STOCK PURCHASE AGREEMENT
STOCK
PURCHASE AGREEMENT
(the
“Agreement") dated November 6, 2008, by and among Stone Consulting Services
Inc., a Delaware corporation (the “Buyer”); the stockholders of Yatinoo
International, S.A. set forth on Schedule
B
annexed
hereto (each such stockholder is referred to individually as a “Seller” and
collectively as the “Sellers”); Yatinoo International, S.A., a Public Limited
Company formed in Spain and its subsidiaries (collectively, the “Corporation”);
and Khaled Akid, as agent for the Sellers (the “Sellers’ Agent” and the
“Exchange Agent”).
WITNESSETH:
WHEREAS,
the
Corporation is engaged in activity related to the Internet, in particular,
the
development and the communication of gates and web sites in the Arabic and
African countries regions;
WHEREAS,
the
Sellers own 100% of the issued capital stock (the "Stock") of the
Corporation;
WHEREAS,
the
Sellers wish to sell and the Buyer wishes to purchase the Stock on the terms
and
subject to the conditions set forth in this Agreement;
WHEREAS,
the
Boards of Directors of the Buyer and the Corporation have determined that the
YI
Acquisition (defined in Section 1.1 below) is consistent with and in furtherance
of its long-term business strategy and fair to, and in the best interests of
the
Buyer, the Corporation and their respective stockholders;
WHEREAS,
in
furtherance of YI Acquisition, the parties intend that: (i) the existing Board
of Directors and Shareholders of Buyer have approved a 30-for-one forward stock
split (“Forward Split”) effective immediately prior to the Closing (defined in
Article II) and all references in this Agreement except where otherwise stated
give effect to the Forward Split; (ii) simultaneous with the Closing, Xxxxxxx
Xxxxx, the President of Buyer (the “Stone Principal”) and/or his designees shall
return to Stone for cancellation all but 600,000 shares of the Stone Principal’s
shares; (iii) the existing officers and directors of Buyer will resign and
be
replaced with the Sellers’ designees; (iv) the existing business, assets and
liabilities of Buyer will be spun off or otherwise transferred to the Stone
Principal or his designees; and (v) Buyer will change its corporate name to
“Yatinoo, Inc.” or as otherwise designated by the Sellers’ Agent;
and
WHEREAS,
the
parties have determined that it is in their respective best interests to
consummate the YI Acquisition and to undertake such other actions as described
herein, all on the terms and subject to the conditions set forth in this
Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing and the terms, conditions, representations,
warranties and covenants appearing in this Agreement, the parties hereto agree
as follows:
ARTICLE
I
Sale
and Purchase of the Stock.
1.1. YI
Acquisition.
Upon
the terms and subject to the conditions set forth in this Agreement, including,
but not limited to, the condition precedent that all deliveries pursuant to
Article VI have been satisfied, at the Closing the Sellers shall sell, transfer
and deliver to the Buyer, and the Buyer shall purchase (the “YI Acquisition”)
from the Sellers, the Stock, which constitutes one hundred percent (100%) of
the
issued and outstanding shares of capital stock of the Corporation, as set forth
in Schedule
B
annexed
hereto, free and clear of all liens, mortgages, deeds of trust, security
interests, pledges, charges, encumbrances, liabilities and claims of every
kind.
1.2. Purchase
Price.
The
purchase price of FOURTEEN MILLION FOUR HUNDRED THOUSAND (14,400,000) restricted
shares (the "Purchase Price") of $.001 par value Common Stock of the Buyer
(the
“Buyer’s Shares”), payable by the Buyer to the Sellers for the Stock, shall be
delivered to the Exchange Agent on behalf of the subscribers (“Subscribers”) in
the amounts set forth opposite each Subscriber’s name on Schedule
A
annexed
hereto. The Purchase Price shall be equal to forty-eight (48%) percent of the
issued and outstanding capital stock of Buyer immediately post closing and
post
Forward Split.
1.3. Appointment
of Exchange Agent.
The
Subscribers shall designate Khaled Akid to act as Exchange Agent for the
Subscribers in connection with the YI Acquisition to receive in trust for the
Subscribers, in accordance with the amount of Buyer’s Shares set forth on
Schedule A for each Subscriber, to which the Subscribers shall become entitled
pursuant to this Agreement. If Khaled Akid becomes unable to serve as Exchange
Agent, another Subscriber or other person, as may be designated by a majority
of
the Subscribers, shall succeed as the Exchange Agent.
1.4. Exchange
of Corporation Certificates.
In
consideration of the Purchase Price, the Exchange Agent shall surrender at
the
Closing certificates with stock powers endorsed in blank (the “Certificates”)
for the Stock of the Corporation. Until surrendered as contemplated by this
Section 1.4, each Certificate shall be deemed at any time after the Closing
to
represent only the right to receive its pro rata portion of the Purchase Price
as contemplated by Section 1.2 hereof.
1.5. Options,
Warrants and Treasury Stock.
All
outstanding options, warrants and other convertible securities and any Stock
owned and treasury stock of the Corporation, shall be surrendered at the Closing
and retired by the Corporation. All securities of the Corporation other than
the
Stock shall be cancelled without payment of any consideration therefore and
shall cease to exist.
1.6. Transfer
Books; No Further Ownership Rights in the Stock.
At the
Closing, the stock transfer books of the Corporation shall be closed, and
thereafter there shall be no further registration of transfers of the Stock
on
the records of the Corporation by the Sellers. From and after the Closing,
the
holders of Certificates evidencing ownership of the Stock outstanding
immediately prior to the Closing shall cease to have any rights with respect
to
such Stock, except as otherwise provided for herein or by applicable law. If,
after the Closing, Certificates are presented to the Exchange Agent for any
reason, they shall be cancelled and exchanged as provided in this Section
1.6.
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1.7. Directors
and Officers.
At the
Closing, the officers of the Corporation immediately prior to the Closing shall
be the officers and directors of the Buyer until the expiration of their
respective terms and until their successors have been elected and qualified.
Xxxxx Xxxxxxxxxxxx and/or his designees shall have the right to appoint two
members out of six of the Board of Directors of Buyer at the Closing and the
Sellers shall have the right to appoint four members, subject to Yatinoo, Inc.
accepting such nominations for a period until the later of (i) 12 months
following the Closing of the YI Acquisition or (ii) the next annual meeting
of
shareholders following the YI Acquisition. Pursuant to Section 6.2 below, Buyer
shall deliver to the Sellers a certified copy of Board of Directors resolutions
electing the aforementioned six (6) member Board of Directors and accepting
the
resignation of all existing officers and directors of the Buyer.
1.8. Buyer
Forward Split.
Prior
to the Closing, the Board of Directors and a majority of the stockholders of
Buyer shall have authorized a 30-for-one forward split of all of Buyer’s
outstanding shares of Common Stock and an increase in the number of authorized
shares of Common Stock to 500 million shall have been made effective by filing
a
Certificate of Amendment to the Buyer’s Certificate of Incorporation with the
Secretary of State of Delaware.
1.9. Cancellation
of Buyer Shares.
Xxxxxxx
Xxxxx, the Stone Principal, and/or his designees, shall surrender for
cancellation at the Closing certificates with stock powers endorsed in blank
for
cancellation at the Closing respecting an aggregate of 134,400,000 post-Forward
Split shares of a total 135,000,000 restricted shares issued and outstanding
of
the Buyer for payment to the Stone Principal of $200,000 consideration therefore
and such shares shall cease to exist. Payment to the Stone Principal shall
be
made at the closing by a cash payment of $120,000 and a full recourse promissory
note in the amount of $80,000 from Joy Terrace Capital Incorporated (“JTC”) and
personally guaranteed by Xxxxx Xxxxxxxxxxxx. The forms of Promissory Note and
Guaranty Agreement are attached hereto as Exhibits
A and B,
respectively.
1.10. Spin-Off
of Buyer’s Business.
At and
as of the Closing, Buyer shall transfer all of the assets, liabilities and
business that exist immediately before the Closing to either Xxxxxxx Xxxxx
or an
entity designated by Xxxxxxx Xxxxx. This transaction shall be evidenced by
an
Assumption of Assets and Liabilities Agreement in the form attached hereto
as
Exhibit
C.
1.11. Additional
Actions.
If at
any time after the Closing, the Buyer shall
consider or be advised that any deeds, bills of sale, assignments, assurances
or
any other actions or things are necessary or desirable to vest, perfect or
confirm of record or otherwise in the Buyer its right, title or interest in,
to
or under any of the rights, properties or assets of the Corporation or otherwise
carry out this Agreement, the officers and directors of the Buyer shall be
authorized to execute and deliver, in the name and on behalf of Corporation
or
the Buyer, all such deeds, bills of sale, assignments and assurances and to
take
and do, in the name and on behalf of Corporation or the Buyer, all such other
actions and things as may be necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights, properties
or assets in the Buyer or otherwise to carry out this
Agreement.
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ARTICLE
II
Closing
The
closing of the sale and purchase of the Stock provided for in Section 1 of
this
Agreement (the "Closing") shall take place at the offices of Xxxxxxxx Xxxxx
LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. (E.S.T) on or before
November 30, 2008 (the "Closing Date") or at such other date, time or location
as may be mutually agreed upon in writing by the parties. All proceedings to
be
taken and all documents to be executed at the Closing, including this Agreement,
shall be deemed to have been taken, delivered and executed simultaneously,
and
no proceeding shall be deemed taken nor documents deemed executed or delivered
until all have been taken, delivered and executed.
ARTICLE
III
Representations
and Warranties of the Sellers
Each
of
the Sellers hereby severally and not jointly, warrants and represents to the
Buyer as follows (as used herein, "Seller’s best knowledge" or "to the best
knowledge of the Seller" shall mean information actually known by the Sellers
without due inquiry):
3.1. Ownership
of Shares.
The
Sellers are the owners, beneficially and of record, of the Stock, which
constitutes one hundred percent (100%) of the issued and outstanding shares
of
capital stock of the Corporation. The Stock is the sole voting stock of the
Corporation and is duly authorized, validly issued, fully paid and
non-assessable. The Stock has not been pledged, mortgaged or otherwise
encumbered in any way and there is no lien, mortgage, charge, claim, liability,
security interest or encumbrance of any nature against the Stock. There are
no
options, warrants, rights of subscription or conversion, calls, commitments,
agreements, arrangements, understandings, plans, contracts, proxies, voting
trusts, voting agreements or instruments of any kind or character, oral or
written, to which the Sellers or the Corporation is a party, or by which the
Sellers or the Corporation is bound, relating to the issuance, voting or sale
of
the Stock or any authorized but unissued shares of capital stock of the
Corporation or of any securities representing the right to purchase or otherwise
receive any such shares of capital stock. There are no stockholders agreements,
preemptive rights or other agreements, arrangements, groups, commitments or
understandings, oral or written, that have not been disclosed to the Buyer,
relating to the voting, issuance, acquisition or disposition of shares of the
Corporation or the conduct or management of the Corporation by its Board of
Directors. The Sellers have, and at the Closing shall have, good and marketable
title to the Stock and full right to transfer title to the Stock, subject to
any
restrictions imposed by state or federal securities laws, free and clear of
all
liens, mortgages, charges, liabilities, claims, security interests or
encumbrances of every type whatsoever. The sale, conveyance, transfer and
delivery of the Stock by the Sellers to the Buyer pursuant to this Agreement
will transfer full legal and equitable right, title and interest in the Stock
to
the Buyer, free and clear of all liens, mortgages, charges, claims, liabilities,
security interests and encumbrances of any nature whatsoever.
3.2. Capacity,
Organization, Standing, Capitalization.
The
Sellers have full power and authority to enter into and perform under this
Agreement and all other agreements and instruments to be entered into in
connection with the transactions contemplated hereby, and to consummate such
transactions, and, no other consent or joinder of any other persons or
corporations is required to consummate such transactions. Except as set forth
on
Schedule
3.2
of this
Agreement, the Corporation has no subsidiaries. This Agreement has been, and
each of the other agreements and instruments executed hereunder (the "Other
Agreements") will at the Closing, be duly executed and delivered by the Sellers.
