JOINDER AGREEMENT
This
Joinder Agreement (the “Joinder
Agreement”)
is
made as of August 9, 2007 by the undersigned, Jpak Group, Inc., a Nevada
corporation, and delivered pursuant to Section 8.10 of the Note Purchase
Agreement, dated as of May 17, 2007 (the “Note
Purchase Agreement”),
by
and among Jpak
Group Co., Ltd., a company organized under the laws of the Cayman Islands (the
“Company”),
Grand
International Industrial Limited, a company organized under the laws of Hong
Kong (“Grand
International”),
and
each investor identified on the signature pages thereto (individually, an
“Investor”
and,
collectively, the “Investors”),
and is
made in consideration of and pursuant to such Note Purchase Agreement. All
capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Note Purchase Agreement.
In
consideration of the terms and conditions in the Note Purchase Agreement, the
undersigned, by executing and delivering this Joinder Agreement, hereby agrees
that by executing this Joinder Agreement it (i) is a party to the Note Purchase
Agreement, (ii) assumes all of the obligations of the Company set forth in
the
Note Purchase Agreement and (iii) agrees to be bound by and to observe all
of
the terms and conditions of the Note Purchase Agreement. Reference is hereby
made to the Note Purchase Agreement for the precise terms of the obligations
of
Company provided therein. Without in any way limiting the foregoing, the
undersigned hereby represents and warrants to the Investors that each of the
representations and warranties set forth in Section 4 of the Note Purchase
Agreement are, as of the date hereof, true and correct as to the undersigned
(unless the context otherwise provides).
The
undersigned acknowledges receiving and reviewing a copy of the Note Purchase
Agreement and authorizes the parties to the Note Purchase Agreement to attach
this counterpart signature page to the Note Purchase Agreement.
In
addition to the terms and conditions set forth in the Note Purchase Agreement,
the undersigned hereby further agrees as follows:
1. Representations
and Warranties.
The
undersigned hereby represents and warrants as follows:
1.1 Authorization;
Enforcement.
The
undersigned has the requisite corporate power and authority to enter into,
where
applicable, and perform (i) this Joinder Agreement, (ii) the Registration Rights
Agreement in the form attached hereto as Exhibit
A,
(iii)
the Lock-Up Agreement in the form attached hereto as Exhibit
B,
(iv)
the Securities Escrow Agreement in the form attached hereto as Exhibit
C,
(v) the
Certificate of Designation of the Relative Rights and Preferences of the Series
A Convertible Preferred Stock in the form attached hereto as Exhibit
D
(the
“Series
A Designation”),
(vi)
the Certificate of Designation of the Relative Rights and Preferences of the
Series B Convertible Preferred Stock to be issued upon exercise of the Series
J
Warrant in the form attached hereto as Exhibit
E
(the
“Series
B Designation”),
(vii)
the Series A Warrant in the form attached hereto as Exhibit
F,
(viii)
the Series B Warrant in the form attached hereto as Exhibit
G,
(ix)
the Series C Warrant to be issued upon exercise of the Series J Warrant in
the
form attached hereto as Exhibit
H,
(x) the
Series D Warrant to be issued upon exercise of the Series J Warrant in the
form
attached hereto as Exhibit
I
and (xi)
the Series J Warrant in the form attached hereto as Exhibit
J
(collectively, items (vii), (viii) and (xi) shall be referred to as the
“Warrants”,
and
items (i), (ii), (iii), (iv), (v), (vii), (viii) and (xi) shall be referred
to
as the “Transaction
Documents”)
and to
issue (a) the shares
of
Series A Convertible Preferred Stock (and the shares of common stock issuable
upon conversion thereof), (b) the shares of Series B Convertible Preferred
Stock
(and the shares of common stock issuable upon conversion thereof) upon
exercise of the Series J Warrant,
(c) the
Series A Warrant (and
the
securities issuable upon exercise thereof) and
the
Series B Warrant (and
the
securities issuable upon exercise thereof), and (d) the Series C Warrant (and
the securities issuable upon exercise thereof) upon
exercise of the Series J Warrant and the Series
D
Warrant (and the securities issuable upon exercise thereof) upon
exercise of the Series J Warrant, all in
accordance with the terms of the Note Purchase Agreement. The execution,
delivery and performance of the Transaction Documents by the undersigned and
the
consummation by it of the transactions contemplated hereby and thereby have
been
duly and validly authorized by all necessary corporate action, and no further
consent or authorization of the undersigned or its Board of Directors or
stockholders is required. This Joinder Agreement has been duly executed and
delivered by the undersigned. The other Transaction Documents will have been
duly executed and delivered by the undersigned at the closing of the
transactions contemplated by the Transaction Documents (the “Closing”).
