STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") is made and entered
into effective August 16, 2006 by and among EVOLVE ONE, INC., a Delaware
corporation ("EVLO"), CHINA DIRECT INVESTMENTS, INC., a Florida corporation
("CDI"), and the shareholders of CDI listed on the signature page and Schedule A
hereto, constituting all of the shareholders of CDI (collectively, the
"Shareholders").
RECITALS:
A. The Shareholders own all of the issued and outstanding common stock of CDI,
consisting of 10,000,000 shares of common stock, $.001 par value per share (the
"CDI Shares").
B. EVLO desires to acquire the CDI Shares from the Shareholders in exchange for
10,000,000 shares of restricted common stock, $.0001 par value per share, of
EVLO (the "EVLO Shares") to be issued to the Shareholders.
C. The Shareholders desire to exchange their CDI Shares for the EVLO Shares upon
the terms and conditions set forth herein.
D. It is the intention of the parties hereto that: (i) EVLO shall acquire the
CDI Shares solely for the EVLO Shares (the "Exchange"); (ii) the Exchange shall
qualify as a transaction exempt from registration or qualification under the
Securities Act of 1933, as amended (the "Securities Act"), and (iii) the
Exchange shall qualify as a "tax-free" transaction within the meaning of Section
368 of the Internal Revenue Code of 1986.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
SECTION 1. EXCHANGE OF SHARES
1.1 Exchange of Shares. On the Closing (as hereinafter defined), the
Shareholders shall tender the CDI Shares to EVLO and EVLO shall issue the EVLO
Shares to the Shareholders in exchange therefore. The Shareholders shall each
execute an Investment Letter at or prior to the receipt of the EVLO Shares
substantially in the form of Exhibit A hereto.
1.2 Delivery of CDI Shares. On the Closing Date, the Shareholders will deliver
to EVLO the certificates representing the CDI Shares, duly endorsed for transfer
(or with executed stock powers) so as to convey good and marketable title to the
CDI Shares to EVLO, and, promptly thereafter, EVLO will cause its transfer agent
to deliver certificates evidencing the EVLO Shares to the Shareholders in
accordance with Schedule A hereto.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each of the Shareholders represents and warrants to EVLO as follows:
2.1 Information on Shareholders. Each of the Shareholders is an "accredited
investor," as such term is defined in Regulation D promulgated under the
Securities Act, or is otherwise experienced in investments and business matters,
has made investments of a speculative nature and has such knowledge and
experience in financial, tax and other business matters as to enable him to
evaluate the merits and risks of, and to make an informed investment decision
with respect to, this Agreement. Each of the Shareholders understands that his
acquisition of the EVLO Shares is a speculative investment, and each of the
Shareholders represents that he is able to bear the risk of such investment for
an indefinite period, and can afford a complete loss thereof.
2.2 Investment Intent. The Shareholders understand that the EVLO Shares have not
been registered under the Securities Act, and may not be sold, assigned,
pledged, transferred or otherwise disposed of unless the EVLO Shares are
registered under the Securities Act or an exemption from registration is
available. Shareholders represent and warrant that each is acquiring the EVLO
Shares for his/its own account, for investment, and not with a view to the sale
or distribution of the EVLO Shares except in compliance with the Securities Act.
Each certificate representing the EVLO Shares will have the following or
substantially similar legend thereon:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") or any state securities laws. The shares
have been acquired for investment and may not be sold or
transferred in the absence of an effective Registration
Statement for the shares under the Securities Act unless, in
the opinion of counsel satisfactory to the Company,
registration is not required under the Securities Act or any
applicable state securities laws."
2.3 Ownership of CDI Shares and Authorization of Agreement. Shareholders are the
sole record and beneficial owners of the CDI Shares, all of which shares are
owned free and clear of all rights, claims, liens and encumbrances, and have not
been sold, pledged, assigned or otherwise transferred except pursuant to this
Agreement. There are no outstanding subscriptions, rights, options, warrants or
other agreements obligating Shareholders to sell or transfer to any third person
any of the CDI Shares owned by Shareholders, or any interest therein.
Shareholders have the power to enter into this Agreement and to carry out his,
her or its obligations hereunder. This Agreement has been duly executed by the
Shareholders and constitutes the valid and binding obligation of the
Shareholders, enforceable against the Shareholders in accordance with its terms.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CDI
CDI, to the best of its knowledge, hereby represents and warrants to
EVLO as follows, with any exceptions thereto being denoted on the applicable
schedule to this Agreement:
3.1 Organization and Good Standing. CDI is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Florida,
and is entitled to own or lease its properties and to carry on its business as
and in the places where such properties are now owned, leased or operated and
such business is now conducted. CDI is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.
3.2 Authorization; Enforceability; No Breach. CDI has all necessary corporate
power and authority to execute this Agreement and perform its obligations
hereunder. This Agreement constitutes the valid and binding obligation of CDI
enforceable against CDI in accordance with its terms, except as may be limited
by bankruptcy, moratorium, insolvency or other similar laws generally affecting
the enforcement of creditors' rights. The execution, delivery and performance of
this Agreement by CDI and the consummation of the transactions contemplated
hereby will not:
(a) violate any provision of the Charter or By-Laws of CDI;
(b) violate, conflict with or result in the breach of any of the terms of,
result in a material modification of, otherwise give any other contracting party
the right to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, any contract or other agreement to which CDI is a
party or by or to which it or any of its assets or properties may be bound or
subject;
(c) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon, CDI, or
upon the properties or business of CDI; or
(d) violate any statute, law or regulation of any jurisdiction applicable to the
transactions contemplated herein which could have a Material Adverse Effect (as
hereinafter defined) on the business or operations of CDI.
3.3 Compliance with Laws. CDI has complied with all federal, state, county and
local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would materially and adversely affect the business or financial
condition of CDI.