This Agreement constitutes, and each of the Other Agreements will constitute,
the legal, valid and binding obligation of the Sellers enforceable in accordance
with its respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights generally or by general equitable principles.
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3.3. Conflicts.
Neither
the execution and delivery of this Agreement or any of the other agreements
to
which such Seller is a party, nor the consummation or performance of the YI
Acquisition will, directly or indirectly (with or without notice or lapse of
time):
(a) contravene,
conflict with or result in a violation of any Legal Requirement or any Order
to
which such Seller, or the Corporation is subject; or
(b) contravene,
conflict with or result in a violation of any of the terms or requirements
of,
or give any Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate or modify, any Governmental Authorization that is held by the
Corporation;
except
for any such contravention, conflict or violation which would not reasonably
be
expected to make illegal or materially delay or impair the consummation of
the
YI Acquisition, or
(c) (i)
conflict with or result in a violation or breach of (ii) constitute (with or
without notice or passage of time) a default under (iii) result in or give
any
person the right of termination, cancellation, acceleration or modification
in
or with respect to (iv) result in or give to any person any additional rights
under or (v) result in the creation or imposition of an Encumbrance upon the
assets of the Corporation under, any Applicable Contract or other arrangement
to
which the Corporation or any of the Sellers is a party or is bound.
3.4. No
Finder’s Fee.
The
Sellers have not created any obligation for any finder’s, investment banker’s or
broker’s fee in connection with the YI Acquisition.
3.5. Purchase
Entirely for Own Account.
The
Buyer’s Shares proposed to be acquired by each Seller hereunder will be acquired
for investment for its own account, and not with a view to the resale or
distribution of any part thereof, and the Seller has no present intention of
selling or otherwise distributing the Buyer’s Shares, except in compliance with
applicable securities laws.
3.6. Available
Information.
The
Seller has such knowledge and experience in financial and business matters
that
it is capable of evaluating the merits and risks of investment in the
Buyer.
3.7. Non-Registration.
The
Seller understands that the Buyer’s Shares have not been registered under the
Securities Act of 1933, as amended (the “Securities
Act”)
and if
issued in accordance with the provisions of this Agreement, will be issued
by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature
of
the investment intent and the accuracy of the Seller’s representations as
expressed herein.
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3.8. Restricted
Securities.
The
Seller understands that the Buyer’s Shares are characterized as “restricted
securities” under the Securities Act inasmuch as this Agreement contemplates
that, if acquired by the Seller pursuant hereto, the Buyer’s Shares would be
acquired in a transaction not involving any public offering. The Seller further
acknowledges that if the Buyer’s Shares was issued to the Seller in accordance
with the provisions of this Agreement, such Buyer’s Shares may not be resold
without registration under the Securities Act or the existence of an exemption
therefrom. In this connection, the Seller represents that it is familiar with
Rule 144 promulgated under the Securities Act, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities
Act.
3.9. Legends.
It is
understood that the Buyer’s Shares will bear one or all of the following
legends:
(a) “THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144
OF
SUCH ACT.”
(b) Any
legend required by the “blue sky” laws of any state to the extent such laws are
applicable to the securities represented by the certificate so
legended.
3.10. Schedule
13D; Section 16(b).
If the
number of Buyer’s Shares acquired by any Seller, when aggregated with all other
shares of Common Stock of Buyer owned by such Seller at such time would result
in Seller beneficially owning (as determined in accordance with Section 13(d)
of
the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules
thereunder) in excess of 4.99% of the then issued and outstanding Buyer’s Shares
and the Buyer’s Shares are then registered under Section 12(g) of the Exchange
Act, such Seller shall comply with the disclosure requirements of Schedule
13D
and, if such amount exceeds 9.99%, such Seller shall also comply under the
reporting obligations of Sections 16(a) and 16(b) of the Exchange Act and the
rules promulgated thereunder.
ARTICLE
IV
Representations
and Warranties of the Corporation
The
Corporation and it Subsidiaries (collectively, the "Corporation") represent,
covenant and warrant to Buyer, jointly and severally, as
follows:
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4.1. Corporate
Organization; Etc.
The
Corporation and each of its Subsidiaries is duly organized, validly existing
and
in good standing under the laws of the jurisdiction in which it is organized
and
has full corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to engage
it to own, lease or otherwise hold its properties and assets and to conduct
its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in
the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on the Corporation, a material adverse effect on the ability
of
the Corporation to perform its obligations under this Agreement or on the
ability of the Corporation to consummate the YI Acquisition (a "Corporation
Material Adverse Effect").
The
Corporation and each of its Subsidiaries is duly qualified or licensed to do
business as a foreign corporation in good standing in the jurisdictions where
the nature of its business or its ownership or leasing of its properties make
such qualification necessary except where the failure to so qualify would not
reasonably be expected to have a Corporation Material Adverse Effect. The copies
of the Organizational Documents and all amendments thereto of the Corporation
and its Subsidiaries heretofore delivered to Buyer are complete and correct
copies of such instruments as presently in effect.
4.2. Capitalization
of Companies.
Sellers
own in the aggregate all of the issued and outstanding other equity interest
of
each of the Corporation and the Corporation owns all of the issued and
outstanding equity interests of its Subsidiaries, in each case free and clear
of
all Encumbrances, other than Encumbrances which will be extinguished on or
prior
to the Closing Date.
4.3. Authority;
Execution and Delivery; Enforceability.
The
Corporation has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the YI Acquisition. The execution
and
delivery by the Corporation of this Agreement and the consummation" by the
Corporation of the YI Acquisition have been duly authorized and approved by
the
Board of Directors of the Corporation and no other corporate proceedings on
the
part of the Corporation are necessary to authorize this Agreement and the YI
Acquisition. When executed and delivered, this Agreement will be enforceable
against the Corporation in accordance with its terms.
4.4. No
Conflict.
Neither
the execution and delivery of this Agreement or any of the Documents nor the
consummation or performance of the YI Acquisition will, directly or indirectly
(with or without notice or lapse of time):
(a) contravene,
conflict with or result in a violation of, or give any Person the right to
exercise any remedy or obtain any relief under, any Legal Requirement or any
Order to which the Corporation or any of its Subsidiaries is
subject;
(b) contravene,
conflict with or result in a violation of any of requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate
or
modify, any Governmental Authorization that is held by any of the Corporation
or
its Subsidiaries;
(c) except
as
set forth in Section 4.4(c) of Corporation’s Disclosure Schedule, and except as
required filings with the Securities and Exchange Commission (the "SEC")
and
applicable "Blue Sky" or state securities commissions, no material consent,
approval, license, permit, order or authorization ("Consent")
of, or
registration, declaration or filing with, or permit from, any Governmental
Body
is required to be obtained or made by or with respect to the Corporation in
connection with the execution, delivery and performance of this Agreement or
the
consummation of the YI Acquisition.
7
(d) result
in
the imposition or creation of any Encumbrance upon or with respect to any of
the
Assets, except Permitted Encumbrances;
4.5. Financial
Statements.
The
Corporation has heretofore delivered to Buyer and attached hereto as Section
4.5
of Corporation’s Disclosure Schedule and the accompanying financial statements
of YATINOO INTERNATIONAL, S.A. and its group, which comprise the consolidated
balance sheet as of the 30th of June 2008 (the "Balance
Sheet Date")
and
the consolidated income statement, consolidated statement of changes in equity
and consolidated cash flow statement for the six months ended June 30, 2008
and
the year ended December 31, 2007, and a summary of significant accounting
policies and other explanatory notes and those corresponding to the financial
year end as of December 31, 2007 (all such financial statements, collectively,
the " Consolidated Financial Statements").The Sellers have also delivered to
Buyer and attached hereto as Section 4.5 of Corporation’s Disclosure Schedule,
the unaudited consolidated balance sheet as of June 30, 2007 and the
consolidated income statement and statement of charges in consolidated cash
flow
for the six months ended June 30, 2007. Except as detailed in the report of
Xxxxx Auditors S.L. dated September 5, 2008, the Consolidated Financial
Statements give a true and fair view, in all significant aspects, of the
consolidated balance sheet position of the company YATINOO INTERNATIONAL and
its
group, as at 30th of June 2008 and its consolidated results, the changes in
equity and cash flows resulting from the financial year ended as of that date,
and they contain sufficient and appropriate information for its adequate
interpretation and comprehension according to international standards of
financial reporting adopted by the European Union (IFRS). The Consolidated
Financial Statements attached hereto in Section 4.5 of Corporation’s Disclosure
Schedule have been reconciled to U.S. GAAP.
4.6. No
Unknown Liabilities, Etc.
As of
the Balance Sheet Date, the Corporation had no liability or obligation of any
nature (absolute, accrued, contingent or otherwise) not otherwise disclosed
herein which is not fully reflected or reserved against in the Balance Sheet,
which, in accordance with IFRS, should have been shown or reflected in the
Balance Sheet. There has been no material change in the assets (other than
cash)
or liabilities (other than tax liabilities calculated in accordance with IFRS)
of the Corporation since June 30, 2008.
4.7. Title
to Properties; Encumbrances.
Except
as set forth in Section 4.7(a) of Corporation’s Disclosure Schedule, each of the
Corporation and its Subsidiaries has good title to, or in the case of assets
held pursuant to a lease or a license, valid and binding leasehold interests
or
licenses in, the Assets (whether real, personal and mixed, tangible and
intangible) which it purports to own including, without limitation, all the
properties and assets reflected in the Balance Sheet (except for accounts
receivable collected, and properties and assets sold, since the date of the
Balance Sheet in the Ordinary Course of Business). Except as set forth in
Section 4.7(b) of Corporation’s Disclosure Schedules all such owned Assets are
free and clear of all Encumbrances other than Permitted Encumbrances. The Assets
presently owned, leased or licensed by the Corporation and its Subsidiaries
and
described elsewhere in this Agreement include all rights, properties and other
assets necessary to permit the Corporation and its Subsidiaries to conduct
the
Business in all material respects in the same manner as conducted by the
Corporation and its Subsidiaries prior to the date hereof.
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4.8. Property,
Plant and Equipment.
Except
as set forth in Section 4.8 of the Corporation’s Disclosure Schedule, the
property, plant and equipment of the Corporation and its Subsidiaries are in
good operating condition and repair (normal wear and tear excepted) and are
reasonably adequate for the uses to which they are being put, and none of such
equipment is in need of material maintenance or repairs except for ordinary,
routine maintenance and repairs.
4.9. Legal
Proceedings.
(a) Except
as
set forth in Schedule 4.9 of the Corporation’s Disclosure Schedule, neither the
Sellers in their capacity as stockholders and/or as officers or directors of
the
Corporation, nor the Corporation is a party to any pending litigation,
arbitration or administrative proceeding or, to the best of Sellers' knowledge,
to any investigation, and no such litigation, arbitration or administrative
proceeding. or investigation that might result in any material adverse change
in
the financial condition, business or properties of the Corporation or of the
Sellers is threatened.
(b) Except
as
disclosed in Schedule 4.9 of the Corporation’s Disclosure Schedule, the Sellers
and the Corporation have no knowledge of and have not received notice of any
complaints, claims or threats, plans or intentions to discontinue commercial
relations or transactions from any customer of the Corporation, any purchaser
of
goods or services from the Corporation, any employee or independent contractor
significant to the conduct or operation of the Corporation or its businesses
or
any party to any agreement to which the Corporation is a party.
(c) Except
as
disclosed in Schedule 4.9 of the Corporation’s Disclosure Schedule, there is no
claim (whether based on statute, negligence, breach of warranty, strict
liability or any other theory) relating directly or indirectly to any product
manufactured or sold, or any services performed by the Corporation.
(d) Except
as
disclosed in Schedule 4.9 of the Corporation’s Disclosure Schedule, the
Corporation is under no obligation with respect to the return of goods in the
possession of customers.
