Exhibit 10.2

 

 

 

 

 

 

 

 

 

 

 

SECURITIES PURCHASE AGREEMENT

 

Dated as of April 19, 2017

 

between

 

MLIGHT TECH, INC.

 

and

 

HE CEN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents

 

ARTICLE 1 Purchase and Sale of the SERIES A CONVERTIBLE DEBENTURE 4      
Section 1.1 Purchase Price and Closing 4       ARTICLE 2 Representations and
Warranties 5       Section 2.1 Representations and Warranties of the Company,
non-PRC Subsidiaries and the PRC Subsidiary 5       Section 2.2 Representations
and Warranties of the Purchasers 15       ARTICLE 3 Covenants 18       Section
3.1 Securities Compliance 18       Section 3.2 Confidential Information 18      
Section 3.3 Compliance with Laws 18       Section 3.4 Keeping of Records and
Books of Account 19       Section 3.5 Reporting Status 19       Section 3.6
Disclosure of Transaction 19       Section 3.7 Disclosure of Material
Information 19       Section 3.8 Pledge of Securities 19       Section 3.9
Sarbanes-Oxley Act 20       Section 3.10 No Integrated Offerings 20      
Section 3.11 No Manipulation of Price 20       ARTICLE 4 CONDITIONS 20      
Section 4.1 Conditions Precedent to the Obligation of the Company to Sell the
DEBENTURES 20       Section 4.2 Conditions Precedent to the Obligation of the
Purchasers to Purchase the DEBENTURES 21       ARTICLE 5 Stock Certificate
Legend 22       Section 5.1 Legend 22

 

 2 

 

 

ARTICLE 6 Indemnification 23       Section 6.1 General Indemnity 23      
Section 6.2 Indemnification Procedure 24       ARTICLE 7 Miscellaneous 25      
Section 7.1 Fees and Expenses 25       Section 7.2 Specific Enforcement, Consent
to Jurisdiction 25       Section 7.3 Entire Agreement; Amendment 26      
Section 7.4 Notices 26       Section 7.5 Waivers 27       Section 7.6 Headings
27       Section 7.7 Successors and Assigns 27       Section 7.8 No Third Party
Beneficiaries 27       Section 7.9 Governing Law 27       Section 7.10 Survival
27       Section 7.11 Counterparts 28       Section 7.12 Publicity 28      
Section 7.13 Severability 28       Section 7.14 Further Assurances 28      
Section 7.15 Currency 28       Section 7.16 Termination 28       Section 7.17
Language 29

 

 3 

 

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of April 19,
2017 by and between mLight Tech, Inc., a Florida corporation, (the “Company”)
and He Cen (the “Purchaser”).

 

RECITALS

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”), Rule 506 and/or Regulation S promulgated thereunder, the
Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities of
the Company as more fully described in this Agreement; and

 

WHEREAS, the Purchaser is desiring to purchase a Series A convertible debenture
(the “Series A Convertible Debenture” from the Company for an aggregate price of
one hundred and fifty thousand U.S. dollars ($150,000) which are convertible
into shares of common stock of the Company, par value $0.0001 per share (the
“Common Stock” and the “Conversion Share(s)”) at price of $0.01 per share to the
Purchaser;

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchaser hereby
agree as follows:

 

ARTICLE I

 

Purchase and Sale of the Series A Convertible Debenture

 

Section 1.1 Purchase Price and Closing.

 

(a)  Subject to the terms and conditions hereof, the Company agrees to issue and
sell to the Purchaser and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchaser agrees to purchase Series A Convertible Debenture for an aggregate
price of $150,000 (the “Offering Amount” or the “Purchase Price”), convertible
into shares of Common Stock at a conversion price of $0.01 per share (the
“Debenture(s)”).

 

(b)  Subject to all conditions to closing being satisfied or waived, the closing
of the purchase and sale of the Debentures shall take place at the primary
offices of Hunter Taubman Fischer &Li LLC located at 1450 Broadway Floor 26, New
York, New York 10018 (the “Closing”) immediately following the date of the
occurrence of completion and receipt by the Company of the Offering Amount (the
“Closing Date”).

 

 4 

 

 

(c)  Subject to the terms and conditions of this Agreement, at the Closing the
Company shall deliver or cause to be delivered to the Purchaser (i) the Series A
Convertible Debenture, and (ii) any other documents required to be delivered
pursuant to this Agreement. At the time of the Closing, the Purchaser shall have
delivered its Purchase Price by wire transfer pursuant to the wire information
contained in this Agreement.

 

ARTICLE II

 

Representations and Warranties

 

Section 2.1 Representations and Warranties of the Company, its Subsidiaries. The
Company hereby represents and warrants to the Purchaser on behalf of itself, its
Subsidiaries (as hereinafter defined), as of the date hereof (except as set
forth on the Schedule of Exceptions attached hereto with each numbered Schedule
corresponding to the section number herein), as follows:

 

(a) Organization, Good Standing and Power. The Company, each of its Subsidiaries
is a corporation or other entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization (as applicable) and respectively, has the
requisite corporate power to own, lease and operate its properties and assets
and to conduct its business as it is now being conducted. Except as set forth on
Schedule 2.1(a), the Company each of its Subsidiaries is duly qualified to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary except for any jurisdiction(s) (alone or in the aggregate) in which
the failure to be so qualified will not have a Material Adverse Effect (as
defined in Section 2.1(g) hereof).

 

(b) Corporate Power; Authority and Enforcement. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, and to issue and sell the Debentures in accordance with the
terms hereof. The execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action,
and no further consent or authorization of the Company or its Board of Directors
or stockholders is required. This Agreement constitutes, or shall constitute
when executed and delivered, a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by other equitable principles of general application.

 

(c) Capitalization. The authorized capital stock of the Company is set forth in
the Company’s Form 10-K Annual Report for the periods ended September 30, 2016
(the “Form 10-K”) and the shares thereof currently issued and outstanding as of
April 19, 2017 is 204,000,000 and, except as set forth in the on Schedule 2.1(c)
hereto, is the authorized and issued and outstanding capital stock of the
Company as at the date hereof. All of the issued outstanding shares of the
Common Stock have been duly and validly authorized.

 

 5 

 

 

(i)  no shares of Common Stock are entitled to preemptive, conversion or other
rights and there are no outstanding options, warrants, scrip, rights to
subscribe to, call or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company;

 

(ii) there are no contracts, commitments, understandings, or arrangements by
which the Company is or may become bound to issue additional shares of capital
stock of the Company or options, securities or rights convertible into shares of
capital stock of the Company;

 

(iii) the Company is not a party to any agreement granting registration or
anti-dilution rights to any person with respect to any of its equity or debt
securities;

 

(iv) the Company is not a party to, and it has no knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of the
Company.

 

The offer and sale of all capital stock, convertible securities, rights,
warrants, or options of the Company issued prior to the Closing complied with
all applicable Federal and state securities laws, except where non-compliance
would not have a Material Adverse Effect. The Company has furnished or made
available to the Purchaser true and correct copies of the Company’s Articles of
Incorporation, as amended and in effect on the date hereof (the “Articles”), and
the Company’s Bylaws, as amended and in effect on the date hereof (the
“Bylaws”). Except as restricted under applicable federal, state, local or
foreign laws and regulations, the Articles, this Agreement, or as set forth on
Schedule 2.1 (c), no written or oral contract, instrument, agreement,
commitment, obligation, plan or arrangement of the Company shall limit the
payment of dividends on the Company’s Preferred Shares, or its Common Stock.

