Document:

Unassociated Document

 

SHARE EXCHANGE AGREEMENT

by and among

Rhino Productions, Inc.

(a Nevada corporation),

Vast Glory Holdings Limited

(a British Virgin Islands company)

and

Yakun Song

 

Dated as of September 13, 2011

 

  

  

  

 

SHARE EXCHANGE AGREEMENT

 

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

Preliminary Statement

 

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

 

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

 

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

 

Agreement

 

NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived here from, and intending to be legally bound hereby, it is hereby agreed as follows:

 

ARTICLE I

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE COMPANY

 

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

 

Section 1.01 Incorporation.  The Company is a company duly incorporated, validly existing, and in good standing under the laws of the British Virgin Islands and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.  The Company has delivered to Rhino complete and correct copies of the memorandum of association and articles of association of the Company as in effect on the date hereof, as well as a true and correct copy of the Business Registration Certificate of the Company.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of Company’s memorandum of association or articles of association.  The Company has taken all actions required by law, its memorandum of association and articles of association, or otherwise to authorize the execution and delivery of this Agreement.  The Company has full power, authority, and legal capacity and has taken all action required by law, its memorandum of association and articles of association, and otherwise to consummate the transactions herein contemplated.

 

  

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Section 1.02 Authorized Shares.   As of the date hereof, the Company has 5,000 issued and outstanding shares.  The issued and outstanding shares are validly issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.

 

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

 

Section 1.04 Financial Statements.

 

(a)   The Company has delivered to Rhino (i) the audited balance sheets of the Company as of December 31, 2009 and December 31, 2010 and the related audited statements of operations, stockholders’ equity and cash flows for the fiscal years ended December 31, 2009 and December 31, 2010   together with the notes to such statements and the opinion of  Child Van Wagoner & Bradshaw, PLLC, independent certified public accountants and the unaudited consolidated balance sheets of the Company and its subsidiaries as of June 30, 2010 and June 30, 2011 and the related unaudited consolidated statements of operations and retained earnings and cash flows of the Company and its subsidiaries for the six months then ended. All such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a  material adverse effect upon the business, prospects, management, properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole. The Company balance sheets are true and accurate and present fairly as of their respective dates the financial condition of the Company.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, the Company had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of the Company, in accordance with generally accepted accounting principles. The statements of operations, stockholders’ equity and cash flows reflect fairly the information required to be set forth therein by generally accepted accounting principles.

 

(b)   The Company has duly and punctually paid all governmental fees and taxes which it has become liable to pay and has duly allowed for all taxes reasonably foreseeable and is under no liability to pay any penalty or interest in connection with any claim for governmental fees or taxation and the Company has made any and all proper declarations and returns for taxation purposes and all information contained in such declarations and returns is true and complete and full provision or reserves have been made in its financial statements for all governmental fees and taxation.

 

(c)   The books and records, financial and otherwise, of the Company are in all material aspects complete and correct and have been maintained in accordance with generally accepted accounting principles consistently applied throughout the periods involved.

 

Section 1.05 Information.  The information concerning the Company set forth in this Agreement and in the Company Schedules or delivered to Rhino pursuant hereto, is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.   

 

  

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

 

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

 

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

 

(b)   The Company has not (i) amended its memorandum of association or articles of association; (ii) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its shares; (iii) made any material change in its method of management, operation or accounting, (iv) entered into any other material transaction other than sales in the ordinary course of its business; or (v) made any increase in or adoption of any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement made to, for, or with its officers, directors, or employees; and

 

(c)   The Company has not (i) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities calling for the issuance thereof, (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except as disclosed herein and except liabilities incurred in the ordinary course of business; (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights or canceled, or agreed to cancel, any debts or claims; or (iv) issued, delivered, or agreed to issue or deliver any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock) except in connection with this Agreement.

 

Section 1.08 Litigation and Proceedings.  There are no actions, suits, proceedings, or investigations pending or, to the knowledge of the Company after reasonable investigation, threatened by or against the Company or affecting the Company or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind.  The Company does not have any knowledge of any material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any court, arbitrator, or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default.

Section 1.09   Contracts.

 

(a)   All “material” contracts, agreements, franchises, license agreements, debt instruments or other commitments to which  the Company is a party or by which it or any of its assets, products, technology, or properties are bound other than those incurred in the ordinary course of business have been delivered to or made available to Rhino.  A “material” contract, agreement, franchise, license agreement, debt instrument or commitment is one which (i) will remain in effect for more than [six (6)] months after the date of this Agreement or (ii) involves aggregate obligations of at least one hundred thousand dollars ($100,000);

  

(b)   All contracts, agreements, franchises, license agreements, and other commitments to which the Company is a party or by which its properties are bound and which are material to the operations of the Company taken as a whole are valid and enforceable by the Company in all respects, except as limited by bankruptcy and insolvency laws and by other laws affecting the rights of creditors generally; and

 

  

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(c)   Except as included or described in the Company Schedule 1.09 or reflected in the most recent Company balance sheet, the Company is not a party to any oral or written (i) contract for the employment of any officer or employee which cannot be terminated by the Company on no more than 30 days notice to the employee at a cot to the Company of no more than five thousand dollars ($5,000); (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) guaranty of any obligation; (iv) collective bargaining agreement; or (v) agreement with any present or former officer or director of the Company which contains no more adverse to the Company than those which would be obtained from a third party.

 

Section 1.10   No Conflict With Other Instruments.  The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of any indenture, mortgage, deed of trust, or other material agreement, or instrument to which the Company is a party or to which any of its assets, properties or operations are subject.

 

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

 

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

 

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

  

Section 1.14 Valid Obligation.  This Agreement and all agreements and other documents executed by the Company in connection herewith constitute the valid and binding obligation of the Company, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER

 

The Shareholder hereby represents and warrants to Rhino as follows.

 

Section 2.01 Good Title.   Shareholder is the record and beneficial owner, and has good title to the shares of the Company owned by the Shareholder (“Company Shares”), with the right and authority to sell and deliver such Company Shares, free and clear of all liens, claims, charges, encumbrances, pledges, mortgages, security interests, options, rights to acquire, proxies, voting trusts or similar agreements, restrictions on transfer or adverse claims of any nature whatsoever.  Upon delivery of any certificate or certificates duly assigned, representing the same as herein contemplated and/or upon registering of Rhino as the new owner of such Company Shares in the share register of the Company, Rhino will receive good title to such Company Shares, free and clear of all liens.

 

  

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

 

Section 2.03 No Conflicts.  The execution and delivery of this Agreement by the Shareholder and the performance by the Shareholder of her obligations hereunder in accordance with the terms hereof: (a) will not require the consent of any third party or governmental entity under any laws; (b) will not violate any laws applicable to the Shareholder and (c) will not violate or breach any contractual obligation to which the Shareholder is a party.

 

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

 

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

 

Section 2.06 Acquisition of Exchange Shares for Investment.

 

(a) Shareholder is acquiring the Exchange Shares for investment for such Shareholder’s own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Shareholder has no present intention of selling, granting any participation in, or otherwise distributing the same.  Shareholder further represents that she does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Exchange Shares.

 

(b)  Shareholder represents and warrants that such Shareholder (i) can bear the economic risk of such Shareholder’s respective investments, and (ii) possesses such knowledge and experience in financial and business matters that such Shareholder is capable of evaluating the merits and risks of the investment in Rhino and its securities.

 

(c)  Shareholder is not a “U.S. Person” as defined in Rule 902(k) of Regulation S of the Securities Act (“Regulation S”) and understands that the Exchange Shares are not registered under the Securities Act and that the issuance thereof to such Shareholder is intended to be exempt from registration under the Securities Act pursuant to Regulation S.  Shareholder has no intention of becoming a U.S. Person.  At the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement, Shareholder was outside of the United States.  Each certificate representing the Exchange Shares shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities laws:

“THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”

 

  

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“TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION.  HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

 

(d)  Shareholder acknowledges that neither the SEC, nor the securities regulatory body of any state or other jurisdiction, has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.

  

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

 

(f)  Shareholder understands that the Exchange Shares may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Exchange Shares or any available exemption from registration under the Securities Act, the Exchange Shares may have to be held indefinitely.   Shareholder further acknowledges that the Exchange Shares may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of Rule 144 are satisfied (including, without limitation, Rhino’s compliance with the reporting requirements under the Securities Exchange Act of 1934, as amended (“Exchange Act”)).

 

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

 

Section 2.07 Additional Legend; Consent. Additionally, the Exchange Shares will bear any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended. Shareholder consents to Rhino making a notation on its records or giving instructions to any transfer agent of Exchange Shares in order to implement the restrictions on transfer of the Exchange Shares.

 

  

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ARTICLE III

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF RHINO

 

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

 

Section 3.01 Organization.  Rhino is a corporation duly incorporated, validly existing, and in good standing under the laws of Nevada and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.  Included in the Rhino SEC Reports (as defined below) are complete and correct copies of the articles of incorporation and bylaws of Rhino (the “Articles”) as in effect on the date hereof. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of Rhino’s Articles.  Rhino has taken all action required by law, its Articles, or otherwise to authorize the execution and delivery of this Agreement, and Rhino has full power, authority, and legal right and has taken all action required by law, its Articles, or otherwise to consummate the transactions herein contemplated.

 

Section 3.02 Capitalization. 

 

(a) Rhino’s authorized capitalization consists of 70,000,000 shares of common stock, par value $0.001 per share, of which 3,809,600 shares are issued and outstanding, and 5,000,000 shares of preferred stock, par value $0.001 per share, none of which have been issued or are outstanding.   All issued and outstanding shares are legally issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person. As of the Closing Date, no shares of Rhino’s common stock were reserved for issuance upon the exercise of outstanding options to purchase the common stock; no shares of common stock were reserved for issuance upon the exercise of outstanding warrants to purchase shares of Rhino common stock; and no shares of common stock were reserved for issuance upon the conversion of any outstanding convertible notes, debentures or other securities.  All outstanding shares of Rhino common stock have been issued and granted in compliance with (i) all applicable securities laws and (in all material respects) other applicable laws and regulations, and (ii) all requirements set forth in any applicable Contracts.