4.10. Encumbrances.
Except
as disclosed in Schedule 4.10 of the Corporation’s Disclosure Schedule, there
are no liens, mortgages. deeds of trust, claims, charges, security interests
or
other encumbrances or liabilities of any type whatsoever to which any of the
assets of the Corporation.
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4.11. Proprietary
Rights.
(a)
The
Corporation owns all right, title and interest in and to, or otherwise possesses
legally enforceable rights, or is licensed to use, all patents, copyrights,
technology, software, software tools, know-how, processes, trade secrets,
trademarks, service marks, trade names, Internet domain names and other
proprietary rights used in or necessary for the conduct of the Corporation’s
business as conducted to the date of this Agreement, including, without
limitation, the technology, information, databases, data lists, data
compilations, and all proprietary rights developed or discovered or used in
connection with or contained in all versions and implementations of the
Corporation's World Wide Web sites or any product which has been or is being
distributed or sold by the Corporation or currently is under development by
the
Corporation or has previously been under development by the Corporation
(collectively, including such Web site, the "Yatinoo Products"), free and clear
of all liens, claims and encumbrances (including without limitation linking,
licensing and distribution rights) (all of which are referred to as "Yatinoo
Proprietary Rights"). In addition, the Corporation is not aware of any legal
restrictions or impediments that would prevent the Corporation from conducting
its business as proposed to conducted in the Corporation’s Business Plan dated
July 2008. Section 4.11(a) of the Corporation’s Disclosure Schedule contains an
accurate and complete (i) description of all patents, trademarks (with separate
listings of registered and unregistered trademarks), trade names, Internet
domain names and registered copyrights in or related to the Yatinoo Products
or
otherwise included in the Yatinoo Proprietary Rights and all applications and
registration statements therefor, including the jurisdictions in which each
such
Yatinoo Proprietary Right has been issued or registered or in which any such
application of such issuance and registration has been filed, (ii) list of
all
licenses and other agreements with third parties (the "Third Party Licenses")
relating to any material patents, copyrights, trade secrets, software,
inventions, technology, know-how, processes or other proprietary rights that
the
Corporation is licensed or otherwise authorized by such third parties to use,
market, distribute or incorporate in Yatinoo Products (such patents, copyrights,
trade secrets, software, inventions, technology, know-how, processes or other
proprietary rights are collectively referred to as the "Third Party Technology")
and (iii) list of all licenses and other agreements with third parties relating
to any material information, compilations, data lists or databases that the
Corporation is licensed or otherwise authorized by such third parties to use,
market, disseminate, distribute or incorporate in Yatinoo Products. All of
the
Corporation's patents, copyrights, trademark, trade name or Internet domain
name
registrations related to or in the Yatinoo Products are valid and in full force
and effect; and consummation of the transactions contemplated by this Agreement
will not alter or impair any such rights. No claims have been asserted or
threatened against the Corporation (and the Corporation is not aware of any
claims which are likely to be asserted or threatened against the Corporation
or
which have been asserted or threatened against others relating to Yatinoo
Proprietary Rights or Yatinoo Products) by any person challenging the
Corporation's use, possession, manufacture, sale or distribution of Yatinoo
Products under any Yatinoo Proprietary Rights (including, without limitation,
the Third Party Technology) or challenging or questioning the validity or
effectiveness of any material license or agreement relating thereto (including,
without limitation, the Third Party Licenses) or alleging a violation of any
person's or entity's privacy, personal or confidentiality rights. There is
no
valid basis for any claim of the type specified in the immediately preceding
sentence which could in any material way relate to or interfere with the
continued enhancement and exploitation by the Corporation of any of the Yatinoo
Products. None of the Yatinoo Products nor the use or exploitation of any
Yatinoo Proprietary Rights in its current business infringes on the rights
of or
constitutes misappropriation of any proprietary information or intangible
property right of any third person or entity, including without limitation
any
patent, trade secret, copyright, trademark or trade name and the Corporation
has
not been sued in any suit, action or proceeding which involves a claim of such
infringement, misappropriation or unfair competition.
10
(b) Except
as
set forth in Section 4.11(b) of the Corporation’s Disclosure Schedule, the
Corporation has not granted any third party any right to manufacture, reproduce,
distribute, market or exploit any of the Yatinoo Products or any adaptations,
translations, or derivative works based on the Yatinoo Products or any portion
thereof. The Corporation has not knowingly granted any third party any right
to
allow users of the Corporation's World Wide Web site to link to other World
Wide
Web or Internet sites. Except with respect to the rights of third parties to
the
Third Party Technology, no third party has any express right to manufacture,
reproduce, distribute, market or exploit any works or materials of which any
of
the Yatinoo Products are a "derivative work" as that term is defined in the
United States Copyright Act, Title 17, U.S.C. Section 101.
(c) All
material designs, drawings, specifications, source code, object code, scripts,
documentation, flow charts, diagrams, data lists, databases, compilations and
information incorporating, embodying or reflecting any of the Yatinoo Products
at any stage of their development (the "Yatinoo Components") were written,
developed and created solely and exclusively by employees of the Corporation
without the assistance of any third party or entity or were created by third
parties who assigned ownership of their rights to the Corporation by means
of
valid and enforceable consultant confidentiality and invention assignment
agreements, copies of which have been delivered to Buyer. The Corporation has
at
all times used commercially reasonable efforts customary in its industry to
treat the Yatinoo Proprietary Rights related to Yatinoo Products and Yatinoo
Components as containing trade secrets and has not disclosed or otherwise dealt
with such items in such a manner as intended or reasonably likely to cause
the
loss of such trade secrets by release into the public domain.
(d) To
the
Corporation's knowledge, no employee, contractor or consultant of the
Corporation is in violation in any material respect of any term of any written
employment contract, patent disclosure agreement or any other written contract
or agreement relating to the relationship of any such employee, consultant
or
contractor with the Corporation or, to the Corporation's knowledge, any other
party because of the nature of the business conducted by the Corporation.
(e) Each
person presently or previously employed by the Corporation (including
independent contractors, if any) with access authorized by the Corporation
to
confidential information has executed a confidentiality and non-disclosure
agreement pursuant to the form of agreement previously provided to Buyer or
its
representatives. Such confidentiality and non-disclosure agreements constitute
valid and binding obligations of the Corporation and such person, enforceable
in
accordance with their respective terms.
(f) No
product liability or warranty claims have been communicated in writing to or
threatened against the Corporation.
(g) To
the
Corporation's knowledge, there is no material unauthorized use, disclosure,
infringement or misappropriation of any Yatinoo Proprietary Rights, or any
Third
Party Technology to the extent licensed by or through the Corporation, by any
third party, including any employee or former employee of the Corporation.
The
Corporation has not entered into any agreement to indemnify any other person
against any charge of infringement of any Yatinoo Proprietary Rights, other
than
indemnification provisions contained in purchase orders arising in the ordinary
course of business.
11
(h) The
Corporation has taken all steps customary and reasonable in the industry to
protect and preserve the confidentiality and proprietary nature of all
Intellectual Property and other confidential information not otherwise protected
by patents, patent applications or copyright ("Confidential Information").
All
use, disclosure or appropriation of Confidential Information owned by the
Corporation by or to a third party has been pursuant to the terms of a written
agreement between the Corporation and such third party. All use, disclosure
or
appropriation of Confidential Information not owned by the Corporation has
been
pursuant to the terms of a written agreement between the Corporation and the
owner of such Confidential Information, or is otherwise lawful.
4.12. Contracts.
Except
as disclosed in Section 4.12 of Corporation’s Disclosure Schedule, there are no
Contracts that are material to the business, properties, assets, condition
(financial or otherwise), results of operations or prospects of the Corporation
and its Subsidiaries taken as a whole. Neither the Corporation nor any
Subsidiary is in violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice would cause
such violation of or default under) any Contract to which it is a party or
by
which it or any of its properties or assets is bound, except for violations
or
defaults that would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
4.13. Business
Plan.
The
information set forth in the Business Plan of the Corporation dated July 2008
with respect to the operations of the Corporation and its Subsidiaries is true
and complete in all material respects and accurately reflects such operations
for the periods indicated herein.
4.14. Taxes.
(a) Except
as
set forth in Section 4.14 of the Corporation’s Disclosure Schedule, each of the
Corporation and each Subsidiary has timely filed, or has caused to be timely
filed on its behalf, all Tax Returns required to be filed by it, and all such
Tax Returns are true, complete and accurate, except to the extent any failure
to
file or any inaccuracies in any filed Tax Returns, individually or in the
aggregate, have not had and would not reasonably be expected to have a
Corporation Material Adverse Effect. All Taxes shown to be due on such Tax
Returns, or otherwise owned, have been timely paid, except to the extent that
any failure to pay, individually or in the aggregate, has not had and would
not
reasonably be expected to have a Material Adverse Effect.
(b) The
Financial Statements (as defined in Section 4.5) reflect an adequate reserve
for
all Taxes payable by the Corporation and the Subsidiaries (in addition to any
reserve for deferred Taxes to reflect timing differences between book and Tax
items) for all Taxable periods and portions thereof through the date of such
financial statements. No deficiency with respect to any Taxes has been proposed,
asserted or assessed against the Corporation or any Subsidiary, and no
requirements for waivers of the time to assess any such Taxes are pending,
except to the extent any such deficiency or request for waiver, individually
or
in the aggregate, has not had any would not reasonably be expected to have
a
Corporation Material Adverse Effect.
12
4.15. Compliance
with Applicable Laws.
The
Corporation and its Subsidiaries are in compliance with all applicable Laws,
including those relating to occupational health and safety and the environment,
except for instances of noncompliance that, individually and in the aggregate,
have not had and would not reasonably be expected to have a Corporation Material
Adverse Effect. Except as set forth in Section 4.15 of the Corporation’s
Disclosure Schedule, the Corporation has not received any written communication
during the past two years from a Governmental Entity that alleges that the
Corporation is not in compliance with any material respect with any applicable
Law.
4.16. Default;
Violations or Restrictions.
The
execution, delivery and performance of this Agreement and of any agreement
to be
executed and delivered by the Corporation in connection with the transactions
contemplated hereby and the consummation of any of the transactions contemplated
hereby or thereby will not (or with the giving of notice or the lapse of time
or
both would) result in the breach of any term or provision of the Articles of
Incorporation or by-laws of the Corporation or violate any provision of or
result in the breach of, modification of, acceleration of the maturity of
obligations under, or constitute a default, or give rise to any right of
termination, cancellation, acceleration or otherwise be in conflict with or
result in a loss of contractual benefits to the Corporation, under any law,
order, writ, injunction, decree, statute, rule or regulation of any court,
governmental agency or arbitration tribunal or any of the terms, conditions or
provisions of any contract, lease, note, bond, mortgage, deed of trust,
indenture, license, securities agreement, agreement or other instrument or
obligation by which the Corporation or the Sellers is a party or by which either
of them may be bound, or require any consent, approval or notice under any
law,
rule or decree or any such document or instrument; or result in the creation
or
imposition of any lien, claim, restriction, charge or encumbrance upon the
Corporation’s assets or interfere with or otherwise adversely affect the ability
to carry on the business of the Corporation after the Closing Date on
substantially the same basis as it is not conducted by the
Corporation.
4.17. Books
and Records.
The
books and records of the Corporation are, in all material respects, complete
and
correct and have been maintained in accordance with good business practice.
True
and complete copies of the Articles of Incorporation and By-laws of the
Corporation and all amendments thereto and true and complete copies of the
Articles of Incorporation and By-laws of the Corporation and all amendments
thereto and true and complete copies of all minutes, resolutions, stock
certificates and stock transfer records of the Corporation are contained in
the
minute books and stock transfer books that have been delivered to the Buyer
for
inspection and will be delivered to the Buyer at the Closing. The minute books,
stock certificate books, stock transfer records and such other books and records
as may be requested by the Buyer, as exhibited to the Buyer, and its
representatives, are complete and correct in all material respects.
4.18. Relationships
with Vendors and Customers.
