash flows of the Purchaser at the respective dates of
and for the periods referred to in such financial statements, all in accordance
with (i) GAAP methodologies applied on a consistent basis throughout the periods
involved and (ii) Regulation S-X or Regulation S-K, as applicable (except as may
be indicated in the notes thereto and for the omission of notes and audit
adjustments in the case of unaudited quarterly financial statements to the
extent permitted by Regulation S-X or Regulation S-K, as applicable).

 

(c) Except as and to the extent reflected or reserved against in the Purchaser
Financials, the Purchaser has not incurred any Liabilities or obligations of the
type required to be reflected on a balance sheet in accordance with GAAP that is
not adequately reflected or reserved on or provided for in the Purchaser
Financials, other than Liabilities of the type required to be reflected on a
balance sheet in accordance with GAAP that have been incurred since January 1,
2018 in the ordinary course of business.

 

3.7 Absence of Certain Changes. As of the date of this Agreement, the Purchaser
has, since March 31, 2019, not received a notice of a Material Adverse Effect.

 

3.8 Actions; Orders; Permits. There is no pending or, to the Knowledge of the
Purchaser, threatened Action to which the Purchaser is subject which would
reasonably be expected to have a Material Adverse Effect on the Purchaser. There
is no material Action that the Purchaser has pending against any other Person.
The Purchaser is not subject to any material Orders of any Governmental
Authority, nor are any such Orders pending. The Purchaser holds all Permits
necessary to lawfully conduct its business as presently conducted, and to own,
lease and operate its assets and properties, all of which are in full force and
effect, except where the failure to hold such Permit or for such Permit to be in
full force and effect would not reasonably be expected to have a Material
Adverse Effect on the Purchaser.

 

3.9 Investment Company Act. The Purchaser is not an “investment company” or a
Person directly or indirectly “controlled” by or acting on behalf of an
“investment company”, in each case within the meaning of the Investment Company
Act of 1940, as amended.

 

3.10 Finders and Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission from the Purchaser, the
Target Companies or any of their respective Affiliates in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
the Purchaser.

 

3.11 Ownership of Exchange Shares. All Exchange Shares issued and delivered in
accordance with Article I to the Seller shall be, upon issuance and delivery of
such Exchange Shares, fully paid and non-assessable, free and clear of all
Liens, other than restrictions arising from applicable securities Laws, the
Lock-Up Agreement, and any Liens incurred by Seller, and the issuance and sale
of such Exchange Shares pursuant hereto will not be subject to or give rise to
any preemptive rights or rights of first refusal.

 

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3.12 Independent Investigation. The Purchaser has conducted its own independent
investigation, review and analysis of the business, results of operations,
prospects, condition (financial or otherwise) or assets of the Target Companies,
and acknowledge that it has been provided adequate access to the personnel,
properties, assets, premises, books and records, and other documents and data of
the Target Companies for such purpose. The Purchaser acknowledges and agrees
that: (a) in making its decision to enter into this Agreement and to consummate
the transactions contemplated hereby, it has relied solely upon its own
investigation and the express representations and warranties of the Company and
the Seller set forth in Article IV and Article V (including the related portions
of the Company Disclosure Schedules and any Supplemental Disclosure Schedules
provided by the Company or the Seller); and (b) none of the Company, the Seller
or their respective Representatives have made any representation or warranty as
to the Target Companies, the Seller or this Agreement, except as expressly set
forth in Article IV and Article V (including the related portions of the Company
Disclosure Schedules and Supplemental Disclosure Schedules provided by the
Company or the Seller).

 

Article IV
JOINT REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLERS

 

Except as set forth in the disclosure schedules delivered by the Company to the
Purchaser on the date hereof (the “Company Disclosure Schedules”), the Section
numbers of which are numbered to correspond to the Section numbers of this
Agreement to which they refer, each of the Company and each Seller hereby,
jointly and severally, represents and warrants to the Purchaser and as follows:

 

4.1 Due Organization and Good Standing. The Company is a business company duly
organized, validly existing and in good standing under the Laws of Canada and
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Each Subsidiary of the
Company is a corporation or other entity duly formed, validly existing and in
good standing under the Laws of its jurisdiction of organization and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Each Target Company is duly
qualified or licensed and in good standing in the jurisdiction in which it is
incorporated or registered and in each other jurisdiction where it does business
or operates to the extent that the character of the property owned, or leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary. Schedule 4.1 lists all jurisdictions in
which any Target Company is qualified to conduct business and all names other
than its legal name under which any Target Company does business. The Company
has provided to the Purchaser accurate and complete copies of its Organizational
Documents and the Organizational Documents of each of its Subsidiaries, each as
amended to date and as currently in effect. No Target Company is in violation of
any provision of its Organizational Documents.

 

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4.2 Authorization; Binding Agreement. The Company has all requisite corporate
power and authority to execute and deliver this Agreement and each Ancillary
Document to which it is or is required to be a party, to perform the Company’s
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and each Ancillary Document to which the Company is or is required to be a party
and the consummation of the transactions contemplated hereby and thereby, (a)
have been duly and validly authorized by the Company’s board of directors and
the Company’s shareholders to the extent required by the Company’s
Organizational Documents, any other applicable Law or any Contract to which the
Company or any of its shareholders is a party or by which it or its securities
are bound and (b) no other proceedings on the part of the Company are necessary
to authorize the execution and delivery of this Agreement and each Ancillary
Document to which it is a party or to consummate the transactions contemplated
hereby and thereby. This Agreement has been, and each Ancillary Document to
which the Company is or is required to be a party shall be when delivered, duly
and validly executed and delivered by the Company and assuming the due
authorization, execution and delivery of this Agreement and any such Ancillary
Document by the other parties hereto and thereto, constitutes, or when delivered
shall constitute, the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to the
Enforceability Exceptions.

 

4.3 Capitalization.

 

(a) The Company is authorized to issue an unlimited number of Company Ordinary
Shares, 2,730,000 of which Class A Company Shares are issued and outstanding.
Prior to giving effect to the transactions contemplated by this Agreement, the
Sellers are the legal (registered) and beneficial owners of all of the issued
and outstanding shares and other equity interests in or of the Company, with
each Seller owning the shares of the Company set forth on Schedule 4.3(a), all
of which shares and other equity interests are owned free and clear of any
Liens. The Purchased Shares to be delivered by the Seller to the Purchaser at
the Closing constitute all of the issued and outstanding shares and other equity
interests in or of the Company. All of the outstanding shares and other equity
interests in or of the Company have been duly authorized, are fully paid and
non-assessable and not in violation of any purchase option, right of first
refusal, preemptive right, subscription right or any similar right under any
provision of any applicable Law, the Company Charter or any Contract to which
the Company is a party or by which it or its securities are bound. The Company
holds no shares or other equity interests in or of the Company in its treasury.
None of the outstanding shares or other equity interests in or of the Company
were issued in violation of any applicable securities Laws.

 

(b) There are no options, warrants or other rights to subscribe for or purchase
any shares or other equity interests in or of the Company or securities
convertible into or exchangeable for, or that otherwise confer on the holder any
right to acquire any shares or other equity interests in or of the Company, or
preemptive rights or rights of first refusal or first offer, nor are there any
Contracts, commitments, arrangements or restrictions to which the Company or any
of its shareholders is a party or bound relating to any equity securities of the
Company, whether or not outstanding. There are no outstanding or authorized
equity appreciation, phantom equity or similar rights with respect to the
Company. There are no voting trusts, proxies, shareholder agreements or any
other agreements or understandings with respect to the voting of the Company’s
shares or other equity interests. There are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares
or other equity interests or securities in or of the Company, nor has the
Company granted any registration rights to any Person with respect to the
Company’s equity securities. All of the Company’s securities have been granted,
offered, sold and issued in compliance with all applicable securities Laws. As a
result of the consummation of the transactions contemplated by this Agreement,
no shares or other equity interests in or of the Company are issuable and no
rights in connection with any interests, warrants, rights, options or other
securities of the Company accelerate or otherwise become triggered (whether as
to vesting, exercisability, convertibility or otherwise).

 

(c) Since January 1, 2018, the Company has not declared or paid any distribution
or dividend in respect of its shares or other equity interests and has not
repurchased, redeemed or otherwise acquired any shares or other equity interests
in or of the Company, and the board of directors of the Company has not
authorized any of the foregoing.

 

7

 

 

4.4 Subsidiaries.

 

(a) Schedule 4.4(a) sets forth the name of each Subsidiary of the Company, and
with respect to each Subsidiary (a) its jurisdiction of organization, (b) its
authorized shares or other equity interests (if applicable), (c) the number of
issued and outstanding shares or other equity interests and the record holders
and beneficial owners thereof and (d) its Tax election to be treated as a
corporate or a disregarded entity under the Code and any state or applicable
non-U.S. Tax laws, if any. All of the outstanding equity securities of each
Subsidiary of the Company are duly authorized and validly issued, fully paid and
non-assessable (if applicable), and were offered, sold and delivered in
compliance with all applicable securities Laws, and owned by the Company or one
of its Subsidiaries free and clear of all Liens (other than those, if any,
imposed by such Subsidiary’s Organizational Documents). There are no Contracts
to which the Company or any of its Affiliates is a party or bound with respect
to the voting (including voting trusts or proxies) of the shares or other equity
interests of any Subsidiary of the Company other than the Organizational
Documents of any such Subsidiary. There are no outstanding or authorized
options, warrants, rights, agreements, subscriptions, convertible securities or
commitments to which any Subsidiary of the Company is a party or which are
binding upon any Subsidiary of the Company providing for the issuance or
redemption of any shares or other equity interests in or of any Subsidiary of
the Company. There are no outstanding equity appreciation, phantom equity,
profit participation or similar rights granted by any Subsidiary of the Company.
No Subsidiary of the Company has any limitation on its ability to make any
distributions or dividends to its equity holders, whether by Contract, Order or
applicable Law. Except for the equity interests of the Subsidiaries listed on
Schedule 4.4(a), the Company does not own or have any rights to acquire,
directly or indirectly, any shares or other equity interests of any Person. None
of the Company or its Subsidiaries is a participant in any joint venture,
partnership or similar arrangement. There are no outstanding material
contractual obligations of the Company or its Subsidiaries to provide funds to,
or make any investment (in the form of a loan, capital contribution or
otherwise) in, any other Person (other than loans to customers in the ordinary
course of business).

 

(b) Sellers are, collectively, the legal and beneficial owners of one hundred
percent (100%) of the issued and outstanding equity interests of the Company.
There are no outstanding options, warrants, rights (including conversion rights,
preemptive rights, rights of first refusal or similar rights) or agreements to
purchase or acquire any equity interest, or any securities convertible into or
exchangeable for an equity interest, of the Company. The Company operates its
business in China, the United States and Canada.

 

(c) The capital and organizational structure of each Target Company organized or
registered in the PRC (each, a “PRC Target Company”) are valid and in full
compliance with the applicable PRC Laws. The registered capital of each PRC
Target Company has been fully paid up in accordance with the schedule of payment
stipulated in its articles of association, approval documents, certificates of
approval and legal person business license (collectively, the “PRC Establishment
Documents”) and in compliance with applicable PRC Laws, and there is no
outstanding capital contribution commitment. The Establishment Documents of each
PRC Target Company has been duly approved and filed in accordance with the laws
of the PRC and are valid and enforceable. The business scope specified in the
PRC Establishment Documents of the PRC Target Companies complies in all material
respects with the requirements of all applicable PRC Laws, and the operation and
conduct of business by, and the term of operation of the PRC Target Companies in
accordance with the PRC Establishment Documents is in compliance in all material
respects with applicable PRC Laws.

 

4.5 Governmental Approvals. No Consent of or with any Governmental Authority on
the part of any Target Company is required to be obtained or made in connection
with the execution, delivery or performance by the Company of this Agreement or
any Ancillary Documents to which it is a party or the consummation by the
Company of the transactions contemplated hereby or thereby other than such
filings as contemplated by this Agreement.

 

8

 

 

4.6 Non-Contravention. The execution and delivery by the Company (or any other
Target Company, as applicable) of this Agreement and each Ancillary Document to
which any Target Company is a party or otherwise bound, and the consummation by
any Target Company of the transactions contemplated hereby and thereby and
compliance by any Target Company with any of the provisions hereof and thereof,
will not (a) conflict with or violate any provision of any Target Company’s
Organizational Documents, (b) subject to obtaining the Consents from
Governmental Authorities referred to in Section 4.5 hereof, and any condition
precedent to such Consent or waiver having been satisfied, conflict with or
violate any Law, Order or Consent applicable to any Target Company or any of
their properties or assets, or (c) (i) violate, conflict with or result in a
breach of, (ii) constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, (iii) result in the
termination, withdrawal, suspension, cancellation or modification of, (iv)
accelerate the performance required by any Target Company under, (v) result in a
right of termination or acceleration under, (vi) give rise to any obligation to
make payments or provide compensation under, (vii) result in the creation of any
Lien upon any of the properties or assets of any Target Company under, (viii)
give rise to any obligation to obtain any third party consent or provide any
notice to any Person or (ix) give any Person the right to declare a default,
exercise any remedy, claim a rebate, chargeback, penalty or change in delivery
schedule, accelerate the maturity or performance, cancel, terminate or modify
any right, benefit, obligation or other term under, any of the terms, conditions
or provisions of, any Company Material Contract.

 

4.7 Financial Statements.

 

(a) As used herein, the term “Company Financials” means the (i) audited
consolidated financial statements of the Target Companies (including, in each
case, any related notes thereto), consisting of the consolidated balance sheet
of the Target Companies as of December 31, 2019, and the related consolidated
unaudited income statement, changes in shareholder equity and statement of cash
flows for the years then ended and (ii) the unaudited financial statements,
consisting of the consolidated balance sheet of the Target Companies as of March
31, 2020 (the “Interim Balance Sheet Date”) and the related consolidated income
statement, changes in shareholder equity and statement of cash flows for the
three (3) months then ended. The Company Financials (i) accurately reflect the
books and records of the Target Companies as of the times and for the periods
referred to therein, (ii) were prepared in accordance with GAAP, consistently
applied throughout and among the periods involved (except that the unaudited
statements exclude the footnote disclosures and other presentation items
required for GAAP and exclude year-end adjustments which will not be material in
amount), and (iii) fairly present in all material respects the financial
position of the Target Companies as of the respective dates thereof and the
results of the operations and cash flows of the Target Companies for the periods
indicated.

 

(b) Each Target Company maintains accurate books and records reflecting its
assets and Liabilities and maintains proper and adequate internal accounting
controls that provide reasonable assurance that (i) such Target Company does not
maintain any off-the-book accounts and that such Target Company’s assets are
used only in accordance with the Target Company’s management directives, (ii)
transactions are executed with management’s authorization, (iii) transactions
are recorded as necessary to permit preparation of the financial statements of
such Target Company and to maintain accountability for such Target Company’s
assets, (iv) access to such Target Company’s assets is permitted only in
accordance with management’s authorization, (v) the reporting of such Target
Company’s assets is compared with existing assets at regular intervals and
verified for actual amounts and (vi) accounts, notes and other receivables are
recorded accurately, and proper and adequate procedures are implemented to
effect the collection of accounts, notes and other receivables on a current and
timely basis. No Target Company has been subject to or involved in any material
fraud that involves management or other employees who have a significant role in
the internal controls over financial reporting of the Company and its
Subsidiaries. Since January 1, 2019, no Target Company or its Representatives
has received any written complaint, allegation, assertion or claim regarding the
accounting or auditing practices, procedures, methodologies or methods of any
Target Company or its internal accounting controls, including any material
written complaint, allegation, assertion or claim that any Target Company has
engaged in questionable accounting or auditing practices.

 

9

 

 

(c) No Target Company has ever been subject to the reporting requirements of
Sections 13(a) and 15(d) of the Exchange Act.

 

(d) All material Indebtedness of the Target Companies is disclosed in the
financial statements and related notes previously delivered to the Purchaser. No
Indebtedness of any Target Company contains any restriction upon (i) the
prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by
any Target Company, or (iii) the ability of the Target Companies to grant any
Lien on their respective properties or assets.

 

(e) No Target Company is subject to any Liabilities or obligations (whether or
not required to be reflected on a balance sheet prepared in accordance with
GAAP), except for those that are either (i) adequately reflected or reserved on
or provided for in the consolidated balance sheet of the Company and its
Subsidiaries as of the Interim Balance Sheet Date contained in the Company
Financials or (ii) not material and that were incurred after the Interim Balance
Sheet Date in the ordinary course of business consistent with past practice
(other than Liabilities for breach of any Contract or violation of any Law).

 

(f) All financial projections with respect to the Target Companies that were
delivered by or on behalf of the Company to the Purchaser or their
Representatives were prepared in good faith using assumptions that the Company
believes to be reasonable.

 

4.8 Absence of Certain Changes. Since January 1, 2019, each Target Company has
(a) conducted its business only in the ordinary course of business consistent
with past practice, (b) not been subject to a Material Adverse Effect and (c)
has not taken any action or committed or agreed to take any action that would be
prohibited by Section 6.2(b) if such action were taken on or after the date
hereof without the consent of the Purchaser.

 

4.9 Compliance with Laws. No Target Company is or has been in material conflict
or non-compliance with, or in material default or violation of, nor has any
Target Company received, since January 1, 2019, any written or oral notice of
any material conflict or non-compliance with, or material default or violation
of, any applicable Laws by which it or any of its properties, assets, employees,
business or operations are or were bound or affected.

 

4.10 Company Permits. Each Target Company (and its employees who are legally
required to be licensed by a Governmental Authority in order to perform his or
her duties with respect to his or her employment with any Target Company), holds
all Permits necessary to lawfully conduct in all material respects its business
as presently conducted and as currently contemplated to be conducted, and to
own, lease and operate its assets and properties (collectively, the “Company
Permits”). The Company has made available to the Purchaser true, correct and
complete copies of all material Company Permits. All of the Company Permits are
in full force and effect, and no suspension or cancellation of any of the
Company Permits is pending or, to the Company’s Knowledge, threatened. No Target
Company is in violation in any material respect of the terms of any Company
Permit. All filings and registrations with Governmental Authorities required in
respect of each of the Target Companies and its operations, including but not
limited to the registrations with the Chinese Ministry of Commerce, the Chinese
State Administration of Industry and Commerce, and the Chinese State
Administration for Foreign Exchange, tax bureau, customs authorities, product
registration authorities and health regulatory authorities, as applicable, have
been duly completed in accordance with applicable Law.

 

10

 

 

4.11 Litigation. Set forth on Schedule 4.11 is a complete list of litigation
matters. Except as disclosed in Schedule 4.11, there is no (a) Action of any
nature pending or threatened, nor is there any reasonable basis for any Action
to be made, or (b) Order pending now or rendered by a Governmental Authority
since January 1, 2018, in either case of (a) or (b) by or against any Target
Company, its current or former directors, officers or equity holders (provided,
that any litigation involving the directors, officers or equity holders of a
Target Company must be related to the Target Company’s business, equity
securities or assets), its business, equity securities or assets. The items
listed on Schedule 4.11, if finally determined adverse to the Target Companies,
will not have, either individually or in the aggregate, a Material Adverse
Effect upon any Target Company. Since January 1, 2018, none of the current or
former officers, senior management or directors of any Target Company have been
charged with, indicted for, arrested for, or convicted of any felony or any
crime involving fraud.

