EXCHANGE AGREEMENT
Between
Eternal Technologies Group, Inc.
and
E-Sea Biomedical Engineering Co. International Ltd.
Dated October 31, 2004
TABLE OF CONTENTS
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF E-SEA BIOMEDICAL ENGINEERING CO INTERNATIONAL LTD.
1.01 Organization.......................................................... 2
1.02 Capitalization........................................................ 2
1.03 Subsidiaries and Predecessor Corporations............................. 2
1.04 Financial Statements.................................................. 2
1.05 Information........................................................... 2
1.06 Options and Warrants.................................................. 2
1.07 Title and Related Matters............................................. 2
1.08 Litigation and Proceedings............................................ 3
1.09 Contracts............................................................. 3
1.10 Material Contract Defaults............................................ 3
1.11 No Conflict With Other Instruments.................................... 3
1.12 Governmental Authorizations........................................... 4
1.13 Compliance With Laws and Regulations.................................. 4
1.14 Insurance............................................................. 4
1.15 Approval of Agreement................................................. 4
1.16 Material Transactions or Affiliations................................. 4
1.17 Labor Relations....................................................... 4
1.18 E-Sea Schedules....................................................... 4
1.19 Bank Accounts; Power of Attorney...................................... 5
1.20 Valid Obligation...................................................... 5
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ETERNAL TECHNOLOGIES GROUP, INC.
2.01 Organization.......................................................... 5
2.02 Capitalization........................................................ 6
2.03 Subsidiaries and Predecessor Corporations ............................ 6
2.04 Securities Filings; Financial Statements.............................. 6
2.05 Options and Warrants.................................................. 6
2.06 Litigation and Proceedings............................................ 6
2.07 Material Contract Defaults............................................ 6
2.08 No Conflict With Other Instruments.................................... 6
2.09 Governmental Authorizations........................................... 6
2.10 Compliance With Laws and Regulations.................................. 7
2.11 Approval of Agreement................................................. 7
2.12 Continuity of Business Enterprises.................................... 7
ARTICLE III PLAN OF EXCHANGE
3.01 The Exchange.......................................................... 7
3.02 Closing............................................................... 7
3.03 Closing Events........................................................ 8
3.04 Termination........................................................... 8
ARTICLE IV SPECIAL COVENANTS
4.01 Access to Properties and Records...................................... 9
4.02 Delivery of Books and Records......................................... 9
4.03 Third Party Consents and Certificates................................. 9
4.04 Consent of the E-Sea Shareholders..................................... 9
4.05 Actions Prior to Closing.............................................. 9
4.06 Sales Under Rule 144 or 145, If Applicable............................ 10
4.07 Indemnification....................................................... 11
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF ETERNAL TECHNOLOGIES GROUP, INC.
5.01 Accuracy of Representations and Performance of Covenants.............. 11
5.02 Officer's Certificates................................................ 11
5.03 No Material Adverse Change............................................ 11
5.04 Good Standing......................................................... 11
5.05 Approval by E-Sea Shareholders........................................ 12
5.06 No Governmental Prohibitions.......................................... 12
5.07 Consents.............................................................. 12
5.08 Other Items........................................................... 12
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF E-SEA BIOMEDICAL ENGINEERING CO INTERNATIONAL
LTD. AND THE E-SEA BIOMEDICAL ENGINEERING CO INTERNATIONAL LTD. SHAREHOLDERS
6.01 Accuracy of Representations and Performance of Covenants.............. 12
6.02 Officer's Certificate................................................. 12
6.03 No Material Adverse Change............................................ 12
6.04 Good Standing......................................................... 12
6.05 No Governmental Prohibition........................................... 12
6.06 Other Items........................................................... 13
ARTICLE VII MISCELLANEOUS
7.01 Brokers............................................................... 13
7.02 Governing Law......................................................... 13
7.03 Notices............................................................... 13
7.04 Attorney's Fees....................................................... 14
7.05 Confidentiality....................................................... 14
7.06 Public Announcements and Filings...................................... 14
7.07 Schedules; Knowledge.................................................. 14
7.08 Third Party Beneficiaries............................................. 14
7.09 Expenses.............................................................. 14