The
Corporation and the Sellers have no knowledge of any present or future
conditions or state of facts or circumstances which would materially adversely
affect the Corporation after the Closing Date. The Corporation’s relationships
with its customers, client and vendors are satisfactory, and the Corporation
and
the Sellers have no knowledge of any facts or circumstances which might
materially alter, negate, impair or in any way materially adversely affect
the
continuity of any such relationships. The Corporation and the Sellers have
no
knowledge of any material outstanding claims of any of its customers or clients
presently outstanding, pending or threatened against the Corporation. The
Corporation and the Sellers have no knowledge of any present or future
conditions or state of facts or circumstances which would prevent the business
of the Corporation from being carried on by the Buyer after the Closing Date
in
essentially the same manner as it is presently being carried
on.
13
4.19. Insurance.
The
Corporation and its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Corporation and its Subsidiaries
are engaged and in the geographic areas where they engage in such businesses.
The Corporation has no reason to believe that it will not be able to renew
its
and its subsidiaries’ existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business on terms consistent with market for the Corporation
and
such Subsidiaries’ respective lines of business.
4.20. Internal
Accounting Controls.
The
Corporation and its Subsidiaries maintain 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. The Corporation has established disclosure controls and procedures
for the Corporation and designed such disclosure controls and procedures to
ensure that material information relating to the Corporation, including its
subsidiaries, is make known to the officers by others within those entities.
The
Corporation’s officers have evaluated the effectiveness of the Company’s
controls and procedures. Since December 31, 2007, there have been no significant
changes in the Corporation’s internal controls or, to the Corporation’s
knowledge, in other factors that could significantly affect the Corporation’s
internal controls.
4.21. No
Additional Agreements.
The
Corporation does not have any agreement or understanding with any Seller with
respect to the transactions contemplated by this Agreement other than as
specified in this Agreement.
4.22. Disclosure.
The
Corporation confirms that neither it nor any person acting on its behalf has
provided any Seller or its respective agents or counsel with any information
that the Corporation believes constitutes material, non-public information
except insofar as the existence and terms of the proposed YI Acquisition
hereunder may constitute such information and except for information that will
be disclosed by the Buyer under a current report on Super Form 8-K. The
Corporation understands and confirms that the Sellers will rely on the foregoing
representations and covenants in effecting transactions in securities of the
Corporation. All disclosure provided to the Sellers regarding the Corporation,
its business and the transactions contemplated hereby, furnished by or on behalf
of the Corporation (including the Corporation’s representations and warranties
set forth in this Agreement) are true and correct and do not contain any untrue
statements of a material fact or omit to state any material fact necessary
in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
14
4.23. Consents.
Section
4.23 of Corporation’s Disclosure Schedule sets forth and identifies all
consents, assignments, releases, waivers and approvals required of any Person
which if not obtained would reasonably be expected (with or without notice
or
lapse of time) to contravene, conflict with or result in a material violation
or
breach of or accelerate the maturity of, or give any person the right to declare
a default or exercise any remedy under any Material Contract or violate any
Legal Requirement.
4.24. Governmental
Licenses.
Section
4.24 of Corporation’s Disclosure Schedule contains a correct and complete list
of all material governmental and administrative consents, permits, appointments,
approvals, licenses, certificates and franchises which are (i) necessary for
the
operation of the Corporation, and (ii) required in connection with Sellers'
execution, delivery or performance of this Agreement, all of which have been
obtained by the Corporation and are in full force and effect.
4.25. Brokers
and Finders.
No
agent, broker, investment banker, person, or firm acting on behalf of any of
the
Sellers, the Corporation or any firm or corporation affiliated with any of
them,
or under its authority, is or will be entitled to a financial advisory fee,
brokerage commission, finder's fee or other like payment in connection with
the
transactions contemplated hereby.
4.26. Relationships
With Related Persons.
Except
as set forth in Section 4.26 of Corporation’s Disclosure Schedule, and except
through or related to its ownership of the Stock of the Corporation, neither
the
Sellers nor any Affiliate of Sellers has any outstanding Contract with the
Corporation or its Subsidiaries.
4.27. Absence
of Changes.
Since
December 31, 2007, there has not been any Corporation Material Adverse Effect,
or any event or development which, individually or together with other such
events, could reasonably be expected to result in a Corporation Material Adverse
Effect. None of the other representations or warranties set forth in this
Agreement shall be deemed to limit the foregoing.
4.28. Disclosure.
No
warranty, representation or covenant of the Sellers contained in this Agreement,
or in any Exhibit, Schedule, certificate or written statement delivered in
connection herewith, contains or shall contain any untrue statement of a
material fact nor to the Knowledge of the Corporation, shall such warranties,
representations and covenants omit any fact necessary in order to make any
such
statements, in light of the circumstances in which they were made, not false
or
misleading. Without limiting the generality of the foregoing, neither the
Corporation or its Subsidiaries has any Knowledge that any third party intends
to cease doing business with the Corporation or is aware of any adverse
prospects in respect of the Business.
15
ARTICLE
V
Representations
and Warranties of Buyer
The
Buyer
represents and warranties as follows to each of the Sellers and the Corporation
that, except as set forth in the reports, schedules, forms, statements and
other
documents filed by Buyer with the SEC and publicly available prior to the date
of the Agreement (the “Filed
Buyer SEC Documents”),
as
follows:
5.1. Buyer
Organization; Etc.
Buyer
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware and has full power and authority to carry on
its
business as it is now being conducted and to own the properties and assets
it
now owns.
5.2. Authority;
No Conflict.
(a) This
Agreement constitutes the legal, valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except as may be limited
by
bankruptcy, moratorium and insolvency laws and other laws affecting the rights
of creditors generally and except as may be limited by general principles of
equity. Upon the execution and delivery by it of the Other Agreements to which
Buyer is a party and the execution and delivery thereof by each other party
thereto, such Other Agreements will constitute the legal, valid and binding
obligations of Buyer, enforceable in accordance with their respective terms,
except as may be limited by bankruptcy, moratorium and insolvency laws and
other
laws affecting the rights of creditors generally and except as may be limited
by
general principles of equity. Buyer has the power, authority and capacity to
execute and deliver this Agreement and the Other Agreements to which it is
a
party and to perform its respective obligations under this Agreement and such
Other Agreements.
(b) Neither
the execution and delivery of this Agreement or any of the Other Agreements,
nor
the consummation or performance of the YI Acquisition will, directly or
indirectly (with or without notice or lapse of time):
(c) contravene,
conflict with or result in a violation of any Legal Requirement or any Order
to
which Buyer is subject; or
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(i)
|
conflict
with or result in a violation or breach of (b) constitute (with or
without
notice or passage of time) a default under (c) result in or give
any
person the right of termination, cancellation, acceleration or
modification in or with respect to (d) result in or give to any person
any
additional rights under or (e) result in the creation or imposition
of an
Encumbrance upon the assets of the Buyer under any agreement or other
arrangement to which Buyer is a party or is bound;
or
|
|
(ii)
|
contravene,
conflict with or result in a violation of any of the terms or requirements
of, or give any Governmental Body the right to revoke, withdraw,
suspend,
cancel, terminate or modify, any Governmental Authorization that
is held
by Buyer.
|
16
(d) Buyer
is
not and will not be required to give any notice to, or obtain any Consent from,
any Person in connection with the execution and delivery of this Agreement
or
any of the Other Agreements or the consummation or performance of the YI
Acquisition.
5.3. Subsidiaries;
Equity Interest.
Buyer
does not own, directly or indirectly, any capital stock, membership interest,
joint venture interest or other equity interest in any person.
5.4. Capital
Structure.
As of
the Closing Date the authorized capital stock of Buyer shall consist of
500,000,000 shares of Buyer’s Common Stock, par value $.001 per share, and
5,000,000 shares of preferred stock, par value $.001 per share. As of the
Closing date (i) 150,000,000 post-Forward Split shares of Buyer’s Common Stock
shall be issued and outstanding, (ii) no shares of preferred stock are
outstanding and (ii) no shares of Buyer’s Common Stock or preferred stock are
held by Buyer in its treasury. Except as set forth above, no shares of capital
stock or other voting securities of Buyer were issued, reserved for issuance
or
outstanding. All outstanding shares of the capital stock of Buyer are, and
all
such shares that may be issued prior to the date hereof will be when issued,
duly authorized, validly issued, fully paid and nonassessable and not subject
to
or issued in violation of any purchase option, call option, right of first
refusal, preemptive right, subscription right or any similar right under any
provision of the General Corporation Law of the State of Delaware, the Buyer’s
Certificate of Incorporation, Buyer’s By-laws or any Contract to which Buyer is
a party or otherwise bound. Of the outstanding 150,000,000 shares of the Buyer’s
Common Stock 133,860,000 are restricted Shares held by the Stone Principal
and
constitute control stock and 1,140,000 are restricted shares held by
non-affiliates. The remaining 15,000,000 shares of the Buyer’s outstanding
Common Stock have been registered for resale with the SEC. Except as set forth
above, as of the date of this Agreement, there are not any options, warrants,
rights, convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which Buyer is a party or by which
any of them is bound (i) obligating Buyer to issue, deliver or sell, or cause
to
be issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, Buyer, (ii) obligating
Buyer to issue, grant, extend or enter into any such option, warrant, call,
right, security, commitment, Contract, arrangement or undertaking or (iii)
that
give any person the right to receive any economic benefit or right similar
to or
derived from the economic benefits and rights occurring to holders of the
capital stock of the Buyer. As of the date of this Agreement, there are not
any
outstanding contractual obligations of Buyer to repurchase, redeem or otherwise
acquire any shares of capital stock of Buyer. The Buyer is not a party to any
agreement granting any securityholder of the Buyer the right to cause the Buyer
to register shares of the capital stock or other securities of the Buyer held
by
such securityholder under the Securities Act. The stockholder list provided
to
the Corporation is a current shareholder list generated by its stock transfer
agent, and such list accurately reflects all of the issued and outstanding
shares of the Buyer's Common Stock.
5.5. Authority;
Execution and Delivery; Enforceability.
The
execution and delivery by the Buyer of this Agreement and the consummation
by
the Buyer of the YI Acquisition have been duly authorized and approved by the
Board of Directors of the Buyer and no other corporate proceedings on the part
of the Buyer are necessary to authorize this Agreement and the YI Acquisition.
This Agreement constitutes a legal, valid and binding obligation of the Buyer,
enforceable against the Buyer in accordance with the terms hereof.
17
5.6. SEC
Documents; Undisclosed Liabilities
(a) Buyer
has
filed all reports, schedules, forms, statements and other documents required
to
be filed by Buyer with the SEC since April 10, 2008, pursuant to Sections 13(a),
14 (a) and 15(d) of the Exchange Act (the "Buyer
SEC Documents").
(b) As
of its
respective filing date, each Buyer SEC Document complied in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the SEC promulgated thereunder applicable to such Buyer SEC Document, and
did
not contain any untrue statement of a material fact or omit 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. Except to the extent that information contained in any Buyer SEC
Document has been revised or superseded by a later filed Buyer SEC Document,
none of the Buyer SEC Documents contains any untrue statement of a material
fact
or omits to state any 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 consolidated financial statements
of
Buyer included in the Buyer SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP (except, in the case of unaudited statements, as permitted by the
rules and regulations of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial. position of Buyer and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods shown (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
(c) Except
as
set forth in the Filed Buyer SEC Documents, Buyer has no liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by GAAP to be set forth on a balance sheet of Buyer or in the notes
thereto.
5.7. Absence
of Certain Changes or Events.
Except
as disclosed in the Filed Buyer SEC Documents, from the date of the most recent
audited financial statements included in the Filed Buyer SEC Documents to the
date of this Agreement, Buyer has conducted its business only in the ordinary
course:
5.8. Taxes.
(a) Buyer
has
timely filed, or has caused to be timely filed on its behalf, all Tax Returns
required to be filed by it, and all such Tax Returns are true, complete and
accurate, except to the extent any failure to file or any inaccuracies in any
filed Tax Returns, individually or in the aggregate, have not had and would
not
reasonably be expected to have a Material Adverse Effect on Buyer. All Taxes
shown to be due on such Tax Returns, or otherwise owed, has been timely paid,
except to the extent that any failure to pay, individually or in the aggregate,
has not had and would not reasonably be expected to have a Material Adverse
Effect on Buyer.