 

4.12 Material Contracts.

 

(a) Schedule 4.12(a) sets forth a true, correct and complete list of, and the
Company has made available to the Purchaser (including written summaries of oral
Contracts), true, correct and complete copies of, each Contract to which any
Target Company is a party or by which any Target Company, or any of its
properties or assets are bound or affected (each contract required to be set
forth on Schedule 4.12(a), a “Company Material Contract”) that:

 

(i) contains covenants that limit the ability of any Target Company (A) to
compete in any line of business or with any Person or in any geographic area or
to sell, or provide any service or product or solicit any Person, including any
non-competition covenants, employee and customer non-solicit covenants,
exclusivity restrictions, rights of first refusal or most-favored pricing
clauses or (B) to purchase or acquire an interest in any other Person;

 

(ii) involves any joint venture, profit-sharing, partnership, limited liability
company or other similar agreement or arrangement relating to the formation,
creation, operation, management or control of any partnership or joint venture;

 

(iii) involves any exchange traded, over the counter or other swap, cap, floor,
collar, futures contract, forward contract, option or other derivative financial
instrument or Contract, based on any commodity, security, instrument, asset,
rate or index of any kind or nature whatsoever, whether tangible or intangible,
including currencies, interest rates, foreign currency and indices;

 

(iv) evidences Indebtedness (whether incurred, assumed, guaranteed or secured by
any asset) of any Target Company having an outstanding principal amount in
excess of $100,000;

 

(v) involves the acquisition or disposition, directly or indirectly (by merger
or otherwise), of assets with an aggregate value in excess of $25,000 (other
than in the ordinary course of business consistent with past practice) or shares
or other equity interests in or of another Person;

 

(vi) relates to any merger, consolidation or other business combination with any
other Person or the acquisition or disposition of any other entity or its
business or material assets or the sale of any Target Company, its business or
material assets;

 

(vii) by its terms, individually or with all related Contracts, calls for
aggregate payments or receipts by the Target Companies under such Contract or
Contracts of at least $50,000 per year or $150,000 in the aggregate;

 

11

 

 

(viii) obligates the Target Companies to provide continuing indemnification or a
guarantee of obligations of a third party after the date hereof in excess of
$100,000;

 

(ix) is between any Target Company and any Top Customer or Top Supplier (other
than in the ordinary course of business);

 

(x) is between any Target Company and any directors, officers or employees of a
Target Company (other than at-will employment arrangements with employees
entered into in the ordinary course of business consistent with past practice),
including all non-competition, severance and indemnification agreements, or any
Related Person;

 

(xi) obligates the Target Companies to make any capital commitment or
expenditure in excess of $25,000 (including pursuant to any joint venture);

 

(xii) relates to a material settlement entered into within three (3) years prior
to the date of this Agreement or under which any Target Company has outstanding
obligations (other than customary confidentiality obligations or in the ordinary
course of business);

 

(xiii) provides another Person (other than another Target Company or any
manager, director or officer of any Target Company) with a power of attorney;

 

(xiv) relates to the development, ownership, licensing or use of any
Intellectual Property by, to or from any Target Company, other than
Off-the-Shelf Software Agreements;

 

(xv) relates to any real estates, including, without limitation, leases, lease
guarantees, agreements and documents related thereto;

 

(xvi) evidences any Liens; or

 

(xvii) is otherwise material to any Target Company and not described in clauses
(i) through (xiv) above.

 

(b) With respect to each Company Material Contract: (i) such Company Material
Contract is valid and binding and enforceable in all respects against the Target
Company party thereto (subject to the Enforceability Exceptions) and each other
party thereto, and is in full force and effect; (ii) neither the execution of
this Agreement nor the consummation of the transactions contemplated by this
Agreement will affect the validity or enforceability of any Company Material
Contract; (iii) no Target Company is in breach or default in any respect, and no
event has occurred that with the passage of time or giving of notice or both
would constitute a breach or default by any Target Company, or permit
termination or acceleration by the other party thereto, under such Company
Material Contract; (iv) no other party to such Company Material Contract is in
breach or default in any respect, and no event has occurred that with the
passage of time or giving of notice or both would constitute such a breach or
default by such other party, or permit termination or acceleration by any Target
Company, under such Company Material Contract; (v) no Target Company has
received written or oral notice of an intention by any party to any such Company
Material Contract that provides for a continuing obligation by any party thereto
to terminate such Company Material Contract or amend the terms thereof, other
than modifications in the ordinary course of business that do not adversely
affect any Target Company; and (vi) no Target Company has waived any rights
under any such Company Material Contract.

 

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4.13 Intellectual Property.

 

(a) Schedule 4.13(a)(i) sets forth: (i) all Patents, Trademarks, Internet Assets
and Copyrights owned or licensed by a Target Company or otherwise used or held
for use by a Target Company in which a Target Company is the owner, applicant or
assignee (“Company Registered IP”), specifying as to each item, as applicable:
(A) the nature of the item, including the title, (B) the owner of the item, (C)
the jurisdictions in which the item is issued or registered or in which an
application for issuance or registration has been filed and (D) the issuance,
registration or application numbers and dates; and (ii) all material
unregistered Intellectual Property owned or purported to be owned by a Target
Company. Schedule 4.13(a)(ii) sets forth all licenses, sublicenses and other
agreements or permissions (“Company IP Licenses”) (other than “shrink wrap,”
“click wrap,” and “off the shelf” software agreements and other agreements for
Software commercially available on reasonable terms to the public generally with
license, maintenance, support and other fees of less than $5,000 per year
(collectively, “Off-the-Shelf Software Agreements”), which are not required to
be listed, although such licenses are “Company IP Licenses” as that term is used
herein), under which a Target Company is a licensee or otherwise is authorized
to use or practice any Intellectual Property, and describes (A) the applicable
Intellectual Property licensed, sublicensed or used and (B) any royalties,
license fees or other compensation due from a Target Company, if any. Each
Target Company owns, free and clear of all Liens (other than Permitted Liens),
has valid and enforceable rights in, and has the unrestricted right to use,
sell, license, transfer or assign, all Intellectual Property currently used,
licensed or held for use by such Target Company, and previously used or licensed
by such Target Company, except for the Intellectual Property that is the subject
of the Company IP Licenses. For each Patent and Patent application in the
Company Registered IP, the Target Companies have obtained valid assignments of
inventions from each inventor. Except as set forth on Schedule 4.13(a)(iii), all
Company Registered IP is owned exclusively by the applicable Target Company
without obligation to pay royalties, licensing fees or other fees, or otherwise
account to any third party with respect to such Company Registered IP.

 

(b) Each Target Company has a valid and enforceable license to use all
Intellectual Property that is the subject of the Company IP Licenses applicable
to such Target Company. The Company IP Licenses include all of the licenses,
sublicenses and other agreements or permissions necessary to operate the Target
Companies as presently conducted. Each Target Company has performed all
obligations imposed on it in the Company IP Licenses, has made all payments
required to date, and such Target Company is not, nor is any other party
thereto, in breach or default thereunder, nor has any event occurred that with
notice or lapse of time or both would constitute a default thereunder. The
continued use by the Target Companies of the Intellectual Property that is the
subject of the Company IP Licenses in the same manner that it is currently being
used is not restricted by any applicable license of any Target Company. All
registrations for Copyrights, Patents and Trademarks that are owned by or
exclusively licensed to any Target Company are valid and in force, and all
applications to register any Copyrights, Patents and Trademarks are pending and
in good standing, all without challenge of any kind. No Target Company is party
to any Contract that requires a Target Company to assign to any Person all of
its rights in any Intellectual Property developed by a Target Company under such
Contract.

 

(c) Schedule 4.13(c) sets forth all licenses, sublicenses and other agreements
or permissions under which a Target Company is the licensor (each, an “Outbound
IP License”), and for each such Outbound IP License, describes (i) the
applicable Intellectual Property licensed, (ii) the licensee under such Outbound
IP License, and (iii) any royalties, license fees or other compensation due to a
Target Company, if any. Each Target Company has performed all obligations
imposed on it in the Outbound IP Licenses, and such Target Company is not, nor
is any other party thereto, in breach or default thereunder, nor has any event
occurred that with notice or lapse of time or both would constitute a default
thereunder.

 

13

 

 

(d) No Action is pending or, to the Company’s Knowledge, threatened that
challenges the validity, enforceability, ownership, or right to use, sell,
license or sublicense any Intellectual Property currently licensed, used or held
for use by the Target Companies in any material respect. No Target Company has
received any written or oral notice or claim asserting or suggesting that any
infringement, misappropriation, violation, dilution or unauthorized use of the
Intellectual Property of any other Person is or may be occurring or has or may
have occurred, as a consequence of the business activities of any Target
Company, nor is there a reasonable basis therefor. There are no Orders to which
any Target Company is a party or its otherwise bound that (i) restrict the
rights of a Target Company to use, transfer, license or enforce any Intellectual
Property owned by a Target Company, (ii) restrict the conduct of the business of
a Target Company in order to accommodate a third Person’s Intellectual Property,
or (iii) grant any third Person any right with respect to any Intellectual
Property owned by a Target Company. No Target Company is currently infringing,
or has, in the past, infringed, misappropriated or violated any Intellectual
Property of any other Person in any material respect in connection with the
ownership, use or license of any Intellectual Property owned or purported to be
owned by a Target Company or otherwise in connection with the conduct of the
respective businesses of the Target Companies. No third party is infringing
upon, has misappropriated or is otherwise violating any Intellectual Property
owned, licensed by, licensed to, or otherwise used or held for use by any Target
Company (“Company IP”) in any material respect.

 

(e) All employees and independent contractors of a Target Company have assigned
to the Target Companies all Intellectual Property arising from the services
performed for a Target Company by such Persons. No current or former officers,
employees or independent contractors of a Target Company have claimed any
ownership interest in any Intellectual Property owned by a Target Company. There
has been no violation of a Target Company’s policies or practices related to
protection of Company IP or any confidentiality or nondisclosure Contract
relating to the Intellectual Property owned by a Target Company. The Company has
provided the Purchaser with true and complete copies of all written Contracts
referenced in subsections under which employees and independent contractors
assigned their Intellectual Property to a Target Company. To the Company’s
Knowledge, none of the employees of any Target Company is obligated under any
Contract, or subject to any Order, that would materially interfere with the use
of such employee’s best efforts to promote the interests of the Target
Companies, or that would materially conflict with the business of any Target
Company as presently conducted. Each Target Company has taken reasonable
security measures in order to protect the secrecy, confidentiality and value of
the material Company IP.

 

(f) No Person has obtained unauthorized access to third party information and
data in the possession of a Target Company, nor has there been any other
compromise of the security, confidentiality or integrity of such information or
data. Each Target Company has complied with all applicable Laws relating to
privacy, personal data protection, and the collection, processing and use of
personal information and its own privacy policies and guidelines. The operation
of the business of the Target Companies has not and does not materially violate
any right to privacy or publicity of any third person, or constitute unfair
competition or trade practices under applicable Law.

 

(g) The consummation of any of the transactions contemplated by this Agreement
will neither violate nor by their terms result in the breach, modification,
cancellation, termination, suspension of, or acceleration of any payments with
respect to, or release of source code because of (i) any Contract providing for
the license or other use of Intellectual Property owned by a Target Company, or
(ii) any Company IP License. Following the Closing, the Company shall be
permitted to exercise, directly or indirectly through its Subsidiaries, all of
the Target Companies’ rights under such Contracts or IP Licenses described in
the previous sentence to the same extent that the Target Companies would have
been able to exercise had the transactions contemplated by this Agreement not
occurred, without the payment of any additional amounts or consideration other
than ongoing fees, royalties or payments which the Target Companies would
otherwise be required to pay in the absence of such transactions.

 

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4.14 Taxes and Returns.

 

(a) Each Target Company has or will have timely filed, or caused to be timely
filed, all Tax Returns and reports required to be filed by it (taking into
account all available extensions), which Tax Returns are true, accurate, correct
and complete in all material respects, and has paid, collected or withheld, or
caused to be paid, collected or withheld, all Taxes required to be paid,
collected or withheld, other than such Taxes for which adequate reserves in the
Company Financials have been established in accordance with GAAP. Schedule
4.14(a) sets forth each jurisdiction in which each Target Company files or is
required to file a Tax Return. Each Target Company has complied with all
applicable Laws relating to Tax.

 

(b) There is no current pending or threatened Action against a Target Company by
a Governmental Authority in a jurisdiction where the Target Company does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.

 

(c) No Target Company is being audited by any Tax authority or has been notified
in writing or, to the Knowledge of the Company, orally by any Tax authority that
any such audit is contemplated or pending. There are no claims, assessments,
audits, examinations, investigations or other Actions pending against a Target
Company in respect of any Tax, and no Target Company has been notified in
writing of any proposed Tax claims or assessments against it (other than, in
each case, claims or assessments for which adequate reserves in the Company
Financials have been established).

 

(d) There are no Liens with respect to any Taxes upon any Target Company’s
assets, other than Permitted Liens.

 

(e) Each Target Company has collected or withheld all Taxes currently required
to be collected or withheld by it, and all such Taxes have been paid to the
appropriate Governmental Authorities or set aside in appropriate accounts for
future payment when due.

 

(f) No Target Company has any outstanding waivers or extensions of any
applicable statute of limitations to assess any amount of Taxes. There are no
outstanding requests by a Target Company for any extension of time within which
to file any Tax Return or within which to pay any Taxes shown to be due on any
Tax Return.

 

(g) No Target Company has made any change in accounting method or received a
ruling from, or signed an agreement with, any taxing authority that would
reasonably be expected to have a material impact on its Taxes following the
Closing.

 

(h) No Target Company has any Liability for the Taxes of another Person (other
than another Target Company) (i) under any applicable Tax Law, (ii) as a
transferee or successor, or (iii) by contract, indemnity or otherwise. No Target
Company is a party to or bound by any Tax indemnity agreement, Tax sharing
agreement or Tax allocation agreement or similar agreement, arrangement or
practice with respect to Taxes (including advance pricing agreement, closing
agreement or other agreement relating to Taxes with any Governmental Authority)
that will be binding on the Company or its Subsidiaries with respect to any
period following the Closing Date.

 

(i) No Target Company has requested, or is the subject of or bound by any
private letter ruling, technical advice memorandum, closing agreement or similar
ruling, memorandum or agreement with any Governmental Authority with respect to
any Taxes, nor is any such request outstanding.

 

15

 

 

4.15 Real Property. Schedule 4.15 contains a complete and accurate list of all
premises currently leased or subleased or otherwise used or occupied by a Target
Company for the operation of the business of a Target Company (the “Leased
Premises”), and of all current leases, lease guarantees, agreements and
documents related thereto, including all amendments, terminations and
modifications thereof or waivers thereto (collectively, the “Company Real
Property Leases”), as well as the current annual rent and term under each
Company Real Property Lease. The Company has provided to the Purchaser a true
and complete copy of each of the Company Real Property Leases, and in the case
of any oral Company Real Property Lease, a written summary of the material terms
of such Company Real Property Lease. The Company Real Property Leases are valid,
binding and enforceable in accordance with their terms and are in full force and
effect. No event has occurred which (whether with or without notice, lapse of
time or both or the happening or occurrence of any other event) would constitute
a default on the part of a Target Company or any other party under any of the
Company Real Property Leases, and no Target Company has received notice of any
such condition. No Target Company owns or has ever owned any real property or
any interest in real property (other than the leasehold interests in the Company
Real Property Leases).

 

4.16 Personal Property. Each item of Personal Property which is currently owned,
used or leased by a Target Company with a book value or fair market value of
greater than Twenty-Five Thousand Dollars ($25,000) is set forth on Schedule
4.16, along with, to the extent applicable, a list of lease agreements and lease
guarantees related thereto, including all amendments, terminations and
modifications thereof or waivers thereto (“Company Personal Property Leases”).
All such items of Personal Property are in good operating condition and repair
(reasonable wear and tear excepted), and are suitable for their intended use in
the business of the Target Companies. The operation of each Target Company’s
business as it is now conducted or presently proposed to be conducted is not
dependent upon the right to use the Personal Property of Persons other than a
Target Company, except for such Personal Property that is owned by, or leased,
licensed or otherwise contracted to, a Target Company. The Company has provided
to the Purchaser a true and complete copy of each of the Company Personal
Property Leases, and in the case of any oral Company Personal Property Lease, a
written summary of the material terms of such Company Personal Property Lease.
The Company Personal Property Leases are valid, binding and enforceable in
accordance with their terms and are in full force and effect. No event has
occurred which (whether with or without notice, lapse of time or both or the
happening or occurrence of any other event) would constitute a default on the
part of a Target Company or any other party under any of the Company Personal
Property Leases, and no Target Company has received notice of any such
condition.

 

4.17 Title to and Sufficiency of Assets. Each Target Company has good and
marketable title to, or a valid leasehold interest in or right to use, all of
its assets, free and clear of all Liens other than (a) Permitted Liens, (b) the
rights of lessors under leasehold interests and (c) Liens specifically
identified on the Interim Balance Sheet. The assets (including Intellectual
Property rights and contractual rights) of the Target Companies constitute all
of the assets, rights and properties that are used in the operation of the
businesses of the Target Companies as it is now conducted and presently proposed
to be conducted or that are used or held by the Target Companies for use in the
operation of the businesses of the Target Companies, and taken together, are
adequate and sufficient for the operation of the businesses of the Target
Companies as currently conducted and as presently proposed to be conducted.

 

4.18 Employee Matters.

 

(a) No Target Company is a party to any collective bargaining agreement or other
Contract with any group of employees, labor organization or other representative
of any of the employees of any Target Company and the Company has no Knowledge
of any activities or proceedings of any labor union or other party to organize
or represent such employees. There has not occurred or been threatened any
strike, slow-down, picketing, work-stoppage, or other similar labor activity
with respect to any such employees. There are no unresolved labor controversies
(including unresolved grievances and age or other discrimination claims), if
any, that are pending or threatened between any Target Company and Persons
employed by or providing services to a Target Company. No current officer or
employee of a Target Company has provided any Target Company written or oral
notice of his or her plan to terminate his or her employment with any Target
Company.

 

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(b) Each Target Company (i) is and has been in compliance in all material
respects with all applicable Laws respecting employment and employment
practices, terms and conditions of employment, health and safety and wages and
hours, and other Laws relating to discrimination, disability, labor relations,
hours of work, payment of wages and overtime wages, pay equity, immigration,
workers compensation, working conditions, employee scheduling, occupational
safety and health, family and medical leave, and employee terminations, and have
not received written notice, or any other form of notice, that there is any
pending Action involving unfair labor practices against a Target Company, (ii)
is not liable for any material arrears of wages or any material penalty for
failure to comply with any of the foregoing, and (iii) is not liable for any
material payment to any Governmental Authority with respect to unemployment
compensation benefits, social security or other benefits or obligations for
employees, independent contractors or consultants (other than routine payments
to be made in the ordinary course of business and consistent with past
practice). There are no Actions pending or threatened against a Target Company
brought by or on behalf of any applicant for employment, any current or former
employee, any Person alleging to be a current or former employee, or any
Governmental Authority, relating to any such Law or regulation, or alleging
breach of any express or implied contract of employment, wrongful termination of
employment, or alleging any other discriminatory, wrongful or tortious conduct
in connection with the employment relationship.

