AMENDED AND RESTATED AGREEMENT
EXHIBIT
10.15
This
Amended and Restated Agreement (the “Superceding Agreement”) dated
as of April 9, 2010 by and between Linear Capital Asia Limited, Inc., having its
principal place of business at 00000 Xxx Xxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx,
XX 00000 (together with its affiliates, subsidiaries, members, predecessors and
successors, including, but not limited to Linear Group Holdings, LLC,
collectively, “Linear”),
Shandong Caopu Arts & Crafts Co., Ltd., a PRC corporation (“Caopu”) and China Shandong
Industries, Inc., a Delaware corporation (the “Company”).
WHEREAS, Linear and Caopu
entered into an agreement dated October 7, 2008 (the “Original Agreement”) pursuant
to which Linear advanced certain costs and expenses for the benefit of Caopu and
the Company in the aggregate amount of $161,000 (the “Advances”).
WHEREAS, the parties hereto
have determined to avoid possible litigation regarding disputes concerning the
Original Agreement by entry into this Superceding Agreement which, among other
items, supercedes and cancels in its entirety the Original Agreement and
provides mutual releases of each party by the other.
NOW, THEREFORE, in
consideration of the mutual covenants and conditions herein contained and the
acts herein described, it is agreed between the parties as follows:
1. Conversion of
Advances. Upon execution of this Superceding Agreement by the
parties hereto (the “Effective
Date”), the $161,000 of Advances made by Linear shall automatically
convert into 64,400 shares (the “Conversion Shares”) of the
Company’s restricted common stock, par value $0.0001 per share, in full
cancellation and satisfaction of the Advances and any and all other claims for
funds and/or securities against Caopu, the Company and/or any of their
respective affiliates to Linear and/or any of its affiliates. The
conversion price of the Advances into Conversion Shares shall be $2.50 per
Conversion Share. Such 64,400 Conversion Shares are subject to all
reverse stock splits effectuated by the Company following the date of this
Superceding Agreement and the Shares shall have piggy back registration rights
with respect to selling shareholder registration statements filed by the Company
with the SEC following the closing of the Company’s underwritten registration
statement. Linear must complete a standard selling shareholder
questionnaire completed by the other selling shareholders. In
addition to the Conversion Shares and in full satisfaction of any and all other
claims by Linear for fees, interest, payments and/or other owed funds,
compensation and/or payments, Linear shall receive a 2 year warrant (the “Warrant”)
to purchase 300,000 shares of Common Stock (the “Warrant
Shares”) at an exercise price (the “Exercise
Price”) equal to the higher of (i) the per share public offering price of
a share of Common Stock in the Company’s proposed underwritten public offering
of its securities of at least $5,000,000 gross amount of proceeds, and (ii) if
no underwritten public offering of $5,000,000 gross amount has occurred, $2.50
per share (the “$2.50 Alternate Exercise Price”). The $2.50
Alternate Exercise Price of the Warrants shall be adjusted proportionately
upwards for any reverse stock splits, and the number of Warrant Shares issuable
upon exercise of the Warrant shall be adjusted proportionately downward for any
stock splits. The Warrant shall not be exercisable until November 31,
2010.
2. Linear acknowledges
and understands that the certificates representing the Conversion Shares,
the Warrant and the Warrant Shares will bear substantially the following
legend:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”)
OR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH
REGISTRATION, PROVIDED THAT LINEAR DELIVERS TO THE COMPANY AN OPINION OF COUNSEL
(WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE
AVAILABILITY OF SUCH EXEMPTION.
3. Release by the Company and
Caopu. As a material inducement to Linear to enter into this
Superceding Agreement, and provided that neither Linear nor any Company Releasor
(as defined below) breaches this Superceding Agreement and in return for Linear
complying with its obligations under this Superceding Agreement, the Company and
Caopu, for themselves and each of their respective affiliates and related
entities, parent and subsidiary corporations, divisions, shareholders, employee
benefit plans and/or pension plans or funds, successors and assigns and their
past, present or future officers, directors, trustees, fiduciaries,
administrators, employees, agents, representatives, predecessors, and
shareholders (collectively, the “Company Releasors”), hereby
forever fully releases, discharges and acquits Linear, and any and all of
Linear’s affiliates and related entities, parent and subsidiary corporations,
divisions, members, employee benefit plans and/or pension plans or funds,
successors and assigns and its and their past, present or future officers,
directors, trustees, fiduciaries, administrators, employees, agents,
representatives, predecessors, and members, including, but not limited to,
Linear Group Holdings, LLC (collectively, the “Company Releasees”) from any
and all claims, charges, demands, sums of money, actions, rights, causes of
action, obligations and liabilities of any kind or nature whatsoever, at law or
in equity, which the Company and/or Caopu may have had, claims to have had, now
has, may claim to have or claims to have, which are or may be based upon any
facts, acts, conduct, representations, omissions, contracts, claims, events,
causes, matters or things of any conceivable kind or character existing or
occurring at any time on or before the Effective Date relating to the subject
matter of this Superceding Agreement.