 

(d) Issuance of Debentures and Conversion Shares. The Debentures to be issued at
the Closing have been duly authorized by all necessary corporate action and the
Conversion Shares, when paid for or issued in accordance with the terms hereof,
shall be validly issued and outstanding, fully paid and non-assessable.

 

(e) Subsidiaries. Schedule 2.1(e) hereto sets forth each Subsidiary of the
Company, showing the jurisdiction of its incorporation or organization and
showing the percentage of ownership of each Subsidiary. There are no outstanding
preemptive, conversion or other rights, options, warrants or agreements granted
or issued by or binding upon any Subsidiary for the purchase or acquisition of
any shares of capital stock of any Subsidiary or any other securities
convertible into, exchangeable for or evidencing the rights to subscribe for any
shares of such capital stock. Except as disclosed in the Form 10-K, neither the
Company nor any Subsidiary is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of the
capital stock of any Subsidiary or any convertible securities, rights, warrants
or options of the type described in the preceding sentence. Neither the Company
nor any Subsidiary is party to, nor has any knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of any
Subsidiary. For the purposes of this Agreement, “Subsidiary” shall mean any
corporation or other entity of which at least a majority of the securities or
other ownership interests having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by the Company and/or any
of its other Subsidiaries. All of the outstanding shares of capital stock of
each Subsidiary has been duly authorized and validly issued, and are fully paid
and non-assessable.

 

 6 

 

 

(f)  Commission Documents, Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the Commission pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the
Form 10-K and other material filed pursuant to Section 13(a) or 15(d) of the
Exchange Act (all of the foregoing including filings incorporated by reference
therein being referred to herein as the “Commission Documents”). The Company has
not provided to the Purchaser any material non-public information or other
information which, according to applicable law, rule or regulation, was required
to have been disclosed publicly by the Company but which has not been so
disclosed, other than (i) with respect to the transactions contemplated by this
Agreement, or (ii) pursuant to a non-disclosure or confidentiality agreement
signed by the Purchaser. At the time of the respective filings, the Form 10-Q’s
and the Form 10-K’s complied in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission promulgated
thereunder and other federal, state and local laws, rules and regulations
applicable to such documents. As of their respective filing dates, none of the
Form 10-Q’s or Form 10-K’s contained any untrue statement of a material fact;
and none omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the Commission Documents comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission or other applicable rules and regulations with
respect thereto. Such financial statements have been prepared in accordance with
United States generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements), and fairly present in all material
respects the consolidated financial position of the Company as of the dates
thereof and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).

 

(g) No Material Adverse Effect. Except as disclosed in the Company’s current
report on Form 8-K filed on April 5, 2017 (the “Form 8-K”), as at September 30,
2016 and as at the date of this Agreement, the Company, and its Subsidiaries
have not experienced or suffered any Material Adverse Effect. For the purposes
of this Agreement, “Material Adverse Effect” shall mean (i) any material adverse
effect upon the assets, properties, financial condition, business or prospects
of the Company, and its Subsidiaries, when taken as a consolidated whole, and/or
(ii) any condition, circumstance, or situation that would prohibit or otherwise
materially interfere with the ability of the Company to perform any of its
material covenants, agreements and obligations under this Agreement.

 

 7 

 

 

(h) No Undisclosed Liabilities. Other than as disclosed in the Form 10-K, Form
8-K or on Schedule 2.1(h) to the knowledge of the Company, neither the Company,
nor the Subsidiaries has any liabilities, obligations, claims or losses (whether
liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those incurred in the ordinary course of the Company’s
and the Subsidiaries’ respective businesses since September 30, 2016 and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect.

 

(i) No Undisclosed Events or Circumstances. To the Company’s knowledge, no event
or circumstance has occurred or exists with respect to the Company, the
Subsidiaries or their respective businesses, properties, operations or financial
condition, which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed.

 

(j) Intentionally Left Blank

 

(k) Title to Assets. Except where non-compliance would not have a Material
Adverse Effect, each of the Company and the Subsidiaries has good and marketable
title to (i) all properties and assets purportedly owned or used by them as
reflected in the Financial Statements, (ii) all properties and assets necessary
for the conduct of their business as currently conducted, and (iii) all of the
real and personal property reflected in the Financial Statements free and clear
of any Lien. All leases are valid and subsisting and in full force and effect.

 

(l) Actions Pending. There is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or any other proceeding
pending or, to the knowledge of the Company, threatened against or involving the
Company or Subsidiary which questions the validity of this Agreement or the
transactions contemplated hereby or thereby or any action taken or to be taken
pursuant hereto or thereto. Except where the same would not have a Material
Adverse Effect, there is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or any other proceeding pending or, to
the knowledge of the Company, threatened against or involving the Company or any
Subsidiary involving any of their respective properties or assets. To the
knowledge of the Company, there are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against the Company, the Subsidiaries or any of their respective
executive officers or directors in their capacities as such.

 

(m) Compliance with Law. The Company and the Subsidiaries have all material
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of their respective
business as now being conducted by it unless the failure to possess such
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

 

 8 

 

 

(n) No Violation. The business of the Company and the Subsidiaries is not being
conducted in violation of any Federal, state, local or foreign governmental
laws, or rules, regulations and ordinances of any of any governmental entity,
except for possible violations which singularly or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. The Company is not
required under Federal, state, local or foreign law, rule or regulation to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement, or issue and
sell the Debentures in accordance with the terms hereof or thereof (other than
(x) any consent, authorization or order that has been obtained as of the date
hereof, (y) any filing or registration that has been made as of the date hereof
or (z) any filings which may be required to be made by the Company with the
Commission or state securities administrators subsequent to the Closing.)

 

(o) No Conflicts. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
herein and therein do not and will not (i) violate any provision of the
Company’s Certificate or Bylaws, (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond,
license, lease agreement, instrument or obligation to which the Company is a
party or by which it or its properties or assets are bound, (iii) create or
impose a lien, mortgage, security interest, pledge, charge or encumbrance
(collectively, “Lien”) of any nature on any property of the Company under any
agreement or any commitment to which the Company is a party or by which the
Company is bound or by which any of its respective properties or assets are
bound, or (iv) result in a violation of any federal, state, local or foreign
statute, rule, regulation, order, judgment or decree (including Federal and
state securities laws and regulations) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries are bound or affected, provided, however, that, excluded from the
foregoing in all cases are such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect.

 

(p) Taxes. Each of the Company and the Subsidiaries, to the extent its
applicable, has accurately prepared and filed all federal, state and other tax
returns required by law to be filed by it, has paid or made provisions for the
payment of all taxes shown to be due and all additional assessments, and
adequate provisions have been and are reflected in the consolidated financial
statements of the Company for all current taxes and other charges to which the
Company or the Subsidiaries, if any, is subject and which are not currently due
and payable. None of the federal income tax returns of the Company have been
audited by the Internal Revenue Service. The Company has no knowledge of any
additional assessments, adjustments or contingent tax liability (whether
federal, state or foreign) of any nature whatsoever, whether pending or
threatened against the Company or any subsidiary for any period, nor of any
basis for any such assessment, adjustment or contingency.

 

(q) Certain Fees. Except as set forth on Schedule 2.1(q) hereto, no brokers
fees, finders fees or financial advisory fees or commissions will be payable by
the Company with respect to the transactions contemplated by this Agreement.

