-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BODICyvTmX0MB9bl3jbnPaSXURcOQIfmI0MoGPEsbqRwZ0h6rg+9A3M/rPT4nWPl gbBrVOknhuaF/zKoHWPlgw== 0001144204-06-038879.txt : 20060918 0001144204-06-038879.hdr.sgml : 20060918 20060918164346 ACCESSION NUMBER: 0001144204-06-038879 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060918 DATE AS OF CHANGE: 20060918 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Dolce Ventures, Inc CENTRAL INDEX KEY: 0001326364 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 320028823 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-81992 FILM NUMBER: 061096099 BUSINESS ADDRESS: STREET 1: 118 CHATHAM ROAD CITY: SYRACUSE STATE: NY ZIP: 13203 BUSINESS PHONE: 3154765769 MAIL ADDRESS: STREET 1: 118 CHATHAM ROAD CITY: SYRACUSE STATE: NY ZIP: 13203 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GAS Investment China Co., Ltd CENTRAL INDEX KEY: 0001375705 IRS NUMBER: 000000000 STATE OF INCORPORATION: D8 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: AKARA BLDG, 24 DE CASTRO STREET STREET 2: WICKHAMS CAY I, ROAD TOWN CITY: TORTOLA STATE: D8 ZIP: -- BUSINESS PHONE: 861082600527 MAIL ADDRESS: STREET 1: AKARA BLDG, 24 DE CASTRO STREET STREET 2: WICKHAMS CAY I, ROAD TOWN CITY: TORTOLA STATE: D8 ZIP: -- SC 13D 1 v053007_sc13d.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------ SCHEDULE 13D Under the Securities Act of 1934 (Amendment No. ____) * DOLCE VENTURES, INC. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $.001 PER SHARE - -------------------------------------------------------------------------------- (Title of Class of Securities) 25659R 10 1 - -------------------------------------------------------------------------------- (CUSIP Number) Darren Ofsink, Esq. Guzov Ofsink, LLC 600 Madison Avenue, 14th Floor New York, New York 10022 Tel. No. (212) 371-8008 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 7, 2006 - -------------------------------------------------------------------------------- (Date of Event Which Requires Filing of This Statement) - -------------------------------------------------------------------------------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. |_| Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Continued on the following pages) - -------------------------------------------------------------------------------- CUSIP No. 13D 2565R 10 1 - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) GAS Investment China Co., Ltd. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 72,569,764 BENEFICIALLY -------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 0 REPORTING -------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 72,569,764 -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 72,569,764 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 72.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- Item 1. Security and Issuer. The class of equity securities to which this Schedule 13D (the "Statement") relates is the $.001 par value per share common stock (the "Common Stock") of the Issuer. The Issuer is a Utah corporation and its principal executive offices are located at 118 Chatham Road, Syracuse, NY 13203. Item 2. Identity and Background. (a) The name of the person filing this statement is GAS Investment China Co., Ltd., hereafter sometimes referred to as the "Reporting Person." (b) The Reporting Person's place of organization is the British Virgin Islands. (c) The Reporting Person's principal business is that of being a holding company. (d) The Reporting Person's address of its principal business and address of its principal office is Akara Building, 24 De Castro Street, Wickhams Cay I, Road Town, Tortola, British Virgin Islands. (e) During the last five years, the Reporting Person has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (f) During the last five years, the Reporting Person has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, United States Federal or State securities laws or finding any violations with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. On or about August 24, 2006, GAS Investment China Co., Ltd., a company organized under the laws of the British Virgin Islands ("Gas (BVI)"), and certain shareholders of the Company (the "Selling Shareholders") entered into a stock purchase agreement (the "Stock Purchase Agreement"), whereby the Selling Shareholders agreed to sell to Gas (BVI) an aggregate of 72,569,764 shares of our Common Stock, representing approximately 72.0% of our total issued and outstanding voting securities as of the date thereof, in exchange for $675,000 (the "Purchase Price"). The closing of the transactions contemplated under the Stock Purchase Agreement occurred on September 7, 2006, simultaneously with the consummation of a share exchange transaction and a private financing of the Company (as described below, collectively, the "Reverse Merger Transaction"). As a result of the consummation of the Reverse Merger Transaction, Gas (BVI) became a wholly-owned subsidiary of the Company. The source of funds for the Purchase Price was from the proceeds of the private financing as described below. On or about September 7, 2006, the Company consummated a share exchange transaction with the holders of all of the outstanding capital stock of Gas (BVI), whereby