EXCHANGE AGREEMENT
Between
ECOLOGICAL SYSTEMS, INC.
and
STANFORD CAPITAL INTERNATIONAL LIMITED
Dated December 31, 2002
TABLE OF CONTENTS
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF STANFORD
CAPITAL INTERNATIONAL LIMITED
1.01 Organization 5
1.02 Capitalization 5
1.03 Subsidiaries and Predecessor Corporations 6
1.04 Financial Statements 6
1.05 Information 6
1.06 Options and Warrants 7
1.07 Absence of Certain Changes or Events 7
1.08 Title and Related Matters 7
1.09 Litigation and Proceedings 9
1.10 Contracts 9
1.11 Material Contract Defaults 9
1.12 No Conflict With Other Instruments 9
1.13 Governmental Authorizations 9
1.14 Compliance With Laws and Regulations 10
1.15 Insurance 10
1.16 Approval of Agreement 10
1.17 Material Transactions or Affiliations 10
1.18 Labor Relations 10
1.19 Stanford Schedules 10
1.20 Bank Accounts; Power of Attorney 11
1.21 Valid Obligation 11
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ECOLOGICAL
SYSTEMS, INC.
2.01 Organization 11
2.02 Capitalization 12
2.03 Subsidiaries and Predecessor Corporations 12
2.04 Securities Filings; Financial Statements 12
2.05 Information 13
2.06 Options and Warrants 13
2.07 Absence of Certain Changes or Events 13
2.08 Title and Related Matters 14
2.09 Litigation and Proceedings 14
2.10 Contracts 14
2.11 Material Contract Defaults 15
2.12 No Conflict With Other Instruments 15
2.13 Governmental Authorizations 15
2.14 Compliance With Laws and Regulations 15
2.15 Insurance 15
2.16 Approval of Agreement 15
2.17 Continuity of Business Enterprises 17
2.18 Material Transactions or Affiliations 16
2.19 Labor Relations 16
2.20 Ecological Schedules 16
2.21 Bank Accounts; Power of Attorney 17
2.22 Valid Obligation 17
ARTICLE III PLAN OF EXCHANGE
3.01 The Exchange 17
3.02 Anti-Dilution 17
3.03 Closing 17
3.04 Closing Events 18
3.05 Termination 18
ARTICLE IV SPECIAL COVENANTS
4.01 Access to Properties and Records 19
4.02 Delivery of Books and Records 20
4.03 Third Party Consents and Certificates 20
4.04 Name Change and State of Incorporation 20
4.05 Atlantic Shareholder Meeting 20
4.06 Consent of Digital Shareholders 20
4.07 Designation of Directors and Officers 20
4.08 Exclusive Dealing Rights 20
4.09 Actions Prior to Closing 21
4.10 Sales Under Rule 144 or 145, If Applicable 23
4.11 Indemnification 23
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF WATERFORD WEB ADVISORS
5.01 Accuracy of Representations and Performance of Covenants 24
5.02 Officer's Certificates 24
5.03 No Material Adverse Change 24
5.04 Good Standing 24
5.05 Approval by Eternal Shareholders 24
5.06 No Governmental Prohibitions 24
5.07 Consents 24
5.08 Other Items 24
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF STANFORD CAPITAL
INTERNATIONAL LIMITED AND THE ETERNAL SHAREHOLDERS
6.01 Accuracy of Representations and Performance of Covenants 25
6.02 Officer's Certificate 25
6.03 No Material Adverse Change 25
6.04 Good Standing 25
6.05 No Governmental Prohibition 25
6.06 Consents 25
6.07 Other Items 25
ARTICLE VII MISCELLANEOUS
7.01 Brokers 26
7.02 Governing Law 26
7.03 Notices 26
7.04 Attorney's Fees 26
7.05 Confidentiality 26
7.06 Public Announcements and Filings 27
7.07 Schedules; Knowledge 27
7.08 Third Party Beneficiaries 27
7.09 Expenses 27
7.10 Entire Agreement 27
7.11 Survival; Termination 27
7.12 Counterparts 27
7.13 Amendment or Waiver 27
7.14 Best Efforts 28
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement")
is entered into as of this 31st day of December 2002 by and between ECOLOGICAL
SYSTEMS, INC. a Nevada corporation (hereinafter referred to as ("Ecological")
ETERNAL TECHNOLOGIES GROUP LTD., a British Virgin Islands corporation
(hereinafter referred to as "Stanford"), upon the following premises:
Premises
WHEREAS, Ecological is a publicly held corporation organized under the
laws of the State of Delaware;
WHEREAS, Stanford is a privately held corporation organized under the
laws of the special administration Region of Hong Kong;
WHEREAS, the Board of Directors of the constituent corporations have
determined that it is in the best interest of the parties that Ecological
acquire 100% of the issued and outstanding securities of Stanford in exchange
for the issuance of certain shares of Ecological (the "Exchange") and Stanford
agreed to use its best efforts to cause its shareholders (the "Stanford
Shareholders") to exchange their securities of Stanford on the terms described
herein; and
WHEREAS, Ecological and Stanford desire to set forth the terms of the
Exchange, which is intended to constitute a tax-free reorganization pursuant to
the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986.
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF Stanford
As an inducement to, and to obtain the reliance of Ecological, except
as set forth on the Stanford Schedules (as hereinafter defined), Stanford
represents and warrants as follows:
Section 1.01 Organization. Stanford is a corporation duly organized,
validly existing, and in good standing under the laws of the Special
Administration Region of Hong Kong and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in the states or countries in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification, except where failure to be so qualified would not have a material
adverse effect on its business. Included in the Stanford Schedules are complete
and correct copies of the Memorandum and Articles of Association of Stanford as
in effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Stanford's Memorandum and Articles of Association.
Stanford has taken all actions required by law, its articles of incorporation,
or otherwise to authorize the execution and delivery of this Agreement. Stanford
has full power, authority, and legal right and has taken all action required by
law, its articles of incorporation, and otherwise to consummate the transactions
herein contemplated.
Section 1.02 Capitalization. The authorized capitalization of
Stanford consists of 10,000 shares of common stock, $1.00 par value, of which
10,000 shares are currently issued and outstanding. All issued and outstanding
shares are legally issued, fully paid, and non-assessable and not issued in
violation of the preemptive or other rights of any person.
Section 1.03 Subsidiaries and Predecessor Corporations. Stanford does
not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in Schedule 1.03. For purposes hereinafter, the term "Stanford" also
includes those subsidiaries, if any, set forth on Schedule 1.03.
Section 1.04 Financial Statements.
(a) Included in the Stanford Schedules are (i)the audited
balance sheets of Stanford as of March 31, 2000, 2001 and 2002 and the
related audited statements of operations, stockholders' equity and cash
flows for the three fiscal years ended December 31, 2000, 2001and 2002
together with the notes to such statements and the opinion of Ho,
Xxxxxxx, Xxxx independent certified public accountants, with respect
thereto and the unaudited balance sheets of Stanford as of September
30, 2002, and 2001 and the related statements of operations,
stockholders equity and cashflows from the nine months ended September
30, 2002 and 2001 together with the note to such statements.
(b) All such financial statements have been prepared in
accordance with generally accepted accounting principles. The Stanford
balance sheets present a true and fair view as of the dates of such
balance sheets of the financial condition of Stanford. Stanford did not
have, as of the dates of such balance sheets, except as and to the
extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in the
balance sheets or the notes thereto, prepared in accordance with
generally accepted accounting principles, and all assets reflected
therein are properly reported and present fairly the value of the
assets of Stanford in accordance with generally accepted accounting
principles.