18
(b) The
most
recent financial statements contained in the Filed Buyer SEC Documents reflect
an adequate reserve for all Taxes payable by Buyer (in addition to any reserve
for deferred Taxes to reflect timing differences between book and Tax items)
for
all Taxable periods and portions thereof through the date of such financial
statements. No deficiency with respect to any Taxes has been proposed, asserted
or assessed against Buyer, and no requests for waivers of the time to assess
any
such Taxes are pending, except to the extent any such deficiency or request
for
waiver, individually or in the aggregate, has not had and would not reasonably
be expected to have a Material Adverse Effect on Buyer.
(c) There
are
no Liens for Taxes (other than for current Taxes not yet due and payable) on
the
assets of Buyer. Buyer is not bound by any agreement with respect to
Taxes.
5.9. Litigation.
Except
as disclosed in the Filed Buyer SEC Documents, there is no suit, action or
proceeding pending or, to the knowledge of Buyer, threatened against or
affecting Buyer (and Buyer is not aware of any basis for any such suit, action
or proceeding) that, individually or in the aggregate, has had or would
reasonably be expected to have a Buyer Material Adverse Effect, nor is there
any
Judgment outstanding against Buyer that has had or would reasonably be expected
to have a Material Adverse Effect on Buyer.
5.10. Compliance
with Applicable Laws.
Except
as disclosed in the Filed Buyer SEC Documents, Buyer is in compliance with
all
applicable Laws, including those relating to occupational health and safety
and
the environment, except for instances of noncompliance that, individually and
in
the aggregate, have not had and would not reasonably be expected to have a
Buyer
Material Adverse Effect. Except as set forth in the Filed Buyer SEC Documents,
Buyer has not received any written communication during the past two years
from
a Governmental Entity that alleges that Buyer is not in compliance in any
material respect with any applicable Law. This Section 5.10 does not relate
to
matters with respect to Taxes, which are the subject of Section
5.8.
5.11. Contracts.
Except
as disclosed in the Filed Buyer SEC Documents, there are no Contracts that
are
material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the Buyer taken as a whole.
Buyer is not in violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice would cause
such a violation of, or default under) any Contract to which it is a party
or by
which it or any of its properties or assets is bound, except for violations
or
defaults that would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect on Buyer.
5.12. Transactions
With Affiliates and Employees.
Except
as set forth in the Filed Buyer SEC Documents, none of the officers or directors
of the Buyer and, to the knowledge of the Buyer, none of the employees of the
Buyer is presently a party to any transaction with the Buyer or any Subsidiary
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Buyer, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
19
5.13. Internal
Accounting Controls.
The
Buyer 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. The Buyer has established disclosure
controls and procedures for the Buyer and designed such disclosure controls
and
procedures to ensure that material information relating to the Buyer is made
known to the officers by others within those entities. The Buyer's officers
have
evaluated the effectiveness of the Buyer's controls and procedures. Since
December 31, 2007, there have been no significant changes in the Buyer's
internal controls or, to the Buyer's knowledge, in other factors that could
significantly affect the Buyer's internal controls.
5.14. Investment
Company.
The
Buyer is not, and is not an affiliate of, and immediately following the Closing
will not have become, an "investment company" within the meaning of the
Investment Corporation Act of 1940, as amended.
5.15. Disclosure.
The
Buyer confirms that neither it nor any person acting on its behalf has provided
any Seller or its respective agents or counsel with any information that the
Buyer believes constitutes material, non-public information except insofar
as
the existence and terms of the proposed transactions hereunder may constitute
such information and except for information that will be disclosed by the Buyer
under a current report on Form 8-K filed after the Closing. The Buyer
understands and confirms that the Sellers’ will rely on the foregoing
representations and covenants in effecting transactions in securities of the
Buyer. All disclosure provided to the Sellers’ regarding the Buyer, its business
and the transactions contemplated hereby, furnished by or on behalf of the
Buyer
(including the Buyer's representations and warranties set forth in this
Agreement) are true and correct and do not contain any untrue statement of
a
material fact or omit to state any material fact necessary in order to make
the
statements made therein, in light of the circumstances under which they were
made, not misleading.
5.16. Brokers
and Finders.
Neither
Buyer nor any of its Affiliates has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders’ fees in connection
with the YI Acquisition.
5.17. Certain
Registration Matters.
The
Buyer has not granted or agreed to grant to any person any rights (including
“piggy-back” registration rights) to have any securities of the Buyer registered
with the SEC or any other governmental authority that have not been satisfied.
5.18. Listing
and Maintenance Requirements.
Buyer’s
Shares are listed for trading on the OTC Bulletin Board maintained by the
Financial Industry Regulatory Authority, Inc. (“FINRA”). Buyer has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with the listing and maintenance requirements for continued listing of the
Buyer’s Shares on the OTC Bulletin Board. Appropriate notice of the name change
to Yatinoo, Inc. and the Forward Split will be given within the time frame
required by Delaware law, in addition to the notice required to be given to
FINRA pursuant to Rule 10b-17.
20
5.19. Status
of Buyer’s Shares.
The
Buyer’s Shares (i) have been duly authorized, are validly issued, fully paid and
nonassessable, (ii) are free of any preemptive rights, (iii) have been issued
in
compliance with applicable Federal and State laws concerning the issuance of
securities, (iv) have the rights, preferences, privileges, and restrictions
set
forth in Buyer’s Certificate of Incorporation and By-laws, (v) represent all of
the outstanding restricted shares of Buyer’s common stock as of the Closing
Date, (vi) will be free and clear of any Liens of any kind and (vii) will be
duly registered in the names of the Sellers, in Buyer’s stockholders ledger.
5.20. Reporting
Status.
Buyer
is a reporting issuer under Section 15(d) of the Exchange Act. Buyer’s
Registration Statement on Form S-1 (No. 333-149995) was declared effective
by
the SEC on April 10, 2008, and no stop order is in effect or, to the knowledge
of Buyer, threatened. Buyer is now, and immediately prior to the Closing will
be, current in its filings and will have filed on a timely basis all of the
filings required to have been made in the previous twelve months.
ARTICLE
VI
Deliveries
6.1. Deliveries
of the Sellers’ Agent.
| (a) |
Concurrently
herewith the Sellers’ Agent is delivering this Agreement executed by the
Sellers’ Agent and the Exchange Agent.
|
| (b) |
At
or prior to the Closing, each Seller shall deliver to the Exchange
Agent:
|
|
(i)
|
a
copy of the Restricted Share Subscription Agreement signed by the
Sellers
with respect to the Buyers Shares;
|
|
(ii)
|
a
copy of the Confidential Purchaser Questionnaire signed by the Sellers
with respect to the Buyers Shares;
|
|
(iii)
|
certificates
representing all of the Corporation Stock owned by the Sellers;
|
|
(iv)
|
duly
executed stock powers for transfer by the Seller of its Corporation
Stock
to the Buyer; and
|
|
(v)
|
Payment
of the $200,000 purchase price to the Stone Principal consisting
of
$120,000 in cash and a recourse promissory note for $80,000 as set
forth
in Section 1.9 above in the form of Exhibit
A
attached hereto with a personal guaranty in the form of Exhibit
B
attached hereto.
|
| (c) | At or prior to the Closing, the Sellers’ Agent shall deliver to the Buyer the officer’s certificates in accordance with Section 8.6. |
6.2. Deliveries
of the Buyer.
(a)
Concurrently
herewith, the Buyer is delivering:
21
|
(i)
|
to
the Sellers’ Agent, Exchange Agent and to the Corporation, a copy of this
Agreement executed by Buyer;
|
|
(ii)
|
to
the Corporation, a certificate in the form of Exhibit
D
attached hereto, from the Buyer, signed by its Secretary or Assistant
Secretary certifying that the attached copies of the Buyer’s Certificate
of Incorporation, By-laws and resolutions of the Board of Directors
of the
Buyer, approving the YI Acquisition are all true, complete and correct
and
remain in full force and effect;
|
|
(iii)
|
to
the Corporation, letters of resignation of Xxxxxxx and Xxxx Xxxxx
from all
positions they hold with Buyer effective upon the
Closing;
|
|
(iv)
|
to
the Corporation, evidence of the Board of Directors election of (A)
Khaled
Akid as a director and as the Chief Executive Officer and three other
nominees of the Sellers, and (B) Two designees of Xxxxx Xxxxxxxxxxxx
as
directors, of the Buyer effective upon the Closing as set forth in
Exhibit
D
attached hereto; and
|
|
(v)
|
[INTENTIONALLY
LEFT BLANK];
|
|
(vi)
|
to
the Corporation, signed copies of the Assumption of Assets and Liabilities
Agreement in the form of Exhibit
C,
attached hereto;
|
|
(vii)
|
certificates
with stock powers endorsed in blank for cancellation respecting
134,400,000 post-forward split shares of the Buyer from the Stone
Principal and/or his designees.
|
(b)
At
the
Closing, the Buyer shall deliver:
|
(i)
|
to
the Exchange Agent, certificates representing the new shares of Buyer’s
Shares issued to such Seller as set forth in Schedule
A;
|
|
(ii)
|
to
the Sellers’ Agent and the Corporation, the officer’s certificate in
accordance with Section 7.4.
|
6.3. Deliveries
of the Corporation.
(a)
Concurrently
herewith, the Corporation is delivering to the Buyer:
|
(i)
|
this
Agreement executed by Corporation; and
|
|
(ii)
|
a
certificate from the Corporation, signed by its secretary, or similar
authorized officer, certifying that the attached copies of the
Corporation’s constituent instruments and resolutions of the Board of
Directors of the Corporation approving the Agreement and the YI
Acquisition are all true, complete and correct and remain in full
force
and effect.
|
22
(b) At
the
Closing, the Corporation shall deliver to the Buyer, the officer’s certificate
in accordance with Section 8.6.
ARTICLE
VII
Conditions
to Obligations of Sellers
Each
and
every obligation of Sellers to consummate the transactions contemplated by
this
Agreement or to be performed on or before the Closing shall be subject to
satisfaction, on or before the Closing, of each of the following conditions,
unless waived in writing by Sellers:
7.1. Representations
and Warranties True.
The
representations and warranties of Buyer contained herein shall be in all
material respects true and accurate as of the date when made and as of the
Closing as though such representations and warranties were made at and as of
such date, except for changes expressly permitted or contemplated by the terms
of this Agreement, except to the extent such representations and warranties
speak of an earlier date (in which case, as of such date).
7.2. Performance.
Buyer
shall have performed and complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with by
Buyer on or prior to the Closing.
7.3. No
Proceeding.
No
Proceeding shall have been instituted or Threatened seeking to enjoin, restrain
or prohibit the consummation of, or having the effect of making illegal or
otherwise prohibiting, the YI Acquisition.
7.4. Certificates.
Buyer
shall have furnished Sellers with such certificates of its officers and others
to evidence compliance with the conditions set forth in this Article VII as
may
be reasonably requested by Sellers, including a certificate to the effect that
the conditions set forth in Section 7.1 and Section 7.2 have been
met.
7.5. Governmental
Consents, Approvals and Waivers.
Any
consents, permits, approvals and waivers of any Governmental Body required
in
order for the parties to complete the transactions contemplated hereby shall
have been obtained.
7.6. No
Material Adverse Change.
There
shall not have been occurrence, event, incident, action, failure to act, or
transaction since June 30, 2008 which has had or is reasonably likely to cause
a
Material Adverse Change.
7.7. Post-Closing
Capitalization.
At, and
immediately after, the Closing, the authorized capitalization, and the number
of
issued and outstanding shares of the capital stock of the Buyer on a fully
diluted basis, shall be as specified in this Agreement.
7.8. SEC
Reports.