the Company issued an aggregate of 14,361,647 shares of our newly designated Series A Stock in exchange for the 9,950,000 shares of common stock of Gas (BVI) held by the Gas (BVI) Shareholders. As a result of the consummation of the share exchange transaction, the Company ceased being a shell company as such term is defined in Rule 12b-2 under the Exchange Act, and Gas (BVI) is now a wholly-owned subsidiary of the Company. On or about September 7, 2006, the Company entered into and closed a stock purchase agreement with certain investors, pursuant to which the Company issued, for an aggregate of $6,876,800 in gross cash proceeds, to the Investors an aggregate of 2,509,782 shares of our newly designated Series B Stock at $2.74 per share and certain warrants to purchase shares of the Company's Common Stock. Item 4. Purpose of Transaction. Pursuant to the terms of the Stock Purchase Agreement, the directors of the Company appointed Gas (BVI)'s appointees to the board of directors of the Company and resigned their positions on our board and as our officers effective as of September 7, 2006. As a result thereof, there was a change in the entirety of our board of directors and executive officers effective as of September 7, 2006. Accordingly, the purpose of the transaction was to effect a change in control in the Company. By obtaining a change in control in the Company, the Company was able to effectuate the Reverse Merger Transaction as described in Item 3 above. Except as set forth herein, the Reporting Person has no other plans or proposals which would relate to or result in: (a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or terms of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Issuer; (f) Any other material change in the Issuer's business or corporate structure; (g) Changes in the Issuer's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) Any action similar to any of those enumerated above. The Reporting Person reserves the right from time to time to acquire or dispose of shares of Common Stock, or to formulate other purposes, plans or proposals regarding the Issuer or securities of the Issuer held by such Reporting Person to the extent deemed advisable in light of general investment policies, market conditions and other factors. Item 5. Interest in Securities of the Issuer. (a) As of the date hereof, the Reporting Person beneficially owns 72,569,764 shares of the Issuer's Common Stock which represents approximately 72.0% of the Issuer's outstanding common stock. (b) The Reporting Person directly owns the 72,569,764 shares of Common Stock and has the sole power to vote or to direct the vote with respect to the 72,569,764 shares referred to herein. (c) Except for the acquisition of 72,569,764 shares of Common Stock pursuant to the Stock Purchase Agreement, no transactions in the Common Stock were effected during the past sixty days by the Reporting Person. (d) To the best knowledge of the Reporting Person, no person other than the Reporting Person has the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of the 72,569,764 shares of Common Stock reported in Item 5(a). (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. The Reporting Person does not have any contracts, arrangements, understandings or relationship (legal or otherwise) with any person with respect to the 72,569,764 shares of Common Stock reported in Item 5(a). Item 7. Material to be Filed as Exhibits. 1. Stock Purchase Agreement dated August 24, 2006, among Gas (BVI) and the Selling Shareholders. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certify that the information set forth in this Schedule 13D is true, complete and correct. Date: September 18, 2006 /s/ Liu Yu Chuan ---------------------------------------- Name: Liu Yu Chuan EX-99.1 2 v053007_ex99-1.txt STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (this "Agreement") is made and entered into as of August 24, 2006 by and among the persons listed under the heading "Shareholders" on the signature page hereto (collectively, the "Sellers") and Gas Investment China Co., Ltd., a company organized under the laws of the British Virgin Islands("Purchaser"). WHEREAS, Sellers are the sole record and beneficial owners of Seventy Two Million Five Hundred Sixty Nine Thousand Seven Hundred Sixty Four (72,569,764) shares of $.001 par value per share common stock of Dolce Ventures, Inc., a Utah corporation (the "Company") and wish to sell all of those shares (the "Stock"); and WHEREAS, Purchaser wishes to purchase Stock from Sellers in a private sale that is not part of a distribution or public offering; NOW, THEREFORE, in the parties hereto agree as follows: 1. Agreement to Purchase and Sell the Stock. Sellers will sell to Purchaser and Purchaser agrees to purchase the Stock for a purchase price of Six Hundred Seventy Five Thousand Dollars ($675,000)(the "Purchase Price") in a private sale exempt from registration under Section 4(1) of the Securities Act of 1933, as amended (the "Act"). 