Termination Agreement
Between
Eternal Technologies Group, Inc.
And
The Shareholders of E-Sea Biomedical Engineering Co. International Ltd. as of
October 31, 2004
And
E-Sea Biomedical Engineering Co. International Ltd. as of October 31, 2004
Dated April 26, 2005
THIS TERMINATION AGREEMENT (hereinafter referred to as this
"Agreement") is entered into as of this 26th day of April, 2005, but effective
as of October 31, 2004 by and between Eternal Technologies Group, Inc. a Nevada
corporation (hereinafter referred to as "Eternal") and the former shareholders
(hereinafter referred to as the "Former Shareholders") of E-Sea Biomedical
Engineering Co. International, Ltd., a British Virgin Islands corporation
(hereinafter referred to as "E-Sea"), who, pursuant to the Exchange Agreement
executed October 31, 2004 received 14,000,000 shares of Eternal in exchange for
100% of the common stock of 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 subsidiary corporation of Eternal organized under
the laws of the British Virgin Islands and engaged in the ownership and
operation of medical equipment manufacturing facilities and technologies;
WHEREAS, management of the constituent corporations entered into a
exchange agreement (the "Exchange Agreement") dated October 31, 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
therein; and
WHEREAS, Eternal, E-Sea, and the Former Shareholders desire to
terminate the Exchange.
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
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. 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.
ARTICLE II
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. 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.
ARTICLE III
PLAN OF TERMINATION
Section 3.01 The Termination. On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date (as defined in
Section 3.02), each Former Shareholder (as defined in the Exchange Agreement)
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 Eternal received pursuant
to the Exchange in the aggregate constituting 14,000,000 of the issued and
outstanding shares of common stock of Eternal held by each of such shareholders;
the objective of such Termination being the rescission by Eternal of the
acquisition of 100% of the issued and outstanding common shares of E-Sea. In
exchange for the transfer of such securities by the Former Shareholders, Eternal
shall issue to the Former Shareholders (1) an aggregate of 100% of the shares of
common stock of E-Sea to the Former Shareholders as of the Closing Date. In the
event the Termination is consummated but less than 14,000,000 of the common
shares of Eternal are delivered to Eternal, the number of Shares of E-Sea
delivered to the Former Shareholders as described above shall be reduced
proportionately. At the Closing, each Former Shareholder shall, on surrender of
his certificate or certificates representing such Eternal shares to Eternal or
its registrar or transfer agent, be entitled to receive a certificate or
certificates evidencing his proportionate interest in the E-Sea Shares. Upon
consummation of the transaction contemplated herein, assuming participation by
all of the Former Shareholders, all of the shares of capital stock of E-Sea
shall be held by the Former shareholders.
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 April 30, 2005. Such
Closing shall take place at a mutually agreeable time and place.
Section 3.03 Closing Events. At the Closing, Eternal, E-Sea and the
Former Shareholders, individually or through a representative, 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.
Upon execution of this Agreement by both parties the Exchange Agreement date
October 31, 2004 between Eternal and E-Sea shall be of no further force or
effect, and no obligation, right or liability shall arise hereunder, except that
each party shall bear its own costs in connection with the negotiation,
preparation, and execution of this Agreement.
Section 3.04 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.
ARTICLE IV
Section 4.01 Delivery of Books and Records. At the Closing, Eternal shall
deliver to E-Sea 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 Eternal or its representatives.
Section 4.02 Indemnification.
(a) E-Sea and the Former Shareholders hereby agree 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 in this Agreement. The indemnification provided for in
this paragraph shall survive the Closing and consummation of the termination
contemplated with this Agreement.
(b) Eternal hereby agrees to indemnify E-Sea and the Former Shareholders and
each of the officers, agents, and directors of E-Sea 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 this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and consummation of the
termination contemplated by this Agreement.
ARTICLE V
Section 5.01 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
Nevada, 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 with venue in
Houston, Texas.
Section 5.02 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
1301 Xxxxxx, #1200
Xxxxxxx, Xxxxx 00000
If to E-Sea
or the Former
Shareholders, 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
Section 5.03 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. As of closing of this Termination 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 5.04 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 5.05 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 5.06 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 5.07 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 5.08 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 5.09 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: /s/ XxXxx Xx
BY: Eternal Technologies Group, Inc.
--------------------------------
Secretary or Assistant Secretary Chairman
XxXxx Xx
ATTEST: /s/ Liu Tielian
BY: E-Sea Biomedical Engineering Co.
--------------------------------
Secretary or Assistant Secretary International Limited
Chairman and Former Shareholder
representative
Liu Tielian
The undersigned Former 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. Each of the undersigned hereby
represents and affirms that he has read each of the representations and
warranties of E-Sea and the Former Shareholders 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/ Xx. Xxx Tielian, individually
Xx. Xxx Tielian
-------------------------------------
/s/ Ou Xxxxxx, individually
Ou Xxxxxx
-------------------------------------
The undersigned Former 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. Each of the
undersigned hereby represents and affirms that he has read each of the
representations and warranties of E-Sea and the Former Shareholders set out in
this Agreement and that, to the best of his knowledge, all of such
representations and warranties are true and correct.
/s/ Liu Tielian, individually
Liu Tielian
/s/ Ou Xxxxxx, individually
Ou Xxxxxx