 

                   (b) There are no equity securities, partnership interests or similar ownership interests of any class of any equity security of Rhino, or any securities exchangeable or convertible into or exercisable for such equity securities, partnership interests or similar ownership interests, issued, reserved for issuance or outstanding.   Except as contemplated by this Agreement, there are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which Rhino is a party or by which it is bound obligating Rhino to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock, partnership interests or similar ownership interests of Rhino or obligating Rhino to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security, call, right, commitment or agreement.  There is no plan or arrangement to issue shares of Rhino common stock, except as set forth in this Agreement.

 

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

 

  

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

 

Section  3.04 SEC Filings; Financial Statements. 

 

(a) Rhino has made available to the Company a correct and complete copy, or there has been available on EDGAR, copies of each report, registration statement and definitive proxy statement filed by Rhino with the SEC since January 1, 2009 (the “Rhino SEC Reports”), which are all the forms, reports and documents required to be filed by Rhino with the SEC since January 1, 2009. As of their respective dates, the Rhino SEC Reports: (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Rhino SEC Reports, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superseded) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

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

 

(c) Each set of financial statements (including, in each case, any related notes thereto) contained in the Rhino SEC Reports comply as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and each fairly presents in all material respects the financial position of Rhino at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a  material adverse effect upon the business, prospects, management, properties, operations, condition (financial or otherwise) or results of operations of Rhino, taken as a whole (“Material Adverse Effect”). The Rhino balance sheets are true and accurate and present fairly as of their respective dates the financial condition of Rhino.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, Rhino had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of Rhino, in accordance with generally accepted accounting principles. The statements of operations, stockholders’ equity and cash flows reflect fairly the information required to be set forth therein by generally accepted accounting principles;

 

  

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(d) Rhino has no liabilities with respect to the payment of any federal, state, county, local or other taxes (including any deficiencies, interest or penalties), except for taxes accrued but not yet due and payable which, in the aggregate, are less than $3,000;

 

(e) Rhino has timely filed all state, federal or local income and/or franchise tax returns required to be filed by it from inception to the date hereof.  Each of such income tax returns reflects the taxes due for the period covered thereby, except for amounts which, in the aggregate, are immaterial; and

  

(f) The books and records, financial and otherwise, of Rhino are in all material aspects complete and correct and have been maintained in accordance with generally accepted accounting principles consistently applied throughout the periods involved.

 

Section 3.05 Information   The information concerning Rhino set forth in this Agreement and the Rhino Schedules is complete and accurate in all material respects and does not contain any untrue statements of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.  In addition, Rhino has fully disclosed in writing to the Company (through this Agreement, the Rhino SEC Reports or the Rhino Schedules) all information relating to matters involving Rhino or its assets or its present or past operations or activities which (i) indicated or may indicate, in the aggregate, the existence of a greater than $10,000 liability, (ii) have led or may lead to a competitive disadvantage on the part of Rhino or (iii) either alone or in aggregation with other information covered by this Section, otherwise have led or may lead to a material adverse effect on Rhino, its assets, or its operations or activities as presently conducted or as contemplated to be conducted after the Closing Date, including, but not limited to, information relating to governmental, employee, environmental, litigation and securities matters and transactions with affiliates.

 

Section 3.06 Options or Warrants.   There are no existing options, warrants, calls, or commitments of any character relating to the authorized and unissued stock of Rhino.

 

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

 

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

 

(b) Rhino has not (i) amended its Articles except as required by this Agreement; (ii) declared or made, or agreed to declare or make any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii) waived any rights of value which in the aggregate are outside of the ordinary course of business or material considering the business of Rhino; (iv) made any material change in its method of management, operation, or accounting; (v) entered into any transactions or agreements other than in the ordinary course of business; (vi) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or  termination pay to any present or former officer or employee; (vii) increased the rate of compensation payable or to become payable by it to any of its officers or directors or any of its salaried employees whose monthly compensation exceed $1,000; or  (viii) made any increase in any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement, made to, for or with its officers, directors, or employees;

 

  

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(c) Rhino has not (i) granted or agreed to grant any options, warrants, or other rights for its stock, bonds, or other corporate securities calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (iii) paid or agreed to pay any material obligations or liabilities (absolute or contingent) other than current liabilities reflected in or shown on the most recent Rhino balance sheet and current liabilities incurred since that date in the ordinary course of business and professional and other fees and expenses in connection with the preparation of this Agreement and the consummation of the transaction contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights (except assets, properties, or rights not used or useful in its business which, in the aggregate have a value of less than $1,000), or canceled, or agreed to cancel, any debts or claims (except debts or claims which in the aggregate are of a value less than $1,000); (v) made or permitted any amendment or termination of any contract, agreement, or license to which it is a party if such amendment or termination is material, considering the business of Rhino; or (vi) issued, delivered or agreed to issue or deliver, any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock), except in connection with this Agreement; and

 

(d)  Rhino has not become subject to any law or regulation which materially and adversely affects, or in the future, may adversely affect, the business, operations, properties, assets or condition of Rhino.

 

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

 

Section  3.09 Contracts.

 

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

 

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

 

(c) Rhino is not a party to any oral or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation, (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of Rhino.

 

Section 3.10 No Conflict With Other Instruments.   The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which Rhino is a party or to which any of its assets, properties or operations are subject.

 

Section 3.11 Compliance With Laws and Regulations.  Rhino has complied with all applicable statutes and regulations of any federal, state, or other applicable governmental entity or agency thereof.  This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.

 

  

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Section 3.12  Approval of Agreement.  The Board of Directors of Rhino has authorized the execution and delivery of this Agreement by Rhino and has approved this Agreement and the transactions contemplated hereby.

 

Section 3.13 Material Transactions or Affiliations.  Except as disclosed herein, in the Rhino SEC Reports and in the Rhino Schedules, there exists no contract, agreement or arrangement between Rhino and any predecessor and any person who was at the time of such contract, agreement or arrangement an officer, director, or person owning of record or known by Rhino to own beneficially, 5% or more of the issued and outstanding common shares of Rhino and which is to be performed in whole or in part after the date hereof or was entered into since January 1, 2009.  Neither any officer, director, nor 5% Shareholders of Rhino has, or has had since inception of Rhino, any known interest, direct or indirect, in any such transaction with Rhino which was material to the business of Rhino.  Rhino has no commitment, whether written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any such affiliated person.

 

Section 3.14 Valid Obligation.  This Agreement and all agreements and other documents executed by Rhino in connection herewith constitute the valid and binding obligation of Rhino, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

 

Section 3.15 Exchange Act Compliance.

 

Rhino is in compliance with, and current in, all of the reporting, filing and other requirements under the Exchange Act, the Rhino common stock has been registered under Section 12(g) of the Exchange Act, and Rhino is in compliance with all of the requirements under, and imposed by, Section 12(g) of the Exchange Act, except where a failure to so comply is not reasonably likely to have a Material Adverse Effect on Rhino.

 

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

 

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

 

ARTICLE III

ARTICLE IV

PLAN OF EXCHANGE

 

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

   

  

12

  

 

Upon consummation of the transaction contemplated herein, all of the issued and outstanding shares of the Company shall be held by Rhino. Upon consummation of the transaction contemplated herein there shall be 12,059,600 shares of Rhino common stock issued and outstanding.

  

Section 4.02 Closing.  The closing (the “Closing” or the “Closing Date”) of the transactions contemplated by this Agreement shall occur on September 13, 2011 upon the exchange of the shares of Rhino and the Company as described in Section 4.01 herein. Such Closing shall take place at a mutually agreeable time and place, and be conditioned upon all of the conditions of the Offering being met.

 

Section 4.03 Closing Events.  At the Closing, Rhino, the Company and the Shareholder shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.

 

Section 4.04 Termination.  This Agreement may be terminated by the Board of Directors of the Company or Rhino only in the event that Rhino or the Company does not meet the conditions precedent set forth in Articles VI and VII.  If this Agreement is terminated pursuant to this section, this Agreement shall be of no further force or effect, and no obligation, right or liability shall arise hereunder.

ARTICLE V

SPECIAL COVENANTS

 

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

 

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

 

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

 

 Section 5.04 Indemnification.

 

(a) The Company hereby agrees to indemnify Rhino and each of the officers, agents and directors of Rhino as of the date of execution of this Agreement against any loss, liability, claim, damage, or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever) (the “Loss”), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article I of this Agreement.  The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.

 

  

13

  

 

(b)                 Shareholder agrees to indemnify Rhino and each of the officers, agents and directors of Rhino as of the date of execution of this Agreement against any Loss, to which she or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article II of this Agreement.  The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.

 

Section 5.05 The Acquisition of Exchange Shares.  Rhino and the Company understand and agree that the consummation of this Agreement, including the issuance of the Exchange Shares to the Shareholder in exchange for the Company Shares as contemplated hereby constitutes the offer and sale of securities under the Securities Act and applicable state statutes.  Rhino and the Company agree that such transactions shall be consummated in reliance on exemptions from the registration and prospectus delivery requirements of such statutes, which depend, among other items, on the circumstances under which such securities are acquired.

 

(a) In connection with the transaction contemplated by this Agreement, Rhino and the Company shall each file, with the assistance of the other and their respective legal counsel, such notices, applications, reports, or other instruments as may be deemed by them to be necessary or appropriate in an effort to document reliance on such exemptions, and the appropriate regulatory authority in the jurisdictions where the Shareholder resides unless an exemption requiring no filing is available in such jurisdictions, all to the extent and in the manner as may be deemed by such parties to be appropriate.

 

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

 

(c) The Shareholder acknowledges that the basis for relying on exemptions from registration or qualifications are factual, depending on the conduct of the various parties, and that no legal opinion or other assurance will be required or given to the effect that the transactions contemplated hereby are in fact exempt from registration or qualification.

 

Section 5.06 Sales of Securities Under Rule 144, If Applicable.

 

(a) Rhino will use its best efforts to at all times satisfy the current public information requirements of Rule 144 promulgated under the Securities Act so that its shareholders can sell restricted securities that have been held for one year or more or such other restricted period as required by Rule 144 as it is from time to time amended.