3.4 Consents and Approvals. No filing with, and no permit, authorization,
consent, or approval of, any public body or authority or any third party is
necessary for the consummation by CDI of the transactions contemplated by this
Agreement.
3.5 Litigation. There is no action, suit or proceeding pending or threatened, or
any investigation, at law or in equity, before any arbitrator, court or other
governmental authority, pending or threatened, nor any judgment, decree,
injunction, award or order outstanding, against or in any manner involving CDI
or any of CDI's properties or rights, which (a) could reasonably be expected to
have a material adverse effect on CDI taken as a whole, or (b) could reasonably
be expected to materially and adversely affect consummation of any of the
transactions contemplated by this Agreement (collectively, a "Material Adverse
Effect").
3.6 Brokers or Finders. No broker's or finder's fee will be payable by CDI in
connection with the transaction contemplated by this Agreement, nor will any
such fee be incurred as a result of any actions by CDI.
3.7 Real Estate. CDI neither owns real property nor is a party to any leasehold
agreement, except as set forth on Schedule 3.7 hereof.
3.8 Assets. CDI owns all rights, title and interest in and to its assets, free
and clear of all liens, pledges, mortgages, security interests, conditional
sales contracts or any other encumbrances.
3.9 Financial Statements. The audited balance sheet of CDI at December 31, 2005
and related statement of operations, cash flow and shareholders' equity, and the
unaudited balance sheet of CDI at June 30, 2006 and related statements of
operations, cash flow and shareholders' equity (collectively the "CDI Financial
Statements") fairly present in all material respects the financial position of
CDI as of the respective dates thereof, and the other related statements
included therein fairly present in all material respects the results of
operations, changes in shareholders' equity and cash flows of CDI for the
respective periods or as of the respective dates set forth therein, all in
conformity with generally accepted accounting principles consistently applied
during the periods involved, except as otherwise noted therein.
3.10 Absence of Changes; No Undisclosed Liabilities. Except as set forth on
Schedule 3.10, since June 30, 2006, CDI has not incurred any liability material
to CDI, except in the ordinary course of its business, consistent with past
practices; suffered a change, or any event involving a prospective change, in
the business, assets, financial condition, or results of operations of CDI which
has had, or is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect, (other than as a result of changes or proposed changes
in federal or state regulations of general applicability or interpretations
thereof, changes in generally accepted accounting principles, and changes that
could, under the circumstances, reasonably have been anticipated in light of
disclosures made in writing by CDI to EVLO pursuant hereto); or subsequent to
the date hereof, conducted its business and operations other than in the
ordinary course of business and consistent with past practices. CDI has no
liability (and CDI is not aware of any basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand
against any of them giving rising to any liability which individually or is in
the aggregate are reasonably likely to have a Material Adverse Effect on CDI)
except for (a) liabilities set forth on the face of the most recent balance
sheet included in the CDI Financial Statements, and (b) liabilities which have
arisen after the date of such balance sheet in the ordinary course of business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, tort, infringement, or violation of law).
3.11 Capitalization. The authorized capital stock of CDI consists of 200,000,000
shares of common stock of which 10,000,000 shares are presently issued and
outstanding. CDI has not granted, issued or agreed to grant, issue or make
available any warrants, options, subscription rights or any other commitments of
any character relating to the unissued shares of capital stock of CDI, except as
listed on Schedule 3.11 hereof, all of which at the Closing will be terminated
and replaced with identical options of EVLO. All of the CDI Shares are duly
authorized and validly issued, fully paid and non-assessable.
3.12 Contracts. A copy of each of the material contracts, instruments,
mortgages, notes, security agreements, leases, agreements, or understandings,
whether written or oral, to which CDI is a party that relates to or affects the
assets or operations of CDI or to which CDI's assets or operations may be bound
or subject (collectively, the "Contracts"), has been provided to EVLO. Each
Contract is a valid and binding obligation of CDI and in full force and effect,
except for where the failure to be in full force and effect would not,
individually or in the aggregate, have a Material Adverse Effect. For purposes
of this Agreement a material contract shall be any contract or agreement
involving consideration in excess of $10,000. There are no existing defaults by
CDI thereunder or, to the knowledge of CDI, by any other party thereto, which
defaults, individually or in the aggregate, would have a Material Adverse
Effect.
3.13 Taxes. All required tax returns or federal, state, county, municipal,
local, foreign and other taxes and assessments have been properly prepared and
filed by CDI for all years for which such returns are due unless an extension
for filing any such return has been properly prepared and filed. Any and all
federal, state, county, municipal, local, foreign and other taxes, assessments,
including any and all interest, penalties and additions imposed with respect to
such amounts have been paid or provided for. CDI has not been audited by any
local, state or federal tax authority.
3.14 (a) Except to the extent that any inaccuracy of any of the following (or
the circumstances giving rise to such inaccuracy), in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on CDI: (i) CDI owns,
or is licenses or otherwise has the legally enforceable right to use (in each
case, clear of any liens or encumbrances of any kind), all Intellectual Property
(as hereinafter defined) used in or necessary for the conduct of its business as
currently conducted; (ii) no claims are pending or, to the knowledge of CDI,
threatened that CDI is infringing on or otherwise violating the rights of any
person with regard to any Intellectual Property used by, owned by, and/or
licensed to CDI; (iii) as of the date of this Agreement, to the knowledge of
CDI, no person is infringing on or otherwise violating any right of CDI with
respect to any Intellectual Property owned by and/or licensed to CDI; and (iv)
as of the date of this Agreement, CDI has not received any notice of any claim
challenging the ownership or validity of any Intellectual Property owned by CDI
or challenging CDI's license or legally enforceable right to use any
Intellectual Property licensed by it.