(c) Stanford has no liabilities with respect to the payment of
any federal, state, county, local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued but not
yet due and payable.
(d) Stanford has filed all state, federal or local income
and/or franchise tax returns required to be filed by it from inception
to the date hereof. Each of such income tax returns reflects the taxes
due for the period covered thereby, except for amounts which, in the
aggregate, are immaterial.
(e) The books and records, financial and otherwise, of
Stanford are in all material respects complete and correct and have
been maintained in accordance with good business and accounting
practices.
(f) All of Stanford' assets are reflected on its financial
statements, and, except as set forth in the Stanford Schedules or the
financial statements of Stanford or the notes thereto, Stanford has no
material liabilities, direct or indirect, matured or unmatured,
contingent or otherwise.
Section 1.05 Information. The information concerning Stanford set forth
in this Agreement and in the Stanford Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading. In addition,
Stanford has fully disclosed in writing to Ecological (through this Agreement or
the Stanford Schedules) all information relating to matters involving Stanford
or its assets or its present or past operations or activities which (i)
indicated or may indicate, in the aggregate, the existence of a greater than
$25,000 liability or diminution in value, (ii) have led or may lead to a
competitive disadvantage on the part of Stanford or (iii) either alone or in
aggregation with other information covered by this Section, otherwise have led
or may lead to a material adverse effect on the transactions contemplated herein
or on Stanford, its assets, or its operations or activities as presently
conducted or as contemplated to be conducted after the Closing Date, including,
but not limited to, information relating to governmental, employee,
environmental, litigation and securities matters and transactions with
affiliates.
Section 1.06 Options or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued Stanford common stock, except options, warrants, calls or commitments,
if any, to which Stanford is not a party and by which it is not bound.
Section 1.07 Absence of Certain Changes or Events. Except as set forth
in this Agreement or the Stanford Schedules, since September 30, 2002:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of Stanford or
(ii) any damage, destruction, or loss to Stanford (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets, or condition of Stanford;
(b) Stanford has not (i) amended its articles of incorporation
or bylaws; (ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are outside of the ordinary course of
business or material considering the business of Stanford; (iv) made
any material change in its method of management, operation or
accounting; (v) entered into any other material transaction other than
sales in the ordinary course of its business; (vi) made any accrual or
arrangement for payment of bonuses or special compensation of any kind
or any severance or termination pay to any present or former officer or
employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its
salaried employees whose monthly compensation exceeds $1,000; or (viii)
made any increase in any profit sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement made to, for, or with its officers, directors,
or employees;
(c) Stanford has not (i) borrowed or agreed to borrow any
funds or incurred, or become subject to, any material obligation or
liability (absolute or contingent) except as disclosed herein and
except liabilities incurred in the ordinary course of business; (ii)
paid or agreed to pay any material obligations or liability (absolute
or contingent) other than current liabilities reflected in or shown on
the most recent Stanford balance sheet, and current liabilities
incurred since that date in the ordinary course of business and
professional and other fees and expenses in connection with the
preparation of this Agreement and the consummation of the transactions
contemplated hereby; (iii) sold or transferred, or agreed to sell or
transfer, any of its assets, properties, or rights (except assets,
properties, or rights not used or useful in its business which, in the
aggregate have a value of less than $1,000), or canceled, or agreed to
cancel, any debts or claims (except debts or claims which in the
aggregate are of a value of less than $1,000); (iv) made or permitted
any amendment or termination of any contract, agreement, or license to
which it is a party if such amendment or termination is material,
considering the business of Stanford; or (v) issued, delivered, or
agreed to issue or deliver any stock, bonds or other corporate
securities including debentures (whether authorized and unissued or
held as treasury stock); and
(d) to the best knowledge of Stanford, Stanford has not become
subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect the business,
operations, properties, assets, or condition of Stanford.
Section 1.08 Title and Related Matters. Stanford has good and
marketable title to all of its properties, inventory, interests in properties,
and assets, real and personal, which are reflected in the most recent Stanford
balance sheet or acquired after that date (except properties, inventory,
interests in properties, and assets sold or otherwise disposed of since such
date in the ordinary course of business) free and clear of all liens, pledges,
charges, or encumbrances except (a) statutory liens or claims not yet
delinquent; (b) such imperfections of title and easements as do not and will not
materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties; and (c) as described in the
Stanford Schedules. Except as set forth in the Stanford Schedules, Stanford
owns, free and clear of any liens, claims, encumbrances, royalty interests, or
other restrictions or limitations of any nature whatsoever, any and all products
it is currently manufacturing, including the underlying technology and data, and
all procedures, techniques, marketing plans, business plans, methods of
management, or other information utilized in connection with Stanford' business.
Except as set forth in the Stanford Schedules, no third party has any right to,
and Stanford has not received any notice of infringement of or conflict with
asserted rights of others with respect to any product, technology, data, trade
secrets, know-how, propriety techniques, trademarks, service marks, trade names,
or copyrights which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially adverse effect
on the business, operations, financial condition, income, or business prospects
of Stanford or any material portion of its properties, assets, or rights.
Section 1.09 Litigation and Proceedings. Except as set forth in the
Stanford Schedules, there are no actions, suits, proceedings, or investigations
pending or, to the knowledge of Stanford after reasonable investigation,
threatened by or against Stanford or affecting Stanford or its properties, at
law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind.
Stanford does not have any knowledge of any material default on its part with
respect to any judgment, order, injunction, decree, award, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default.
Section 1.10 Contracts.
(a) Except as included or described in the Stanford Schedules,
there are no "material" contracts, agreements, franchises, license
agreements, debt instruments or other commitments to which Stanford is
a party or by which it or any of its assets, products, technology, or
properties are bound other than those incurred in the ordinary course
of business (as used in this Agreement, a "material" contract,
agreement, franchise, license agreement, debt instrument or commitment
is one which (i) will remain in effect for more than six (6) months
after the date of this Agreement or (ii) involves aggregate obligations
of at least fifty thousand dollars ($50,000));
(b) All contracts, agreements, franchises, license agreements,
and other commitments to which Stanford is a party or by which its
properties are bound and which are material to the operations of
Stanford taken as a whole are valid and enforceable by Stanford in all
respects, except as limited by bankruptcy and insolvency laws and by
other laws affecting the rights of creditors generally;
(c) Stanford is not a party to or bound by, and the properties
of Stanford are not subject to any contract, agreement, other
commitment or instrument; any charter or other corporate restriction;
or any judgment, order, writ, injunction, decree, or award which
materially and adversely affects, the business operations, properties,
assets, or condition of Stanford; and
(d) Except as included or described in the Stanford Schedules
or reflected in the most recent Stanford balance sheet, Stanford is not
a party to any oral or written (i) contract for the employment of any
officer or employee which is not terminable on 30 days, or less notice;
(ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, (iii) agreement,
contract, or indenture relating to the borrowing of money, (iv)
guaranty of any obligation, other than one on which Stanford is a
primary obligor, for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of obligations
which, in the aggregate do not exceed more than one year or providing
for payments in excess of $25,000 in the aggregate; (vi) collective
bargaining agreement; or (vii) agreement with any present or former
officer or director of Stanford.
Section 1.11 Material Contract Defaults. Stanford is not in default in
any material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets or condition of Stanford and there is no event of default in
any material respect under any such contract, agreement, lease, or other
commitment in respect of which Stanford has not taken adequate steps to prevent
such a default from occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which Stanford is a party or to which any of its
properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the
Stanford Schedules, Stanford has all licenses, franchises, permits, and other
governmental authorizations that are legally required to enable it to conduct
its business in all material respects as conducted on the date hereof. Except
for compliance with federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body
is required in connection with the execution and delivery by Stanford of this
Agreement and the consummation by Stanford of the transactions contemplated
hereby.