 

(c) Schedule 4.18(c) sets forth a complete and accurate list of all employees,
officers and directors of the Target Companies showing for each as of that date
(i) such person’s name, job title or description, employer, location, salary
level (including any bonus, commission, deferred compensation or other
remuneration payable (other than any such arrangements under which payments are
at the discretion of the Target Companies)), (ii) any bonus, commission or other
remuneration other than salary paid during the calendar year ending December 31,
2019, and (iii) any wages, salary, bonus, commission or other compensation due
and owing to each employee during or for the calendar year ending December 31,
2019. Except as disclosed in Schedule 4.18(c), no employee is a party to a
written employment Contract with a Target Company and each employee of a PRC
Target Company is employed with a “non-fixed term” in accordance with the
Chinese Labor Contract Law, and the Target Companies have paid in full to all
such employees all wages, salaries, commission, bonuses and other compensation
due to its employees, including overtime compensation, and there are no
severance payments which are or could become payable by a Target Company to any
such employees under the terms of any written or oral agreement, or commitment
or any Law, custom, trade or practice. Each such employee has entered into the
Company’s standard form of employee non-disclosure, inventions and restrictive
covenants agreement with the Company or its Subsidiaries (whether pursuant to a
separate agreement or incorporated as part of such employee’s overall employment
agreement), a copy of which has been provided to the Purchaser by the Company.

 

(d) There are no independent contractors (including consultants) currently
engaged by any Target Company, along with the position, a description of
responsibilities, the entity engaging such Person, date of retention and rate of
remuneration, most recent increase (or decrease) in remuneration and amount
thereof, for each such Person. Each such independent contractors are a party to
a written Contract with a Target Company. Each such independent contractor has
entered into customary covenants regarding confidentiality, non-competition and
assignment of inventions and copyrights in such Person’s agreement with a Target
Company, a copy of which has been provided to the Purchaser by the Company. For
the purposes of applicable Law, including the Code, all independent contractors
who are currently, or within the last six (6) years have been, engaged by a
Target Company are bona fide independent contractors and not employees of a
Target Company. Each independent contractor is terminable on fewer than thirty
(30) days’ notice, without any obligation of any Target Company to pay severance
or a termination fee.

 

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4.19 Benefit Plans.

 

(a) Set forth on Schedule 4.19(a) is a true and complete list of each Foreign
Plan of a Target Company (each, a “Company Benefit Plan”). No Target Company has
ever maintained or contributed to (or had an obligation to contribute to) any
“employee benefit plan” (as defined in Section 3(3) of ERISA).

 

(b) With respect to each Company Benefit Plan which covers any current or former
officer, director, consultant or employee (or beneficiary thereof) of a Target
Company, the Company has provided to the Purchaser accurate and complete copies,
if applicable, of: (i) all Company Benefit Plans and related trust agreements or
annuity Contracts (including any amendments, modifications or supplements
thereto); (ii) the most recent annual and periodic accounting of plan assets;
(iii) the most recent actuarial valuation; and (iv) all communications with any
Governmental Authority concerning any matter that is still pending or for which
a Target Company has any outstanding Liability or obligation.

 

(c) With respect to each Company Benefit Plan: (i) such Company Benefit Plan has
been administered and enforced in all material respects in accordance with its
terms and the requirements of any and all applicable Laws, and has been
maintained, where required, in good standing with applicable regulatory
authorities and Governmental Authorities; (ii) no breach of fiduciary duty has
occurred; (iii) no Action is pending or threatened (other than routine claims
for benefits arising in the ordinary course of administration); and (iv) all
contributions and premiums required to be made with respect to a Company Benefit
have been timely made. No Target Company has incurred any obligation in
connection with the termination of, or withdrawal from, any Company Benefit
Plan.

 

(d) The present value of the accrued benefit liabilities (whether or not vested)
under each Company Benefit Plan, determined as of the end of the Company’s most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is reasonable, did not exceed the current value of the assets of such Company
Benefit Plan allocable to such benefit liabilities.

 

(e) The consummation of the transactions contemplated by this Agreement and the
Ancillary Documents will not: (i) entitle any individual to severance pay,
unemployment compensation or other benefits or compensation; or (ii) accelerate
the time of payment or vesting, or increase the amount of any compensation due,
or in respect of, any individual.

 

(f) Except to the extent required by applicable Law, no Target Company provides
health or welfare benefits to any former or retired employee or is obligated to
provide such benefits to any active employee following such employee’s
retirement or other termination of employment or service.

 

(g) All Company Benefit Plans can be terminated at any time as of or after the
Closing Date without resulting in any liability to any Target Company, the
Purchaser, or their respective Affiliates for any additional contributions,
penalties, premiums, fees, fines, excise taxes or any other charges or
liabilities.

 

4.20 Environmental Matters.

 

(a) Each Target Company is and has been in compliance in all material respects
with all applicable Environmental Laws, including obtaining, maintaining in good
standing, and complying with all Permits required for its business and
operations by Environmental Laws (“Environmental Permits”), no Action is pending
or threatened to revoke, modify, or terminate any such Environmental Permit, and
no facts, circumstances, or conditions currently exist that could adversely
affect such continued compliance with Environmental Laws and Environmental
Permits or require capital expenditures to achieve or maintain such continued
compliance with Environmental Laws and Environmental Permits.

 

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(b) No Target Company is the subject of any outstanding Order or Contract with
any Governmental Authority or other Person in respect of any (i) Environmental
Laws, (ii) Remedial Action, or (iii) Release or threatened Release of a
Hazardous Material. No Target Company has assumed, contractually or by operation
of Law, any Liabilities or obligations under any Environmental Laws.

 

(c) No Action has been made or is pending or threatened against any Target
Company or any assets of a Target Company alleging either or both that a Target
Company may be in material violation of any Environmental Law or Environmental
Permit or may have any material Liability under any Environmental Law.

 

(d) No Target Company has manufactured, treated, stored, disposed of, arranged
for or permitted the disposal of, generated, handled or released any Hazardous
Material, or owned or operated any property or facility, in a manner that has
given or would reasonably be expected to give rise to any material Liability or
obligation under applicable Environmental Laws. No fact, circumstance, or
condition exists in respect of any Target Company or any property currently or
formerly owned, operated, or leased by any Target Company or any property to
which a Target Company arranged for the disposal or treatment of Hazardous
Materials that could reasonably be expected to result in a Target Company
incurring any material Environmental Liabilities.

 

(e) There is no investigation of the business, operations, or currently owned,
operated, or leased property of a Target Company or previously owned, operated,
or leased property of a Target Company pending or threatened that could lead to
the imposition of any Liens under any Environmental Law or material
Environmental Liabilities.

 

(f) There is not located at any of the properties of a Target Company any (i)
underground storage tanks, (ii) asbestos-containing material, or (iii) equipment
containing polychlorinated biphenyls.

 

(g) The Company has provided to the Purchaser all environmentally related site
assessments, audits, studies, reports and results of investigations that have
been performed in respect of the currently or previously owned, leased, or
operated properties of any Target Company.

 

4.21 Transactions with Related Persons. Except as set forth in the financial
statements and related notes previously delivered to the Purchaser, no Target
Company nor any of its Affiliates, nor any officer, director, manager, employee,
trustee or beneficiary of a Target Company or any of its Affiliates, nor any
immediate family member of any of the foregoing (whether directly or indirectly
through an Affiliate of such Person) (each of the foregoing, a “Related Person”)
is presently, or since January 1, 2018 has been, a party to any transaction with
a Target Company, including any Contract or other arrangement (a) providing for
the furnishing of services by (other than as officers, directors or employees of
the Target Company), (b) providing for the rental of real property or Personal
Property from or (c) otherwise requiring payments to (other than for services or
expenses as directors, officers or employees of the Target Company in the
ordinary course of business consistent with past practice), any Related Person
or any Person in which any Related Person has an interest as an owner, officer,
manager, director, trustee or partner or in which any Related Person has any
direct or indirect interest (other than the ownership of securities representing
no more than two percent (2%) of the outstanding voting power or economic
interest of a publicly traded company). Except as set forth in the financial
statements and related notes previously delivered to the Purchaser, no Target
Company has outstanding any Contract or other arrangement or commitment with any
Related Person, and no Related Person owns any real property or Personal
Property, or right, tangible or intangible (including Intellectual Property)
which is used in the business of any Target Company. Schedule 4.21 specifically
identifies all Contracts, arrangements or commitments subject to this Section
4.21 that cannot be terminated upon sixty (60) days’ notice by the Target
Companies without cost or penalty.

 

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4.22 Insurance.

 

(a) Schedule 4.22(a) lists all insurance policies (by policy number, insurer,
coverage period, coverage amount, annual premium and type of policy) held by a
Target Company relating to a Target Company or its business, properties, assets,
directors, officers and employees, copies of which have been provided to the
Purchaser. All premiums due and payable under all such insurance policies have
been timely paid and the Company and its Subsidiaries are otherwise in material
compliance with the terms of such insurance policies. All such insurance
policies are in full force and effect, and to the Knowledge of the Company,
there is no threatened termination of, or material premium increase with respect
to, any of such insurance policies. No Target Company has any self-insurance or
co-insurance programs. Since January 1, 2018, no Target Company has received any
notice from, or on behalf of, any insurance carrier relating to or involving any
adverse change or any change other than in the ordinary course of business, in
the conditions of insurance, any refusal to issue an insurance policy or
non-renewal of a policy, or requiring or suggesting material alteration of any
of assets of a Target Company, purchase of additional equipment or material
modification of any of methods of doing business by a Target Company.

 

(b) Schedule 4.22(b) identifies each individual insurance claim in excess of
$50,000 made by a Target Company since January 1, 2018. Each Target Company has
reported to its insurers all claims and pending circumstances that would
reasonably be expected to result in a claim that could be covered by any such
insurance policies, except where such failure to report such a claim would not
be reasonably likely to be material to the Target Companies. No Target Company
has made any claim against an insurance policy as to which the insurer is
denying coverage.

 

4.23 Top Customers and Suppliers. Schedule 4.23 lists, by dollar volume paid for
each of (a) the twelve (12) months ended on December 31, 2019 and (b) the period
from January 1, 2020 through the Interim Balance Sheet Date, the key customers
of the Target Companies (the “Top Customers”) and the key suppliers of goods or
services to the Target Companies (the “Top Suppliers”). The relationships of
each Target Company with such suppliers and customers are good commercial
working relationships and (i) no Top Supplier or Top Customer within the last
twelve (12) months has cancelled or otherwise terminated, or, to the Company’s
Knowledge, intends to cancel or otherwise terminate, any relationships of such
Person with a Target Company, (ii) no Top Supplier or Top Customer has during
the last twelve (12) months decreased materially or, to the Company’s Knowledge,
threatened to stop, decrease or limit materially, or intends to modify
materially its relationships with a Target Company or intends to stop, decrease
or limit materially its products or services to any Target Company or its usage
or purchase of the products or services of any Target Company, (iii) to the
Company’s Knowledge, no Top Supplier or Top Customer intends to refuse to pay
any amount due to any Target Company or seek to exercise any remedy against any
Target Company, (iv) no Target Company has within the past two (2) years been
engaged in any material dispute with any Top Supplier or Top Customer, and (v)
the consummation of the transactions contemplated in this Agreement and the
other Ancillary Documents will not affect the relationship of any Target Company
with any Top Supplier or Top Customer.

 

4.24 Books and Records. All of the financial books and records of the Target
Companies are complete and accurate in all material respects and have been
maintained in the ordinary course consistent with past practice and in
accordance with applicable Laws.

 

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4.25 Accounts Receivable. All accounts, notes and other receivables, whether or
not accrued, and whether or not billed, of the Target Companies (the “Accounts
Receivable”) arose from sales actually made or services actually performed and
represent valid obligations to a Target Company. None of the Accounts Receivable
are, subject to any right of recourse, defense, deduction, return of goods,
counterclaim, offset, or set off on the part of the obligor in excess of any
amounts reserved therefor on the Company Financials. All of the Accounts
Receivable are, to the Knowledge of the Company, fully collectible according to
their terms in amounts not less than the aggregate amounts thereof carried on
the books of the Target Companies (net of reserves) within ninety (90) days.

 

4.26 Certain Business Practices. No Target Company, nor any of their respective
Representatives acting on their behalf has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees, to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977
or any comparable or similar Law of any other country or other jurisdiction, or
(iii) made any other unlawful payment. No Target Company, nor any of their
respective Representatives acting on their behalf has directly or indirectly,
given or agreed to give any gift or similar benefit in any material amount to
any customer, supplier, governmental employee or other Person who is or may be
in a position to help or hinder any Target Company or assist any Target Company
in connection with any actual or proposed transaction. The operations of each
Target Company are and have been conducted at all times in compliance with
laundering statutes in all applicable jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Authority, and no Action involving
a Target Company with respect to the any of the foregoing is pending or, to the
Knowledge of the Company, threatened. No Target Company or any of their
respective directors or officers, or, to the Knowledge of the Company, any other
Representative acting on behalf of a Target Company is currently identified on
the specially designated nationals or other blocked person list or otherwise
currently subject to any U.S. sanctions administered by OFAC, and no Target
Company has, directly or indirectly, used any funds, or loaned, contributed or
otherwise made available such funds to any Subsidiary, joint venture partner or
other Person, in connection with any sales or operations in any country
sanctioned by OFAC or for the purpose of financing the activities of any Person
currently subject to, or otherwise in violation of, any U.S. sanctions
administered by OFAC in the last five (5) fiscal years. None of the Target
Companies has engaged in transactions with, or exported any of its products or
associated technical data (i) into (or to a national or resident of) Cuba, Iran,
Iraq, Libya, North Korea, Syria or any other country to which the United States
has embargoed goods to or has proscribed economic transactions with or (ii) to
the knowledge of the Company, to any Person included on the United States
Treasury Department’s list of Specially Designated Nationals or the U.S.
Commerce Department’s Denied Persons List. No Target Company has, since January
1, 2018, breached or been in violation of any Law regulating or covering conduct
in, or the nature of, the workplace, including regarding sexual harassment or,
on any impermissible basis, a hostile work environment.

 

4.27 Investment Company Act. No Target Company is an “investment company” or a
Person directly or indirectly “controlled” by or acting on behalf of an
“investment company”, in each case within the meaning of the Investment Company
Act of 1940, as amended.

 

4.28 Finders and Investment Bankers. No Target Company has incurred or will
incur any Liability for any brokerage, finder’s or other fee or commission in
connection with the transactions contemplated hereby.

 

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4.29 Independent Investigation. The Company has conducted its own independent
investigation, review and analysis of the business, results of operations,
prospects, condition (financial or otherwise) or assets of the Purchaser, and
acknowledges that it has been provided adequate access to the personnel,
properties, assets, premises, books and records, and other documents and data of
the Purchaser for such purpose. The Company acknowledges and agrees that: (a) in
making its decision to enter into this Agreement and to consummate the
transactions contemplated hereby, it has relied solely upon its own
investigation and the express representations and warranties of the Purchaser
set forth in Article III; and (b) neither the Purchaser nor any of its
Representatives have made any representation or warranty as to the Purchaser or
this Agreement, except as expressly set forth in Article III.

 

4.30 Information Supplied. None of the information supplied or to be supplied by
the Company expressly for inclusion or incorporation by reference: (a) in any
Current Report on Form 8-K, and any exhibits thereto or any other report, form,
registration or other filing made with any Governmental Authority with respect
to the transactions contemplated by this Agreement or any Ancillary Documents;
or (b) in the mailings or other distributions to the Purchaser’s shareholders
and/or prospective investors with respect to the consummation of the
transactions contemplated by this Agreement or in any amendment to any of
documents identified in (a) through (c), will, when filed, made available,
mailed or distributed, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. Notwithstanding the
foregoing, the Company makes no representation, warranty or covenant with
respect to any information supplied by or on behalf of the Purchaser or its
Affiliates.

 

4.31 SAFE Registrations. Each Target Company that is incorporated outside of the
PRC has taken, and shall continue to take in the future, all reasonable steps to
comply with, and to ensure compliance by each of its equity holders, option
holders, directors, officers and employees that is, or is directly or indirectly
owned or controlled by, a PRC resident or citizen with any applicable rules and
regulations of the relevant PRC government agencies (including the Ministry of
Commerce, the National Development and Reform Commission and the State
Administration of Foreign Exchange) relating to overseas investment by PRC
residents and citizens or overseas listing by offshore special purpose vehicles
controlled directly or indirectly by PRC companies and individuals, such as the
Company (the “PRC Overseas Investment Regulations”), including requesting each
equity holder, option holder, director, officer and employee that is, or is
directly or indirectly owned or controlled by, a PRC resident or citizen to
complete any registration and other procedures required under applicable PRC
Overseas Investment Regulations.

 

4.32 PRC Compliance.

 

(a) Each of the Target Companies has complied, and has taken all steps to ensure
compliance, in material aspect, by each of its shareholders, directors and
officers that is, or is directly or indirectly owned or controlled by, a PRC
resident or citizen with any applicable rules and regulations of the relevant
PRC government agencies in effect on the Closing Date (including but not limited
to the Ministry of Commerce, the National Development and Reform Commission, the
China Securities Regulatory Commission (“CSRC”) and the State Administration of
Foreign Exchange) (the “SAFE”) relating to overseas investment by PRC residents
and citizens (the “PRC Overseas Investment and Listing Regulations”), including,
requesting each such person that is, or is directly or indirectly owned or
controlled by, a PRC resident or citizen to complete any registration and other
procedures required under applicable PRC Overseas Investment and Listing
Regulations (including any applicable rules and regulations of the SAFE).

 

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(b) The Company is aware of and has been advised as to the content of the Rules
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors and any
official clarifications, guidance, interpretations or implementation rules in
connection with or related thereto in effect on the applicable Closing Date (the
“PRC Mergers and Acquisitions Rules”) jointly promulgated by the Ministry of
Commerce, the State Assets Supervision and Administration Commission, the State
Tax Administration, the State Administration of Industry and Commerce, the CSRC
and the State Administration of Foreign Exchange on August 8, 2006, including
the provisions thereof which purport to require offshore special purpose
entities formed for listing purposes and controlled directly or indirectly by
PRC companies or individuals to obtain the approval of the CSRC prior to the
listing and trading of their securities on an overseas stock exchange. The
Company has received legal advice specifically with respect to the PRC Mergers
and Acquisitions Rules from its PRC counsel, and the Company understands such
legal advice. In addition, the Company has communicated such legal advice in
full to each of its directors that signed the Registration Statement and each
such director has confirmed that he or she understands such legal advice. The
consummation of the transactions contemplated by this Agreement, the
Non-Competition Agreement, the Lock-up Agreement, the Registration Right
Agreement, and the Escrow Agreement (A) are not and will not be, as of the date
hereof or at the Closing Date, as the case may be, adversely affected by the PRC
Mergers and Acquisitions Rules and (B) do not require the prior approval of the
CSRC or any other Governmental Authority.

 

(c) Each of the Target Companies holds, and is operating in compliance in all
material respects with, all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders of any Governmental
Authority or self-regulatory body required for the conduct of its business and
all such franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and effect; and
none of the Target Companies has received notice of any revocation or
modification of any such franchise, grant, authorization, license, permit,
easement, consent, certification or order or has reason to believe that any such
franchise, grant, authorization, license, permit, easement, consent,
certification or order will not be renewed in the ordinary course; and each of
the Target Companies is in compliance in all material respects with all
applicable federal, state, local and foreign laws, regulations, orders and
decrees.

 

4.33 Disclosure. No representations or warranties by the Company in this
Agreement (including the disclosure schedules hereto) or the Ancillary
Documents, (a) contains or will contain any untrue statement of a material fact,
or (b) omits or will omit to state, when read in conjunction with all of the
information contained in this Agreement, the disclosure schedules hereto and the
Ancillary Documents, any fact necessary to make the statements or facts
contained therein not materially misleading.