(b) For purposes of this Agreement, "Intellectual Property"
means trademarks (registered or unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names, and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable, or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works of authorship, whether
copyrighted, copyrightable, or not in any jurisdiction; registration or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; any similar intellectual property or proprietary
rights and computer programs and software (including source code, object code,
and data); licenses, immunities, covenants not to xxx, and the like relating to
the foregoing; and any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing.
3.15 Labor and Employment Matters. (a) CDI is and has been in compliance in
all respects with all applicable laws respecting employment and employment
practices, terms, and conditions of employment and wages and hours, including,
such laws respecting employment discrimination, equal opportunity, affirmative
action, worker's compensation, occupational safety, and health requirements and
unemployment insurance and related matters, and are not engaged in and have not
engaged in any unfair labor practice; (b) no investigation or review by or
before any governmental entity concerning any violations of any such applicable
laws is pending nor, to the knowledge of CDI is any such investigation
threatened or has any such investigation occurred during the last three years,
and no governmental entity has provided any notice to CDI or otherwise asserted
an intention to conduct any such investigation; (c) there is no labor strike,
dispute, slowdown, or stoppage actually pending or threatened against CDI; (d)
no union representation question or union organizational activity exists
respecting the employees of CDI; (e) no collective bargaining agreement exists
which is binding on CDI; (f) CDI has experienced no work stoppage or other labor
difficulty; and (g) in the event of termination of the employment of any of the
current officers, directors, employees, or agents of CDI, CDI shall, pursuant to
any agreement or by reason of anything done prior to the closing by CDI not be
liable to any of said officers, directors, employees, or agents for so-called
"severance pay" or any other similar payments or benefits, including, without
limitation, post-employment healthcare (other than pursuant to COBRA) or
insurance benefits, except to the extent that any matter in Items (a), (b), (f)
and (g) could reasonably be expected individually or in the aggregate to have a
Material Adverse Effect on CDI. CDI had entered into employment agreements with
Xx. Xxxx, Xx. Xxxxxx, Xx. Xxxxx, Xx. Xx (xxxxx) Xxx and Xx. Xxxxxxxx Xxxx each
of which on the Closing the parties will terminate with no further obligations
by the parties thereto in exchange for identical employment agreements with
EVLO.
3.16 Employee Benefit Plans. CDI is not a party to any written or formal
employee benefit plan (including, without limitation, any "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) policy or agreement that is maintained (all of
the foregoing, the "Benefit Plans"), or is or was contributed to by CDI or
pursuant to which CDI or any trade or business, whether or not incorporated (an
"ERISA Affiliate"), which together with CDI would be deemed a "single employer"
within the meaning of Section 4001 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), is still potentially liable for payments,
benefits, or claims.
3.17 State Anti-Takeover Statutes. The CDI Board of Directors has approved this
Agreement and the transactions contemplated hereby and thereby such approval
constitutes approval of the Agreement and other transactions contemplated hereby
and thereby by the CDI Board of Directors as required under Florida law. To the
knowledge of CDI, no state anti-takeover statute is applicable to the Exchange.
3.18 Absence of Certain Business Practices. Neither CDI nor any director,
officer, employer, or agent of CDI, nor any person acting on their behalf,
directly or indirectly has to CDI's knowledge given or agree to give any gift or
similar benefit to any customer, supplier, governmental employee or other person
which (a) might subject CDI to any damage or penalty in any civil, criminal, or
governmental litigation or proceeding, (b) if not given in the past, might have
had a Material Adverse Effect on CDI, or (c) if not continued in the future,
might have a Material Adverse Effect on CDI or which might subject CDI to suit
or penalty in any private or governmental litigation or proceeding.
3.19 Internal Accounting Controls. CDI maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.20 Full Disclosure. No representation or warranty by CDI in this Agreement or
in any document or schedule to be delivered by them pursuant hereto, and no
written statement, certificate or instrument furnished or to be furnished to
EVLO pursuant hereto or in connection with the negotiation, execution or
performance of this Agreement contains, or will contain, any untrue statement of
a material fact or omits, or will omit, to state any fact necessary to make any
statement herein or therein not materially misleading or necessary to a complete
and correct presentation of all material aspects of the businesses of CDI.
SECTION 4. REPRESENTATIONS AND WARRANTS OF EVLO.
EVLO hereby represents and warrants to CDI and the Shareholders as
follows, with any exceptions thereto being denoted on the applicable schedule to
this Agreement:
4.1 Organization and Good Standing. EVLO is a corporation duly organized,
validly existing and in good standing under the laws of Florida, and is entitled
to own or lease its properties and to carry on its business as and in the places
where such properties are now owned, leased or operated and such business is now
conducted. EVLO is qualified to do business as a foreign corporation in each
jurisdiction, if any, in which its property or business requires such
qualification.
4.2 Authorization; Enforceability; No Breach. EVLO has all necessary corporate
power and authority to execute this Agreement and perform its obligations
hereunder. This Agreement constitutes the valid and binding obligation of EVLO
enforceable against EVLO in accordance with its terms, except as may be limited
by bankruptcy, moratorium, insolvency or other similar laws generally affecting
the enforcement of creditors' rights. The execution, delivery and performance of
this Agreement by EVLO and the consummation of the transactions contemplated
hereby will not:
(a) violate any provision of the Charter or By-Laws of EVLO;
(b) violate, conflict with or result in the breach of any of the terms of,
result in a material modification of, otherwise give any other contracting party
the right to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, any contract or other agreement to which EVLO is a
party or by or to which it or any of its assets or properties may be bound or
subject;
(c) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon, EVLO, or
upon the properties or business of EVLO; or
(d) violate any statute, law or regulation of any jurisdiction applicable to the
transactions contemplated herein which could have a Material Adverse Effect on
the business or operations of EVLO.