7.10 Entire Agreement...................................................... 14
7.11 Survival; Termination................................................. 14
7.12 Counterparts.......................................................... 14
7.13 Amendment or Waiver................................................... 14
7.14 Best Efforts.......................................................... 15
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement")
is entered into as of this 31st day of October by and between Eternal
Technologies Group, Inc. a Nevada corporation (hereinafter referred to as
"Eternal")and E-Sea Biomedical Engineering Co. International, Ltd., a British
Virgin Islands corporation (hereinafter referred to as "E-Sea"), upon the
following premises:
Premises
WHEREAS, Eternal is a publicly held corporation organized under the
laws of the State of Nevada and engaged in animal husbandry and meat processing;
WHEREAS, E-Sea is a privately held corporation organized under the laws
of the British Virgin Islands and engaged in the ownership and operation of
animal husbandry and meat processing company;
WHEREAS, management of the constituent corporations entered into a
letter of intent (the "Letter of Intent") dated October 30, 2004 pursuant to
which Eternal agreed to acquire 100% of the issued and outstanding securities of
E-Sea in exchange for the issuance of certain shares of Eternal (the "Exchange")
and E-Sea agreed to use its best efforts to cause its shareholders (the "E-Sea
Shareholders") to exchange their securities of E-Sea on the terms described
herein; and
WHEREAS, Eternal and E-Sea 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 E-SEA
As an inducement to, and to obtain the reliance of Eternal, except as
set forth on the E-Sea Schedules (as hereinafter defined), E-Sea represents and
warrants as follows:
Section 1.01 Organization. E-Sea is a corporation duly organized,
validly existing, and in good standing under the laws of the British Virgin
Islands 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 E-Sea Schedules are complete and correct copies of the
Memorandum and articles of association of E-Sea 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 E-Sea's
Memorandum and articles of association. E-Sea has taken all actions required by
law, its articles of incorporation, or otherwise to authorize the execution and
delivery of this Agreement. E-Sea 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 E-Sea
consists of 50,000 shares of common stock, $1.00 par value, of which 1,000
shares are currently issued and outstanding and no shares of preferred stock.
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. E-Sea does not
have any predecessor corporation(s) but does have subsidiaries as disclosed on
Schedule 1.03, 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 "E-Sea" also includes those subsidiaries, if any, set
forth on Schedule 1.03.
Section 1.04 Financial Statements.
(a) Included in the E-Sea Schedules are (i) the unaudited
balance sheets and the related statements of operations of E-Sea as of
and for the period ended October 31, 2004.
(b) All such financial statements have been prepared in
accordance with generally accepted accounting principles. The E-Sea
balance sheet present a true and fair view as of the date of such
balance sheet of the financial condition of E-Sea. E-Sea did not have,
as of the date 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 E-Sea
in accordance with generally accepted accounting principles.
(c) E-Sea has no liabilities with respect to the payment of
any federal, province, county, local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued but not
yet due and payable.
(d) E-Sea has filed all provincial, 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 E-Sea
are in all material respects complete and correct and have been
maintained in accordance with good business and accounting practices.
(f) All of E-Sea's assets are reflected on its financial
statements, and, except as set forth in the E-Sea Schedules or the
financial statements of E-Sea or the notes thereto, E-Sea has no
material liabilities, direct or indirect, matured or unmatured,
contingent or otherwise.
Section 1.05 Information. The information concerning E-Sea set forth in
this Agreement and in the E-Sea 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,
E-Sea has fully disclosed in writing to Eternal (through this Agreement or the
E-Sea Schedules) all information relating to matters involving E-Sea 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 of
diminution in value, (ii) have led or may lead to a competitive disadvantage on
the part of E-Sea 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 E-Sea, 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 common stock,
Section 1.07 Title and Related Matters. E-Sea has good and marketable
title to all of its properties, inventory, interests in properties, and assets,
real and personal, which are reflected in the October 31, 2004 balance sheet
(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 E-Sea Schedules. Except as set forth in the E-Sea
Schedules, E-Sea 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 E-Sea's business. Except as set forth in the E-Sea Schedules, no
third party has any right to, and E-Sea 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 E-Sea or any material portion of its
properties, assets, or rights.
Section 1.08 Litigation and Proceedings. Except as set forth in the
E-Sea Schedules, there are no actions, suits, proceedings, or investigations
pending or, to the knowledge of E-Sea after reasonable investigation, threatened
by or against E-Sea or affecting E-Sea 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. E-Sea 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 1.09 Contracts.