 

Article V
REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

Except as set forth in the Company Disclosure Schedules or in the schedules
delivered by the Seller to the Purchaser on the date hereof, the Section numbers
of which are numbered to correspond to the Section numbers of this Agreement to
which they refer, the Sellers hereby jointly and severally represent and
warrant, as of the date hereof and as of the Closing, to the Purchaser as
follows:

 

5.1 Due Organization and Good Standing. Each Seller, if not an individual
person, is an entity duly organized, validly existing and in good standing under
the Laws of the jurisdiction of its formation and has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted.

 

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5.2 Authorization; Binding Agreement. Each Seller has all requisite power,
authority and legal right and capacity to execute and deliver this Agreement and
each Ancillary Document to which it is a party, to perform such Seller’s
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. This Agreement has been, and each Ancillary
Document to which a Seller is or is required to be a party shall be when
delivered, duly and validly executed and delivered by such Seller and assuming
the due authorization, execution and delivery of this Agreement and any such
Ancillary Document by the other parties hereto and thereto, constitutes, or when
delivered shall constitute, the legal, valid and binding obligation of such
Seller, enforceable against such Seller in accordance with its terms, subject to
the Enforceability Exceptions.

 

5.3 Ownership. Sellers own good, valid and marketable title to the Purchased
Shares, free and clear of any and all Liens, with each Seller owning the
Purchased Shares set forth in Annex I. There are no proxies, voting rights,
shareholders’ agreements or other agreements or understandings, to which a
Seller is a party or by which a Seller is bound, with respect to the voting or
transfer of any of such Seller’s Purchased Shares other than this Agreement.
Upon delivery of the Purchased Shares to the Purchaser on the Closing Date in
accordance with this Agreement, the entire legal and beneficial interest in the
Purchased Shares and good, valid and marketable title to the Purchased Shares,
free and clear of all Liens (other than those imposed by applicable securities
Laws or those incurred by the Purchaser), will pass to the Purchaser.

 

5.4 Governmental Approvals. No Consent of or with any Governmental Authority on
the part of any Seller is required to be obtained or made in connection with the
execution, delivery or performance by such Seller of this Agreement or any
Ancillary Documents or the consummation by a Seller of the transactions
contemplated hereby or thereby other than such filings as expressly contemplated
by this Agreement.

 

5.5 Non-Contravention. The execution and delivery by each Seller of this
Agreement and each Ancillary Document to which it is a party or otherwise bound,
and the consummation by such Seller of the transactions contemplated hereby and
thereby, and compliance by each Seller with any of the provisions hereof and
thereof, will not (a) conflict with or violate any provision of any Seller’s
Organizational Documents, (b) subject to obtaining the Consents from
Governmental Authorities referred to in Section 5.4 hereof, and any condition
precedent to such Consent or waiver having been satisfied, conflict with or
violate any Law, Order or Consent applicable to any Seller or any of its
properties or assets or (c) (i) violate, conflict with or result in a breach of,
(ii) constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, (iii) result in the termination,
withdrawal, suspension, cancellation or modification of, (iv) accelerate the
performance required by any Seller under, (v) result in a right of termination
or acceleration under, (vi) give rise to any obligation to make payments or
provide compensation under, (vii) result in the creation of any Lien upon any of
the properties or assets of any Seller under, (viii) give rise to any obligation
to obtain any third party consent or provide any notice to any Person or (ix)
give any Person the right to declare a default, exercise any remedy, claim a
rebate, chargeback, penalty or change in delivery schedule, accelerate the
maturity or performance, cancel, terminate or modify any right, benefit,
obligation or other term under, any of the terms, conditions or provisions of,
any Contract to which a Seller is a party or a Seller or its properties or
assets are otherwise bound, except for any deviations from any of the foregoing
clauses (a), (b) or (c) that has not had and would not reasonably be expected to
have a Material Adverse Effect on any Seller.

 

5.6 No Litigation. There is no Action pending or threatened, nor any Order is
outstanding, against or involving any Seller or any of its officers, directors,
managers, shareholders, properties, assets or businesses, whether at law or in
equity, before or by any Governmental Authority, which would reasonably be
expected to adversely affect the ability of such Seller to consummate the
transactions contemplated by, and discharge its obligations under, this
Agreement and the Ancillary Documents to which such Seller is a party.

 

24

 

 

5.7 Investment Representations. Each Seller: (a) is an “accredited investor” as
such term is defined in Rule 501(a) of Regulation D under the Securities Act;
(b) is acquiring its portion of the Exchange Shares for itself for investment
purposes only, and not with a view towards any resale or distribution of such
Exchange Shares; (c) has been advised and understands that the Exchange Shares
(i) are being issued in reliance upon one or more exemptions from the
registration requirements of the Securities Act and any applicable state
securities Laws, (ii) have not been and shall not be registered under the
Securities Act or any applicable state securities Laws and, therefore, must be
held indefinitely and cannot be resold unless such Exchange Shares are
registered under the Securities Act and all applicable state securities Laws,
unless exemptions from registration are available and (iii) are subject to
additional restrictions on transfer pursuant to the Lock-Up Agreement; (d) is
aware that an investment in the Purchaser is a speculative investment and is
subject to the risk of complete loss; and (e) acknowledges that the Purchaser is
under no obligation hereunder to register the Exchange Shares under the
Securities Act. No Seller has any Contract with any Person to sell, transfer, or
grant participations to such Person, or to any third Person, with respect to the
Exchange Shares. By reason of such Seller’s business or financial experience, or
by reason of the business or financial experience of such Seller’s “purchaser
representatives” (as that term is defined in Rule 501(h) under the Securities
Act), each Seller is capable of evaluating the risks and merits of an investment
in the Purchaser and of protecting its interests in connection with this
investment. Each Seller has carefully read and understands all materials
provided by or on behalf of the Purchaser or its Representatives to such Seller
or such Seller’s Representatives pertaining to an investment in the Purchaser
and has consulted, as such Seller has deemed advisable, with its own attorneys,
accountants or investment advisors with respect to the investment contemplated
hereby and its suitability for such Seller. Each Seller acknowledges that the
Exchange Shares are subject to dilution for events not under the control of such
Seller. Each Seller has completed its independent inquiry and has relied fully
upon the advice of its own legal counsel, accountant, financial and other
Representatives in determining the legal, tax, financial and other consequences
of this Agreement and the transactions contemplated hereby and the suitability
of this Agreement and the transactions contemplated hereby for such Seller and
its particular circumstances, and, except as set forth herein, has not relied
upon any representations or advice by the Purchaser or its Representatives. Each
Seller acknowledges and agrees that Seller has not been guaranteed or
represented to by any Person, (i) any specific amount or the event of the
distribution of any cash, property or other interest in the Purchaser or (ii)
the profitability or value of the Exchange Shares in any manner whatsoever.
Seller: (A) has been represented by independent counsel (or has had the
opportunity to consult with independent counsel and has declined to do so); (B)
has had the full right and opportunity to consult with such Seller’s attorneys
and other advisors and has availed itself of this right and opportunity; (C) has
carefully read and fully understands this Agreement in its entirety and has had
it fully explained to it or him by such counsel; (D) is fully aware of the
contents hereof and the meaning, intent and legal effect thereof; and (E) is
competent to execute this Agreement and has executed this Agreement free from
coercion, duress or undue influence.

 

5.8 Finders and Investment Bankers. No Seller, nor any of their respective
Representatives on their behalf, has employed any broker, finder or investment
banker or incurred any liability for any brokerage fees, commissions, finders’
fees or similar fees in connection with the transactions contemplated by this
Agreement.

 

5.9 Independent Investigation. Each Seller has conducted its own independent
investigation, review and analysis of the business, results of operations,
prospects, condition (financial or otherwise) or assets of the Purchaser, and
acknowledges that it has been provided adequate access to the personnel,
properties, assets, premises, books and records, and other documents and data of
the Purchaser for such purpose. Each Seller acknowledges and agrees that: (a) in
making its decision to enter into this Agreement and to consummate the
transactions contemplated hereby, it has relied solely upon its own
investigation and the express representations and warranties of the Purchaser
set forth in Article III; and (b) neither the Purchaser nor any of their
Representatives have made any representation or warranty as to the Purchaser, or
this Agreement, except as expressly set forth in Article III.

 

25

 

 

5.10 Information Supplied. None of the information supplied or to be supplied by
any Seller expressly for inclusion or incorporation by reference: (a) in any
Current Report on Form 8-K, and any exhibits thereto or any other report, form,
registration or other filing made with any Governmental Authority with respect
to the transactions contemplated by this Agreement or any Ancillary Documents;
or (b) in the mailings or other distributions to the Purchaser’s shareholders
and/or prospective investors with respect to the consummation of the
transactions contemplated by this Agreement or in any amendment to any of
documents identified in (a) through (c), will, when filed, made available,
mailed or distributed, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. Notwithstanding the
foregoing, no Seller makes any representation, warranty or covenant with respect
to any information supplied by or on behalf of the Purchaser or their
Affiliates.

 

5.11 Disclosure. No representations or warranties by any Seller in this
Agreement (including the disclosure schedules hereto) or the Ancillary
Documents, (a) contains or will contain any untrue statement of a material fact,
or (b) omits or will omit to state, when read in conjunction with all of the
information contained in this Agreement, the disclosure schedules hereto and the
Ancillary Documents, any fact necessary to make the statements or facts
contained therein not materially misleading.

 

Article VI
COVENANTS

 

6.1 Access and Information.

 

(a) The Company shall give, and shall direct its Representatives to give, the
Purchaser and its Representatives, at reasonable times during normal business
hours and upon reasonable intervals and notice, access to all offices and other
facilities and to all employees, properties, Contracts, agreements, commitments,
books and records, financial and operating data and other information (including
Tax Returns, internal working papers, client files, client Contracts and
director service agreements), of or pertaining to the Target Companies, as the
Purchaser or its Representatives may reasonably request regarding the Target
Companies and their respective businesses, assets, Liabilities, financial
condition, prospects, operations, management, employees and other aspects
(including unaudited quarterly financial statements, including a consolidated
quarterly balance sheet and income statement, a copy of each material report,
schedule and other document filed with or received by a Governmental Authority
pursuant to the requirements of applicable securities Laws, and independent
public accountants’ work papers (subject to the consent or any other conditions
required by such accountants, if any)) and instruct each of the Company’s
Representatives to cooperate with the Purchaser and their Representatives in
their investigation; provided, however, that the Purchaser and its
Representatives shall conduct any such activities in such a manner as not to
unreasonably interfere with the business or operations of the Target Companies.

 

(b) The Purchaser shall give, and shall direct its Representatives to give, the
Company and its Representatives, at reasonable times during normal business
hours and upon reasonable intervals and notice, access to all offices and other
facilities and to all employees, properties, Contracts, agreements, commitments,
books and records, financial and operating data and other information (including
Tax Returns, internal working papers, client files, client Contracts and
director service agreements), of or pertaining to the Purchaser or its
Subsidiaries, as the Company or its Representatives may reasonably request
regarding the Purchaser, its Subsidiaries and their respective businesses,
assets, Liabilities, financial condition, prospects, operations, management,
employees and other aspects (including unaudited quarterly financial statements,
including a consolidated quarterly balance sheet and income statement, a copy of
each material report, schedule and other document filed with or received by a
Governmental Authority pursuant to the requirements of applicable securities
Laws, and independent public accountants’ work papers (subject to the consent or
any other conditions required by such accountants, if any)) and instruct each of
the Purchaser’s Representatives to cooperate with the Company and its
Representatives in their investigation; provided, however, that the Company and
its Representatives shall conduct any such activities in such a manner as not to
unreasonably interfere with the business or operations of the Purchaser or any
of its Subsidiaries.

 

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6.2 Conduct of Business of the Company.

 

(a) Unless the Purchaser shall otherwise consent in writing (such consent not to
be unreasonably withheld, conditioned or delayed), during the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement in accordance with Section 9.1 or the Closing (the “Interim
Period”), except as expressly contemplated by this Agreement the Company shall,
and shall cause the Target Companies to, (i) conduct their respective
businesses, in all material respects, in the ordinary course of business
consistent with past practice, (ii) comply with all Laws applicable to the
Target Companies and their respective businesses, assets and employees, and
(iii) take all reasonable measures necessary or appropriate to preserve intact,
in all material respects, their respective business organizations, to keep
available the services of their respective managers, directors, officers,
employees and consultants, to maintain, in all material respects, their existing
relationships with all Top Customers and Top Suppliers, and to preserve the
possession, control and condition of their respective material assets, all as
consistent with past practice.

 

(b) Without limiting the generality of Section 6.2(a) and except as contemplated
by the terms of this Agreement, during the Interim Period, without the prior
written consent of the Purchaser (such consent not to be unreasonably withheld,
conditioned or delayed), the Company shall not, and shall cause the Target
Companies to not:

 

(i) amend, waive or otherwise change, in any respect, its Organizational
Documents;

 

(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose
to issue, grant, sell, pledge or dispose of any of its equity securities or any
options, warrants, commitments, subscriptions or rights of any kind to acquire
or sell any of its equity securities, or other securities, including any
securities convertible into or exchangeable for any of its shares or other
equity securities or securities of any class and any other equity-based awards,
or engage in any hedging transaction with a third Person with respect to such
securities;

 

(iii) split, combine, recapitalize or reclassify any of its shares or other
equity interests or issue any other securities in respect thereof or pay or set
aside any dividend or other distribution (whether in cash, equity or property or
any combination thereof) in respect of its equity interests, or directly or
indirectly redeem, purchase or otherwise acquire or offer to acquire any of its
securities;

 

(iv) incur, create, assume, prepay or otherwise become liable for any
Indebtedness (directly, contingently or otherwise), outside the ordinary course
of business, in excess of $100,000 (individually or in the aggregate), make a
loan or advance to or investment in any third party, or guarantee or endorse any
Indebtedness, Liability or obligation of any Person;

 

27

 

 

(v) increase the wages, salaries or compensation of any of its executive
officers, or, in the case of employees other than executive officers, increase
the wages, salaries or compensation of any of such employees other than in the
ordinary course of business, consistent with past practice, and in any event not
in the aggregate by more than five percent (5%), or make or commit to make any
bonus payment (whether in cash, property or securities) to any employee, or
materially increase other benefits of employees generally, or enter into,
establish, materially amend or terminate any Company Benefit Plan with, for or
in respect of any current consultant, officer, manager director or employee, in
each case other than as required by applicable Law, pursuant to the terms of any
Company Benefit Plans or in the ordinary course of business consistent with past
practice;

 

(vi) make or rescind any material election relating to Taxes, settle any claim,
action, suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, file any amended Tax Return or claim for refund,
or make any material change in its accounting or Tax policies or procedures, in
each case except as required by applicable Law or in compliance with GAAP;

 

(vii) transfer or license to any Person or otherwise extend, materially amend or
modify, permit to lapse or fail to preserve any of the Company Registered IP,
Company Licensed IP or other Company IP, or disclose to any Person who has not
entered into a confidentiality agreement any Trade Secrets;

 

(viii) terminate, or waive or assign any material right under, any Company
Material Contract outside of the ordinary course of business or enter into any
Contract (A) involving amounts reasonably expected to exceed $100,000 per year
or $250,000 in the aggregate, (B) that would be a Company Material Contract or
(C) with a term longer than one year that cannot be terminated without payment
of a material penalty and upon notice of sixty (60) days or less;

 

(ix) fail to maintain its books, accounts and records in all material respects
in the ordinary course of business consistent with past practice;

 

(x) establish any Subsidiary or enter into any new line of business;

 

(xi) fail to use commercially reasonable efforts to keep in force insurance
policies or replacement or revised policies providing insurance coverage with
respect to its assets, operations and activities in such amount and scope of
coverage as are currently in effect;

 

(xii) revalue any of its material assets or make any change in accounting
methods, principles or practices, except to the extent required to comply with
GAAP and after consulting with the Company’s outside auditors;

 

(xiii) waive, release, assign, settle or compromise any claim, action or
proceeding (including any suit, action, claim, proceeding or investigation
relating to this Agreement or the transactions contemplated hereby), other than
waivers, releases, assignments, settlements or compromises that involve only the
payment of monetary damages (and not the imposition of equitable relief on, or
the admission of wrongdoing by, the Company or its Affiliates) not in excess of
$100,000 (individually or in the aggregate), or otherwise pay, discharge or
satisfy any Actions, Liabilities or obligations, unless such amount has been
reserved in the Company Financials;

 

(xiv) close or materially reduce its activities, or effect any layoff or other
personnel reduction or change, at any of its facilities;

 

28

 

 

(xv) acquire, including by merger, consolidation, acquisition of stock or
assets, or any other form of business combination, any corporation, partnership,
limited liability company, other business organization or any division thereof,
or any material amount of assets outside the ordinary course of business
consistent with past practice;

 

(xvi) make capital expenditures in excess of $100,000 (individually for any
project (or set of related projects) or $250,000 in the aggregate);

 

(xvii) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization;

 

(xviii) voluntarily incur any Liability or obligation (whether absolute,
accrued, contingent or otherwise) in excess of $100,000 individually or $250,000
in the aggregate other than pursuant to the terms of a Company Material Contract
or Company Benefit Plan;

 

(xix) sell, lease, license, transfer, exchange or swap, mortgage or otherwise
pledge or encumber (including securitizations), or otherwise dispose of any
material portion of its properties, assets or rights;

 

(xx) enter into any agreement, understanding or arrangement with respect to the
voting of equity securities of the Company;

 

(xxi) take any action that would reasonably be expected to significantly delay
or impair the obtaining of any consents or approvals of any Governmental
Authority to be obtained in connection with this Agreement;

 

(xxii) enter into, amend, waive or terminate (other than terminations in
accordance with their terms) any transaction with any Related Person (other than
compensation and benefits and advancement of expenses, in each case, provided in
the ordinary course of business consistent with past practice);

 

(xxiii) make any payments or transfer any assets to any affiliates; or

 

(xxiv) authorize or agree to do any of the foregoing actions.

 

6.3 .