4.3 The EVLO Shares. The EVLO Shares to be issued to the Shareholders have been,
or on or prior to the Closing will have been, duly authorized by all necessary
corporate and shareholder actions and, when so issued in accordance with the
terms of this Agreement, will be validly issued, fully paid and non-assessable
and will not be issued in violation of the pre-emptive or similar rights of any
person.
4.4 Compliance with Laws. EVLO has complied with all federal, state, county and
local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would materially and adversely affect the business or financial
condition of EVLO.
4.5 Consents and Approvals. No filing with, and no permit, authorization,
consent or approval of any public body or authority or any third party is
necessary for the consummation by EVLO of the transactions contemplated by this
Agreement.
4.6 Litigation. Other than as set forth on Schedule 4.6 and in its publicly
filed documents with the Securities and Exchange Commission ("SEC"), there is no
action, suit or proceeding pending or threatened, or any investigation, at law
or in equity, before any arbitrator, court or other governmental authority,
pending or threatened, nor any judgment, decree, injunction, award or order
outstanding, against or in any manner involving EVLO or any of EVLO's properties
or rights which (a) could reasonably be expected to have a material adverse
effect on EVLO taken as a whole, or (b) could reasonably be expected to
materially and adversely affect consummation of any of the transactions
contemplated by this Agreement.
4.7 Brokers or Finders. No broker's or finder's fee will be payable by EVLO in
connection with the transaction contemplated by this Agreement, nor will any
such fee be incurred as a result of any actions by EVLO.
4.8 Real Estate. EVLO neither owns real property nor is a party to any
leasehold agreement.
4.9 Assets. EVLO owns all rights, title and interest in and to its assets, free
and clear of all liens, pledges, mortgages, security interests, conditional
sales contracts or any other encumbrances.
4.10 Financial Statements. The audited balance sheets of EVLO at December 31,
2005 and 2004 and related statements of operations, cash flow and shareholders'
equity, and the unaudited balance sheet of EVLO at June 30, 2006 and related
statements of operations, cash flow and shareholders' equity (collectively the
"EVLO Financial Statements") fairly present in all material respects the
financial position of EVLO as of the respective dates thereof, and the other
related statements included therein fairly present in all material respects the
results of operations, changes in shareholders' equity and cash flows of EVLO
for the respective periods or as of the respective dates set forth therein, all
in conformity with generally accepted accounting principles consistently applied
during the periods involved, except as otherwise noted therein.
4.11 Absence of Changes; No Undisclosed Liabilities. Except as disclosed in its
Form 10-QSB for fiscal year ended June 30, 2006, since June 30, 2006, EVLO has
not incurred any liability material to EVLO on a consolidated basis, except in
the ordinary course of its business, consistent with past practices; suffered a
change, or any event involving a prospective change, in the business, assets,
financial condition, or results of operations of EVLO which has had, or is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect, (other than as a result of changes or proposed changes in federal or
state regulations of general applicability or interpretations thereof, changes
in generally accepted accounting principles, and changes that could, under the
circumstances, reasonably have been anticipated in light of disclosures made in
writing by EVLO to CDI pursuant hereto); or subsequent to the date hereof,
conducted its business and operations other than in the ordinary course of
business and consistent with past practices. EVLO has no liability (and EVLO is
not aware of any basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any of them
giving rising to any liability which individually or is in the aggregate are
reasonably likely to have a Material Adverse Effect on EVLO) except for (a)
liabilities set forth on the face of the most recent balance sheet included in
the EVLO Financial Statements, and (b) liabilities which have arisen after the
date of such balance sheet in the ordinary course of business (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, tort, infringement, or violation of law).
4.12 Capitalization. The authorized capital stock of EVLO consists of
150,000,000 shares of common stock of which 526,120 (post 100 for 1 reverse
stock-split) shares are presently issued and outstanding, and 10,000,000 shares
of preferred stock, no shares of which have been issued or designated. EVLO has
not granted, issued or agreed to grant, issue or make available any warrants,
options, subscription rights or any other commitments of any character relating
to the unissued shares of capital stock of EVLO except as set forth in Schedule
4.12 hereto or as disclosed in its public filings with the SEC. All of the EVLO
Shares are duly authorized and validly issued, fully paid and non-assessable.
4.13 Contracts. A copy of each of the material contracts, instruments,
mortgages, notes, security agreements, leases, agreements, or understandings,
whether written or oral, to which EVLO is a party that relates to or affects the
assets or operations of EVLO or to which EVLO's assets or operations may be
bound or subject (collectively, the "Contracts"), has been provided to CDI. Each
of the Contracts is a valid and binding obligation of EVLO and in full force and
effect, except for where the failure to be in full force and effect would not,
individually or in the aggregate, have a Material Adverse Effect. For purposes
of this Agreement a material contract shall be any contract or agreement
involving consideration in excess of $10,000. There are no existing defaults by
EVLO thereunder or, to the knowledge of EVLO, by any other party thereto, which
defaults, individually or in the aggregate, would have a Material Adverse
Effect.
4.14 Taxes. All required tax returns or federal, state, county, municipal,
local, foreign and other taxes and assessments have been properly prepared and
filed by EVLO for all years for which such returns are due unless an extension
for filing any such return has been properly prepared and filed. Any and all
federal, state, county, municipal, local, foreign and other taxes, assessments,
including any and all interest, penalties and additions imposed with respect to
such amounts have been paid or provided for. EVLO has never been audited by any
local, state or federal tax authority.