 

(b) Upon being informed in writing by any person holding restricted stock of Rhino that such person intends to sell any shares under rule 144 promulgated under the Securities Act (including any rule adopted in substitution or replacement thereof), Rhino will certify in writing to such person that it is compliance with Rule 144 current public information requirement to enable such person to sell such person’s restricted stock under Rule 144, as may be applicable under the circumstances.

 

(c) If any certificate representing any such restricted stock is presented to Rhino’s transfer agent for registration or transfer in connection with any sales theretofore made under Rule 144, provided such certificate is duly endorsed for transfer by the appropriate person(s) or accompanied by a separate stock power duly executed by the appropriate person(s) in each case with reasonable assurances that such endorsements are genuine and effective, and is accompanied by a legal opinion that such transfer has complied with the requirements of Rule 144, as the case may be, Rhino will promptly instruct its transfer agent to register such transfer and to issue one or more new certificates representing such shares to the transferee and, if appropriate under the provisions of Rule 144, as the case may be, free of any stop transfer order or restrictive legend.

 

  

14

  

 

Section 5.07 Assistance with Post-Closing SEC Reports and Inquiries.  Upon the reasonable request of Rhino, after the Closing Date, the Company shall use its commercially reasonable best efforts to provide such information available to it, including information, filings, reports, financial statements or other circumstances of Rhino occurring, reported or filed prior to the Closing, as may be necessary or required by Rhino for the preparation of the reports that Rhino is required to file after Closing with the SEC to remain in compliance and current with its reporting requirements under the Exchange Act, or filings required to address and resolve matters as may relate to the period prior to Closing and any SEC comments relating thereto or any SEC inquiry thereof.

 

ARTICLE VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF RHINO

 

The obligations of Rhino under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

 

Section 6.01 Accuracy of Representations and Performance of Covenants.  The representations and warranties made by the Company in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at and as of the Closing Date (except for changes therein permitted by this Agreement).  The Company shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by the Company prior to or at the Closing.  Rhino shall be furnished with a certificate, signed by a duly authorized executive officer of the Company and dated the Closing Date, to the foregoing effect. The representations and warranties made by the Shareholders in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at and as of the Closing Date (except for changes therein permitted by this Agreement).  

 

Section 6.02 No Governmental Prohibition.   No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

 

Section 6.03  Consents.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of the Company after the Closing Date on the basis as presently operated shall have been obtained.

 

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

 

  

15

  

 

ARTICLE VII

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY

AND THE SHAREHOLDER

 

The obligations of the Company and the Shareholder under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

 

Section 7.01 Accuracy of Representations and Performance of Covenants.  The representations and warranties made by Rhino in this Agreement were true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date.  Additionally, Rhino shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by Rhino. The Company shall be furnished with a certificate, signed by a duly authorized executive officer of Rhino and dated the Closing Date, to the foregoing effect.

 

                  Section 7.02 No Governmental Prohibition.  No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

 

Section 7.03 Consents.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of Rhino after the Closing Date on the basis as presently operated shall have been obtained.

 

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

 

ARTICLE VIII

MISCELLANEOUS

 

Section 8.01 Brokers.   Rhino and the Company agree that, except as set out on Schedule 8.01 attached hereto, there were no finders or brokers involved in bringing the parties together or who were instrumental in the negotiation, execution or consummation of this Agreement.  Rhino and the Company agree to indemnify the other against any claim by any third person other than those described above for any commission, brokerage, or finder’s fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party.

 

Section 8.02 Governing Law.  This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the United States of America and, with respect to the matters of state law, with the laws of the State of Nevada.  Venue for all matters shall be in New York, New York, without giving effect to principles of conflicts of law thereunder.  Each of the parties (a) irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought exclusively in the federal courts of the United States. By execution and delivery of this Agreement, each party hereto irrevocably submits to and accepts, with respect to any such action or proceeding, generally and unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives any and all rights such party may now or hereafter have to object to such jurisdiction.

 

  

16

  

 

Section 8.03 Notices.   Any notice or other communications required or permitted hereunder shall  be in writing and shall be sufficiently given if personally delivered to it or sent by telecopy, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

  

If to the Company, to:

	  	
Number 01 Commercial Street

Kuntai International Center

Chaowai Road, Chaoyang District

Beijing, People’s Republic of China 100020

Attention: Ya Kun Song, Chief Executive Officer

  

	  	

If to Rhino, to:

        Number 01 Commercial Street

        Kuntai International Center

        Chaowai Road, Chaoyang District

        Beijing, People’s Republic of China 100020

        Attention: Ya Kun Song, Chief Executive Officer

    With copies to (which shall not constitute notice):

 

Eaton & Van Winkle LLP

3 Park Avenue, 16th floor

New York, New York 10016

Attention: Vincent J. McGill, Esq.

	 

    

or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3) days after mailing, if sent by registered or certified mail.

                  Section 8.04 Attorney’s Fees.  In the event that either party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be reimbursed by the losing party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

 

                   Section 8.05 Confidentiality.  Each party hereto agrees with the other that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement.  In the event of the termination of this Agreement, each party shall return to the other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.

 

  

17

  

 

Section 8.06 Public Announcements and Filings.  Unless required by applicable law or regulatory authority, none of the parties will issue any report, statement or press release to the general public, to the trade, to the general trade or trade press, or to any third party (other than its advisors and representatives in connection with the transactions contemplated hereby) or file any document, relating to this Agreement and the transactions contemplated hereby, except as may be mutually agreed by the parties.  Copies of any such filings, public announcements or disclosures, including any announcements or disclosures mandated by law or regulatory authorities, shall be delivered to each party at least one (1) business day prior to the release thereof.

 

Section 8.07 Schedules; Knowledge.  Each party is presumed to have full knowledge of all information set forth in the other party’s schedules delivered pursuant to this Agreement.

 

Section 8.08 Third Party Beneficiaries.  This contract is strictly between Rhino, the Company and the shareholders of the Company and, except as specifically provided, no director, officer, stockholder (other than the Shareholder), employee, agent, independent contractor or any other person or entity shall be deemed to be a third party beneficiary of this Agreement.

 

Section 8.09 Expenses.  Subject to Article VI and VII above, whether or not the Exchange is consummated, each of Rhino and the Company will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the Exchange or any of the other transactions contemplated hereby.

 

Section 8.10 Entire Agreement.  This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.

 

Section 8.11 Survival; Termination.  The representations, warranties, and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a period of one year.

 

Section 8.12 Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.

 

Section 8.13 Amendment or Waiver.  Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.  At any time prior to the Closing Date, this Agreement may by amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

 

Section 8.14 Best Efforts.   Subject to the terms and conditions herein provided, each party shall use its best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable.  Each party also agrees that it shall use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.

 

  

18

  

 

IN WITNESS WHEREOF, the parties hereto have executed, or caused this Agreement to be executed on their behalf, by their respective officers, hereunto duly authorized, as of the date first-above written.

 

	  	
Rhino Productions, Inc.

	  
	  	  	  	  
	  	
By:

	/s/ Yakun Song	  
	  	  	
Name: Yakun Song

Title: Chief Executive Officer

	  
	  	  	  	  
	  	  	  	  
	  	
Vast Glory Holdings Limited

 

	  
	  	
By:

	
/s/ Yakun Song

	  
	  	  	
Name:  Yakun Song

	  
	  	  	
Title:  Director

	  
	  	
 

	  
	 	 	/s/ Yakun Song	 
	  	  	
Yakun Song, as the sole shareholder of Vast Glory Holdings Limited

	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

  

19

  

Table 1:  Exchange Shares to be Issued

 

VAST GLORY HOLDING LIMITED SHAREHOLDERS

 

	
Name of Vast Glory Holdings  Limited 

Shareholder

	
Vast Glory 

Holdings Limited 

Stock Ownership 

%

	
Shares of Vast 

Glory Holdings 

Limited

	
Shares of Rhino Productions, 

Inc. Common Stock

	
Ya Kun Song

	
100%

	
 

	
8,250,000

	
 

	  	  	
 

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

Total

 

  

20

  

 

Vast Glory Holdings Limited

Share Exchange Agreement

Company Schedules

September 13, 2011

	
Section 1.03

Subsidiaries

	  
	
HK Foods Logistics, Ltd., a Hong Kong company

 

	
Section 1.04

Financial Statements

	  
	
Audited financial statements for the years ended December 31, 2010 and December 31, 2011 and unaudited financial statements for the six months ended June 30, 20010 and June 30, 2011 are attached.

	
 

Section 1.06

Options and Warrants

None.

 

	  
	
Section 1.07

Absence of Certain Changes or Events

	  
	
None.

 

	  
	
Section 1.08

Litigation and Proceedings

	  
	
None.

 

	
Section 1.09

Contracts

	  
	
None.

	  

 

  

21

  

 

Rhino Productions, Inc. (“Rhino”)

Share Exchange Agreement

Rhino Schedules

September 13, 2011

	
Section 2.04

SEC Reports;Financial Statements

	  
	
See SEC filings.

 

	  
	
Section 2.07

Absence of Certain Changes or Events

	  
	
None.

 

	  
	
Section 2.08

Litigation and Proceedings

	  
	
None.

 

	
Section 2.09

Contracts

	  
	
None.

 

	  

 

22exhibit101.htm - Generated by SEC Publisher for SEC Filing

 

Exhibit 10.1

 

LEASE AGREEMENT

 

 

SECTION 1 ‐ GENERAL PROVISIONS, EXHIBITS, AND DEFINITIONS.

 

(a)        Parties.

 

(i)         Landlord:                     Sherman Properties, LLC

                                                                        9090 Kephart Dr.

                                                                        Mentor, OH 44060

                                                                        Attn: Mr. Pete Sherman

 

 

(ii)        Tenant:                        Powdermet, Inc.

                                                24112 Tungsten Road

                                                Euclid, Ohio 44123

                                                Attn: Mr. Andrew Sherman

 

(b)        Basic Lease Terms.