(a) Except as included or described in the E-Sea Schedules,
there are no "material" contracts, agreements, franchises, license
agreements, debt instruments or other commitments to which E-Sea 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 E-Sea is a party or by which its
properties are bound and which are material to the operations of E-Sea
taken as a whole are valid and enforceable by E-Sea in all respects,
except as limited by bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally;
(c) E-Sea is not a party to or bound by, and the properties of
E-Sea 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 E-Sea; and
(d) Except as included or described in the E-Sea Schedules or
reflected in the most recent October 31, 2004 balance sheet, E-Sea 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 E-Sea 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 E-Sea.
Section 1.10 Material Contract Defaults. E-Sea 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 E-Sea and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which E-Sea has not taken adequate steps to prevent such a default
from occurring.
Section 1.11 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 E-Sea is a party or to which any of its
properties or operations are subject.
Section 1.12 Governmental Authorizations. Except as set forth in the
E-Sea Schedules, E-Sea 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 E-Sea of this
Agreement and the consummation by E-Sea of the transactions contemplated hereby.
Section 1.13 Compliance With Laws and Regulations. Except as set forth
in the E-Sea Schedules, to the best of its knowledge E-Sea 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 E-Sea or except to the extent that noncompliance would not result
in the occurrence of any material liability for E-Sea.
Section 1.14 Insurance. All of the properties of E-Sea are fully
insured for their full replacement cost.
Section 1.15 Approval of Agreement. The board of directors of E-Sea has
authorized the execution and delivery of this Agreement by E-Sea and has
approved this Agreement and the transactions contemplated hereby, and will
recommend to the E-Sea Shareholders that the Exchange be accepted by them.
Section 1.16 Material Transactions or Affiliations. Set forth in the
E-Sea Schedules is a description of every contract, agreement, or arrangement
between E-Sea 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 E-Sea to own beneficially, 5% or more of the issued and
outstanding common stock of E-Sea 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 E-Sea Schedules or
otherwise disclosed herein, no officer, director, or 5% shareholder of E-Sea
has, or has had since inception of E-Sea any known interest, direct or indirect,
in any transaction with E-Sea which was material to the business of E-Sea. There
are no commitments by E-Sea, 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 1.17 Labor Relations. E-Sea has not had work stoppage resulting
from labor problems. To the knowledge of E-Sea no union or other collective
bargaining organization is organizing or attempting to organize any employee of
E-Sea.
Section 1.18 E-Sea Schedules. E-Sea has delivered to Eternal the
following schedules, which are collectively referred to as the " E-Sea
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
E-Sea 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
memorandum and articles of association of E-Sea in effect as of the
date of this Agreement;
(b) a schedule containing the financial statements of E-Sea
identified in paragraph 1.04(a);
(c) a Schedule 1.19(c) containing a list indicating the name
and address of each shareholder of E-Sea together with the number of
shares owned by him, her or it;
(d) a schedule containing a description of all real property
owned by E-Sea, 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
E-Sea carries on or proposes to carry on its business (except those
which, in the aggregate, are immaterial to the present or proposed
business of E-Sea);
(f) a schedule listing the accounts receivable and notes and
other obligations receivable of E-Sea as of October 31, 2004, or
thereafter other than in the ordinary course of business of E-Sea
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 E-Sea as of October 31, 2004, or that
arose thereafter other than in the ordinary course of the business of
E-Sea 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 E-Sea respecting such obligations;
(h) a schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the
E-Sea Schedules by Sections 1.01 through 1.19.
E-Sea shall cause the E-Sea Schedules and the instruments and data
delivered to Eternal 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 E-Sea. E-Sea shall
have until November 30, 2004 to provide such schedules. If E-Sea cannot or fails
to do so, or if E-Sea acting reasonably finds any such schedules or updates
provided after the date hereof to be unacceptable according to the criteria set
forth below, Eternal may terminate this Agreement by giving written notice to
E-Sea within five (5) days after the schedules or updates were due to be
produced or were provided. For purposes of the foregoing, Eternal may consider a
disclosure in the E-Sea 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 1.19 Bank Accounts; Power of Attorney. Set forth in Schedule
1.21 is a true and complete list of (a) all accounts with banks, money market
mutual funds or securities or other financial institutions maintained by E-Sea
within the past twelve (12) months, the account numbers thereof, and all persons
authorized to sign or act on behalf of E-Sea, (b) all safe deposit boxes and
other similar custodial arrangements maintained by E-Sea within the past twelve
(12) months, and (c) the names of all persons holding powers of attorney from
E-Sea or who are otherwise authorized to act on behalf of E-Sea with respect to
any matter, other than its officers and directors, and a summary of the terms of
such powers or authorizations.
