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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 22, 1997
HLS (USA), INC.
(formerly HARVEST E-XPRESS)
(Exact name of registrant as specified in its charter)
Nevada 87-0530644
(State or other jurisdiction of 33-89326 (IRS Employer
incorporation) (Commission File No.) Identification No.)
145 West 44th Street
6th Floor
New York, NY 10036
(Address of principal executive offices)
(212) 789-7772
(Registrant's telephone number, including area code)
Page 1 of 34 Pages
Exhibit Index on Page 4
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<PAGE>
Items 1 and 2. Changes in Control of the Registrant;
Acquisition or Disposition of Assets.
On April 22, 1997, the stockholders of Harvest E-xpress, a
Nevada corporation (the "Company"), approved certain amendments to the
Company's articles of incorporation, including (i) changing the
Company's name to HLS (USA), Inc. and (ii) changing the authorized
capital of the Company to consist of 60,000,000 shares of common stock,
par value $0.001 per share, consisting of 30,000,000 shares of Class A
Common Stock ("Class A Common Stock") and 30,000,000 shares of Class B
Common Stock ("Class B Common Stock"). The Class A Common Stock is
entitled to one vote per share and the Class B Common Stock is entitled
to ten votes per share. The Class B Common Stock does not vote on the
election of directors.
On April 22, 1997, the Company issued to McKinley Capital,
Inc. 200,000 shares of Class A Common Stock and warrants (the
"Warrants") to purchase an additional 200,000 shares of Class A Common
Stock for an aggregate consideration of $20,000. The Warrants expire
April 23, 2002 and have an exercise price of $5 per share of Class A
Common Stock. The foregoing securities were sold as compensation for
services rendered by McKinley in connection with the transactions
described herein.
On May 2, 1997, the Company purchased 100% of the issued and
outstanding common shares of HLS Corporation Limited, a corporation
organized under the laws of Bermuda ("HLS"), from Hong Leong Strategic
Holdings Limited, a corporation organized under the laws of Bermuda
("HLSHL"), pursuant to a Stock Purchase Agreement dated as of April 30,
1997, among HLSHL, the Company, McKinley, Ken Edwards and David N.
Nemelka. HLS is now a wholly owned subsidiary of the Company. HLS's sole
asset consists of securities representing an approximately 46% indirect
interest in Henan Xinfei Co. Ltd., a Sino-foreign equity joint venture
engaged in the manufacture and sale of refrigerators and freezers in
China. The purchase price was paid through the issuance to HLSHL of
590,000 shares of Class A Common Stock and 29,010,000 shares of Class B
Common Stock. In connection with the foregoing transaction, Ken Edwards,
President and Secretary and a director of the Company, resigned from his
positions with the Company and Peter C. R. Huang and Kwek Ling Peck,
designees of HLSHL, were appointed directors of the Company. Messrs.
Huang and Kwek constitute the Company's entire board of directors.
As a result of the foregoing, HLSHL beneficially owns
approximately 59.6% of the issued and outstanding Class A Common Stock
and 100% of the issued and outstanding Class B Common Stock, which
together represent approximately 99.6% of the voting power of the
Company's common stock.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The required financial statements are not included in this
Current Report on Form 8-K pursuant to Instruction (a)(4) of Item 7 and
will be filed separately when available.
(b) Pro forma financial information.
The required pro forma financial information is not included
in this Current Report on Form 8-K pursuant to Instruction (b)(2) of
Item 7 and will be filed separately when available.
(c) Exhibits.
The exhibits listed on the accompanying Index to Exhibits are
filed as part of this Current Report on Form 8-K.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
HLS (USA), INC.
By: /s/ Peter C. R. Huang
Date: May 5 , 1997 --------------------------
Name: Peter C. R. Huang
Title: Director
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INDEX TO EXHIBITS
Exhibit No. Description Sequential Page No.
1.1 Amended and Restated Articles of
Incorporation of Harvest E-xpress.
1.2 Stock Purchase Agreement dated as of
April 30, 1997, among Hong Leong
Strategic Holdings Limited, Harvest
E-xpress, McKinley Capital, Inc.,
Ken Edwards and David N. Nemelka.
Exhibit 1.1
[CONFORMED COPY]
CERTIFICATE OF
RESTATED ARTICLES OF INCORPORATION
of
HARVEST E-XPRESS
The undersigned hereby certifies that he is the duly elected
and acting President and Secretary of Harvest E-xpress (the
"Corporation"), a corporation organized and existing under the laws of
the State of Nevada, and that, for the purpose of amending and restating
its original Articles of Incorporation, which were filed with the
Secretary of State of the State of Nevada on June 23, 1994, pursuant to
and by virtue of Chapter 78 of the Nevada Revised Statutes, the
following Restated Articles of Incorporation have been duly adopted by
the vote of a majority of the outstanding common stock of the
Corporation in accordance with the provisions of Chapter 78 of the
Nevada Revised Statutes.
RESTATED
ARTICLES OF INCORPORATION
OF
HARVEST E-XPRESS
ARTICLE I
The name of the corporation (which is hereinafter referred to
as the "Corporation") is HLS (USA), Inc.
ARTICLE II
The address of the registered office of the Corporation in the
State of Nevada is One East First Street, Reno, Nevada 89501. The name
of the registered agent of the Corporation is The Corporation Trust
Company.
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ARTICLE III
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the provisions
of Chapter 78 of the Nevada Revised Statutes.
ARTICLE IV
(a) The total number of shares of all classes of stock which
the Corporation shall have the authority to issue is 60,000,000 shares
of common stock, par value $0.001 per share ("Common Stock"). Of the
60,000,000 shares of authorized Common Stock, 30,000,000 shares shall be
designated "Class A Common Stock" and 30,000,000 shares shall be
designated "Class B Common Stock". Each share of common stock of the
Corporation outstanding immediately prior to the effectiveness of these
Restated Articles of Incorporation shall upon such effectiveness
automatically be reclassified as one share of Class A Common Stock.