 

(i)         Commencement Date of Lease: November 1, 2005

 

(ii)        Term of Lease: fifteen (15) consecutive lease years, as defined in subsection 3(b) hereof.  

 

(iii)       Base Rent: As set forth on Exhibit B,  payable in monthly installments.

 

(iv)       Permitted Use:  General commercial, manufacturing, warehouse and office purposes, subject to applicable zoning, environmental and building laws and ordinances.

 

(v)        Premises: The Buildings and Building Site shown on Exhibits A-1 and A-2.

 

 

(c)        Exhibits.  The following exhibits are attached to this Lease and incorporated herein by reference.

 

EXHIBIT A-1        ‐        Legal Description of the Building Site.

 

EXHIBIT A‐2        -        Plat Showing the Building and Building Site.

 

EXHIBIT B            -        Schedule of Rents

 

(d)        Definitions.  Unless otherwise expressly provided herein, or the context requires a different interpretation, the following definitions shall control the interpretation of this Lease.

 

 

 

 

 

1

 

(i)         “Building” means, collectively, (i) the two story building consisting of approximately 11690 square feet base plus a 2945 sq ft mezzanine; (ii) the two story building consisting of approximately 32797 square feet; (iii) the related outbuildings, storage sheds and vaults located at 24112 Tungsten Road, Euclid Ohio 44123.

 

(ii)        “Building Site” ‐ the approximately 10.5 acre area consisting of the Building and the adjacent parking areas and undeveloped land owned by Landlord, including all other buildings and improvements constructed thereon, as shown on the attached Exhibit A‐2.

 

SECTION 2 ‐ LEASE OF PREMISES.  For the rent and upon the terms and conditions set forth in this Lease, Landlord leases the Premises to Tenant and Tenant leases the Premises from Landlord. 

 

SECTION 3 ‐ TERM OF LEASE.

 

(a)        Commencement Date.  The Commencement Date of the Lease is set forth in Section 1(b)(i) hereof.  

 

(b)        Lease Year.  The first lease year shall begin on the Commencement Date and shall end on the last day of the twelfth full month following the Commencement Date of this Lease.  Succeeding lease years shall each consist of a twelve (12) month period beginning with the first day of the month following the end of the prior lease year.

 

SECTION 4 ‐ BASE RENT.  

 

(a)        Base Rent.  Tenant agrees to pay Landlord, without deduction or setoff, at the address shown in subsection 1(a)(i) or at such other place as Landlord may from time to time designate, the Base Rent set forth in Exhibit B hereof.  Each monthly installment of Base Rent shall be paid in advance on or before the first day of the calendar month.  Tenant’s obligation to pay rent shall begin on the Commencement Date of the Lease.  It is the purpose and intent of Landlord and Tenant that the Base Rent shall be absolutely net to Landlord except for the items to be paid by Landlord and specifically set forth in this Lease Agreement, so that this Lease shall yield, net to Landlord, the Base Rent specified in Exhibit B hereof during the term hereof, and that all costs, expenses and charges of every kind and nature relating to the Building (other than those specifically assumed hereunder by Landlord) which may arise or become due during the term of this Lease shall be paid by Tenant, and that Landlord shall be indemnified and saved harmless by Tenant from and against the same. 

 

	
 

2

 

(b)   Reserve Account.  For each of the first five (5) lease years, after Landlord has paid all amounts due to the holder of any note and mortgage secured by a lien against the Premises, all amounts payable with respect real property taxes (or similar taxes) imposed against the Building or the Building Site, any insurance premiums with respect to the Building or the Building Site and any Operating Expenses incurred by Landlord and not reimbursed by Tenant, plus a reserve amount equal to thirty-five percent (35%) of the total Base Rent paid by Tenant in such lease year, Landlord shall deposit the remaining Base Rent paid by Tenant in a reserve account (the “Reserve Account”) to be applied to make alterations and improvements to the Premises.  Landlord and Tenant shall meet annually, no later than sixty (60) days after the end of each such lease year, to determine one or more improvements to the Premises to be completed by funds from the Reserve Account.  In the event of a dispute between Landlord and Tenant with respect to the application of the funds in the Reserve Account, Landlord shall have the right to apply such funds to such improvements as Landlord, in its reasonable judgment, shall deem appropriate.  

 

 

SECTION 5 ‐ ADDITIONAL RENT. Any rents or other charges not included in Base Rent which Tenant herein expressly or impliedly covenants or agrees to pay howsoever the same may be denominated shall hereinafter be referred to as “Additional Rent.”  Landlord shall have the same rights and remedies as are provided for herein at law or in equity for the nonpayment of Additional Rent as Landlord shall have for the nonpayment of Base Rent.  All taxes, premiums, charges, costs, and expenses which Tenant assumes or agrees to pay under any provisions of this Lease, together with all interest and penalties that may accrue thereon in the event of Tenant’s failure to pay the same as herein provided, all other damages, costs and expenses which Landlord may suffer or incur, and any and all other sums which may become due, by reason of any default of Tenant or failure on Tenant’s part to comply with the agreements, terms, covenants, and conditions of this Lease on Tenant’s part to be performed, and each or any of them, shall be deemed to be Additional Rent.  In addition to the Base Rent, during the term of this Lease and any extension or renewal hereof, Tenant shall pay all of the following expenses incurred by the Landlord relating to the Premises (collectively, “Operating Expenses”) all costs and expenses of any kind, nature, and description incurred by the Landlord in connection with the maintenance, operation, care and repair of the Building or the Building Site (other than landscaping or grounds-keeping charges) which Landlord determines are desirable for the operation and maintenance of the Building or the Building Site in accordance with the standard maintained in the Euclid, Ohio area for similar buildings and building sites.  Tenant shall also reimburse landlord for property taxes and insurance premiums, if paid for by the landlord, when due.  The foregoing additional charges and Operating Expenses shall be paid by Tenant to Landlord within thirty (30) days of the date that Landlord submits an invoice for such charges to Tenant (or, the due date of such item if earlier). 

 

 

SECTION 6 ‐ CONSTRUCTION OF TENANT IMPROVEMENTS.

 

(a)        Delivery of Premises.  Possession of the Premises shall be delivered to Tenant on the Commencement Date. 

 

 

 

 

 

 

 

 

3

 

(b)        Condition of Building.  On the Commencement Date, Tenant will accept delivery of the Premises, together with any building(s), fixtures, equipment, and improvements thereon, in their present condition “AS IS, WHERE IS”, subject to all faults and patent and latent defects. Tenant represents and warrants that it has not relied upon any representations or warranties as to the state or condition of the Building made by Landlord, any persons comprising Landlord, or any representatives, employees, former employees, or agents of Landlord.  Tenant does not require Landlord to make any improvements, repairs or replacements to the Premises, other than those agreed upon in writing and listed in Exhibit A3.  Landlord makes no warranty whatsoever as to condition, state of repair, fitness, fitness for a particular purpose or otherwise with regard to the Building or the fixtures, equipment, or improvements to be located thereon. 

 

SECTION 7 ‐ USE OF PREMISES BY TENANT.  Tenant shall use the Premises solely for the purposes specified in subsection 1(b)(vi) hereof, and shall not engage in any business or permit any use of the Premises which is forbidden by law, ordinance, or government regulation, or which may increase the premium cost of or invalidate any policy of insurance carried on the Premises or covering its operation.  In the event that Tenant’s use of the Premises increases the premium cost of insurance carried on the Building or the Building Site, Tenant shall pay any such increase.  Tenant agrees that the Premises shall be used and occupied subject to, and in accordance with, all laws, rules, regulations, ordinances, restrictions, and any certificate of occupancy.  Tenant shall not use or occupy, nor permit or suffer, the Premises or any part thereof to be used or occupied for any unlawful or illegal business, use or purpose, nor for any disreputable business, use or purpose, nor in such manner as to constitute a nuisance of any kind.  Tenant shall immediately upon the discovery of any such unlawful, illegal, or disreputable use take all necessary steps, legal and equitable to compel the discontinuance of such use and to oust and remove any subtenants, occupants, or other persons guilty of such unlawful, illegal, or disreputable use.  Tenant shall not (either with or without negligence) cause or permit the escape, disposal, or release of any hazardous substances or materials in the Premises.  

 

SECTION 8 – REAL PROPERTY TAXES.  Landlord shall be responsible for payment of all real property taxes and assessments levied or assessed against the Building or the Building Site.    

 

SECTION 9 ‐ IMPROVEMENTS.

 

(a)        Prior Consent Required.  Tenant shall not make or permit to be made any significant alterations or improvements to the Premises outside without Landlord’s prior written consent.  Any alterations or improvements which may be permitted by Landlord shall be upon the condition that Tenant shall promptly pay all costs, expenses, and charges thereof, shall make such alterations or improvements in accordance with applicable laws and building codes and in a good and workmanlike manner, and shall fully and completely indemnify Landlord against any mechanic’s lien or other liens or claims in connection with the making of such alterations and improvements.  Tenant shall promptly repair any damage to the Building or to the Building Site caused by any alterations or improvements made by Tenant.

 

 

 

 

 

 

 

 

4

 

 

Exhibit 10.1

 

(b)        Removal of Improvements.  Except as otherwise provided herein, all alterations and improvements by Tenant shall become the property of Landlord and shall not be removed from the Premises.  All trade fixtures, furniture, and furnishings installed in the Premises by Tenant and paid for by Tenant shall remain the property of Tenant and may be removed upon the expiration of the term of this Lease; provided (i) that any of such items as are affixed to the Premises and require severance may be removed only if Tenant repairs any damage caused by such removal and (ii) that Tenant shall have fully performed all of the covenants and agreements to be performed by Tenant under the provisions of this Lease.  If Tenant fails to remove such items from the Premises prior to the expiration or earlier termination of this Lease, all such trade fixtures, furniture, and furnishings shall become the property of the Landlord unless Landlord elects to require their removal, in which case Tenant shall promptly remove such trade fixtures, furniture, and furnishings and restore the Building to its prior condition.  To the extent that any additions or improvements by Tenant include the installation of wires and/or lines for telecommunication or computers, such wires shall be clipped and tagged for identification purpose when installed and, upon the expiration of this Lease, Landlord shall have the right to require Tenant’s removal thereof in accordance with the provisions of this subsection 9(b).