4.15 Except as may be disclosed in its public filings with the SEC and to the
extent that any inaccuracy of any of the following (or the circumstances giving
rise to such inaccuracy), in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on EVLO: (i) EVLO owns, or is licensed or
otherwise has the legally enforceable right to use (in each case, clear of any
liens or encumbrances of any kind), all Intellectual Property (as hereinafter
defined) used in or necessary for the conduct of its business as currently
conducted; (ii) no claims are pending or, to the knowledge of EVLO, threatened
that EVLO is infringing on or otherwise violating the rights of any person with
regard to any Intellectual Property used by, owned by, and/or licensed to EVLO
or any of its subsidiaries; (iii) as of the date of this Agreement, to the
knowledge of EVLO, no person is infringing on or otherwise violating any right
of EVLO with respect to any Intellectual Property owned by and/or licensed to
EVLO; and (iv) as of the date of this Agreement, neither EVLO nor any of its
subsidiaries have received any notice of any claim challenging the ownership or
validity of any Intellectual Property owned by EVLO or challenging EVLO's
license or legally enforceable right to use any Intellectual Property licensed
by it.
4.16 Labor and Employment Matters. (a) EVLO is and has been in compliance in all
respects with all applicable laws respecting employment and employment
practices, terms, and conditions of employment and wages and hours, including,
such laws respecting employment discrimination, equal opportunity, affirmative
action, worker's compensation, occupational safety, and health requirements and
unemployment insurance and related matters, and are not engaged in and have not
engaged in any unfair labor practice; (b) no investigation or review by or
before any governmental entity concerning any violations of any such applicable
laws is pending nor, to the knowledge of EVLO is any such investigation
threatened or has any such investigation occurred during the last three years,
and no governmental entity has provided any notice to EVLO or otherwise asserted
an intention to conduct any such investigation; (c) there is no labor strike,
dispute, slowdown, or stoppage actually pending or threatened against EVLO; (d)
no union representation question or union organizational activity exists
respecting the employees of EVLO; (e) no collective bargaining agreement exists
which is binding on EVLO; (f) EVLO has experienced no work stoppage or other
labor difficulty; and (g) in the event of termination of the employment of any
of the current officers, directors, employees, or agents of EVLO, EVLO shall
not, pursuant to any agreement or by reason of anything done prior to the
closing by EVLO be liable to any of said officers, directors, employees, or
agents for so-called "severance pay" or any other similar payments or benefits,
including, without limitation, post-employment healthcare (other than pursuant
to COBRA) or insurance benefits, except to the extent that any matter in Items
(a), (b), (f) and (g) could reasonably be expected individually or in the
aggregate to have a Material Adverse Effect on EVLO.
4.17 Employee Benefit Plans. Except as may be disclosed in its public filings
with the SEC, EVLO is not a party to any written or formal employee benefit plan
(including, without limitation, any "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) policy or agreement that is maintained (all of the foregoing, the
"Benefit Plans"), or is or was contributed to by EVLO or pursuant to which EVLO
or any trade or business, whether or not incorporated (an "ERISA Affiliate"),
which together with EVLO would be deemed a "single employer" within the meaning
of Section 4001 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), is still potentially liable for payments, benefits, or
claims.
4.18 State Anti-Takeover Statutes. The EVLO Board of Directors has approved this
Agreement and the transactions contemplated hereby, and thereby such approval
constitutes approval of the Agreement and other transactions contemplated hereby
and thereby by the EVLO Board of Directors as required under Delaware law. To
the knowledge of EVLO, no state anti-takeover statute is applicable to the
Exchange.
4.19 Absence of Certain Business Practices. Neither EVLO nor any director,
officer, employer, or agent of the foregoing, nor any person acting on its
behalf, directly or indirectly has to EVLO's knowledge given or agree to give
any gift or similar benefit to any customer, supplier, governmental employee or
other person which (a) might subject EVLO to any damage or penalty in any civil,
criminal, or governmental litigation or proceeding, (b) if not given in the
past, might have had a Material Adverse Effect on EVLO, or (c) if not continued
in the future, might have a Material Adverse Effect on EVLO or which might
subject EVLO to suit or penalty in any private or governmental litigation or
proceeding.
4.20 Internal Accounting Controls. EVLO maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
4.21 SEC Reports. Except as may be disclosed in its public filings with the SEC,
EVLO has filed all reports required to be filed by it under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials,
including the exhibits thereto, being collectively referred to herein as the
"SEC Reports"). The SEC Reports comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Reports, when filed, 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. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing.
4.22 Full Disclosure. No representation or warranty by EVLO in this Agreement or
in any document or schedule to be delivered by them pursuant hereto, and no
written statement, certificate or instrument furnished or to be furnished to CDI
pursuant hereto or in connection with the negotiation, execution or performance
of this Agreement contains, or will contain, any untrue statement of a material
fact or omits, or will omit, to state any fact necessary to make any statement
herein or therein not materially misleading or necessary to a complete and
correct presentation of all material aspects of the businesses of EVLO.
SECTION 5. COVENANTS AND ADDITIONAL AGREEMENT
5.1. Examinations and Investigations. Prior to the Closing, the parties
acknowledge that they have been entitled, through their employees and
representatives, to make such investigation and verification of the assets,
properties, business and operations, books, records and financial condition of
the other, including communications with suppliers, vendors and customers, as
they each may reasonably require. No investigation by a party hereto shall,
however, diminish or waive in any way any of the representations, warranties,
covenants or agreements of the other party under this Agreement. Consummation of
this Agreement shall be subject to the fulfillment of due diligence procedures
to the reasonable satisfaction of each of the parties hereto and their
respective counsel.
5.2. Expenses. Each party hereto agrees to pay its own costs and expenses
incurred in negotiating this Agreement and consummating the transactions
described herein.
5.3. Further Assurances. The parties shall execute such documents and other
papers and take such further action as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated hereby.
Each such party shall use its best efforts to fulfill or obtain in the
fulfillment of the conditions to the Closing, including, without limitation, the
execution and delivery of any documents or other papers, the execution and
delivery of which are necessary or appropriate to the Closing.