(b) Except as provided in these Restated Articles of
Incorporation, the holders of Class A Common Stock and Class B Common
Stock shall have all the rights afforded holders of common stock under
Chapter 78 of the Nevada Revised Statutes, including the right to vote
on all matters submitted to a vote of the common stockholders and the
right to receive the net assets of the Corporation on dissolution. The
Class A Common Stock and the Class B Common Stock shall vote together as
a single class; provided, however, that (i) holders of Class A Common
Stock shall be entitled to one vote per share on all matters submitted
to a vote of the common stockholders, (ii) holders of Class B Common
Stock shall not be entitled to vote on the election of directors but
shall be entitled to ten votes per share on all other matters submitted
to a vote of the common stockholders and (iii) the rights of holders of
Class A Common Stock may not be modified except by a majority vote of
each class of the Class A Common Stock and the Class B Common Stock.
Shares of Class A Common Stock and Class B Common Stock shall receive
pro rata any dividends and distributions payable on or in respect of
Common Stock; provided, however, that (A) in the event of any dividend
to holders of Common Stock payable in Common Stock, holders of Class A
Common Stock shall only receive dividends of Class A Common Stock, but
holders of Class B Common Stock may receive dividends payable in Common
Stock in Class A Common Stock or Class B Common Stock, as designated by
the Board of Directors when
<PAGE>
declaring any such dividend, and (B) in the event of any distribution to
holders of Common Stock of the shares of a subsidiary of the
Corporation, if the common stock of such subsidiary is divided into a
class of common stock with one vote on matters submitted to a vote of
common stockholders and one class of common stock with multiple votes on
matters submitted to a vote of common stockholders, the class of common
stock with multiple votes shall be distributed only to holders of the
Class B Common Stock (whether or not such class of common stock with
multiple votes has substantially the same rights as the Class B Common
Stock and whether or not shares of the class of common stock of such
subsidiary with only one vote per share are also distributed to holders
of Class B Common Stock).
(c) Stockholders of the Corporation shall not have any
preemptive rights to subscribe for additional issues of stock of the
Corporation except as may be agreed from time to time by the Corporation
and any such stockholder.
(d) The holders of the capital stock of the Corporation shall
not be personally liable for the payment of the Corporation's debts and
the private property of the holders of the capital stock of the
Corporation shall not be subject to the payment of debts of the
Corporation to any extent whatsoever.
ARTICLE V
The amount of the authorized stock of the Corporation of any
class or classes may be increased or decreased by the affirmative vote
of the holders of a majority of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors,
voting together as a single class.
ARTICLE VI
SECTION 1. Number, Election and Terms of Directors. The
members of the governing board of the Corporation shall be styled
Directors of the Corporation. The number of the Directors of the
Corporation shall be fixed from time to time by or pursuant to the
By-Laws of the Corporation, and shall initially be two.
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SECTION 2. Newly Created Directorships and Vacancies. Newly
created directorships resulting from any increase in the number of
Directors and any vacancies on the Board of Directors resulting from
death, resignation, disqualification, removal or other cause shall be
filled only by the affirmative vote of a majority of the remaining
Directors then in office, even though less than a quorum of the Board of
Directors. No decrease in the number of Directors constituting the Board
of Directors shall shorten the term of any incumbent Director.
SECTION 3. Removal of Directors. Any Director may be removed
from office, with or without cause, only by the affirmative vote of the
holders of 75% of the voting power of all shares of the Corporation
entitled to vote generally in the election of Directors, voting together
as a single class.
ARTICLE VII
Any action required or permitted to be taken by the
stockholders of the Corporation may be effected by any consent in
writing by such holders, signed by holders of not less than that number
of shares of Common Stock required to approve such action.
ARTICLE VIII
Subject to any express provision of the laws of the State of
Nevada or these Articles of Incorporation, the Board of Directors shall
have the power to make, alter, amend and repeal the By-Laws of the
Corporation (except so far as By-Laws of the Corporation adopted by the
stockholders shall otherwise provide). Any By-Laws made by the Directors
under the powers conferred hereby may be altered, amended or repealed by
the Directors or by the stockholders.
ARTICLE IX
Election of Directors need not be by ballot unless the By-laws
of the Corporation shall so provide.
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ARTICLE X
SECTION 1. Elimination of Certain Liability of Directors. A
Director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the Director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for the
payment of distributions to stockholders in violation of Section 78.300
of the Nevada Revised Statutes, or (iv) for any transaction from which
the Director derived an improper personal benefit.
SECTION 2. Indemnification and Insurance. (a) Action, etc.,
Other Than by or in the Right of the Corporation. The Corporation shall
indemnify and hold harmless, to the fullest extent permitted by
applicable law as it presently exists or may hereafter be amended, any
Agent (as hereinafter defined) against costs, charges and Expenses (as
hereinafter defined), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the Agent in connection with such
action, suit or proceeding, and any appeal therefrom, if the Agent acted
in good faith and in a manner the Agent reasonably believed to be in or
not opposed to the best interests of the Corporation, and with respect
to any criminal action or proceeding, had no reasonable cause to believe
such conduct was unlawful. The termination of any action, suit or
proceeding--whether by judgment, order, settlement conviction, or upon a
plea of nolo contendere or its equivalent--shall not, of itself, create
a presumption that the Agent did not act in good faith and in a manner
which the Agent reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action
or proceeding, that the Agent had reasonable cause to believe that the
Agent's conduct was unlawful.
(b) Action, etc., by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
judicial action or suit brought by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that such person
is or was an Agent, against costs, charges and Expenses actually and
reasonably incurred by the Agent in connection with the defense or
settlement of such action or suit and any appeal therefrom if the Agent
acted in good faith and in
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a manner such person reasonably believed to be in or not opposed to the
best interests of the Corporation, except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for gross negligence or wilful
misconduct in the performance of the Agent's duty to the Corporation
unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such costs, charges and Expenses which such court shall deem proper.
(c) Determination of Right of Indemnification. Any
indemnification under Paragraphs (a) and (b) of this Section (unless
ordered by a court) shall be paid by the Corporation unless a
determination is reasonably and promptly made (i) by the Board of
Directors by a majority vote of a quorum consisting of Directors who
were not parties to such action, suit or proceeding, or (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Directors so directs, by independent legal counsel in a
written opinion, or (iii) by the stockholders, that such person acted in
bad faith and in a manner that such person did not believe to be in or
not opposed to the best interests of the Corporation, or, with respect
to any criminal proceeding, that such person believed or had reasonable
cause to believe that his conduct was unlawful.
