STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (this “Agreement”) is entered into as of [February 27, 2007], by and between:

 

(a)         AAA International Ltd., a corporation organized and existing under the laws of the State of Delaware, the United States of America with its head office at ____________________, USA (“Purchaser”);

 

(b)         Mr. MILLER Kim, a resident of the Republic of Korea (“Korea”) with Resident Registration Number _________________ with his address at _______________________ (“Seller”).

 

Purchaser and Seller shall individually be referred to as a “Party” and collectively as the “Parties.”

 

RECITALS

 

             A.          Seller owns 1,000 shares of common stock of CAC Co., Ltd. (“Shares”), a company with its head office at _________________________________ (the “Company”).

 

             B.          Seller wishes to sell to Purchaser, and Purchaser wishes to purchase from Seller, the Shares owned by Seller (the “Shares”), upon the terms and subject to the conditions set forth herein.

 

             NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto (collectively, the “Parties”) agree as follows:

 

 

1.          Purchase Price

 

Purchaser shall pay to Seller as consideration for such Shares the aggregate purchase price of _____________________ Won (KRW__________) [or ____________ Won (KRW________________ per Share)] (“Purchase Price”).

 

2.          Remittance of the Purchase Price and Transfer of Share Certificates

 

2.1                Purchaser shall, by [February __, 2009] (the “Payment Date”), pay to Seller the aggregate Purchase Price by wire transfer of such sum into a bank account designated in writing by Seller.

2.2                Seller shall, upon receipt of Purchase Price, deliver to Purchaser or anyone designated by Purchaser the share certificates for the Shares.

2.3                Seller shall, if necessary as determined by Purchaser or anyone designated by Purchaser, cooperate to complete the share transfer of Shares as described by the Articles of Incorporation of the Company.

 

3.          Representations and Warranties

 

3.1        Seller, as of the Payment Date, represents and warrants to Purchaser as follows in connection with the Company:

 

3.1.1           The Company is a corporation duly organized, validly existing and              in good standing under the laws of Korea and has all necessary power and authority to operate and carry on its businesses as described in its Articles of Incorporation.  The execution, delivery and performance of this Agreement by Seller do not and will not in any material respect violate, conflict with or result in the breach of any provisions of the Articles of Incorporation of the Company, and the Company shall perform any and all acts to obtain any consent, approval, authorization, or file or notify any governmental or supervisory authorities as required;

3.1.2           The total share capital of the Company is five hundred million Won (KRW500,000,000) with 50,000 shares issued and outstanding.  There are no stocks, bonds with warrants, convertible securities of any character obligating the Company to issue any shares of capital stocks of the Company;

3.1.3           The Company has all necessary powers and authority to own, operate or lease the real estate, automobiles, right of lease and any other legal rights to use such assets held by the Company, and there are no mortgages in any form recorded on such rights except as set forth in the registration.  The Company has good and marketable titles to all of its equipments and inventories free and clear of all encumbrances, including, but not limited to, lien, pledge and mortgage;

3.1.4           All returns and reports (including any and all estimated tax returns and tax extensions) in respect of taxes required to be filed with respect to the Company have been timely filed.  All taxes required to be shown on such returns and reports or otherwise due have been timely paid.  There are no pending actions or investigations by tax authorities and no pending actions or investigations in connection with a violation of labor law, environmental law or any other administrative laws; and

3.1.5           There are no actions by or against the Company, and the Company is not aware of or has not been notified with any occurrence or probable occurrence of litigation, arbitration or any other legal disputes.

 

3.2                 Seller represents and warrants to Purchaser as follows in connection with the Shares:

 

3.2.1           Seller is the rightful owner of the Shares with legitimate right to dispose;

3.2.2           All of the Shares are free and clear of any encumbrances, and Purchaser shall be able to exercise its rights as a legitimate owner of the Shares once the Shares are transferred to Purchaser;

3.2.3           Transfer of the Shares under this Agreement shall not in any respect conflict with any relevant law, violate any condition in connection with government approval of the Company’s incorporation or constitutes a default or a breach of an obligation under an agreement executed by and between the Company and a third party.  The Company has completed all the procedures including obtaining any authorization, consent, or approval by such third party or administrative agencies; and

3.2.4           The Shares represent the entire interest of Seller in the Company and Seller has no other interest in the Company, contingent or otherwise, including but not limited to, warrants.

 

3.3                 Seller shall indemnify and hold harmless Purchaser against and in respect of any and all liabilities, losses, damages, claims, costs and expenses (including, without limitation, reasonable attorney’s fees) arising out of, resulting from, or in connection with any misrepresentation, breach of warranty or representation in this Agreement.