5.4. Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, each of the parties hereto agree to keep
confidential any information disclosed to each other in connection therewith;
provided, however, such obligation shall not apply to information which:
(a) at the time of disclosure was public knowledge;
(b) after the time of disclosure becomes public knowledge (except due to the
action of the receiving party); or
(c) the receiving party had within its possession at the time of disclosure.
5.7 Stock Certificates and Consideration. At the Closing, the
Shareholders shall have delivered the certificates representing the CDI Shares
duly endorsed (or with executed stock powers) so as to make EVLO the sole owner
thereof. At such Closing, EVLO shall issue the EVLO Shares to the Shareholders,
as provided herein.
5.8 Management of CDI and EVLO. On the Closing date, the directors and
officers of EVLO shall resign and the designees of CDI shall, from and after the
Closing, be the directors and officers of EVLO.
5.9 Employment Agreement. CDI has employment agreements with each of
the Shareholders, and Xx.Xxx and Xx. Xxxx.On the Closing date, CDI and each of
the Shareholders, Xx. Xxx and Xx.Xxxx will terminate the employment agreements
with CDI with no further obligations by the parties thereto, and ELVO will enter
into identical employment agreements with the Shareholders in the form
attached hereto as Exhibit B, and employment agreements with Xx. Xxx and Xx.
Xxxx.
5.10 Options. CDI has issued options to the persons and in the amounts
listed on Schedule 3.11. On the Closing date, CDI and each option holder will
terminate the options with no further obligations by CDI, and ELVO will issue
identical options to each person under the ELVO 2006 Equity Compensation Plan
SECTION 6. THE CLOSING
The closing (the "Closing") shall take place contemporaneous with the
execution of this Agreement, or at such other time and place as is mutually
agreed upon by EVLO, CDI and the Shareholders, following satisfaction or waiver
of all conditions precedent to Closing. At the Closing, the parties shall
provide each other with such documents as may be necessary or appropriate and
customary in transactions of this sort in order to consummate the transactions
contemplated hereby, including evidence of due authorization of the Agreement
and the transactions contemplated hereby.
SECTION 7. CONDITIONS PRECEDENT TO CLOSING
7.1 Conditions Precedent to the Obligation of EVLO to Issue the EVLO
Shares. The obligation of EVLO to issue the EVLO Shares to the Shareholders and
to otherwise consummate the transactions contemplated hereby is subject to the
satisfaction, at or before the Closing, of each of the conditions set forth
below. These conditions are for EVLO's sole benefit and may be waived by EVLO at
any time in its sole discretion.
(a) Accuracy of CDI's and the Shareholders' Representations and Warranties. The
representations and warranties of CDI and the Shareholders will be true and
correct in all material respects as of the date when made and as of the Closing,
as though made at that time.
(b) Performance by CDI and the Shareholders. CDI and the Shareholders shall have
performed all agreements and satisfied all conditions required to be performed
or satisfied by them at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
(d) No Material Adverse Changes. CDI shall have suffered no Material Adverse
Effect.
(e) Employment Agreements. The Shareholders shall have terminated the employment
agreements with CDI and entered into employment agreements with EVLO.
(f) Options. The option holders and CDI shall have terminated the outstanding
options and EVLO shall have issued identical options to those persons.
(g) Miscellaneous. CDI and the Shareholders shall have delivered to EVLO such
other documents relating to the transactions contemplated by this Agreement as
EVLO may reasonably request.
7.2 Conditions Precedent to the Obligation of the Shareholders to
Exchange CDI Shares. The obligation of the Shareholders to exchange their CDI
Shares for the EVLO Shares and to otherwise consummate the transactions
contemplated hereby is subject to the satisfaction, at or before the Closing, of
each of the conditions set forth below. These conditions are for the
Shareholders' sole benefit and may be waived by CDI at any time in its sole
discretion.
(a) Accuracy of EVLO's Representations and Warranties. The representations and
warranties of EVLO will be true and correct in all material respects as of the
date when made and as of the Closing, as though made at that time.
(b) Performance by EVLO. EVLO shall have performed all agreements and satisfied
all conditions required to be performed or satisfied by them at or prior to the
Closing.
(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
(d) No Material Adverse Changes. EVLO shall have suffered no Material Adverse
Effect.
(e) Employment Agreements. The Shareholders shall have terminated the employment
agreements with CDI and entered into employment agreements with EVLO.
(f) Options. The option holders and CDI shall have terminated the outstanding
options and EVLO shall have issued identical options to those persons.
(g) Management. The directors and officers of EVLO shall have resigned and the
designees of CDI shall be appointed as the directors and officers of EVLO.
(h) Miscellaneous. EVLO shall have delivered to the Shareholders such other
documents relating to the transactions contemplated by this Agreement as the
Shareholders may reasonably request.
SECTION 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF EVLO
Notwithstanding any right of CDI and the Shareholders fully to
investigate the affairs of EVLO, CDI and the Shareholders shall have the right
to rely fully upon the representations, warranties, covenants and agreements of
EVLO contained in this Agreement or in any document delivered by EVLO or any of
its representatives, in connection with the transactions contemplated by this
Agreement. All such representations, warranties, covenants and agreements shall
survive the execution and delivery hereof and the Closing hereunder for 12
months following the Closing.
SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF CDI
AND THE SHAREHOLDERS
Notwithstanding any right of EVLO fully to investigate the affairs of
CDI, EVLO has the right to rely fully upon the representations, warranties,
covenants and agreements of CDI and the Shareholders contained in this Agreement
or in any document delivered to EVLO by CDI or any of its representatives, in
connection with the transactions contemplated by this Agreement. All such
representations, warranties, covenants and agreements shall survive the
execution and delivery hereof and the Closing hereunder for 12 months following
the Closing.