(d) Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Section, to the extent that
an Agent has been successful on the merits or otherwise, including,
without limitation, the dismissal of an action without prejudice, the
settlement of an action without admission of liability, or the defense
of any claim, issue or matter therein, or on appeal from any such
proceeding, action, claim or matter, such Agent shall be indemnified
against all costs, charges and Expenses incurred in connection
therewith.
(e) Advances of Expenses. Except as limited by Paragraph (f)
of this Section, costs, charges, and Expenses incurred by an Agent in
any action, suit, proceeding or investigation or any appeal therefrom
shall be paid by the Corporation in advance of the final disposition of
such matter if the Agent shall undertake to repay such amount in the
event that it is ultimately determined as provided herein that such
person is not entitled to indemnification.
<PAGE>
Notwithstanding the foregoing, no advance shall be made by the
Corporation if a determination is reasonably and promptly made by the
Board of Directors by a majority vote of a quorum of disinterested
Directors, or (if such a quorum is not obtainable or, even if
obtainable, a quorum of disinterested Directors so directs) by
independent legal counsel in a written opinion, that, based upon the
facts known to the Board of Directors or counsel at the time such
determination is made, the Agent acted in bad faith and in a manner that
such person did not believe to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal
proceeding, that such person believed or had reasonable cause to believe
his conduct was unlawful. In no event shall any advance be made in
instances where the Board of Directors or independent legal counsel
reasonably determines that the Agent deliberately breached such
persons's duty to the Corporation or its stockholders.
(f) Right of Agent to Indemnification upon Application;
Procedure upon Application. Any indemnification under Paragraphs (a),
(b) and (d) or advance under Paragraph (e) of this Section, shall be
made promptly, and in any event within 60 days, upon the written request
of the Agent, unless with respect to applications under Paragraphs (a),
(b) or (e), a determination is reasonably and promptly made by the Board
of Directors by a majority vote of a quorum of disinterested Directors
that such Agent acted in a manner set forth in such Paragraphs as to
justify the Corporation's not indemnifying or making an advance to the
Agent. In the event no quorum of disinterested Directors is obtainable,
the Board of Directors shall promptly direct that independent legal
counsel shall decide whether the Agent acted in the manner set forth in
such Paragraphs as to justify the Corporation's not indemnifying or
making an advance to the Agent. The right to indemnification or advances
as granted by this Section shall be enforceable by the Agent in any
court of competent jurisdiction if the Board of Directors or independent
legal counsel denies the claim in whole or in part or if no disposition
of such claim is made within 60 days. The Agent's costs, charges and
Expenses incurred in connection with successfully establishing such
person's right to indemnification, in whole or in part, in any such
proceeding shall also be indemnified by the Corporation.
(g) Other Rights and Remedies. The indemnification provided by
this Section shall not be deemed exclusive of, and shall not affect, any
other rights to
<PAGE>
which an Agent seeking indemnification may be entitled under any law,
By-law, or charter provision, agreement, vote of stockholders or
disinterested Directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be an
Agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. All rights to indemnification under
this Section shall be deemed to be a contract between the Corporation
and the Agent who serves in such capacity at any time while these
Articles and other relevant provisions of the general corporation law
and other applicable law, if any, are in effect. Any repeal or
modification thereof shall not affect any rights or obligations then
existing.
(h) Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was an Agent against any
liability asserted against such person and incurred by him or her in any
such capacity, or arising out of such persons's status as such, whether
or not the Corporation would have the power to indemnify such person
against such liability under the provisions of this Section. The
Corporation may create a trust fund, grant a security interest or use
other means (including, without limitation, a letter of credit) to
ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
(i) Other Enterprises, Fines, and Serving at Corporation's
Request. For purposes of this Section, references to "other enterprise"
in Paragraph (a) shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with respect
to any employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service by Agent as Director,
officer, employee, agent or fiduciary of the Corporation which imposes
duties on, or involves services by, such Agent with respect to any
employee benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner such person reasonably believed
to be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Section.
(j) Savings Clause. If this Section or any portion thereof
shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall
<PAGE>
nevertheless indemnify each Agent as to costs, charges and Expenses,
judgments, fines and amounts paid in settlement with respect to any
action, suit, proceeding or investigation, and any appeal therefrom,
whether civil, criminal or administrative, and whether internal or
external, including a grand jury proceeding and an action or suit
brought by or in the right of the Corporation, to the full extent
permitted by any applicable portion of this Section that shall not have
been invalidated, and to the fullest extent permitted by applicable law.
(k) Definitions. For the purposes of this Article:
(1) "Agent" means any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding or investigation, whether
civil, criminal or administrative, and whether external or internal
to the Corporation (other than a judicial action or suit brought by
or in the right of the Corporation) by reason of the fact that he
or she is or was or has agreed to be a Director, officer, employee,
agent or fiduciary of the Corporation, or that, being or having
been such a Director, officer, employee, agent or fiduciary, he or
she is or was serving at the request of the Corporation as a
Director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise.
(2) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, and all
other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute
or defend, investigating, or being or preparing to be a witness in
a proceeding.
ARTICLE XI
The Corporation reserves the right at any time and from time
to time to amend, alter, change or repeal any provision contained in
these Articles of Incorporation, and other provisions authorized by the
laws of the State of Nevada at the time in force may be added or
inserted, in the
<PAGE>
manner now or hereafter prescribed by law; and all rights, preferences
and privileges of whatsoever nature conferred upon stockholders,
Directors or any other persons whomsoever by and pursuant to these
Articles of Incorporation in its present form or as hereafter amended
are granted subject to the right reserved in this Article.
ARTICLE XII
The name and address of each member of the Board of Directors
of the Corporation is:
Name Address
Ken Edwards 4484 Taylor Avenue
Ogden, Utah 84403
Peter C.R. Huang 145 West 44th Street
Sixth Floor
New York, New York 10036
ARTICLE XIII
The Corporation shall exist in perpetuity, from and after the
date of filing of its original Articles of Incorporation with the
Secretary of State of the State of Nevada unless dissolved according to
law.
ARTICLE XIV
The provisions of Sections 78.378 to 78.379 of the Nevada
Revised Statutes shall be inapplicable to the Corporation.
IN WITNESS WHEREOF, this certificate has been executed by Ken
Edwards, President and Secretary of Harvest E-xpress, on this 22nd day
of April, 1997.