Each
of the Transaction Documents constitutes, or shall constitute when executed
and
delivered, a valid and binding obligation of the undersigned enforceable against
the undersigned in accordance with its terms, except as such enforceability
may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor’s rights and remedies or by
other equitable principles of general application.
1.2 Capitalization.
The
authorized capital stock of the undersigned and the shares thereof currently
issued and outstanding as of the date hereof are set forth on Schedule
1.2
hereto.
All of the outstanding shares of the Common Stock and the Series A Convertible
Preferred Stock have been duly and validly authorized. Except as set forth
on
Schedule
1.2
hereto,
no shares of Common Stock are entitled to preemptive rights or registration
rights and there are no outstanding options, warrants, scrip, rights to
subscribe to, call or commitments of any character whatsoever relating to,
or
securities or rights convertible into, any shares of capital stock of the
undersigned. Except as provided in the Transaction Documents, there are no
contracts, commitments, understandings, or arrangements by which the undersigned
is or may become bound to issue additional shares of the capital stock of the
undersigned or options, securities or rights convertible into shares of capital
stock of the undersigned. Except as set forth on Schedule
1.2
or
otherwise provided in the Transaction Documents, the undersigned is not a party
to any agreement granting registration or anti-dilution rights to any person
with respect to any of its equity or debt securities. Except as provided in
the
Transaction Documents, the undersigned is not a party to, and it has no
knowledge of, any agreement restricting the voting or transfer of any shares
of
the capital stock of the undersigned. The undersigned has furnished or made
available to the Investors true and correct copies of the undersigned’s Articles
of Incorporation as in effect on the date hereof (the “Articles”),
and
the undersigned’s Bylaws as in effect on the date hereof (the “Bylaws”).
For
the purposes of this Joinder Agreement, “Material
Adverse Effect”
means
any material adverse effect on the business, operations, properties, prospects,
or financial condition of the undersigned and its subsidiaries and/or any
condition, circumstance, or situation that would prohibit or otherwise
materially interfere with the ability of the undersigned to perform any of
its
obligations under this Joinder Agreement in any material respect.
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1.3 Issuance
of Shares.
The
Series A Convertible Preferred Stock, the Series A Warrant, the Series B Warrant
and the Series J Warrant to be issued at the Closing have been duly authorized
by all necessary corporate action and the Series A Convertible Preferred Stock,
when paid for or issued in accordance with the terms hereof, and the Series
B
Convertible Preferred Stock (together with the Series A Convertible Preferred
Stock, the “Preferred
Shares”)
when
issued upon exercise of the Series J Warrant, shall be validly issued and
outstanding, fully paid and nonassessable and entitled to the rights and
preferences set forth in the Series A Designation and Series B Designation,
as
applicable. When the shares of Common Stock issuable upon conversion of the
Preferred Shares and upon exercise of the Series A Warrants, Series B Warrants,
Series C Warrants and Series D Warrants are issued in accordance with the terms
of the Series A Designation and Series B Designation, as applicable, and the
Series A Warrants, Series B Warrants, Series C Warrants and Series D Warrants,
respectively, such shares will be duly authorized by all necessary corporate
action and validly issued and outstanding, fully paid and nonassessable, and
the
holders shall be entitled to all rights accorded to a holders of such shares.