 

(r) Disclosure. Except as set forth in Schedule 2.1(r), neither this Agreement
nor the Schedules hereto nor any other documents, certificates or instruments
furnished to the Purchaser by or on behalf of the Company or the Subsidiaries in
connection with the transactions contemplated by this Agreement contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made herein or therein, taken as a whole and in
the light of the circumstances under which they were made herein or therein, not
false or misleading.

 

 9 

 

 

(s) Intellectual Property. Each of the Company and the Subsidiaries owns or has
the lawful right to use all patents, trademarks, domain names (whether or not
registered) and any patentable improvements or copyrightable derivative works
thereof, websites and intellectual property rights relating thereto, service
marks, trade names, copyrights, licenses and authorizations, and all rights with
respect to the foregoing, which are necessary for the conduct of their
respective business as now conducted without any conflict with the rights of
others, except where the failure to so own or possess would not have a Material
Adverse Effect.

 

(t) Books and Record Internal Accounting Controls. Except as may have otherwise
been disclosed in the Form 10-K’s or the Form 10-Ks, the books and records of
the Company and the Subsidiaries accurately reflect in all material respects the
information relating to the business of the Company and the Subsidiaries, the
location and collection of their assets, and the nature of all transactions
giving rise to the obligations or accounts receivable of the Company, or the
Subsidiaries. Except as disclosed on Schedule 2.1(t), the Company and the
Subsidiaries maintain a system of internal accounting controls sufficient, in
the judgment of the Company, to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate actions are taken with respect to any differences.

 

(u) Material Agreements. Any and all written or oral contracts, instruments,
agreements, commitments, obligations, plans or arrangements, the Company and the
Subsidiaries is a party to, that a copy of which would be required to be filed
with the Commission as an exhibit to a registration statement on Form S-1
(collectively, the “Material Agreements”) if the Company or any subsidiary were
registering securities under the Securities Act has previously been publicly
filed with the Commission in the Commission Documents. Each of the Company and
the Subsidiaries has in all material respects performed all the obligations
required to be performed by them to date under the foregoing agreements, have
received no notice of default and are not in default under any Material
Agreement now in effect the result of which would cause a Material Adverse
Effect.

 

(v) Transactions with Affiliates. Except as set forth in the Financial
Statements or in the Commission Documents, there are no loans, leases,
agreements, contracts, royalty agreements, management contracts or arrangements
or other continuing transactions between (a) the Company or any Subsidiary on
the one hand, and (b) on the other hand, any officer, employee, consultant or
director of the Company, or any of Subsidiaries, or any person owning any
capital stock of the Company or any Subsidiary or any member of the immediate
family of such officer, employee, consultant, director or stockholder or any
corporation or other entity controlled by such officer, employee, consultant,
director or stockholder, or a member of the immediate family of such officer,
employee, consultant, director or stockholder.

 

 10 

 

 

(w) Securities Act of 1933. Assuming the accuracy of the representations of the
Purchaser set forth in Section 2.2 (d)-(h) hereof, the Company has complied and
will comply with all applicable federal and state securities laws in connection
with the offer, issuance and sale of the Debentures hereunder. Neither the
Company nor anyone acting on its behalf, directly or indirectly, has or will
sell, offer to sell or solicit offers to buy any of the Debentures, to, or
solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any person, or has taken or
will take any action so as to bring the issuance and sale of any of the
Debentures in violation of the registration provisions of the Securities Act and
applicable state securities laws, and neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
any of the Debentures.

 

(x) Governmental Approvals. Except for the filing of any notice prior or
subsequent to the Closing Date that may be required under applicable state
and/or Federal securities laws (which if required, shall be filed on a timely
basis), no authorization, consent, approval, license, exemption of, filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution or delivery of the Debentures, or for
the performance by the Company of its obligations under this Agreement.

 

(y) Employees. Except as disclosed on Schedule 2.1(y), neither the Company nor
any subsidiary has any collective bargaining arrangements covering any of its
employees. Schedule 2.1(y) sets forth a list of the employment contracts,
agreements regarding proprietary information, non-competition agreements,
non-solicitation agreements, confidentiality agreement, or any other similar
contract or restrictive covenant, relating to the right of any officer, employee
or consultant to be employed or engaged by the Company. Since April 5, 2017, no
officer, consultant or key employee of the Company or any subsidiary whose
termination, either individually or in the aggregate, would have a Material
Adverse Effect, has terminated or, to the knowledge of the Company, has any
present intention of terminating his or her employment or engagement with the
Company or any subsidiary.

 

(z) Absence of Certain Developments. Except as disclosed on Schedule 2.1(z) or
as disclosed in the Form 10-K or the Form 8-K, since September 30, 2016, neither
the Company nor the Subsidiaries have:

 

(i) issued any stock, bonds or other corporate securities or any rights, options
or warrants with respect thereto;

 

(ii) borrowed any amount or incurred or become subject to any liabilities
(absolute or contingent) except current liabilities incurred in the ordinary
course of business which are comparable in nature and amount to the current
liabilities incurred in the ordinary course of business during the comparable
portion of its prior fiscal year, as adjusted to reflect the current nature and
volume of the Company’s or such subsidiary’s business;

 

 11 

 

 

(iii) discharged or satisfied any lien or encumbrance or paid any obligation or
liability (absolute or contingent), other than current liabilities paid in the
ordinary course of business;

 

(iv) declared or made any payment or distribution of cash or other property to
stockholders with respect to its stock, or purchased or redeemed, or made any
agreements so to purchase or redeem, any shares of its capital stock;

 

(v) sold, assigned or transferred any other tangible assets, or canceled any
debts or claims, except in the ordinary course of business;

 

(vi) sold, assigned or transferred any patent rights, trademarks, trade names,
copyrights, trade secrets or other intangible assets or intellectual property
rights, or disclosed any proprietary confidential information to any person
except to customers in the ordinary course of business or to the Purchaser or
their representatives;

 

(vii) suffered any substantial losses or waived any rights of material value,
whether or not in the ordinary course of business, or suffered the loss of any
material amount of prospective business;

 

(viii) made any changes in employee compensation except in the ordinary course
of business and consistent with past practices;

 

(ix) made capital expenditures or commitments therefor that aggregate in excess
of $50,000;

 

(x) entered into any other transaction other than in the ordinary course of
business, or entered into any other material transaction, whether or not in the
ordinary course of business;

 

(xi) made charitable contributions or pledges in excess of $10,000;

 

(xii) suffered any material damage, destruction or casualty loss, whether or not
covered by insurance;

 

(xiii) experienced any material problems with labor or management in connection
with the terms and conditions of their employment;

 

(xiv) effected any two or more events of the foregoing kind which in the
aggregate would be material to the Company or its subsidiaries; or

 

(xv) entered into an agreement, written or otherwise, to take any of the
foregoing actions.

 

 12 

 

 

(aa) Public Utility Holding Company Act; Investment Company Act and U.S. Real
Property Holding Corporation Status. The Company is not a “holding company” or a
“public utility company” as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended. The Company is not, and as a result of and
immediately upon the Closing will not be, an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended. The Company is not and has never been a U.S.
real property holding corporation within the meaning of Section 897 of the
Internal Revenue Code of 1986, as amended.