SECTION 10. INDEMNIFICATION
10.1 Obligation of EVLO to Indemnify. Subject to the limitations on the survival
of representations and warranties contained in Section 8, EVLO hereby agree to
indemnify, defend and hold harmless the Shareholders and CDI, to the extent
provided for herein, from and against any losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
attorneys' fees and disbursements) (a "Loss") based upon, arising out of, or
otherwise due to any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of EVLO contained in this Agreement or in any
document or other writing delivered pursuant to this Agreement.
10.2 Obligation of the CDI and the Shareholders to Indemnify. Subject to the
limitations on the survival of representations and warranties contained in
Section 9, CDI and the Shareholders agree to indemnify, defend and hold harmless
EVLO to the extent provided for herein from and against any Loss based upon,
arising out of, or otherwise due to any inaccuracy in or any breach of any
representation, warranty, covenant or agreement made by any of them and
contained in this Agreement or in any document or other writing delivered
pursuant to this Agreement.
SECTION 11. MISCELLANEOUS
11.1 Waivers. The waiver of a breach of this Agreement or the failure of any
party hereto to exercise any right under this Agreement shall in no event
constitute a waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
11.2 Amendment. This Agreement may be amended or modified only by an instrument
of equal formality signed by the parties or the duly authorized representatives
of the respective parties.
11.3 Assignment. This Agreement is not assignable except by operation of law.
11.4 Notices. Until otherwise specified in writing, the mailing
addresses of both parties of this Agreement shall be as follows:
CDI: 0000 X. Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX, 00000
With a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx Xxxxxxxxxx & Beilly LLP
0000 Xxxxxxxxx Xxxxxxxxx, X.X., Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
The Shareholders: 0000 X. Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX, 00000
EVLO: 0000 X. Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX, 00000
Any notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address as may be furnished in writing to the
addressor.
11.5 Governing Law; Venue. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida, without regard to the
conflicts of law provisions thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the County
of Palm Beach, State of Florida, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this agreement in that jurisdiction or the
validity or enforceability of any provision of this agreement in any other
jurisdiction. EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.
11.6 Publicity. No publicity release or announcement concerning this Agreement
or the transactions contemplated hereby shall be issued by either party hereto
at any time from the signing hereof without advance approval in writing of the
form and substance thereof by the other party.
11.7 Entire Agreement. This Agreement (including the Exhibits and Schedules
hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the Exchange and related
transactions, and supersede all prior agreements, written or oral, with respect
thereto.
11.8 Headings. The headings in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
11.9 Severability of Provisions. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or other provision
of this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
EVOLVE ONE, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx, President
CHINA DIRECT INVESTMENTS, INC.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx, President
SHAREHOLDERS
Yuejian (Xxxxx) Wang
Xxxx Xxxxxx
Xxxxx Xxxxx
SCHEDULE A
EXCHANGE WITH EVLO
Shares of Shares of
CDI EVLO
Name of to be to be
Shareholder Exchanged Received
Xxxxx Xxxx 4,000,000 4,000,000
Xxxx Xxxxxx 4,000,000 4,000,000
Xxxxx Xxxxx 2,000,000 2,000,000
Total 10,000,000 10,000,000
EXHIBIT A
INVESTMENT LETTER
Evolve One, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX, 00000
In connection with the receipt of the EVLO Shares from Evolve One, Inc., a
Delaware corporation ("Company") pursuant to the terms and conditions of the
Stock Exchange Agreement dated August 16, 2006, the undersigned hereby
represents, warrants, covenants and agrees as set forth below.
1. Purchase Entirely for Own Account. The Shares will be acquired for
investment for the Undersigned' own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and the
undersigned has no present intention of selling, granting any participation in,
or otherwise distributing the EVLO Shares or any portion thereof. Further, the
undersigned does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or to
any third person, with respect to all or any portion of the EVLO Shares.
2. No Securities Act Registration. The undersigned understands that the
EVLO Shares have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), by reason of a specific exemption or specific
exemptions from the registration provisions of the Securities Act which depend
upon, among other things, the bona fide nature of The undersigned' investment
intent as expressed herein.
3. Restricted Securities. The undersigned acknowledges that, unless the
undersigned has been advised by the Company that a current registration
statement is in effect covering the resale of the EVLO Shares, because the EVLO
Shares have not been registered under the Securities Act, the EVLO Shares must
be held by the undersigned indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available. The
undersigned is aware of the provision of Rule 144 promulgated under the
Securities Act that permits the limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the satisfaction of having held the EVLO Shares for a certain
duration of time, the availability of certain current public information about
the Company, the sale being through a "broker's transaction" (as provided by
Rule 144(f)), and the volume of shares sold not exceeding specified limitations
(unless the sale is within the requirements of Rule 144(k)).
4. Accredited and Sophisticated Investor. The undersigned: (a) is an
accredited investor as defined in Rule 501(a) of Regulation D of the Securities
and Exchange Commission; (b)(i) either alone or with the undersigned's
professional advisor or advisors, has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of
acquiring the EVLO Shares, (ii) either alone by reason of the undersigned'
business or financial experience or together with the undersigned' professional
advisor or advisors, has the capacity to protect the undersigned' interests in
connection with acquisition of the EVLO Shares; and (c) is able to bear the
economic risk of the investment in the EVLO Shares, including a complete loss of
the investment.
5. Opportunity to Ask Questions. The undersigned has had an opportunity
to ask questions of and receive answers from the Company or its representatives
concerning the terms of the undersigned' investment in the EVLO Shares, all such
questions have been answered to the full satisfaction of the undersigned, and
the undersigned has had the opportunity to request and obtain any additional
information the undersigned deemed necessary to verify or supplement the
information contained therein. The undersigned has reviewed and understands the
disclosure provided in the Company's Form 10-KSB for the year end December 31,
2005 and the Form 10-QSB for the quarter ended June 30, 2006.