Section 1.14 Compliance With Laws and Regulations. Except as set forth
in the Stanford Schedules, to the best of its knowledge Stanford has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of Stanford or except to the extent that noncompliance
would not result in the occurrence of any material liability for Stanford.
Section 1.15 Insurance. All of the properties of Stanford are fully
insured for their full replacement cost.
Section 1.16 Approval of Agreement. The board of directors of Stanford
has authorized the execution and delivery of this Agreement by Stanford and has
approved this Agreement and the transactions contemplated hereby, and will
recommend to the Stanford Shareholders that the Exchange be accepted by them.
Section 1.17 Material Transactions or Affiliations. Set forth in the
Stanford Schedules is a description of every contract, agreement, or arrangement
between Stanford and any predecessor and any person who was at the time of such
contract, agreement, or arrangement an officer, director, or person owning of
record, or known by Stanford to own beneficially, 5% or more of the issued and
outstanding common stock of Stanford and which is to be performed in whole or in
part after the date hereof or which was entered into not more than three years
prior to the date hereof. Except as disclosed in the Stanford Schedules or
otherwise disclosed herein, no officer, director, or 5% shareholder of Stanford
has, or has had since inception of Stanford, any known interest, direct or
indirect, in any transaction with Stanford which was material to the business of
Stanford. There are no commitments by Stanford, whether written or oral, to lend
any funds, or to borrow any money from, or enter into any other transaction
with, any such affiliated person.
Section 1.18 Labor Relations. Stanford has not had work stoppage
resulting from labor problems. To the knowledge of Stanford, no union or other
collective bargaining organization is organizing or attempting to organize any
employee of Stanford.
Section 1.19 Stanford Schedules. Stanford has delivered to Ecological
the following schedules, which are collectively referred to as the "Stanford
Schedules" and which consist of separate schedules dated as of the date of
execution of this Agreement, all certified by the chief executive officer of
Stanford as complete, true, and correct as of the date of this Agreement in all
material respects:
(a) a schedule containing complete and correct copies of the
articles of incorporation, and bylaws of Stanford in effect as of the
date of this Agreement;
(b) a schedule containing the financial statements of Stanford
identified in paragraph 1.04(a);
(c) a Schedule 1.19(c) containing a list indicating the name
and address of each shareholder of Stanford together with the number of
shares owned by him, her or it;
(d) a schedule containing a description of all real property
owned by Stanford, together with a description of every mortgage, deed
of trust, pledge, lien, agreement, encumbrance, claim, or equity
interest of any nature whatsoever in such real property;
(e) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which
Stanford carries on or proposes to carry on its business (except those
which, in the aggregate, are immaterial to the present or proposed
business of Stanford);
(f) a schedule listing the accounts receivable and notes and
other obligations receivable of Stanford as of September 30, 2002 or
thereafter other than in the ordinary course of business of Stanford,
indicating the debtor and amount, and classifying the accounts to show
in reasonable detail the length of time, if any, overdue, and stating
the nature and amount of any refunds, set offs, reimbursements,
discounts, or other adjustments, which are in the aggregate material
and due to or claimed by such debtor;
(g) a schedule listing the accounts payable and notes and
other obligations payable of Stanford as of September 30, 2002, or that
arose thereafter other than in the ordinary course of the business of
Stanford, indicating the creditor and amount, classifying the accounts
to show in reasonable detail the length of time, if any, overdue, and
stating the nature and amount of any refunds, set offs, reimbursements,
discounts, or other adjustments, which in the aggregate are material
and due to or claimed by Stanford respecting such obligations;
(h) a schedule setting forth a description of any material
adverse change in the business, operations, property, inventory,
assets, or condition of Stanford since September 30, 2002, required to
be provided pursuant to section 1.07 hereof; and
(i) a schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the
Stanford Schedules by Sections 1.01 through 1.18.
Stanford shall cause the Stanford Schedules and the instruments and
data delivered to Ecological hereunder to be promptly updated after the date
hereof up to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to
above have been completed or are available to be furnished by Stanford. Stanford
shall have until December 31, 2002 to provide such schedules. If Stanford cannot
or fails to do so, or if Ecological acting reasonably finds any such schedules
or updates provided after the date hereof to be unacceptable according to the
criteria set forth below, Ecological may terminate this Agreement by giving
written notice to Stanford within five (5) days after the schedules or updates
were due to be produced or were provided. For purposes of the foregoing,
Ecological may consider a disclosure in the Stanford Schedules to be
"unacceptable" only if that item would have a material adverse impact on the
financial statements listed in Section 1.04(a), taken as a whole.
Section 1.20 Bank Accounts; Power of Attorney. Set forth in Schedule
1.20 is a true and complete list of (a) all accounts with banks, money market
mutual funds or securities or other financial institutions maintained by
Stanford within the past twelve (12) months, the account numbers thereof, and
all persons authorized to sign or act on behalf of Stanford, (b) all safe
deposit boxes and other similar custodial arrangements maintained by Stanford
within the past twelve (12) months, and (c) the names of all persons holding
powers of attorney from Stanford or who are otherwise authorized to act on
behalf of Stanford with respect to any matter, other than its officers and
directors, and a summary of the terms of such powers or authorizations.
Section 1.21 Valid Obligation. This Agreement and all agreements and
other documents executed by Stanford in connection herewith constitute the valid
and binding obligation of Stanford, enforceable in accordance with its or their
terms, except as may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF Ecological
As an inducement to, and to obtain the reliance of Stanford and the
Stanford Shareholders, except as set forth in the Ecological Schedules (as
hereinafter defined), Ecological represents and warrants as follows:
Section 2.01 Organization. Ecological is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware
and has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets, to carry on its
business in all material respects as it is now being conducted, and except where
failure to be so qualified would not have a material adverse effect on its
business, there is no jurisdiction in which it is not qualified in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the Ecological Schedules
are complete and correct copies of the certificate of incorporation and bylaws
of Ecological as in effect on the date hereof. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
hereby will not, violate any provision of Ecological's certificate of
incorporation or bylaws. Ecological has taken all action required by law, its
certificate of incorporation, its bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and Ecological has full power,
authority, and legal right and has taken all action required by law, its
certificate of incorporation, bylaws, or otherwise to consummate the
transactions herein contemplated.
Section 2.02 Capitalization. Ecological's authorized capitalization
consists of 20,000,000 shares of common stock, par value $.001 of which
19,984,625 shares are issued and outstanding and 1,000,000 shares of preferred
stock par value, $.001 of which none are issued and outstanding (the "
Ecological Shares"). All issued and outstanding shares are legally issued, fully
paid, and non-assessable and not issued in violation of the preemptive or other
rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. Ecological does
not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in Schedule 2.03. For purposes hereinafter, the term "Ecological" also
includes those subsidiaries, if any, set forth on Schedule 2.03.
Section 2.04 Securities Filings; Financial Statements.
(a) For at least the past twelve months Ecological has filed
all forms, reports and documents required to be filed with the
Securities and Exchange Commission, and has heretofore delivered to
Stanford, in the form filed with the Commission, (i) all quarterly and
annual reports on Forms 10-QSB and 10-KSB filed since December 31,
2000, (ii) all other reports filed by Ecological with the Securities
and Exchange Commission since December 31, 2000 (collectively, the "SEC
Reports") and (iii) all comment letters from the Securities and
Exchange Commission with respect to the SEC Reports. The SEC Reports
(i) were prepared in accordance with the requirements of the Securities
Exchange Act of 1934 or the Securities Act of 1933, as appropriate, and
(ii) 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 the light of the circumstances
under which they were made, not misleading.