4. Release by
Releasee. As a material inducement to the Company and Caopu to
enter into this Superceding Agreement, and provided that no Company Releasor
breaches this Superceding Agreement and in return for the Company and Caopu
complying with their respective obligations under this Superceding Agreement,
Linear, for itself and each Company Releasee hereby forever fully releases,
discharges and acquits each and every Company Releasor from any and all claims,
charges, demands, sums of money, actions, rights, causes of action, obligations
and liabilities of any kind or nature whatsoever, at law or in equity, which any
Company Releasee may have had, claims to have had, now has, may claim to have or
claims to have, which are or may be based upon any facts, acts, conduct,
representations, omissions, contracts, claims, events, causes, matters or things
of any conceivable kind or character existing or occurring at any time on or
before the Effective Date relating to the subject matter of this Superceding
Agreement.
5. Non-Admission by the
Parties. It is specifically understood and agreed that this
Superceding Agreement does not constitute and is not to be construed as an
admission by either Party of: (i) any violation of any federal, state
or local law, statute or regulation; or (ii) the commission of any other
actionable wrong.
6. Notices. Except
as otherwise provided herein, all notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if
successfully delivered by: (a) overnight courier with next business day
delivery, or (b) by email or telecopier (with no error message resulting) as
follows:
If to
Linear, to:
Linear
Capital Asia Limited, Inc.
c/o
Linear Group Holdings, LLC
Attn.:
Xxxx Xxxxxxx, Managing Member
00000 Xxx
Xxxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Fax:
(000)000-0000
Email:
xxxxxxxxx@xxxxx.xxx
With a
copy (which shall not constitute notice) to:
Xxxxx
Xxxxxxx, Esq.
0000 Xxxxx Xxxxx
Xxxx
Xxxxx Xxxxxx, XX
00000
Fax:(000)
000-0000
Email:
xxxxxxx@xxxxxxx.xxx
If to the Company, to:
Attn.:
Xxxxxxxx Xx, Chairman and Chief Executive Officer
No. 2888
Qinghe Road
Development
Zone Cao County
Xxxxxxxx
Xxxxxxxx, 000000, the People’s Republic of China
Fax:
Email:
With a copy (which shall not constitute
notice) to:
Gusrae,
Xxxxxx, Xxxxx & Xxxxxxx, PLLC
Attn:
Xxxxxxxx Xxxxxxx, Esq.
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Fax:
(000) 000-0000
Email:
xxxxxxxx@xxxxxx.xxx
or such other addresses, email
addresses and/or telecopier numbers as shall be furnished in a writing signed by
any party or, in the case of the law firms, furnished or published by such
party, and any such notice or communication shall be deemed to have been given
or served (i) the next business day after the date actually sent if sent via
overnight courier, (ii) upon successful transmission by email if
delivered by email, or (iii) upon telecopier confirmation of delivery to
addressee received by the sender if sent by telecopier.
7. Breach. Notwithstanding
any provision herein to the contrary, the releases contained herein do not apply
to any claim for breach of any provision of this Superceding
Agreement.
8. Cooperation. The
parties hereto agree to cooperate fully with one another in effecting and
carrying out the terms and conditions of this Superceding
Agreement.
9. Further
Assurances. Each of the parties hereto from time to time, at
the request and expense of any other party hereto and without further
consideration, shall execute and deliver such other instruments and take such
further action as the other party may require to more effectively complete any
matter provided for herein.
10. Agreement
Enforceable. Nothing contained herein is intended to prevent
Linear, Caopu or the Company from enforcing this Superceding
Agreement.
11. No
Reliance. Neither the Company nor Linear is relying on any
representations made by the other regarding this Superceding Agreement of the
implications thereof.