Section 1.20 Valid Obligation. This Agreement and all agreements and
other documents executed by E-Sea in connection herewith constitute the valid
and binding obligation of E-Sea, 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 ETERNAL TECHNOLOGIES GROUP, INC.
As an inducement to, and to obtain the reliance of E-Sea and the E-Sea
Shareholders, except as set forth in the Eternal Schedules (as hereinafter
defined), Eternal represents and warrants as follows:
Section 2.01 Organization. Eternal is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada 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 Eternal Schedules are
complete and correct copies of the certificate of incorporation and bylaws of
Eternal 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 Eternal 's certificate of incorporation or
bylaws. Eternal 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 Eternal 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. Eternal 's authorized capitalization
consists of 95,000,000 shares of common stock, par value $.001 of which
30,679,630 shares are issued and outstanding and 5,000,000 shares of Preferred
Stock, par value $.001, of which no shares are 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 2.03 Subsidiaries and Predecessor Corporations. Eternal's
predecessor corporation was Waterford Sterling Corporation. Its subsidiaries are
disclosed in Schedule 2.03. For purposes hereinafter, the term " Eternal " also
includes those subsidiaries, if any, set forth on Schedule 2.03.
Section 2.04 Securities Filings; Financial Statements.
(a) Since December 12, 2002, the effective date of its
acquisition by Waterford Sterling, Eternal has timely filed all forms,
reports and documents required to be filed with the Securities and
Exchange Commission, and has heretofore delivered to E-Sea, in the form
filed with the Commission, (i) all quarterly and annual reports on
Forms 10-QSB and 10-KSB filed since December 12, 2002, (ii) all other
reports filed by Eternal with the Securities and Exchange Commission
since December 31, 2004 (collectively, the "SEC Reports") and (iv) 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.
Section 2.05 Options or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized
and unissued stock of Eternal.
Section 2.06 Litigation and Proceedings. There are no actions, suits,
proceedings or investigations pending or, to the knowledge Eternal after
reasonable investigation, threatened by or against Eternal or affecting Eternal
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 2.06. Eternal 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 2.07 Material Contract Defaults. Eternal 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 Eternal and there is no event of default in
any material respect under any such contract, agreement, lease, or other
commitment in respect of which Eternal has not taken adequate steps to prevent
such a default from occurring.
Section 2.08 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
Eternal is a party or to which any of its assets or operations are subject.
Section 2.09 Governmental Authorizations. Eternal 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 Eternal of this Agreement and the consummation by Eternal of the
transactions contemplated hereby.
Section 2.10 Compliance With Laws and Regulations. To the best of its
knowledge, Eternal 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 Eternal 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 2.11 Approval of Agreement. The board of directors of Eternal
has authorized the execution and delivery of this Agreement by Eternal 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 2.12 Continuity of Business Enterprises. Eternal has no
commitment or present intention to liquidate Eternal or sell or otherwise
dispose of a material portion of Eternal's business or assets following the
consummation of the transactions contemplated hereby.
Section 2.13 Valid Obligation. This Agreement and all agreements and
other documents executed by Eternal in connection herewith constitute the valid
and binding obligation of Eternal, 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 E-Sea 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 E-Sea set forth on Schedule 1.18(c) attached hereto, in the aggregate
constituting 100% of the issued and outstanding shares of common stock of E-Sea
held by each of such shareholders; the objective of such Exchange being the
acquisition by Eternal of 100% of the issued and outstanding common stock of
E-Sea. In exchange for the transfer of such securities by the E-Sea
Shareholders, Eternal shall issue to the E-Sea Shareholders (1) an aggregate of
14,000,000 shares of common stock of Eternal to the E-Sea Shareholders as of the
Closing Date. In the event the Exchange is consummated, as provided in Section
5.05, but less than 100% of the common stock of E-Sea is delivered to Eternal,
the number of Shares issuable by Eternal to the E-Sea Shareholders as described
above shall be reduced proportionately. At the Closing, each E-Sea Shareholder
shall, on surrender of his certificate or certificates representing such E-Sea
shares to Eternal or its registrar or transfer agent, be entitled to receive a
certificate or certificates evidencing his proportionate interest in the Initial
Shares. Upon consummation of the transaction contemplated herein, assuming
participation by all of the E-Sea Shareholders, all of the shares of capital
stock of E-Sea shall be held by Eternal.