(b) Included in the Ecological Schedules are (i) the audited
balance sheets of Ecological as of March 31, 2002 and 2001, and the
related audited statements of operations, stockholders' equity and cash
flows for the two fiscal years ended March 31, 2002 and March 31, 2001,
together with the notes to such statements and the opinion of Xxxxx X.
Xxxxxxxx, P.C., independent certified public accountants, with respect
thereto, all as set forth in the SEC Reports and also the unaudited
balance sheets as of September 30, 2002 and 2001 and the related
statements of operations, stockholders equity and cash flows for the
six months ended June 30, 2002 and 2001 together with notes to such
statements.
(c) All such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved. The Ecological balance sheets
present fairly as of their respective dates the financial condition of
Ecological. As of the date of such balance sheets, except as and to the
extent reflected or reserved against therein, Ecological had no
liabilities
or obligations (absolute or contingent) which should be reflected in
the balance sheets or the notes thereto prepared in accordance with
generally accepted accounting principles, and all assets reflected
therein are properly reported and present fairly the value of the
assets of Ecological, in accordance with generally accepted accounting
principles. The statements of operations, stockholders' equity and cash
flows reflect fairly the information required to be set forth therein
by generally accepted accounting principles.
(d) Ecological has no liabilities with respect to the payment
of any federal, state, county, local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued but not
yet due and payable.
(e) Ecological has timely filed all state, federal or local
income and/or franchise tax returns required to be filed by it from
inception to the date hereof. Each of such income tax returns reflects
the taxes due for the period covered thereby, except for amounts which,
in the aggregate, are immaterial.
(f) The books and records, financial and otherwise, of
Ecological are in all material aspects complete and correct and have
been maintained in accordance with good business and accounting
practices.
(g) All of Ecological's assets are reflected on its financial
statements, and, except as set forth in the Ecological Schedules or the
financial statements of Ecological or the notes thereto, Ecological has
no material liabilities, direct or indirect, matured or unmatured,
contingent or otherwise.
Section 2.05 Information. The information concerning Ecological set
forth in this Agreement and the Ecological Schedules is complete and accurate in
all material respects and does not contain any untrue statements of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading. In
addition, Ecological has fully disclosed in writing to Stanford (through this
Agreement or the Ecological Schedules) all information relating to matters
involving Ecological or its assets or its present or past operations or
activities which (i) indicated or may indicate, in the aggregate, the existence
of a greater than $25,000 liability or diminution in value, (ii) have led or may
lead to a competitive disadvantage on the part of Ecological or (iii) either
alone or in aggregation with other information covered by this Section,
otherwise have led or may lead to a material adverse effect on the transactions
contemplated herein or on Ecological, its assets, or its operations or
activities as presently conducted or as contemplated to be conducted after the
Closing Date, including, but not limited to, information relating to
governmental, employee, environmental, litigation and securities matters and
transactions with affiliates.
Section 2.06 Options or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of Ecological.
Section 2.07 Absence of Certain Changes or Events. Except as disclosed
in Exhibit 2.07, or permitted in writing by Stanford, since the date of the most
recent Ecological balance sheet:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets or condition of Ecological or
(ii) any damage, destruction or loss to Ecological (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets or condition of Ecological;
(b) Ecological has not (i) amended its certificate of
incorporation or bylaws; (ii) declared or made, or agreed to declare or
make any payment of dividends or distributions of any assets of any
kind whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are outside of the ordinary course of
business or material considering the business of Ecological; (iv) made
any material change in its method of management, operation, or
accounting; (v) entered into any transactions or agreements other than
in the ordinary course of business; (vi) made any accrual or
arrangement for or payment of bonuses or special compensation of any
kind or any severance or termination pay to any present or former
officer or employee; (vii) increased the rate of compensation payable
or to become payable by it to any of its officers or directors or any
of its salaried employees whose monthly compensation exceed $1,000; or
(viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement, made to, for or with its officers,
directors, or employees;
(c) Ecological has not (i) granted or agreed to grant any
options, warrants, or other rights for its stock, bonds, or other
corporate securities calling for the issuance thereof; (ii) borrowed or
agreed to borrow any funds or incurred, or become subject to, any
material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid or
agreed to pay any material obligations or liabilities (absolute or
contingent) other than current liabilities reflected in or shown on the
most recent Ecological balance sheet and current liabilities incurred
since that date in the ordinary course of business and professional and
other fees and expenses in connection with the preparation of this
Agreement and the consummation of the transaction contemplated hereby;
(iv) sold or transferred, or agreed to sell or transfer, any of its
assets, properties, or rights (except assets, properties, or rights not
used or useful in its business which, in the aggregate have a value of
less than $1000), or canceled, or agreed to cancel, any debts or claims
(except debts or claims which in the aggregate are of a value less than
$1000); (v) made or permitted any amendment or termination of any
contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business of
Ecological; or (vi) issued, delivered or agreed to issue or deliver,
any stock, bonds, or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock), except in
connection with this Agreement; and
(d) to the best knowledge of Ecological, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future, may adversely affect, the business,
operations, properties, assets or condition of Ecological.
Section 2.08 Title and Related Matters. Ecological has good and
marketable title to all of its properties, inventory, interest in properties,
and assets, real and personal, which are reflected in the most recent Ecological
balance sheet or acquired after that date (except properties, inventory,
interest in properties, and assets sold or otherwise disposed of since such date
in the ordinary course of business), free and clear of all liens, pledges,
charges, or encumbrances except (a) statutory liens or claims not yet
delinquent; (b) such imperfections of title and easements as do not and will not
materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties; and (c) as described in the
Ecological Schedules. Except as set forth in the Ecological Schedules,
Ecological owns, free and clear of any liens, claims, encumbrances, royalty
interests, or other restrictions or limitations of any nature whatsoever, any
and all products it is currently manufacturing, including the underlying
technology and data, and all procedures, techniques, marketing plans, business
plans, methods of management, or other information utilized in connection with
Ecological's business. Except as set forth in the Ecological Schedules, no third
party has any right to, and Ecological has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, propriety techniques,
trademarks, service marks, trade names, or copyrights which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a materially adverse effect on the business, operations, financial
condition, income, or business prospects of Ecological or any material portion
of its properties, assets, or rights.
Section 2.09 Litigation and Proceedings. There are no actions, suits,
proceedings or investigations pending or, to the knowledge Ecological after
reasonable investigation, threatened by or against Ecological or affecting
Ecological or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind except as disclosed in Schedule 2.09. Ecological has no
knowledge of any default on its part with respect to any judgement, order, writ,
injunction, decree, award, rule or regulation of any court, arbitrator, or
governmental agency or instrumentality or any circumstance which after
reasonable investigation would result in the discovery of such default.
Section 2.10 Contracts.
(a) Ecological is not a party to, and its assets, products,
technology and properties are not bound by, any material contract,
franchise, license agreement, agreement, debt instrument or other
commitments whether such agreement is in writing or oral, except as
disclosed in Schedule 2.10.