2. Closing And Payment. Subject to the terms and conditions hereof, and in reliance upon the written representations and warranties of Purchaser, Sellers will sell and, subject to the terms and conditions hereof, and in reliance upon the written representations and warranties of Sellers, Purchaser will purchase, at a single closing, the Stock. The closing shall be held on September 7, 2006, or such other date as the Parties may agree (the "Closing Date"), at the offices of Guzov Ofsink, LLC, 600 Madison Avenue, 14th Floor, New York, new York 10022 (the "Closing"). At the Closing, Sellers will deliver to Purchaser original stock certificates evidencing the Stock to be purchased hereunder, along with stock powers executed in blank. At the Closing, Purchaser will deliver to Joseph Passalaqua, as agent for all Sellers, the Purchase Price, by wire transfer, cashier's check, or by such other means as the parties may agree upon in writing. 3. Representations and Warranties of Sellers. Sellers hereby represent and warrant to Purchaser that the statements in the following paragraphs of this Section 3 are all true and complete as of the date hereof, and will be true and complete as of the Closing Date as if first made on such date. 3.1 Authority; Due Authorization. This Agreement has been duly and validly executed and delivered by Sellers, and upon the execution and delivery by Purchaser of this Agreement and the performance by Purchaser of its obligations herein, will constitute, a legal, valid and binding obligation of Sellers enforceable against Sellers in accordance with its terms, except as such enforcement may be limited by bankruptcy or insolvency laws or other laws affecting enforcement of creditors' rights or by general principles of equity. 1 3.2 No Conflicts. The execution and delivery by Sellers of this Agreement does not, and the performance by Sellers of their obligations under this Agreement and the consummation of the transactions contemplated hereby will not, conflict with or result in a violation or breach of any of the terms, conditions or provisions of any other agreement to which Sellers are a party. 3.3 Title to Securities. Sellers are the sole record and beneficial owner of the Stock and have sole managerial and dispositive authority with respect to the Stock. Sellers have not granted any person a proxy with respect to the Stock that has not expired or been validly withdrawn. The sale and delivery of the Stock to Purchaser pursuant to this Agreement will vest in Purchaser legal and valid title to the Stock, free and clear of all liens, security interests, adverse claims or other encumbrances of any character whatsoever ("Encumbrances") (other than Encumbrances created by Purchaser and restrictions on resales of the Shares under applicable securities laws). 3.4 Valid Issuance. The Common Stock being purchased by the Purchaser hereunder is, and shall be at the Closing, duly and validly issued, fully paid, and non-assessable and in each instance have been issued in accordance with the registration requirements of applicable securities laws, including, without limitation, the Securities Act of 1933, as amended (the "Act"), or valid exemptions therefrom. 3.5 Corporate Documents. Copies of the Company's current articles of incorporation, all amendments thereto, and bylaws, as of the date hereof, other than a Certificate of Correction filed in August, 2006, have been filed as exhibits to the Company's reports (the "Filings") with the Securities and Exchange Commission ("SEC"). 3.6 The Company. The Company, and its subsidiaries, are corporations duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. 3.7 Capitalization of the Company. Immediately prior to the Closing, the authorized capital stock of the Company shall consist of a total of 250,000,000 (two hundred fifty million) shares of Common Stock, $.001 par value (the "Common Stock"), and 100,000,000 (one hundred million) shares of Preferred Stock, $.001 par value. Immediately prior to the Closing there will be no shares of preferred stock outstanding and no more than 100,770,140 shares of Common Stock outstanding. There are no commitments to issue, and there are no outstanding warrants, options, convertible securities or debt, preferred stock, or any other securities. In addition, there are no conversion or exchange privileges, preemptive rights, or other rights or agreements to purchase or otherwise acquire or issue any securities of the Company, and there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security of the Company or any instrument or security exercisable or exchangeable for, or convertible into any security of the Company. 2 3.8 Subsidiaries. Other than as set forth in the Filings, the Company does not own, directly or indirectly, any capital stock or other equity securities of any other corporation, partnership, limited liability company, association or other business entity other than as set forth in the Filings. The Company is not a participant in any joint venture, partnership or similar arrangement. 3.9 Financial Statements. The Company's financial statements contained in its Filings (the "Financial Statements") have been prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods indicated and with each other, except that the unaudited Financial Statements do not contain all footnotes required by U.S. GAAP. The Financial Statements fairly present the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments. Except as set forth in the Financial Statements, the Company has no material liabilities (contingent or otherwise). The Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with U.S. GAAP until Closing. 