1.4 No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the
undersigned, the performance by the undersigned of its obligations under the
Series
A
Designation and Series B Designation, as applicable,
and the
consummation by the undersigned of the transactions contemplated herein and
therein do not and will not (i) violate any provision of the Articles or Bylaws,
(ii) conflict with, or constitute a default (or an event which with notice
or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the undersigned is a party or
by
which it or its properties or assets are bound, (iii) create or impose a lien,
mortgage, security interest, charge or encumbrance of any nature on any property
of the undersigned under any agreement or any commitment to which the
undersigned is a party or by which the undersigned is bound or by which any
of
its respective properties or assets are bound, or (iv) result in a violation
of
any federal, state, local or foreign statute, rule, regulation, order, judgment
or decree (including Federal and state securities laws and regulations)
applicable to the undersigned or any of its subsidiaries or by which any
property or asset of the undersigned or any of its subsidiaries are bound or
affected, except, in all cases other than violations pursuant to clauses (i)
through (iv) above, for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in
the
aggregate, have a Material Adverse Effect. The business of the undersigned
and
its subsidiaries is not being conducted in violation of any laws, ordinances
or
regulations of any governmental entity, except for possible violations which
singularly or in the aggregate do not and will not have a Material Adverse
Effect. The undersigned is not required under Federal, state or local law,
rule
or regulation to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for
it to
execute, deliver or perform any of its obligations under the Transaction
Documents, or issue and sell the Preferred Shares, the Warrants, and the
securities issuable upon conversion or exercise thereof, in accordance with
the
terms hereof or thereof (other than any filings which may be required to be
made
by the undersigned with the Securities and Exchange Commission or state
securities administrators subsequent to the Closing, any registration statement
which may be filed pursuant to the Transaction Documents, and the Series
A
Designation and Series B Designation);
provided
that,
for purposes of the representation made in this sentence, the undersigned is
assuming and relying upon the accuracy of the relevant representations and
agreements of the Investors in the Note Purchase Agreement.
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1.5 Investment
Company Act Status.
The
undersigned is not, and as a result of and immediately upon the Closing will
not
be, an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as
amended.
1.6 Dilutive
Effect.
The
undersigned understands and acknowledges that its obligation to issue shares
of
Common Stock upon conversion of the Series A Convertible Preferred Stock and
Series B Convertible Preferred Stock (assuming the Series J Warrant is exercised
in accordance with its terms) in accordance with the Transaction Documents
and
its obligation to issue the shares of Common Stock upon the exercise of
the
Series A Warrants, Series B Warrants, Series C Warrants and Series D
Warrants
in
accordance with this Joinder Agreement and the
Series A Warrants, Series B Warrants, Series C Warrants and Series D Warrants,
as applicable,
is, in
each case, absolute and unconditional regardless of the dilutive effect that
such issuance may have on the ownership interest of other stockholders of the
undersigned.
1.7 Xxxxxxxx-Xxxxx
Act.
The
undersigned is in compliance with the provisions of the Xxxxxxxx-Xxxxx Act
of
2002 (the “Xxxxxxxx-Xxxxx
Act”),
and
the rules and regulations promulgated thereunder, that are applicable to the
undersigned, and intends to comply with other applicable provisions of the
Xxxxxxxx-Xxxxx Act, and the rules and regulations promulgated thereunder, upon
the effectiveness of such provisions.
1.8 Books
and Records; Internal Accounting Controls.
The
books and records of the undersigned and its subsidiaries accurately reflect
in
all material respects the information relating to the business of the
undersigned and its subsidiaries, the location and collection of their assets,
and the nature of all transactions giving rise to the obligations or accounts
receivable of the undersigned or any subsidiary. The undersigned and each of
its
subsidiaries maintain a system of internal accounting controls sufficient,
in
the judgment of the undersigned, 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 U.S. generally accepted
accounting principles consistently applied (“GAAP”)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 actions is taken with respect to any
differences.
1.9 Transactions
with Affiliates.
Except
as set forth on Schedule
1.9
hereto,
there are no loans, leases, agreements, contracts, royalty agreements,
management contracts or arrangements or other continuing transactions between
(a) the undersigned or any subsidiary on the one hand, and (b) on the other
hand, any officer, employee, consultant or director of the undersigned, or
any
of its subsidiaries, or any person owning any capital stock of the undersigned
or any subsidiary or any member of the immediate family of such officer,
employee, consultant, director or stockholder or any corporation or other entity
controlled by such officer, employee, consultant, director or stockholder,
or a
member of the immediate family of such officer, employee, consultant, director
or stockholder.