 

(bb) ERISA. No liability to the Pension Benefit Guaranty Corporation has been
incurred with respect to any Plan (as defined below) by the Company or any of
its Subsidiaries which is or would have a Material Adverse Effect. The execution
and delivery of this Agreement and the issuance and sale of the Debentures and
Conversion Shares, the will not involve any transaction which is subject to the
prohibitions of Section 406 of ERISA or in connection with which a tax could be
imposed pursuant to Section 4975 of the Internal Revenue Code of 1986, as
amended, provided, that, if any of the Purchaser, or any person or entity that
owns a beneficial interest in any of the Purchaser, is an “employee pension
benefit plan” (within the meaning of Section 3(2) of ERISA) with respect to
which the Company is a “party in interest” (within the meaning of Section 3(14)
of ERISA), the requirements of Sections 407(d)(5) and 408(e) of ERISA, if
applicable, are met. As used in this Section 2.1(bb), the term “Plan” shall mean
an “employee pension benefit plan” (as defined in Section 3 of ERISA) which is
or has been established or maintained, or to which contributions are or have
been made, by the Company or any subsidiary or by any trade or business, whether
or not incorporated, which, together with the Company or any subsidiary, is
under common control, as described in Section 414(b) or (c) of the Code.

 

(cc) No Integrated Offering. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales of any security or solicited any offers to buy any security
under circumstances that would cause the offering of the Debentures pursuant to
this Agreement to be integrated with prior offerings by the Company for purposes
of the Securities Act which would prevent the Company from selling the
Debentures pursuant to Rule 506 under the Securities Act, nor will the Company
or any of its affiliates take any action or steps that would cause the offering
of the Debentures to be integrated with other offerings. The Company does not
have any registration statement pending before the Commission or currently under
the Commission’s review and since September 30, 2016, other than as contemplated
under this Agreement or disclosed in the Form 8-K, the Company has not offered
or sold any of its equity securities or debt securities convertible into shares
of Common Stock.

 

(dd) Sarbanes-Oxley Act. The Company is in compliance with the applicable
provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the
rules and regulations promulgated thereunder, that are effective and for which
compliance by the Company is required as of the date hereof.

 

(ee) No Additional Agreements. Neither the Company nor any of its affiliates has
any agreement or understanding with any Purchaser with respect to the
transactions contemplated by this Agreement other than as specified in this
Agreement.

 

 13 

 

 

(ff) Foreign Corrupt Practices Act. Neither the Company, the Subsidiaries, nor
to the knowledge of the Company, the Subsidiaries any agent or other person
acting on behalf of the Company or the Subsidiaries, has, directly or
indirectly, (i) used any funds, or will use any proceeds from the sale of the
Debentures, for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company, or any
subsidiary of the Company (or made by any Person acting on their behalf of which
the Company is aware) or any members of their respective management which is in
violation of any applicable law, or (iv) has violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder which was applicable to the Company or any of
its subsidiaries.

 

(gg) PFIC. None of the Company or any of its Subsidiaries is or intends to
become a “passive foreign investment company” within the meaning of Section 1297
of the U.S. Internal Revenue Code of 1986, as amended.

 

(hh) OFAC. None of the Company or any of its Subsidiaries nor, to the knowledge
of the Company, any director, officer, agent, employee, Affiliate or Person
acting on behalf of any of the Company or any of its Subsidiaries, is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the sale of Debentures to any
subsidiary of the Company, joint venture partner or other Person or entity,
towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any
other country sanctioned by OFAC or for the purpose of financing the activities
of any Person currently subject to any U.S. sanctions administered by OFAC.

 

(ii) Money Laundering Laws. The operations of each of the Company and the
Subsidiaries have been conducted at all times in compliance with the money
laundering requirements of all applicable governmental authorities and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental authority (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental
authority or any arbitrator involving any of the Company or the Subsidiaries
with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.

 

 14 

 

 

Section 2.2 Representations and Warranties of the Purchaser. The Purchaser
hereby makes the following representations and warranties to the Company as of
the date hereof, with respect solely to itself and not with respect to any other
Purchaser:

 

(a) Organization and Good Standing of the Purchaser. If the Purchaser is an
entity, such Purchaser is a corporation, partnership or limited liability
company duly incorporated or organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization.

 

(b) Authorization and Power. The Purchaser has the requisite power and authority
to enter into and perform this Agreement. The execution, delivery and
performance of this Agreement and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate, partnership or limited liability company action, and no further
consent or authorization of such Purchaser or its Board of Directors,
stockholders, partners, members, or managers, as the case may be, is required.
This Agreement has been duly authorized, executed and delivered by such
Purchaser and constitutes, or shall constitute when executed and delivered, a
valid and binding obligation of such Purchaser enforceable against such
Purchaser in accordance with the terms hereof.

 

(c) No Conflicts. The execution, delivery and performance of this Agreement and
the consummation by such Purchaser of the transactions contemplated hereby and
thereby or relating hereto do not and will not (i) result in a violation of such
Purchaser’s charter documents, bylaws, operating agreement, partnership
agreement or other organizational documents or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of any agreement, indenture or instrument or
obligation to which such Purchaser is a party or by which its properties or
assets are bound, or result in a violation of any law, rule, or regulation, or
any order, judgment or decree of any court or governmental agency applicable to
such Purchaser or its properties (except for such conflicts, defaults and
violations as would not, individually or in the aggregate, have a material
adverse effect on such Purchaser). Such Purchaser is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under this Agreement, provided, that for purposes of the
representation made in this sentence, such Purchaser is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.

 

(d) Status of Purchaser. The Purchaser is a “non-US person” as defined in
Regulation S. Such Purchaser is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act and such Purchaser is not a broker-dealer,
nor an affiliate of a broker-dealer.

 

 15 

 

 

(e) Acquisition for Investment. The Purchaser is acquiring the Debentures,
solely for its own account for the purpose of investment and not with a view to
or for sale in connection with a distribution. The Purchaser does not have a
present intention to sell the Securities, nor a present arrangement (whether or
not legally binding) or intention to effect any distribution of the Securities
to or through any person or entity; provided, however, that by making the
representations herein (except as provided below), such Purchaser does not agree
to hold the Securities for any minimum or other specific term and reserves the
right to dispose of the Securities at any time in accordance with Federal and
state securities laws applicable to such disposition. The Purchaser acknowledges
that it is able to bear the financial risks associated with an investment in the
Securities and that it has been given full access to such records of the Company
and the Subsidiaries and to the officers of the Company and the Subsidiaries and
received such information as it has deemed necessary or appropriate to conduct
its due diligence investigation and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company’s stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company. The Purchaser further acknowledges that such Purchaser
understands the risks of investing in companies domiciled and/or which operate
primarily in the People’s Republic of China and that the purchase of the
Securities involves substantial risks.

 

(f) Reliance on Exemptions. The Purchaser understands that the Debentures are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and the Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Securities.

 

(g) Information. The Purchaser and its advisors, if any, have had the
opportunity to ask questions of management of the Company and its Subsidiaries
and have been furnished with all information relating to the business, finances
and operations of the Company and information relating to the offer and sale of
the Securities which have been requested by the Purchaser or its advisors.
Neither such inquiries nor any other due diligence investigation conducted by
the Purchaser or any of its advisors or representatives shall modify, amend or
affect the Purchaser’s right to rely on the representations and warranties of
the Company contained herein. The Purchaser understands that its investment in
the Securities involves a significant degree of risk. The Purchaser further
represents to the Company that the Purchaser’s decision to enter into this
Agreement has been based solely on the independent evaluation of the Purchaser
and its representatives.

 

(h) Governmental Review. The Purchaser understands that no United States federal
or state agency or any other government or governmental agency has passed upon
or made any recommendation or endorsement of the Securities.