 

(a) Except as contemplated by the terms of this Agreement (including all of the
transactions contemplated by the proxy statement filed by the Purchaser on
September 30, 2019 and any filings subsequent to such date and prior to the date
hereof) during the Interim Period, without the prior written consent of the
Company (such consent not to be unreasonably withheld, conditioned or delayed),
the Purchaser shall not:

 

(i) amend, waive or otherwise change, in any respect, its Organizational
Documents;

 

(ii) except as contemplated herein, authorize for issuance, issue, grant, sell,
pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of
its equity securities or any options, warrants, commitments, subscriptions or
rights of any kind to acquire or sell any of its equity securities, or other
securities, including any securities convertible into or exchangeable for any of
its equity securities or other security interests of any class and any other
equity-based awards, or engage in any hedging transaction with a third Person
with respect to such securities;

 

29

 

 

(iii) split, combine, recapitalize or reclassify any of its shares or other
equity interests or issue any other securities in respect thereof or pay or set
aside any dividend or other distribution (whether in cash, equity or property or
any combination thereof) in respect of its shares or other equity interests, or
directly or indirectly redeem, purchase or otherwise acquire or offer to acquire
any of its securities;

 

(iv) incur, create, assume, prepay or otherwise become liable for any
Indebtedness (directly, contingently or otherwise) in excess of $100,000
(individually or in the aggregate), make a loan or advance to or investment in
any third party, or guarantee or endorse any Indebtedness, Liability or
obligation of any Person;

 

(v) make or rescind any material election relating to Taxes, settle any claim,
action, suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, file any amended Tax Return or claim for refund,
or make any material change in its accounting or Tax policies or procedures, in
each case except as required by applicable Law or in compliance with GAAP;

 

(vi) terminate, waive or assign any material right under any material agreement
to which it is a party;

 

(vii) fail to maintain its books, accounts and records in all material respects
in the ordinary course of business consistent with past practice;

 

(viii) establish any Subsidiary or enter into any new line of business;

 

(ix) fail to use commercially reasonable efforts to keep in force insurance
policies or replacement or revised policies providing insurance coverage with
respect to its assets, operations and activities in such amount and scope of
coverage as are currently in effect;

 

(x) revalue any of its material assets or make any change in accounting methods,
principles or practices, except to the extent required to comply with GAAP and
after consulting the Purchaser’s outside auditors;

 

(xi) waive, release, assign, settle or compromise any claim, action or
proceeding (including any suit, action, claim, proceeding or investigation
relating to this Agreement or the transactions contemplated hereby), other than
waivers, releases, assignments, settlements or compromises that involve only the
payment of monetary damages (and not the imposition of equitable relief on, or
the admission of wrongdoing by, the Purchaser) not in excess of $100,000
(individually or in the aggregate), or otherwise pay, discharge or satisfy any
Actions, Liabilities or obligations, unless such amount has been reserved in the
Purchaser Financials;

 

(xii) acquire, including by merger, consolidation, acquisition of stock or
assets, or any other form of business combination, any corporation, partnership,
limited liability company, other business organization or any division thereof,
or any material amount of assets outside the ordinary course of business;

 

(xiii) make capital expenditures in excess of $100,000 individually for any
project (or set of related projects) or $250,000 in the aggregate;

 

30

 

 

(xiv) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization;

 

(xv) voluntarily incur any Liability or obligation (whether absolute, accrued,
contingent or otherwise) in excess of $100,00] individually or $250,000 in the
aggregate other than pursuant to the terms of a material Contract in existence
as of the date of this Agreement or entered into in the ordinary course of
business or in accordance with the terms of this Section 6.3 during the Interim
Period;

 

(xvi) sell, lease, license, transfer, exchange or swap, mortgage or otherwise
pledge or encumber (including securitizations), or otherwise dispose of any
material portion of its properties, assets or rights;

 

(xvii) enter into any agreement, understanding or arrangement with respect to
the voting of the Purchaser Shares;

 

(xviii) take any action that would reasonably be expected to significantly delay
or impair the obtaining of any consents or approvals of any Governmental
Authority to be obtained in connection with this Agreement; or

 

(xix) authorize or agree to do any of the foregoing actions.

 

6.4 Annual and Interim Financial Statements. From the date hereof through the
Closing Date, within thirty (30) calendar days following the end of each
three-month quarterly period and each fiscal year, the Company shall deliver to
the Purchaser an unaudited consolidated income statement and an unaudited
consolidated balance sheet for the period from the Interim Balance Sheet Date
through the end of such quarterly period or fiscal year and the applicable
comparative period in the preceding fiscal year, in each case accompanied by a
certificate of the Chief Financial Officer of the Company to the effect that all
such financial statements fairly present the consolidated financial position and
results of operations of the Target Companies as of the date or for the periods
indicated, in accordance with GAAP, subject to year-end audit adjustments and
excluding footnotes. From the date hereof through the Closing Date, the Company
will also promptly deliver to the Purchaser copies of any audited consolidated
financial statements of the Company and its Subsidiaries that the Company’s
certified public accountants may issue.

 

6.5 Purchaser Public Filings. During the Interim Period, the Purchaser will keep
current and timely file all of its public filings with the SEC and otherwise
comply in all material respects with applicable securities Laws and shall use
its commercially reasonable efforts to maintain the listing of the Purchaser
Shares on NYSE.

 

6.6 No Solicitation.

 

(a) For purposes of this Agreement, (i) an “Acquisition Proposal” means any
inquiry, proposal or offer, or any indication of interest in making an offer or
proposal, from any Person or group at any time relating to an Alternative
Transaction, and (ii) an “Alternative Transaction” means with respect to (A) the
Company, the Sellers and their respective Affiliates and (B) the Purchaser and
its Affiliates, a transaction (other than the transactions contemplated by this
Agreement) concerning the sale of (x) all or any material part of the business
or assets of any Target Companies or the Purchaser or (y) any of the shares or
other equity interests or profits of any Target Companies or the Purchaser, in
any case, whether such transaction takes the form of a sale of shares or other
equity, assets, merger, consolidation, issuance of debt securities, management
Contract, joint venture or partnership, or otherwise.

 

31

 

 

(b) During the Interim Period, in order to induce the other Parties to continue
to commit to expend management time and financial resources in furtherance of
the transactions contemplated hereby, each Party shall not, and shall cause its
Representatives to not, without the prior written consent of the Company and the
Purchaser, directly or indirectly, (i) solicit, assist, initiate or facilitate
the making, submission or announcement of, or intentionally encourage, any
Acquisition Proposal, (ii) furnish any non-public information regarding such
Party or its Affiliates (or, with respect to any Seller, any Target Company) or
their respective businesses, operations, assets, Liabilities, financial
condition, prospects or employees to any Person or group (other than a Party to
this Agreement or their respective Representatives) in connection with or in
response to an Acquisition Proposal, (iii) engage or participate in discussions
or negotiations with any Person or group with respect to, or that could be
expected to lead to, an Acquisition Proposal, (iv) approve, endorse or
recommend, or publicly propose to approve, endorse or recommend, any Acquisition
Proposal, (v) negotiate or enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement related to any
Acquisition Proposal, or (vi) release any third Person from, or waive any
provision of, any confidentiality agreement to which such Party is a party.

 

(c) Each Party shall notify the others as promptly as practicable (and in any
event within 48 hours) orally and in writing of the receipt by such Party or any
of its Representatives of (i) any bona fide inquiries, proposals or offers,
requests for information or requests for discussions or negotiations regarding
or constituting any Acquisition Proposal or any bona fide inquiries, proposals
or offers, requests for information or requests for discussions or negotiations
that could be expected to result in an Acquisition Proposal, and (ii) any
request for non-public information relating to such Party or its Affiliates (or
with respect to any Seller, any Target Company), specifying in each case, the
material terms and conditions thereof (including a copy thereof if in writing or
a written summary thereof if oral) and the identity of the party making such
inquiry, proposal, offer or request for information. Each Party shall keep the
others promptly informed of the status of any such inquiries, proposals, offers
or requests for information. During the Interim Period, each Party shall, and
shall cause its Representatives to, immediately cease and cause to be terminated
any solicitations, discussions or negotiations with any Person with respect to
any Acquisition Proposal and shall, and shall direct its Representatives to,
cease and terminate any such solicitations, discussions or negotiations.

 

6.7 No Trading. The Company and the Sellers each acknowledge and agree that it
is aware, and that their respective Affiliates are aware (and each of their
respective Representatives is aware or, upon receipt of any material nonpublic
information of the Purchaser, will be advised) of the restrictions imposed by
the Federal Securities Laws and other applicable foreign and domestic Laws on a
Person possessing material nonpublic information about a publicly traded
company. The Company and the Sellers each hereby agree that, while any of them
are in possession of such material nonpublic information, it shall not purchase
or sell any securities of the Purchaser (other than acquire the Exchange Shares
in accordance with Article I), communicate such information to any third party,
take any other action with respect to the Purchaser in violation of such Laws,
or cause or encourage any third party to do any of the foregoing.

 

6.8 Notification of Certain Matters. During the Interim Period, each of the
Parties shall give prompt notice to the other Parties if such Party or its
Affiliates (or, with respect to the Company, any Seller): (a) fails to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it or its Affiliates (or, with respect to the Company, any Seller)
hereunder in any material respect; (b) receives any notice or other
communication in writing from any third party (including any Governmental
Authority) alleging (i) that the Consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement or
(ii) any non-compliance with any Law by such Party or its Affiliates (or, with
respect to the Company, any Seller); (c) receives any notice or other
communication from any Governmental Authority in connection with the
transactions contemplated by this Agreement; (d) discovers any fact or
circumstance that, or becomes aware of the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which, would reasonably be expected to
cause or result in any of the conditions set forth in Article VIII to not being
satisfied or the satisfaction of those conditions being materially delayed; or
(e) becomes aware of the commencement or threat, in writing, of any Action
against such Party or any of its Affiliates (or, with respect to the Company,
any Seller), or any of their respective properties or assets, or, to the
Knowledge of such Party, any officer, director, partner, member or manager, in
his, her or its capacity as such, of such Party or of its Affiliates (or, with
respect to the Company, any Seller) with respect to the consummation of the
transactions contemplated by this Agreement. No such notice shall constitute an
acknowledgement or admission by the Party providing the notice regarding whether
or not any of the conditions to the Closing have been satisfied or in
determining whether or not any of the representations, warranties or covenants
contained in this Agreement have been breached.

 

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6.9 Efforts.

 

(a) Subject to the terms and conditions of this Agreement, each Party shall use
its commercially reasonable efforts, and shall cooperate fully with the other
Parties, to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable Laws and
regulations to consummate the transactions contemplated by this Agreement
(including the receipt of all applicable consents of Governmental Authorities)
and to comply as promptly as practicable with all requirements of Governmental
Authorities applicable to the transactions contemplated by this Agreement.

 

(b) Prior to the Closing, each Party shall use its commercially reasonable
efforts to obtain any Consents of Governmental Authorities or other third
Persons as may be necessary for the consummation by such Party or its Affiliates
of the transactions contemplated by this Agreement or required as a result of
the execution or performance of, or consummation of the transactions
contemplated by, this Agreement by such Party or its Affiliates, and the other
Parties shall provide reasonable cooperation in connection with such efforts.

 

(c) Notwithstanding anything herein to the contrary, no Party shall be required
to agree to any term, condition or modification with respect to obtaining any
Consents in connection with the transactions contemplated by this Agreement that
would result in, or would be reasonably likely to result in: (i) a Material
Adverse Effect to such Party or its Affiliates, or (ii) such Party having to
cease, sell or otherwise dispose of any material assets or businesses (including
the requirement that any such assets or business be held separate).

 

6.10 Further Assurances. The Parties hereto shall further cooperate with each
other and use their respective commercially reasonable efforts to take or cause
to be taken all actions, and do or cause to be done all things, necessary,
proper or advisable on their part under this Agreement and applicable Laws to
consummate the transactions contemplated by this Agreement as soon as
practicable, including preparing and filing as soon as practicable all
documentation to effect all necessary notices, reports and other filings.

 

6.11 [Intentionally Omitted]

 

6.12 Public Announcements. The Parties agree that no public release, filing or
announcement concerning this Agreement or the Ancillary Documents or the
transactions contemplated hereby or thereby shall be issued by any Party or any
of their Affiliates without the prior written consent of the Purchaser and the
Company (which consent shall not be unreasonably withheld, conditioned or
delayed), except as such release or announcement may be required by applicable
Law or the rules or regulations of any securities exchange, in which case the
applicable Party shall use commercially reasonable efforts to allow the other
Parties reasonable time to comment on, and arrange for any required filing with
respect to, such release or announcement in advance of such issuance.

 

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6.13 Confidential Information.

 

(a) The Company (prior to the Closing) and each Seller hereby agree that they
shall, and shall cause their respective Representatives to: (i) treat and hold
in strict confidence any Purchaser Confidential Information, and will not use it
for any purpose (except in connection with the consummation of the transactions
contemplated by this Agreement or the Ancillary Documents, performing their
obligations hereunder or thereunder, enforcing their rights hereunder or
thereunder, or in furtherance of their authorized duties on behalf of the
Purchaser or its Subsidiaries), nor directly or indirectly disclose, distribute,
publish, disseminate or otherwise make available to any third party any of the
Purchaser Confidential Information without the Purchaser’s prior written
consent; and (ii) in the event that the Company (prior to the Closing), any
Seller or any of the respective Representatives becomes legally compelled to
disclose any Purchaser Confidential Information, (A) provide the Purchaser with
prompt written notice of such requirement so that the Purchaser or an Affiliate
thereof may seek a protective order or other remedy or waive compliance with
this Section 6.13(a), and (B) in the event that such protective order or other
remedy is not obtained, or the Purchaser waives compliance with this Section
6.13(a), furnish only that portion of such Purchaser Confidential Information
which is legally required to be provided as advised in writing by outside
counsel and to exercise its commercially reasonable efforts to obtain assurances
that confidential treatment will be accorded such Purchaser Confidential
Information. In the event that this Agreement is terminated and the transactions
contemplated hereby are not consummated, the Company and the Sellers shall, and
shall cause their respective Representatives to, promptly deliver to the
Purchaser any and all copies (in whatever form or medium) of Purchaser
Confidential Information and destroy all notes, memoranda, summaries, analyses,
compilations and other writings related thereto or based thereon.

 

(b) The Purchaser hereby agrees that during the Interim Period and, in the event
this Agreement is terminated in accordance with Article IX, for a period of two
(2) years after such termination, it shall, and shall cause its Representatives
to: (i) treat and hold in strict confidence any Company Confidential
Information, and will not use for any purpose (except in connection with the
consummation of the transactions contemplated by this Agreement or the Ancillary
Documents, performing its obligations hereunder or thereunder or enforcing its
rights hereunder or thereunder), nor directly or indirectly disclose,
distribute, publish, disseminate or otherwise make available to any third party
any of the Company Confidential Information without the Company’s prior written
consent; and (ii) in the event that the Purchaser or any of its Representatives
becomes legally compelled to disclose any Company Confidential Information, (A)
provide the Company with prompt written notice of such requirement so that the
Company, any Seller or an Affiliate of any of them may seek a protective order
or other remedy or waive compliance with this Section 6.13(b), and (B) in the
event that such protective order or other remedy is not obtained, or the Company
waives compliance with this Section 6.13(b), furnish only that portion of such
Company Confidential Information which is legally required to be provided as
advised in writing by outside counsel and to exercise its commercially
reasonable efforts to obtain assurances that confidential treatment will be
accorded such Company Confidential Information. In the event that this Agreement
is terminated and the transactions contemplated hereby are not consummated, the
Purchaser shall, and shall cause their Representatives to, promptly deliver to
the Company any and all copies (in whatever form or medium) of Company
Confidential Information and destroy all notes, memoranda, summaries, analyses,
compilations and other writings related thereto or based thereon.
Notwithstanding the foregoing, the Purchaser and its Representatives shall be
permitted to disclose any and all Company Confidential Information to the extent
required by the Federal Securities Laws.

 

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6.14 Litigation Support. Following the Closing, in the event that and for so
long as any Party is actively contesting or defending against any third party or
Governmental Authority Action in connection with any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction that existing on or prior to the
Closing Date involving the Purchaser or any Target Company, each of the other
Parties will (i) reasonably cooperate with the contesting or defending party and
its counsel in the contest or defense, (ii) make available its personnel at
reasonable times and upon reasonable notice and (iii) provide (A) such testimony
and (B) access to its non-privileged books and records as may be reasonably
requested in connection with the contest or defense, at the sole cost and
expense of the contesting or defending party.

 

6.15 Documents and Information. After the Closing Date, the Purchaser and the
Target Companies shall, and shall cause their respective Subsidiaries to, until
the seventh (7th) anniversary of the Closing Date, retain all books, records and
other documents pertaining to the business of the Target Companies in existence
on the Closing Date.

 

6.16 [Intentionally omitted.]

 

6.17 Supplemental Disclosure Schedules.

 

(a) During the Interim Period, each of the Company and each Seller shall have
the right, by providing one or more written supplemental disclosure schedules
(“Supplemental Disclosure Schedules”) to the others, to update its disclosure
schedules: (a) to reflect changes in the ordinary course of business first
existing or occurring after the date of this Agreement, which if existing or
occurring on or prior to the date of this Agreement, would have been required to
be set forth on such schedules, and (b) which updates do not result from any
breach of a covenant made by such disclosing Party or its Affiliates in this
Agreement. Other than any updates permitted by the prior sentence, no
Supplemental Disclosure Schedule shall affect any of the conditions to the
Parties’ respective obligations under the Agreement (including for purposes of
determining satisfaction or waiver of the conditions set forth in Article VIII),
or any other remedy available to the Parties arising from a representation or
warranty that was or would be inaccurate, or a warranty that would be breached,
without qualification by the update.

 

(b) For the purposes of the Company Disclosure Schedules, any information, item
or other disclosure set forth in any part of such disclosure schedules (or, to
the extent applicable, any Supplemental Disclosure Schedule) shall be deemed to
have been set forth in all other applicable parts of such disclosure schedules
(or, to the extent applicable, Supplemental Disclosure Schedules) to the extent
that the applicability of such disclosure to such other parts is reasonably
apparent on the face of such disclosure. Inclusion of information in any
disclosure schedule or Supplemental Disclosure Schedule shall not be construed
as an admission by such party that such information is material to the business,
properties, financial condition or results of operations of, as applicable, the
Company, any Seller or their respective Affiliates. Matters reflected in any
disclosure schedule or Supplemental Disclosure Schedule is not necessarily
limited to matters required by this Agreement to be reflected therein and the
inclusion of such matters shall not be deemed an admission that such matters
were required to be reflected in such disclosure schedule or Supplemental
Disclosure Schedule. Such additional matters are set forth for informational
purposes only and do not necessarily include other matters of a similar nature.

 

6.18 . During the Interim Period, the Purchaser will consult with the Company,
and the Purchaser and the Company will adopt, effective as of the Closing,
corporate and operational policies for the Purchaser, the Company and their
respective Subsidiaries, including the Target Companies, appropriate for a
company publicly traded in the United States with active business and operations
in the industries and regions in which the Target Companies operate and
contemplate operating as of the Closing.

 

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6.19 SOX 404(b) Compliance. From and after the Closing, the Sellers agree to
engage the Purchaser’s audit firm to complete an attestation, to the extent
required pursuant to Section 404(b) of SOX and Item 308(b) of Regulation S-K, of
the Purchaser’s internal control over financial reporting effective no later
than December 31, 2020, or such earlier date as is required by SEC rules or
other applicable Law, with such audit firm’s attestation report to be included
in the Purchaser’s applicable annual report, if required by SEC rules or other
applicable Law.

 

Article VII
SURVIVAL

 

7.1 Survival.

 

(a) All representations and warranties of the Company and the Sellers contained
in this Agreement (including all schedules and exhibits hereto and all
certificates, documents, instruments and undertakings furnished pursuant to this
Agreement) shall survive the Closing through and until the second (2nd)
anniversary of the Closing Date; provided, however, that (a) the representations
and warranties contained in Sections 4.14 (Taxes and Returns), 4.19 (Benefit
Plans), 4.20 (Environmental Matters), 4.30 (Information Supplied) and 5.10
(Information Supplied) shall survive until sixty (60) days after the expiration
of the applicable statute of limitations, and (b) the representations and
warranties contained in Sections 4.1 (Due Organization and Good Standing), 4.2
(Authorization; Binding Agreement), 4.3 (Capitalization), 4.4 (Subsidiaries),
4.28 (Finders and Investment Bankers), 4.29 (Independent Investigation), 5.1
(Due Organization and Good Standing), 5.2 (Authorization; Binding Agreement),
5.3 (Ownership), 5.8 (Finders and Investment Bankers) and 5.9 (Independent
Investigation) will survive indefinitely. Additionally, Fraud Claims against the
Company or the Sellers shall survive indefinitely. If written notice of a claim
for breach of any representation or warranty has been given before the
applicable date when such representation or warranty no longer survives in
accordance with this Section 7.1(a), then the relevant representations and
warranties shall survive as to such claim, until the claim has been finally
resolved. All covenants, obligations and agreements of the Company and the
Sellers contained in this Agreement (including all schedules and exhibits hereto
and all certificates, documents, instruments and undertakings furnished pursuant
to this Agreement) shall survive the Closing and continue until fully performed
in accordance with their terms.