/s/ Ken Edwards
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Ken Edwards
President and Secretary
<PAGE>
STATE OF UTAH )
) ss,
COUNTY OF SALT LAKE )
On the 22nd day of April, 1997, personally appeared before me
Ken Edwards who, being by me first duly sworn, declared that he is the
person who signed the foregoing document as President and Secretary of
Harvest E- xpress and that the statements therein contained are true.
IN WITNESS THEREOF, I have hereunto set my hand and seal this
22nd day of April, 1997.
/s/ Nancy Christoffersen
----------------------------
NOTARY PUBLIC
Residing at Odgen Utah
My commission expires: Sept. 16, 1997
Exhibit 1.2
[CONFORMED COPY]
STOCK PURCHASE AGREEMENT dated as of
April 30, 1997, among HONG LEONG STRATEGIC
HOLDINGS LIMITED, a Bermuda exempted
company ("Seller"), HARVEST E-XPRESS, a
Nevada corporation ("Buyer"), MCKINLEY
CAPITAL, INC., a Nevada corporation
("McKinley"), KEN EDWARDS ("Edwards"), and
DAVID N. NEMELKA ("Nemelka" and, together
with McKinley and Edwards, the
"Principals").
Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, all the issued and outstanding shares, par value $0.001
per share (the "HLS Shares"), of HLS Corporation Limited, a Bermuda
exempted company and wholly owned subsidiary of Seller (the "Company").
Accordingly, Seller, Buyer, McKinley, Nemelka and Edwards
hereby agree as follows:
SECTION 1. Purchase and Sale of the Shares. On the terms and
subject to the conditions of this Agreement, at the Closing (as defined
in Section 2) Seller shall sell, transfer and deliver to Buyer, and
Buyer shall purchase from Seller, the HLS Shares for an aggregate
consideration consisting of (a) 590,000 shares (the "Buyer A Shares") of
the Class A common stock, $0.001 par value per share, of Buyer ("Buyer
Class A Stock") and (b) 29,010,000 shares (the "Buyer B Shares" and,
together with the Buyer A Shares, the "Buyer Shares") of the Class B
common stock, $0.001 par value per share, of Buyer ("Buyer Class B
Stock") payable as set forth below in Section 2.
SECTION 2. Closing. The closing (the "Closing") of the
purchase and sale of the HLS Shares shall be held at the offices of
Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York,
New York, at 10:00 a.m. on April 23, 1997, or, if the conditions to the
Closing set forth in Section 3 shall not have been satisfied by such
date, as soon as practicable after such conditions shall have been
satisfied. The date on which the Closing shall occur is hereinafter
referred to as the "Closing Date". At the Closing, (i) Buyer shall
deliver or cause to be delivered to Seller certificates, registered in
the name of Seller, representing the Buyer Shares and (ii) Seller shall
deliver or cause to be delivered to Buyer certificates representing the
HLS Shares, duly endorsed or accompanied by stock powers duly endorsed
in proper form for transfer, with appropriate transfer stamps, if any,
affixed.
<PAGE>
SECTION 3. Conditions to Closing. (a) Buyer's Obligation. The
obligation of Buyer to purchase and pay for the HLS Shares is subject to
the satisfaction (or waiver by Buyer) as of the Closing of the following
conditions:
(i) The representations and warranties of Seller made in this
Agreement shall be true and correct in all material respects on and
as of such time. Seller shall have performed or complied in all
material respects with all obligations and covenants required by
this Agreement to be performed or complied with by Seller by the
time of the Closing. Seller shall have delivered to Buyer a
certificate dated the Closing Date and signed by an authorized
officer of Seller confirming the foregoing.
(ii) The stockholders of Buyer shall have approved an
amendment and restatement of the Articles of Incorporation of Buyer
in the form of Exhibit A (the "Charter Amendment"); and the Charter
Amendment shall become effective.
(iii) No statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or
other order entered, promulgated or issued by any Federal, state or
local government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority
or instrumentality (a "Governmental Entity") preventing the
purchase and sale of the HLS Shares shall be in effect.
(iv) Seller shall have received all approvals from the Bermuda
Monetary Authority necessary to consummate the transactions
contemplated hereby.
(b) Seller's Obligation. The obligation of Seller to sell and
deliver the HLS Shares to Buyer is subject to the satisfaction (or
waiver by Seller) as of the Closing of the following conditions:
(i) The representations and warranties of Buyer and each of
the Principals made in this Agreement shall be true and correct in
all material respects on and as of the time of the Closing as
though made as of such time. Buyer and each of the Principals shall
have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be
performed or complied with by Buyer or such Principal as the case
may be, by the time of the Closing. Buyer and each of the
Principals shall have
<PAGE>
delivered to Seller a certificate dated the Closing Date and
signed, in the case of Buyer and McKinley, by an authorized officer
of Buyer and McKinley, respectively, and, in the case of Edwards
and Nemelka, by Edwards and Nemelka, respectively, confirming the
foregoing.
(ii) The stockholders of Buyer shall have approved the Charter
Amendment, and the Charter Amendment shall have become effective.
(iii) No statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or
other order entered, promulgated or issued by any Governmental
Entity preventing the purchase and sale of the HLS Shares shall be
in effect.
(iv) The stockholders of Buyer shall include at least 300
persons not affiliates or associates of, or employed by, Buyer or
any of its affiliates and associates; and each of such 300 persons
shall own beneficially and of record at least 100 shares of Buyer
Class A Stock; and Seller shall have received a certificate, signed
by Edwards, to the effect of the foregoing.
(v) Seller shall have received a reliance letter, in the form
of Exhibit B, from Pritchett, Siler & Hardy, P.C., with respect to
the audited financial statements included in the Buyer's Annual
Report on Form 10-KSB for the year ended December 31, 1996 (the
"1996 Form 10-KSB").
(vi) Seller shall have received all approvals from the Bermuda
Monetary Authority necessary to consummate the transactions
contemplated hereby.
(vii) In the event McKinley shall have made any transfers of
any shares of Buyer Class A Stock pursuant to Section 8(c), Seller
shall have received (A) a certificate of McKinley dated the Closing
Date identifying each such transferee, including the number of
shares transferred, and confirming that they have advised each such
transferee that such shares of Buyer Class A Stock are "restricted
securities" under the Securities Act of 1933, as amended (the
"Securities Act") and (B) an agreement from each such transferee
complying with the requirements of Section 8(c).