 

(i) Transfer or Re-sale. The Purchaser understands that the sale or re-sale of
the Conversion Shares has not been and is not being registered under the
Securities Act or any applicable state securities laws, and the Conversion
Shares may not be transferred unless (i) the Conversion Shares are sold pursuant
to an effective registration statement under the Securities Act, (ii) the
Purchaser shall have delivered to the Company an opinion of counsel that shall
be in form, substance and scope customary for opinions of counsel in comparable
transactions to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration, which
opinion shall be reasonably acceptable to the Company, (iii) the Securities are
sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under
the Securities Act (or a successor rule) (“Rule 144”)) of the Purchaser who
agrees to sell or otherwise transfer the Securities only in accordance with this
Section 2.2(f) and who is a non-US person, (iv) the Securities are sold pursuant
to Rule 144, or (v) the Securities are sold pursuant to Regulation S under the
Securities Act (or a successor rule) (“Regulation S”). Notwithstanding the
foregoing or anything else contained herein to the contrary, the Securities may
be pledged as collateral in connection with a bona fide margin account or other
lending arrangement.

 

 16 

 

 

(j) Legends. The Purchaser understands that the Conversion Shares shall bear a
restrictive legend in the form as set forth below. The Purchaser understands
that, until such time the Conversion Shares may be sold pursuant to Rule 144 or
Regulation S without any restriction as to the number of securities as of a
particular date that can then be immediately sold, the Conversion Shares may
bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the certificates
evidencing such Securities):

 

“Neither the offer nor sale of the securities represented by this certificate
has been registered under the Securities Act of 1933, as amended, (the “Act”).
The securities may not be sold, transferred or assigned in the absence of an
effective registration statement for the securities under the Act, or an opinion
of counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, that registration is not required under the Act or
unless sold pursuant to Rule 144 or Regulation S under the Act.”

 

(k) Residency. The Purchaser is a resident of the jurisdiction set forth
immediately below such Purchaser’s name on the signature pages hereto.

 

(l) Short Sales. The Purchaser may engage in short sales of Common Stock, to the
extent permissible by applicable law and regulation.

 

(m) Intentionally Left Blank.

 

(n) Additional Representations and Warranties of Non-U.S. Persons. The Purchaser
indicating that it is not a U.S. person on its signature page to this Agreement,
severally and not jointly, further makes the representations and warranties to
the Company set forth on Exhibit A.

 

(o) No General Solicitation. The Purchaser acknowledges that the Debentures were
not offered to such Purchaser by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio, or (ii) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of communications.

 

(p) Rule 144. Such Purchaser understands that the Conversion Shares must be held
indefinitely unless such Conversion Shares are registered under the Securities
Act or an exemption from registration is available. Such Purchaser acknowledges
that such Purchaser is familiar with Rule 144 and Rule 144A, of the rules and
regulations of the Commission, as amended, promulgated pursuant to the
Securities Act (“Rule 144”), and that such person has been advised that Rule 144
and Rule 144A, as applicable, permits resales only under certain circumstances.
Such Purchaser understands that to the extent that Rule 144 or Rule 144A is not
available, such Purchaser will be unable to sell any Conversion Shares without
either registration under the Securities Act or the existence of another
exemption from such registration requirement.

 

 17 

 

 

(q) Independent Investment. Except as may be disclosed in any filings with the
Commission by the Purchaser under Section 13 and/or Section 16 of the Exchange
Act, no Purchaser has agreed to act with any other Purchaser for the purpose of
acquiring, holding, voting or disposing of the Debentures purchased hereunder
for purposes of Section 13(d) under the Exchange Act, and the Purchaser is
acting independently with respect to its investment in the Debentures.

 

(r) Brokers. Purchaser does not have any knowledge of any brokerage or finder’s
fees or commissions that are or will be payable by the Company to any broker,
financial advisor or consultant, finder, placement agent, investment banker,
bank or other person or entity with respect to the transactions contemplated by
this Agreement.

ARTICLE III

 

Covenants

 

The Company covenants with the Purchaser as follows, which covenants are for the
benefit of the Purchaser and its permitted assignees (as defined herein).

 

Section 3.1 Securities Compliance. The Company shall notify the Commission in
accordance with its rules and regulations, of the transactions contemplated by
any of this Agreement, and shall take all other necessary action and proceedings
as may be required and permitted by applicable law, rule and regulation, for the
legal and valid issuance of the Debentures to the Purchaser or subsequent
holders.

 

Section 3.2 Confidential Information. The Purchaser agrees that such Purchaser
and its employees, agents and representatives will keep confidential and will
not disclose, divulge or use (other than for purposes of monitoring its
investment in the Company) any confidential information which such Purchaser may
obtain from the Company pursuant to financial statements, reports and other
materials submitted by the Company to such Purchaser pursuant to this Agreement,
unless such information is known to the public through no fault of such
Purchaser or his or its employees or representatives; provided, however, that a
Purchaser may disclose such information (i) to its attorneys, accountants and
other professionals in connection with their representation of such Purchaser in
connection with such Purchaser’s investment in the Company, (ii) to any
prospective permitted transferee of the Debentures, so long as the prospective
transferee agrees to be bound by the provisions of this Section 3.3, or (iii) to
any general partner or affiliate of such Purchaser.

 

Section 3.3 Compliance with Laws. The Company shall comply, and cause each
subsidiary to comply in all material respects, with all applicable laws, rules,
regulations and orders,except where non-compliance could not reasonably be
expected to have a Material Adverse Effect.

 

 18 

 

 

Section 3.4 Keeping of Records and Books of Account. The Company shall keep and
cause each Subsidiary to keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently applied,
reflecting all financial transactions of the Company and the Subsidiaries, and
in which, for each fiscal year, all proper reserves for depreciation, depletion,
obsolescence, amortization, taxes, bad debts and other purposes in connection
with its business shall be made.

 

Section 3.5 Intentionally Left Blank.

 

Section 3.6 Disclosure of Transaction. The Company shall file with the
Commission, the Form 8-K describing the material terms of the transactions
contemplated hereby (and attaching as exhibits thereto this Agreement) within
four (4) Business Days following the First Closing Date. “Business Day” means
any day during which the NYSE AMEX (“AMEX”) (or other principal exchange) shall
be open for trading.

 

Section 3.7 Disclosure of Material Information. The Company and the Subsidiaries
covenant and agree that neither it nor any other person acting on its or their
behalf has provided or, from and after the filing of the Press Release, will
provide any Purchaser or its agents or counsel with any information that the
Company believes constitutes material non-public information (other than with
respect to the transactions contemplated by this Agreement), unless prior
thereto such Purchaser shall have executed a specific written agreement
regarding the confidentiality and use of such information. The Company
understands and confirms that the Purchaser shall be relying on the foregoing
covenants in effecting transactions in securities of the Company. At the time of
the filing of the Press Release, no Purchaser shall be in possession of any
material, nonpublic information received from the Company, any of its
subsidiaries or any of its respective officers, directors, employees or agents
that is not disclosed in the Press Release. The Company shall not disclose the
identity of any Purchaser in any filing with the SEC except as required by the
rules and regulations of the SEC thereunder. In the event of a breach of the
foregoing covenant by the Company, any of its subsidiaries, or any of its or
their respective officers, directors, employees and agents, in addition to any
other remedy provided herein, a Purchaser may notify the Company, and the
Company shall make public disclosure of such material nonpublic information
within two (2) trading days of such notification.