 

(b) The representations and warranties of the Purchaser contained in this
Agreement or in any certificate or instrument delivered pursuant to this
Agreement shall not survive the Closing, and from and after the Closing, each of
the Purchaser and its Representatives shall not have any further obligations,
nor shall any claim be asserted or action be brought against the Purchaser or
its Representatives with respect thereto. The covenants and agreements made by
the Purchaser in this Agreement or in any certificate or instrument delivered
pursuant to this Agreement, including any rights arising out of any breach of
such covenants or agreements, shall not survive the Closing, except for those
covenants and agreements contained herein and therein that by their terms apply
or are to be performed in whole or in part after the Closing.

 

7.2 Indemnification by the Sellers. Subject to the terms and conditions of this
Article VII, from and after the Closing, the Sellers and their respective
successors and assigns (the “Indemnifying Parties”) will jointly and severally
indemnify, defend and hold harmless the Purchaser and its Affiliates and their
respective officers, directors, managers, employees, successors and permitted
assigns (the “Indemnified Parties”) from and against any and all losses,
Actions, Orders, Liabilities, damages (including consequential damages),
diminution in value, Taxes, interest, penalties, Liens, amounts paid in
settlement, costs and expenses (including reasonable expenses of investigation
and court costs and reasonable attorneys’ fees and expenses), (any of the
foregoing, a “Loss”) paid, suffered or incurred by, or imposed upon, any
Indemnified Party to the extent arising in whole or in part out of or resulting
directly or indirectly from (whether or not involving a Third Party Claim): (i)
the breach of any representation or warranty made by the Company or any Seller
set forth in this Agreement or in any certificate delivered by the Company or
any Seller pursuant to this Agreement; (ii) the breach of any covenant or
agreement on the part of any Seller or the Company set forth in this Agreement
or in any certificate delivered by the Company or any Seller pursuant to this
Agreement; (iii) any Action by Person(s) who were holders of equity securities
of a Target Company, including options, warrants, convertible debt or other
convertible securities or other rights to acquire equity securities of a Target
Company, prior to the Closing arising out of the sale, purchase, termination,
cancellation, expiration, redemption or conversion of any such securities; or
(iv) any Fraud Claims.

 

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7.3 General Indemnification Provisions.

 

(a) Solely for purposes of determining the amount of Losses under this Section
7.3 (and, for the avoidance of doubt, not for purposes of determining whether
there has been a breach giving rise to the indemnification claim), all of the
representations, warranties and covenants set forth in this Agreement (including
the disclosure schedules hereto) or any Ancillary Document that are qualified by
materiality, Material Adverse Effect or words of similar import or effect will
be deemed to have been made without any such qualification.

 

(b) No investigation or knowledge by an Indemnified Party or its Representatives
of a breach of a representation, warranty, covenant or agreement of an
Indemnifying Party shall affect the representations, warranties, covenants and
agreements of the Indemnifying Party or the recourse available to the
Indemnified Parties under any provision of this Agreement, including this
Section 7.3, with respect thereto.

 

(c) The amount of any Losses suffered or incurred by any Indemnified Party shall
be reduced by the amount of any insurance proceeds paid to the Indemnified Party
or any Affiliate thereof as a reimbursement with respect to such Losses (and no
right of subrogation shall accrue to any insurer hereunder, except to the extent
that such waiver of subrogation would prejudice any applicable insurance
coverage), net of the costs of collection and the increases in insurance
premiums resulting from such Loss or insurance payment.

 

7.4 Indemnification Procedures.

 

(a) The Purchaser shall have the sole right to act on behalf of the Indemnified
Parties with respect to any indemnification claims made pursuant to this Article
VII, including bringing and settling any claims hereunder and receiving any
notices on behalf of the Indemnified Parties. The Sellers shall have the sole
right to act on behalf of the Indemnifying Parties with respect to any
indemnification claims made pursuant to this Article VII, including defending
and settling any claims hereunder and receiving any notices on behalf of the
Indemnifying Parties.

 

(b) In order to make a claim for indemnification hereunder, the Purchaser on
behalf of an Indemnified Party must provide written notice (a “Claim Notice”) of
such claim to the Sellers on behalf of the Indemnifying Parties, which Claim
Notice shall include (i) a reasonable description of the facts and circumstances
which relate to the subject matter of such indemnification claim to the extent
then known and (ii) the amount of Losses suffered by the Indemnified Party in
connection with the claim to the extent known or reasonably estimable (provided,
that the Purchaser may thereafter in good faith adjust the amount of Losses with
respect to the claim by providing a revised Claim Notice to the Sellers).

 

37

 

 

(c) In the case of any claim for indemnification under this Article VII arising
from a claim of a third party (including any Governmental Authority) (a “Third
Party Claim”), the Purchaser must give a Claim Notice with respect to such Third
Party Claim to the Sellers promptly (but in no event later than thirty (30)
days) after the Indemnified Party’s receipt of notice of such Third Party Claim;
provided, that the failure to give such notice will not relieve the Indemnifying
Party of its indemnification obligations except to the extent that the defense
of such Third Party Claim is materially and irrevocably prejudiced by the
failure to give such notice. The Sellers will have the right to defend and to
direct the defense against any such Third Party Claim, at its expense and with
counsel selected by the Sellers, unless (i) the Sellers fail to acknowledge
fully to the Purchaser the obligations of the Indemnifying Party to the
Indemnified Party within twenty (20) days after receiving notice of such Third
Party Claim or contests, in whole or in part, their indemnification obligations
therefor or (ii) at any time while such Third Party Claim is pending, (A) there
is a conflict of interest between the Sellers on behalf of the Indemnifying
Party and the Purchaser on behalf of the Indemnified Party in the conduct of
such defense, (B) the applicable third party alleges a Fraud Claim or (C) such
claim is criminal in nature, could reasonably be expected to lead to criminal
proceedings, or seeks an injunction or other equitable relief against the
Indemnified Party. If the Sellers on behalf of the Indemnifying Party elect, and
are entitled, to compromise or defend such Third Party Claim, they will within
twenty (20) days (or sooner, if the nature of the Third Party Claim so requires)
notify the Purchaser of their intent to do so, and the Purchaser and the
Indemnified Party will, at the request and expense of the Sellers, cooperate in
the defense of such Third Party Claim. If the Sellers on behalf of the
Indemnifying Party elect not to, or at any time are not entitled under this
Section 7.4 to, compromise or defend such Third Party Claim, fail to notify the
Purchaser of their election as herein provided or refuse to acknowledge or
contest their obligation to indemnify under this Agreement, the Purchaser on
behalf of the Indemnified Party may pay, compromise or defend such Third Party
Claim. Notwithstanding anything to the contrary contained herein, the
Indemnifying Party will have no indemnification obligations with respect to any
such Third Party Claim which is settled by the Indemnified Party or the
Purchaser without the prior written consent of the Sellers on behalf of the
Indemnifying Party (which consent will not be unreasonably withheld, delayed or
conditioned); provided, however, that notwithstanding the foregoing, the
Indemnified Party will not be required to refrain from paying any Third Party
Claim which has matured by a final, non-appealable Order, nor will it be
required to refrain from paying any Third Party Claim where the delay in paying
such claim would result in the foreclosure of a Lien upon any of the property or
assets then held by the Indemnified Party or where any delay in payment would
cause the Indemnified Party material economic loss. The Sellers’ right on behalf
of the Indemnifying Party to direct the defense will include the right to
compromise or enter into an agreement settling any Third Party Claim; provided,
that no such compromise or settlement will obligate the Indemnified Party to
agree to any settlement that requires the taking or restriction of any action
(including the payment of money and competition restrictions) by the Indemnified
Party other than the execution of a release for such Third Party Claim and/or
agreeing to be subject to customary confidentiality obligations in connection
therewith, except with the prior written consent of the Purchaser on behalf of
the Indemnified Party (such consent to be withheld, conditioned or delayed only
for a good faith reason). Notwithstanding the Sellers’ right on behalf of the
Indemnifying Party to compromise or settle in accordance with the immediately
preceding sentence, the Sellers on behalf of the Indemnifying Party may not
settle or compromise any Third Party Claim over the objection of the Purchaser
on behalf of the Indemnified Party; provided, however, that consent by the
Purchaser on behalf of the Indemnified Party to settlement or compromise will
not be unreasonably withheld, delayed or conditioned. The Purchaser on behalf of
the Indemnified Party will have the right to participate in the defense of any
Third Party Claim with counsel selected by it subject to the Sellers’ right on
behalf of the Indemnifying Party to direct the defense.

 

(d) With respect to any direct indemnification claim that is not a Third Party
Claim, the Sellers on behalf of the Indemnifying Party will have a period of
thirty (30) days after receipt of the Claim Notice to respond thereto. If the
Sellers on behalf of the Indemnifying Party do not respond within such thirty
(30) days, the Sellers on behalf of the Indemnifying Party will be deemed to
have accepted responsibility for the Losses set forth in such Claim Notice
subject to the limitations on indemnification set forth in this Article VII and
will have no further right to contest the validity of such Claim Notice. If the
Sellers on behalf of the Indemnifying Party respond within such thirty (30) days
after the receipt of the Claim Notice and reject such claim in whole or in part,
the Purchaser on behalf of the Indemnified Party will be free to pursue such
remedies as may be available under this Agreement (subject to Section 11.4), any
Ancillary Documents or applicable Law.

 

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Article VIII
CLOSING CONDITIONS

 

8.1 Conditions to Each Party’s Obligations. The obligations of each Party to
consummate the transactions described herein shall be subject to the
satisfaction or written waiver (where permissible) by the Company and the
Purchaser of the following conditions:

 

(a) Requisite Regulatory Approvals. All Consents required to be obtained from or
made with any Governmental Authority in order to consummate the transactions
contemplated by this Agreement, shall have been obtained or made.

 

(b) Requisite Consents. The Consents required to be obtained from or made with
any third Person (other than a Governmental Authority) in order to consummate
the transactions contemplated by this Agreement as set forth in Schedule 8.1(c)
shall have each been obtained or made.

 

(c) No Law. No Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any Law (whether temporary, preliminary or permanent) or
Order that is then in effect and which has the effect of making the transactions
or agreements contemplated by this Agreement illegal or which otherwise prevents
or prohibits consummation of the transactions contemplated by this Agreement.

 

(d) No Litigation. There shall not be any pending Action brought by a
third-party non-Affiliate to enjoin or otherwise restrict the consummation of
the Closing.

 

8.2 Conditions to Obligations of the Company and the Sellers. In addition to the
conditions specified in Section 8.1, the obligations of the Company and the
Sellers to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or written waiver (by the Company) of the following
conditions:

 

(a) Representations and Warranties. All of the representations and warranties of
the Purchaser set forth in this Agreement and in any certificate delivered by
the Purchaser pursuant hereto shall be true and correct on and as of the date of
this Agreement and on and as of the Closing Date as if made on the Closing Date,
except for (i) those representations and warranties that address matters only as
of a particular date (which representations and warranties shall have been
accurate as of such date), and (ii) any failures to be true and correct that do
not materially and adversely affect the Purchaser’s ability to consummate the
transactions contemplated hereby.

 

(b) Agreements and Covenants. The Purchaser shall have performed in all material
respects all of the Purchaser’s obligations and complied in all material
respects with all of the Purchaser’s agreements and covenants under this
Agreement to be performed or complied with by the Purchaser on or prior to the
Closing Date.

 

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(c) No Material Adverse Effect. No Material Adverse Effect shall have occurred
with respect to the Purchaser (excluding the Subsidiaries of the Purchaser)
since the date of this Agreement.

 

(d) Closing Deliveries.

 

(i) Officer Certificate. The Purchaser shall have delivered to the Company a
certificate, dated the Closing Date, signed by an executive officer of the
Purchaser in such capacity, certifying as to the satisfaction of the conditions
specified in Sections 8.2(a), 8.2(b) and 8.2(c).

 

(ii) Secretary Certificate. The Purchaser shall have delivered to the Company a
certificate from its secretary certifying as to (A) copies of the Purchaser’s
Organizational Documents as in effect as of the Closing Date, (B) the
resolutions of the Purchaser’s board of directors authorizing the execution,
delivery and performance of this Agreement and each of the Ancillary Documents
to which it is a party or by which it is bound, and the consummation of the
transactions contemplated hereby and thereby and (C) the incumbency of officers
authorized to execute this Agreement or any Ancillary Document to which the
Purchaser is or is required to be a party or otherwise bound.

 

(e) Effectiveness of Certain Ancillary Documents.

 

(i) Non-Competition Agreements. The Non-Competition and Non-Solicitation
Agreements to be entered into by Sellers and the other Subject Parties thereto
(as defined therein) in favor of and for the benefit of the Purchaser, the
Company and each of the other Covered Parties (as defined therein) (each, a
“Non-Competition Agreement”), the form of which is attached as Exhibit A hereto,
shall be duly executed and delivered and in full force and effect in accordance
with the terms thereof as of the Closing.

 

(ii) Lock-Up Agreement. The Lock-Up Agreement to be entered into by and among
the Sellers and the Purchaser (the “Lock-Up Agreement”), the form of which is
attached as Exhibit B hereto, shall be duly executed and delivered and in full
force and effect in accordance with the terms thereof as of the Closing.

 

(f) [Intentionally omitted.]

 

8.3 Conditions to Obligations of the Purchaser . In addition to the conditions
specified in Section 8.1, the obligations of the Purchaser to consummate the
transactions contemplated by this Agreement are subject to the satisfaction or
written waiver (by the Purchaser) of the following conditions:

 

(a) Representations and Warranties. All of the representations and warranties of
the Company and the Sellers set forth in this Agreement and in any certificate
delivered by the Company or Sellers pursuant hereto shall be true and correct on
and as of the date of this Agreement and on and as of the Closing Date as if
made on the Closing Date, except for (i) those representations and warranties
that address matters only as of a particular date (which representations and
warranties shall have been accurate as of such date), and (ii) any failures to
be true and correct that (without giving effect to any qualifications or
limitations as to materiality or Material Adverse Effect), individually or in
the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect on, or with respect to, any Target Company or adversely
affects the Company’s or Sellers’ ability to consummate the transactions
contemplated hereby.

 

(b) Agreements and Covenants. The Company and Sellers shall have performed in
all material respects all of such Party’s obligations and complied in all
material respects with all of such Party’s agreements and covenants under this
Agreement to be performed or complied with by it on or prior to the Closing
Date.

 

40

 

 

(c) No Material Adverse Effect. No Material Adverse Effect shall have occurred
with respect to any Target Company since the date of this Agreement.

 

(d) Closing Deliveries.

 

(i) Officer Certificate. The Purchaser shall have received a certificate from
the Company, dated as the Closing Date, signed by an executive officer of the
Company in such capacity, certifying as to the satisfaction of the conditions
specified in Sections 8.3(a), 8.3(b) and 8.3(c).

 

(ii) Seller Certificate. The Purchaser shall have received a certificate from
each Seller, dated as of the Closing Date, signed by such Seller, certifying as
to the satisfaction of the conditions specified in Sections 8.3(a) and 8.3(b)
with respect to such Seller.

 

(iii) Secretary Certificate. The Company shall have delivered to the Purchaser a
certificate from its secretary certifying as to (A) copies of the Company’s
Organizational Documents as in effect as of the Closing Date, (B) the
resolutions of the Company’s board of directors and shareholders authorizing the
execution, delivery and performance of this Agreement and each of the Ancillary
Documents to which it is a party or by which it is bound, and the consummation
of the transactions contemplated hereby and thereby, and (C) the incumbency of
officers authorized to execute this Agreement or any Ancillary Document to which
the Company is or is required to be a party or otherwise bound.

 

(iv) Good Standing. The Company shall have delivered to the Purchaser good
standing certificates (or similar documents applicable for such jurisdictions)
for each Target Company certified as of a date no later than five (5) days prior
to the Closing Date from the proper Governmental Authority of the Target
Company’s jurisdiction of organization and from each other jurisdiction in which
the Target Company is qualified to conduct business as a foreign corporation or
other entity as of the Closing, in each case to the extent that good standing
certificates or similar documents are generally available in such jurisdictions.

 

(v) Certified Charter. The Company shall have delivered to the Purchaser a copy
of the Company Charter, as in effect as of the Closing, certified by the
appropriate Governmental Authority as of a date no more than ten (10) Business
Days prior to the Closing Date.

 

(vi) [Intentionally Omitted]

 

(vii) [Intentionally Omitted]

 

(viii) Share Certificates and Transfer Instruments. The Purchaser shall have
received from Sellers share certificates representing the Purchased Shares (or
duly executed affidavits of lost stock certificates and indemnities in forms and
substance reasonably acceptable to the Purchaser), together with executed
instruments of transfer in respect of the Purchased Shares in favor of the
Purchaser (or its nominee) and in form reasonably acceptable for transfer on the
books of the Company.

 

(ix) Board Resolutions. The Purchaser shall have received duly executed written
resolutions of the board of directors of the Company, in the agreed form,
approving: the transfer of the Purchased Shares to the Purchaser (or its
nominee) at Closing; and the appointment of such persons as directors and/or
officers of the Company as the Purchaser may request prior to Closing.

 

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(x) Effectiveness of Certain Ancillary Documents. Each of the Non-Competition
Agreements and the Lock-Up Agreement shall be duly executed and delivered and in
full force and effect in accordance with the terms thereof as of the Closing.

 

8.4 Frustration of Conditions. Notwithstanding anything contained herein to the
contrary, no Party may rely on the failure of any condition set forth in this
Article VIII to be satisfied if such failure was caused by the failure of such
Party or its Affiliates (or with respect to the Company, any Target Company or
any Seller) to comply with or perform any of its covenants or obligations set
forth in this Agreement.