-4-
1.10 Indebtedness.
Schedule
1.10
hereto
sets forth as of a recent date all outstanding secured and unsecured
Indebtedness of the undersigned or any subsidiary, or for which the undersigned
or any subsidiary has commitments. For the purposes of this Joinder Agreement,
“Indebtedness”
shall
mean (a) any liabilities for borrowed money or amounts owed in excess of
$100,000 (other than trade accounts payable incurred in the ordinary course
of
business), (b) all guaranties, endorsements and other contingent obligations
in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the undersigned’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection
or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $25,000 due under leases required
to be
capitalized in accordance with GAAP. Except as set forth on Schedule
1.10,
neither
the undersigned nor any subsidiary is in default with respect to any
Indebtedness.
1.11 No
Undisclosed Liabilities.
Since
March 31, 2007, neither the undersigned nor any of its subsidiaries has incurred
any liabilities, obligations, claims or losses (whether liquidated or
unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise)
other than those incurred in the ordinary course of the undersigned's or its
subsidiaries respective businesses or which, individually or in the aggregate,
are not reasonably likely to have a Material Adverse Effect. Since March 31,
2007, none of the undersigned or any of its subsidiaries has participated in
any
transaction material to the condition of the undersigned which is outside of
the
ordinary course of its business.
2. Covenants.
The
undersigned hereby covenants and agrees as follows:
2.1 Registration
and Listing.
The
undersigned shall cause its Common Stock to be registered under Sections 12(b)
or 12(g) of the Exchange Act no later than the effective date of the
Registration Statement (as defined in the Registration Rights Agreement), to
comply in all respects with its reporting and filing obligations under the
Exchange Act, to comply with all requirements related to any registration
statement filed pursuant to the Registration Rights Agreement, and to not take
any action or file any document (whether or not permitted by the Securities
Act
or the rules promulgated thereunder) to terminate or suspend such registration
or to terminate or suspend its reporting and filing obligations under the
Exchange Act or Securities Act, except as otherwise permitted in the Transaction
Documents. Subject to the terms of the Transaction Documents, the undersigned
further covenants that it will take such further action as the Investors may
reasonably request, all to the extent required from time to time to enable
the
Investors to sell the shares of Common Stock issuable upon conversion of the
Preferred Shares and exercise of the
Series A Warrants, Series B Warrants, Series C Warrants and Series D
Warrants
without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act. Upon the request
of
the Investors, the undersigned shall deliver to the Investors a written
certification of a duly authorized officer as to whether it has complied with
such requirements.
-5-
2.2 Status
of Dividends.
The
undersigned covenants and agrees that (i) no Federal income tax return or claim
for refund of Federal income tax or other submission to the Internal Revenue
Service (the “Service”)
will
adversely affect the Preferred Shares, any other series of its Preferred Stock,
or the Common Stock, and no deduction shall operate to jeopardize the
availability to Investors of the dividends received deduction provided by
Section 243(a)(1) of the Code or any successor provision, (ii) in no report
to
shareholders or to any governmental body having jurisdiction over the
undersigned or otherwise will it treat the Preferred Shares other than as equity
capital or the dividends paid thereon other than as dividends paid on equity
capital unless required to do so by a governmental body having jurisdiction
over
the accounts of the undersigned or by a change in generally accepted accounting
principles required as a result of action by an authoritative accounting
standards setting body, and (iii) it will take no action which would result
in
the dividends paid by the undersigned on the Preferred Shares out of the
undersigned’s current or accumulated earnings and profits being ineligible for
the dividends received deduction provided by Section 243(a)(1) of the Code.
The
preceding sentence shall not be deemed to prevent the undersigned from
designating the Preferred Shares as “Convertible Preferred Stock” in its annual
and quarterly financial statements in accordance with its prior practice
concerning other series of preferred stock of the undersigned. In the event
that
the Investors have reasonable cause to believe that dividends paid by the
undersigned on the Preferred Shares out of the undersigned’s current or
accumulated earnings and profits will not be treated as eligible for the
dividends received deduction provided by Section 243(a)(1) of the Code, or
any
successor provision, the undersigned will, at the reasonable request of the
Investors of 51% of the outstanding Preferred Shares, join with the Investors
in
the submission to the IRS of a request for a ruling that dividends paid on
the
Preferred Shares will be so eligible for Federal income tax purposes, at the
Investors expense. In addition, the undersigned will reasonably cooperate with
the Investors (at Investors’ expense) in any litigation, appeal or other
proceeding challenging or contesting any ruling, technical advice, finding
or
determination that earnings and profits are not eligible for the dividends
received deduction provided by Section 243(a)(1) of the Code, or any successor
provision to the extent that the position to be taken in any such litigation,
appeal, or other proceeding is not contrary to any provision of the Code.