<PAGE>
SECTION 4. Representations and Warranties of Seller. Seller
hereby represents and warrants to Buyer as follows:
(a) Authority. Seller is an exempted company validly existing
under the laws of Bermuda. Seller has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. All
corporate acts and other proceedings required to be taken by Seller to
authorize the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly
and properly taken. This Agreement has been duly executed and delivered
by Seller and constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms.
(b) No Conflicts; Consents. The execution and delivery of this
Agreement by Seller do not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will not,
conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancelation or acceleration of any obligation or to loss of
a material benefit under, or result in the creation of any lien, claim,
encumbrance of any kind upon any of the properties or assets of the
Company under, any provision of (i) the constitutive documents of
Seller, (ii) any material agreement or obligation to which Seller or the
Company is a party or by which any of their respective assets are bound
or (iii) any judgment, order or decree, or material statute, law,
ordinance, rule or regulation applicable to Seller or the Company or
their respective assets, other than such as in the aggregate would not
have a material adverse effect on the business, financial condition or
results of operations of the Company (a "Material Adverse Effect"). No
material consent, approval, license, permit, order or authorization of,
or registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to Seller or the
Company in connection with the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated
hereby, other than (A) compliance with and filings under Bermuda law, if
applicable, and (B) those that may be required solely by reason of
Buyer's participation in the transactions contemplated hereby.
(c) The HLS Shares. Seller has good and valid title to the HLS
Shares, free and clear of any liens, claims or encumbrances of any kind.
Assuming Buyer has the requisite power and authority to be the lawful
owner of the
<PAGE>
HLS Shares, upon delivery to Buyer at the Closing of certificates
representing the HLS Shares, duly endorsed by Seller, and upon Seller's
receipt of the Consideration, (i) good and valid title to the HLS Shares
will pass to Buyer, free and clear of any liens, claims or encumbrances
of any kind, other than those arising from acts of Buyer or its
affiliates and (ii) Buyer will be entitled to registration on the
Company's register of members as the owner of the HLS Shares.
(d) Organization and Standing; Books and Records. The Company
is an exempted company validly existing under the laws of Bermuda. The
Company has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its assets and to
carry on its business as presently conducted, other than such the lack
of which would not have a Material Adverse Effect.
(e) Capital Stock of the Company. The authorized capital stock
of the Company consists of 50,000,000 Class A Common Shares, par value
$0.001 per share (the "HLS A Shares"), and 5,000,000 Class B Common
Shares, par value $0.001 per share (the "HLS B Shares"), of which
25,000,000 HLS A Shares and 5,000,000 HLS B Shares (which together
constitute the HLS Shares), are duly authorized and validly issued and
outstanding, fully paid and nonassessable. Seller is the record and
beneficial owner of the HLS Shares. Except for the HLS Shares, there are
no shares or other equity securities of the Company outstanding. The HLS
Shares are not subject to any purchase option, call, right of first
refusal, preemptive or similar rights under any provision of applicable
law, the Memorandum of Association and Bye-laws of the Company, any
contract, agreement or instrument to which the Company is subject or
bound.
(f) Assets of the Company. (1) The only material asset of the
Company is approximately 90% of the outstanding capital stock of HS-HL
Company Pte. Ltd. ("HS- HL"), a Singapore corporation, and certain
ancillary rights relating thereto. The only material liabilities of the
Company relate to its ownership of HS-HL.
(2) The only material assets of HS-HL are 100% of the
outstanding capital stock of HN-SIN Electric Pte Ltd and Hong Leong
Electric Pte Ltd. (collectively, the "HS-HL Subsidiaries"), Singapore
corporations. The only material liabilities of HS-HL relate to its
ownership of the HS-HL Subsidiaries.
<PAGE>
(3) The only material asset of the HS-HL Subsidiaries is a
collective ownership interest of approximately 51% in Henan Xinfei
Electric Co. Ltd. ("Xinfei"), a Sino-foreign equity joint venture, and
certain ancillary rights relating thereto. The only material liabilities
of the HS-HL Subsidiaries relate to their respective ownership interests
in Xinfei.
(4) Attached as Exhibit C is a recent unaudited balance sheet
and an audited balance sheet for the year ended December 31, 1995 for
Xinfei.
(g) Liquidity. Seller is entering into the transactions
contemplated hereby with the intention of using its best efforts to
establish over the next 90 days and thereafter develop a trading market
in the United States for the Buyer Class A Stock (or any successor
security). No assurances can be given that such a market will develop.
SECTION 5. Covenants of Seller. Seller shall not, and shall
not permit the Company to, take any action that would result in any of
the conditions to the purchase and sale of the HLS Shares set forth in
Section 3(a) not being satisfied.
SECTION 6. Representations and Warranties Relating to Buyer.
The Principals jointly and severally represent and warrant to Seller as
follows:
(a) Authority; Books and Records. Buyer is a corporation
validly existing under the laws of the State of Nevada. Buyer has all
requisite corporate power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. All corporate acts and other proceedings required
to be taken by Buyer to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and properly taken. This Agreement
has been duly executed and delivered by Buyer and constitutes a legal,
valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms. Buyer has prior to the execution of this
Agreement delivered to Seller true and complete copies of the Articles
of Incorporation and By- laws, each as amended to date, of Buyer. The
stock certificate and transfer books and the minute books of Buyer
(which have been made available for inspection by Seller prior to the
date hereof) are true and complete.
(b) No Conflicts; Consents. The execution and delivery of this
Agreement do not, and the consummation of
<PAGE>
the transactions contemplated hereby and compliance with the terms
hereof shall not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancelation or acceleration of any
obligation or to loss of a material benefit under, or result in the
creation of any lien, claim or encumbrance of any kind upon any of the
assets of Buyer or any subsidiary of Buyer under, any provision of (i)
the Articles of Incorporation or By- laws of Buyer, (ii) any material
agreement or obligation to which Buyer is a party or by which any of
Buyer's assets are bound, or (iii) any judgment, order, or decree, or
material statute, law, ordinance, rule or regulation applicable to Buyer
or Buyer's assets. No material consent, approval, license, permit, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with
respect to Buyer or Buyer's affiliates in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, other than (A) compliance with and
filings under Bermuda law, if applicable, (B) filings under Section 13
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and (C) those that may be required solely by reason of Seller's
participation in the transactions contemplated hereby.