3.10 No Conflicts. Neither the Company, nor any subsidiary, is in violation of, in conflict with, in breach of or in default under any term or provision of, and no right of any party to accelerate, terminate, modify or cancel has come into existence under, (i) its articles of incorporation or by-laws (each as may have been amended, supplemented or restated), (ii) any provision of any judgment, writ, injunction, decree or order to which the any of them is a party; or (iii) any law, statute, rule or regulation applicable to any of them. 3.11 Litigation. There is no action, suit, proceeding or investigation pending or, to the best knowledge of Sellers, currently threatened against the Company or any subsidiary that may affect the validity of this Agreement or the right of the Sellers to enter into this Agreement or to consummate the transactions contemplated hereby. There is no action, suit, proceeding or investigation pending or, to the best knowledge of Sellers, currently threatened against the Company or its subsidiaries, before any court or by or before any governmental body or any arbitration board or tribunal, nor is there any judgment, decree, injunction or order of any court, governmental department, commission, agency, instrumentality or arbitrator against the Company or any of its subsidiaries. The Company and its subsidiaries are not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company or any subsidiary currently pending or which the Company intends to initiate. When any reference to the "knowledge" or "best knowledge" of the Company or Sellers is made in this Agreement, such terms shall mean the knowledge that would be gained from due inquiry into the matters referenced. 3 3.12 Brokers' Fees and Commissions. Neither the Company nor any of its officers, directors, employees, stockholders, agents or representatives, nor Seller have employed any investment banker, broker, or finder in connection with the transactions contemplated by this Agreement and no such person or entity is entitled to a fee with respect to the transactions contemplated by this Agreement, except that Sellers are obligated to pay a commission of $75,000 to Belmont Partners, LLC from the Purchase Price. 3.13 Securities Laws. The Company has complied in all respects with applicable federal and state securities laws, rules and regulations, including the Sarbanes Oxley Act of 2002, as such laws, rules and regulations apply to the Company and its securities; and all shares of capital stock of the Company have been issued in accordance with applicable federal and state securities laws, rules and regulations. There are no stop orders in effect with respect to any of the Company's securities. 3.14 Books and Financial Records. All the accounts, books, registers, ledgers, Board minutes and financial and other material records of whatsoever kind of each of the Company and its subsidiaries have been fully properly and accurately kept and completed; there are no material inaccuracies or discrepancies of any kind contained or reflected therein; and they give and reflect a true and fair view of the financial, contractual and legal position of each company. 3.15 Employee Benefit Plans. The Company does not have any "Employee Benefit Plan" as defined in the U.S. Employee Retirement Income Security Act of 1974 or similar plans under applicable laws. 3.16 Tax Returns, Payments and Elections. Each of the Company and its subsidiaries has timely filed all Tax (as defined below) returns, statements, reports, declarations and other forms and documents (including, without limitation, estimated Tax returns and reports and material information returns and reports) ("Tax Returns") required pursuant to applicable law to be filed with any Tax Authority (as defined below), all such Tax Returns are accurate, complete and correct in all material respects, and each Group Company has timely paid all Taxes due. Each of the Company and its subsidiaries has withheld or collected from each payment made to each of its employees, the amount of all Taxes (including, but not limited to, United States income taxes and other foreign taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax Authority. For purposes of this Agreement, the following terms have the following meanings: "Tax" (and, with correlative meaning, "Taxes" and "Taxable") means any and all taxes including, without limitation, (i) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, value added, net worth, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any United States, local or foreign governmental authority or regulatory body responsible for the imposition of any such tax (domestic or foreign) (a "Tax Authority"), (ii) any liability for the payment of any amounts of the type described in (i) as a result of being a member of an affiliated, consolidated, combined or unitary group for any taxable period or as the result of being a transferee or successor thereof and (iii) any liability for the payment of any amounts of the type described in (i) or (ii) as a result of any express or implied obligation to indemnify any other person. 