(b) All contracts, agreements, franchises, license agreements,
and other commitments to which Ecological is a party or by which its
properties are bound and which are material to the operations of
Ecological taken as a whole are valid and enforceable by Ecological in
all respects, except as limited by bankruptcy and insolvency laws and
by other laws affecting the rights of creditors generally;
(c) Ecological is not a party to or bound by, and the
properties of Ecological are not subject to any contract, agreement,
other commitment or instrument; any charter or other corporate
restriction; or any judgment, order, writ, injunction, decree, or award
which materially and adversely affects, the business operations,
properties, assets, or condition of Ecological; and
(d) Except as included or described in the Ecological
Schedules or reflected in the most recent Ecological balance sheet,
Ecological is not a party to any oral or written (i) contract for the
employment of any officer or employee which is not terminable on 30
days, or less notice; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or
retirement plan, (iii) agreement, contract, or indenture relating to
the borrowing of money, (iv) guaranty of any obligation, other than one
on which Ecological is a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for collection and other
guaranties of obligations which, in the aggregate do not exceed more
than one year or providing for payments in excess of $25,000 in the
aggregate; (vi) collective bargaining agreement; or (vii) agreement
with any present or former officer or director of Ecological.
Section 2.11 Material Contract Defaults. Ecological is not in default
in any material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets or condition of Ecological and there is no event of default
in any material respect under any such contract, agreement, lease, or other
commitment in respect of which Ecological has not taken adequate steps to
prevent such a default from occurring.
Section 2.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which
Ecological is a party or to which any of its assets or operations are subject.
Section 2.13 Governmental Authorizations. Ecological has all licenses,
franchises, permits, and other governmental authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent or order of, of registration, declaration or filing with, any
court or other governmental body is required in connection with the execution
and delivery by Ecological of this Agreement and the consummation by Ecological
of the transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
knowledge, Ecological has complied with all applicable statutes and regulations
of any federal, state, or other applicable governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
Ecological or except to the extent that noncompliance would not result in the
occurrence of any material liability. This compliance includes, but is not
limited to, the filing of all reports to date with federal and state securities
authorities.
Section 2.15 Insurance. All of the properties of Ecological are fully
insured for their full replacement cost.
Section 2.16 Approval of Agreement. The board of directors of
Ecological has authorized the execution and delivery of this Agreement by
Ecological and has approved this Agreement and the transactions contemplated
hereby and will recommend to its shareholders that they approve this Agreement
and the transactions contemplated hereby.
Section 2.17 Continuity of Business Enterprises. Ecological has no
commitment or present intention to liquidate Stanford or sell or otherwise
dispose of a material portion of Stanford' business or assets following the
consummation of the transactions contemplated hereby.
Section 2.18 Material Transactions or Affiliations. Except as disclosed
herein and in the Ecological Schedules, there exists no contract, agreement or
arrangement between Ecological and any predecessor and any person who was at the
time of such contract, agreement or arrangement an officer, director, or person
owning of record or known by Ecological to own beneficially, 5% or more of the
issued and outstanding common stock of Ecological and which is to be performed
in whole or in part after the date hereof or was entered into not more than
three years prior to the date hereof. Neither any officer, director, nor 5%
shareholder of Ecological has, or has had since inception of Ecological, any
known interest, direct or indirect, in any such transaction with Ecological
which was material to the business of Ecological. Ecological has no commitment,
whether written or oral, to lend any funds to, borrow any money from, or enter
into any other transaction with, any such affiliated person.
Section 2.19 Labor Relations. Ecological has not had work stoppage
resulting from labor problems. To the knowledge of Ecological, no union or other
collective bargaining organization is organizing or attempting to organize any
employee of Ecological.
Section 2.20 Ecological Schedules. Ecological has delivered to Stanford
the following schedules, which are collectively referred to as the "Ecological
Schedules" and which consist of separate schedules, which are dated the date of
this Agreement, all certified by the chief executive officer of Ecological to be
complete, true, and accurate in all material respects as of the date of this
Agreement:
(a) a schedule containing complete and accurate copies of the
certificate of incorporation and bylaws of Ecological as in effect as
of the date of this Agreement;
(b) a schedule containing the financial statements of
Ecological identified in paragraph 2.04(b);
(c) a Schedule 2.20(c) containing a list indicating the name
and address of each shareholder of Ecological together with the number
of shares owned by him, her or it;
(d) a schedule containing a description of all real property
owned by Ecological, together with a description of every mortgage,
deed of trust, pledge, lien, agreement, encumbrance, claim, or equity
interest of any nature whatsoever in such real property;
(e) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which
Ecological carries on or proposes to carry on its business (except
those which, in the aggregate, are immaterial to the present or
proposed business of Ecological);
(f) a schedule listing the accounts receivable and notes and
other obligations receivable of Ecological as of September 30, 2001, or
thereafter other than in the ordinary course of business of Ecological,
indicating the debtor and amount, and classifying the accounts to show
in reasonable detail the length of time, if any, overdue, and stating
the nature and amount of any refunds, set offs, reimbursements,
discounts, or other adjustments which are in the aggregate material and
due to or claimed by such debtor;
(g) a schedule listing the accounts payable and notes and
other obligations payable of Ecological as of September 30, 2001, or
that arose thereafter other than in the ordinary course of the business
of Ecological, indicating the creditor and amount, classifying the
accounts to show in reasonable detail the length of time, if any,
overdue, and stating the nature and amount of any refunds, set offs,
reimbursements, discounts, or other adjustments, which in the aggregate
are material and due to or claimed by Ecological respecting such
obligations;
(h) a schedule setting forth a description of any material
adverse change in the business, operations, property, inventory,
assets, or condition of Ecological since September 30, 2001 required to
be provided pursuant to section 2.07 hereof; and
(i) a schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the
Ecological Schedules by Sections 2.01 through 2.19.
Ecological shall cause the Ecological Schedules and the instruments and
data delivered to Stanford hereunder to be promptly updated after the date
hereof up to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to
above have been completed or are available to be furnished by Ecological.
Ecological shall have until December 31, 2002 to provide such schedules. If
Ecological cannot or fails to do so, or if Stanford acting reasonably finds any
such schedules or updates provided after the date hereof to be unacceptable
according to the criteria set forth below, Stanford may terminate this Agreement
by giving written notice to Ecological within five (5) days after the schedules
or updates were due to be produced or were provided. For purposes of the
foregoing, Stanford may consider a disclosure in the Ecological Schedules to be
"unacceptable" only if that item would have a material adverse impact on the
financial statements listed in Section 2.04(b), taken as a whole.
Section 2.21 Bank Accounts; Power of Attorney. Set forth in Schedule
2.21 is a true and complete list of (a) all accounts with banks, money market
mutual funds or securities or other financial institutions maintained by
Ecological within the past twelve (12) months, the account numbers thereof, and
all persons authorized to sign or act on behalf of Ecological, (b) all safe
deposit boxes and other similar custodial arrangements maintained by Ecological
within the past twelve (12) months, and (c) the names of all persons holding
powers of attorney from Ecological or who are otherwise authorized to act on
behalf of Ecological with respect to any matter, other than its officers and
directors, and a summary of the terms of such powers or authorizations.
Section 2.22 Valid Obligation. This Agreement and all agreements and
other documents executed by Ecological in connection herewith constitute the
valid and binding obligation of Ecological, enforceable in accordance with its
or their terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 3.03),
each Stanford Shareholder who shall elect to accept the exchange offer described
herein (the "Accepting Shareholders"), shall assign, transfer and deliver, free
and clear of all liens, pledges, encumbrances, charges, restrictions or known
claims of any kind, nature, or description, the number of shares of common stock
of Stanford set forth on Schedule 1.19(c) attached hereto, in the aggregate
constituting 100% of the issued and outstanding shares of common stock of
Stanford held by each of such shareholders; the objective of such Exchange being
the acquisition by Ecological of 100% of the issued and outstanding common stock
of Stanford. In exchange for the transfer of such securities by the Stanford
Shareholders, Ecological shall issue to the Stanford Shareholders (1) an
aggregate of _____________ of common stock of Ecological. At the Closing, each
Stanford Shareholder shall, on surrender of his certificate or certificates
representing such Stanford shares to Ecological or its registrar or transfer
agent, be entitled to receive a certificate or certificates evidencing his
proportionate interest in the Shares. Upon consummation of the transaction
contemplated herein, assuming participation by all of the Stanford Shareholders,
all of the shares of capital stock of Stanford shall be held by Ecological.