(c) Capital Stock of Buyer. On the date of this Agreement, the
authorized capital stock of Buyer consists of (i) 50,000,000 shares of
Common Stock, par value $0.001 per share, of which 200,000 are duly
authorized and validly issued and outstanding, fully paid and
nonassessable. On the Closing Date, after giving effect to the Charter
Amendment, the authorized capital stock of Buyer will consist of (i)
30,000,000 shares of Buyer Class A Stock, of which 400,000 (which
400,000 shares includes the 200,000 shares issued pursuant to Section
6(f)) will be duly authorized and validly issued and outstanding, fully
paid and nonassessable and (ii) 30,000,000 shares of Buyer Class B
Stock, of which none will be outstanding. On the Closing Date, Buyer
will also have outstanding warrants (the "Warrants") in the form of
Exhibit D to purchase 200,000 shares of Buyer Class A Stock. There are
no commitments (other than this Agreement and the Warrants) pursuant to
which Buyer is or may become obligated to issue any shares of capital
stock or other securities of Buyer.
(d) Equity Interests. Buyer does not directly or indirectly
own any capital stock of or other equity interests in any corporation,
partnership or other person and Buyer is not a member of or participant
in any partnership, joint venture or similar person.
<PAGE>
(e) Financial Statements. (1) Buyer has filed all required
reports, schedules, forms, statements and other documents with the
Securities and Exchange Commission (the "SEC") since its formation (the
"SEC Documents"). As of their respective dates, the SEC Documents
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 promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement
of a material fact or omitted 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.
Except to the extent that information contained in any SEC Document has
been revised or superseded by a later filed SEC Document, none of the
SEC Documents contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of
Buyer included in the SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the
case of unaudited statements, as permitted by Form 10-QSB of the SEC)
applied on a consistent basis during the periods involved (except as may
be indicated in the notes thereto) and fairly present the consolidated
financial position of Buyer and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Buyer does not have
any securities registered under Section 12 of the Exchange Act. The
balance sheet included in the 1996 Form 10-KSB is referred to herein as
the "Buyer Balance Sheet".
(2) Buyer does not have any liabilities or obligations, except
(A) as disclosed, reflected or reserved against in the Buyer Balance
Sheet and (B) liabilities or obligations under, or specifically referred
to in, this Agreement.
(3) Buyer does not have any assets, except (A) as disclosed in
the Buyer Balance Sheet, (B) corporate books and records, (C) cash and
(D) rights under this Agreement.
(f) Fees and Expenses. In connection with the transactions
contemplated by this Agreement, McKinley will
<PAGE>
be entitled to purchase 200,000 shares of Buyer Class A Stock and
Warrants covering an additional 200,000 shares of Buyer Class A Stock,
all for aggregate cash consideration of $20,000 as compensation for
services rendered to Buyer. Such compensation has been unanimously
approved by all the directors of Buyer, and will be issued prior to the
Closing. Other than as aforesaid, all fees and expenses incurred by
Buyer, including, without limitation, any finders fees due to any party
(including George Rainey or any firm with which he may be affiliated) in
connection with the transactions contemplated hereby will be paid by
McKinley.
(g) Absence of Earnings and Profits. Buyer does not have any
"earnings and profits" as such term is interpreted for purposes of
Section 316(a) of the Internal Revenue Code of 1986, as amended.
SECTION 7. Covenants of Buyer and the Principals. (a) No
Additional Representations. Buyer and each Principal acknowledges and
agrees that none of Seller, the Company or any other person has made any
representation or warranty, expressed or implied, with respect to the
transactions contemplated hereby, the Company or its assets, liabilities
and business, the accuracy or completeness of any information regarding
the Company furnished or made available to Buyer and its representatives
(including each Principal), except as expressly set forth in this
Agreement.
(b) Access. Prior to the Closing, Buyer shall give Seller and
its representatives reasonable access, during normal business hours and
upon reasonable notice, to the personnel, properties, books and records
of Buyer.
(c) Ordinary Conduct. Except as expressly permitted by the
terms of this Agreement, from the date hereof to the Closing, Buyer
shall conduct its business, and each Principal shall cause Buyer to
conduct its business, in the ordinary course in substantially the same
manner as presently conducted. Buyer shall not, and each Principal shall
not permit Buyer to, take any action that would result in any of the
conditions to the transactions contemplated by this Agreement set forth
in Section 3(b) not being satisfied. In addition, except as otherwise
permitted by the terms of this Agreement, Buyer shall not, and each
Principal shall not permit Buyer to, do any of the following without the
prior written consent of Seller:
(i) amend its Articles of Incorporation or By- laws;
<PAGE>
(ii) declare or pay any dividend or make any other
distribution to its stockholders whether or not upon or in respect
of any shares of its capital stock;
(iii) issue, redeem or otherwise acquire any shares of its
capital stock;
(iv) incur any liabilities or increase any liability in
existence on the Closing Date;
(v) acquire or dispose of any asset;
(vi) make or incur any capital expenditure; or
(vii) agree, whether in writing or otherwise, to do any of the
foregoing.
(d) Resignations. On the Closing Date, Buyer shall (i) cause
to be delivered to Seller duly signed resignations, effective
immediately after the Closing, of all directors and officers of Buyer
and (ii) cause to be appointed as directors of Buyer two nominees of
Seller.
(e) The Buyer Shares. On the Closing Date, the Buyer Shares
will have been duly and validly authorized and issued and be fully paid
and nonassessable. The Buyer Shares will not be subject to any purchase
option, call, right of first refusal, preemptive or similar rights under
any provision of applicable law, the Articles of Incorporation or
By-laws of Buyer, or any contract, agreement or instrument to which
Buyer is subject or bound.
(f) Seller Commitments. Buyer and each Principal acknowledges
that, other than the representation set forth in Section 4(g), Seller
has made no representations and given no assurance as to any actions
that may or may not be taken by it or by Buyer following the Closing.