4 3.17 Minute Books. The minute books of each of the Company and its subsidiaries contain a complete summary of all meetings of directors and stockholders since the time of incorporation of such company and reflect all transactions referred to in such minutes accurately in all material respects. 3.18 Labor Agreements and Actions; Employee Compensation. Neither the Company, nor any of its subsidiaries is bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or has sought to represent any of the employees, representatives or agents of any such company. 3.19 Investment Company. The Company is not an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. 3.20 `34 Act Reports. To the best knowledge of the Sellers, none of the Company's Flings, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading, in light of the circumstances in which they were made. 3.21 Material Agreements. The Company is not a party to or bound by any contracts, including, but not limited to: 5 3.21.1 employment, advisory or consulting contract; 3.21.2 plan providing for employee benefits of any nature; 3.21.3 lease with respect to any property or equipment; 3.21.4 contract, agreement, understanding or commitment for any future expenditure in excess of $1,000 in the aggregate; 3.21.5 contract or commitment pursuant to which it has assumed, guaranteed, endorsed, or otherwise become liable for any obligation of any other person, entity or organization; 3.21.6 agreement with any person relating to the dividend, purchase or sale of securities, that has not been settled by the delivery or payment of securities when due, and which remains unsettled upon the date of the Agreement. 3.22 No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the accountants and lawyers formerly or presently employed by the Company. The Company is current with respect to fees owed to its accountants and lawyers. 4. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Sellers that the statements in the following paragraphs of this Section 4 are all true and complete as of the date hereof: 4.1 Exempt Transaction. Purchaser understands that the offering and sale of the Stock is intended to be exempt from registration under the Act and exempt from registration or qualification under any state law. 4.2 Authorization. Purchaser represents that it has full power and authority to enter into this Agreement. This Agreement has been duly and validly executed and delivered by Purchaser, and upon the execution and delivery by Sellers of this Agreement and the performance by Sellers of their obligations herein, will constitute, a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, except as such enforcement may be limited by bankruptcy or insolvency laws or other laws affecting enforcement of creditors' rights or by general principles of equity. 4.3 Purchase for Own Account. The Stock to be purchased by Purchaser hereunder will be acquired for investment for Purchaser's own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof, and Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. 6 4.4 Investment Experience. The Purchaser understands that the purchase of the Stock involves substantial risk. 5. Conditions to Purchaser's Obligations at the Closing. 5.1 Conditions to Each Closing. Subject to the terms hereof, the obligation of the Purchaser to purchase the Stock at the Closing is subject to the fulfillment, prior to the Closing to the satisfaction of the Purchaser, of the following conditions, the waiver of which shall not be effective against Purchaser without written consent thereto: 5.1.1 Representations and Warranties True and Correct. The representations and warranties made by Sellers in Section 3 hereof shall be true and correct and complete as of the date hereof, and shall be true and correct and complete as of the date of the Closing with the same force and effect as if they had been made on and as of such date. 5.1.2 Performance of Obligations. The Sellers shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 5.1.3 Securities Laws. The offer and sale of the Stock to the Purchaser pursuant to this Agreement shall be exempt from the registration and/or qualification requirements of all applicable securities laws. 5.1.4 Change in Board of Directors and Management. The Sellers shall cause (i) the current members of the Board of Directors to appoint Purchaser's appointees to the Board and to resign their positions on the Company's Board, and (ii) the current officers of the Company to resign their positions as officers of the Company. 5.1.5 Assumption of Liabilities. Sellers shall cause Pegasus Tel, Inc. ("Pegasus") to assume all liabilities of the Company, and with respect to any liability as of the Closing Date, whether contingent or otherwise, which was not assumed or paid by Pegasus (collectively "Liabilities"), the Sellers hereby agree to indemnify, defend and hold harmless Purchaser and the Company from and against any and all claims, expenses and/or losses which may be incurred by the Company or Purchaser in connection with a Liability. 5.1.6 Spinoff. Sellers shall cause the Company and its Board of Directors to pass such resolutions as may be necessary to set a record date for a spinoff of Pegasus which shall be no later than October 15, 2006 and to authorize a spinoff of Pegasus to the shareholders of the Company in accordance with SEC Staff Legal Bulletin No. 4 dated September 16, 1997 and such other laws and regulations as may be applicable to such transaction (the "Spinoff"). 