The
Buyer shall have filed all reports and other documents required to be filed
by
Buyer under the U.S. federal securities laws through the Closing Date.
23
7.9. OTCBB
Quotation.
The
Buyer shall have maintained its status as a company whose common stock is quoted
on the OTC Bulletin Board and no reason shall exist as to why such status shall
not continue immediately following the Closing.
7.10. Deliveries.
The
deliveries specified in Section 6.2 shall have been made by the Buyer.
7.11. Board
of Director Approval.
This
Agreement shall have been approved by the board of directors of Buyer. Buyer
shall have delivered to the Sellers certified copies of the resolutions of
the
board of directors of Buyer authorizing the execution of this Agreement; the
consummation of the YI Acquisition; the election of directors as set forth
in
Section 1.7 all as set forth in Exhibit
D,
along
with certified copies of the documents evidencing the name change of Buyer
to
Yatinoo, Inc. and the Forward Split required by this Agreement, and the notices
required to be given in connection therewith.
7.12. Books
and Records.
All of
Buyer’s books and records shall have been delivered to the Sellers or their
designees.
7.13. Cancellation
of Shares.
The
134,400,000 Post-Forward Split shares owned by Xxxxxxx Xxxxx and/or his
designees shall be redeemed and restored to the status of authorized and
unissued shares, as set forth in Section 1.9.
7.14. Stockholder
List.
Buyer
shall have produced a certified stockholder list.
7.15. Subsidiaries;
existing assets and business.
Buyer
has no wholly owned active and/or inactive subsidiaries. At and as of the
Closing, Buyer will transfer all of its assets and business that existed
immediately before the Closing to either Xxxxxxx Xxxxx or an entity designated
by Xxxxxxx Xxxxx which shall agree to assume all of Buyer’s pre-Closing
liabilities and indemnify Buyer, Corporation and Sellers with respect to any
of
Buyer’s pre-Closing liabilities as set forth in the Assumption of Assets and
Liabilities Agreement in the form of Exhibit
C
attached
hereto.
7.16. Performance
and Compliance.
Buyer
and the Stone Principal shall have performed and complied in all material
respects with all covenants, conditions and obligations and agreements required
by this Agreement to be performed or complied with by it or prior to the Closing
date.
7.17. Applicable
Exemption from Registration under Securities Act.
The
Sellers shall be satisfied that the issuance of the Buyer’s Shares in connection
with the YI Acquisition, shall be exempt from registration pursuant to
Regulation D under the Securities Act and Section 4(2) of the Securities
Act.
7.18. Form
8-K.
A final
draft of the Current Report on Super Form 8-K, which discloses the Sellers
and
the Corporation entering into this Agreement, the consummation of the YI
Acquisition, and which also includes all information required to be reported
with respect to a “reverse merger” transaction with a public “shell company”
including, without limitation, the information required pursuant to Section
506 – Change in Shell Company Status, shall have been approved by Buyer,
the Corporation and their respective legal advisors, to be filed with the SEC
within four (4) Business Days after the Closing.
24
ARTICLE
VIII
Conditions
to Obligations of Buyer
Each
and
every obligation of Buyer to consummate the transactions contemplated by this
Agreement or to be performed on or before the Closing shall be subject to the
satisfaction, on or before the Closing, of each of the following conditions,
unless waived in writing by Buyer:
8.1. Representations
and Warranties True.
The
representations and warranties of Sellers and the Corporation contained herein
shall be in all material respects true and accurate as of the date when made
and
at and as of the Closing Date as though such representations and warranties
were
made at and as of such date, except for changes expressly permitted or
contemplated by the terms of this Agreement, except to the extent such
representations and warranties speak of an earlier date (in which case, as
of
such date).
8.2. Performance.
Sellers
and the Corporation shall have performed and complied in all material respects
with all agreements and covenants required by this Agreement to be performed
or
complied with by them on or prior to the Closing.
8.3. No
Proceeding.
No
Proceeding shall have been instituted or threatened seeking to enjoin, restrain
or prohibit the consummation of, or having the effect of making illegal or
otherwise prohibiting, the YI Acquisition.
8.4. Receipt
of Third Party Consents.
The
Corporation and its Subsidiaries and Sellers shall have obtained all material
required consents, permits, waivers or other approvals of, or have given any
required notice to, any such third parties as set forth by Section 4.4 of
Corporation’s Disclosure Schedule.
8.5. Governmental
Consents, Approvals and Waivers.
The
Corporation and its Subsidiaries and/or the Sellers, as applicable, shall have
received any consents, permits, approvals and waivers of any Governmental Body
required in order for them to complete the transactions contemplated
hereby.
8.6. Certificates.
The
Sellers’ Agent and the Corporation shall have furnished Buyer with such
certificates to evidence compliance with the conditions set forth in this
Article VIII as may be reasonably requested by Buyer, including a certificate
to
the effect that the conditions set forth in Section 8.1 and
Section 8.2 have been met.
8.7. Corporate
Documents.
Buyer
shall have received from the Sellers’ Agent a certificate of existence of each
of the Corporation and each Subsidiary from its respective state of
organization.
8.8. No
Material Adverse Change.
There
shall not have been any occurrence, event, incident, action, failure to act,
or
transaction since June 30, 2008, which has had or is reasonably likely to cause
a Material Adverse Effect on the Corporation.
25
8.9. Deliveries.
The
deliveries specified in Section 6.1 and Section 6.3 shall have been made by
the
Sellers’ Agent and the Corporation, respectively.
8.10. Audited
Financial Statements and Form 10 Disclosure.
The
Corporation shall have provided the Buyer with reasonable assurances that the
Buyer will be able to comply with its obligation to file a current report on
Super Form 8-K within four (4) business days following the Closing containing
the requisite audited consolidated financial statements of the Corporation
and
the requisite Form 10-type disclosure regarding the Corporation.
ARTICLE
IX
Survival
of Representations and Warranties: Indemnification.
9.1. Survival
of Representations and Warranties.
All
representations and warranties made by the Sellers, the Corporation or the
Buyer
in this Agreement, including without limitation all representations and
warranties made in any Exhibit or Schedule hereto or certificate delivered
hereunder, shall survive the Closing until the first anniversary of the Closing
Date (the "Survival Date").
9.2. Indemnity
by Sellers.
Provided that the transaction contemplated by this Agreement is closed, the
Sellers hereby agree to indemnify, defend and hold harmless the Buyer from
and
against all liabilities, losses, costs or damages whatsoever (including expenses
and reasonable fees of legal counsel) ("Claims") arising out of or relating
to
Claims made prior to the Survival Date in the event that it is determined that
such Claims arise out of or from or are based upon (i) the inaccuracy in any
material respect of any representation or warranty contained in Article III
made
by the Sellers; or (ii) the non-performance by the Sellers in any material
respect of any covenant, agreement or obligation to be performed by the Sellers
under this Agreement;
9.3. Indemnification
by Buyer.
Provided that the transaction contemplated by this Agreement is closed, the
Buyer hereby agrees to indemnify, defend and hold harmless the Sellers from
and
against all Claims arising out of or from or based upon (i) the inaccuracy
in
any material respect of any representation or warranty contained in Article
V by
the Buyer; or (ii) the non-performance by the Buyer in any material respect
of
any covenant, agreement or obligation to be performed by the Buyer under this
Agreement.
9.4. Defense
of Claims.
Whenever any Claim shall arise for indemnification hereunder, the party entitled
to indemnification (the "Indemnitee") shall notify the indemnifying party (the
"Indemnitor") in writing within 30 days after the Indemnitee has actual
knowledge that it is entitled to indemnification of such Claim constituting
the
basis for such Claim (the "Notice of Claim"). The Notice of Claim shall specify
all facts known to the Indemnitee giving rise to such indemnification claim
and
the amount or an estimate of the amount of the liability arising
therefrom.
If
the
facts giving rise to any such indemnification shall involve any actual,
threatened or possible claim or demand by any person against the Indemnitee,
the
Indemnitor shall be entitled (without prejudice to the right of the Indemnitee
to participate at its expense through co-counsel of its own choosing) to contest
or defend such claim at his expense and through counsel of his own choosing
if
he gives written notice of his intention to do so to the Indemnitee within
10
days after receipt of the Notice of Claim; provided that Indemnitor diligently
prosecutes or defends such claim.
26
The
Indemnitee shall not settle any claim which would give rise to liability on
the
part of the Indemnitor under the indemnity contained in this Section without
the
written consent of the Indemnitor, which consent shall not unreasonably be
withheld. If a firm offer is made to settle a claim or litigation defended
by
the Indemnitee and the Indemnitor refuses to accept such offer within 20 days
after receipt of written notice from the Indemnitee of the terms of such offer,
then, in such event, the Indemnitee shall continue to contest or defend such
claim and shall be indemnified pursuant to the terms hereof. Provided, however,
that in the event the Indemnitor refuses to accept such offer to settle a claim
as described above and the Indemnitee continues to contest or defend such claim,
the indemnification provided for herein shall be deemed to include the value
of
management's time spent in connection with the defense of such claim. If a
firm
offer is made to settle a claim or litigation and the Indemnitor notifies the
Indemnitee in writing that the Indemnitor desires to accept and agree to such
settlement, but the Indemnitee elects not to accept or agree to it, the
Indemnitee may continue to contest or defend such claim or litigation and,
in
such event, the total maximum liability of the Indemnitor to indemnify or
otherwise reimburse the Indemnitee hereunder with respect to such claim or
litigation shall be limited to and shall not exceed the amount of such
settlement offer, plus reasonable out-of-pocket costs and expenses (including
reasonable attorneys' fees and disbursements) to the date of notice that the
Indemnitor desires to accept such settlement.
Notwithstanding
any provision of this Agreement to the contrary, no claim for indemnification
pursuant to this Article 9 by the Indemnitee (other than a claim arising under
except to the extent any Claim exceeds, in the aggregate. the sum of
$10,000.
Notwithstanding
any provision of this Agreement to the contrary, neither Sellers' nor Buyer's
maximum liability for indemnification shall exceed the Purchase
Price.
ARTICLE
X
Covenants.
A. The
Sellers and the Corporation hereby covenant and agree:
10.1. Further
Assurances.
The
Sellers’ Agent and Sellers hereby agrees that, from time to time at the
reasonable request of the Buyer and without further consideration, they shall
execute and deliver such additional instruments and take such other action
as
the Buyer or may reasonably require to convey, assign, transfer and deliver
the
Stock and otherwise to carry out the terms of this Agreement.
10.2. Access
to the Corporation: Confidentiality.
(a) Subsequent
to the date hereof and prior to the Closing Date, the Sellers’ Agent will
continue to give to the Buyer, their counsel, accountants, and other
representatives, full and free access to all properties, books, contracts,
commitments and records of the Corporation so that the Buyer may have full
opportunity to make such investigation as they shall desire.
27
(b) From
and
after the date of this Agreement until the Closing or the termination of this
Agreement, the Sellers’ Agent, Exchange Agent, Sellers and the Corporation and
their representatives will maintain the confidentiality of all documents and
information of a confidential nature disclosed to the other party in the course
of their negotiations and the Buyer's due diligence review and will in no event
use any confidential information for any purpose other than for the evaluation
of the transactions contemplated herein and in the event of termination of
this
Agreement will destroy all copies of documentation which each party may have
delivered to the other party and will not use any confidential information
from
the Buyer for their own benefit.
10.3. Conduct
of Business Pending Closing.
From
the date of this Agreement to the Closing Date, except as expressly disclosed
in
the Schedules to this Agreement, the Corporation shall conduct its operations
as
engaged in at the date of this Agreement according to its ordinary course of
business, shall maintain its records and books of account in a manner that
fairly and currently reflects its financial condition and results of operations
and shall not engage in any transactions other than as contemplated by this
Agreement.
10.4. Closing
Documents.
Provided that the Buyer has fully performed its obligations and Sellers'
conditions have been satisfied, the Sellers’ Agent and the Corporation shall
execute and deliver all instruments and documents required as a condition
precedent to the Closing and take all action required to carry out the terms
of
this Agreement and to consummate the transactions contemplated
hereby.