Notwithstanding the foregoing, nothing herein contained shall be deemed to
preclude the undersigned from claiming a deduction with respect to such
dividends if (i) the Code shall hereafter be amended, or final Treasury
regulations thereunder are issued or modified, to provide that dividends on
the
Preferred Shares or Common Stock should not be treated as dividends for Federal
income tax purposes or that a deduction with respect to all or a portion of
the
dividends on the Preferred Shares is allowable for Federal income tax purposes,
or (ii) in the absence of such an amendment, issuance or modification and after
a submission of a request for ruling or technical advice, the IRS shall issue
a
published ruling or advise that dividends on the Preferred Shares should not
be
treated as dividends for Federal income tax purposes. If the IRS specifically
determines that the Preferred Shares or Common Stock constitute debt, the
undersigned may file protective claims for refund.
2.3 Transfer
Agent Instructions.
The
undersigned shall issue irrevocable instructions to its transfer agent, and
any
subsequent transfer agent, to issue certificates, registered in the name of
each
Investor or its respective nominee(s), for the Common Stock issuable on
conversion of the Preferred Shares and exercise of the
Series A Warrants, Series B Warrants, Series C Warrants and Series D
Warrants
in such
amounts as specified from time to time by each Investor to the undersigned
upon
conversion of the Preferred Shares or exercise of the
Series A Warrants, Series B Warrants, Series C Warrants and Series D
Warrants
in the
form of Exhibit
K
attached
hereto (the “Irrevocable
Transfer Agent Instructions”).
Prior
to registration of the Common Stock issuable on conversion of the Preferred
Shares and exercise of the
Series A Warrants, Series B Warrants, Series C Warrants and Series D
Warrants
under
the Securities Act, all such certificates shall bear the following restrictive
legend:
THESE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR JPAK GROUP, INC. SHALL HAVE RECEIVED AN OPINION OF
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER
THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED
-6-
The
undersigned warrants that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section
2.3
will be
given by the undersigned to its transfer agent and that the shares of Common
Stock issuable on conversion of the Preferred Shares and exercise of
the
Series A Warrants, Series B Warrants, Series C Warrants and Series D
Warrants
shall
otherwise be freely transferable on the books and records of the undersigned
as
and to the extent provided in this Joinder Agreement and the Registration Rights
Agreement. If an Investor provides the undersigned with an opinion of counsel,
in a generally acceptable form, to the effect that a public sale, assignment
or
transfer of the shares of Common Stock issuable on conversion of the Preferred
Shares and exercise of the
Series A Warrants, Series B Warrants, Series C Warrants and Series D
Warrants
may be
made without registration under the Securities Act or the Investor provides
the
undersigned with reasonable assurances that such shares can be sold pursuant
to
Rule 144 without any restriction as to the number of securities acquired as
of a
particular date that can then be immediately sold, the undersigned shall permit
the transfer, and, in the case of such shares, promptly instruct its transfer
agent to issue one or more certificates in such name and in such denominations
as specified by such Investor and without any restrictive legend. The
undersigned acknowledges that a breach by it of its obligations under this
Section
2.3
will
cause irreparable harm to the Investors by vitiating the intent and purpose
of
the transaction contemplated hereby. Accordingly, the undersigned acknowledges
that the remedy at law for a breach of its obligations under this Section 2.3
will be
inadequate and agrees, in the event of a breach or threatened breach by the
undersigned of the provisions of this Section
2.3,
that
the Investors shall be entitled, in addition to all other available remedies,
to
an order and/or injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.
2.4 Disclosure
of Material Information.
The
undersigned covenants and agrees that neither it nor any other person acting
on
its behalf has provided or will provide any Investor or its agents or counsel
with any information that the undersigned believes constitutes material
non-public information, unless prior thereto such Investor shall have executed
a
written agreement regarding the confidentiality and use of such
information. The undersigned understands and confirms that each Investor
shall be relying on the foregoing representations in effecting transactions
in
securities of the undersigned.