 

Article IX
TERMINATION AND EXPENSES

 

9.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing as
follows:

 

(a) by mutual written consent of the Purchaser and the Company;

 

(b) by written notice by the Purchaser or the Company if any of the conditions
to the Closing set forth in Article VIII have not been satisfied or waived by
the six (6) month anniversary of the date of this Agreement (the “Outside
Date”); provided, however, the right to terminate this Agreement under this
Section 9.1(b) shall not be available to a Party if the breach or violation by
such Party or its Affiliates (or with respect to the Company, the Sellers) of
any representation, warranty, covenant or obligation under this Agreement was
the cause of, or resulted in, the failure of the Closing to occur on or before
the Outside Date;

 

(c) by written notice by either the Purchaser or the Company if a Governmental
Authority of competent jurisdiction shall have issued an Order or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such Order or other action has
become final and non-appealable; provided, however, that the right to terminate
this Agreement pursuant to this Section 9.1(c) shall not be available to a Party
if the failure by such Party or its Affiliates (or with respect to the Company,
the Sellers) to comply with any provision of this Agreement has been a
substantial cause of, or substantially resulted in, such action by such
Governmental Authority;

 

(d) by written notice by the Company, if (i) there has been a breach by the
Purchaser of any of its representations, warranties, covenants or agreements
contained in this Agreement, or if any representation or warranty of the
Purchaser shall have become untrue or inaccurate, in any case, which would
result in a failure of a condition set forth in Section 8.2(a) or Section 8.2(b)
to be satisfied (treating the Closing Date for such purposes as the date of this
Agreement or, if later, the date of such breach), and (ii) the breach or
inaccuracy is incapable of being cured or is not cured within the earlier of (A)
twenty (20) days after written notice of such breach or inaccuracy is provided
by the Company or (B) the Outside Date; provided, that the Company shall not
have the right to terminate this Agreement pursuant to this Section 9.1(d) if at
such time the Company or any Seller is in material uncured breach of this
Agreement;

 

(e) by written notice by the Purchaser, if (i) there has been a breach by the
Company or any Seller of any of their respective representations, warranties,
covenants or agreements contained in this Agreement, or if any representation or
warranty of such Parties shall have become untrue or inaccurate, in any case,
which would result in a failure of a condition set forth in Section 8.3(a) or
Section 8.3(b) to be satisfied (treating the Closing Date for such purposes as
the date of this Agreement or, if later, the date of such breach), and (ii) the
breach or inaccuracy is incapable of being cured or is not cured within the
earlier of (A) twenty (20) days after written notice of such breach or
inaccuracy is provided by the Purchaser (B) the Outside Date; provided, that the
Purchaser shall not have the right to terminate this Agreement pursuant to this
Section 9.1(e) if at such time the Purchaser is in material uncured breach of
this Agreement; or

 

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(f) by written notice by the Purchaser if there shall have been a Material
Adverse Effect on the Target Companies following the date of this Agreement
which is uncured and continuing.

 

9.2 Effect of Termination. This Agreement may only be terminated in the
circumstances described in Section 9.1 and pursuant to a written notice
delivered by the applicable Party to the other applicable Parties, which sets
forth the basis for such termination, including the provision of Section 9.1
under which such termination is made. In the event of the valid termination of
this Agreement pursuant to Section 9.1, this Agreement shall forthwith become
void, and there shall be no Liability on the part of any Party or any of their
respective Representatives, and all rights and obligations of each Party shall
cease, except: (i) Sections 6.11, 6.13, 9.3, 9.4, Article XI and this Section
9.2 shall survive the termination of this Agreement, and (ii) nothing herein
shall relieve any Party from Liability for any willful breach of any
representation, warranty, covenant or obligation under this Agreement or any
Fraud Claim against such Party, in either case, prior to termination of this
Agreement (in each case of clauses (i) and (ii) above). Without limiting the
foregoing, and except as provided in Sections 9.3 and 9.4 and this Section 9.2,
the Parties’ sole right prior to the Closing with respect to any breach of any
representation, warranty, covenant or other agreement contained in this
Agreement by another Party or with respect to the transactions contemplated by
this Agreement shall be the right, if applicable, to terminate this Agreement
pursuant to Section 9.1.

 

9.3 Fees and Expenses. Subject to Section 9.4, all Expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the Party incurring such expenses. As used in this Agreement, “Expenses”
shall include all out-of-pocket expenses (including all fees and expenses of
counsel, accountants, investment bankers, financial advisors, financing sources,
experts and consultants to a Party hereto or any of its Affiliates) incurred by
a Party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution or performance of this Agreement or any
Ancillary Document related hereto and all other matters related to the
consummation of this Agreement.

 

9.4 Termination Fee. Notwithstanding Section 9.3 above, in the event that there
is a termination of this Agreement (a) by the Purchaser pursuant to Section
9.1(e) or Section 9.1(f) or (b) by the Company pursuant to Section 9.1(d), the
breaching Party shall pay to the other Party a termination fee equal to the
Expenses actually incurred by or on behalf of such other Party or any of its
Affiliates in connection with the authorization, preparation, negotiation,
execution or performance of this Agreement or the transactions contemplated
hereby, including any related SEC filings (the “Termination Fee”). The
Termination Fee shall be paid by wire transfer of immediately available funds to
an account designated in writing by the Purchaser or the Company, respectively,
within ten (10) Business Days after such Party delivers to the other Party the
amount of such Expenses, along with reasonable documentation in connection
therewith. Notwithstanding anything to the contrary in this Agreement, the
Parties expressly acknowledge and agree that, with respect to any termination of
this Agreement in circumstances where the Termination Fee is payable, the
payment of the Termination Fee shall, in light of the difficulty of accurately
determining actual damages, constitute liquidated damages with respect to any
claim for damages or any other claim which any Party would otherwise be entitled
to assert against the other Party or its Affiliates or any of their respective
assets, or against any of their respective directors, officers, employees or
shareholders with respect to this Agreement and the transactions contemplated
hereby and shall constitute the sole and exclusive remedy available to the
Parties, provided, that the foregoing shall not limit the rights of any Party to
seek specific performance or other injunctive relief in lieu of terminating this
Agreement.

 

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Article X
RELEASES

 

10.1 Release and Covenant Not to Sue. Effective as of the Closing, to the
fullest extent permitted by applicable Law, each Seller, on behalf of itself and
its Affiliates and any Person that owns any share or other equity interest in or
of such Seller (the “Releasing Persons”), hereby releases and discharges the
Target Companies from and against any and all Actions, obligations, agreements,
debts and Liabilities whatsoever, whether known or unknown, both at law and in
equity, which such Releasing Person now has, has ever had or may hereafter have
against the Target Companies arising on or prior to the Closing Date or on
account of or arising out of any matter occurring on or prior to the Closing
Date, including any rights to indemnification or reimbursement from a Target
Company, whether pursuant to its Organizational Documents, Contract or
otherwise, and whether or not relating to claims pending on, or asserted after,
the Closing Date. From and after the Closing, each Releasing Person hereby
irrevocably covenants to refrain from, directly or indirectly, asserting any
Action, or commencing or causing to be commenced, any Action of any kind against
the Target Companies or their respective Affiliates, based upon any matter
purported to be released hereby. Notwithstanding anything herein to the
contrary, the releases and restrictions set forth herein shall not apply to any
claims a Releasing Person may have against any party other than the Company
pursuant to the terms and conditions of this Agreement or any Ancillary
Document.

 

Article XI
MISCELLANEOUS

 

11.1 Notices. All notices, consents, waivers and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
(i) in person, (ii) by facsimile or other electronic means, with affirmative
confirmation of receipt, (iii) one Business Day after being sent, if sent by
reputable, nationally recognized overnight courier service or (iv) three (3)
Business Days after being mailed, if sent by registered or certified mail,
pre-paid and return receipt requested, in each case to the applicable Party at
the following addresses (or at such other address for a Party as shall be
specified by like notice):

 

If to the Company, to:

 

Yong Yang, Director

Fast Approach, Inc.

117 North Meadows Crescent

Thornhill, Ontario L4J3C4

yongyang@fastapproach.com

 

 

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If to Sellers, to:

 

Yong Yang

3600 Steeles Avenue East

Markham, Ontario L3R927

yongyang@fastapproach.com

If to Purchaser, to

 

Bin Zhou, CEO

Planet Green Holdings Corp.

Suite 200

9841 Washingtonian Blvd.

Gaithersburg, MD 20878

 

With copies to (which shall not constitute notice):

 

Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attention:  Bill Huo
                   Ari Edelman
Facsimile No.: (212) 370-7889
Telephone No.: (212) 370-1300
Email: bhuo@egsllp.com
            aedelman@egsllp.com

 

11.2 Binding Effect; Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the Parties hereto and their
respective successors and permitted assigns. This Agreement shall not be
assigned by operation of Law or otherwise without the prior written consent of
the Purchaser and the Company, and any assignment without such consent shall be
null and void; provided that no such assignment shall relieve the assigning
Party of its obligations hereunder.

 

11.3 Third Parties. Nothing contained in this Agreement or in any instrument or
document executed by any party in connection with the transactions contemplated
hereby shall create any rights in, or be deemed to have been executed for the
benefit of, any Person that is not a Party hereto or thereto or a successor or
permitted assign of such a Party.

 

11.4 Arbitration. Any and all disputes, controversies and claims (other than
applications for a temporary restraining order, preliminary injunction,
permanent injunction or other equitable relief or application for enforcement of
a resolution under this Section 11.4) arising out of, related to, or in
connection with this Agreement or the transactions contemplated hereby (a
“Dispute”) shall be governed by this Section 11.4. A party must, in the first
instance, provide written notice of any Disputes to the other parties subject to
such Dispute, which notice must provide a reasonably detailed description of the
matters subject to the Dispute. The parties involved in such Dispute shall seek
to resolve the Dispute on an amicable basis within ten (10) Business Days of the
notice of such Dispute being received by such other parties subject to such
Dispute (the “Resolution Period”); provided, that if any Dispute would
reasonably be expected to have become moot or otherwise irrelevant if not
decided within sixty (60) days after the occurrence of such Dispute, then there
shall be no Resolution Period with respect to such Dispute. Any Dispute that is
not resolved during the Resolution Period may immediately be referred to and
finally resolved by arbitration pursuant to the then-existing Expedited
Procedures of the Commercial Arbitration Rules (the “AAA Procedures”) of the
American Arbitration Association (the “AAA”). Any party involved in such Dispute
may submit the Dispute to the AAA to commence the proceedings after the
Resolution Period. To the extent that the AAA Procedures and this Agreement are
in conflict, the terms of this Agreement shall control. The arbitration shall be
conducted by one arbitrator nominated by the AAA promptly (but in any event
within five (5) Business Days) after the submission of the Dispute to the AAA
and reasonably acceptable to each party subject to the Dispute, which arbitrator
shall be a commercial lawyer with substantial experience arbitrating disputes
under acquisition agreements. The arbitrator shall accept his or her appointment
and begin the arbitration process promptly (but in any event within five (5)
Business Days) after his or her nomination and acceptance by the parties subject
to the Dispute. The proceedings shall be streamlined and efficient. The
arbitrator shall decide the Dispute in accordance with the substantive law of
the state of New York. Time is of the essence. Each party shall submit a
proposal for resolution of the Dispute to the arbitrator within twenty (20) days
after confirmation of the appointment of the arbitrator. The arbitrator shall
have the power to order any party to do, or to refrain from doing, anything
consistent with this Agreement, the Ancillary Documents and applicable Law,
including to perform its contractual obligation(s); provided, that the
arbitrator shall be limited to ordering pursuant to the foregoing power (and,
for the avoidance of doubt, shall order) the relevant party (or parties, as
applicable) to comply with only one or the other of the proposals. The
arbitrator’s award shall be in writing and shall include a reasonable
explanation of the arbitrator’s reason(s) for selecting one or the other
proposal. The seat of arbitration shall be in New York County, State of New
York. The language of the arbitration shall be English.

 

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11.5 Governing Law; Jurisdiction. This Agreement shall be governed by, construed
and enforced in accordance with the Laws of the State of New York without regard
to the conflict of laws principles thereof. Subject to Section 11.4, all Actions
arising out of or relating to this Agreement shall be heard and determined
exclusively in any state or federal court located in New York, New York (or in
any court in which appeal from such courts may be taken) (the “Specified
Courts”). Subject to Section 11.4, each Party hereto hereby (a) submits to the
exclusive jurisdiction of any Specified Court for the purpose of any Action
arising out of or relating to this Agreement brought by any Party hereto and (b)
irrevocably waives, and agrees not to assert by way of motion, defense or
otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated hereby may not be enforced in or by
any Specified Court. Each Party agrees that a final judgment in any Action shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by Law. Each Party irrevocably consents to the
service of the summons and complaint and any other process in any other action
or proceeding relating to the transactions contemplated by this Agreement, on
behalf of itself, or its property, by personal delivery of copies of such
process to such Party at the applicable address set forth in Section 11.1.
Nothing in this Section 11.5 shall affect the right of any Party to serve legal
process in any other manner permitted by Law.

 

11.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 11.6.

 

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11.7 Specific Performance. Each Party acknowledges that the rights of each Party
to consummate the transactions contemplated hereby are unique, recognizes and
affirms that in the event of a breach of this Agreement by any Party, money
damages may be inadequate and the non-breaching Parties may have not adequate
remedy at law, and agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed by an applicable
Party in accordance with their specific terms or were otherwise breached.
Accordingly, each Party shall be entitled to seek an injunction or restraining
order to prevent breaches of this Agreement and to seek to enforce specifically
the terms and provisions hereof, without the requirement to post any bond or
other security or to prove that money damages would be inadequate, this being in
addition to any other right or remedy to which such Party may be entitled under
this Agreement, at law or in equity.

 

11.8 Severability. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable in a jurisdiction, such provision shall be
modified or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity, legality or
enforceability of such provision be affected thereby in any other jurisdiction.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the Parties will substitute for any invalid,
illegal or unenforceable provision a suitable and equitable provision that
carries out, so far as may be valid, legal and enforceable, the intent and
purpose of such invalid, illegal or unenforceable provision.

 

11.9 Amendment. This Agreement may be amended, supplemented or modified only by
execution of a written instrument signed by the Purchaser and the Company.

 

11.10 Waiver. The Purchaser on behalf of itself and its Affiliates, on the one
hand, and the Company on behalf of itself and its Affiliates, may in its sole
discretion (i) extend the time for the performance of any obligation or other
act of any other non-Affiliated Party hereto, (ii) waive any inaccuracy in the
representations and warranties by such other non-Affiliated Party contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
by such other non-Affiliated Party with any covenant or condition contained
herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the Party or Parties to be bound thereby.
Notwithstanding the foregoing, no failure or delay by a Party in exercising any
right hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise of any other
right hereunder.

 

11.11 Entire Agreement. This Agreement and the documents or instruments referred
to herein, including any exhibits and schedules attached hereto, which exhibits
and schedules are incorporated herein by reference, together with the Ancillary
Documents, embody the entire agreement and understanding of the Parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein or the documents or instruments
referred to herein, which collectively supersede all prior agreements and the
understandings among the Parties with respect to the subject matter contained
herein.

 

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11.12 Interpretation. The table of contents and the Article and Section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the Parties and shall not in any way affect the meaning
or interpretation of this Agreement. In this Agreement, unless the context
otherwise requires: (a) any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and words in the singular,
including any defined terms, include the plural and vice versa; (b) reference to
any Person includes such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such Person in any other
capacity; (c) any accounting term used and not otherwise defined in this
Agreement or any Ancillary Document has the meaning assigned to such term in
accordance with GAAP; (d) “including” (and with correlative meaning “include”)
means including without limiting the generality of any description preceding or
succeeding such term and shall be deemed in each case to be followed by the
words “without limitation”; (e) the words “herein,” “hereto,” and “hereby” and
other words of similar import in this Agreement shall be deemed in each case to
refer to this Agreement as a whole and not to any particular Section or other
subdivision of this Agreement; (f) the word “if” and other words of similar
import when used herein shall be deemed in each case to be followed by the
phrase “and only if”; (g) the term “or” means “and/or”; (h) any reference to the
term “ordinary course” or “ordinary course of business” shall be deemed in each
case to be followed by the words “consistent with past practice”; (i) any
agreement, instrument, insurance policy, Law or Order defined or referred to
herein or in any agreement or instrument that is referred to herein means such
agreement, instrument, insurance policy, Law or Order as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes, regulations,
rules or orders) by succession of comparable successor statutes, regulations,
rules or orders and references to all attachments thereto and instruments
incorporated therein; (j) except as otherwise indicated, all references in this
Agreement to the words “Section,” “Article”, “Schedule”, and “Exhibit” are
intended to refer to Sections, Articles, Schedules and Exhibits to this
Agreement; and (k) the term “Dollars” or “$” means United States dollars. Any
reference in this Agreement to a Person’s directors shall include any member of
such Person’s governing body and any reference in this Agreement to a Person’s
officers shall include any Person filling a substantially similar position for
such Person. Any reference in this Agreement or any Ancillary Document to a
Person’s shareholders shall include any applicable owners of the equity
interests of such Person, in whatever form, including with respect to the
Purchaser its shareholders under the NRS or its Organizational Documents. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. Consequently, in the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement. To the extent that any Contract, document, certificate or
instrument is represented and warranted to by the Company to be given,
delivered, provided or made available by the Company, in order for such
Contract, document, certificate or instrument to have been deemed to have been
given, delivered, provided and made available to the Purchaser or its
Representatives, such Contract, document, certificate or instrument shall have
been posted to the electronic data site maintained on behalf of the Company for
the benefit of the Purchaser and its Representatives and the Purchaser and its
Representatives have been given access to the electronic folders containing such
information.

 

11.13 Counterparts. This Agreement may be executed and delivered (including by
facsimile or other electronic transmission) in one or more counterparts, and by
the different Parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.

 

Article XII
DEFINITIONS

 

12.1 Certain Definitions. For purpose of this Agreement, the following
capitalized terms have the following meanings:

 

“Action” means any notice of noncompliance or violation, or any claim, demand,
charge, action, suit, litigation, audit, settlement, complaint, stipulation,
assessment or arbitration, or any request (including any request for
information), inquiry, hearing, proceeding or investigation, by or before any
Governmental Authority.

 

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“Affiliate” means, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by, or under common Control with such Person.

 

“Ancillary Documents” means each agreement, instrument or document attached
hereto as an Exhibit, including the Non-Competition Agreements and the Lock-Up
Agreement and the other agreements, certificates and instruments to be executed
or delivered by any of the Parties in connection with or pursuant to this
Agreement.

 

“Benefit Plans” of any Person means any and all deferred compensation, executive
compensation, incentive compensation, equity purchase or other equity-based
compensation plan, employment or consulting, severance or termination pay,
holiday, vacation or other bonus plan or practice, hospitalization or other
medical, life or other insurance, supplemental unemployment benefits, profit
sharing, pension, or retirement plan, program, agreement, commitment or
arrangement, and each other employee benefit plan, program, agreement or
arrangement, including each “employee benefit plan” as such term is defined
under Section 3(3) of ERISA, maintained or contributed to or required to be
contributed to by a Person for the benefit of any employee or terminated
employee of such Person, or with respect to which such Person has any Liability,
whether direct or indirect, actual or contingent, whether formal or informal,
and whether legally binding or not.

 

“Business Day” means any day other than a Saturday, Sunday or a legal holiday on
which commercial banking institutions in New York, New York are authorized to
close for business.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor
statute thereto, as amended. Reference to a specific section of the Code shall
include such section and any valid treasury regulation promulgated thereunder.

 

“Company Charter” means the certificate of incorporation of the Company, as
amended and effective under applicable Laws.

 

“Company Confidential Information” means all confidential or proprietary
documents and information concerning the Target Companies or the Sellers or any
of their respective Representatives, furnished in connection with this Agreement
or the transactions contemplated hereby; provided, however, that Company
Confidential Information shall not include any information which, (i) at the
time of disclosure by the Purchaser or its Representatives, is generally
available publicly and was not disclosed in breach of this Agreement or (ii) at
the time of the disclosure by the Company, the Sellers or their respective
Representatives to the Purchaser or its Representatives was previously known by
such receiving party without violation of Law or any confidentiality obligation
by the Person receiving such Company Confidential Information.

 

“Class A Company Shares” means the Class A shares of the Company, without par
value, with full voting rights.

 

“Class B Company Shares” means the Class B shares of the Company, without par
value, with no voting rights.

 

“Consent” means any consent, approval, waiver, authorization or Permit of, or
notice to or declaration or filing with any Governmental Authority or any other
Person.