Neither Buyer nor any of the Principals is entering into the
transactions contemplated hereby, or (in the case of the Principals)
voting as stockholders of Buyer with respect thereto, in reliance on any
disclosed, undisclosed or expected plans of Seller, other than the
representation set forth in Section 4(g), for the future of Buyer or
with respect to its capital stock. Buyer and each Principal acknowledges
that (i) Seller shall be completely free to take such actions as a
stockholder of Buyer as Seller considers to be in its interests and (ii)
any designees of Seller on the Board of Directors of Buyer shall be
completely free to take such actions as they consider to be in the best
interests of Buyer, including, without limitation, additional
acquisitions by Buyer or the Company,
<PAGE>
issuance of securities by Buyer or the Company, issuance of additional
shares of Buyer Class A Stock on a one-for-one basis in exchange for
shares of Buyer Class B Stock, a merger, consolidation, reorganization,
liquidation or dissolution of Buyer or any other form of extraordinary
transaction.
SECTION 8. Additional Obligations of McKinley and Nemelka. (a)
Representations and Warranties. McKinley and Nemelka, jointly and
severally, represent and warrant to Seller as follows: (i) McKinley is a
corporation validly existing under the laws of the State of Nevada; (ii)
McKinley has all requisite corporate power and authority to enter into
this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby; (iii) all corporate acts and other
proceedings required to be taken by McKinley to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly and properly taken; (iv)
this Agreement has been duly executed and delivered by McKinley and
Nemelka and constitutes a legal, valid and binding obligation of
McKinley and Nemelka, enforceable against McKinley and Nemelka in
accordance with its terms and (v) Nemelka and McKinley beneficially own
within the meaning of Rule 13d-3 under the Exchange Act, 32,500 shares
of common stock of Buyer plus the Warrants plus the shares referred to
in Section 6(f).
(b) Voting. Each of McKinley and Nemelka shall vote or cause
to be voted all shares of capital stock of Buyer owned beneficially or
of record by them in favor of the transactions contemplated hereby.
(c) Transfers. From the date hereof, and for three months
following the Closing Date, neither Nemelka nor McKinley shall sell,
transfer or otherwise dispose of any shares of Buyer Class A Stock or
any Warrants; provided, however, that the foregoing shall not prevent
McKinley from transferring shares of Buyer Class A Stock on the Closing
Date to fewer than 15 transferees. McKinley shall notify in writing
each transferee of Buyer Class A Stock under the proviso to the
preceding sentence that such Buyer Class A Stock is "restricted" within
the meaning of Rule 144 under the Securities Act, and obtain from each
such transferee a written agreement in form satisfactory to Seller not
to transfer any such Buyer Class A Stock for three months following the
Closing Date and, following such date, not to transfer any such Buyer
Class A Stock in violation of the registration requirements of the
Securities Act.
<PAGE>
(d) Securities Laws Matters. McKinley (i) acknowledges that
the Warrants, the shares of Buyer Class A Stock referred to in Section
6(f) and the shares underlying the Warrants have not been registered
under the Securities Act and (ii) agrees not to offer for sale or sell
any such securities in violation of the registration requirements of the
Securities Act.
SECTION 9. Additional Obligations of Edwards. (a)
Representations and Warranties. Edwards represents and warrants to
Seller as follows: (i) this Agreement has been duly executed and
delivered by Edwards and constitutes a legal, valid and binding
obligation of Edwards, enforceable against Edwards in accordance with
its terms and (ii) Edwards beneficially owns, within the meaning of Rule
13d-3 under the Exchange Act, 97,200 shares of common stock of Buyer.
(b) Voting. Edwards shall vote or cause to be voted all shares
of capital stock of Buyer owned beneficially or of record by him or any
member of his immediate family to be voted in favor of the transactions
contemplated hereby.
(c) Transfers. For three months following the Closing Date,
Edwards shall not sell, transfer or otherwise dispose of any shares of
Buyer Class A Stock.
SECTION 10. Mutual Covenants. Each party covenants and agrees
as follows:
(a) Publicity. Seller and Buyer agree that, from the date
hereof through the Closing Date, no public release or announcement
concerning the transactions contemplated hereby shall be issued by
either party without the prior consent of the other party (which consent
shall not be unreasonably withheld).
(b) Best Efforts. Each party shall use its best efforts to
cause the Closing to occur.
(c) Records. On the Closing Date, Buyer shall deliver or cause
to be delivered to Seller all material agreements, documents, books,
records and files (collectively, "Records"), if any, in the possession
of Buyer relating to the business and operations of Buyer to the extent
not then in the possession of Seller.
SECTION 11. Further Assurances. After the Closing, from time
to time, as and when requested by either party hereto, the other party
shall execute and deliver, or
<PAGE>
cause to be executed and delivered, all such documents and instruments
and shall take, or cause to be taken, all such further or other actions,
as such other party may reasonably deem necessary or desirable to
consummate the transactions contemplated by this Agreement.
SECTION 12. Indemnification. (a) Indemnifica tion Constitutes
Exclusive Remedy. Each party acknowledges that, should the Closing
occur, such party shall not have any rights or remedies, other than as
expressly set forth in this Section 12, against any other party in
connection with the transactions contemplated hereby. In furtherance of
the foregoing, each party hereby waives, from and after the Closing, to
the fullest extent permitted under applicable law, any and all rights,
claims and causes of action, other than as expressly set forth in this
Section 12, such party may have against any other party and its
affiliates arising under or based upon any Federal, state, local or
foreign statute, law, ordinance, rule or regulation or otherwise.
(b) Indemnification by the Principals. From and after the
Closing, each Principal shall indemnify Seller, the Company, Buyer, each
of their affiliates and each of their respective officers, directors,
employees, stockholders, agents and representatives against and hold
them harmless from any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses) suffered or incurred by
any such indemnified party to the extent arising from (i) any breach of
any representation or warranty by such Principal contained in this
Agreement, (ii) any breach of any covenant of such Principal contained
in this Agreement or (iii) all obligations and liabilities of whatever
kind and nature, primary or secondary, direct or indirect, absolute or
contingent, known or unknown, whether or not accrued, of Buyer that
arises out of the operations or existence of Buyer prior to the Closing
Date (other than those listed in Section 6(e)(2)).
(c) Indemnification by Seller. From and after the Closing,
Seller shall indemnify each Principal, each of their affiliates and each
of their respective officers, directors, employees, stockholders, agents
and representatives against and hold them harmless from any loss,
liability, claim, damage or expense (including reasonable legal fees and
expenses) suffered or incurred by any such indemnified party to the
extent arising from (i) any breach of any representation or warranty by
Seller contained in this Agreement or (ii) any breach of any covenant of
Seller contained in this Agreement.