Section 3.02 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 November 15, 2004, subject
to the right of Eternal or E-Sea 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 3.03 Closing Events. At the Closing, Eternal, E-Sea 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, E-Sea shall
provide an opinion of counsel acceptable to Eternal as to such matters as
Eternal 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, E-Sea 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 E-Sea 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).
Section 3.04 Termination.
(a) This Agreement may be terminated by the board of directors
of either Eternal or E-Sea 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
3.04, 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 in accordance with the Expense Sharing
Agreement attached hereto as Exhibit "B".
(b) This Agreement may be terminated by the board of
directors of Eternal 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 E-Sea in the assets,
properties, business, or financial condition of E-Sea , which
could have a materially adverse effect on the financial
statements of E-Sea listed in Section 1.04(a) taken as a
whole, except any changes disclosed in the E-Sea Schedules;
(ii) the board of directors of Eternal determines in
good faith that one or more of E-Sea's conditions to Closing
has not occurred, through no fault of E-Sea.
(iii) on or before October 30, 2004 Eternal notifies
E-Sea that Eternal's investigation pursuant to Section 4.01
below has uncovered information which it finds unacceptable by
the same criteria set forth in Section 1.18; or
(iv) E-Sea 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 E-Sea 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 3.04, this Agreement shall be of no further force or effect,
and no obligation, right or liability shall arise hereunder, except
that E-Sea shall bear its own costs as well as the reasonable costs of
Eternal 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 E-Sea at any time prior to the Closing Date if:
(i) the board of directors of E-Sea determines in
good faith that one or more of Eternal's conditions to Closing
has not occurred, through no fault of Eternal;
(ii) on or before October 30, 2004 E-Sea notifies
Eternal that E-Sea's investigation pursuant to Section 4.01
below has uncovered information which it finds unacceptable.
(iii) Eternal 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 Eternal 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 3.04, this Agreement shall be of no further force or effect,
and no obligation, right or liability shall arise hereunder, except
that Eternal shall bear its own costs as well as the reasonable costs
of E-Sea 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. Eternal and E-Sea will
each afford to the officers and authorized representatives of the other full
access to the properties, books and records of Eternal or E-Sea , 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 Eternal or E-Sea, 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, E-Sea shall
deliver to Eternal the originals of the corporate minute books, books of
account, contracts, records, and all other books or documents of E-Sea now in
the possession of E-Sea or its representatives.
Section 4.03 Third Party Consents and Certificates. Eternal and E-Sea
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 Consent of E-Sea Shareholders. E-Sea shall use its best
efforts to obtain the consent of all E-Sea Shareholders to participate in the
Exchange.
Section 4.05 Actions Prior to Closing.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the E-Sea Schedules or as
permitted or contemplated by this Agreement, Eternal (subject to
paragraph (d) below) and E-Sea 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 Eternal nor E-Sea will:
(i) make any changes in their articles or certificate
of incorporation or bylaws;
(ii) take any action described in Section 1.07.
(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
Section 4.06 Sales Under Rule 144 or 145,If Applicable.
(a) Eternal 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 Eternal 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), Eternal 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 Eternal'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 Eternal and its
counsel that the stock transfer has complied with the requirements of
Rule 144, 145 or Regulation S, as the case may be, Eternal 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 4.16 shall survive
the Closing and the consummation of the transactions contemplated by
this Agreement.
Section 4.07 Indemnification.
(a) E-Sea hereby agrees to indemnify Eternal and each of the
officers, agents and directors of Eternal 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) Eternal hereby agrees to indemnify E-Sea and each of the
officers, agents, and directors of E-Sea and each of the E-Sea
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 ETERNAL TECHNOLOGIES GROUP, INC.
The obligations of Eternal 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 E-Sea 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). E-Sea shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by E-Sea prior to or at the Closing.
Eternal shall be furnished with a certificate, signed by a duly authorized
executive officer of E-Sea and dated the Closing Date, to the foregoing effect.