 

“Contracts” means all contracts, agreements, binding arrangements, bonds, notes,
indentures, mortgages, debt instruments, purchase order, licenses (and all other
contracts, agreements or binding arrangements concerning Intellectual Property),
franchises, leases and other instruments or obligations of any kind, written or
oral (including any amendments and other modifications thereto).

 

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“Control” of a Person means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract, or otherwise.
“Controlled”, “Controlling” and “under common Control with” have correlative
meanings. Without limiting the foregoing a Person (the “Controlled Person”)
shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning
beneficially, as meant in Rule 13d-3 under the Exchange Act, securities
entitling such Person to cast ten percent (10%) or more of the votes for
election of directors or equivalent governing authority of the Controlled Person
or (ii) entitled to be allocated or receive ten percent (10%) or more of the
profits, losses, or distributions of the Controlled Person; (b) an officer,
director, general partner, partner (other than a limited partner), manager, or
member (other than a member having no management authority that is not a 10%
Owner) of the Controlled Person; or (c) a spouse, parent, lineal descendant,
sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law,
sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a
trust for the benefit of an Affiliate of the Controlled Person or of which an
Affiliate of the Controlled Person is a trustee.

 

“Copyrights” means any works of authorship, mask works and all copyrights
therein, including all renewals and extensions, copyright registrations and
applications for registration and renewal, and non-registered copyrights.

 

“Environmental Law” means any Law in any way relating to (a) the protection of
human health and safety, (b) the protection, preservation or restoration of the
environment and natural resources (including air, water vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource), or (c) the exposure to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous Materials.

 

“Environmental Liabilities” means, in respect of any Person, all Liabilities,
obligations, responsibilities, Remedial Actions, Losses, damages, costs, and
expenses (including all reasonable fees, disbursements, and expenses of counsel,
experts, and consultants and costs of investigation and feasibility studies),
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand by any other Person or in response to any violation of Environmental Law,
whether known or unknown, accrued or contingent, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
to the extent based upon, related to, or arising under or pursuant to any
Environmental Law, Environmental Permit, Order, or Contract with any
Governmental Authority or other Person, that relates to any environmental,
health or safety condition, violation of Environmental Law, or a Release or
threatened Release of Hazardous Materials.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Foreign Plan” means any plan, fund (including any superannuation fund) or other
similar program or arrangement established or maintained outside the United
States by the Company or any one or more of its Subsidiaries primarily for the
benefit of employees of the Company or such Subsidiaries residing outside the
United States, which plan, fund or other similar program or arrangement
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.

 

50

 

 

“Fraud Claim” means any claim based in whole or in part upon fraud, willful
misconduct or intentional misrepresentation.

 

“GAAP” means generally accepted accounting principles as in effect in the United
States of America.

 

“Governmental Authority” means any federal, state, local, foreign or other
governmental, quasi-governmental or administrative body, instrumentality,
department or agency or any court, tribunal, administrative hearing body,
arbitration panel, commission, or other similar dispute-resolving panel or body.

 

“Hazardous Material” means any waste, gas, liquid or other substance or material
that is defined, listed or designated as a “hazardous substance”, “pollutant”,
“contaminant”, “hazardous waste”, “regulated substance”, “hazardous chemical”,
or “toxic chemical” (or by any similar term) under any Environmental Law, or any
other material regulated, or that could result in the imposition of Liability or
responsibility, under any Environmental Law, including petroleum and its
by-products, asbestos, polychlorinated biphenyls, radon, mold, and urea
formaldehyde insulation.

 

“Indebtedness” of any Person means (a) all indebtedness of such Person for
borrowed money (including the outstanding principal and accrued but unpaid
interest) or for the deferred purchase price of property or services, (b) any
other indebtedness of such Person that is evidenced by a note, bond, debenture,
credit agreement or similar instrument, (c) all obligations of such Person under
leases that should be classified as capital leases in accordance with GAAP, (d)
all obligations of such Person for the reimbursement of any obligor on any line
or letter of credit, banker’s acceptance, guarantee or similar credit
transaction, in each case, that has been drawn or claimed against, (e) all
obligations of such Person in respect of acceptances issued or created, (f) all
interest rate and currency swaps, caps, collars and similar agreements or
hedging devices under which payments are obligated to be made by such Person,
whether periodically or upon the happening of a contingency, (g) all obligations
secured by an Lien on any property of such Person and (h) any premiums,
prepayment fees or other penalties, fees, costs or expenses associated with
payment of any Indebtedness of such Person and (h) all obligation described in
clauses (a) through (g) above of any other Person which is directly or
indirectly guaranteed by such Person or which such Person has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which it has otherwise assured a creditor against loss.

 

“Intellectual Property” means all of the following as they exist in any
jurisdiction throughout the world: Patents, Trademarks, Copyrights, Trade
Secrets, Internet Assets, Software and other intellectual property, and all
licenses, sublicenses and other agreements or permissions related to the
preceding property.

 

“Internet Assets” means any all domain name registrations, web sites and web
pages and related rights, items and documentation related thereto.

 

“Knowledge” means, with respect to (i) the Company, the actual knowledge of the
executive officers or directors of any Target Company, after due inquiry or (ii)
any other Party, the actual knowledge of its directors and executive officers,
after due inquiry.

 

“Law” means any federal, state, local, municipal, foreign or other law, statute,
legislation, principle of common law, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, directive, requirement,
writ, injunction, settlement, Order or Consent that is or has been issued,
enacted, adopted, passed, approved, promulgated, made, implemented or otherwise
put into effect by or under the authority of any Governmental Authority.

 

51

 

 

“Liabilities” means any and all liabilities, Indebtedness, Actions or
obligations of any nature (whether absolute, accrued, contingent or otherwise,
whether known or unknown, whether direct or indirect, whether matured or
unmatured and whether due or to become due), including Tax liabilities due or to
become due.

 

“Lien” means any mortgage, pledge, security interest, attachment, right of first
refusal, option, proxy, voting trust, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in
the nature thereof), restriction (whether on voting, sale, transfer, disposition
or otherwise), any subordination arrangement in favor of another Person, any
filing or agreement to file a financing statement as debtor under the Uniform
Commercial Code or any similar Law.

 

“Material Adverse Effect” means, with respect to any specified Person, any fact,
event, occurrence, change or effect that has had, or would reasonably be
expected to have, individually or in the aggregate, a material adverse effect
upon (a) the business, assets, Liabilities, results of operations, prospects or
condition (financial or otherwise) of such Person and its Subsidiaries, taken as
a whole, or (b) the ability of such Person or any of its Subsidiaries on a
timely basis to consummate the transactions contemplated by this Agreement or
the Ancillary Documents to which it is a party or bound or to perform its
obligations hereunder or thereunder; provided, however, that any changes or
effects directly or indirectly attributable to, resulting from, relating to or
arising out of the following (by themselves or when aggregated with any other,
changes or effects) shall not be deemed to be, constitute, or be taken into
account when determining whether there has or may, would or could have occurred
a Material Adverse Effect: (i) general changes in the financial or securities
markets or general economic or political conditions in the country or region in
which such Person or any of its Subsidiaries do business; (ii) changes,
conditions or effects that generally affect the industries in which such Person
or any of its Subsidiaries principally operate; (iii) changes in GAAP or other
applicable accounting principles or mandatory changes in the regulatory
accounting requirements applicable to any industry in which such Person and its
Subsidiaries principally operate; (iv) conditions caused by acts of God,
terrorism, war (whether or not declared) or natural disaster; (v) any failure in
and of itself by such Person and its Subsidiaries to meet any internal or
published budgets, projections, forecasts or predictions of financial
performance for any period (provided that the underlying cause of any such
failure may be considered in determining whether a Material Adverse Effect has
occurred or would reasonably be expected to occur to the extent not excluded by
another exception herein); provided further, however, that any event,
occurrence, fact, condition, or change referred to in clauses (i) - (iv)
immediately above shall be taken into account in determining whether a Material
Adverse Effect has occurred or could reasonably be expected to occur to the
extent that such event, occurrence, fact, condition, or change has a
disproportionate effect on such Person or any of its Subsidiaries compared to
other participants in the industries in which such Person or any of its
Subsidiaries primarily conducts its businesses.

 

“NRS” means Nevada Revised Statutes, as amended.

 

“NYSE” means NYSE MKT LLC.

 

“Organizational Documents” means, with respect to the Purchaser, the Purchaser
Charter, and with respect to any other Party, its Certificate of Incorporation
and Bylaws or similar organizational documents, in each case, as amended.

 

“Order” means any order, decree, ruling, judgment, injunction, writ,
determination, binding decision, verdict, judicial award or other action that is
or has been made, entered, rendered, or otherwise put into effect by or under
the authority of any Governmental Authority.

 

“Purchaser Charter” means the articles of incorporation of the Purchaser, as
amended and effective under the NRS.

 

52

 

 

“Purchaser Confidential Information” means all confidential or proprietary
documents and information concerning the Purchaser, its Subsidiaries or any of
its Representatives; provided, however, that Purchaser Confidential Information
shall not include any information which, (i) at the time of disclosure by the
Company, Sellers or their respective Representatives, is generally available
publicly and was not disclosed in breach of this Agreement or (ii) at the time
of the disclosure by the Purchaser or its Representatives to the Company,
Sellers or their respective Representatives was previously known by such
receiving party without violation of Law or any confidentiality obligation by
the Person receiving such Purchaser Confidential Information. For the avoidance
of doubt, from and after the Closing, Purchaser Confidential Information will
include the confidential or proprietary information of the Target Companies.

 

“Purchaser Shares” means the shares of common stock, par value $0.001 per share,
of the Purchaser.

 

“Purchaser Share Price” shall mean the average closing trade price of each
Purchaser Share (or any successor equity security, including equity securities
of a successor entity issued in exchange for Purchaser Shares) as listed by NYSE
(or any successor exchange or quotation system on which such shares are listed
or quoted) for the twenty (20) day trading period ending on the trading day
immediately prior to the date of determination.

 

“Patents” means any patents, patent applications and the inventions, designs and
improvements described and claimed therein, patentable inventions, and other
patent rights (including any divisionals, provisionals, continuations,
continuations-in-part, substitutions, or reissues thereof, whether or not
patents are issued on any such applications and whether or not any such
applications are amended, modified, withdrawn, or refiled).

 

“Permits” means all federal, state, local or foreign or other third-party
permits, grants, easements, consents, approvals, authorizations, exemptions,
licenses, franchises, concessions, ratifications, permissions, clearances,
confirmations, endorsements, waivers, certifications, designations, ratings,
registrations, qualifications or orders of any Governmental Authority or any
other Person.

 

“Permitted Liens” means (a) Liens for Taxes or assessments and similar
governmental charges or levies, which either are (i) not delinquent or (ii)
being contested in good faith and by appropriate proceedings, and adequate
reserves have been established with respect thereto, (b) other Liens imposed by
operation of Law arising in the ordinary course of business for amounts which
are not due and payable and as would not in the aggregate materially adversely
affect the value of, or materially adversely interfere with the use of, the
property subject thereto, (c) Liens incurred or deposits made in the ordinary
course of business in connection with social security, (d) Liens on goods in
transit incurred pursuant to documentary letters of credit, in each case arising
in the ordinary course of business, or (v) Liens arising under this Agreement or
any Ancillary Document.

 

“Person” means an individual, corporation, partnership (including a general
partnership, limited partnership or limited liability partnership), limited
liability company, association, trust or other entity or organization, including
a government, domestic or foreign, or political subdivision thereof, or an
agency or instrumentality thereof.

 

“Personal Property” means any machinery, equipment, tools, vehicles, furniture,
leasehold improvements, office equipment, plant, parts and other tangible
personal property.

 

“PRC” means the People’s Republic of China.

 

53

 

 

“Release” means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, or leaching into the indoor or outdoor
environment, or into or out of any property.

 

“Remedial Action” means all actions to (i) clean up, remove, treat, or in any
other way address any Hazardous Material, (ii) prevent the Release of any
Hazardous Material so it does not endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment, (iii) perform pre-remedial
studies and investigations or post-remedial monitoring and care, or (iv) correct
a condition of noncompliance with Environmental Laws.

 

“Representative” means, as to any Person, such Person’s Affiliates and its and
their managers, directors, officers, employees, agents and advisors (including
financial advisors, counsel and accountants).

 

“RMB” means Renminbi of the People’s Republic of China.

 

“SEC” means the Securities and Exchange Commission (or any successor
Governmental Authority).

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Software” means any computer software programs, including all source code,
object code, and documentation related thereto and all software modules, tools
and databases.

 

“SOX” means the Sarbanes-Oxley Act of 2002, as amended.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership,
association or other business entity of which (i) if a corporation, a majority
of the total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a partnership, association or other business
entity, a majority of the partnership or other similar ownership interests
thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more Subsidiaries of that Person or a combination thereof. For
purposes hereof, a Person or Persons will be deemed to have a majority ownership
interest in a partnership, association or other business entity if such Person
or Persons will be allocated a majority of partnership, association or other
business entity gains or losses or will be or control the managing director,
managing member, general partner or other managing Person of such partnership,
association or other business entity.

 

“Target Company” means each of the Company and its direct and indirect
Subsidiaries (if any).

 

“Tax Return” means any return, declaration, report, claim for refund,
information return or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed in
connection with the determination, assessment or collection of any Taxes or the
administration of any Laws or administrative requirements relating to any Taxes.

 

“Taxes” means (a) all direct or indirect federal, state, local, foreign and
other net income, gross income, gross receipts, sales, use, value-added, ad
valorem, transfer, franchise, profits, license, lease, service, service use,
withholding, payroll, employment, social security and related contributions due
in relation to the payment of compensation to employees, excise, severance,
stamp, occupation, premium, property, windfall profits, alternative minimum,
estimated, customs, duties or other taxes, fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax
or additional amounts with respect thereto, (b) any Liability for payment of
amounts described in clause (a) whether as a result of being a member of an
affiliated, consolidated, combined or unitary group for any period or otherwise
through operation of law and (c) any Liability for the payment of amounts
described in clauses (a) or (b) as a result of any tax sharing, tax group, tax
indemnity or tax allocation agreement with, or any other express or implied
agreement to indemnify, any other Person.

 

54

 

 

“Trade Secrets” means any trade secrets, confidential business information,
concepts, ideas, designs, research or development information, processes,
procedures, techniques, technical information, specifications, operating and
maintenance manuals, engineering drawings, methods, know-how, data, mask works,
discoveries, inventions, modifications, extensions, improvements, and other
proprietary rights (whether or not patentable or subject to copyright,
trademark, or trade secret protection).

 

“Trademarks” means any trademarks, service marks, trade dress, trade names,
brand names, internet domain names, designs, logos, or corporate names
(including, in each case, the goodwill associated therewith), whether registered
or unregistered, and all registrations and applications for registration and
renewal thereof.

 

12.2 Section References. The following capitalized terms, as used in this
Agreement, have the respective meanings given to them in the Section as set
forth below adjacent to such terms:

 

Term   Section AAA   11.4 AAA Procedures   11.4 Accounts Receivable   4.25
Acquisition Proposal   6.6(a) Agreement   Preamble Alternative Transaction  
6.6(a) Closing   2.1 Closing Date   2.1 Company   Preamble Company Benefit Plan
  4.19(a) Company Disclosure Schedules   Article IV Company Financials   4.7(a)
Company IP   4.13(d) Company IP Licenses   4.13(a) Company Material Contract  
4.12(a) Company Permits   4.10 Company Personal Property Leases   4.16 Company
Real Property Leases   4.15 Company Registered IP   4.13(a) CSRC   4.32(a)
Dispute   11.4 Enforceability Exceptions   3.2 Environmental Permit   4.20(a)
Exchange Shares   1.2 Expenses   9.3 Interim Balance Sheet Date   4.7(a) Interim
Period   6.2(a) Lock-Up Agreement   8.2(e)(ii) Non-Competition Agreement  
8.2(e)(i) Off-the-Shelf Software Agreements   4.13(a) Outbound IP License  
4.13(c) Outside Date   9.1(b) Purchaser   Preamble Party(ies)   Preamble PRC
Establishment Document   4.4(c) PRC Mergers and Acquisitions Rules   4.32(b) PRC
Overseas Investment Regulations   4.31 PRC Overseas Investment and Listing
Regulations   4.32(a) PRC Target Company   4.4(c) Pro Rata Share   1.2 Public
Certifications   3.6(a) Purchased Shares   1.1 Purchaser   Preamble Purchaser
Financials   3.6(b) Purchaser Material Contracts     Related Person   4.21
Releasing Persons   10.1 Resolution Period   11.4 SAFE   4.32(a) SEC Reports  
3.6(a) Sellers   Preamble Specified Courts   11.5 Supplemental Disclosure
Schedules   6.17(a) Termination Fee   9.4 Top Customers   4.23

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be signed and
delivered by its respective duly authorized officer as of the date first written
above.

 

  The Purchaser:         PLANET GREEN HOLDINGS CORPORATION   a Nevada
corporation         By: /s/ Daqi Cui     Name: Daqi Cui     Title: Chief
Operating Officer           The Company:         FAST APPROACH, INC.   a
Canadian corporation         By: /s/ Yong Yang     Name: Yong Yang     Title:
Chairman

 

 

 

 

  The Sellers:       /s/ Yong Yang   Yong Yang       /s/ Mu Xiao   Mu Xiao      
/s/ Dongming Li   Dongming Li       /s/ Ye Zhang   Ye Zhang       /s/ Yiming
Qian   Yiming Qian       /s/ Jing Pan   Jing Pan       11486314 Canada Inc.    
  /s/ Ping Liu   By: Ping Liu   Title: Chairman       Peaceland Holdings Inc.  
    /s/ David Young   By: David Yang   Title:       /s/ Patrick Zheng   Patrick
Zheng       /s/Weikai Gao   Weikai Gao       /s/ Steven Wang   Steven Wang

  

 

 

 

ANNEX I
List of Sellers

 

Name  Number of Shares Outstanding   % Voting   Number of Shares to Receive from
the Purchaser  Yong Yang   762,500    27.93%   502,747  Mu Xiao   680,000  
 24.91%   448,352  Dongming Li   10,000    0.37%   6,593  Ye Zhang   100,000  
 3.66%   65,934  Yiming Qian   70,000    2.56%   46,154  Jing Pan   680,000  
 24.91%   448,352  Peaceland Holdings Inc.   20,000    0.73%   13,187  Partrick
Zheng   20,000    0.73%   13,187  11486314 Canada Inc.   287,500    10.53% 
 189,560  Weikai Gao   50,000    1.83%   32,967  Steven Wang   50,000    1.83% 
 32,967  Total   2,730,000         1,800,000 

 

 

 

 

List of Schedules

 

Schedule 4.1 – Jurisdictions

Schedule 4.3(a) – Capitalization

Schedule 4.4(a) – Subsidiaries

Schedule 4.11 – Litigation

Schedule 4.12(a) – Material Contracts

Schedule 4.13(a)(i) – Intellectual Property

Schedule 4.13 (a)(ii-iii)

Schedule 4.13(c)

Schedule 4.15 – Leased Premises

Schedule 4.16 – Personal Property

Schedule 4.18(c) Employees, Officers and Directors

Schedule 4.19(a) Benefit Plans

Schedule 4.21 Related Party Contracts

Schedule 4.22(a-b) – Insurance policies and Insurance claims

Schedule 4.23 Customers and Suppliers

Schedule 8.1(c) Consents