 

SECTION 10 ‐ REPAIRS BY LANDLORD.  In the event that Tenant shall not maintain the Premises as required by this Lease, Landlord shall have the right, but not the obligation, to perform, or cause to be performed, any repairs that the Landlord shall deem necessary with respect to the Premises and all costs incurred by Landlord shall be paid by Tenant within thirty (30) days of receipt by Tenant of Landlord’s invoice therefore. Any amounts expended by Landlord pursuant to this Section 10 shall be deemed Operating Expenses payable by Tenant and shall constitute Additional Rent payable hereunder.  Landlord agrees to provide written notice 15 days prior to performing any such maintenance with an estimate of repair costs, and shall give the tenant reasonable time, not to exceed 30 days, to perform said maintenance or repairs.

 

SECTION 11 – REPAIRS AND MAINTENANCE OF THE PREMISES BY TENANT.  Tenant shall keep the Premises and every part thereof and any fixtures, facilities, or equipment contained therein, including, without limitation, the electrical, water, water heating, wastewater, and heating, ventilating, overhead pipe systems and air conditioning systems serving the Building or the Building Site in good condition and repair, and shall make any replacements thereof.  Tenant shall also repair or replace all structural elements of the Building, including, without limitation, the foundations, exterior walls, roof, doors and windows and shall replace any broken and cracked glass on windows and doors situated in the Building.  Tenant shall not permit any waste, damage, or injury to the Premises.  Tenant shall be responsible for all maintenance related to the Premises, other than as provided below, and shall contract for and obtain all necessary service, including, without limitation, janitorial and waste removal services, necessary to maintain the Premises in a safe, healthy and clean manner.  Notwithstanding the foregoing, Landlord shall be responsible for maintaining all landscaping and grounds-keeping for the Premises.  

 

 

 

 

 

 

 

 

5

 

SECTION 12 ‐ INSURANCE.

 

(a)        Commercial Liability Insurance.  Tenant agrees to carry commercial general liability insurance covering the Premises and Tenant’s use thereof in companies and in a form satisfactory to Landlord, with a minimum combined single limit of [One Million Dollars ($1,000,000.00)] for liability on account of bodily injury and property damage.  Tenant shall deposit such policy or policies (or certificates thereof) with Landlord prior to the Commencement Date. Such policy or policies shall name Landlord and Tenant as additional insureds and shall bear endorsements to the effect the insurer agrees to notify Landlord not less than ten (10) days in advance of any modification or cancellation thereof.

 

(b)        Landlord’s Liability.  Landlord shall not be liable: (i) for any damage to Tenant’s property located in the Premises, regardless of the cause of such damage, or (ii) for any acts or omissions of other tenants of the Building, if any, or (iii) for any condition of the Premises whatsoever unless Landlord is responsible for the repair thereof and has failed to make such repair after notice from Tenant of the need therefor and the expiration of a reasonable time for the making of such repair.

 

(c)        Fire and Extended Coverage Insurance.  Tenant agrees to carry, or pay the premiums for if the policy is in the landlords name, policies insuring the Building and all permanent improvements within the Building Site against fire and such other perils as are normally covered by a “special form” (formerly known as “all‐risk”) policy of property insurance, in a mutually agreed upon amount not to exceed eighty percent (80%) of the value thereof, together with insurance against such other risks and in such amounts as Landlord deems appropriate.  Tenant agrees to carry insurance against fire and such other risks as are normally covered by a “special form” (formerly known as “all‐risk”) policy of property insurance for tenant’s personal property for at least $500,000.  in an amount equal to at least one hundred percent (80%) of the replacement cost of Tenant’s trade fixtures, furniture, furnishings, special equipment, and all other items of personal property of Tenant located on or within the Premises.  Upon written request, each party shall furnish the other with a certificate evidencing such coverage.

 

(d)        Mutual Waiver of Subrogation.  Landlord and Tenant each agree to cause to be included in their respective policies of insurance the agreement of the issuer thereof that such policies shall not be invalidated by a waiver of claims by the insured against the Landlord or Tenant, as the case may be, and each will furnish evidence thereof to the other.  In addition, but not in limitation of any other waiver herein, Landlord and Tenant each hereby waive any claim against the other for any loss resulting from any cause, including the negligence of the other, to the extent of the insurance proceeds available therefor.

 

(e)        Compliance with Regulations.  Tenant agrees to comply with all applicable rules, regulations, and requirements of any federal, state, county, or municipal authority, and the rules, regulations, and requirements of fire rating organizations and underwriters.  Tenant, at Tenant’s cost and expense, shall make all replacements, alterations, and any and all repairs to the Premises required to comply with such rules, regulations, and requirements.

 

 

 

6

 

 

Exhibit 10.1

 

SECTION 13 ‐ EMINENT DOMAIN.  If at any time during the term of this Lease the Building or any material portion of the Building Site is taken, in whole or in part, for public or quasi‐public use or is condemned under eminent domain or conveyed under threat of such a taking or condemnation, either party may terminate this Lease effective on the date of such taking or conveyance, and Tenant shall not be entitled to claim or have paid to Tenant any compensation or damages whatsoever for or on account of any loss, injury, damage, taking, or conveyance of any right, interest, or estate of Tenant, and Tenant hereby relinquishes and assigns to Landlord any rights to any such damages.  Landlord shall be entitled to claim and have paid to it, for the use and benefit of Landlord, all compensation and damages for and on account of or arising out of such taking, condemnation, or conveyance, without deduction from the amount thereof for or on account of any right, title, interest or estate of Tenant in or to such property.  Tenant, upon request of Landlord, shall execute any and all releases, transfers, or other documents as shall be required by such public or quasi‐public authority to effect and give further evidence and assurance of the foregoing.

 

SECTION 14 ‐ DEFAULT.

 

(a)        Default.  An event of default (“Event of Default”) under the terms and conditions of this Lease shall be deemed to have occurred if:

 

(i)         Tenant fails to pay Base Rent, Additional Rent or charges, or any other sums due under this Lease or otherwise to Landlord, [and such failure continues for ten (10) days after written notice from Landlord];

 

(ii)        Tenant fails to maintain insurance as required by this Lease, and such failure continues for a period of three (3) days after written notice from Landlord;

 

(iii)       Tenant vacates the Building or permits waste to be committed or any unnecessary damage done upon or to the Premises, and such condition continues for a period of thirty (30) days after written notice from Landlord;

 

(iv)       Tenant fails to perform or comply with any other condition or term of this Lease and such failure continues for a period of ten (10) days after written notice from Landlord;

 

(v)        Tenant makes an assignment for the benefit of creditors or Tenant is subjected to receivership;

 

(vi)       A petition in bankruptcy is filed by or against Tenant, or Tenant is declared insolvent in any way; or

 

(vii)      The Premises or Tenant’s assets or property therein are levied upon or attached under process against Tenant, which is not satisfied or dissolved within ten (10) days after such levy.

 

(b)        Landlord’s Remedies.  Upon the occurrence of an Event of Default hereunder, Landlord may pursue any of the following remedies:

 

 

 

 

 

7

 

(i)         Landlord may declare the term of the Lease ended and re‐enter and take possession of the Premises.  Tenant shall be notified of such election by Landlord by delivery of written notice to vacate, stating that the Lease has been terminated and specifying the date of termination, which shall not be less than three (3) days from the date of such notice.  In the event of such termination, Tenant shall peacefully surrender the Premises to Landlord on the date set forth in the notice.  Thereafter, Landlord may re‐enter the Premises without further notice and repossess it by summary proceedings or otherwise, and may have, hold, and enjoy the Premises and the right to receive all rental income therefrom, free and clear of any claim on the part of Tenant.

 

(ii)        Without terminating this Lease and without notice, except as is required by law, Landlord may re‐enter the Premises by summary proceedings or otherwise and dispossess Tenant.  No re‐entry or taking of possession of the Premises by Landlord shall be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such intention is given to Tenant or unless the termination of this Lease is decreed by a court of competent jurisdiction.  In the event of such re‐entry, Landlord may, without being obligated to do so, in its own name but as agent for Tenant, relet the whole or any portion of the Premises, or the whole or any portion thereof with additional space, for any period equal to, greater, or less than the remainder of the original term of this Lease, for any sum (including any rental concessions and rent‐free occupancy) which it may deem reasonable, to any tenant which it may deem suitable and satisfactory, and for any use and purpose which it may deem appropriate.  In the event of any reletting, Landlord shall apply the rent therefrom first to the payment of Landlord’s expenses, including attorney’s fees incurred by reason of Tenant’s default, commissions, and the repairs, renovation, or alteration of the Premises, and then to the payment of rent and all other items due from Tenant hereunder, Tenant remaining liable for any deficiency.

 

(iii)       Any obligation imposed by law upon Landlord to relet the Premises shall be subject to the normal standards and requirements of Landlord for acceptance of any tenant.  The failure of Landlord to relet, or if relet, to collect the rent under such reletting, shall not release or affect Tenant’s liability for damages hereunder.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

(iv)       Should any rent collected by Landlord as provided in this Section 14 be insufficient to fully pay to Landlord a sum equal to all rent reserved herein and other charges payable hereunder for the remainder of the term herein originally demised, Tenant shall be and remain liable for any such deficiency, and the right of Landlord to recover from Tenant the amount thereof, or a sum equal to all such rent and other charges payable hereunder, shall survive the issuance of any dispossessor warrant or other cancellation or termination hereof, and Landlord shall be entitled to retain any surplus.  Landlord shall have the right, in place and instead of holding Tenant so liable, forthwith to recover against Tenant as damages for loss of the bargain and not as a penalty, in addition to any other damages becoming due, an aggregate sum which, at the time of the termination of this Lease or of the recovery of possession of the Premises by Landlord, as the case may be, represents the then present worth of the excess, if any, of the aggregate of the rent and all the charges payable by Tenant hereunder that would have accrued for the balance of the term over the aggregate rental value of the Premises (such rental value to be computed on the basis of a tenant paying not only rent to Landlord for the use and occupation of the Premises, but also such Additional Rent and other charges as are required to be paid by Tenant under the terms of this Lease) for the balance of such term.

