Item
1.01 Entry Into A Material Definitive Agreement.
On
May 9, 2019, Planet Green Holdings Corp. (the “
Company
”) and Shanghai Xunyang Internet Technology
Co., Ltd. (the “
Subsidiary
”), a subsidiary of the Company, entered into a Share Exchange Agreement
(the “
Share Exchange Agreement
”) with Xianning Bozhuang Tea Products Co., Ltd.
(“
Target
”), and each of the shareholders of Target (collectively, the “
Sellers
”),
pursuant to which, among other things and subject to the terms and conditions contained therein, the Subsidiary agreed to
effect an acquisition of Target by acquiring from the Sellers all of the outstanding equity interests of Target (the
“
Acquisition
”). Target produces tea products and sells such products in China. On May 14, 2019, the
Company closed the Acquisition.
Pursuant
to the Share Exchange Agreement, in exchange for the acquisition of all of the outstanding equity interests of Target by the
Subsidiary, the Company issued an aggregate of 1,080,000 shares of common stock, par value $0.001 per share, of the
Company (the “
Exchange Shares
”) to the Sellers. At the closing of the Acquisition, the Company entered
into a lock-up agreement with the Sellers with respect to the Exchange Shares, pursuant to which the Sellers agreed, subject
to certain exceptions, not to transfer the Exchange Shares, or publicly disclose the intention to do so, from the closing of
the Acquisition until the first anniversary of the closing (the “
Lock-Up Agreement
”).
The
Share Exchange Agreement contains customary representations and warranties made by the Company and Subsidiary, on the one
hand, and Target and the Sellers on the other hand, made solely for the benefit of the other, which in certain cases are
subject to specified exceptions and qualifications contained in the Share Exchange Agreement or in information provided pursuant to certain
disclosure schedules to the Share Exchange Agreement.
At the closing of
the Acquisition, the Sellers and certain individuals that are involved in the management of Target (the “
Subject Parties
”)
entered into a non-competition and non-solicitation agreement (the “
Non-Competition Agreement
”) in favor of
the Company and Subsidiary, relating to the post-acquisition business of the Company (the “
Business
”) in the
production and selling of tea products in the Peoples’ Republic of China (the “
PRC
”). Pursuant to the
Non-Competition Agreement, subject to certain exceptions, for a period of four years from the closing of the Acquisition,
each Subject Party and his/her affiliates will not, without prior written consent of both the Company and Subsidiary, anywhere
in the PRC, directly or indirectly engage in (or own, manage, finance or control, or become engaged or serve as an officer, director,
member, partner, employee, agent, consultant, advisor or representative of, an entity that engages in) the Business.
The
foregoing descriptions of the Share Exchange Agreement, the Lock-Up Agreement and the Non-Competition Agreement do not
purport to be complete and are subject to, and are qualified in their entirety by, the full text of those agreements, which
are filed herewith as Exhibits 10.1, 10.2, and 10.3 and incorporated herein by reference.
In
connection with the closing of the Acquisition, the Subsidiary entered into a number of agreements with the
Target which are customary for variable interest entities, copies of which are filed herewith as Exhibits 10.4 through 10.8, respectively.