6. Investment Risks. The undersigned recognizes that an investment in
the EVLO Shares involves substantial risks, and is fully aware of and
understands all of the risk factors related to the acquisition of the EVLO
Shares. The undersigned has determined that the acquisition of the EVLO Shares
is consistent with the undersigned's investment objectives. The undersigned is
able to bear the economic risks of an investment in the EVLO Shares, and at the
present time could afford a complete loss of such investment.
7. Limitation on Manner of Offering. The EVLO Shares were not offered
to the undersigned by any means of general solicitation or general advertising.
8. Tax and Other Matters. The undersigned is not relying on the Company
with respect to tax and other economic considerations involved in the
acquisition of the EVLO Shares. The undersigned has carefully considered and
has, to the extent the undersigned believes such discussion necessary, discussed
with the undersigned' professional, legal, tax, accounting and financial
advisors the suitability of an investment in the EVLO Shares for the
undersigned's particular tax and financial situation and the undersigned has
determined that the EVLO Shares are a suitable investment for him.
9. Restrictive Legends. The undersigned understands that the EVLO
Shares shall bear one or more of the following restrictive legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY
STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT SUCH REGISTRATION AND QUALIFICATION UNDER THE
ACT AND SUCH LAWS IS NOT REQUIRED"
(b) Any legend required by applicable state law.
10. Successors. The representations and warranties contained herein
shall be binding upon the heirs, executors, administrators, personal
representatives and other successors of the undersigned and shall inure to the
benefit of and be enforceable by the Company.
11. Address. The address, telephone number and facsimile number set
forth at the end of this letter are the undersigned's true and correct address.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the securities covered thereby until
the end of such period.
SHAREHOLDER
(Signature)
Address:
Telephone:
Social Security Number
EXHIBIT B
FORM OF EMPLOYMENT AGREEMENT
SCHEDULE 3.10
Liabilities
SCHEDULE 3.11
Options and Warrants
Options; 2005 ESOP Amount Ex Price Issued Exp. Vest
------- ---------- -------- ------ ----
Xxxx Xxxxxx 400,000 $ 0.01 1/1/2005 2/1/2010 1/1/2005
Xxxxx Xxxx 400,000 $ 0.01 1/1/2005 2/1/2010 1/1/2005
Xxxxx Xxxxx 200,000 $ 0.01 6/1/2005 2/1/2010 6/1/2005
--------------------------------------------------------------------------
1,000,000
Options; 2006 ESOP Amount Ex Price Issued Exp. Vest
------- ---------- -------- ------ ----
Xxxx Xxxxxx 400,000 $ 2.50 1/1/2005 1/1/2011 1/1/2006
Xxxxx Xxxx 400,000 $ 2.50 1/1/2005 1/1/2011 1/1/2006
Xxxxx Xxxxx 200,000 $ 2.50 6/1/2005 1/1/2011 1/1/2006
Xxxxxxx Xxxxxxxx 1,000,000 $ 0.30 3/1/2006 1/1/2012 1/1/2007
Xxxxxxx Xxxxxxxx 100,000 $ 2.50 3/1/2006 3/1/2012 3/1/2007
Xxxxxxxx Xxxx 24,000 $ 2.50 6/5/2006 6/1/2011 6/1/2006
Xxx Xx 24,000 $ 2.50 6/1/2006 6/1/2012 6/1/2007
Xxxx Xxxx 500,000 $ 0.01 5/1/2006 5/1/2011 5/1/2006
Xxxxxxx Xxx 500,000 $ 2.50 5/1/2006 5/1/2011 5/1/2006
Xxxxxxx Xxxxxx 500,000 $ 2.50 5/1/2006 5/1/2011 5/1/2006
Xxxx Xxxx 500,000 $ 2.50 5/1/2006 5/1/2011 5/1/2006
Xx Xxx 48,000 $ 2.50 6/5/2006 6/1/2012 6/1/2007
--------------------------------------------------------------------------
4,196,000
Amount Ex Price Issued Exp. Vest
------- ---------- -------- ------ ----
Xxxx Xxxxxx 400,000 $ 5.00 1/1/2005 1/1/2012 1/1/2007
Xxxxx Xxxx 400,000 $ 5.00 1/1/2005 1/1/2012 1/1/2007
Xxxxx Xxxxx 200,000 $ 5.00 6/1/2005 1/1/2012 1/1/2007
Xxxxxxx Xxxxxxxx 100,000 $ 5.00 3/1/2006 1/1/2012 1/1/2007
--------------------------------------------------------------------------
1,100,000
Amount Ex Price Issued Exp. Vest
------- ---------- -------- ------ ----
Xxxx Xxxxxx 500,000 $ 7.50 1/1/2005 1/1/2013 1/1/2008
Xxxxx Xxxx 500,000 $ 7.50 1/1/2005 1/1/2013 1/1/2008
Xxxxx Xxxxx 250,000 $ 7.50 6/1/2005 1/1/2013 1/1/2008
Xxxxxxx Xxxxxxxx 125,000 $ 7.50 3/1/2006 1/1/2013 1/1/2008
--------------------------------------------------------------------------
1,375,000
Amount Ex Price Issued Exp. Vest
------- ---------- -------- ------ ----
Xxxxx Xxxx 500,000 $ 10.00 1/1/2005 1/1/2014 1/1/2009
Xxxxx Xxxxx 250,000 $ 10.00 6/1/2005 1/1/2014 1/1/2009
Xxxxxxx Xxxxxxxx 125,000 $ 10.00 3/1/2006 1/1/2014 1/1/2009
--------------------------------------------------------------------------
1,375,000