 

Section 3.8 Pledge of Debentures. The Company acknowledges and agrees that the
Debentures may be pledged by a Purchaser in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Debentures. The pledge of Debentures shall not be deemed to be a transfer, sale
or assignment of the Debentures hereunder, and no Purchaser effecting a pledge
of Debentures shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement;
provided, that a Purchaser and its pledgee shall be required to comply with the
provisions of Article V hereof in order to effect a sale, transfer or assignment
of Debentures to such pledgee. At a Purchaser’s expense, the Company hereby
agrees to execute and deliver such documentation as a pledgee of the Debentures
may reasonably request in connection with a pledge of the Debentures to such
pledgee by a Purchaser, in accordance with applicable laws relating to the
transfer of the securities.

 

 19 

 

 

Section 3.9 Sarbanes-Oxley Act. The Company shall be in compliance with the
applicable provisions of the Sarbanes-Oxley Act of 2002, and the rules and
regulations promulgated thereunder, as required under such Act.

 

Section 3.10 No Integrated Offerings. The Company shall not make any offers or
sales of any security (other than the securities being offered or sold
hereunder) under circumstances that would require registration of the securities
being offered or sold hereunder under the Securities Act.

 

Section 3.11 No Manipulation of Price. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.

 

ARTICLE IV

 

CONDITIONS

 

Section 4.1 Conditions Precedent to the Obligation of the Company to Sell the
Debentures. The obligation hereunder of the Company to issue and sell the
Debentures is subject to the satisfaction or waiver, at or before the Closing,
of each of the conditions set forth below. These conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion.

 

(a) Accuracy of the Purchaser’s Representations and Warranties. The
representations and warranties of the Purchaser in this Agreement shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true
and correct in all material respects as of such date.

 

(b) Performance by the Purchaser. The Purchaser shall have performed, satisfied
and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such
Purchaser at or prior to the Closing.

 

(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

 

(d) Delivery of Purchase Price. The Purchase Price for the Debentures shall have
been delivered to the Company pursuant to the wiring information contained
hereto in Exhibit B to this Agreement.

 

 20 

 

 

(e) Delivery of this Agreement. This Agreement shall have been duly executed and
delivered by the Purchaser to the Company.

 

Section 4.2 Conditions Precedent to the Obligation of the Purchaser to Purchase
the Debentures in the Offering. The obligation hereunder of the Purchaser to
acquire and pay for the Debentures offered in the Offering is subject to the
satisfaction or waiver, at or before the Closing, of each of the conditions set
forth below. These conditions are for the Purchaser’s sole benefit and may be
waived by such Purchaser at any time in its sole discretion.

  

(a) Accuracy of the Company’s Representations and Warranties. Each of the
representations and warranties of the Company in this Agreement shall be true
and correct in all respects as of the date when made and as of the Closing Date
as though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
respects as of such date.

 

(b) Performance by the Company. The Company shall have performed, satisfied and
complied in all respects with all covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Company at
or prior to the Closing.

 

(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

 

(d) No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any subsidiary, or any of the officers, directors or affiliates
of the Company or any subsidiary seeking to restrain, prevent or change the
transactions contemplated by this Agreement, or seeking damages in connection
with such transactions.

 

(e)  Certificates. The Company shall have executed and delivered to the
Purchaser the certificates (in such denominations as such Purchaser shall
request) for the Debentures being acquired by such Purchaser at the Closing (in
such denominations as such Purchaser shall request) to such address set forth
next to the Purchaser with respect to the Closing.

 

(i) Resolutions. The Board of Directors of the Company shall have adopted
resolution consistent with Section 2.1(b) hereof in a form reasonably acceptable
to such Purchaser (the “Resolution”).

 

 21 

 

 

  (k) Secretary’s Certificate. The Company shall have delivered to such
Purchaser a secretary’s certificate, dated as of the Closing Date, as to (i) the
resolutions adopted by the Board of Directors of the Company consistent with
Section 2.1(b), (ii) the Articles, (iii) the Bylaws, , and (iv) the authority
and incumbency of the officers of the Company executing this Agreement.

  

(l) Officer’s Certificate. The Company shall have delivered to the Purchaser a
certificate of an executive officer of the Company, dated as of the Closing
Date, confirming the accuracy of the Company’s representations, warranties and
covenants as of the Closing Date and confirming the compliance by the Company
with the conditions precedent set forth in this Section 4.2 as of the Closing
Date.

 

(n) Material Adverse Effect. Unless otherwise disclosed in the Form 8-K, no
Material Adverse Effect shall have occurred at or before the Closing Date.

  

ARTICLE V

 

Stock Certificate Legend

 

Section 5.1 Legend. Each certificate representing the Conversion Shares shall be
stamped or otherwise imprinted with a legend substantially in the following form
(in addition to any legend required by applicable state securities or “blue sky”
laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION,
(B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER
THE U.S. SECURITIES ACT, (C) WITHIN THE UNITED STATES AFTER REGISTRATION OR IN
ACCORDANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S.
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, OR (D) WITHIN THE UNITED STATES IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAWS AND THE HOLDER HAS PRIOR TO SUCH SALE
FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE CORPORATION.

 

 22 

 

 

The Company agrees to reissue certificates representing any of the Conversion
Shares, without the legend set forth above if at such time, prior to making any
transfer of any such Conversion Shares, such holder thereof shall give written
notice to the Company describing the manner and terms of such sale and removal
as the Company may reasonably request. Such proposed transfer and removal will
not be effected until: (a) either (i) the Company has received an opinion of
counsel reasonably satisfactory to the Company, to the effect that the
registration of the Conversion Shares under the Securities Act is not required
in connection with such proposed transfer, (ii) a registration statement under
the Securities Act covering such proposed disposition has been filed by the
Company with the Commission and has become effective under the Securities Act,
(iii) the Company has received other evidence reasonably satisfactory to the
Company that such registration and qualification under the Securities Act and
state securities laws are not required, or (iv) the holder provides the Company
with reasonable assurances that such security can be sold pursuant to Rule
144(i) under the Securities Act; and (b) either (i) the Company has received an
opinion of counsel reasonably satisfactory to the Company, to the effect that
registration or qualification under the securities or “blue sky” laws of any
state is not required in connection with such proposed disposition, or (ii)
compliance with applicable state securities or “blue sky” laws has been effected
or a valid exemption exists with respect thereto. The Company will respond to
any such notice from a holder within five (5) business days. In the case of any
proposed transfer under this Section 5.1, the Company will use reasonable
efforts to comply with any such applicable state securities or “blue sky” laws,
but shall in no event be required, (x) to qualify to do business in any state
where it is not then qualified, (y) to take any action that would subject it to
tax or to the general service of process in any state where it is not then
subject, or (z) to comply with state securities or “blue sky” laws of any state
for which registration by coordination is unavailable to the Company. The
restrictions on transfer contained in this Section 5.1 shall be in addition to,
and not by way of limitation of, any other restrictions on transfer contained in
any other section of this Agreement. Whenever a certificate representing the
Conversion Shares is required to be issued to a Purchaser without a legend, in
lieu of delivering physical certificates representing the Conversion Shares
(provided that a registration statement under the Securities Act providing for
the resale of the Conversion Shares is then in effect), the Company may cause
its transfer agent to electronically transmit the Conversion Shares to a
Purchaser by crediting the account of such Purchaser or such Purchaser’s prime
broker with the DTC through its DWAC system (to the extent not inconsistent with
any provisions of this Agreement).