7 6. Conditions to Sellers' Obligations at the Closing. 6.1 The obligations of the Sellers under this Agreement with respect to the Investor are subject to the fulfillment at or before the Closing of the following conditions: 6.1.1 Representations and Warranties. The representations and warranties of the Purchaser contained in Section 4 hereof shall be true and correct as of such Closing. 6.1.2 Payment of Purchase Price. Purchaser shall have delivered to the Sellers the Purchase Price. 7. Seller's Covenants. 7.1 Spinoff. By November 15, 2006, Sellers shall have taken all steps necessary to effect the Spinoff and Sellers hereby agree to pay all expenses necessary to effect the Spinoff, including, but not limited to, attorney's fees, transfer agent fees and filing fees and expenses. Purchaser agrees to cause the Company to provide any assistance reasonably necessary to effect the Spinoff which cannot be performed by Pegasus or Sellers; provided, however, that neither Purchaser nor the Company shall have any obligation to pay any monies to accomplish the Spinoff. 8. Indemnification. 8.1 Sellers shall indemnify and hold Purchasers, the Company and their affiliates, officers, directors, employees, agents, successors and assigns harmless from and against any claim, action, suit, proceeding, loss, liability, damage or expense (including, without limitation, reasonable attorneys' fees), directly or indirectly arising from or related to any breach by Sellers of this Agreement, including, but not limited to, Sellers' representations, warranties or covenants hereunder. Each Seller's liability pursuant to this indemnification provision shall be apportioned based on the number of Shares sold to Purchaser as compared to the total number of Shares sold to Purchaser. 8.2 Purchaser shall indemnify and hold Sellers harmless from and against any claim, action, suit, proceeding, loss, liability, damage or expense (including, without limitation, reasonable attorneys' fees) directly or indirectly arising from or related to any breach by Purchaser of this Agreement, including, but not limited to, Purchaser's representations, warranties or covenants hereunder. 8 9. General Provisions. 9.1 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. 9.2 Governing Law; Jurisdiction. Any dispute, disagreement, conflict of interpretation or claim arising out of or relating to this Agreement, or its enforcement, shall be governed by the laws of the State of New York. Sellers and Purchaser hereby irrevocably and unconditionally submit, for themselves and their property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to above. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices below. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 9 9.3 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. A telefaxed copy of this Agreement shall be deemed an original. 9.4 Headings. The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs, exhibits and schedules shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits and schedules attached hereto, all of which exhibits and schedules are incorporated herein by this reference. 9.5 Costs, Expenses. Each party hereto shall bear its own costs in connection with the preparation, execution and delivery of this Agreement. 9.6 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of Sellers and the Purchaser. No delay or omission to exercise any right, power, or remedy accruing to Purchaser, upon any breach, default or noncompliance of Sellers under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. All remedies, either under this Agreement, by law, or otherwise afforded to Purchaser, shall be cumulative and not alternative. 9.7 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms. 9.8 Entire Agreement. This Agreement, together with all exhibits and schedules hereto, constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings duties or obligations between the parties with respect to the subject matter hereof. 9.9 Further Assurances. From and after the date of this Agreement, upon the request of the Purchaser or Sellers, Purchaser and Sellers shall execute and deliver such instruments, documents or other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. 10 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. GAS INVESTMENT CHINA CO., LTD. By: /s/ Liu Yu Chuan ---------------------------- Title: Director ------------------------- SHAREHOLDERS: /s/ Carl E Worboys /s/ John F. Passalaqua - --------------------------- ------------------------------ /s/ David F. Stever /s/ Inna Sheveleva - --------------------------- ------------------------------ /s/ Lewis A. McGuinness /s/ Rebecca McGuinness - --------------------------- ------------------------------ /s/ Joseph C. Passalaqua /s/ Hope Savage - --------------------------- ------------------------------ /s/ Mary K. Evans /s/ Anthony Lombardo - --------------------------- ------------------------------ /s/ J. W. Patterson /s/ John Burns, Sr. - --------------------------- ------------------------------ /s/ Margaret L. Sollish /s/ Kevin Kopaunik - --------------------------- ------------------------------ 11 -----END PRIVACY-ENHANCED MESSAGE-----