 

(v)        In the event of a default or threatened default by Tenant of any of the terms, provisions, covenants, conditions, and Rules and Regulations of this Lease, Landlord shall have the right to injunction and the right to invoke any remedy permitted to Landlord in law or in equity.  All remedies available to Landlord are declared to be cumulative and concurrent.  No termination of this Lease nor any taking or recovering of possession of the Premises shall deprive Landlord of any of its remedies or actions against Tenant.

 

(vi)       Without limiting the generality of the foregoing, in determining Landlord’s loss, Landlord may accelerate all base rent and additional rent due for the balance of the term of this Lease, discounted at the rate of 8 percent (8%) per annum, and declare the same immediately due and payable.  In determining the amount of any additional rent payments for purposes of this computation, Landlord may make such determination based upon the amount of the additional rent payable by Tenant for the twelve (12) month period immediately preceding Tenant’s default and assume that the same increases at the rate of 3 percent (3%) per annum.

 

SECTION 15 ‐ ASSIGNMENT AND SUBLETTING.

 

(a)        Prior Approval Required for Assignment.  This Lease shall not be assigned, mortgaged, pledged, encumbered, or in any other manner transferred by the Tenant, voluntarily or involuntarily, by operation of law or otherwise, without the prior written consent of Landlord.

 

 

	
 

9

 

(b)        Permitted Subletting.  The Premises, or any portion thereof, may be subleased by Tenant to any third party without the prior approval of Landlord, subject to the following: (i) the provisions of Section 15(c) shall be applicable to any sublease; (ii) any subtenant shall comply with all of the terms and conditions of this Lease, including the Permitted Use specified in Section1(b)(iv) hereof; (iii) a subtenant’s occupancy of the Premises shall be in compliance with all applicable laws.  Any other subletting of the Premises shall require the prior written consent of Landlord.  

 

(c)        Consent not a Release.  If Tenant shall at any time during the term of this Lease sublet all or any part of the Premises or assign or transfer this Lease, either with or without the consent of Landlord, Tenant shall nevertheless remain fully liable under all of the terms, covenants, and conditions of this Lease.  If this Lease is assigned, or if the Premises or any part thereof are subleased, used, or occupied by anybody other than Tenant, Landlord may collect from the assignee, sublessee, or occupant any rent or other charges payable by Tenant under this Lease and apply the amount collected to the rent and other amounts due from Tenant hereunder, but such collection by Landlord shall not be deemed an acceptance of the assignee, sublessee, or occupant as a tenant or a release of Tenant from the obligations of Tenant under this Lease.

 

SECTION 16 ‐ DAMAGE OR DESTRUCTION.

 

(a)        Termination.  If (i) the Building is damaged to the extent of more than twenty‐five percent (25%) of the cost of replacement thereof, (ii) the proceeds of Landlord’s insurance recovered or recoverable as a result of damage to the Building are insufficient to pay fully for the cost of replacement of the Building, (iii) the  Building shall be damaged as a result of a risk which is not covered the building insurance policy, or (iv) the Building is damaged in whole or in part during the last two (2) years of the lease term or of the Renewal Term hereof; then, in any such event, Landlord may terminate this Lease by notice given within ninety (90) days after such event and upon the date specified in such notice, which shall be not less than thirty (30) days nor more than sixty (60) days after the giving of such notice, this Lease shall terminate, and Tenant shall vacate and surrender the Building to Landlord.  If the damage or any repairing or restoration resulting therefrom shall render the Building untenantable, in whole or in part, a proportionate abatement of the rent shall be allowed from the date when the damage occurred until completion of the repairs or restoration or, in the event Landlord elects to terminate this Lease, until such date of termination.

 

(b)        Repair or Restoration.  If this Lease is not terminated as provided in subsection 16(a), Landlord, at Landlord’s expense, shall proceed with the repair or restoration of the Building and of the Building.  All repairs and restoration of the Building not included in Landlord’s work shall be performed by Tenant promptly and diligently, at Tenant’s own expense.  Upon the completion of Landlord’s work, Tenant shall promptly replace, at Tenant’s own cost, all of Tenant’s fixtures, furnishings, and other appurtenances necessary to conduct Tenant’s business in the Building.

 

 

 

 

 

 

10

 

SECTION 17 ‐ ENTRY AND REIMBURSEMENT RIGHTS OF LANDLORD.  Landlord reserves the right at all reasonable times to go upon and inspect the Premises and every part thereof, and, at Landlord’s option, to make repairs, alterations, and additions to the Premises.  Any such inspections, repairs, alterations, or additions shall be conducted in such a manner as to minimize any impact on tenants full use of the property, and shall be conducted with tenant’s representative present in occupied buildings were hazardous materials or operations are present.  If Landlord shall make any payments on behalf of Tenant which are Tenant’s obligation in order to fulfill Tenant’s covenants, then any amounts so paid by Landlord are agreed and declared to be additional charges, and shall be due and payable to Landlord by Tenant upon submission to Tenant of an invoice, bill, or statement therefor.

 

SECTION 18 ‐ SUBORDINATION.

 

(a)        Subordination of Lease to Mortgage.  Landlord reserves the right to demand and obtain from Tenant a waiver of priority, in recordable form, subordinating Tenant’s Lease in favor of any mortgage lien placed upon the Building Site from time to time by Landlord; provided that Landlord shall procure from any such mortgagee an agreement providing in substance that so long as Tenant shall faithfully discharge the obligations on its part to be kept and performed under the terms of this Lease, Tenant’s tenancy will not be disturbed nor this Lease affected by any default under such mortgage, and Tenant agrees that this Lease shall remain in full force and effect even though default in the mortgage may occur.  Any such agreement may require Tenant to notify the mortgagee of any Landlord default hereunder, and may include other similar conditions, provided such conditions do not materially and adversely affect Tenant’s rights hereunder.

 

(b)        Lease Subject to Recorded Documents.  This Lease is subject to, and Tenant covenants to comply with, all lawful easements, covenants, and restrictions of record pertaining to the Building Site and any easements appurtenant thereto.

 

SECTION 19 ‐ NO WAIVER BY LANDLORD.  No waiver of any of the terms, covenants, provisions, and conditions of this Lease, or of the Rules and Regulations, and no waiver of any legal or equitable relief or remedy, shall be implied by the failure of Landlord to assert any rights or to declare any forfeiture, and no waiver of any of such terms, covenants, provisions, and conditions of this Lease, or the Rules and Regulations, shall be valid unless it shall be in writing and signed by Landlord.  No waiver by Landlord or forgiveness of performance by Landlord in respect to one or more tenants shall constitute a waiver of forgiveness of performance in favor of Tenant, or any other tenants, nor shall the waiver or forgiveness of performance of any one or more of the terms, covenants, provisions, and conditions of this Lease or the Rules and Regulations, be claimed or pleaded by Tenant to excuse a subsequent failure of performance of any of the terms, covenants, provisions, and conditions of this Lease or the Rules and Regulations.

 

SECTION 20 ‐ VACATION OF PREMISES; HOLDOVER.  Upon the expiration of this Lease or its prior termination, Tenant shall surrender possession of the Premises (including all Tenant’s improvements and replacements thereof) and all fixtures permanently attached to the Building during the term (except for trade fixtures which Tenant is permitted to remove and such fixtures as Landlord shall direct Tenant to remove) in as good condition and repair as at the commencement of the term hereof, except for loss by fire or other casualty covered by the insurance maintained hereunder, a taking pursuant to powers of eminent domain, and ordinary wear and tear.  If Tenant remains in possession of the Premises after the expiration of the Term of Lease, as the same may be extended pursuant to the terms hereof, Tenant shall be deemed to be a tenant of the Premises on a month-to-month basis upon the same terms and provisions hereof, except for the Term of Lease and Tenant shall pay Base Rent in an amount equal to 150% of the Base Rent payable hereunder during last month of the Term.  

11

 

SECTION 21 ‐ INDEMNIFICATION BY TENANT.  Tenant shall, to the maximum extent permitted by law, indemnify and save harmless Landlord against and from all costs, expenses, liabilities, losses, damages, injunctions, suits, actions, fines, penalties, claims, and demands of every kind or nature, including reasonable counsel fees, by or on behalf of any person, party or governmental authority whatsoever arising out of: (a) any failure by Tenant to perform any of the agreements, terms, covenants, or conditions of this Lease on Tenant’s part to be performed when due, (b) any accident, injury, or damage which shall happen in or about the Premises or appurtenances, however occurring, and maintenance, alteration, repair, use, or operation of the Premises, or any part thereof, during the Term, (c) failure to comply with any laws, ordinances, requirements, orders, directions, rules, or regulations of any federal, state, county, or city governmental authority, (d) any mechanic’s lien, conditional bill of sale, or chattel mortgage filed against the Premises or any equipment therein or any materials used in the construction or alteration of any building(s), fixtures, or improvements thereon, (e) Tenant’s possession of the Premises and/or the operation of its business on the Premises, or (f) construction of any improvements to the Premises by Tenant.

 

SECTION 22 ‐ MECHANICS LIENS.  Tenant shall not permit any lien, mortgage, or other encumbrance to attach to the Building, the Building Site or upon any interest of Landlord or Tenant in the Building Site or in the building(s), fixtures, or improvements thereon; it being agreed that should Tenant cause any alterations, rebuilding, replacements, changes, additions, improvements, or repairs to be made to the Premises, or cause any labor to be performed or materials to be furnished therein, thereon or thereto, Landlord shall not under any circumstances be liable for the payment of any expense incurred or for the value of any work done or materials furnished, but all such alterations, rebuilding, replacements, changes, addition, improvements and repairs, and labor and material, shall be made, furnished and performed at Tenant’s expense and Tenant shall be solely and wholly responsible to contractors, laborers and materialmen furnishing and performing such labor and material.  If, because of any act or omission (or alleged act of omission) of Tenant, any mechanic’s or other lien, charge or order for the payment of money shall be filed against the Building Site, the Building or fixtures or improvements thereon, or against Landlord or any conditional bill of sale or chattel mortgage shall be filed for or affecting any equipment or any materials used in the construction or alteration of, or installed in, any such building(s) or improvement(s) (whether or not such lien, charge or order, conditional bill of sale, or chattel mortgage is valid or enforceable as such), Tenant shall, at its sole cost and expense, cause the same to be canceled and discharged of record or bonded within thirty (30) days after notice of filing thereof.