 

ARTICLE VI

 

Indemnification

 

Section 6.1 General Indemnity. The Company agrees to indemnify and hold harmless
the Purchaser (and their respective directors, officers, managers, partners,
members, shareholders, affiliates, agents, successors and assigns) from and
against any and all losses, liabilities, deficiencies, costs, damages and
expenses (including, without limitation, reasonable attorneys’ fees, charges and
disbursements) incurred by the Purchaser as a result of any inaccuracy in or
breach of the representations, warranties or covenants made by the Company
herein. The Purchaser severally but not jointly agrees to indemnify and hold
harmless the Company and its directors, officers, affiliates, agents, successors
and assigns from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation, reasonable
attorneys’ fees, charges and disbursements) incurred by the Company as a result
of any inaccuracy in or breach of the representations, warranties or covenants
made by such Purchaser herein. The maximum aggregate liability of the Purchaser
pursuant to its indemnification obligations under this Article VI shall not
exceed the portion of the Purchase Price paid by such Purchaser hereunder. In no
event shall any “Indemnified Party” (as defined below) be entitled to recover
consequential or punitive damages resulting from a breach or violation of this
Agreement.

 

 23 

 

 

Section 6.2 Indemnification Procedure. Any party entitled to indemnification
under this Article VI (an “Indemnified Party”) will give written notice to the
indemnifying party of any matters giving rise to a claim for indemnification;
provided, that the failure of any party entitled to indemnification hereunder to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under this Article VI except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any action,
proceeding or claim is brought against an Indemnified Party in respect of which
indemnification is sought hereunder, the indemnifying party shall be entitled to
participate in and, unless in the reasonable judgment of the Indemnified Party a
conflict of interest between it and the indemnifying party may exist with
respect of such action, proceeding or claim, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. In the event that the
indemnifying party advises an Indemnified Party that it will contest such a
claim for indemnification hereunder, or fails, within thirty (30) days of
receipt of any indemnification notice to notify, in writing, such person of its
election to defend, settle or compromise, at its sole cost and expense, any
action, proceeding or claim (or discontinues its defense at any time after it
commences such defense), then the Indemnified Party may, at its option, defend,
settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying party elects in writing to assume and does so assume
the defense of any such claim, proceeding or action, the Indemnified Party’s
costs and expenses arising out of the defense, settlement or compromise of any
such action, claim or proceeding shall be losses subject to indemnification
hereunder. The Indemnified Party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party which relates to such
action or claim. The indemnifying party shall keep the Indemnified Party fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the Indemnified Party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense. The indemnifying party shall not be liable for any settlement of any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall be liable for any
settlement if the indemnifying party is advised of the settlement but fails to
respond to the settlement within thirty (30) days of receipt of such
notification. Notwithstanding anything in this Article VI to the contrary, the
indemnifying party shall not, without the Indemnified Party’s prior written
consent, settle or compromise any claim or consent to entry of any judgment in
respect thereof which imposes any future obligation on the Indemnified Party or
which does not include, as an unconditional term thereof, the giving by the
claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such claim. The indemnification required by this Article
VI shall be made by periodic payments of the amount thereof during the course of
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred, so long as the Indemnified Party irrevocably
agrees to refund such moneys if it is ultimately determined by a court of
competent jurisdiction that such party was not entitled to indemnification. The
indemnity agreements contained herein shall be in addition to (a) any cause of
action or similar rights of the Indemnified Party against the indemnifying party
or others, and (b) any liabilities the indemnifying party may be subject to
pursuant to the law.

  

 24 

 

 

ARTICLE VII

 

Miscellaneous

 

Section 7.1 Fees and Expenses. Except as otherwise set forth in this Agreement,
each party shall pay the fees and expenses of its advisors, counsel, accountants
and other experts, if any, and all other expenses, incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement..

 

Section 7.2 Specific Enforcement, Consent to Jurisdiction.

 

(a) The Company and the Purchaser acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which any of them may be entitled by law or
equity.

 

(b) Each of the Company and the Purchaser (i) hereby irrevocably submits to the
jurisdiction of the United States District Court sitting in the Southern
District of New York and the courts of the State of New York located in New York
county for the purposes of any suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby or thereby
and (ii) hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Each of
the Company and the Purchaser consents to process being served in any such suit,
action or proceeding by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing in this Section 7.2 shall affect or limit any right to serve process in
any other manner permitted by law. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. The Company hereby
appoints Hunter Taubman Fischer & Li, LLC, with offices at 1450 Broadway, 26th
Floor, New York, NY 10018 as its agent for service of process in New York.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.

 

 25 

 

 

Section 7.3 Entire Agreement; Amendment. This Agreement contains the entire
understanding and agreement of the parties with respect to the matters covered
hereby and, except as specifically set forth herein, neither the Company nor any
of the Purchaser makes any representations, warranty, covenant or undertaking
with respect to such matters and they supersede all prior understandings and
agreements with respect to said subject matter, all of which are merged herein.
No provision of this Agreement may be waived or amended other than by a written
instrument signed by the Company and the Purchaser , and no provision hereof may
be waived other than by a written instrument signed by the party against whom
enforcement of any such waiver is sought.

 

Section 7.4 Notices. All notices, demands, consents, requests, instructions and
other communications to be given or delivered or permitted under or by reason of
the provisions of this Agreement or in connection with the transactions
contemplated hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (i) if personally delivered, on
the business day of such delivery (as evidenced by the receipt of the personal
delivery service), (ii) if mailed certified or registered mail return receipt
requested, two (2) business days after being mailed, (iii) if delivered by
overnight courier (with all charges having been prepaid), on the business day of
such delivery (as evidenced by the receipt of the overnight courier service of
recognized standing), or (iv) if delivered by facsimile transmission, on the
business day of such delivery if sent by 6:00 p.m. in the time zone of the
recipient, or if sent after that time, on the next succeeding business day (as
evidenced by the printed confirmation of delivery generated by the sending
party’s telecopier machine). If any notice, demand, consent, request,
instruction or other communication cannot be delivered because of a changed
address of which no notice was given (in accordance with this Section 7.4), or
the refusal to accept same, the notice, demand, consent, request, instruction or
other communication shall be deemed received on the second business day the
notice is sent (as evidenced by a sworn affidavit of the sender). All such
notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable:

 

If to the Company:

 

mLight Tech, Inc.

 

with copies (which shall not constitute notice) to:

 

Hunter Taubman Fischer & Li, LLC

1450 Broadway, 26th Floor

New York, New York 10018

 

If to Purchaser: 

He Cen

Tel. No.: 86-18570659144

Fax No: 86-18570659144

 

 26 

 

 

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

 

Section 7.5 Waivers. No waiver by any party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provisions, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

 

Section 7.6 Headings. The section headings contained in this Agreement
(including, without limitation, section headings and headings in the exhibits
and schedules) are inserted for reference purposes only and shall not affect in
any way the meaning, construction or interpretation of this Agreement. Any
reference to the masculine, feminine, or neuter gender shall be a reference to
such other gender as is appropriate. References to the singular shall include
the plural and vice versa.

 

Section 7.7 Successors and Assigns. This Agreement may not be assigned by a
party hereto without the prior written consent of the Company or the Purchaser,
as applicable, provided, however, that, subject to federal and state securities
laws, a Purchaser may assign its rights and delegate its duties hereunder in
whole or in part to an affiliate or to a third party acquiring all or
substantially all of its Debentures in a private transaction without the prior
written consent of the Company or the other Purchaser, after notice duly given
by such Purchaser to the Company provided, that no such assignment or obligation
shall affect the obligations of such Purchaser hereunder and that such assignee
agrees in writing to be bound, with respect to the transferred securities, by
the provisions hereof that apply to the Purchaser. The provisions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

 

Section 7.8 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

Section 7.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Agreement shall
not be interpreted or construed with any presumption against the party causing
this Agreement to be drafted.