Section 3.02 Anti-Dilution. The number of shares of Ecological common
stock issuable upon exchange pursuant to Section 3.01 shall be appropriately
adjusted to take into account any other stock split, stock dividend, reverse
stock split, recapitalization, or similar change in the Ecological common stock
which may occur (i) between the date of the execution of this Agreement and the
Closing Date, as to the Initial Shares, and (ii) between the date of the
execution of this Agreement and the release date, as to the Additional Shares.
Section 3.03 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than December 31, 2002, subject
to the right of Ecological or Stanford to extend such Closing Date by up to an
additional sixty (60) days. Such Closing shall take place at a mutually
agreeable time and place.
Section 3.04 Closing Events. At the Closing, Ecological, Stanford and
each of the Accepting Shareholders shall execute, acknowledge, and deliver (or
shall ensure to be executed, acknowledged, and delivered) any and all
certificates, opinions, financial statements, schedules, agreements,
resolutions, rulings or other instruments required by this Agreement to be so
delivered at or prior to the Closing, together with such other items as may be
reasonably requested by the parties hereto and their respective legal counsel in
order to effectuate or evidence the transactions contemplated hereby. Among
other things, Ecological shall provide an opinion of counsel acceptable to
Stanford as to such matters as Stanford may reasonably request, which shall
include, but not be limited to, a statement, to the effect that (i) to such
counsel's best knowledge, after reasonable investigation, from inception until
the Closing Date, Ecological has complied with all applicable statutes and
regulations of any federal, state, or other applicable governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
Ecological or except to the extent that noncompliance would not result in the
occurrence of any material liability (such compliance including, but not being
limited to, the filing of all reports to date with federal and state securities
authorities) and
Section 3.05 Termination.
(a) This Agreement may be terminated by the board of directors
of either Ecological or Stanford at any time prior to the Closing Date
if:
(i) there shall be any actual or threatened action or
proceeding before any court or any governmental body which
shall seek to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement and which, in the
judgement of such board of directors, made in good faith and
based upon the advice of its legal counsel, makes it
inadvisable to proceed with the Exchange; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions (which does not
include the Securities and Exchange Commission) or in the
judgement of such board of directors, made in good faith and
based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will
be obtained only on a condition or conditions which would be
unduly burdensome, making it inadvisable to proceed with the
Exchange.
In the event of termination pursuant to this paragraph (a) of Section
3.05, no obligation, right or liability shall arise hereunder, and each
party shall bear all of the expenses incurred by it in connection with
the negotiation, drafting, and execution of this Agreement and the
transactions herein contemplated.
(b) This Agreement may be terminated by the board of directors
of Ecological at any time prior to the Closing Date if:
(i) there shall have been any change after the date
of the latest balance sheet of Stanford in the assets,
properties, business, or financial condition of Stanford,
which could have a materially adverse effect on the financial
statements of Stanford listed in Section 1.04(a) taken as a
whole, except any changes disclosed in the Stanford Schedules;
(ii) the board of directors of Ecological determines
in good faith that one or more of Ecological's conditions to
Closing has not occurred, through no fault of Ecological.
(iii) Ecological takes the termination action
specified in Section 1.18 as a result of Stanford Schedules or
updates thereto which Ecological finds unacceptable;
(iv) on or before December 15, 2002, Ecological
notifies Stanford that Ecological's investigation pursuant to
Section 4.01 below has uncovered information which it finds
unacceptable by the same criteria set forth in Section 1.19;
or
(v) Stanford shall fail to comply in any material
respect with any of its covenants or agreements contained in
this Agreement or if any of the representations or warranties
of Stanford contained herein shall be inaccurate in any
material respect, where such noncompliance or inaccuracy has
not been cured within ten (10) days after written notice
thereof.
If this Agreement is terminated pursuant to this paragraph (b) of
Section 3.05, this Agreement shall be of no further force or effect,
and no obligation, right or liability shall arise hereunder, except
that Stanford shall bear its own costs as well as the reasonable costs
of Ecological in connection with the negotiation, preparation, and
execution of this Agreement and qualifying the offer and sale of
securities to be issued in the Exchange under the registration
requirements, or exemption from the registration requirements, of state
and federal securities laws.
(c) This Agreement may be terminated by the board of directors
of Stanford at any time prior to the Closing Date if:
(i) there shall have been any change after the date
of the latest balance sheet of Ecological in the assets,
properties, business or financial condition of Ecological,
which could have a material adverse effect on the financial
statements of Ecological listed in Section 2.04(b) taken as a
whole, except any changes disclosed in the Ecological
Schedules;
(ii) the board of directors of Stanford determines in
good faith that one or more of Stanford' conditions to Closing
has not occurred, through no fault of Stanford;
(iii) Stanford takes the termination action specified
in Section 2.20 as a result of Ecological Schedules or updates
thereto which Stanford finds unacceptable;
(iv) on or before December 15, 2002 Stanford notifies
Ecological that Stanford' investigation pursuant to Section
4.01 below has uncovered information which it finds
unacceptable by the same criteria set forth in Section 2.20;
or
(v) Ecological shall fail to comply in any material
respect with any of its covenants or agreements contained in
this Agreement or if any of the representations or warranties
of Ecological contained herein shall be inaccurate in any
material respect, where such noncompliance or inaccuracy has
not been cured within ten (10) days after written notice
thereof.
If this Agreement is terminated pursuant to this paragraph (c) of
Section 3.05, this Agreement shall be of no further force or effect,
and no obligation, right or liability shall arise hereunder, except
that Ecological shall bear its own costs as well as the reasonable
costs of Stanford and its principal shareholders incurred in connection
with the negotiation, preparation and execution of this Agreement.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. Ecological and Stanford will
each afford to the officers and authorized representatives of the other full
access to the properties, books and records of Ecological or Stanford, as the
case may be, in order that each may have a full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of the other,
and each will furnish the other with such additional financial and operating
data and other information as to the business and properties of Ecological or
Stanford, as the case may be, as the other shall from time to time reasonably
request. Without limiting the foregoing, as soon as practicable after the end of
each fiscal quarter (and in any event through the last fiscal quarter prior to
the Closing Date), each party shall provide the other with quarterly internally
prepared and unaudited financial statements.
Section 4.02 Delivery of Books and Records. At the Closing, Stanford
shall deliver to Ecological the originals of the corporate minute books, books
of account, contracts, records, and all other books or documents of Stanford now
in the possession of Stanford or its representatives.
Section 4.03 Third Party Consents and Certificates. Ecological and
Stanford agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein contemplated.
Section 4.04 Name Change & State of Incorporation. At or prior to the
Closing Date, Ecological's Board of Directors shall have approved an amendment
to the certificate of incorporation to change the name of Ecological to
"STANFORD CAPITAL CORPORATION. Such amendment shall be carried out promptly upon
approval of the same by the shareholders of Ecological.
Section 4.05 Ecological Shareholder Meeting. Ecological shall call a
special shareholders meeting to be held on or prior to the Closing Date at which
meeting the shareholders of Ecological shall be requested to approve, and
Ecological's Board of Directors shall recommend approval of, the terms of this
Agreement, including the name change and the change in the state of
incorporation described in Section 4.04 and such other matters as shall require
shareholder approval hereunder.