 

SECTION 23 ‐ ESTOPPEL CERTIFICATES.  Upon receipt of Landlord’s written request, Tenant shall promptly execute and deliver to Landlord, for the benefit of such persons as Landlord names in such request, a statement in writing (and in form and substance satisfactory to Landlord) certifying to such of the following facts as are true:  (a) that this Lease constitutes the entire agreement between Landlord and Tenant and is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications); (b) the dates to which the rent and other charges hereunder have been paid and the amount of any security deposited with Landlord; (c) that all conditions precedent to the Lease taking effect have been satisfied; (d) that Tenant has accepted possession, the lease term has commenced, and Tenant is occupying the Premises; and (e) that Tenant knows of no default under the Lease by the Landlord and that there are no defenses or offsets which Tenant has against enforcement of this Lease by Landlord.  Such statement shall also specify the actual Commencement Date and the expiration date of the Lease.  Tenant shall also execute and deliver any other forms, documents, certificates, and agreements reasonably required by any mortgage lender or purchaser of the Building Site, provided there is no resulting material adverse change in Tenant’s rights hereunder.

 

 

12

 

SECTION 24 ‐ QUIET ENJOYMENT.  Landlord hereby covenants and agrees that if Tenant performs all the covenants and agreements herein stipulated to be performed on Tenant’s part, Tenant shall at all times during the continuance hereof have the peaceable and quiet enjoyment and possession of the Premises without hindrance from Landlord or any person or persons lawfully claiming the Premises, subject, however, to the terms of this Lease and all instruments to which this Lease is subordinate.

 

SECTION 25 ‐ UTILITIES. Tenant shall be responsible for the cost of all utilities (and related charges) used on or furnished to the Premises, including electricity, natural gas, telephone and water and sewer charges (including the cost of an annual inspection and repair and replacement of the water meter and back‐flow prevention device, if applicable).  Except as otherwise provided herein, Tenant shall pay for all utilities used on or furnished to the Premises directly to the entity providing each utility service.

 

SECTION 26 ‐  TRANSFER OF LANDLORD’S INTEREST; LIABILITY OF LANDLORD.

 

(a)        Transfer by Landlord.  If Landlord should sell or otherwise transfer Landlord’s interest in the Building Site, Tenant agrees that Landlord shall thereafter have no liability to Tenant under this Lease or any modification or amendment hereof or extensions or renewals hereof, except for such liabilities as have accrued prior to the date of such sale or transfer of Landlord’s interest.

 

(b)        Landlord not Liable for Injury or Damage. Tenant is and shall be in exclusive control and possession of the Premises as provided herein, and except for Landlord’s gross negligence or intentional misconduct, neither Landlord nor its affiliates, partners, shareholders, officers, directors, employees, successors, and assigns shall in any event whatsoever be liable for any injury or damage to any property or to any person happening on or about the Premises, nor for any loss, injury or damage to any property of Tenant, or of any other person contained therein. Landlord and its agents shall have no responsibility for the care or safety of any cash or property of any kind, type, or nature kept on the Building by Tenant, or for the criminal acts of third parties.  Landlord and its agents shall not be liable for any theft, damage, or injury occasioned by failure to keep the Building secured, heated, cooled, or in repair, or for any bodily injury or property damage done or occasioned by or from structural failure or collapse of plumbing, gas, water, steam or other pipes, or sewage, or the bursting, leaking, or running of any water outlet, container, or fixture, in, above, upon, or about the Building, nor for any injury or damage occasioned by wind, snow, or ice being upon or coming through the roof, skylight, windows, doors, parking, road, or sidewalk areas, or otherwise, nor for any injury or damage arising from the omission of any of the utilities or services supplied or due to be supplied by Landlord, or from acts of negligence or willfulness of co‐tenants or other occupants or users of the Building Site, except to the extent caused by the gross negligence of Landlord or its employees, agents, or representatives.  The provisions hereof permitting Landlord to enter and inspect the Premises are made for the purpose of enabling Landlord to be informed as to whether Tenant is complying with the agreements, terms, covenants, and conditions hereof, and to do such acts as Tenant shall fail to do.

 

 

 

 

 

 

13

 

 

Exhibit 10.1

 

SECTION 27 ‐ RIGHTS RESERVED.  Landlord reserves the right to make any alterations, repairs, improvements, or additions in or to the Building Site, the Building, the fixtures, and equipment thereof, the street entrances, doors, halls, corridors, passages, elevators, stairways, or other facilities which Landlord may deem necessary or desirable, if reasonable under the circumstances; provided, however, that such activities shall not unreasonably interfere with or disturb Tenant’s business or occupancy. Any or all of the foregoing rights may be exercised by Landlord without being deemed an eviction or disturbance of Tenant’s use and possession of the Premises, and without right of deduction, set-off, or abatement of the rents reserved, charges for operating expenses, or taxes and additional and other charges payable by Tenant hereunder or otherwise relieving Tenant from payment and performance of Tenant’s obligations hereunder.

 

SECTION 28 ‐ MISCELLANEOUS PROVISIONS.  The laws of the State of Ohio shall govern the validity, performance, and enforcement of this Lease.  The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provision of this Lease or the Lease itself.  The submission of this document for examination does not constitute an offer to lease, or a reservation of or option for the Premises, and becomes effective only upon execution and delivery thereof by Landlord and Tenant.  All negotiations, considerations, representations, and understandings between the parties are incorporated herein and may be modified or altered only by agreement in writing between the parties.  This Lease shall not be recorded.  A memorandum of lease describing the Building Site, giving the commencement date and term of this Lease and renewal rights, if any, and referring to this Lease, may be executed and may be recorded by either party.  The agreements, terms, covenants, and conditions herein shall bind and inure to the benefit of Landlord and Tenant and their respective successors and, except as otherwise provided herein, their assigns.

 

SECTION 29 – SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of fifteen thousand ($15,000) (the “Security Deposit”) as security for the full and faithful performance of each of the obligations and covenants imposed upon Tenant under this Lease.  Notwithstanding the foregoing, if Tenant shall have fully and faithfully performed all of its obligations under this Lease as of the last day of each of the first four (4) lease years hereunder, Landlord shall credit against Tenant’s first payment of Base Rent due in the next succeeding lease year (i.e. the first payment in the second, third, fourth and fifth lease years), an amount equal to five thousand dollars ($5,000) and the Security Deposit shall be reduced by any amount so credited.  If Tenant defaults in the payment of Base Rent, Additional Rent or in the performance of any of the other covenants or obligations imposed upon Tenant under this Lease, then Landlord, at Landlord’s election, without notice and without terminating this Lease, may apply the funds so deposited as security to the payment of any Rent due hereunder or to the remedy of any other default hereunder, or to terminate this Lease by reason of any such default and retain such funds as liquidated damages for any such default and not by way of penalty.  Any action taken by Landlord pursuant to this Section 29 shall not be construed to be a waiver of any other rights or remedies of Landlord, or of any of Landlord’s rights to enforce any such right or remedy, in case of any subsequent default.  If the security deposit or any part thereof is used, applied or retained in curing any default, Tenant shall, within 10 business days, deposit with Landlord as additional security an amount in each case  equal to the amounts so used, applied or retained, and if Tenant shall fail to do so, such failure shall constitute a default under this Lease, affording Landlord the same rights and remedies as a default in payment of Base Rent.  

 

 

 

 

 

 

 

14

 

 

Exhibit 10.1

 

SECTION 30 - ENVIRONMENTAL COMPLIANCE AND INDEMNIFICATION.

 

(a)        Environmental Compliance.  Tenant shall, and Tenant shall cause all employees, agents, contractors, subcontractors, subtenants, invitees, licensees and assignees of Tenant and any other persons present on or occupying the Premises to conduct all activities on the Premises, and to keep and maintain the Premises, including, without limitation, the soil and groundwater thereof, in compliance with all Environmental Laws (as hereinafter defined).  During the term of this Lease, Tenant shall not conduct any activities on the Premises in violation of any Environmental Laws, nor shall Tenant cause or permit any conditions on the Premises, including conditions relating to the soil and groundwater thereof, that violate any Environmental Laws. 

 

(b)        Handling of Hazardous Materials.  Neither Tenant nor any employees, agents, contractors, subcontractors, invitees and licensees of Tenant nor any other persons occupying or present on the Premises shall:  (i) use, generate, manufacture, or store in, on, under or about the Premises or transport to or from the Premises any Hazardous Materials (as hereinafter defined) except as such may be required in connection with the permitted uses of the Premises and then only to the extent permitted by and in full compliance with Environmental Laws after obtaining all necessary permits and licenses therefor; or (ii) cause or permit the disposal or release of any Hazardous Materials, debris, or wastes (including without limitation, any hazardous waste) in, on, under, about or from the Premises or any adjoining property.

 

(c)        Environmental Laws.  For the purposes of this Agreement, “Environmental Laws” shall include the Comprehensive Environmental Response, Compensation and Liability Act; the Resource Conversation and Recovery Act; the Clean Air Act; the Federal Water Pollution Control Act; the Hazardous Materials Transportation Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Refuse Act of 1989; the Emergency Planning and Community Right-to-Know Act; and the Occupational Safety and Health Act; as amended from time to time; and any similar federal, state and local laws and ordinances and the regulations and rules implementing such statutes, laws and ordinances, including without limitation those which regulate or pertain to hazardous materials, substances or environmental matters.

 

(d)        Hazardous Materials.  For the purposes of this Agreement, the term “Hazardous Materials” shall mean (i) any substance, chemical, waste or organism that is hazardous, toxic, pathogenic, flammable, explosive, radioactive or dangerous, including, without limitation, any substances defined as or included in the definition of "hazardous substances," “extremely hazardous substance,” "hazardous wastes," "hazardous materials," “hazardous air pollutants” or "toxic substances" under any Environmental Laws; (ii) oil,  petroleum or petroleum products, by-products or wastes; (iii) polychlorinated biphenyls (PCB's), asbestos, dioxins, dibenzofurans, urea-formaldehyde, or any material containing the previously mentioned substances, lead based paint; and (iv) any insecticides, fungicides and rodenticides.