2.5 Pledge
of Securities.
The
undersigned acknowledges and agrees that the securities issued pursuant to
the
Transaction Documents may be pledged by an Investor in connection with a
bona fide
margin
agreement or other loan or financing arrangement that is secured by the Common
Stock. No Investor effecting a pledge of Common Stock shall be required to
provide the undersigned with any notice thereof or otherwise make any delivery
to the undersigned pursuant to this Joinder Agreement or any other Transaction
Document; provided that an Investor and its pledgee shall be required to comply
with the provisions of Section 2.3 hereof in order to effect a sale, transfer
or
assignment of Common Stock to such pledgee. At the Investor's expense, the
undersigned hereby agrees to execute and deliver such documentation as a pledgee
of the Common Stock may reasonably request in connection with a pledge of the
Common Stock to such pledgee by an Investor.
-7-
2.6 DTC
Status.
No
later than the date of effectiveness of the Registration Statement (as defined
in the Registration Rights Agreement), the undersigned shall engage a transfer
agent that is a participant in, and the undersigned shall cause the Common
Stock
to be eligible for transfer pursuant to, the Depository Trust Company Automated
Securities Transfer Program.
2.7
Use
of
Proceeds.
The net
proceeds from the sale of the Notes shall be used by the undersigned for the
purposes set forth in the Note Purchase Agreement and not to redeem any Common
Stock or securities convertible, exercisable or exchangeable into Common Stock
or to settle any outstanding litigation.
3. Conditions
Precedent to the Obligation of the Investors.
The
obligation of each Investor to acquire the Series A Convertible Preferred Stock,
the Series A Warrants, the Series B Warrants and the Series J Warrants is
subject to the satisfaction or waiver, at or before the Closing, of
each
of the conditions set forth in the Transaction Documents, including, but not
limited to, the following (which
are for
each Investor’s sole benefit and may be waived by such Investor at any time in
its sole discretion):
3.1 No
Injunction.
No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any
of
the transactions contemplated by this Joinder Agreement or the other Transaction
Documents.
3.2 No
Proceedings or Litigation.
No
action, suit or proceeding before any arbitrator or any governmental authority
shall have been commenced, and no investigation by any governmental authority
shall have been threatened, against the undersigned or any subsidiary, or any
of
the officers, directors or affiliates of the undersigned or any subsidiary
seeking to restrain, prevent or change the transactions contemplated by this
Joinder Agreement or the other Transaction Documents, or seeking damages in
connection with such transactions.
3.3 Certificate
of Designation of Rights and Preferences.
Prior
to the Closing, the Series
A
Designation shall
have been filed with the Secretary of State of the State of Nevada.
3.4 Certificates.
The
undersigned shall have executed and delivered to the Investors the certificates
(in such denominations as such Investor shall request) for the Series A
Convertible Preferred Stock, the Series A Warrants, the Series B Warrants and
the Series J Warrants being acquired by such Investor at the Closing (in such
denominations as such Investor shall request).
3.5 Resolutions.
The
Board of Directors of the undersigned shall have adopted resolutions consistent
with Section
1.1
hereof
in a form reasonably acceptable to such Investor (the “Resolutions”).
-8-
3.6 Secretary’s
Certificate.
The
undersigned shall have delivered to such Investor a secretary’s certificate,
dated as of the Closing, as to (i) the Resolutions, (ii) the Articles, (iii)
the
Bylaws, (iv) the Series
A
Designation as
in
effect at the Closing, and (iv) the authority and incumbency of the officers
of
the undersigned executing the Transaction Documents and any other documents
required to be executed or delivered in connection therewith.
3.7 Officer’s
Certificate.
The
undersigned shall have delivered to the Investors a certificate of an executive
officer of the undersigned, dated as of the Closing, confirming the accuracy
of
the undersigned’s representations, warranties and covenants as of the Closing
and confirming the compliance by the undersigned with the conditions precedent
set forth in this Section
3
as of
the Closing.
3.8 Opinion
of Counsel.
At the
Closing, the Investors shall have received an opinion of counsel to the
undersigned, dated the date of the Closing, in a form reasonably acceptable
to
the Investors.