12. Confidentiality. Each
of the parties hereto agrees that the terms of this Superceding Agreement shall
be kept confidential and shall not be disclosed to any third party at any time,
other than to the parties’ attorneys, accountants, and persons with a business
reason to know such terms on a need to know basis. Moreover, this
Superceding Agreement and its terms shall not be used or disclosed in any court,
arbitration, or other legal proceeding, except to enforce the provisions of this
Superceding Agreement. Nothing herein, however, shall prohibit (i)
the Company and/or Caopu from disclosing this Superceding Agreement and the
contents hereof directly and/or indirectly in connection with any financing or
reports required to be filed with the SEC and/or any other governmental and/or
self-regulatory body, or (ii) any party or its attorney from responding to any
inquiry by a securities regulator, including a securities regulator of the U.S.
Securities and Exchange Commission, Finra, or any other self-regulatory
organization, regarding this settlement or its underlying facts and
circumstances. The Confidentiality provision is a material provision of this
Superceding Agreement and a violation thereof shall constitute a material
breach.
13. Counterparts. This
Superceding Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and all counterparts so executed shall constitute
one agreement binding on all of the parties hereto, notwithstanding that all of
the parties are not signatory to the same counterpart.
14. Binding
Effect, Governing Law; Consent to Jurisdiction. This Superceding Agreement
shall be governed by and construed solely and exclusively in accordance with the
internal laws of the State of New York without regard to the conflicts of laws
principles thereof. The parties hereto hereby expressly and irrevocably agree
that any suit or proceeding arising directly and/or indirectly pursuant to or
under this Superceding Agreement shall be brought solely in a federal or state
court located in the City, County and State of New York. By its execution
hereof, the parties hereby covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect as
if personally served upon them in New York City. The parties hereto expressly
and irrevocably waive any claim that any such jurisdiction is not a convenient
forum for any such suit or proceeding and any defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of all of its reasonable counsel fees and
disbursements.
15. Benefit and
Burden. This Superceding Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective heirs,
executors, administrators, representatives, successors and assigns.
16.
Amendments or
Waivers. This Superceding Agreement may not be modified,
amended, or terminated except by an instrument in writing signed by each of the
parties hereto. No failure to exercise, and no delay in exercising,
any right, remedy, or power under this Superceding Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
or power under this Superceding Agreement preclude any other or further exercise
thereof, or the exercise of any right, remedy, or power provided herein or by
law or in equity.
17. Severability. If
for any reason any provision of this Superceding Agreement is determined to be
wholly or partly invalid or unenforceable, that shall not affect the validity
and enforceability of the remaining provisions of this Superceding
Agreement.
18. Drafting. The
drafting and negotiation of this Superceding Agreement have been participated in
by each of the parties, and for all purposes this Superceding Agreement shall be
deemed to have been drafted jointly by each of the parties. No
ambiguity will be construed against any party for having “drafted” this
Superceding Agreement.
19. Entire
Agreement. Other than the Letter Agreement dated of even date
herewith by and among the parties hereto, this Superceding Agreement constitutes
the entire agreement and understanding reached by the parties regarding the
subject matter of this Superceding Agreement.
20. Past Attorneys’ Fees and
Costs. Each party shall bear its or his own attorneys’ fees
and costs incurred in connection with this matter before and through the date of
full execution of this Agreement.
21. Representation by
Counsel. Each party is represented by counsel and has read and
fully understands the terms of this Agreement.
22. Signatures. The
parties hereby signify their agreement to the above terms by their signatures
below. The Parties execute this Superceding Agreement on his or its
own behalf and represent that he or it has had an opportunity to consult with an
attorney prior to signing this Superceding Agreement.
[signatures appear on next following
page]
IN WITNESS WHEREOF, the
parties have hereunto set their hands as of the date first written
above.
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By:
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/s/ Xxxxxxxx Xx
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Name: Xxxxxxxx
Xx
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Title: Chairman
and Chief Executive Officer
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SHANDONG
CAOPU ARTS & CRAFTS CO., LTD.
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By:
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/s/ Xxxxxxxx Xx
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Name: Xxxxxxxx
Xx
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Title: Chairman
and Chief Executive Officer
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LINEAR
CAPITAL ASIA LIMITED
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C/O
LINEAR GROUP HOLDINGS, LLC
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By:
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/s/ Xxxx Xxxxxxx
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Name: Xxxx
Xxxxxxx
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Title: Managing
Member
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