Section 5.02 Officer's Certificate. Eternal shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of E-Sea to the effect that no litigation, proceeding, investigation, or
inquiry is pending, or to the best knowledge of E-Sea 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 E-Sea
Schedules, by or against E-Sea, which might result in any material adverse
change in any of the assets, properties, business, or operations of Sea.
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 E-Sea 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. E-Sea shall have received a certificate of
good standing from the British Virgin Islands, dated as of a date within ten
days prior to the Closing Date certifying that E-Sea is in good standing as a
corporation in the British Virgin Islands.
Section 5.05 Approval by E-Sea 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
E-Sea, unless a lesser number is agreed to by Eternal.
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 Eternal and E-Sea after the Closing Date on the basis as presently
operated shall have been obtained.
Section 5.08 Other Items.
(a) Eternal shall have received a list of E-Sea's shareholders
containing the name, address, and number of shares held by each E-Sea
shareholder as of the date of Closing, certified by an executive
officer of E-Sea as being true, complete and accurate; and
(b) Eternal shall have received such further opinions,
documents, certificates or instruments relating to the transactions
contemplated hereby as Eternal may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF E-SEA BIOMEDICAL
ENGINEERING CO INTERNATIONAL LTD.
AND THE E-SEA BIOMEDICAL ENGINEERING CO INTERNATIONAL LTD.
SHAREHOLDERS
The obligations of E-Sea and the E-Sea 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 Eternal 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.
Section 6.02 Officer's Certificate. E-Sea shall have been furnished
with certificates dated the Closing Date and signed by duly authorized executive
officers of Eternal, to the effect that no litigation, proceeding, investigation
or inquiry is pending, or to the best knowledge of Eternal threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or by or against Eternal which might
result in any material adverse change in any of the assets, properties or
operations of Eternal.
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 Eternal.
Section 6.04 Good Standing. E-Sea shall have received a certificate of
good standing from the Secretary of State of the State of Nevada or other
appropriate office, dated as of a date within ten days prior to the Closing Date
certifying that Eternal is in good standing as a corporation in the State of
Nevada 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.
Section 6.08 Other Items. E-Sea shall have received further opinions,
documents, certificates, or instruments relating to the transactions
contemplated hereby as E-Sea may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. Eternal and E-Sea 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. Eternal and E-Sea 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 N, 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.
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 Eternal, to: Xxxx. X, 0/X, Xxxxx X.
Innotech Tower,
235 Nanjing Rd. Heping District,
Tianjin 300052
Attn: Xxxxx Xx
With copies to: Xxxx Xxxxxxxxx, Esq.
Vanderkam & Associates
0000 Xxxxxx, #0000
Xxxxxxx, Xxxxx 00000
If to E-Sea, to: Xxxxxx Xxxxx, Xxxxx X000-000
4018 Jiabin Road, Xxxxx Xxxxxxxx
Xxxxxxxx, Xxxxx 000000
Telephone: 00-000-00000000
Facsimile: 00-000-00000000
Email: xxx000@000.xxx
With copies to: _______________________
=======================
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 Eternal and E-Sea, and, except as specifically provided, no director,
officer, stockholder (other than the E-Sea 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 Eternal and E-Sea 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. For purposes of this agreement,
facsimile signatures shall be deemed original signatures.
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: ____________________________.
BY: Eternal Technologies Group, Inc.
-------------------------------------
Secretary or Assistant Secretary Chairman
XxXxx Xx
ATTEST: _______________________
BY: E-Sea Biomedical Engineering Co.
-------------------------------------- International, Ltd.
Chairman
Secretary or Assistant Secretary Liu Tielian
The undersigned shareholders of E-Sea through their designated
representatives, Xx. Xxx Tielian and Mr. Ou Xxxxxx 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 E-Sea set out in Article I hereof and
that, to the best of his knowledge, all of such representations and warranties
are true and correct.
___________________, individually
Xx. Xxx Tielian
------------------------------------
___________________, individually
Ou Xxxxxx
------------------------------------
The undersigned shareholders of E-Sea their designated representatives,
Xx. Xxx Tielian and Ou Xxxxxx hereby agree to approve the foregoing Agreement
and the transactions contemplated thereby. 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 E-Sea set out in Article II hereof and that,
to the best of his knowledge, all of such representations and warranties are
true and correct.
________________, individually
Liu Tielian
________________, individually
Ou Xxxxxx