3.9 Material
Adverse Effect.
No
Material Adverse Effect shall have occurred at or before the Closing Date.
4. Indemnification.
4.1
Indemnification.
The
undersigned agrees to indemnify and hold harmless each Investor and its
Affiliates and their respective directors, officers, employees and agents from
and against any and all losses, claims, damages, liabilities and expenses
(including without limitation reasonable attorney fees and disbursements and
other expenses incurred in connection with investigating, preparing or defending
any action, claim or proceeding, pending or threatened and the costs of
enforcement thereof) (collectively, "Losses")
to
which such Person may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed
by it
under the Transaction Documents, and will reimburse any such Person for all
such
amounts as they are incurred by such Person.
4.2 Conduct
of Indemnification Proceedings.
Promptly after receipt by any Person (the "Indemnified
Person")
of
notice of any demand, claim or circumstances which would or might give rise
to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section
4.1,
such
Indemnified Person shall promptly notify the undersigned in writing and the
undersigned shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Person, and shall assume
the
payment of all fees and expenses; provided, however, that the failure of any
Indemnified Person so to notify the undersigned shall not relieve the
undersigned of its obligations hereunder except to the extent that the
undersigned or any of its subsidiaries is materially prejudiced by such failure
to notify. In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall
be at
the expense of such Indemnified Person unless: (i) the undersigned and the
Indemnified Person shall have mutually agreed to the retention of such counsel;
or (ii) in the reasonable judgment of counsel to such Indemnified Person
representation of both parties by the same counsel would be inappropriate due
to
actual or potential differing interests between them. The undersigned shall
not
be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent, or if there be a final judgment for the plaintiff, the undersigned
shall indemnify and hold harmless such Indemnified Person from and against
any
loss or liability (to the extent stated above) by reason of such settlement
or
judgment. Without the prior written consent of the Indemnified Person, which
consent shall not be unreasonably withheld, the undersigned shall not effect
any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes
an
unconditional release of such Indemnified Person from all liability arising
out
of such proceeding.
-9-
5. Miscellaneous.
5.1 Fees
and Expenses.
Except
as otherwise set forth herein and the other Transaction Documents, each party
shall pay the fees and expenses of its advisors, counsel, accountants and other
experts, if any, and all other expenses, incurred by such party incident to
the
negotiation, preparation, execution, delivery and performance of the Transaction
Documents, provided
that the
undersigned shall pay all actual attorneys' fees and expenses (including
disbursements and out-of-pocket expenses) incurred by the Investors in
connection with (i) the preparation, negotiation, execution and delivery of
the
Transaction Documents and the transactions contemplated thereunder, which
payment shall be made at the Closing and shall not exceed $20,000 (which amount
includes up to $15,000 not yet paid pursuant to Section 10.5 of the Note
Purchase Agreement), and (ii) the filing and declaration of effectiveness by
the
Commission of the Registration Statement (as defined in the Registration Rights
Agreement) as provided in Section 4 of the Registration Rights
Agreement.
If any
action at law or in equity (including arbitration) is necessary to enforce
or
interpret the terms of any of this Agreement or the other Transaction Documents,
the prevailing party shall be entitled to reasonable attorney’s fees, costs and
necessary disbursements in addition to any other relief to which such party
may
be entitled.
5.2 Governing
Law.
This
Agreement shall be governed by, interpreted under and construed and enforced
in
accordance with the laws of the State of New York, without regard to conflicts
of law principles that would result in the application of the substantive laws
of another jurisdiction. Any action to enforce, arising out of, or relating
in
any way to, any provisions of this Agreement shall only be brought in a state
or
Federal court sitting in New York City, Borough of Manhattan.
-10-
IN
WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of this 9th day of August, 2007.
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JPAK
GROUP, INC.
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|
(f/k/a
Rx Staffing, Inc.)
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|
By:
|
__________________________
|
|
|
Name:
|
||
|
Title:
|
Address:
|
|
|
x/x
Xxxxxxx Renmin Printing Co., Ltd.
|
||
|
Xx.
00, Xxxxxxx Xxxx
|
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Xxxxxxx,
Xxxxxxxx Xxxxxxxx
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Postal
Code 266401
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||
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P.R.
China
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-11-