B. The
Buyer
hereby covenants and warrants as follows:
10.5. Closing
Documents.
The
Buyer shall execute and deliver all instruments and documents required as a
condition precedent to Closing and take all actions required to carry out the
terms of this Agreement and to consummate the transactions contemplated
hereby.
10.6. Noninterference.
The
Buyer shall not take or omit to take any action that (i) if taken or omitted
on
or before the date of this Agreement, would make untrue any of the
representations and warranties contained in Article V of this Agreement, or
(ii)
would interfere with the Buyer's ability to perform or would prevent performance
of any of its obligations under this Agreement or any of the other agreements
or
instruments provided for herein.
10.7. Confidentiality.
From
and after the date of this Agreement until the Closing or the termination of
this Agreement, the Buyer and its representatives will maintain the
confidentiality of all documents and information of a confidential nature
disclosed by the Sellers in the course of their negotiations and the Buyer's
due
diligence review, and will in no event use any confidential information for
any
purpose other than for the evaluation of the transactions contemplated herein
and the financing of this transaction. In the event this Agreement is
terminated, the Buyer will destroy all copies of documentation which they
received from Sellers and will not use any confidential information for their
own benefit.
10.8. Public
Announcements.
Buyer
and the Corporation will consult with each other before issuing, and provide
each other the opportunity to review and comment upon, any press release or
other public statements with respect to the Agreement and the YI Acquisition
and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable Law, court process
or by obligations pursuant to any listing agreement with any national securities
exchange.
28
10.9. Fees
and Expenses.
All
fees and expenses incurred in connection with this Agreement shall be paid
by
the party incurring such fees or expenses, whether or not this Agreement is
consummated.
10.10. Exclusivity.
The
Corporation shall not (i) solicit, initiate, or encourage the submission of
any
proposal or offer from any person relating to the acquisition of any capital
stock or other voting securities of the Corporation, or any assets of the
Corporation (including any acquisition structured as a merger, consolidation,
share exchange or other business combination), (ii) participate in any
discussions or negotiations regarding, furnish any information with respect
to,
assist or participate in, or facilitate in any other manner any effort or
attempt by any person to do or seek any of the foregoing, or (iii) take any
other action that is inconsistent with the YI Acquisition and that has the
effect of avoiding the Closing contemplated hereby. The Corporation shall notify
the Buyer immediately if any person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
10.11. Filing
of Super 8-K.
Buyer
shall, and the Sellers shall cause the Buyer to, file, within four business
days
of the Closing Date, a current report on Super Form 8-K with the SEC disclosing
the terms of this Agreement and other requisite disclosure regarding the YI
Acquisition and including the requisite audited consolidated financial
statements of the Corporation and the requisite Form 10 disclosure regarding
the
Corporation.
ARTICLE
XI
Termination
This
Agreement may be terminated at any time prior to the Closing Date:
(a) By
mutual
written consent of the Sellers’ Agent, Exchange Agent, the Corporation and the
Buyer properly authorized by their respective Boards of Directors.
(b) By
the
Buyer, the Corporation, the Exchange Agent or the Sellers’ Agent if this
transaction is not completed by November 30, 2008 unless extended by mutual
consent.
(c) By
the
Buyer if since June 30, 2008, there has been a material adverse change in the
condition (financial or otherwise), business, assets, liabilities properties,
results of operations, or earnings of the Corporation.
ARTICLE
XII
Objections
12.1. At
the
Closing, in addition to fulfilling the conditions to closing appearing in this
Agreement. the Buyer shall deliver to the Exchange Agent the Purchase Price
as
more specifically described in Article I hereof, together with all other
documents and agreements required to be delivered by it hereunder.
29
12.2. At
the
Closing, in addition to fulfilling the conditions to closing appearing herein,
the Sellers’ Agent shall deliver to the Buyer:
(a) stock
certificate(s) representing the Stock free of all liens, claims and encumbrances
properly endorsed, or with stock powers executed in blank, and with any and
all
transfer, stamp or similar taxes upon the transfer of the shares to the Buyer
paid in full by the Sellers (or the Sellers’ Agent).
(b) all
original minute books, stock books, stock transfer ledger, canceled stock
certificates, corporate seals and financial records and statements of the
Corporation.
ARTICLE
XIII
Miscellaneous
Provisions
13.1. Amendment
and Modification.
This
Agreement may be amended, modified and supplemented by written agreement of
Buyer, the Corporation, and the Sellers’ Agent any time prior to the Closing
with respect to any terms contained herein.
13.2. Waiver
of Compliance.
Any
failure of the Sellers or Sellers’ Agent and the Corporation on the one hand, or
Buyer, on the other, to comply with any obligation, covenant, agreement or
condition herein may be expressly waived in writing by the President or a Vice
President of any such party, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
13.3. Notices.
All
notices or other communications required or permitted to be given pursuant
to
this Agreement shall be in writing and shall be considered as duly given on
(a)
the date of delivery, if delivered in person or if sent by telecopier and also
as provided in clause (b), or (b) two days after mailing, if sent by Federal
Express or other similar overnight delivery service, or (c) three days after
mailing if mailed from within the continental Untied States by registered or
certified mail, return receipt requested, to the party entitled to receive
the
same, at the address provided in this Section 13.3.
Any
party
hereto may change its address by giving notice to the other stating its new
address, all in the manner provided herein. Such newly designated address shall
thereafter be such party’s address for the purpose of all notices or other
communications required or permitted to be given pursuant to this
Agreement.
If
to the
Corporation, Sellers or Sellers’ Agent, to:
Yatinoo
Inc.
Hacienda
San Xxxxxx
c/
San
Xxxxxx, Villa 23
E-29604
Las
Xxxxxx, Xxxxxxxx, Spain
Attention:
Khaled Akid
Fax:
__________________
30
with
a
copy to:
Xxxxxxxx
& Xxxxxxxxx
Xxxxxxxxxxxxx
00
X-00000
Xxxxxxxxx, Xxxxxxx
Attn:
Xxxx X. Xxxxxxxx
Fax:
0000(0)000000000-00
If
to
Buyer:
00
Xxxxx
Xxxxxx
Xxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxxx, President
Fax:
(000)000-0000
Xxxxxxxx
Xxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxxx, Esq.
Fax:
000-000-0000
13.4. Assignment.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without
the
prior written consent of the other parties.
13.5. Sellers’
and Subscribers’ Agent.
By the
execution and delivery of this Agreement, including counterparts hereof, each
Seller and Subscriber (collectively, the “Sellers”) hereby irrevocably
constitutes and appoints Khaled Akid as the true and lawful agent and
attorneys-in-fact (the “Sellers’
Agent”)
of
such Seller with full powers of substitution to act in the name, place and
stead
of such Seller with respect to the performance on behalf of such Seller under
the terms and provisions of this Agreement, as the same may be from time to
time
amended, and to do or refrain from doing all such further acts and things,
and
to execute all such documents on such Sellers’ behalf, as the Sellers’ Agent
shall deem necessary or appropriate in connection with any of the transactions
contemplated under this Agreement, including:
(a) to
receive on behalf of the Sellers all payments made by the Buyer to the Sellers
under this Agreement;
(b) to
act
for the Sellers with respect to all indemnification matters referred to in
this
Agreement, including the right to compromise on behalf of the Sellers any
indemnification claim made by or against the Sellers;
(c) to
terminate, amend, or waive any provision of this Agreement; provided
that any
such action, if material to the rights and obligations of the Sellers in the
reasonable judgment of the Sellers’ Agent, shall be taken in the same manner
with respect to all Sellers, unless otherwise agreed by each Seller who is
subject to any disparate treatment of a potentially adverse nature;
31
(d) to
employ
and obtain the advice of legal counsel, accountants and other professional
advisors as the Sellers’ Agent, in his sole discretion, deems necessary or
advisable in the performance of his duties as Sellers’ Agent and to rely on
their advice and counsel;
(e) to
incur
and pay out of the Purchase Price expenses, including fees of brokers, attorneys
and accountants incurred pursuant to the transactions contemplated hereby,
and
any other fees and expenses allocable or in any way relating to such transaction
or any indemnification claim, whether incurred prior or subsequent to
Closing;
(f) to
do or
refrain from doing any further act or deed on behalf of the Sellers which the
Sellers’ Agent deems necessary or appropriate in his sole discretion relating to
the subject matter of this Agreement as fully and completely as any of the
Sellers could do if personally present and acting.
(g) The
appointment of the Sellers’ Agent shall be deemed coupled with an interest and
shall be irrevocable, and any other person may conclusively and absolutely
rely,
without inquiry, upon any actions of the Sellers’ Agent as the acts of the
Sellers in all matters referred to in this Agreement. Each of the Sellers hereby
ratifies and confirms all that the Sellers’ Agent shall do or cause to be done
by virtue of such Sellers’ Agent’ appointment as Sellers’ Agent of such Seller.
The Sellers’ Agent shall act for the Sellers on all of the matters set forth in
this Agreement in the manner the Sellers’ Agent believes to be in the best
interest of the Sellers, but the Sellers’ Agent shall not be responsible to any
Sellers for any loss or damage any Sellers may suffer by reason of the
performance by the Sellers’ Agent of such Sellers’ Agent’s duties under this
Agreement, other than loss or damage arising from willful misconduct in the
performance of such Sellers’ Agent’s duties under this Agreement.
(h) Each
of
the Sellers hereby expressly acknowledges and agrees that the Sellers’ Agent is
authorized to act on behalf of such Seller notwithstanding any dispute or
disagreement among the Sellers, and that any person shall be entitled to rely
on
any and all action taken by the Sellers’ Agent under this Agreement without
liability to, or obligation to inquire of, any of the Sellers. If the Sellers’
Agent resigns or ceases to function in such capacity for any reason whatsoever,
then the successor Sellers’ Agent shall be the person which the Sellers with a
majority of the Buyer’s Shares appoint; provided,
however,
that if
for any reason no successor has been appointed within thirty (30) days, then
any
Seller shall have the right to petition a court of competent jurisdiction for
appointment of a successor Sellers’ Agent. The Sellers do hereby jointly and
severally agree to indemnify and hold the Sellers’ Agent harmless from and
against any and all liability, loss, cost, damage or expense (including without
limitation attorneys’ fees) reasonably incurred or suffered as a result of the
performance of such Sellers’ Agent’s duties under this Agreement except for any
such liability arising out of the willful misconduct of such Sellers’
Agent.
32
13.6. Independent
Nature of Sellers’ Obligations and Rights.
The
obligations of each Seller under this Agreement are several and not joint with
the obligations of any other Seller, and no Seller shall be responsible in
any
way for the performance of the obligations of any other Seller under this
Agreement. The decision of each Seller to acquire Shares pursuant to this
Agreement has been made by such Seller independently of any other Seller.
Nothing contained herein, and no action taken by any Seller pursuant thereto,
shall be deemed to constitute the Sellers as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Sellers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated herein. Each Seller acknowledges
that no other Seller has acted as agent for such Seller in connection with
making its investment hereunder and that no Stockholder will be acting as agent
of such Seller in connection with monitoring its investment in the Shares or
enforcing its rights under this Agreement. Each Seller shall be entitled to
independently protect and enforce its rights, including without limitation
the
rights arising out of this Agreement, and it shall not be necessary for any
other Seller to be joined as an additional party in any proceeding for such
purpose. The Buyer hereby acknowledges that each of the Sellers has been
provided with this same Agreement for the purpose of closing a transaction
with
multiple Sellers and not because it was required or requested to do so by any
Stockholder.
13.7. Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule or Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the YI Acquisition contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible in an acceptable manner to the end that the YI Acquisition contemplated
hereby is fulfilled to the extent possible.
13.8. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to any otherwise applicable conflict of laws
principles. Any action arising out of or relating to this Agreement shall be
commenced solely in a state or federal court situated in New York, New
York.
13.9. Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimiles of any such counterpart shall have
the
same force and effect as an original signature.