Section 4.06 Consent of Stanford Shareholders. Stanford shall use its
best efforts to obtain the consent of all Stanford Shareholders to participate
in the Exchange.
Section 4.07 Designation of Directors and Officers. On or before the
Closing Date, Ecological shall increase its board of directors to ___(__)
persons. Messrs. __________, ____________, ______________ shall be designated as
additional board members at the Closing. The existing officer(s) and directors
of Ecological shall submit their resignation.
Section 4.08 The Exclusive Dealing Rights. Until 5:00 P.M. Eastern
Daylight Time on December 15, 2002.
(a) In recognition of the substantial time and effort which
Ecological has spent and will continue to spend in investigating
Stanford and its business and in addressing the matters related to the
transactions contemplated herein, each of which may preempt or delay
other management activities, neither Stanford, nor any of its officers,
employees, representatives or agents will directly or indirectly
solicit or initiate any discussions or negotiations with, or, except
where required by fiduciary obligations under applicable law as advised
by counsel, participate in any negotiations with or provide any
information to or otherwise cooperate in any other way with, or
facilitate or encourage any effort or attempt by, any corporation,
partnership, person or other entity or group (other than Ecological and
its directors, officers, employees, representatives and agents)
concerning any merger, sale of substantial assets, sale of shares of
capital stock, (including without limitation, any public or private
offering of the common stock of Stanford) or similar transactions
involving Stanford (all such transactions being referred to as
"Stanford Acquisition Transactions"). If Stanford receives any proposal
with respect to a Stanford Acquisition Transaction, it will immediately
communicate to Ecological the fact that it has received such proposal
and the principal terms thereof.
(b) In recognition of the substantial time and effort which
Stanford has spent and will continue to spend in investigating
Ecological and its business and in addressing the matters related to
the transactions contemplated herein, each of which may preempt or
delay other management activities, neither Ecological, nor any of its
officers, employees, representatives or agents will directly or
indirectly solicit or initiate any discussions or negotiations with,
or, except where required by fiduciary obligations under applicable law
as advised by counsel, participate in any negotiations with or provide
any information to or otherwise cooperate in any other way with, or
facilitate or encourage any effort or attempt by, any corporation,
partnership, person or other entity or group (other than Stanford and
its directors, officers, employees, representatives and agents)
concerning any merger, sale of substantial assets, sale of shares of
capital stock, (including without limitation, any public or private
offering of the common stock of Ecological or similar transactions
involving Ecological (all such transactions being referred to as
"Ecological Acquisition Transactions"). If Ecological receives any
proposal with respect to a Ecological Acquisition Transaction, it will
immediately communicate to Stanford the fact that it has received such
proposal and the principal terms thereof.
Section 4.09 Actions Prior to Closing.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the Ecological Schedules or
Stanford Schedules or as permitted or contemplated by this Agreement,
Ecological (subject to paragraph (d) below) and Stanford respectively,
will each:
(i) carry on its business in substantially the same
manner as it has heretofore;
(ii) maintain and keep its properties in states of
good repair and condition as at present, except for
depreciation due to ordinary wear and tear and damage due to
casualty;
(iii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iv) perform in all material respects all of its
obligations under material contracts, leases, and instruments
relating to or affecting its assets, properties, and business;
(v) use its best efforts to maintain and preserve its
business organization intact, to retain its key employees, and
to maintain its relationship with its material suppliers and
customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by all
federal and state laws and all rules, regulations, and orders
imposed by federal or state governmental authorities.
(b) From and after the date of this Agreement until the
Closing Date, neither Ecological nor Stanford will:
(i) make any changes in their articles or certificate
of incorporation or bylaws;
(ii) take any action described in Section 1.07 in the
case of Stanford, or in Section 2.07, in the case of
Ecological (all except as permitted therein or as disclosed in
the applicable party's schedules);
(iii) enter into or amend any contract, agreement, or
other instrument of any of the types described in such party's
schedules, except that a party may enter into or amend any
contract, agreement, or other instrument in the ordinary
course of business involving the sale of goods or services; or
(iv) sell any assets or discontinue any operations
(other than the Divestiture), sell any shares of capital stock
or conduct any similar transactions other than in the ordinary
course of business.
(C) In light of the fact that Stanford' shareholders will
control Ecological as a result of the Exchange, from and after the date
of this Agreement until the Closing Date, Ecological shall take no
action which is material to its business without the prior written
approval of Stanford, which Stanford may give or withhold in its sole
discretion after consultation with Ecological.
Section 4.10 Sales Under Rule 144 or 145,If Applicable.
(a) Ecological will use its best efforts to at all times
comply with the reporting requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), including timely filing of
all periodic reports required under the provisions of the Exchange Act
and the rules and regulations promulgated thereunder.
(b) Upon being informed in writing by any such person holding
restricted stock of Ecological that such person intends to sell any
shares under Rule 144, Rule 145 or Regulation S promulgated under the
Securities Act (including any rule adopted in substitution or
replacement thereof), Ecological will certify in writing to such person
that it has filed all of the reports required to be filed by it under
the Exchange Act to enable such person to sell such person's restricted
stock under Rule 144, 145 or Regulation S, as may be applicable in the
circumstances, or will inform such person in writing that it has not
filed any such report or reports.
(c) If any certificate representing any such restricted stock
is presented to Ecological's transfer agent for registration of
transfer in connection with any sale theretofore made under Rule 144,
145 or Regulation S, provided such certificate is duly endorsed for
transfer by the appropriate person(s) or accompanied by a separate
stock power duly executed by the appropriate person(s) in each case
with reasonable assurances that such endorsements are genuine and
effective, and is accompanied by an opinion of counsel satisfactory to
Ecological and its counsel that the stock transfer has complied with
the requirements of Rule 144, 145 or Regulation S, as the case may be,
Ecological will promptly instruct its transfer agent to register such
shares and to issue one or more new certificates representing such
shares to the transferee and, if appropriate under the provisions of
Rule 144, 145 or Regulation S, as the case may be, free of any stop
transfer order or restrictive legend. The provisions of this Section
4.11 shall survive the Closing and the consummation of the transactions
contemplated by this Agreement.
Section 4.11 Indemnification.
(a) Stanford hereby agrees to indemnify Ecological and each of
the officers, agents and directors of Ecological as of the date of
execution of this Agreement against any loss, liability, claim, damage,
or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever), to which it or they may become subject arising out of or
based on any inaccuracy appearing in or misrepresentations made under
Article I of this Agreement. The indemnification provided for in this
paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
(b) Ecological hereby agrees to indemnify Stanford and each of
the officers, agents, and directors of Stanford and each of the
Stanford Shareholders as of the date of execution of this Agreement
against any loss, liability, claim, damage, or expense (including, but
not limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they
may become subject arising out of or based on any inaccuracy appearing
in or misrepresentation made under Article II of this Agreement. The
indemnification provided for in this paragraph shall survive the
Closing and consummation of the transactions contemplated hereby and
termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF Ecological
The obligations of Ecological under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants.
The representations and warranties made by Stanford in this Agreement were true
when made and shall be true at the Closing Date with the same force and effect
as if such representations and warranties were made at and as of the Closing
Date (except for changes therein permitted by this Agreement). Stanford shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Stanford prior to or at the
Closing. Ecological shall be furnished with a certificate, signed by a duly
authorized executive officer of Stanford and dated the Closing Date, to the
foregoing effect.