 

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(e)        Notice Requirement.  Tenant shall immediately advise Landlord in writing of, and upon Landlord’s request, provide copies of documents pertaining to:  (i) any notices or citations received by Tenant or of which Tenant is aware pertaining to the Premises or Tenant's operations thereon of a violation or potential violation of any Environmental Laws or relating to the use, storage, generation, removal, closure, remediation, containment, disposal or transportation of, or in any other way relating to, any Hazardous Materials; (ii) any and all enforcement, cleanup, removal or other governmental, administrative or regulatory actions instituted, completed or threatened pursuant to any Environmental Laws; and (iii) all claims made or threatened by any third party against Tenant or the Premises relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials or violation of Environmental Laws. 

 

(f)        Governmental Citations.  If at any time Tenant receives notice or is cited as set forth in subsection (e) above by any governmental authority, Tenant shall within twenty-four (24) hours from receipt thereof, provide a true copy of said citation to Landlord.  Within ten (10) days from receipt of said notice or citation, Tenant shall either: (i) commence and immediately prosecute to completion such remedial action as may be necessary in order to have the Premises comply with the Environmental Laws or (ii) post such security as Landlord requests and commence legal proceedings before a court or other tribunal having jurisdiction thereover contesting the validity and/or applicability of the Environmental Laws cited as a violation, and diligently prosecute such matter to a final judgment or decision.  The obligations of Tenant as set forth in this Section 21 shall also apply in the event that Landlord receives notice or is cited as set forth in subsection (e) for conditions arising from or relating to Tenant’s activities on or occupation of the Premises.  These obligations are conditioned upon Landlord providing Tenant a copy of said notice or citation.

 

(g)        Environmental Indemnification.  Tenant shall be solely responsible for, and Tenant hereby indemnifies and agrees to defend and hold harmless Landlord, its shareholders, directors, officers, employees, agents, successors and assigns, from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, transportation, release, threatened release, discharge or disposal by Tenant, or any employees, agents, contractors, subcontractors, invitees, licensees, subtenants or assignees of Tenant, of Hazardous Materials in, on, under, about or from the Premises, or a violation of Environmental Laws, including, without limitation:  (i) all foreseeable consequential damages; (ii) the cost of any required or necessary repair, cleanup or remediation of the Premises, including the soil and groundwater thereof, and the preparation and implementation of any closure, remedial or other required plans; (iii) damage to any natural resources; and (iv) all reasonable costs and expenses incurred by Landlord in connection with clauses (i), (ii), and (iii), including but not limited to reasonable attorneys' and consultants' fees. 

 

 

 

 

 

 

 

 

 

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(h)   Remedial Measures.  Without Landlord’s prior written consent, Tenant shall not take any action or remedial action or commence any legal proceedings in response to the presence of any Hazardous Materials in, on, under, about or from the Premises or any adjoining property or violation of Environmental Laws, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Materials or violation of Environmental Laws which action or remedial action, settlement, consent or compromise might, in Landlord's reasonable judgment, impair the value of the Premises, Building or Building Site; provided, however, that Landlord's prior consent shall not be necessary in the event that the presence of Hazardous Materials in, on, under, about, or from the Premises or violation of Environmental Laws either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not possible to obtain Landlord's consent before taking such action, provided that in such event Tenant shall notify Landlord as soon as practicable of any action so taken. 

 

(i)     Voluntary Action Program/No Further Action Letter.  Tenant acknowledges that Landlord is in the process of conducting a remediation of the Premises pursuant to Ohio’s Voluntary Action Program (“VAP”).  Tenant hereby acknowledges and agrees that Landlord shall have the right to enter upon the Premises, or any part thereof, for the purpose of conducting activities and operations under Landlord’s VAP remediation program.  Landlord shall use all reasonable efforts to avoid disruption of Tenant’s business activities on the Premises conducting such activities and operations.  

 

(j)     Tenant Indemnification by Landlord.  Landlord hereby indemnifies and agrees to defend and hold harmless Tenant, its shareholders, directors, officers, employees, agents, successors and assigns, from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the any Hazardous Materials in, on, under or about the Premises on or before the date of this Lease to the extent Landlord is indemnified against any such loss, damage, cost, expense or liability by any prior owner or operator of the Premises, or any part thereof, including, without limitation, [Utica Corporation] and [Textron Inc.] (herein a “Prior Owner”).  Upon receipt from Tenant of notice of any loss, damage, cost, expense or liability for which Landlord may be entitled to indemnification from any Prior Owner, Landlord agrees to promptly make claims against such Prior Owner for indemnification against such loss, damage, cost, expense or liability and shall pay such amount (less Landlord’s expenses in pursuing such indemnity) to Tenant.  

 

SECTION 31 - OPTION TO PURCHASE.  In consideration of the Base Rent paid hereunder, the sufficiency of which is hereby acknowledged, Tenant is hereby granted an option to purchase the Premises at any time during the term of this Lease.  If the Tenant shall elect to exercise the aforesaid option, it shall do so by giving to the Landlord notice in writing of its intention to do so not later than [ninety (90)] days prior to the date that Tenant intends to purchase the Premises (the “Closing Date”) together with a non‐refundable Earnest Money Deposit of Thirty Thousand Dollars ($30,000.00), provided, that, if Tenant has not given Landlord notice prior to ninety (90) days before the expiration of the Term (as the same may be extended), this option to purchase shall be null and void.  If Tenant exercises this option, Tenant shall have the right to purchase the property at a purchase price of Two Million Dollars ($2,000,000.00), which purchase price shall be paid by wire transfer on the closing date. Landlord and Tenant shall join together to execute a Memorandum of Lease to evidence Tenant’s option to purchase the Premises.   If Tenant shall exercise the foregoing purchase option, the following provisions shall govern the sale of the Premises to Tenant:

 

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(a)        The purchase price shall be as set forth above and the Closing shall occur on the Closing Date at a location in the Cleveland, Ohio area to be designated by Landlord. At the Closing, the Deed shall be delivered by Landlord to Tenant. After making the prorations and charges herein provided, the Title Company shall record the Deed, deliver to Landlord the balance of the Purchase Price and its escrow statement, and deliver to Tenant the Title Evidence, the recorded Deed (when received from the County Recorder), its escrow statement and any amounts due Tenant.  This Section shall be used as escrow instructions and the Title Company may attach its standard conditions of escrow hereto, provided, however, that in the event of an inconsistency between said standard conditions and these instructions, these instructions shall control. In addition, the Title Company shall file all informational reports required by the Internal Revenue Code as in effect on the Closing Date, including but not limited to, Form 1099‐B;

 

(b)        All real estate taxes and prepaid rents shall be prorated as of the day of closing based upon the latest available tax duplicates, with the closing date being treated as a day of ownership by Landlord.  All prorations shall be final and shall not be further adjusted by Landlord and Tenant;

 

(c)        Fee simple title shall be transferred by Limited Warranty Deed or Fiduciary Deed, as appropriate (the “Deed”) free and clear of all liens and encumbrances, subject to: (i) all easements, covenants, restrictions and other matters of record, (ii) all zoning or similar ordinances and regulations; (iii) all current real estate taxes and assessments, both general and special, which are a lien, but not yet due and payable on the Closing Date; and (iv) those items which would be shown by an accurate survey of the Premises, all of which Tenant agrees to accept;

 

(d)        This Lease shall automatically terminate upon the recordation of the deed from Landlord to Tenant; 

 

(e)        Tenant shall have the right to obtain a standard ALTA Owner's Policy of Title Insurance (the "Title Evidence"), issued by a title insurance company to be designated by Landlord (the "Title Company") in an amount equal to the Purchase Price, showing title to be good in Tenant as required herein;

 

(f)        Tenant shall pay the following costs associated with the closing: (i) one-half of the escrow fee charged by the title company; (ii) all costs associated with the acquisition of the Title Evidence, including, without limitation, any premium, examination fee, commitment fee, underwriting fee and the costs of any endorsements; the cost of recording the deed; (iii) Tenant’s share of all prorations specified above; and (iv) any costs associated with obtaining a survey for the property.  Landlord shall pay the following costs: (w) one-half of the escrow fee charged by the title company; (x) all costs associated with the termination of any mortgage or other financing held by Landlord; (y) all transfer taxes and (z) Landlord’s share of all prorations specified above;  

 

(g)        Landlord shall have no obligation to remove any defects, encumbrances or other impairments of title to the Premises, it being agreed that in the event Tenant objects to any title defect and Landlord is unable or refuses to cure such defect, Tenant’s sole remedy shall be to revoke its election to purchase the Premises;  

 

18

 

 

Exhibit 10.1

 

(h)        Tenant agrees that it shall purchase the Property in its as-is, where-is condition on the date of closing, subject to all defects, both latent and patent.  The other terms and conditions of the purchase shall be in accordance with local custom; and 

 

(i)         If Tenant shall fail to purchase the Premises following the exercise of the option by Tenant, Landlord shall have the right to retain the Earnest Money as liquidated damages, it being acknowledged that the actual damages are difficult to ascertain and the Earnest Money represents a fair approximation of what such damages would be. In addition, the Lease shall remain in full force and effect and Tenant shall have no other right or option to purchase the Premises.

 

 

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IN WITNESS WHEREOF, the parties hereto have executed counterparts hereof, each of which shall have the same force and effect as if it were an original, this 7th day of March, 2006, as to Landlord, and this 7h day of March, 2006, as to Tenant.

 

 

           SHERMAN PROPERTIES, LLC

          an Ohio limited liability company

 

By: /s/ Pete Sherman____________________

 

 

Its: _________________________________

 

 

 

POWDERMET, INC.

a California corporation

 

 

By: /s/ Andrew Sherman________________

 

 

 

Its: CEO_____________________________

 

 

 

 

 

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