<PAGE>
SECTION 13. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by any
party (including by operation of law in connection with a merger, or
sale of substantially all the assets, of Buyer or Seller) without the
prior written consent of each other party hereto. No assignment shall
limit or affect the assignor's obligations hereunder. Any attempted
assignment in violation of this Section 13 shall be void.
SECTION 14. No Third-Party Beneficiaries. Except as provided
in Section 12, this Agreement is for the sole benefit of the parties
hereto and their permitted assigns and nothing herein expressed or
implied shall give or be construed to give to any person, other than the
parties hereto and such assigns, any legal or equitable rights
hereunder.
SECTION 15. Termination. (a) Anything contained herein to the
contrary notwithstanding, this Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the
Closing Date:
(i) by mutual written consent of Seller and Buyer;
(ii) by Seller if any of the conditions set forth in Section
3(b) shall have become incapable of fulfillment, and shall not have
been waived by Seller;
(iii) by Buyer if any of the conditions set forth in Section
3(a) shall have become incapable of fulfillment, and shall not have
been waived by Buyer; or
(iv) by either party hereto, if the Closing does not occur on
or prior to May 2, 1997;
provided, however, that the party seeking termination pursuant to clause
(ii), (iii) or (iv) is not basing termination on any breach in any
material respect of any of its representations, warranties, covenants or
agreements contained in this Agreement.
(b) In the event of termination by Seller or Buyer pursuant to
this Section 15, written notice thereof shall forthwith be given to the
other party and the transactions contemplated by this Agreement shall be
terminated, without further action by either party. If the transactions
contemplated by this Agreement are terminated as provided herein Buyer
shall return all documents and other material received from Seller or
the Company relating
<PAGE>
to the transactions contemplated hereby, whether so obtained before or
after the execution hereof, to Seller.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 15, this
Agreement shall become void and of no further force or effect, except
for the provisions of (i) Section 17 relating to certain expenses, (ii)
Section 18 relating to attorney fees and expenses, (iii) Section 10(a)
relating to publicity and (iv) this Section 15. Nothing in this Section
15 shall be deemed to release either party from any liability for any
breach by such party of the terms and provisions of this Agreement or to
impair the right of either party to compel specific performance by the
other party of its obligations under this Agreement.
SECTION 16. Survival of Representations. The representations
and warranties in Section 4 and in any certificate delivered pursuant to
Section 3(a)(i) shall survive the Closing for purposes of Section 12(c)
and shall terminate at the close of business three years following the
Closing Date. The representations and warranties in Sections 6, 8 and 9
and in any certificate delivered pursuant to Section 3(b)(i) shall
survive the Closing for purposes of Section 12(b) and shall terminate at
the close of business three years following the Closing Date.
SECTION 17. Expenses. Whether or not the transactions
contemplated hereby are consummated, and except as otherwise
specifically provided in this Agreement, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs or expenses.
SECTION 18. Amendments. No amendment, modification or waiver
in respect of this Agreement shall be effective unless it shall be in
writing and signed by all parties hereto.
SECTION 19. Notices. All notices or other communications
required or permitted to be given hereunder shall be in writing and
shall be delivered by hand or sent by confirmed fax or sent, postage
prepaid, by certified or express mail or reputable overnight courier
service and shall be deemed given when so delivered by hand, confirmed
<PAGE>
faxed, or if mailed, three days after mailing (one business day in the
case of express mail or overnight courier service), as follows:
(i) if to Buyer,
Harvest E-xpress
4484 Taylor Avenue
Ogden, Utah 84403
Fax: 801-580-1948
Attention: Ken Edwards
(ii) if to McKinley or Nemelka,
McKinley Capital, Inc.
899 S. Artistic Circle
Springville, UT 84663
Fax: 801-483-6734
Attention: David N. Nemelka
(iii) if to Edwards,
Ken Edwards
4484 Taylor Avenue
Ogden, UT 84403
Fax: 801-580-1948
(iv) if to Seller,
Hong Leong Strategic Holdings Limited
c/o Hong Leong Strategic Holdings, Inc.
145 West 44th Street, 6th Floor
New York, New York 10036
Fax: 212-789-7773
Attention: Peter C. R. Huang
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Fax: 212-474-3700
Attention: Richard Hall.
<PAGE>
SECTION 20. Interpretation; Exhibits and Schedules; Certain
Definitions. (a) The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All Exhibits annexed hereto or
referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in
any Exhibit but not otherwise defined therein, shall have the meaning as
defined in this Agreement.
(b) For all purposes hereof:
(i) "affiliate" and "associate" have the respective meanings
given such terms in Rule 12b-2 promulgated under the Exchange Act;
(ii) "including" means including without limitation;
(iii) "knowledge" of Seller means the knowledge after due
inquiry of Peter Huang;
(iv) "knowledge" of Buyer means the knowledge after due
inquiry of Ken Edwards and any other officer or director of Buyer;
and
(v) "person" means any individual, firm, corporation,
partnership, limited liability company, trust, joint venture,
Governmental Entity or other entity.
SECTION 21. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the
same agreement, and shall become effective when one or more such
counterparts have been signed by each of the parties and delivered to
each other party.
SECTION 22. Entire Agreement. This Agreement contains the
entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements
and understandings relating to such subject matter. None of the parties
shall be liable or bound to any other party in any manner by any
representations, warranties or covenants relating to such subject matter
except as specifically set forth herein.
SECTION 23. Severability. If any provision of this Agreement
(or any portion thereof) or the application of any such provision (or
any portion thereof) to any person or circumstance shall be held
invalid, illegal or
<PAGE>
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other
provision hereof (or the remaining portion thereof) or the application
of such provision to any other persons or circumstances.
SECTION 24. Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New
York applicable to agreements made and to be performed entirely within
such State, without regard to the conflicts of law principles of such
State.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
HONG LEONG STRATEGIC HOLDINGS
LIMITED,
by /s/ Kwek Ling Peck
-------------------------
Name: Kwek Ling Peck
Title: Director
HARVEST E-XPRESS,
by /s/ Ken Edwards
-------------------------
Name: Ken Edwards
Title: President
MCKINLEY CAPITAL, INC.,
by /s/ David N. Nemelka
-------------------------
Name: David N. Nemelka
Title: President
/s/ Ken Edwards
-------------------------------
Ken Edwards
/s/ David N. Nemelka
-------------------------------
David N. Nemelka