Section 5.02 Officer's Certificate. Ecological shall have been
furnished with a certificate dated the Closing Date and signed by a duly
authorized officer of Stanford to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of Stanford
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement, or, to the
extent not disclosed in the Stanford Schedules, by or against Stanford, which
might result in any material adverse change in any of the assets, properties,
business, or operations of Stanford.
Section 5.03 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any change in the financial condition, business,
or operations of Stanford nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable using
the criteria set forth in Section 1.19.
Section 5.04 Good Standing. Ecological shall have received a
certificate of good standing from the Special Administration Region of Hong
Kong, dated as of a date within ten days prior to the Closing Date certifying
that Stanford is in good standing as a corporation in the Special Administration
Region of Hong Kong.
Section 5.05 Approval by Stanford Shareholders. The Exchange shall have
been approved, and shares delivered in accordance with Section 3.01, by the
holders of not less than ninety percent (90%) of the outstanding common stock of
Stanford, unless a lesser number is agreed to by Ecological.
Section 5.06 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.07 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of Ecological and Stanford after the Closing Date on the basis as
presently operated shall have been obtained.
Section 5.08 Other Items.
(a) Ecological shall have received a list of Stanford'
shareholders containing the name, address, and number of shares held by
each Stanford shareholder as of the date of Closing, certified by an
executive officer of Stanford as being true, complete and accurate; and
(b) Ecological shall have received such further opinions,
documents, certificates or instruments relating to the transactions
contemplated hereby as Ecological may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF Stanford
AND THE Stanford SHAREHOLDERS
The obligations of Stanford and the Stanford Shareholders under this
Agreement are subject to the satisfaction, at or before the Closing Date, of the
following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants.
The representations and warranties made by Ecological in this Agreement were
true when made and shall be true as of the Closing Date (except for changes
therein permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, Ecological shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
Ecological and shall have satisfied the conditions described below prior to or
at the Closing:
(a) Immediately prior to the Closing, Ecological shall have no
more than an aggregate of 19,984,625 shares of common stock issued and
outstanding.
(b) The shareholders of Ecological shall have approved the
Exchange and the related transactions described herein and the related
name change.
Stanford shall have been furnished with certificates, signed by duly authorized
executive officers of Ecological and dated the Closing Date, to the foregoing
effect.
Section 6.02 Officer's Certificate. Stanford shall have been furnished
with certificates dated the Closing Date and signed by duly authorized executive
officers of Ecological, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of Ecological
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the Ecological Schedules, by or against Ecological,
which might result in any material adverse change in any of the assets,
properties or operations of Ecological.
Section 6.03 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any change in the financial condition, business or
operations of Ecological nor shall any event have occurred which, with the lapse
of time or the giving of notice, is determined to be unacceptable using the
criteria set forth in Section 2.20.
Section 6.04 Good Standing. Stanford shall have received a certificate
of good standing from the Secretary of State of the State of Delaware or other
appropriate office, dated as of a date within ten days prior to the Closing Date
certifying that Ecological is in good standing as a corporation in the State of
Delaware and has filed all tax returns required to have been filed by it to date
and has paid all taxes reported as due thereon.
Section 6.05 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.06 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of Ecological and Stanford after the Closing Date on the basis as
presently operated shall have been obtained.
Section 6.07 Other Items. Stanford shall have received further
opinions, documents, certificates, or instruments relating to the transactions
contemplated hereby as Stanford may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. Ecological and Stanford agree that, except as set
out on Schedule 7.01 attached hereto, there were no finders or brokers involved
in bringing the parties together or who were instrumental in the negotiation,
execution or consummation of this Agreement. Ecological and Stanford each agree
to indemnify the other against any claim by any third person other than those
described above for any commission, brokerage, or finder's fee arising from the
transactions contemplated hereby based on any alleged agreement or understanding
between the indemnifying party and such third person, whether express or implied
from the actions of the indemnifying party.
Section 7.02 Governing Law. This Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to the matters of state law, with the laws
of the State of Delaware without giving effect to principles of conflicts of law
thereunder. Each of the parties (a) irrevocably consents and agrees that any
legal or equitable action or proceedings arising under or in connection with
this Agreement shall be brought exclusively in the federal courts of the United
States, (b) by execution and delivery of this Agreement, irrevocably submits to
and accepts, with respect to any such action or proceeding, generally and
unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives
any and all rights such party may now or hereafter have to object to such
jurisdiction.
Section 7.03 Notices. Any notice or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to Ecological, to: ECOLOGICAL SYSTEMS, INC.
0000 Xxxx Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
If to Stanford, to: STANFORD CAPITAL INTERNATIONAL LIMITED
Xxxxx 0000, Xxxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
With copies to: Vanderkam & Xxxxxxx
000 Xxxxxxxxx, #000
Xxxxxxx, Xxxxx 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.04 Attorney's Fees. In the event that either party institutes
any action or suit to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the prevailing party shall be reimbursed by
the losing party for all costs, including reasonable attorney's fees, incurred
in connection therewith and in enforcing or collecting any judgement rendered
therein.
Section 7.05 Confidentiality. Each party hereto agrees with the other
that, unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.06 Public Announcements and Filings. Unless required by
applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
Section 7.07 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.08 Third Party Beneficiaries. This contract is strictly
between Ecological and Stanford, and, except as specifically provided, no
director, officer, stockholder (other than the Stanford Shareholders), employee,
agent, independent contractor or any other person or entity shall be deemed to
be a third party beneficiary of this Agreement.
Section 7.09 Expenses. Subject to Sections 3.05 and 7.04 above, whether
or not the Exchange is consummated, each of Ecological and Stanford will bear
their own respective expenses, including legal, accounting and professional
fees, incurred in connection with the Exchange or any of the other transactions
contemplated hereby.
Section 7.10 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.11 Survival; Termination. The representations, warranties,
and covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
Section 7.12 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.13 Amendment or Waiver. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.14 Best Efforts. Subject to the terms and conditions herein
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the date first-above written.
ATTEST: ECOLOGICAL SYSTEMS, INC.
BY: /s/ Xxxxx Xxxxxx
--------------------------------- ------------------
Secretary or Assistant Secretary President
ATTEST: STANFORD CAPITAL INTERNATIONAL LIMITED
BY: /s/ X.X. Xxxx
-------------------
Secretary or Assistant Secretary President
The undersigned shareholders of STANFORD CAPITAL INTERNATIONAL LIMITED
hereby agree to participate in the Exchange on the terms set forth above.
Subject to Section 7.11 above, each of the undersigned hereby represents and
affirms that he has read each of the representations and warranties of STANFORD
CAPITAL INTERNATIONAL LIMITED set out in Article I hereof and that, to the best
of his knowledge, all of such representations and warranties are true and
correct.
/s/ Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxx Xxxxxxx Xxxx Xxxx, individually
/s/ Xxx Xxxxxx Xxxx
Xxx Xxxxxx Xxxx, individually
/s/ Xxx Xxx Yung
Xxx Xxx Yung, individually
/s/ Wan Xxxxx Xx Xxxx
Wan Xxxxx Xx Xxxx, individually
/s/ Sun Kam Fai
Sun Kam Fai, individually
/s/ Xxx Xxx Fai
Xxx Xxx Fai, individually
/s/ Xxxxxx Xxxx Xxx
Xxxxxx Xxxx Xxx, individually
First Max Investment Ltd.
By:_________________________
Its:__________________________
/s/ Xxxx Xxxx Wing
Xxxx Xxxx Wing, individually
/s/ Xxxx Xx Xxxx
Xxxx Xx Xxxx, individually
Metrolink Ltd.
By:_________________________
Its:__________________________