13.10. Headings.
The
headings of the Sections and Articles of this Agreement are inserted for
convenience only and shall not constitute a part hereof or affect in any way
the
meaning or interpretation of this Agreement.
13.11. Assignment.
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the parties without the prior written consent of the other
parties. Any purported assignment without such consent shall be void. Subject
to
the preceding sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
33
13.12. Entire
Agreement.
This
Agreement, including the Exhibits and Corporation’s Disclosure Schedule hereto,
and all documents required to be delivered hereunder and any other documents
and
certificates delivered pursuant to the terms hereof or thereof, set forth the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein, and supersede all prior negotiations,
understandings, discussions, agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any
officer, employee or representative of any party hereto whether written or
oral.
ARTICLE
XIV
Definitions
For
all
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
14.1. The
term
“Affiliate” has the meaning prescribed by Rule 12b-2 of the regulations
promulgated pursuant to the Securities Exchange Act of 1934, as
amended.
14.2. “Applicable
Contract” means any Contract (i) under which the Corporation has any
rights, (ii) under which the Corporation has or is subject to any obligation
or
liability or (iii) by which the Corporation or any of the Assets are bound,
including each amendment, supplement and modification (whether oral or written)
in respect of any of the foregoing.
14.3. “Assets”
means all of the assets, property, goodwill and business of every kind, nature
and description, real, personal or mixed, tangible or intangible, wherever
situated, whether or not reflected on the Balance Sheet, owned or leased by
the
Corporation and its Subsidiaries, including, without limitation, all of the
Intellectual Property Assets and all rights under Applicable Contracts
constituting or held or used or useful in connection with, or related to, the
Business.
14.4. “Balance
Sheet” shall mean the combined balance sheet of the Corporation and its
Subsidiaries as of June 30, 2008 included in the Financial
Statements.
14.5. “Business”
shall mean the business conducted by the Corporation and its Subsidiaries as
of
the date hereof.
14.6. “Code”
means the Internal Revenue Code of 1986, as amended, and any successor
thereto.
14.7. “Contract”
means any agreement, contract, lease, license, sublicense, or other undertaking
(whether written or oral and whether express or implied) that is legally
binding.
14.8. “Damages”
means any loss, liability, obligation, cost of mitigation, claim, damage,
expense, diminution in value (including costs of investigation, defense and
settlement and reasonable attorneys’ fees), whether or not involving a
third-party claim.
14.9. “Encumbrance”
means any charge, claim, community property interest, condition, equitable
interest, mortgage, lien, option, pledge, security interest, right of first
refusal, whether arising by law, by agreement or otherwise.
34
14.10. “GAAP”
means generally accepted accounting principles as from time to time in
effect.
14.11. “Governmental
Authorization” means any approval, consent, license, permit, order, consent
order, consent decree, waiver or other authorization issued, granted, given
or
otherwise made available or applied for by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
14.12. “Governmental
Body” means any (i) nation, state, county, city, town, village, district or
other jurisdiction of any nature, (ii) federal, state, local, municipal, foreign
or other government, (iii) governmental or quasi-governmental authority of
any
nature (including any governmental agency, branch, department, official or
entity and any court or other tribunal), (iv) multi-national organization
or body or (v) federal, state, local, municipal, foreign or other body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power of any
nature.
14.13. “Intellectual
Property Assets” means all Marks, Patents, Copyrights and Trade
Secrets.
14.14. “Knowledge”
or “Know” means, in the case of an individual, such Person’s actual knowledge,
and in the case of the Sellers, actual knowledge after discussion with the
officer or employee of the Corporation and its Subsidiaries who is primarily
responsible for the applicable subject and failing such discussion, the actual
knowledge of such officer or employee. A Person (other than an individual)
will
be deemed to have the actual knowledge of any officer, director or general
partner of such Person.
14.15. “Legal
Requirement” means any federal, state, local, municipal, foreign, international,
multinational or other administrative order, consent order, judgment,
injunction, constitution, law, ordinance, regulation, policy, statute or
treaty.
14.16. “Marks”
means the name “Yatinoo” and all business names, tradenames, registered and
unregistered federal and state trademarks, service marks, slogans, trade dress,
logos and all applications to register the same, domestic and foreign, that
are
owned, licensed, used or held for use by the Corporation and its
Subsidiaries.
14.17. “Material
Adverse Change” means any occurrence, circumstance or condition (excluding
general economic trends or conditions and trends or conditions affecting the
industry in which the Corporation and the Subsidiaries operate) which
individually or in the aggregate, together with all other occurrences,
circumstances and conditions, has resulted in, or is reasonably likely to result
in, a material adverse change in the results of operations financial condition
or prospects of the Corporation and the Subsidiaries taken as a
whole.
14.18. “Material
Contracts” means the Contracts identified or required to be identified in
Section 4.12 of Corporation’s Disclosure Schedule.
14.19. “Order”
means any award, decision, decree, injunction, judgment, order, consent order,
ruling, or verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Body.
35
14.20. “Ordinary
Course of Business” means an action taken by a Person only if such action is
taken in the ordinary course of the normal operations of such Person consistent
with the past practices of such Person.
14.21. “Organizational
Documents” means each of the following as currently in effect, as applicable:
(i) the charter, memorandum, articles or certificate of incorporation and
the by-laws of a corporation, (ii) the partnership agreement and any
statement of partnership of a general partnership, (iii) the limited
partnership agreement and the certificate of limited partnership or formation
of
a limited partnership, (iv) the certificate of formation or articles of
organization and operating agreement of a limited liability company, (v) any
similar document adopted or filed in connection with the creation, formation
or
organization of a Person and (vi) any amendment to any of the
foregoing.
14.22. “Patents”
means all patents, patent applications, provisional patent applications,
divisionals, continuations, continuations-in-part, reissues, reexaminations,
extensions, invention registrations, patentable invention disclosures and
inventions and discoveries that may be patentable, domestic and foreign, that
are owned, licensed, used or held for use by the Companies and their
Subsidiaries.
14.23. “Permitted
Encumbrances” means (i) matters set forth in Section 4.10 of Corporation’s
Disclosure Schedule; (ii) as disclosed in the Financial Statements described
in
Section 4.5; (iii) liens for taxes, assessments and other governmental charges
not yet due and payable or, if due, (A) not delinquent or (B) being contested
in
good faith by appropriate proceedings; (iv) mechanics’, workmen’s, repairmen’s,
warehousemen’s, carriers’ or other like liens arising or incurred in the
Ordinary Course of Business if the underlying obligations are not more than
30
days past due or are being contested in good faith; and (v) liens or
title-retention arrangements arising under original purchase price conditional
sales contracts and equipment leases with third parties entered into in the
Ordinary Course of Business.
14.24. “Person”
means any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union or other entity or
Governmental Body.
14.25. “Corporation’s
Disclosure Schedule” means the disclosure schedules delivered by the Corporation
to Buyer concurrently with the execution and delivery of this
Agreement.
14.26. “Sellers’
Agent” shall have the meaning ascribed to it in Section 13.5.
14.27. “Software”
means any code, both in source and object form, including all interfaces,
navigational devices, menus, menu structures or arrangements, icons and other
instructions directing hardware to perform a function, including computer
software programs, databases and all documentation relating thereto, that are
owned by the Corporation or its Subsidiaries and/or used by the Corporation
or
its Subsidiaries.
14.28. “Subsidiary”
means, as to any Person, (i) any corporation more than 50% of whose stock of
any
class or classes having by the terms thereof ordinary voting power to elect
a
majority of the directors of such corporation (irrespective of whether or not
at
the time stock of any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the
time
owned by such Person and/or one or more Subsidiaries of such Person and (ii)
any
partnership, limited liability company, association, joint venture or other
entity in which such Person and/or one or more Subsidiaries of such Person
has
more than a 50% equity interest at the time.
36
14.29. “Tax”
means all forms of taxation wherever created or imposed, whether any federal,
state, local or foreign income tax; gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code Sec. 59A), customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value-added, alternative or add-on minimum or estimated
tax; or other tax of any kind whatsoever, including any interest, penalty or
addition thereto, whether disputed or not.
14.30. “Tax
Audit” means any audit or assessment of Taxes or other examination by any
Governmental Body or Proceeding relating to Taxes.
14.31. “Tax
Return” means any return (including any information or amended return), report,
statement, schedule, notice, form or other document or information filed with,
delivered or submitted to, or required to be filed with, delivered or submitted
to, any Governmental Body or Person in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.
14.32. “Trade
Secrets” means all technology, know-how, trade secrets, confidential
information, proprietary processes and formulas, customer lists, Software,
technical information, data, process technology, plans, drawings and blue prints
owned, used, held for use or licensed by the Companies and their Subsidiaries
as
licensees or licensors in or on behalf of the Business.
14.33. “Unknown
Liabilities” means each and every liability or obligation of the Corporation and
its Subsidiaries (whether accrued or contingent) arising out of any event,
occurrence or condition prior to the Closing, but only to the extent such
liability or obligation (A) is attributable to the period prior to the
Closing Date and (B) is not (ii) disclosed in the representations and
warranties of the Sellers, the Schedules hereto or Corporation’s Disclosure
Schedule.
37
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be affixed hereto, all as
of
the day and year first above written.
|
Buyer:
|
||
|
STONE
CONSULTING SERVICES, INC.
|
||
|
By:
|
/s/ Xxxxxxx Xxxxx
|
|
|
Name:
Xxxxxxx Xxxxx
|
||
|
Title:
Chief Executive Officer
|
||
|
CORPORATION:
Yatinoo
International, X.X.
|
XXXXXXX’
AGENT AND EXCHANGE
AGENT:
|
||||
|
|
|||||
|
/s/ Khaled Akid
|
|||||
|
By:
|
/s/ Khaled Akid
|
Khaled
Akid
|
|||
|
Name:
Khaled Akid
|
|
||||
|
Title
President and Chief Executive
Officer
|
|||||
38
Schedule
A
|
Name
of Subscriber:
|
Number
of Shares
of
Buyer Post
Forward
Split
Restricted
Common
Stock
to be Issued:
|
|||
|
Xxxxx
Xxxx
|
300,000
|
|||
|
Xxxx
Xxxxxxx
|
1,000,000
|
|||
|
Xxxxx
Xxxxx
|
1,000,000
|
|||
|
Xxxxxx
Xxxx
|
200,000
|
|||
|
Hellas
Management
|
1,000,000
|
|||
|
Capa
Partners Ltd.
|
100,000
|
|||
|
Xxxxxxx
Xxxxxx
|
2,300,000
|
|||
|
Xxxxxxx
X. Xxxxxx
|
200,000
|
|||
|
Xxxxxxx
Xxxxxx
|
500,000
|
|||
|
Xxxxxx
Xxxxxxx
|
400,000
|
|||
|
Khaled
Akid
|
6,130,000
|
|||
|
Croesus
Capital Group
|
133,333
|
|||
|
Xxxxx
Capital Group
|
133,333
|
|||
|
Solon
Capital Group
|
133,334
|
|||
|
Xxx
Xxxxxx
|
120,000
|
|||
|
Xxxxxxx
Trading Ltd.
|
250,000
|
|||
|
Xxxxxxx
Xxxxxxxxxxxx
|
250,000
|
|||
|
Xxxxxxxx
Xxxxxxx
|
250,000
|
|||
|
TOTAL:
|
14,400,000
|
|||
39
Schedule
B
|
Name of Seller:
|
Number (%) of
the Corporation’s
Shares
|
|||
|
Khaled
Akid
|
99,097
(99.097
|
)%
|
||
|
Xxxxxxx
Xxxxxx
|
903
(0.903
|
)%
|
||
40
EXHIBIT
A
Form
of Joy Terrace Capital Promissory Note
41
EXHIBIT
B
Form
of Xxxxxxxxxxxx Guaranty Agreement
42
EXHIBIT
C
Form
of Assumption of Assets
and
Liabilities Agreement
43
EXHIBIT
D
Form
of Secretary’s
Certificate
of Buyer
44