 

Section 7.10 Survival. The representations and warranties of the Company and the
Purchaser shall survive the execution and delivery hereof and the Closing
hereunder for a period of three (3) years following the Closing Date.

 

 27 

 

 

Section 7.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding obligation
of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the original
thereof.

 

Section 7.12 Publicity. The Company agrees that it will not disclose, and will
not include in any public announcement, the name of the Purchaser without the
consent of the Purchaser unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement.

 

Section 7.13 Severability. The provisions of this Agreement are severable and,
in the event that any court of competent jurisdiction shall determine that any
one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement and such provision
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.

 

Section 7.14 Further Assurances. From and after the date of this Agreement, upon
the request of any Purchaser or the Company, each of the Company and the
Purchaser shall execute and deliver such instrument, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.

 

Section 7.15 Currency. Unless otherwise indicated, all dollar amounts referred
to in this Agreement are in United States Dollars. All amounts owing under this
Agreement shall be paid in US dollars. All amounts denominated in other
currencies shall be converted in the US dollar equivalent amount in accordance
with the Exchange Rate on the date of calculation. “Exchange Rate” means, in
relation to any amount of currency to be converted into US dollars pursuant to
this Agreement, the US dollar exchange rate as published in The Wall Street
Journal on the relevant date of calculation.

 

Section 7.16 Termination. This Agreement may be terminated prior to Closing:

 

(a) by mutual written agreement of the Purchaser and the Company, (the; and

 

(b) In the event of a termination pursuant to Section 7.16(a), each Purchaser
shall have the right to a return of up to its entire Purchase Price pursuant to
this Agreement, without interest or deduction. The Company covenants and agrees
to return the Purchase Price.

 

 28 

 

 

Section 7.17. Language. The Agreement is in English only; the Chinese language
herein is merely for reference purpose for the Purchaser. If there is any
conflict between the English and Chinese language, English language prevails.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officer as of the date first above
written.

 

The Company: MLIGHT TECH, INC.       By: /s/ Huibin Su    

Name: Huibin Su

Title:   CEO

 

 29 

 

 

Purchaser Signature Page

 

IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be duly executed
individually or by its authorized officer or member as of the date first above
written.

 

The Purchaser:

 

/s/ He Cen   HE CEN  

 

Address and Contacts of Purchaser

 

Address: Room 1003, Unit 3, Tung Chun Garden

Yijingju, Nancheng District, Dongguan

Guangdong Province, China, 523079

 

Telephone: +86-18570659144

Email: 18353687@qq.com

 

 30 

 

 

Schedule 2.1(a)

 

List of the Company’s Subsidiaries that are not qualified to do business or are
not in good standing in any of the jurisdiction in which such qualification is
necessary

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 31 

 

 

Schedule 2.1(c)

List of the Company’s Shares that are duly issued but not authorized

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 32 

 

 

Schedule 2.1(e)

List of the Company’s Subsidiaries

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 33 

 

 

Schedule 2.1(h)

List of the Company’s undisclosed liabilities

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 34 

 

 

Schedule 2.1(q)

List of the Company’s payable brokers fees, finders fees, financial advisory
fees or commissions related to the transactions contemplated by this Agreement

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 35 

 

 

Schedule 2.1(r)

List of untrue or misleading statements of a material fact contained in any of
the documents furnished to the Purchaser by or on behalf of the Company or the
Subsidiaries in connection with this transaction contemplated by this Agreement.

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 36 

 

 

Schedule 2.1(t)

List of the Company’s internal accounting control deficiency

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 37 

 

 

Schedule 2.1(y)

List of the collective bargaining arrangements covering any of the Company or
its subsidiary’s employee

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 38 

 

 

Schedule 2.1(z)

List of Certain Developments of the Company or its subsidiaries

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 39 

 

 

EXHIBIT A TO THE

SECURITIES PURCHASE AGREEMENT

 

 

 

NON U.S. PERSON REPRESENTATIONS

 

Each Purchaser indicating that it is not a U.S. person, severally and not
jointly, further represents and warrants to the Company as follows:

1.At the time of (a) the offer by the Company and (b) the acceptance of the
offer by such person or entity, of the Debentures, such person or entity was
outside the United States.    

2.Such person or entity is acquiring the Debentures for such Shareholder’s own
account, for investment and not for distribution or resale to others and is not
purchasing the Debentures for the account or benefit of any U.S. person, or with
a view towards distribution to any U.S. person, in violation of the registration
requirements of the Securities Act.    

3.Such person or entity will make all subsequent offers and sales of the
Debentures either (x) outside of the United States in compliance with Regulation
S; (y) pursuant to a registration under the Securities Act; or (z) pursuant to
an available exemption from registration under the Securities Act. Specifically,
such person or entity will not resell the Debentures to any U.S. person or
within the United States prior to the expiration of a period commencing on the
Closing Date and ending on the date that is one year thereafter (the
“Distribution Compliance Period”), except pursuant to registration under the
Securities Act or an exemption from registration under the Securities Act.    

4.Such person or entity has no present plan or intention to sell the Debentures
in the United States or to a U.S. person at any predetermined time, has made no
predetermined arrangements to sell the Debentures and is not acting as a
Distributor of such securities.    

5.Neither such person or entity, its Affiliates nor any Person acting on behalf
of such person or entity, has entered into, has the intention of entering into,
or will enter into any put option, short position or other similar instrument or
position in the U.S. with respect to the Debentures at any time after the
Closing Date through the Distribution Compliance Period except in compliance
with the Securities Act.    

6.Such person or entity consents to the placement of a legend on any certificate
or other document evidencing the Debentures substantially in the form set forth
in Section 5.1.    

7.Such person or entity is not acquiring the Debentures in a transaction (or an
element of a series of transactions) that is part of any plan or scheme to evade
the registration provisions of the Securities Act.    

8.Such person or entity has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to protect such
person’s or entity’s interests in connection with the transactions contemplated
by this Agreement.

 

 40 

 

 

9.Such person or entity has consulted, to the extent that it has deemed
necessary, with its tax, legal, accounting and financial advisors concerning its
investment in the Debentures.    

10.Such person or entity understands the various risks of an investment in the
Debentures and can afford to bear such risks for an indefinite period of time,
including, without limitation, the risk of losing its entire investment in the
Debentures.    

11.Such person or entity has had access to the Company’s publicly filed reports
with the SEC and has been furnished during the course of the transactions
contemplated by this Agreement with all other public information regarding the
Company that such person or entity has requested and all such public information
is sufficient for such person or entity to evaluate the risks of investing in
the Debentures.    

12.Such person or entity has been afforded the opportunity to ask questions of
and receive answers concerning the Company and the terms and conditions of the
issuance of the Debentures.    

13.Such person or entity is not relying on any representations and warranties
concerning the Company made by the Company or any officer, employee or agent of
the Company, other than those contained in this Agreement.    

14.Such person or entity will not sell or otherwise transfer the Conversion
Shares unless either (A) the transfer of such securities is registered under the
Securities Act or (B) an exemption from registration of such securities is
available.    

15.Such person or entity represents that the address furnished on its signature
page to this Agreement is the principal residence if he is an individual or its
principal business address if it is a corporation or other entity.    

16.Such person or entity understands and acknowledges that the Debentures have
not been recommended by any federal or state securities commission or regulatory
authority, that the foregoing authorities have not confirmed the accuracy or
determined the adequacy of any information concerning the Company that has been
supplied to such person or entity and that any representation to the contrary is
a criminal offense.

 

 41 

 

 

EXHIBIT B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42