 

4.          Covenants of Seller

 

4.1        Seller shall not, for the period between the date of this Agreement and the date on which Purchaser purchases the Shares, cause the Company to do any of the following acts without the prior written consent of Purchaser, except such acts which are conducted in the usual and ordinary course of business or operation of the Company:

 

4.1.1     Increase capital stock of the Company;

4.1.2           Dissolve, merge or transform the Company;

4.1.3           Transfer all or part of the Company’s business or acquire any other company’s business or control the management of any other company;

4.1.4           Issue corporate bond;

4.1.5           Transact any business between a director of the Company and Company;

4.1.6           Enter into a transaction involving an amount of _________ Won (KRW_________) or more;

4.1.7           Amend its Articles of Incorporation or internal rules or regulations;

4.1.8           Amend collective employment agreement or employment regulations;

4.1.9           Amend employment contracts or recruit new employees; or

4.1.10       Any acts which materially affect the assets or business of the Company.

 

4.2                 Seller shall not, in the absence of a prior written consent by Purchaser, own any shares of the Company (including the capital increase without consideration or stock dividend), except the Shares to be transferred in this Agreement.

 

4.3                 Seller shall not for a period of two (2) years from the Payment Date of this Agreement, in the absence of a prior written consent by Purchaser, compete with the Company directly or indirectly by engaging in the business in connection with connectors and hinges, including, without limitation, establishing a competitive business, participating as a shareholder with a right to appoint a director or being elected as a director of a competitor.  Seller shall not disclose any proprietary or confidential information of the Company including, without limitation, the Company’s trade secrets acquired by him in connection with the management of the Company, and recommend or solicit any officers and employees of the Company to resign or seek an employment with a competitor.

 

4.4                 With respect to Sections 4.1 through 4.3 of this Agreement, terms and conditions of the employment agreement and non-competition agreement executed by and between Seller and Purchaser (“Employment Agreement”) shall prevail over Sections 4.1 through 4.3 of this Agreement and provisions of Sections 4.1 through 4.3 that are not in conflict with the Employment Agreement shall be construed as a supplement to such Employment Agreement.

 

4.5                 If Seller owns any intellectual property rights, including but not limited to, patent, trademark, utility model rights, design rights, copyrights necessary for the Company’s business, Seller shall transfer such rights to the Company or shall license such rights to the Company free of charge.

 

 

5.          Termination and Indemnification

 

If a Party fails to perform any of its obligations under this Agreement, and the purpose of this Agreement may not be achieved due to such failure, the other Party shall be entitled to terminate this Agreement.

 

6.          Special Covenant

 

The Parties may, if deemed necessary, have special covenants in writing to supplement this Agreement.  The special covenant shall be construed to be a part of this Agreement and if there is any conflict between the provisions of this Agreement and the provisions of any special covenant, the provisions of any special covenant shall prevail over this Agreement.

 

7.          General Provision

 

7.1                Duty of Good Faith

 

During the course of performance under this Agreement, the Parties shall cooperate with each other in good faith.

 

7.2                Confidentiality

 

No Party shall disclose, disseminate or cause to be disclosed any terms and conditions of this Agreement to any third parties, including any confidential information of the other Party that was acquired during the course of negotiation and due diligence in connection with the contemplated transaction herein.

 

7.3                Right to Publicize

 

The Parties shall negotiate with each other prior to publicizing any terms and conditions of this Agreement to an identified third party or unidentified individuals.

 

7.4                Tax and other Costs

 

Each Party shall be responsible for its own taxes, public charges and expenses, including costs of due diligence, incurred in connection with this Agreement unless otherwise agreed by the Parties.

 

7.5                Any right or obligation hereunder may not be assigned by either Party without the prior written consent of the other Party.

 

7.6                This Agreement shall be construed as a supplement to the Stock Purchase Agreement executed on January 12, 2000, Amendment Agreement executed on February 26, 2002 and Second Amendment Agreement executed on February 2004 (collectively, “Previous Agreements”).  Terms and conditions of the Previous Agreements shall prevail over this Agreement in the event of any inconsistency or conflict between the terms and conditions of this Agreement and the Previous Agreements.

 

8.          Dispute Resolution

 

The Parties shall use their best efforts to amicably resolve any dispute, controversy or conflict arising between the Parties out of or in relation to this Agreement.  If the Parties fail to reach an amicable resolution, such dispute, controversy or conflict shall be resolved exclusively by arbitration in Hong Kong, and shall be conducted in English language in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce by three (3) arbitrators, of whom one (1) shall be appointed by Purchaser, another shall be appointed by Seller, and the third shall be appointed by the first two (2) arbitrators.

 

This Agreement shall be executed in two (2) counterparts and each Party shall maintain one (1) copy.

 

 

[February __, 2009]

 

 

Seller

 

____________________

Name: MILLER Kim

 

 

Purchaser

 

AAA International Ltd.

 

____________________

By: Doller

Title: Chairman and President